Institut Français des Relations Internationales Energy Roundtable

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1 Institut Français des Relations Internationales Energy Roundtable Brussels March 21 st, 2013 New Energy Resources in East Africa Pushing back the continent s last hydrocarbon frontier Roger CARVALHO CEO - SPTEC Advisory

2 Introduction to SPTEC Advisory SPTEC Advisory was founded in 1994 as an independent advisory firm focusing on Oil & Gas in Africa and the Middle East, based in Paris. The firm specialises in strategic and commercial advisory, mergers - acquisitions and divestitures advisory, as well as financial structuring and fund raising advisory. Our client base includes corporations, financial institutions, governments and individuals related to our focus industry. The management has an extensive network of relationships with access to industry leaders and decision makers globally. In February 2013, SPTEC Advisory and Upstream Advisors, a niche consultancy firm, have entered into a strategic alliance agreement to leverage their complementary expertise. 2

3 Contacts For further information, please contact: Mustapha K. FAID President Cell: mkf@sptec-advisory.com Roger M. CARVALHO Chief Executive Officer Cell: rmc@sptec-advisory.com 72, rue du Faubourg Saint-Honoré Paris 3

4 Gas has taken a large proportion in World s Energy mix World Energy Consumption (Million tonnes oil equivalent) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% % 0.4% 30.3% (1 499) 18.2% (898) 45.7% (2 260) % 5.6% % % 9.8% 0.1% 17.9% 4.8% 8.7% % (3 724) 23.5% +0.4 (2 906) 23.9% (4 106) 32.8% (4 059) % 24.5% (4 218) 27.1% (4 656) 25.5% (882) 19.4% (673) 49.0% (1 697) % (1 099) 24.7% (1 386) 15.2% (225) % (1 520) 37.3% (2 092) 8.1% 1.6% 41.7% (617) % (2 626) 38.1% (563) 29.0% (1 967) 0% Total World OECD Non-OECD Liquids Natural Gas Coal Nuclear Other (Renewables, Hydro ) Source: BP Statistical Review of World Energy June

5 China and Asia will be the most demanding regions World Gas demand (bcm/a)

6 LNG importers: Demand is revised upwards with China and India reaching top ranks LNG import countries in 2011 Top four LNG importers in 2025 bcm bcm Forecast 2012 Forecast Japan South Korea UK Spain India China Taiwan France 0 Japan China India South Korea Source: BP Statistical Review of World Energy June 2012 Source: BG Group interpretation of Wood Mackenzie data (Nov 2009 and Aug 2012 forecasts) 6

7 World LNG supply challenge: 232 bcm/a gap by 2025 = 232 bcm/a 7

8 LNG trades in 2011: 331 bcm representing 1/3 of total gas trade LNG vs Pipeline trade (bcm) LNG Total % Europe Europe 68 % Pipeline Asia Asia 8

9 Top 10 New discoveries in 2012 Gas discoveries: 84.4 TCF Oil discoveries: 5 bnbbl 9

10 Mozambique accounted for 1/3 of the new volumes and Tanzania ranked 2 nd overall 10

Mozambique / Tanzania: Gas discoveries and prospects 1974 1981 2006 2008 2009 Songo Songo-1: drilled by ENI in Tanzania Mnazi Bay-1: drilled by ENI in Tanzania Mkuranga-1: drilled by Maurel et Prom

11 Mozambique / Tanzania: Gas discoveries and prospects Songo Songo-1: drilled by ENI in Tanzania Mnazi Bay-1: drilled by ENI in Tanzania Mkuranga-1: drilled by Maurel et Prom in Tanzania Kiliwani-North-1: drilled by Aminex in Tanzania Mafia-deep-1: drilled by Maurel et Prom in Tanzania 2010 Windjammer-1: drilled by Anadarko in Mozambique Barquentine-1: drilled by Anadarko in Mozambique Lagosta-1: drilled by Anadarko in Mozambique Pweza-1:drilled by BG in Tanzania Chewa-1: drilled by BG in Tanzania 2011 Tubarao-1: drilled by Anadarko in Mozambique Camarao-1: drilled by Anadarko in Mozambique Mamba south-1: drilled by ENI in Mozambique 2012 Zafarani-1: drilled by Statoil in Tanzania Mamba North-1: drilled by ENI in Mozambique Golfinho-1: drilled by Anadarko in Mozambique Chaza-1: drilled by BG in Tanzania Jodari-1:drilled by BG in Tanzania Mzia-1: drilled by BG in Tanzania Atum-1: drilled by Anadarko in Mozambique Ntorya-1: drilled by Aminex in Tanzania Lavani-1: drilled by Statoil in Tanzania Mamba North east-1: drilled by ENI in Mozambique Coral-1: drilled by ENI in Mozambique Papa-1: drilled by BG in Tanzania 2013 Coral-3: drilled by ENI in Mozambique Tagawizi-1: drilled by Statoil in Tanzania Source: Maurel et Prom Legend: Tanzania discoveries Mozambique discoveries 11

Gas discoveries by actor in Mozambique & Tanzania Statoil Block 2 2012 9 TCF 2013 4 6 TCF 14 TCF (estimated) Aminex Mtwara Block 2012 1.5 TCF 1.

12 Gas discoveries by actor in Mozambique & Tanzania Statoil Block TCF TCF 14 TCF (estimated) Aminex Mtwara Block TCF 1.5 TCF (estimated) Anadarko Area / TCF TCF 50 TCF (estimated) BG Block TCF Block TCF 12.5 TCF (estimated) ENI Area TCF TCF TCF 75 TCF (estimated) 12

13 Mozambique ranks #12 in gas reserves globally 127 TCF in 2012, and more still to confirm Gas Proven Reserves (Tcf) Russia Iran Qatar Turkmenistan USA Saudi Arabia UAE Venezuela Nigeria Algeria Australia Mozambique (e) Iraq Indonésie Malaysia Egypt Norway Canada Kazakhstan Kuwait Uzbekistan Libya Tanzania (e) Source: BP Statistical Review of World Energy June 2012, EIA, SPTEC Advisory

14 New supply for Asia by 2025: East Africa & North America (?) Egypt Japan 7,573 n miles Qatar Japan 6,314 n miles Japan 3,683 n miles Australia Source: Dataloy (2013) Existing supply New supply 14

Mozambican fields development will cost $42.7 bn 25 22.3 Total costs by field (billion USD) (as at December 2012) Capital Costs for potential LNG Plants across the Globe (USD/tpa) 20 9.8 15 11.1 10 4.

15 Mozambican fields development will cost $42.7 bn Total costs by field (billion USD) (as at December 2012) Capital Costs for potential LNG Plants across the Globe (USD/tpa) Prosperidade / Mamba Golfinho / Atum Tubarao Coral Others Total Exploration & Development Capital Costs Total O&M Costs Pre-FID Post-FID (In June 2012) Source: ICF International, Credit Suisse 15

75 Spain $15.25 India $15.70 China $19.35 Japan $19.75 Altamira $3.55 Lake Charles $3.01 Cove Point $3.

16 Current prices and forecasts make Mozambique projects profitable World LNG Estimated March 2013 Landed Prices NBP & Other Hubs Brent (85%), NBP (15%) Long Term: JCC Short Term: NBP/Other hubs Henry Hub/ Nymex UK $9.94 Belgium $9.86 Korea $17.75 Spain $15.25 India $15.70 China $19.35 Japan $19.75 Altamira $3.55 Lake Charles $3.01 Cove Point $3.34 Henry Hub since 2010 Rio de Janeiro $16.84 Bahia Blanca $18.09 Source: Waterborne Energy, Inc. Data in $US/MMBtu Updated: February 7,

17 Mozambique will become a major player in LNG market bcm LNG Nominal Capacity y 39 y 87 y 39 y 127 y 130 y 84 y 58 y 10 y 261 y 74 y Qatar Indonesia Mozambique(e) with 6 LNG trains* Malaysia Nigeria Mozambique(e) with 4 LNG trains* Australia Algeria Trinidad & Tobago Mozambique(e) with 2 LNG trains* Russia Years (Reserves/Production) Source: GIIGNL, ICF International, SPTEC Advisory * Mozambican exports does not take into account internal gas consumption 17

18 Challenges for Mozambique Financing Negotiate with Anadarko and ENI to get LNG development Public ownership and funding Public-Private Partnership ENH s financing structure Financing ENH s equity shares Human Resources Training of decision makers Adequate labor force General education Sustainability and environmental protection Roads Ports Rails Airports Telecom Power grid Infrastructure Local Power Market Energy Mix (Gas, Coal, Hydro) Gas Master Plan Development Decisions about downstream mega-project development Local market and SME promotion Institutional Framework Uses of revenues USD or gas taken in-kind allocation Regulatory clarity in the Energy Sector Marketing structure Other Industries Methanol Fertilizers (ammonia, urea) Gas to liquids (GTL) Cement Steel 18

19 A promising future A New Giant in Natural Resources Gas (127 TCF proven and more to come) Coal (25 billion tons, 25% of the world s coking coal by 2025) A New Player in Energy Geopolitics Asia Europe A Land of Opportunities in all sectors European Industry players 19

SPTEC Advisory was established in 1994 as an independent advisory firm focusing on the Oil & Gas industry in Africa and the Middle-East SPTEC Advisory delivers un-biased advice supported by an

20 SPTEC Advisory was established in 1994 as an independent advisory firm focusing on the Oil & Gas industry in Africa and the Middle-East SPTEC Advisory delivers un-biased advice supported by an in-depth knowledge of the sector value chain SPTEC Advisory specialises in strategic and commercial advisory, investments and divestitures advisory, as well as financial structuring and fund raising advisory

East Africa: for LNG in a New Frontier Region

East Africa: for LNG in a New Frontier Region 17 th INTERNATIONAL CONFERENCE & EXHIBITION ON LIQUEFIED NATURAL GAS (LNG 17) 17 th INTERNATIONAL CONFERENCE & EXHIBITION ON LIQUEFIED NATURAL GAS (LNG 17) East Africa: Opportunities