Africa 2013: New roles for Oilfield Service companies in an emerging market. Gavin Graham EVP Business Development

Transcription

1 Africa 2013: New roles for Oilfield Service companies in an emerging market Gavin Graham EVP Business Development Oil Council: 2013 Africa O&G Assembly Paris, 11 th June 2013

2 Oil and gas industry is not getting any easier

3 Introducing Petrofac Largest UK-listed oil & gas service provider Backlog of US$11.8bn at end of 2012 More than 18,000 employees Over 30 years experience Capabilities span the oil & gas value chain Integrated service offering (IES) IES may deploy capital but does not seek to book reserves 2

4 Petrofac in Africa Active in region since 1999 Algeria Libya Over 1500 employees in the region Mauritania Sudan Offices in Tunisia, Algeria, Nigeria and Sudan Nigeria Engineering projects completed in Algeria, Egypt, Sudan, Mozambique, Uganda, Cote D Ivoire and Gabon Angola Tanzania Mozambique Investments in Tunisia, Algeria, Nigeria and Libya Recent projects Current areas of focus 3

5 mm bpd A changing E&P landscape Creates opportunities for the Oilfield Service Companies (OSCs) IEA Projections of World Oil Production by Company Type NOC Supply trends A Giant fields in decline Percent B Increasing complexity of new supply sources C Average development/ discovery size decreasing NOCs Majors & Independents Share of NOCs Source: World Energy Outlook 2010, OECD/IEA, figure 3.24, page 127; Petrofac analysis 4

6 Production Sharing Contracts NOCs increasingly looking to expand internationally OSC/NOC partnering in Malaysia 22 countries PSC : Operator of Block PM304 (Cendor field): offshore peninsular Malaysia Partners : Petrofac, PETRONAS Carigali, KUFPEC & PetroVietnam Scope : 3-phase fast-track development, operations & maintenance PSC start date: Cendor Phases 1&2 Irama West Desaru East Desaru Cendor Graben Cendor West Desaru (Cendor Phase 3) Cendor kms 5

7 Who s buying and who s selling? Source: IHS NOCs were big net buyers. Global integrated companies were large net sellers due to global divesture programs by majors MLPs and private equity investors sought out-of-favor gas assets, or just wanted to ride the performance of the sector Capital-constrained North American E&Ps needed financially-strong partners to advance development of unconventional holdings 6

8 INOCs in Africa 2 3 Mauritania Algeria Number of INOCs investing in African countries Nigeria Libya Angola Sudan Tanzania Mozambique Source: approximate data based on internet search 7

9 OSC s increasingly play across the opportunity space Source: Bain & Company 8

10 Integrated Energy Services : flexibility is key Funding strategies Petrofac can provide capital alongside our services under flexible commercial models Preferred Contract Structure Production Sharing Contract (PSC) Production Enhancement Contract (PEC) Risk Service Contract (RSC) or BOOT Business concept Field development/ operation Mature field management Build, operate, transfer How we add value Innovative concept selection Fast-track delivery Integrated field management Increased production and recovery Improved operational efficiency Innovative concept selection Fast-track delivery Build and transfer operating capability Example Cendor Magallanes & Santuario Pánuco Arenque Berantai 9

11 Risk vs. reward in different contractual models Source: Bain & Company 10

12 Risk Service Contract Greenfield development under Risk Service Contract RSC can be an alternative to farm-out all exploration upside remains with the operator Formed strategic alliance with Bowleven in November 2012, for the development of the first phase of the offshore Etinde Permit, Cameroon Petrofac will provide services and up to US$500m of investment Scope: developing FDP through to execution of field development Opportunity to provide project management, engineering, procurement and construction services Petrofac will share Bowleven s production revenues, but not own or book reserves 11

13 Reward UKCS: Development of the Duty Holder model Building contracting models to fit customer requirements Offshore Engineering & Operations Laggan Tomore GPIII Ninian Murchison Duty Holder Direct management Direct management Forties Auk North Experienced supervision Experienced supervision Experienced supervision Skilled and competent people Skilled and competent people Skilled and competent people Skilled and competent people Topaz Manpower supply Supervised teams Performance management contracts Responsibility Duty Holder/JVO Grove E&C contract In 2011 Petrofac had contracts on facilities producing 25% UKCS oil and gas production 12

14 Further Evolution of the Duty Holder Model Further evolution of the Duty Holder model Oilfield Service Companies (those willing/able to take subsurface risk) can extend the Duty Holder model into new areas that may meet the needs of NOCs and INOCs All control + reserves, production and revenues remains with the Operator, whilst the OFS takes on increasing responsibility for delivery and, ultimately, full management of the asset Original extent of Duty Holder model A Asset Management team Integrated field operations B Full Project Funding Asset Management team Late-life field management New Opportunity Space GENERAL Offers commercial flexibility to meet client needs MODEL A: New country entry Provides operational support during transition Enables non-operator to acquire assets OSC incentivised to increase production and increase overall value MODEL B: Mature field operator Alternative to farm-out OSC takes over operations Incentivised to invest and extend field life Can evolve into a full PEC Allows operator to redeploy Capex + resources Manages decommissioning 13

15 Production Enhancement Contracts Production Enhancement Contract : PEMEX PECs are used to increase the production from mature fields Petrofac adds value through financial and technical IOR/EOR investment Awarded 4 PECs by PEMEX in Magallanes & Santuario (investment of US$500m) - Pánuco (joint with Schlumberger) - Arenque (first offshore award) Long term investment typically years Earn a tariff per barrel Scope : Reactivation and development of mature blocks through investment Managing on-going operations and maintenance Capability development of national workforce 14

16 Local partners Strategic alliances Advantages of partnerships January 2012 Petrofac signed an alliance agreement with Schlumberger, to work on production enhancement of mature fields Co-managed projects, building on complementary strengths of parties and geographical presences Contract awards : Pánuco PEC, Mexico Petrofac is in partnership with local company SapuraKencana for the Berantai development in Malaysia Local company able to expand their capabilities from the traditional service company world to that of upstream development Played to the national agenda and has been key to the success of the project 15

17 Capability development Investment in training: building national capability Petrofac helps its customers develop capability of local staff and deploy them to design, build, operate and maintain assets Increase resource pool with job ready technicians Up-skill existing resource pool Growing number of capability development contracts: - Singapore operates a live plant training centre (CPTC) - Malaysia designing and building live training plant for PETRONAS - Indonesia providing PERTAMINA graduate engineers with accelerated training at CPTC - Oman joint venture with Takatuf to create a technical training Centre of Excellence for OOC workforce capability development In 2012 we completed 200,000 training days worldwide 16

18 Conclusions 1. NOCs are increasingly looking to expand their operations internationally and Africa is seen as offering some of the most attractive opportunities. 2. These bring new risks for INOCs, particularly in new country entries. 3. Oilfield Service companies are: well represented in these countries, have shown increasing appetite and ability to take on operational, asset management and subsurface risks, have no interest in booking reserves or production, are able to work under flexible and innovative contract structures, and hence are well positioned to partner with the new breed of INOC's and offset the country and resourcing risks that they face. Training of national (and INOC) staff forms a key part of any such partnership. 17

19 One doesn t discover new lands without losing sight of the shore for a very long time Andre Gide Thank you Petrofac Integrated Energy Services