east mediterranean oil & gas opportunities for french

© - Copyright Bureau Veritas

East Mediterranean Oil & Gas Opportunities for French Companies

20 June 2013

Marcel HocharVice President for Middle East

2© - Copyright Bureau Veritas GEP Presentation – 20 June 2013

Contents

1 The East - Med zone presentation

2 Positioning on the global O&G stage: what is changing how does it impact

3 Doing business / Infrastructures / barriers to entry and strengthes

4 What stage of development of O&G , what can we offer

5 E&P Associated Opportunities

6 Downstream Associated Opportunities

7 Positioning of the French Companies.


The East - Med zone presentation

► Energy and Water deficient Region

► Home to many long lasting conflicts

Arab-Israeli

Turkish-Greek over Cyprus

► Levant Basin Estimated Reserves

> 125 tcf of recoverable gas

> 1.7 mbl of recoverable oil

► Contested water territory frontiers

Israel and Lebanon

Israel and Palestinian Territory

Turkey and Cyprus

► Cyprus provides privileged access to the EU market


East - Med positionning on the global O&G stage

The East Med region is centric to an energy Stage facing unplanned evolutions:

Arrival of NA as a major Oil & Gas producer

Consumption and the Petrochem Industry shifting East

Unstable conditions in M.East and N. Africa

Oil price is one of a single market, driven by the transport industry. The prices of gas vary from 1 to 4.

The US are gradually disappearing as a major Importer of O&G, changing the trading geomarket.

N. America added 1 mBPD output in 2012, they’ll be at par with KSA in a few months (12 mbpd ).


Doing Business, Infrastructures, barriers to entry and strengths

►Enforcing Contracts is a concern

►Starting a business and Protecting Investors more difficult in Lebanon and Syria

►No barriers to workforce entry and residence, No imposed local content

►No particular barriers and levies for import of equipment and material

►Good level of education of local population

Ease of Doing Business Rank Starting a

BusinessProtecting Investors

Trading Across Borders

Enforcing Contracts

Saudi Arabia 22 78 19 36 124France 34 27 82 27 8Cyprus 36 37 32 18 108Israel 38 41 6 10 94Lebanon 115 114 100 95 121Syria 144 132 117 125 176


Cyprus Israel Lebanon Syria France KSA

Population Million 1.2 8.0 4.1 22.5

Unemployment % 14% 6.3% 10% 18%

GDP/capita USD 29,100 31,000 15,600 5,100

Power/capita kWh/yr 4675 7011 3130 1637 6847 7427

Water/capita m3/ca/yr 213 282 315 817 512 959

Road Density km/sq.km 135 85 70 40

Rail Network Km 1,001 2,500

Int'l Airports # 2 2 1 3

Ports # 2 6 2 4

Doing Business, Infrastructures, barriers to entry and strengths

WATER SHORTAGE

POWER SHORTAGE

HIGH UNEMPLOYMENT


Cyprus Israel Lebanon

► Gas reserves ̴ 60 tcf

► Block 12 NOBLE started Appraisal Well Drilling

► Blocks 10 & 11 TOTAL drilling in 2015

► Blocks 2, 3 & 9 ENI/KOGAS drilling in 2015

► Mari-B, 1st offshore gasproduction facility 2004

► Dalit, Dolphin, Tanin, Noa, Pinnacles

► Tamar 10tcf Production started in April 2013

► Leviathan 18tcf (NOBLE & WOODSIDE)

► Gas reserves > 30 tcf

► No appraisal well drilled offshore

► 7 appraisal wells drilled onshore

► May – Nov 2013 Ongoing Bidding Process

► Feb 2014 Award

No surveys carried in Syria’s offshore EEZ


• Drilling

• FSO / FPSO

Exploration&

Production

• Onshore LNG

• FLNG

• Pipeline

Processing&

Export

• Subsea pipelines

• Tank Farms

Transportation&

Storage

E&P Associated Opportunities

Building a tissue of local industries and resources


E&P Associated Opportunities

►New Blocks attribution

► Fabrication, Logistics and Supply Infrastructures

►EPC for deep offshore fields development

► LNG Terminals (Vassilikos to start in 2015 $6B)

►Gas Pipelines (Israel to Jordan)

► FLNG Terminals

►Design and Consulting for Infrastructures

►Procurement, Supply Chain, Storage, …


Downstream Associated Opportunities

►East Med Gas Reserves are estimated at 125tcf

► 15% of reserves cover Energy Needs of countries for 100 years

►Which strategy to adopt for the excess Gas?

LNG export, lower cost & easy to connect to future gas highways to Europe (Nabuco)

Petrochemical Industry, resources intensive (Chemicals, Plastics, …)

Gas energy – power – water desalination

Develop high energy consuming industries, (Aluminum, Metals, …)


Possibilities for the Region : Which Value Chain?

Rawgasentry LNG

Onshore Gas treatment

Liquefaction

PowerIndustries

Grid

Desalination

Petrochemicals

Consumption (Power, LNG, Petrochem, Domestic Usage)

► The Region is in need of Power, Water, Jobs

►Gas turbines are the most ‘’environmentally friendly’’ approach


Possibilities for the Region: LNG Export

►LNG export from East Med is feasible and a serious option

►Lower cost

►Easy to connect to future gas highways to Europe

(Nabucco, Southern Gas Corridor, White Stream, …)

►Cyprus (EU member) can federate gas from other countries to facilitate access to European markets

►Asia is already in talks with Israel on the Leviathan reserves


Possibilities for the Region: Petrochemicals

The Petrochemical industry is a real possibility with a global Growth of plastic consumption expected to be at a steady 5% for the years to come .

The East Med zone is very competitive

and needs the jobs :


Possibilities for the Region: Power / Water

Energy & Water deficient countries with high consumption growth

Gas is cheap and environmentally friendlier that coal/fuel

►Build networks for domestic gas distribution

►Plant Conversion (Fuel/Coal Gas)

►Upgrade & Extension of electricity grid

Large facades on the Mediterranean most suitable for

Desalination plants to solve water shortage and ease tensions

►Reverse Osmosis

►Multi Stage Flash

►Distillation


Possibilities for the Region: Industries

Energy intensive industries►Aluminum (replicate examples of UAE, Bahrain)

► Foundries, Metals, Iron/Steel

► Fabricated Metals

►Paper

►Glass,….

►Rail (train, metros, tram, …)

Stronger manufacturing, Economic Expansion, Job creation


Positioning of French Companies

►Robust expertise of the French industry in the O&G sector

…quoted last week by Agence France Presse for the NA Shales : "Il s'agit d'une grande tradition française d'avoir des groupes à la pointe de la technologie pétrolière … il n'y a pas d'autres pays qui dispose de l'intégralité de la filière"

Total, Maurel & Prom, Imerys, Vallourec, Technip, Schlumberger, Trouvay-Cauvin, Bureau Veritas.….

► Lebanon and Syria ex French protectorates and French speaking

►Europe could be one of the major gas export destinations

►Ease of entry through Cyprus, a fellow EU country

► 70% of Human capital expected to be expatriates

east mediterranean oil & gas opportunities for french

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