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D&A Outlook for the Global O&G Industry
Presented by: John Ferentinos
Prepared for: Decom North Sea Breakfast Seminar, OTC Houston 2014
7th May
I. Introduction to Infield Systems
II. Global Decommissioning Market
a) Operational Platforms
b) Age & Tonnage
c) Regional Focus
d) Operational Production Wells
e) Forecast
III. Timing considerations
Table of Contents
2
Geographic Locations
A globally recognised oil & gas consultancy with a dedicated international team of cross-sector specialists
3
Key Global Personnel
c.40 energy professionals – global footprint
Office Locations
London
Aberdeen
Houston
Head Office
Regional Office John Ferentinos (Senior Analyst)
London [email protected] +44 207 423 5036
James Hall (Director) London
[email protected] +44 207 423 5024
Luke Davis (Associate Consultant) London
[email protected] +44 207 423 5023
Paul Main (Research Manager) London
[email protected] +44 207 423 5022
Gregory Brown (Transaction Services Manager) London
[email protected] +44 207 423 5031
Dr.Wei Liu (Senior Analyst) London
[email protected] +44 207 423 5078
Image courtesy of FMC Technologies Inc.
Products & Services
A leading offshore oil and gas and associated services consultancy
Source: Infield Systems Limited, company websites 5
Data, Reports & GIS Mapping Business Strategy and Analysis Transaction Services
• Offshore specific data covering production infrastructure, rigs, specialist vessels, construction yards, contracts and OFS providers
• Sector specific reports • GIS mapping services covering
operational and forecasted production infrastructure
• Market matching and market tracking – “Match & Track”
• Complete market intelligence outsourcing • Bespoke sector services • Market entry strategy • Procurement strategy advisory – “Project
Flow” • Ad-hoc sector analysis • NPV Economic Field Modelling
• Advisory • Market overview IPO • Debt financing analysis • Distressed asset purchase analysis • Buy/sell side market due diligence • Opportunity identification
0
2,000
4,000
6,000
8,000
10,000
12,000
2001 2004 2007 2010 2013 2016 2019
2014
• Over 10,700 platforms are currently estimated to operate offshore worldwide
• An increase in operational infrastructure is expected globally; barring the US GoM
• The US GoM base is at 3,580 platforms - down to 1,130 in 2019 – market is dominated by very small structures in shallow waters
Sources: Infield Systems 6
Operational Fixed Platforms by Region (Units)
North America
Asia
Middle East
Africa
L. America
Europe
0-75m 9,774
structures
>75m+ 936
structures
Platforms by Depth (2014)
Operational Fixed Platforms
Aging Iron
• More than 40% of the operational platforms are 30+ years old ; Life expectancy?
• Mature basins of the GoM and North Sea will enter the decom boom first, markets such as SE Asia represent long term trend
Sources: Infield Systems
7
Average Platform Age by Region (Av. 24 yrs) Global Average Platform Age
30yrs
27yrs
25yrs
22yrs
20yrs
19yrs
18yrs
13yrs
11yrs
0 5 10 15 20 25 30 35
North America
Latin America
West Africa
North Africa
Middle East
Southern Europe
NWECS
South East Asia
Eastern Europe
Australasia
South Asia
South & East Africa
East Asia
Avg Age (Yrs)
1-15 yrs 31%
15-25 yrs 18%
25-30 yrs 9%
30-35 yrs 14%
35+ yrs 28%
• Global estimation: 11.5 million mT of topside infrastructure
• 3.6 million mT is estimated with to be 30+ year old
• Chevron, Apache, Shell, Statoil are more exposed in terms of topside tonnage
Sources: Infield Systems 8
0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000
CNR
Petrobras
Perenco
Saudi Aramco
Apache
Shell
PEMEX
Statoil
ExxonMobil
Chevron
1-15 yrs 15-25 yrs 25-30 yrs 30+ yrs
300,000 mT
Top Operators by Topside Tonnage (2014)
Operators Exposure in Fixed Topsides
Operational Production Well Infrastructure
• Over 25,000 production trees are currently estimated to operate offshore
• The global tree base is increasing by 0.7%, due to subsea activity (7% CAGR)
• 5,450 production trees operate in US GoM - down to 3510 in 2019 (-8% CAGR)
Sources: Infield Systems 9
Operational Wells – Subsea vs. Dry (Units)
0
5,000
10,000
15,000
20,000
25,000
30,000
2000 2003 2006 2009 2012 2015 2018
Dry Wells
Subsea Wells
Subsea Trees by Depth (2014)
2014
0-499m 55%
500-1499m
37%
1500m+
8%
Operational Subsea Equipment as of 2013
Redacted for Commercial Reasons
Latin America:
North America:
Africa:
M.East & Caspian:
Europe: Global Operational Base by Depth:
10
Australasia:
Asia:
Sources: Infield Systems – Count does not include PLETS & PLEMs
98%
Shallow Water
0-499 m
Deep Water
500-1499m
Ultra Deep Water
1500m+
19%
76% 32%
50%
18%
24%
51%
25%
Regional Platform Decommissioning Forecast (by tonnage)
Latin America:
North America:
APAC & M.E:
Europe:
Africa:
Topsides and Jackets <5000mT Topsides & Jackets >5000mT
Notes: Numbers in brackets denote the estimated removed tonnage up to 2050
Topsides OR Jackets >5000mT
2014 2018 2022 2026 2030
2014 2018 2022 2026 2030
2014 2021 2025 20292014 2018 2023 2027
2014 2018 2022 2026 2030
11
Redacted for Commercial Reasons
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
North America Asia Europe Africa Latin America Middle East & Caspian Sea Australasia
Fixed Platforms Decommissioning Forecast (by region)
12
Platform Decommissioning Forecast (Tonnes)
Potential for Upside?
• Aged assets in the US GoM drive the decommissioning market until 2020
• Larger assets in the North Sea are expected to push the capabilities of the HL fleet after 2020
• Opportunities in Asia are increasing later on in the forecast – especially for >5000mT HL
“Once in production, only about 10% of the oil in the reservoir naturally flows to the surface under its own pressure”
BP, “Enhancing oil recovery”
Source: BP 13
Deferring Decommissioning (I) – Sustainable Commodity Prices
Estimated Breakeven Costs for Offshore
The commercial viability of projects is supported by current commodity prices
Sources: Infield Systems; Broker Research 14
20
30
40
50
60
70
80
90
100
110
120
130
140
150
160
170
180
190
200
2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
$/b
bl
90% Confidence Interval 70% Confidence Interval50% Confidence Interval Brent$110 $95$80 $70$60 $50$30
Arctic Region
Ultra-deepwater (West Africa)
Deep /Ultra Deep water (US Gulf) Mid-Water (North Sea)
Deep/Ultra Deep Water (Brazil Pre-Salt)
Shallow/Medium Water (Caspian Sea)
Brent Average (2011-13)
WTI Average (2011-13)
Deferring Decommissioning (II) – Extending the life of Platforms
Remote Developments 1970-2017
More and remoter fields are brought on-stream, giving new life to existing platforms
Sources: Infield Systems 15
21 KMs 19 KMs
0
10
20
30
40
50
60
70
80
90
100
0
5
10
15
20
25
1985 1990 1995 2000 2005 2010 2015
Sub
sea
Fiel
ds
Av.
Tie
bac
k D
ista
nce
(K
Ms)
Subsea Fields Onstream with No Platform Infrastrucutre Avg Tieback Distance (km)
E.O.R – Sarawak and Sabah Enhanced Oil Recovery (Petronas/Shell)
Source: Infield Systems
Source 1: Shell, 2011, http://www.shell.com.my/aboutshell/media-centre/news-and-media-releases/archive/2011/petronas-shell-sign-hoa-for-eor-contracts-20111111.html
16
US$12 billion over a 30 years period, between Shell and Petronas, is projected to increase the average recovery factor in the BDO and North Sabah fields from 36% to 50%1
E.O.R – Sarawak and Sabah Enhanced Oil Recovery (Petronas/Shell)
17
The E.O.R investment may result in an additional 90 to 100 kboe/d of oil production, extending the fields life to beyond 20401
Source: Infield Systems
Source 1: Shell, 2011, http://www.shell.com.my/aboutshell/media-centre/news-and-media-releases/archive/2011/petronas-shell-sign-hoa-for-eor-contracts-20111111.html
2013 → 2020
2019 → 2025
2015 → 2020 2013→ 2022
2019 → 2029
2018 → 2029
2014 → 2024
Disclaimer
18
The information contained in this document is believed to be accurate, but no representation or warranty, express or implied, is made by Infield Systems Limited as to the completeness, accuracy or fairness of any information contained in it, and we do not accept any responsibility in relation to such information whether fact, opinion or conclusion that the reader may draw. The views expressed are those of the individual contributors and do not represent those of the publishers.
Some of the statements contained in this document are forward-looking statements. Forward looking statements include, but are not limited to, statements concerning estimates of recoverable hydrocarbons, expected hydrocarbon prices, expected costs, numbers of development units, statements relating to the continued advancement of the industry’s projects and other statements which are not historical facts. When used in this document, and in other published information of the Company, the words such as "could," "forecast”, “estimate," "expect," "intend," "may," "potential," "should," and similar expressions are forward-looking statements.
Although the Company believes that its expectations reflected in the forward-looking statements are reasonable, such statements involve risk and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Various factors could cause actual results to differ from these forward-looking statements, including the potential for the industry’s projects to experience technical or mechanical problems or changes in financial decisions, geological conditions in the reservoir may not result in a commercial level of oil and gas production, changes in product prices and other risks not anticipated by the Company. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties.
© Infield Systems Limited 2014
