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Investing in Oil and Gas| PFC Energy| Page 3 Oil Prices Rose, But So Did Costs + 52% Large Gulf of Mexico Facility Costs by Segment Avg $28.31 Avg $59.13 Source: PFC Energy
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Strategic Advisors in Global EnergyStrategic Advisors in Global EnergyStrategic Advisors in Global Energy
Investing in Oil and Natural Gas:A Few Key Issues
Prepared for EIA ConferenceSusan Farrell, Senior DirectorPFC Energy
April 8, 2009
Investing in Oil and Gas| PFC Energy| Page 2
The Top 20 IOCs and Top 20 NOCs Account for Over Half of E&P Spend
Source: PFC Energy, Global E&P Surveys
Investing in Oil and Gas| PFC Energy| Page 3
Oil Prices Rose, But So Did Costs
+ 52%$0
$20
$40
$60
$80
$100
$120
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
WTI $/barrel Annual averages
Large Gulf of Mexico Facility Costs by Segment
Avg $28.31
Avg $59.13
Source: PFC Energy
Investing in Oil and Gas| PFC Energy| Page 4
Near term Spending Cuts will be Significant
-24%-29%
-27%
$0
$20
$40
$60
$80
$100
$120
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
E
2009
F
WTI Real(right axis)Development - Top IOCsExploration - Top IOCs
Further cuts expected
E&P Spending by Selected IOCs
2007
$m
mO
il Price 2007 $/bbl
Source: PFC Energy, Global E&P surveys
Investing in Oil and Gas| PFC Energy| Page 5
Some Companies will Disappear:46 of 79 Independents No Longer Exist
Source: PFC Energy
1995
2007
000 mbd
Investing in Oil and Gas| PFC Energy| Page 6
Non-OPEC Decline Rates Continued to Climb in Spite of Higher Prices
Decline Rates for Non-OPEC Supply Online in 2000
0%1%2%3%4%5%6%7%8%9%
10%
2000 2001 2002 2003 2004 2005 2006 2007 2008
Excluding FSU
Including FSU
Source: PFC Energy
Investing in Oil and Gas| PFC Energy| Page 7
The Deepwater Contribution … Can it Continue?
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000(mb/d) Deepwater Oil Production by Project Start Year
200820072006200520042003200220012000199919981997199619951994199219911987
12% average annual decline rate
Source: PFC Energy
Investing in Oil and Gas| PFC Energy| Page 8
The Global Liquids Supply Crunch Still Exists
0
20
40
60
80
100
120
1995 2000 2005 2010 2015 2020 2025 2030
(mmb/d)
Non-OPEC Crude, NGL, & Condensate * OPEC Crude, NGL, & CondensateNon-OPEC Oil Sands Biofuels & Other Liquids0.5% Demand Growth 1.5% Demand Growth1.0% Demand Growth
Non-OPEC Liquids
OPEC Liquids
Tar Sands Biofuels
0.5%
1.0%
1.5%Demand
Source: PFC Energy
PFC Energy consultants are present in the following locations:
Bahrain
Beijing
Buenos Aires
Calgary
Houston
Kuala Lumpur
Lausanne
London
Mumbai
New York
Paris
San Francisco
Washington, D.C.
Strategic Advisors in Global Energy
Main regional offices:
Asia
PFC Energy, Kuala LumpurLevel 27, UBN Tower #2110 Jalan P. Ramlee50250 Kuala Lumpur, MalaysiaTel (60 3) 2172-3400Fax (60 3) 2072-3599
Europe
PFC Energy, France19 rue du Général Foy75008 Paris, France Tel (33 1) 4770-2900Fax (33 1) 4770-5905
__
PFC Energy International,Lausanne19, Boulevard de la Forêt1009 Pully, Switzerland Tel (41 21) 721-1440 Fax: (41 21) 721-1444
Middle East
PFC Energy, Bahrain Flat 72, Building 2334, Road 2830, Al Seef 428, King Mohammed VI AvenueP.O. Box 11118Manama, Kingdom of BahrainTel (973) 1758-0775 Fax (973) 17 58-1776
North America
PFC Energy, Washington D.C.1300 Connecticut Avenue, N.W. Suite 800Washington, D.C. 20036, USATel (1 202) 872-1199 Fax (1 202) 872-1219
__
PFC Energy, Houston4545 Post Oak Place, Suite 312 Houston, Texas 77027-3110, USA Tel (1 713) 622-4447 Fax (1 713) 622-4448
www.pfcenergy.com | [email protected] regional offices are shown in blue.
PFC Energy consultants are present in the following locations:
Bahrain
Beijing
Buenos Aires
Calgary
Houston
Kuala Lumpur
Lausanne
London
Mumbai
New York
Paris
San Francisco
Washington, D.C.
Strategic Advisors in Global Energy
Main regional offices:
Asia
PFC Energy, Kuala LumpurLevel 27, UBN Tower #2110 Jalan P. Ramlee50250 Kuala Lumpur, MalaysiaTel (60 3) 2172-3400Fax (60 3) 2072-3599
Europe
PFC Energy, France19 rue du Général Foy75008 Paris, France Tel (33 1) 4770-2900Fax (33 1) 4770-5905
__
PFC Energy International,Lausanne19, Boulevard de la Forêt1009 Pully, Switzerland Tel (41 21) 721-1440 Fax: (41 21) 721-1444
Middle East
PFC Energy, Bahrain Flat 72, Building 2334, Road 2830, Al Seef 428, King Mohammed VI AvenueP.O. Box 11118Manama, Kingdom of BahrainTel (973) 1758-0775 Fax (973) 17 58-1776
North America
PFC Energy, Washington D.C.1300 Connecticut Avenue, N.W. Suite 800Washington, D.C. 20036, USATel (1 202) 872-1199 Fax (1 202) 872-1219
__
PFC Energy, Houston4545 Post Oak Place, Suite 312 Houston, Texas 77027-3110, USA Tel (1 713) 622-4447 Fax (1 713) 622-4448
www.pfcenergy.com | [email protected] regional offices are shown in blue.
