OIL & ENERGY MARKETS: SHIFTING LANDSCAPE, TRADING OPPORTUNITIES
Gunvor Integrated Global Trading 1
A Balanced Trading Portfolio Naphtha Naphtha LPG Biofuel Gasoline LPG Biofuel Gasoline Gasoil Coal Crude Oil (30%) Fuel Oil Crude Oil (60%) NatGas + LNG Fuel Oil Gasoil 2009: 98 MT mn 2012: 130 MT mn 2
Group Strategy GEOGRAPHICAL EXPANSION PRODUCT DIVERSIFICATION INVESTMENTS ALONG THE VALUE CHAIN New Offices New Partnerships Expanded Trading New Desks Acquisitions Greenfield Projects Brownfield Projects 3
Gunvor Investment Strategy Across the Value Chain Signal Peak (United States) 33% LLC Kolmar (Russia) 30% Keaton Energy Holdings Ltd (South Africa) 24% Lagansky Block (Caspian Sea) 30% Upstream Ust Luga Oil Products Terminal (Russia) 100% Ust Luga Crude Oil Pipeline (Russia) 50% Novorossiysk Fuel Oil Terminal (Russia) 50% Midstream Petroterminal de Panama, S.A. (Panama) 16% Independent Belgium Refinery BV (Belgium) 100% Gunvor Raffinerie Deutschland GmbH (Germany) 100% TAL Pipeline (Italy, Austria, Germany) 10% Downstream 4
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 $/bbl $/mmbtu $/bbl A Changing Oil & Energy Price Backdrop 130 Price-inventory relationship weakens after 2004 110 90 70 50 98-03 04-09 10-12 30 10 80000 85000 90000 95000 100000 105000 110000 115000 120000 US refiner crude stocks, kb Crude price & economic expectations Inter-fuel & inter-region price divergence 1800 150 20 1600 1400 1200 1000 130 110 90 70 15 10 5 800 50 0 600 an09 Aug09 Mar10 Sep10 Apr11 Nov11 un12 an13 S&P500 ICE Brent 30 LNG apan cif OECD crude imports US Henry Hub NW Eur steam coal 5
Changing Financial Framework Too Public equity & debt offerings of physical commodity traders, $US billion 6
kb/d kb/d An Evolving U.S. Oil Landscape US crude oil production 7500 7000 6500 6000 5500 5000 4500 4000 3500 US net oil products exporter since mid-2011 5000 4000 3000 2000 1000 0 737577798183858789919395979901030507091113 Graphic: Financial Times Total products imports Total products exports 7
mb/d Other New Upstream Hotspots Too.. Many with High Political or Infrastructure Risk 10 8 The IEA view on Iraqi supply Iraq: physical potential, potential logistic/political barriers 6 4 2 0 Source: IEA 2012 Central scenario High case 8
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 real GDP growth, % mb/d vs. base case Macro Outlook Uncertainty Global Trade and GDP Growth source: WTO 5 4 3 2 1 0-1 -2-3 Economic risks & oil demand 5 4 3 2 1 0-1 -2-3 oil demand impact IMF 09/11 IMF 10/12 low growth IMF 4/13 9
1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 y-o-y growth, kb/d Energy Demand: Relentless Shift to Emerging Markets Oil demand growth now an emerging market story 5000 4000 3000 2000 1000 0-1000 -2000-3000 -4000 OECD growth China growth Other non OECD growth Primary Energy Growth 2011-2030 Source: BP Energy Outlook 2030 10
Oil & Transport Grab the Headlines, but Power Sector Runs on Coal source: IEA World Energy Outlook, 2012 source: ExxonMobil, Energy Outlook 2013 11
Rising Gas Supplies & Inroads to the Transport Sector New LNG Supplies 2011-2017 Source: ExxonMobil Source: IEA MTGMR 2012 12
million tons oil equivalent % per year China Looms Large as Oil & Energy Demand Motor 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 China accounts for 45% of incremental hydrocarbon energy 1981-2011 oil gas coal total 1.00 0.90 0.80 0.70 0.60 0.50 0.40 0.30 0.20 China RoW World Oil intensity, bbl/$000 GDP China oil demand and GDP growth 20.0 15.0 10.0 5.0 0.0-5.0-10.0 oil demand growth GDP growth China World USA 13
01 02 03 04 05 06 07 08 09 10 11 12 13 $/bbl New East of Suez Capacity Puts European Refining Under Pressure 40.00 30.00 Margins unexpectedly strong in 2012......but weaker ex-us in 2013 20.00 10.00 0.00-10.00 IEA 2012 SING Crack Dubai N.WE crack Brent Med Crack Urals USG crack LLS Chicago crack WTI Declining local demand, plus surge in new capacity east of Suez means focus of rationalisation is in Europe North America shielded by cheap feedstock & energy costs Some OECD Asian capacity benefits from proximity to growth markets Distressed capacity being converted to storage, sold to NOCs & trading companies or closed 14
increment, mb/d Rising Refined Products Trade Refining additions vs oil demand growth 2011-2017 3.5 3 2.5 2 1.5 1 0.5 0-0.5-1 -1.5 Primary refining additions Oil demand growth US is already seeing rising crude output, less imports, maturing oil demand, so trade shifts to products exports New refining capacity in the Middle East and other producing areas, emergence of India and China as exporters of key products Global products trade may grow faster than crude in the next decade 15
SULPHUR CAP (%) Bunker Sulphur Specs Will Affect Trade Too 4.5 4 3.5 HFO IMO/Global IMO/ECA 3 2.5 MGO EU CARB 2 1.5 1 0.5 0 MDO LSFO MGO MDO/MGO 01 anuary 2010 01 anuary 2012 01 anuary 2014 01 anuary 2016 01 anuary 2022 01 anuary 2020 01 anuary 2018 01 anuary 2024 16
A Bright Future for the Trading Companies Pump It Move It Refine It Store It Move It Sell It More diversified geographically, across products and along the value chain But trading remains central Assets must enhance, or benefit from, core business May 2013 17
Thank you for your attention May 2013