Outlook for Offshore Oil & Gas Exploration and Production Projects and Offshore Energy Vessels
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Outlook for Offshore Oil & Gas Exploration and Production Projects
and Offshore Energy Vessels
Subbu Bettadapura
Associate Director, Energy Practice, Frost & Sullivan
April 2009
Table of Contents
Offshore Exploration & Production Projects Currently Taking Place in the Asia Pacific Region: What is the Outlook for Offshore Energy Vessels Projects?
11
22
33
Overview of Offshore Field Developments in the Asia Pacific Region: Mid to Long Term Prospects for the Region
Potential Offshore Reserves
Outlook for Offshore Energy Vessels
44 Conclusion
Proved Oil & Gas Reserves in the Asia Pacific Region (End 2007)
11 Potential Offshore Reserves
Malaysia: Oil 5.4 tmBGas 2.48 TCM
Indonesia: Oil 4.4 tmBGas 3.0 TCM
China: Oil 15.5 tmBGas 1.88 TCM
Bangladesh : Oil 0.44 tmBGas 0.39 TCM
Australia: Oil 4.2 tmBGas 2.51 TCM
India: Oil 5.5 tmBGas 1.06 TCM
Myanmar: Oil 0.5 tmBGas 0.6 TCM
Brunei: Oil 1.2 tmBGas 0.34 TCM
Thailand: Oil 0.5 tmBGas 0.33 TCM
Vietnam: Oil 3.4 tmBGas 0.22 TCM
TOTAL: Oil 40.8 thousand million barrelsGas 14.46 TCM
PNG: Gas 0.44 TCM
Pakistan: Gas 0.85 TCM
1TCM=35.3TCF
Source: BP
Offshore Potential in the Asia Pacific Region; Offshore Prospects
11 Potential Offshore Reserves
KG Basin6.76 TCF
Offshore Sabah (10 TCF) & Sarawak
(45 TCF) 4.2Bboe proven; 8Bboe
potential
Gulf of Thailand
Arthit 1.9TCF
Bohai Bay 7.35 Bboe
Carnarvon 95.5 TCF
East Kalimantan 47 TCF
Makassar Strait6 TCF
Kikeh 700 mmboe
Masela 10 TCF
Phu Khanh Basin
2.48Bboe
Shwe Gas Field
8 TCF
Browse 30.3 TCF
M9 Field, Gulf of
Martaban 1.76 TCF
Bonaparte29.5 TCF
Gippsland10.65 TCF
• Asia Pacific – a significant deepwater region
• Offshore Reserves Discovery Potential maximum off coasts of Vietnam and Indonesia
• APAC Offshore: More gas than oil
Source: Compiled by Frost & Sullivan
Offshore Projects – Australia
PyreneesFinancing arranged for
Pyrenees. The $1.7 billion development is
due to start up un early 2010. FPSO production
Angel Gas ProjectNorth West Shelf, WA
Water depth80mCapital expenditureA$1.6bn
No of wells: 3 Recoverable reserves1.85Tcf
of gas, 84Mmbbls of condensate
First gas: October 2008
Van GoghExmouth Sub-Basin, WAWater depth340-370m
First oil: 2Q, 2009No of wells: 10
Capital expenditure: About $560m. Estimated reserves in excess of 50Mmbbl
PlutoNorthern Carnarvon Basin, Water depth85m (platform);
1,000-400m (field)First Gas Late 2010No of wells: Initially 5
Capital expenditure: A$12bnRecoverable reserves: 5Tcf
FALLING oil prices are raising interest in Australia's liquefied natural gas sector as oil majors look to boost vital reserves they can no longer secure in areas like Canada's oil sands.
IchthysOperator: IPEXStart-up: 2012
A$8 billion
22 Overview of Offshore Projects in the Asia Pacific Region
Source: Dept of Industry & Resources, Western Australia; Compiled by Frost & Sullivan
Offshore Projects – Australia & New Zealand
MaariTaranaki Basin
First oil announced in March 2009.Number of Wells: 5
Expected Production: 50 MMboeCapital expenditure: $600 million
Kupe ProjectTaranaki Basin, North Island,
New Zealand Water depth35m
First GasMid-2009 No of wells: 6
Capital expenditure about $730m
Gorgon Field Development: The long-delayed A$50 billion Gorgon LNG project, potentially the
nation's biggest development yet, is picking up steam, with operator Chevron labeling it the company's top 2009 priority.
Project start-up: 2014
BrowseOperator: Woodside
Start-up: 2012A$11.2 billion
22 Overview of Offshore Projects in the Asia Pacific Region
Source: Compiled by Frost & Sullivan
Offshore Potential – Vietnam
Phu Khanh Basincovers about 56,000km2.
Water depthin the area: 50-2500m.
Drilled: 2wells Estimated reserves: 2.48 Bboe
Tu Chinh- Vung May Basincovers about approximately 28 000km2
Water depth: 1000-1500m.Drilled: 1well
Estimated reserves: 6.3 Bboe
Producing fields: Bach Ho, Rong, Rang Dong, Ruby, Su tu den (Cuu long), Dai hung, Lan Tay (Nam Con Son), Bunga Kekwa - Cai Nuoc, Bunga Raya và Bunga Seroja (Malay), Su Tu Vang
Appraising and developing fields: Hai Thach, Rong Doi, Su Tu Trang (Cuu Long), Rong Đoi Tay (Nam Con Son), Kim Long, Ca Voi, Ac Quy (Malay)
Su Tu Vang (Golden Lion) started production in November 2008. $
1billion project cost. White Lion and Brown Lion fields scheduled to begin production between 2011
and 2016
Song Hong Basin: covers about 126,000km2
Water depth in the area: 20-800m. Drilled:>50wells (25 wells offshore)
Estimated reserves: 5.76 Bboe
22 Overview of Offshore Projects in the Asia Pacific Region
Source: PETROVIETNAM; Compiled by Frost & Sullivan
Offshore - Malaysia
Deepwater/Ultra Deepwater to contribute major portion of undiscovered resources – 10 billion boe
Undiscovered potential: 65% of oil reserves and 45% of gas reserves in deepwater
Gumusut/KakapRecoverable: 620mboe
Depth: 1,100mOnstream: 2011/2012
Operator: Shell
MalikaiRecoverable: 108mboe
Depth: 480mOnstream: 2011/2012
Operator: Shell
KebabanganRecoverable: 2.2tscf
Depth: >200mOnstream: 2012/2013
Operator: KPOC
JangasRecoverable: 81mmboe
Depth: >1000mOnstream: 2012/2013
Operator: Murphy
Ubah CrestRecoverable: 215mmboe
Depth: >1000mOnstream: 2013/2014
Operator: Shell
PisanganRecoverable: 56mmboe
Depth: >1000mOnstream: 2013/2014
Operator: Shell
KamunsuRecoverable: 2.2tscf
Depth: >1000mOnstream: 2014/2015
Operator: KPOC
22 Overview of Offshore Projects in the Asia Pacific Region
Source: PETRONAS; Compiled by Frost & Sullivan
Offshore Malaysia – Deepwater Areas Doubled
Source: PETRONAS
22 Overview of Offshore Projects in the Asia Pacific Region
Malaysia’s reserves from the deepwater areas has doubled over the past five years
Offshore - Indonesia
Deepwater Potential: Major Gas discoveries in Kutei basin; exploration in the Tarakan and Papalang basin
Thrust from Government for faster development of gas projects for meeting domestic and export gas demand
East KalimantanMasela Block
10 TCF Reserves at depth of 4000 m
Inpex to invest $14.5billionProposal for floating LNG plant with production start-
up in 2016
Makassar StraitGehem, Gendalo, Gandang, Maha and Bangka fields
Chevron committed to developing East Kalimantan deepwater fields, Gehem and Gendalo.
To invest $ 6 billion. BP MIGAS: No proposal as of now to review this project
22 Overview of Offshore Projects in the Asia Pacific Region
Source: Planning Dept, Govt of Indonesia; Petroleum Geo-Services ; Compiled by Frost & Sullivan
Offshore – Thailand
Chevron Corp. and its partners will construct the Platong Gas II natural gas project in the Gulf of ThailandTotal development cost of the field is $3.1 billion with startup scheduled for 1Q 2011
The Platong Gas II development, located in shallow water, 120 mi (200 km) offshore, is designed to add 420 MMcf/d of natural gas processing capacity
Salamander Energy Bualuang Oil ProjectGulf of Thailand, ThailandOperator: Salamander Energy Gulf of Thailand,Water Depth About 60mReserves: 20MMboeFirst Oil was in August 2008
Bongkot North field in the Gulf of Thailand is entering another development phase. Production planned in 2010
Coastal Energy has approval for development of the Songkhla field in the Gulf of Thailand.
The approval also covers several surrounding satellite features. The extended production area is significant in that it enables the company to fully exploit the prospects surrounding the primary Songkhla development
22 Overview of Offshore Projects in the Asia Pacific Region
Source: News reports; PTT PLC; Compiled by Frost & Sullivan
Arthit (Blocks B15A & B16A)
Offshore – Cambodia and Myanmar
Cambodia Potential Reserves: 2 Bboe
Chevron to delay development of Cambodia field due to weak oil prices.
Chevron will delay the development of Block A offshore southwest Cambodia due to weak oil prices, according to the country’s Secretary General of Economy and Finance.
Chevron has completed exploration work on the acreage and could kick off first production in 2012 if it started development work now. Production will most likely start in 2014 or 2015 if Chevron decided to wait until the global economy recovers fully.
Shwe Gas FieldMyanmarReserves: 8 TCFGas Supply to China through pipelineThe project is expected to start supplying gas in 2013
22 Overview of Offshore Projects in the Asia Pacific Region
Source: News reports; Compiled by Frost & Sullivan
Pearl River basin Husky Energy
Liwan 3-1-1, Block 29/26
Panyu Gas FieldStarted
production March 2009
Liwan 3-1-1Pearl River Mouth Basin
Water Depth Average 1,300mFirst Gas Planned for 2012/13Reserves estimated at 4-6Tcf
OperatorHusky EnergyPartnerChina National Offshore Oil
Corporation (up to 51 per cent working interest)ContractorsChina Oilfield Services (3D seismic
survey), Seadrill Offshore AS (semi-submersible drill rig)
Offshore – China
Production begun in Jan 2009 from Platform B, part of Peng Lai (PL) 19-3 blocks' Phase 2 project in China's Bohai Bay.
Platforms D and E are expected to come online later in 2009
ConocoPhillips is the operator of PL 19-3, which is currently China's largest offshore oil field. CNOOC holds a 51 percent
interest in the PL 19-3 block
22 Overview of Offshore Projects in the Asia Pacific Region
Source: Compiled by Frost & Sullivan
Offshore - India
70% of offshore acreage is in deepwater
Dhirubhai 1 FPSO commissioned Aug 2008.
Dhirubhai 2 & 3 to follow in 2010 and 2011 respectively
NELP VIII bidding postponed to mid-April. Limited number of
blocks may be on offer due to perceived lack of response from
the market
MA-D6
Bay of BengalArea8,100km²
BlockKG-DWN-98/l (KG-D6)Basin Krishna-Godavari basin
Water Depth700m (2,297ft) to 1,700m (5,577ft)Total reserves about 14,000bcf of gas and about
140m barrels of oilTotal investment About $10bn
Production of crude oil started in September 2008 from the block’s MA field, while production of gas
from the Dhirubhai-1 and Dhirubhai-3 fields is scheduled to start by mid 2009.
Reliance is carrying out conceptual studies for the development of another eight natural gas
discoveries near the D1 and D3 gas fields. The satellite discoveries are likely to be tied to the
production facilities for D1 and D3
22 Overview of Offshore Projects in the Asia Pacific Region
Source: Compiled by Frost & Sullivan
Heera (B-38 & B-37-B)
Tapti South
Offshore Drilling and Completion Capex (US $M) by Country 2009 -2012
33 Overview of Offshore Projects in the Asia Pacific Region
Source: Industry sources; Compiled by Frost & Sullivan
Country 2009 2010 2011 2012 2009-2012
Australia 240 400 300 375 1315
China 40 40 0 70 150
India 180 230 140 270 820
Indonesia 135 135 230 235 735
Malaysia 250 120 320 230 920
Philippines 30 60 70 75 235
Total 875 985 1060 1255 4175
Australia, India, Indonesia and Malaysia – large Investments in Drilling and Completion
0
200
400
600
800
1000
1200
1400
2009 2010 2011 2012
$ M
illi
on
Philippines
Malaysia
Indonesia
India
China
Australia
Energy Vessels – Market Cautious
• Oil companies throughout the world have been re-evaluating energy developments given a collapse in oil prices, which has made some projects uneconomic.
• Integrated Oil & Gas Companies are showing an increasing reliance on very large projects to replace the more diverse existing production base
• Demand still strong for E&P rigs and support vessels but market is getting to be cautious
• Reluctance to commit to additional new-builds. Market has seen a few cancellations
• Southeast Asia 2009 Scene:
• National Oil Companies have strategic interests that differ from listed companies
• Deficit of semi-submersibles
• Surplus of Jack-ups
Continued financial turmoil, prevailing low oil prices and economic recessions are impacting activity levels
The crisis is more widespread than the financial crisis that hit the oil price in 1998
Even if companies take a bullish outlook on a recovery in oil demand growth, falling revenues and a lack of credit will restrict their ability to invest in new projects
33 Outlook for Offshore Energy Vessels
Source: Frost & Sullivan
FPSO Distribution in Asia Pacific
Source: Mustang Engineering
DHIRUBHAI 1 – Aug 2008
INDIA (2)AKER SMART 1 (fTT Polar Alaska) – Jun 2008
33 Outlook for Offshore Energy Vessels
FPSO – Field Operator Owned Vessels (Global)
Source: Mustang Engineering
33 Outlook for Offshore Energy Vessels
FPSO – Contractor Owned Vessels (Global)
Source: Mustang Engineering
33 Outlook for Offshore Energy Vessels
FPSO Deliveries – Global
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Global FPSO Deliveries 10 8 8 12 16 13 8 8 9 10
0
2
4
6
8
10
12
14
16
18
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Nu
mb
er o
f F
PS
O D
eliv
erie
sOthers
Japan
South Korea
China
Malaysia
Singapore
Source: Frost & Sullivan
33 Outlook for Offshore Energy Vessels
Prospective FPSO Projects
Gendalo- Gandang
FPSOIndonesia
Crux Field Liquids Project FPSO
AustraliaFirst liquids by mid-
2011
Dhirubhai 2 & 3 FPSOs(India)
Shipyard: Jurong, Singapore
Chevron TexacoBlock A FPSO
(Cambodia)
Carigali Hess Early Gas Production Unit
(Malaysia)
Vietsovpetro FSO-6(Vietnam)
Premier Blackbird & Dua FPSO(Vietnam)
KEI Kangean FPSO(Indonesia)
INPEX IchthysFPSO/FSO(Australia)
33 Outlook for Offshore Energy Vessels
Source: MODEC; Compiled by Frost & Sullivan
LNG FPSOs
33 Outlook for Offshore Energy Vessels
Demand for LNG Increasing Globally
Number of large-scale gas fields have been decreasing
Exploration has turned to small and medium sized fields
So far, it has been generally unprofitable to develop smaller gas fields using traditional methods
LNG new-build contracts decreasing
Around 2,400-plus small- and medium-sized gas fields with the estimated reserves of around 100 million tons
Source: Frost & Sullivan
LNG FPSOs
33 Outlook for Offshore Energy Vessels
The LNG-FPSO is expected to improve profit margins for developing smaller fields
Ship owners and ship builders more interested in LNG-FPSOs
LNG-FPSO to become shipbuilding industry’s main product and a new growth engine
Order forecast for LNG FPSO expected to surge. Up to 30 LNG-FPSOs could be ordered in 2009 – 2010
South Korean shipbuilders Hyundai, Samsung and Daewoo most likely to land these lucrative contracts
Only Samsung has so far received orders for the units.
In 2008, Samsung received orders for 4 LNG FPSOs from UK’s Flex LNG
This year it received an order for one LNG FPSO ($680m) from an European
Shipping Company Source: Frost & Sullivan
Jack-up Drilling Rigs
39
45
2008 2009
Average Number of Contracted Jack-ups
Lower demand in 2009: 12 Jack-ups surplus in the SEA Jack-up market; Up from 6 during 2008
Southeast Asia
Global New Building Forecast
0
5
10
15
20
25
30
35
40
Jack-Ups 36 25 1 0
2009 2010 2011 2012
Existing Fleet (Upto End 2008)
445
33 Outlook for Offshore Energy Vessels
Near Term Jack-up market remains uncertain
Source: Compiled by Frost & Sullivan
Semi-submersibles
SEA to experience more demand than supply for Semi-submersibles
Average deficit of 4 to 5 Semi-submersibles in the SEA region throughout 2009
Southeast Asia
Depth > 4000 Ft
Number of Deepwater Semis: 82
Global New Building Forecast
0
5
10
15
20
25
Semi-Submersibles 25 10 9 6
2009 2010 2011 2012
33 Outlook for Offshore Energy Vessels
Existing Fleet (Upto End 2008)
178
Source: Compiled by Frost & Sullivan
Drill Ships
Major Driver: New gas discoveries in the region have necessitated deployment of deepwater drilling equipment
Southeast Asia
Depth > 4000 Ft
Number of Deepwater Drillships: 37
0
2
4
6
8
10
12
14
Drill Ships 8 14 14 7
2009 2010 2011 2012
Existing Fleet (Upto End 2008)
43
33 Outlook for Offshore Energy Vessels
Global New Building Forecast
Source: Compiled by Frost & Sullivan
Offshore Support Vessels
Global Fleet
0
500
1,000
1,500
2,000
2003 501 1,499 508 926 438 239
2004 518 1,556 516 955 451 240
2005 551 1,616 525 1,020 450 240
2006 582 1,673 534 1,101 468 243
2007 615 1,753 549 1,199 489 246
2008 656 1,897 559 1,340 551 251
Crew / Supply Vessel
PSV OSV AHTSSupport/safety
Pipe Lay
33 Outlook for Offshore Energy Vessels
Source: Compiled by Frost & Sullivan
PSV – Platform Supply Vessel
OSV – Offshore Tug/Supply Ship
Offshore Support Vessels
Global Shipyard Deliveries
0
50
100
150
200
2009 25 61 7 157 37 3
2010 39 79 8 97 40 8
2011 33 75 6 55 33 7
2012 46 81 7 41 24 5
Crew / Supply Vessel
PSV OSV AHTSSupport/safety
Pipe Lay
33 Outlook for Offshore Energy Vessels
Source: Compiled by Frost & Sullivan
PSV – Platform Supply Vessel
OSV – Offshore Tug/Supply Ship
Offshore Support Vessels
China Shipyard Deliveries: As a Percentage of Global Shipyard Deliveries (2009 – 2012)
Platform Supply VesselChina12%
Others88%
Offshore Tug/Supply Ship
China50%
Others50%
AHTSChina16%
Others84%
Support/SafetyChina4%
Others96%
Pipe Lay
China48%
Others52%
33 Outlook for Offshore Energy Vessels
Source: Compiled by Frost & Sullivan
Crew Supply Vessel
China3%
Others97%
44 Conclusion
• Growing regional awareness of the strategic importance of offshore resources
• Australia, Indonesia, Malaysia and India have substantial development projects for the period 2010 – 2014
• More deep water projects
• National Oil Companies have strategic interests that differ from listed companies
• Impact of Financial crisis on offshore vessels market: •Reluctance to commit to additional new-builds. Market has seen a few cancellations
• Deficit of semi-submersibles and surplus of Jack-ups in 2009• Near Term Jack-up market remains uncertain
• LNG FPSO to become shipbuilding industry’s main product and a new growth engine• Around 2,400-plus small- and medium-sized gas fields
• Leading Shipyards: FPSOs - Singapore; OSVs - China; LNG FPSOs – South Korea
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