OIL & GAS MARKET OVERVIEW

Transcription

1 OIL & GAS MARKET OVERVIEW MALAYSIAN O&G MARKET Laetitia Boura Senior Trade Advisor Industries, Energy & CleanTech Business France Malaysia August

2 CONTENT 1. GENERAL OVERVIEW 2. UPSTREAM 3. GLOBAL EXPLORATION TREND 4. MID & DOWNSTREAM 5. ECOSYSTEM 6. CONCLUSION

3 GENERAL OVERVIEW KEY FIGURES (2017) 2 nd producer in ASEAN and 26 th rank of world proved reserves of crude oil ( bbl/d ). 16 th rank of world natural gas reserves. 28 billions of BOE (Baril Oil Eq): 70% Gas / 30% Oil 3 rd global LNG exporter (after Qatar) DRIVERS OF GROWTH 14.5% of the GDP (2016) 14.7% to the Government s revenue (2016) Source: OIL & GAS GENERAL OVERVIEW AUGUST

4 UPSTREAM OPERATIONS: More than 400 O&G fields in operation Exploration Opportunity in 2016: 9 focus blocks 101 Productions Sharing Contracts (PSCs) and 6 Risk Sharing Contracts OIL & GAS GENERAL OVERVIEW AUGUST

5 GLOBAL EXPLORATION TRENDS Challenges Fall in oil price budget cost inflated cost environment Monetization difficulties for gas Higher volumes in giant fields, longer lead time Return to positive value creation and reduce discovery cost to 1.3$/boe Declining volumes Total discovered volumes decrease 38Bboe ( ) to 12 Bboe (2017) but size of average discovery constant (77Mboe) Industry response Slashing budgets, headcount, exiting conventional exploration Dramatic fall of investment from 90B$ in 2014 to 35B$ in 2017 (record level) More resilient, smarter portfolio, do more with less capital Shift from exploration to DRO OIL & GAS GENERAL OVERVIEW AUGUST

6 GLOBAL EXPLORATION TRENDS Discovery size Mainly high risk exploration More low risk exploration FOCUS ON NEAR-FIELD AND ONSHORE Return to volumes RESULT OF HIGH GRADING AND PRIORITIZATION IN A RESTRICTED BUDGET ENVIRONMENT DEEPWATER DISCOVERIES MAKE 50% OF DISCOVERIES OIL & GAS GENERAL OVERVIEW AUGUST

7 MID & DOWNSTREAM CURRENT SITUATION: MALAYSIA A INTERNATIONAL TRADING HUB 6 refineries with the total refining capacity of around 900,000 bbl/d. Costs reduce resulted in the relocation of sizable players as McDermott and Subsea 7. PENGERANG INTEGRATED PETROLEUM COMPLEX (PIPC) Pengerang Independent Deepwater Petroleum Terminal (PIDPT) Pengerang Integrated Complex (PIC) Refinery and Petrochemical Integrated Development (RAPID) OIL & GAS GENERAL OVERVIEW AUGUST

8 ECOSYSTEM After the Trans Pacific Partnership Agreement, PETRONAS will retain its regulatory and licensing role. PETRONAS growth and stature has been matched by a maturing local industry with over 4,000 oil & gas businesses including International Oil Companies. OIL & GAS GENERAL OVERVIEW AUGUST

9 ECOSYSTEM PETRONAS & PETROS? PDA 1974 Creation of PETRONAS: Sole ownership and control of all upstream oil and gas resources June Federal Court refuses PETRONAS case (requesting affirmation of PDA1974 having a federal implication, including Sarawak) - Based on MA Sarawak reclaiming their constitutional authority to regulate the mining and production of O&G as well as the distribution of Gas. - Referral to High court 1 July Creation of PETROS Sarawak s own oil & gas company comes into force Regulatory challenge at Sarawak? OIL & GAS GENERAL OVERVIEW AUGUST

10 Sarawak Opportunities Right Ahead Unit: MMscf/d Long Term Sarawak Gas Supply-Demand LNG 2 SK 2P+2C Resource as at Unsanctioned CO2 >40% Unsanctioned CO % Unsanctioned High H2S 15% Unsanctioned High H2S High CO2 19% 11% 7% 19% 13% 10% Producing Sanctioned Unsanctioned Sanctioned Sanctioned CO2 >10% High H2S High CO2 Producing CO2 10% Producing High H2S Producing High CO Open Producing Sanctioned Non LNG Demand 1 Power, Petrochemical, Industries, Reticulation SSGP supply Future Project LNG Plant Requirement Domestic demand expected to grow; State is giving focus to grow the petrochemical industry robustly as early as 2019/2020 Undersupplied in meeting current demand; PETRONAS working hard to mitigate the shortfall in order to meet MLNG plant demand Remains a challenge to develop future field; amid the low oil prices and competition among LNG suppliers, developing the discovered gas fields at competitive cost and maintaining supply reliability is critical Technology is the key; to unlock value from the high contaminant discovered resources Maintaining a consistent investment flow in exploration; to ensure sustainable resources to support the future demand Source: TOTAL Malaysia

11 Sabah Growing the Gas Demand and Unlocking Deepwater Potentials Unit: MMscf/d 2500 Long Term Sabah Gas Supply-Demand SB 2P+2C Resource as at % 40% Shallow Water water depth <200 m 2000 TSGP (Non Power) Additional Sipitang Deep Water water depth >200 m Open Producing Opportunity Non-Power Sector Additional Sipitang *Opportunity refers to discovered resources MLNG & FLNGs Non-Power Sector Power Sector (incl Sandakan Power) GCBD Power Sector LNGs (export) TSGP (Non Power) Development of new pipeline infrastructure opens up a new demand opportunities; The Trans Sabah Gas Pipeline (TSGP) is expected to open up new demand center at the Sabah east coast region by 2020/2021 Challenge to develop future field; especially to unlock the discovered resources at deepwater, stranded and marginal Liberalizing the domestic gas remains a challenge; as the cost of developing the future field increases, much efforts need to be undertaken to relook at the domestic gas price Maintaining a consistent investment flow in exploration; to ensure sustainable resources to support the future demand Source: TOTAL Malaysia

12 CONCLUSION MARKET PERSPECTIVES: Development of oil infrastructures, recycling, and dismantling services Know-how and technology with strong added value for exploration (geology, geophysics, imaging, etc.) Drilling in deep sea, collect and treatment of gas EOR and marginal fields, capture of the CO2, etc. Challenge remains to develop Future Projects; Developing high contaminant gas resources at competitive cost through technology solutions remains critical decision in order to provide competitive gas supply GENERAL RECOMMENDATIONS Capacity of innovation (high technology in drilling, engineering of reservoirs, submarine engineering, design and maintenance, equipment and high-technology applications) Find local partners referenced with Petronas Remain attentive to the evolutions of the conditions of eligibility for Sarawak attractive tax system and global incentive allowance (GIFT, Global Incentive For Trading) managed by the MIDA. Agency which support investment in O&G, Maintaining consistent investment flow in exploration; to ensure sustainable resources to support the future demand OIL & GAS GENERAL OVERVIEW AUGUST 2018

13 BUSINESS FRANCE MALAYSIA French Trade Commission / Kuala Lumpur Office EMBASSY OF FRANCE IN MALAYSIA INDUSTRIES, ENERGY & CLEANTECH Laetitia Boura Senior Trade Advisor laetitia.boura@businessfrance.fr Charles MVOGO Trade Advisor charles.mvogo@businessfrance.fr Shahreza SHAHRIR Trade Advisor shahreza.shahrir@businessfrance.fr BUSINESS FRANCE Toute reproduction, représentation ou diffusion, intégrale ou partielle, par quelque procédé que ce soit, sur quelque support que ce soit, papier ou électronique, effectuée sans l autorisation écrite expresse de Business France, est interdite et constitue un délit de contrefaçon sanctionné par les articles L et L du code de la propriété intellectuelle. CLAUSE DE NON-RESPONSABILITÉ Business France ne peut en aucun cas être tenu pour responsable de l utilisation et de l interprétation de l information contenue dans cette publication dans un but autre que celui qui est le sien, à savoir informer et non délivrer des conseils personnalisés. Les coordonnées (nom des organismes, adresses, téléphones, télécopies et adresses électroniques) indiquées ainsi que les informations et données contenues dans ce document ont été vérifiées avec le plus grand soin. Business France ne saurait en aucun cas être tenu pour responsable d éventuels changements.