Photo Credit: John Mikal Torgersen TEEKAY OFFSHORE PARTNERS INVESTOR DAY

Transcription

1 Photo Credit: John Mikal Torgersen TEEKAY OFFSHORE PARTNERS INVESTOR DAY September 30, 2014

2 KENNETH HVID Chief Strategy Officer 2 2

3 Forward Looking Statements This presentation contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management's current views with respect to certain future events and performance. All statements included in or accompanying this presentation, other than statements of historical fact, are forward-looking statements. Forward-looking statements are not guarantees and actual results could differ materially from those expressed or implied in the forward-looking statements. Forwardlooking statements in this presentation include, among others, statements regarding: the fundamentals in and growth potential of the offshore industry; future growth opportunities for the Partnership and its various segments, including the Partnership s ability to participate in new offshore projects or to grow organically; the accretive nature of any acquisitions and any future increases in the Partnership s distributable cash flows; the amount of the Partnership s forward fee-rate revenues; estimated future total assets of the Partnership and its segments; estimated capital expenditures for existing growth projects; illustrative annual distribution growth of the Partnership; the cost and timing of delivery of new and converted vessels and commencement of their time-charter contracts; the timing of completion of operational testing on the HiLoad DP vessel; the status, timing, cost and expected distributable cash flow to be generated from the potential acquisition by the Partnership of the Knarr FPSO; the timing and certainty of entering into long-term financing and charter contracts for the FAU newbuildings prior to their deliveries; the timing and certainty of the Partnership s joint venture with Odebrecht completing negotiations for the Libra FPSO project with Petrobras, and the expected related cost and charter period; expected additional project bidding by the Partnership; the Partnership s FPSO deal execution capacity; and the potential for Teekay Corporation or third parties to offer additional vessels or projects to the Partnership and the Partnership agreeing to acquire such vessels or projects. The following factors are among those that could cause actual results to differ materially from the forward-looking statements, which involve risks and uncertainties, and that should be considered in evaluating any such statement: vessel operations and oil production volumes; significant changes in oil prices; variations in expected levels of field maintenance; increased operating expenses; levels of oil production in the North Sea and Brazil offshore fields; potential early termination of contracts; shipyard delivery or vessel conversion delays and cost overruns; failure by the Partnership to secure financing or charter contracts for FAU newbuildings; changes in exploration, production and storage of offshore oil and gas, either generally or in particular regions; delays in the commencement of time-charters; the inability to successfully complete the operational testing of the HiLoad DP unit; failure of Teekay Corporation to offer to the Partnership additional vessels or of the Partnership to acquire the Knarr FPSO unit; failure to complete negotiations with Petrobras for the Libra FPSO project; potential delays in the commencement of operations of the Knarr FPSO unit; the Partnership s ability to raise adequate financing to purchase additional assets; and other factors discussed in the Partnership s filings from time to time with the SEC, including its Report on Form 20-F for the fiscal year ended December 31, The Partnership expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Partnership s expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based. 3

4 Teekay Offshore Partners Broadening our offshore service offering and growth potential Strong industry fundamentals will continue Two main business platforms: Floating production Offshore logistics 4

5 INVESTMENT HIGHLIGHTS Leading Market Positions Strong Industry Fundamentals Stable Operating Model Strong, Visible Growth Market leader in harsh weather FPSOs and shuttle tankers Deepwater offshore oil production is set to double by 2025 $7.8 billion of forward fee-based revenues $3.2 billion of built-in growth 5

6 Teekay Offshore TEEKAY at a glance OFFSHORE AT A GLANCE 6% Distribution CAGR Since IPO in $3B Market Cap. 15% per annum Total Shareholder Return Since IPO 54 Offshore Units Blue-Chip Customers $ Fee-based Contracts Avg. contract duration of 5.3 years (excluding options) 6

7 Core Regions: Brazil & North Sea North Sea 19 shuttle tankers 6 FPSOs (2 TOO + 4 TK Corp) 2 FSOs Falcon Spirit FSO Suksan Salamander FSO Pattani Spirit FSO Dampier Spirit FSO Brazil 13 shuttle tankers + 1 Hi-Load 3 FPSOs + 1 future FPSO 1 future accommodation unit 7

8 Teekay Offshore s Business Mix Continues to Evolve Enhancing service offering to the customer With roll-off of conventional tanker contracts, Teekay Offshore is becoming a true pure-play in the build-out of offshore crude oil production Total Assets 2007 by Segment Total Assets 2013 by Segment Total Assets 2013 PF* by Segment 80% 49% Total Assets $2.0B 13% 7% 56% Total Assets 37% $3.9B 3% 4% 30% Total Assets $7.1B* 6% 2% 9% 4% Conventional Tankers FSOs Shuttle Tankers FPSOs FAUs Towing * December 2013 pro forma to include known growth projects delivering through

9 Stable Portfolio of Fee-Based Contracts With Strong Customer Base Forward Fee-Based Revenues by Segment* Average Remaining Contract Length by Segment* FPSO 6 years 56% $7.8B Total Forward Fee-Based Revenues 1% 3% 9% 31% FSO Shuttle Tankers Conventional Tankers FAU 5 years 4 years 4 years 3 years * Excludes extension options and includes the Knarr FPSO which has been offered to Teekay Offshore 9

10 Solidifying our Position in the Value Chain Teekay Offshore s growth driven by: 1. Strong fundamentals 2. Responding to needs of our common customers 3. Leveraging our competitive advantages 4. Pursuit of higher returns FPSO (Shipshape) FPSO (Cylindrical) Ocean Towage Floating Accommodation HiLoad DP Shuttle Tankers FSO Offshore Production Offshore Logistics 10

11 Providing Services to Meet Customers Offshore Oil Production Needs FPSO TERMINAL FLOATING ACCOMMODATION OFFSHORE PLATFORM SHUTTLE FSO OFFSHORE PLATFORM REFINERY HI-LOAD + CONVENTIONAL TOWAGE & INSTALLATION OFFSHORE UNITS 11

12 Oil Production Moving Offshore With deepwater taking an increasing share The world needs 50 mb/d of new oil by 2035 just to offset existing field decline Easy-to-find oil is disappearing; new supply will increasingly come from unconventional plays Deepwater offshore oil production is set to double by 2025 Teekay s core customers are at the forefront of these new developments Million boe/d Deepwater Oil Production by Company Noble Others Statoil Eni Statoil ExxonMobil Eni Noble ExxonMobil Shell Statoil Eni BP ExxonMobil Total Chevron Petrobras Source: IHS 12

13 Deepwater Accounts for 23% of New Production for the Top 26 IOCs Rising to 31% when Petrobras is Added 2020 New Production Sources Top 26 IOCs Top 26 IOCs + Petrobras 8% 7% 28% Total 16 mb/d 20% Oil Sands Conventional Onshore Conventional Shallow Deepwater 25% Total 18 mb/d 18% 23% 21% Unconventional 31% 19% Overall production volume growth of the top IOCs requires a balanced production portfolio, despite an increased focus on unconventional sources by many Independents Source: IHS 13

14 Growth Across Multiple Offshore Segments Known Growth Capex by Segment 49% $3.2B Known Growth Projects 14% 2% 7% Dropdown FPSOs (Estimated) FPSO Shuttle / Hi-Load FSO % 19% FAUs Towage Vessels 14

15 Over 80% of Growth Capex Already Booked to Achieve Illustrative Growth Through 2017 Actively bidding on 2017 / 2018 Offshore projects and on-the-water acquisitions to drive future distribution growth TOO Growth CAPEX - Committed vs. Illustrative Target Annual Capital Investment ($millions) 4,000 3,500 3,000 2,500 2,000 1,500 1, Illustrative Distribution Growth 7.5% 5% 5% 83% of Capex to achieve illustrative growth already committed Cumulative Capital Investments (Known) Cumulative CAPEX Required for Illustrative Distribution Growth TOO Known Annual Asset Deliveries 15

16 Well Positioned to Capture Significant Share of Offshore Production Market Growth $80 billion market opportunity in our segments Offshore Unit Demand Number of units $56 billion FPSO FSO Shuttle FAU $80B $ Billions Source: Internal Estimates 0 Offshore Unit Requirement Capex 0 16

17 Core Regions: Brazil & North Sea East Coast Canada Expanding Shuttle Region Gulf of Mexico Growing demand for offshore services West Africa Increasing complexity of offshore services Southeast : Asia Increase in development of smaller fields Current Core Markets Potential New Markets 17

18 FLOATING PRODUCTION, STORAGE AND OFFLOADING (FPSO) 18

19 Strong Demand for FPSO Projects Brazil a key region for new FPSO demand No. Vessels Leased FPSO Operators 16 1 Existing On Order Planned FPSO Projects by Region Brazil Africa N. Europe S.E. Asia Others BW Offshore SBM MODEC Teekay / TOO Bumi Armada Bluewater The pace of FPSO projects is set to increase during the next 5 years Brazil is at the forefront of new FPSO demand Growing trend towards leased instead of oil company owned units Number of Contracts Historical & Forecast FPSO Contracting Forecast Historical contract awards per year E 2015E 2016E 2017E 2018E 2019E 2020E Source: Clarksons / Energy Maritime Associates 19

20 Current FPSO Fleet Contract Status Owner FPSO Unit TOO TOO TOO TOO Petrojarl Varg Talisman Options Voyageur Spirit E.ON Options Cidade de Rio das Ostras Petrobras Options Piranema Spirit Petrobras Options TOO Cidade de Itajai (50%) Petrobras TOO Libra (Conversion) (50%) Petrobras TK TK Hummingbird Spirit Petrojarl Banff Centrica Options CNR Petrojarl Foinaven TK BP Extension TK TK Petrojarl Knarr (Newbuilding) Petrojarl I BG Evaluating opportunities for redeployment, or sale 20

21 Status of Dropdown FPSOs at Teekay Parent Remaining FPSOs targeted for dropdown to TOO by end-2016 FPSO Current Status Dropdown Trigger Petrojarl Knarr Preparing for field installation Offer has been received from Teekay Parent Petrojarl Banff Producing on field Contract uplift commencing Q Hummingbird Spirit Options on current contract run through March 2017 Foinaven Subsea issues causing field to produce below max. capacity Petrojarl 1 In lay-up Bidding on new long-term contract (would require upgrade), or Sale to third party Centrica to complete possible field life extension analysis Enter into new long-term contract based-on enhanced field life Stabilize production and obtain charterer s approval to transfer ownership to TOO Signing of suitable contract 21

22 Knarr FPSO Status Update Arrived in Norway and preparing for offshore installation Tow to field scheduled for early- October will then commence mooring and riser installation (weather dependent) Commissioning planned for October to late-november On schedule to commence 10-year charter to BG in December Expected to generate annual DCF* of approximately $70 million * Distributable Cash Flow is a non-gaap measure used by certain investors to measure the financial performance of Teekay Offshore and other master limited partnerships 22 22

23 Libra FPSO Status Update Expect to sign Letter of Intent with Petrobras today Early Well Test unit 12-year contract commencing early % owned with our Brazilian partner, Odebrecht Oil and Gas Total Capex: $485 million (50% basis) FPSO conversion at Jurong Shipyard in Singapore utilizing 1995-built TOO shuttle tanker, Navion Norvegia Libra field considered to be the largest oil field in Brazil with 8-12B recoverable barrels 23

24 Strengthening FPSO Operational Leadership Key Focus Areas Continue to strengthen the organization Increase access to engineering and project resources Enhance risk mitigation Improve start-up and field commissioning processes Achieve full production capacity on all units Action Reorganized into stand-alone regional teams in Aberdeen, Trondheim and Brazil and established a permanent, Asia-based FPSO execution team Resource sharing agreements with Sevan and Kanfa Implemented a more rigorous risk management process for tendering and execution of projects Installed and commissioned Banff successfully and transferred the same installation and commissioning team to Knarr Restored full production capacity on Banff, Voyageur and Foinaven 24

25 Target-Rich FPSO Market Focused on core North Sea and Brazil markets Expect 55 new FPSO projects in next 5 years Human capacity to execute 2-3 new projects simultaneously Targeting FPSO projects of $500 million to $1 billion each High barriers to entry and few competitors in core markets North Sea Expertise required in a highlyregulated, harsh weather operational environment Leading provider of FPSOs in the North Sea Sevan solution more cost effective as no turret required Expect to bid on 3 projects in next 24 months Brazil Local content requirements and project size and complexity First-mover advantage on Libra oil field Partnership with Odebrecht Expect to bid on 4 projects in next 24 months 25

26 INGVILD SAETHER President, Teekay Shuttle and Offshore Services 26 26

27 TOO s Offshore Logistics Business Shuttle Tankers Core of the franchise Sevan technology FSOs High-return conversions Quality and know-how Hi-Load Innovative technology FAUs Long-haul Towage 27

28 Organization Structured for Growth Stavanger, Norway-based operations streamlined with an intense focus on profitability: Operating costs reduced by approximately 20% compared to three years ago: Implemented Filipino manning program, reducing crew costs G&A reduced by approximately 20% Eliminated middle management layer Increased average revenues per ship day Restructured into a project-oriented organization to grow beyond shuttle tankers Applying core competencies in DP and offshore operations to FAUs, Longhaul towage, Hi-Load units 28

29 OFFSHORE LOGISTICS: DP Offshore Loading 29

30 Brazil Driving Demand for Offloading Solutions Includes a requirement for both DP shuttle tankers and Hi-Load units Brazil to drive the bulk of new shuttle tanker demand to 2020 Replacement demand for vessels 20+ years in the North Sea Requirement for new vessels East Coast Canada ~$2-3 billion of shuttle tanker opportunities anticipated in the next 5 years Shuttle Tankers No. Vessels Existing On Order TOO Knutsen Viken AET Lauritzen Tsakos Estimated New Shuttle Tanker Requirement to 2020 Number of Vessels North Sea CoA* Source: Internal Estimates North Sea TC East Coast Canada *Includes replacement demand Brazil** TOTAL **Includes Hi-Load units 30

31 Hi-Load Technology Enhances Our Offshore Loading Offering Enables conventional tankers to load from offshore fields Eliminates need for regional transshipment Operational testing for Hi-Load #1 expected to be completed during Q4-14 Completed multiple loadings from an offshore unit to a conventional tanker FEED Study with BG for future Brazil operations to focus on direct crude export using Suezmax and VLCC tankers 31

32 Case Study: Scott Spirit Extended Well Tests Xcite - Bentley Field (UK 2012) Receiving up to 1000 m3/day 100 days of operation Noble (Equitorial Guinea 2013) Remote area Challenging logistics 180 days of operation West Linapacan Field (Philippines 2015) Loading, storing, transportation Signed LOI final contract pending Expected start up March 2015 for ~200 days 32

33 OFFSHORE LOGISTICS: Floating Storage and Offtake (FSO) 33

34 FSO Demand Growth Concentrated in Asia and North Sea Trend toward higher-valued FSOs Harsh-weather North Sea units $300 to $500 million Asia-based units $50 to $100 million Pace of FSO demand expected to increase in the next 5 years No. Vessels Leased FSO Operators Existing On Order / Future Conversion TOO Omni MODEC Trada Maritime Planned FSO Projects by Region MISC Existing FSO markets for TOO S.E. Asia North Sea GoM MED Africa Brazil Source: Energy Maritime Associates 34

35 Floating Storage: Short and Long-term Execution Plan /2017 Gina Krog FSO Conversion Commence conversion of built Randgrid shuttle tanker Commence 3-15 year contract with Statoil Prospects Xcite Bentley Field Start up 2017/ years field life Sevan 1M bbls UK sector Premier Oil Sea Lion Field Start up 2018/ years field life Sevan 1.2M bbls Falkland Islands Combined package FSO, Shuttle + potentially Hi-Load Maersk Culzean Field Start up years of field life Sevan 650K bbls UK sector 35

36 OFFSHORE LOGISTICS: Floating Accommodation Units (FAU) 36

37 Growing Need for Floating Accommodation Strong demand for modern DP units to meet growth and replace older units Floating Accommodation Age Profile of FAU Fleet No. Vessels FAU Supply / Demand Balance No. Units Existing On Order Prosafe Floatel TOO Cotemar Gran Energia 60% 24% E 2015E 2016E 2017E 2018E Mexico Brazil North Sea RoW Supply Adjusted Supply* 4% 12% 0-4 years 5-9 years years 30+ years *Adjusted to account for scrapping (30% of units aged 30+ years) & excluding low-spec units on order Source: Platou 37

38 Key Benefits of Teekay Offshore FAUs Cylindrical Sevan design provides high stability and uptime Superior to semi-sub units Large storage capacity (water, fuel, etc.) High variable deck load +2,000 m 2 deck space Important performance factors for the customer: Motion stability Station keeping 38

39 Teekay Offshore FAU has Superior Motion Characteristics Short Term Response in Irregular Waves Less Stable TOO FAU More Stable Typical wave periods in normal operating conditions 39

40 Attractive Returns from FAU Contracts in Key Regions North Sea and UK Continental Shelf Mexico Historically, longterm contracts (3 10 years) Typically shorter contract tenor (9-18 months) Seasonality opposite of shuttle tankers on CoAs (higher field maintenance during summer) Higher returns (5-6x EBITDA) Brazil Medium-term contracts (3 5 years) Returns similar to other offshore production assets (6-8x EBITDA) 40

41 FAU: Execution Plan Rig #1 Complete construction and commence 3-year contract with Petrobras Rig #2 Complete construction and tender for new contract Rig #3 Complete construction and tender for new contract Non-conditional options for an additional 5 units Will consider exercising options based-on market conditions 41

42 OFFSHORE LOGISTICS: Long-Haul Towage 42

43 Expect Strong Demand for DP Towage Towage vessels required to Forecast Installation Mobilisation Towage Source: ABN Amro TOO is constructing four, DPII, 300-ton bollard pull, SX-157 Ulstein X-Bow Design long-distance towing and anchor handling vessels delivering in 2016 Capable of operating at full load for 45 days without refuelling Equipped with anchor handling capabilities required for mooring and installation Gap in the market for units capable of both high-end towage and installation / decommissioning 43

44 TEEKAY OFFSHORE IS WELL- POSITIONED Leading market positions Strong industry fundamentals Stable operating model Strong, visible growth 44 44

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