kpmg - market update on oil and gas
TRANSCRIPT
Oil & Gas Update
Singapore International
Energy Week Reception
Grand Palace Hotel Tokyo
July 2015
Tim Rockell
Kpmg.com/energyaspac
KPMG’s Global Energy Institute – Asia Pacific
1 © 2015 KPMG Services Pte. Ltd. (Registration No: 200003956G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.
Oil & gas Update
Table of Contents
1 KPMG’s Global Energy Institute 2
2 Key themes for 2015 4
3 Toolkit for success 8
4 KPMG’s experiences 11
kpmg.com/energyaspac
2 © 2015 KPMG Services Pte. Ltd. (Registration No: 200003956G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.
KPMG’s Global Energy Institute – Asia Pacific
The KPMG Global Energy Institute:
Insights into current issues
Regional focus on emerging trends
Access new tools
kpmg.com/energyaspac
3 © 2015 KPMG Services Pte. Ltd. (Registration No: 200003956G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.
A View from KPMG’s Global Energy Institute
Table of Contents
1 KPMG’s Global Energy Institute 2
2 Key themes for 2015 7
3 Toolkit for success 9
4 KPMG’s experiences 17
kpmg.com/energyaspac
4 © 2015 KPMG Services Pte. Ltd. (Registration No: 200003956G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.
Regional Momentum: Association of Southeast Asian Nations
(ASEAN)
A land area of
4.46 MILLION sq km,
LARGER than the EU
A population of 626
MILLION, TWICE as
large as the United
States
A combined GDP of
US$2.4 TRILLION,
LARGER than BRAZIL,
INDIA or RUSSIA
As combined economic
potential, it would be the
7th LARGEST
ECONOMY in the world
THE COMBINED POTENTIAL OF SOUTH-EAST ASIAN MARKETS
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affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.
Macro-Analysis
Observations on ASEAN supply and demand environment
Vietnam
• Oil production rising, averaging 340mbd, but upstream
environment still dominated by NOC PetroVietnam
• Vietnam’s oil production comes from fields in the South
China Sea off the country’s southern coast
• Looking to catalyse deep offshore plays
Philippines
• A target for ultra-deepwater potential, French giant Total
is spearheading exploration
• The Reed Bank, a vast offshore area disputed between
China and the Philippines in an area of exploratory
interest
• The world’s second largest geothermal producer
Brunei
• Brunei has produced oil for several decades, primarily
from two large, mature fields - Southwest Ampa and
Champion - in the offshore Baram Delta
• After reaching a recent peak of 220,000 barrels per day
b/d in 2006, Brunei's oil production has declined to
141,000 bbl/d in 2012
Indonesia
• Petroleum reserves are falling faster than those of any other
country in Asia
• Production levels descended for the tenth consecutive year,
amassing just 827,000 b/d 2013, below the government target
of 840,000 b/d
• Fiscal creativity needed to entice foreign investment and
catalyze significant deep offshore potential
Myanmar
• Opening its energy doors with an impending
tender award for over 30 oil and gas blocks
• A queue of IOC and NOC investors are
seeking a stake in this new energy frontier
• Potential deep offshore Titan
Thailand
• Second largest energy consumer in
ASEAN
• Thailand is a net importer of oil and
natural gas, although the country is a
growing producer of natural gas
Malaysia
• Hike in production driven by a number of first
productions, and new PSC’s fuelled by targeted
fiscal incentives
• Opportunity to assess fiscal system, given 27
form 68 PSCs will expire by 2018
• The world’s second largest LNG exporter, due to
its Sarawak MLNG trains
Singapore
• No oil and gas reserves
• Headquarter location for IOC’s operating in
the region
• Singapore is the world’s third largest oil and
oil products trading hub, behind New York
and London
6 © 2015 KPMG Services Pte. Ltd. (Registration No: 200003956G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.
Background
Singapore’s perspective as LNG hub Section
4.1
From Africa:
6,000,000
tonnes LNG per year
From Middle East:
44,000,000
tonnes LNG per year
From Australia:
1,900,000
tonnes LNG per year
To S Korea:
29,000,000
tonnes LNG per year To Japan: 71,000,000
tonnes LNG per year
To China:
15,000,000
tonnes LNG per
year
Pipelines from
Myanmar to Thailand
(7.4bcm/year) and
China (12bcm/year)
Pipeline from Turkmenistan
to China (30bcm/year)
Pipelines from Malaysia
& Indonesia to
Singapore
(2.6bcm/year)
Potential shale gas
import from US starting
in 2017
Units in tonnes LNG
Trade volume data recorded in 2012 Sources: IEA, IGU, EIA KPMG Analysis
Pipelines
from
Thailand to
Malaysia
(7.7bcm/year
)
Pipelines from
Thailand to Vietnam
(2.0bcm/year)
Strategic location
Establishing infrastructure to develop a hub:
− Terminal and storage, operated by SLNG
− Pavilion Energy established to acquire
assets across the entire LNG value chain
Largest bunkering port in the world.
Established bunkering standards.
Gearing up to fuel ships with LNG by 2020
Asia currently accounts for
approximately 75 percent of global LNG
consumption.
Despite the diversity of the region’s LNG
markets, that proportion is poised to
grow steadily.
Consumption Growth
15
29 71
2
6
44
7 © 2013 KPMG Siddharta Advisory, an Indonesian limited liability company and a member firm of the KPMG network of independent member firms affiliated with
KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Indonesia.
A View from KPMG’s Global Energy Institute
Table of Contents
1 KPMG’s Global Energy Institute 2
2 Key themes for 2015 4
3 Toolkit for success 8
4 KPMG’s experiences 11
kpmg.com/energyaspac
8 © 2013 KPMG Siddharta Advisory, an Indonesian limited liability company and a member firm of the KPMG network of independent member firms affiliated with
KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Indonesia.
Market context
The Impact of low commodity prices
Source: BP World Statistics Review
National and international resources organizations will need to deploy strategies to neutralize or limit the impact
-
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
-
20.0
40.0
60.0
80.0
100.0
120.0
1998 2000 2002 2004 2006 2008 2010 2012 2014
mm
boe/d
US
D / b
bl
Crude (Brent, USD / bbl) Natural Gas (US Henry Hub, USD / mmbtu)
2014 / 15
Over Supply
2008 / 09
Economic Crisis
Commodity Prices
Governments
Strategies deployed
Upstream Companies
Downstream Companies
Midstream Companies
Integrated Organizations
Assess Annual Infrastructure
Development
Review and Re Assess Capital
Energy Budget
Review the impact of subsidies
and incentives
Assess opportunities for
securing low cost supply
Economic review of upstream
portfolio
Exit marginal or low return
plays or / cost reduction focus
Re balance capital investments
Exploration vs. Production
Explore future growth from
assets being divested
Opportunities to secure /
renegotiate feedstock supply
Limit exposure in low demand
areas
Review and re assess trade
commodity mix
Storage facilities hold inventory
for short term price decline
Corporate Overhead
Rationalization
Business Unit Cost
Optimization
Portfolio Optimization within
Business Units
Strategic synergies across
Business Units
Optimize cost and rationalize
overheads
Opportunities for growing
downstream asset portfolio
Prepare for regulatory change
and reduced liquidity
Consolidate M&A – trend for
asset deals
9 © 2013 KPMG Siddharta Advisory, an Indonesian limited liability company and a member firm of the KPMG network of independent member firms affiliated with
KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Indonesia.
Energy & Natural Resources Growth Drivers in Asia Pacific - 2015
Capital and
Project
Oversight
Regulatory
Reform and
Stability
Investments
and
Transacting
Deals
Energy and
Cyber
Security
Cost
Management
and
Transparency
Strategy and
Portfolio
Reviews
These three areas will be key tools in the armoury for success:
Successful organizations will be those who can react to these three key themes
10 © 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved.
KPMG and the KPMG logo are registered trademarks of KPMG International.
A View from KPMG’s Global Energy Institute
Table of Contents
1 KPMG’s Global Energy Institute 2
2 Key themes for 2015 4
3 Toolkit for success 8
4 KPMG’s experiences 11
kpmg.com/energyaspac
11 © 2015 KPMG Services Pte. Ltd. (Registration No: 200003956G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.
KPMG’s Experience
KPMG Understands the Market
Major LNG projects:
Navigating the new terrain
Liquified natural gas (LNG)
industry is venturing into
new territory as it
approaches an
unprecedented wave of
expansion. The report
introduces the breadth of
considerations needed to
successfully navigate the
new terrain.
A leader in the Oil &
Gas industry
Change is a constant
factor in the Oil & Gas
industry. The next few
years may represent a
tipping point, based on
increased demand for
energy, the growing
presence of Asian
markets and the gradual
shift from traditional to
alternative energy
sources.
No paper chase:
Transforming risk
management at energy
and natural resources
companies
Energy and natural
resources (ENR)
companies are
challenged by an ever-
growing array of threats
and opportunities, but
technology is creating
immense opportunities to
develop oil and gas
fields, in previously
unconquerable areas.
Energy at risk
Companies now not only
face cyber attacks from
hacking groups, script
kiddies and hactivists,
they are also threatened
by state-sponsored
agencies with limitless
resources. Cyber threats
have never been more
pervasive and attack
damages never more
real.
Energy Industry
Outlook Survey
Energy Industry Outlook
Survey reflects
perspectives from U.S.
energy executives on the
outlook for oil and gas
prices, business
challenges, the impact of
shale oil and gas,
alternative energy
investments, and other
industry trends.
Changing the
geopolitics of oil
This series of short white
papers have key strategic
industry topics including
the evolving role of oil
service companies,
emerging issues of
concern to African NOCs
emerging strategic
energy relationship
between Persian Gulf
producers (and NOCs)
and Asian NOCs.
KPMG’s thought leadership covers a wide range of segments and issues in the Energy & Natural Resources sector
12 © 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are
affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG
International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All
rights reserved.
Thought Leadership in Asia Pacific 2013 - 2015
Singapore
Exploring
Opportunities in
Energy Value
Chain (March 2013)
Shale
Development:
Global Update (July 2013)
The Energy Report
Philippine- Growth
and Opportunities
in Philippine
Electric Power
Sector (October 2013)
Singapore
Performance
Optimisation in
O&G Upstream (23 April 2013)
An emerging
strategic
energy
relationship (January 2014)
Singapore
Energy at Risk
Cyber Security (April 2013)
Asia Pacific
Energy Conference
Summary (April 2013)
No paper chase:
Transforming risk
management at
energy and natural
resources
companies (March 2014)
Nuclear
Power: its role
in shaping
energy
policies in
Asia Pacific (May / June 2014)
Asia Pacific's
Petrochemical
Landscape: A
Tale of
Contrasting
Regions (October 2014)
Future of
Procurement:
Keeping pace
with change in
the ENR Sector (February 2015)
Major LNG
projects:
Navigating the
new terrain (September 2014)
Clarity on
Commodities
Trading:
Transforming
with agility (April 2015)
Commodity
trading–
Meeting the
challenge of
tax and
regulatory
change (January 2014)
When one
crisis meets
another:
Focusing on
talent for the
long term (April 2015)
Floating LNG:
Revolution and
evolution for the
global
industry? (March 2015)
© 2015 KPMG Services Pte. Ltd. (Registration No: 200003956G), a Singapore
incorporated company and a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative ("KPMG
International"), a Swiss entity. All rights reserved.
The KPMG name, logo and ‘cutting through complexity’ are registered
trademarks or trademarks of KPMG International Cooperative (KPMG
International).
Tim Rockell
Director, KPMG Global Energy Institute
Asia Pacific
KPMG in Singapore
T: +65 6507 1998
The Global Energy Institute - ASPAC kpmg.com/energyaspac