Indonesia2012energypoweroutlookbriefing Ss 120426022243 Phpapp01

2012 Indonesia Oil & Gas Sector Outlook

Asia Pacific

Jakarta

25th April 2012

2

Global & Regional Trends —CEO’s Perspective

2 Global exploration and production (E&P) capital

spending to increase to $545 billion in 2012

3 Southeast Asia E&P capital expenditure in 2012

forecast to be $38.7 billion with continued

exploration and development of deepwater fields

4 Two LNG Regas terminals to be commissioned in

Southeast Asia in 2012 with more on the way in

the subsequent years

5 Asia refining capacity additions of 850,000 barrels

per day in 2012 likely to be double of 2011 levels

1

Average oil prices (Brent crude) forecast to be

above $ 90 in 2012

Source: Frost & Sullivan analysis.

3

Supply risks have been the biggest driver for crude oil

price Oil Prices

Oil Price Outlook

• The wide range forecast for Brent crude in

2012 is $90 - $115 per barrel (annual

average)

• Demand for petroleum products and supply

side risks have driven crude oil prices higher

• High crude oil prices have the potential to

stall economic recovery and eventually bring

down oil consumption

96.8

61.5

79.5

111.7 105

Brent Crude, Spot Prices (Annual Average)

$ / B

arr

el

0

20

40

60

80

100

120

140

2007 2008 2009 2010 2011 2012e 2013e

4

Upstream Sector Trends

5

• Some independent E&P

companies in North America

have indicated that they may

spend less in 2012 compared

to 2011

• Increased spending in Middle

East and South America

• Increased spending in Asia

Pacific, specifically in

Southeast Asia

• F&S forecasts the global E&P

capital spending to be $545

billion.

Global E&P capital spending to increase in 2012 to $545

billion

E&P Capital

Spending

Global E&P Capital Spending Outlook

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

$0

$100

$200

$300

$400

$500

$600

2007 2008 2009 2010 2011 (e) 2012 (e)

$ B

n

490 545 442 395 454 400

Gro

wth

Rate

Source: Barclays Capital E&P Spending Survey; Frost & Sullivan estimates for 2012

11.2% 10.9% 11.9%

13.5%

(13.0)%

6

• New areas being explored

• Exploration and development

of deepwater blocks

• Rejuvenation of mature fields

– especially in Indonesia and

Malaysia

• Development of marginal

fields in Malaysia and

Indonesia

• Increased complexity of

projects driving up costs

E&P capital spending in Southeast Asia to be around $

38.7billion

E&P Capital

Spending

Southeast Asia Capital Spending Outlook

Source: Frost & Sullivan estimates based on annual reports of E&P companies and NOCs

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

2007 2008 2009 2010 2011 (e) 2012 (e)

$ B

n

Gro

wth

Rate

19.9 22.6

25.1 29.8

35.0

38.7 13.7%

11.1%

18.6%

17.2%

10.6%

7

Highlights: Southeast Asia Upstream Sector

Growth Potential 2012

0

1

2 3

4

5

4.5

1-2 Years 3-6 Years 7-10 Years

High

Growth

Medium

Growth

Low

Growth

Source: Frost & Sullivan analysis.

Anticipated

Investments

E&P Capital

Expenditure, Southeast

Asia (2012): $38.7

billion

Growth Rate in

2012

10.6%

Attractive Countries

• Malaysia

• Indonesia

Segments to Watch

• Deepwater

• Enhanced Oil

Recovery (EOR)

• Marginal Fields

Stable Increasing Decreasing

8

Highlights: Indonesia and Malaysia Upstream Sector

Stable Increasing Decreasing

Anticipated

Investments

E&P Expenditure,

Indonesia (2012): ~ $21

billion

Growth Rate in

2012

23.5%

Segments to Watch

• Deepwater Projects

Indonesia

Upstream Sector

Anticipated

Investments

E&P Expenditure,

Malaysia (2012): ~ $15

billion

Growth Rate in

2012

16.6%

Segments to Watch

• Deepwater Projects

• Enhanced Oil

Recovery (EOR)

• Marginal Fields

Malaysia

Upstream Sector

9

Investment in Deepwater Prospects to Increase Deepwater

Prospects

Southeast Asia Deepwater Prospects Outlook

Source: Compiled by Frost & Sullivan

Indonesia Waters

West Seno: 1,000 m

Jangkrik: 400 m

Bangka: 1,000 m

Gandang : 1,800m

Gehem : 1,800 m

Gendalo: 1, 800 m

Maha : 1,800 m

Abadi : 1,000 m

Malaysian Waters

Kikeh: 1330 m

Gumusut/Kakap: 1000 m

Siakap North: 1,300 m

Malikai: 565 m

Philippines Waters

Malampaya: 850 m Thailand Waters

Benjarong: 3,220 m

Vietnam Waters

Ca Rong Do: 319 m

Brunei Waters

Block CA-1 Myanmar Waters

Mya: 140 m to 900 m

E& P activity at M9, M11,

AD1,2,3,6,8,9 Deepwater

blocks

Deepwater Definition

• Deepwater - greater than

300 metres depth up to

1500 meters;

• Ultra deepwater - greater

than 1500 meters depth

10

• Deepwater activity in

Southeast Asia is expected

to intensify in the coming

years

• Discovery sizes in shallow

water have been decreasing.

• More prospects for large

discoveries in deepwater

• Discovery costs ($/barrel)

are higher in Southeast Asia

compared to other

deepwater regions

• Demand for offshore support

vessels to increase in 2012

Offshore Drilling in the Asia Pacific to Increase in 2012

from 2011 levels

Offshore

Drilling

Forecasts

Asia Pacific Offshore Drilling Outlook

Source: Frost & Sullivan estimates

Nu

mb

er

of

Wells

Asia Pacific Offshore Wells Drilling Forecast

0

100

200

300

400

500

600

2010 2011 2012

APAC Exploratory Shallow

APAC Development Shallow

APAC Exploratory Deep

APAC Development Deep

11

• Concerns about tightening supply of

high specification rigs led to the

swelling of orders in 2010

• Though there are indications of

oversupply globally, rig demand,

especially for high spec rigs, is

expected to increase in 2012

• High-end Jack-up utilization is over

75% in Southeast Asia

• Rigs operating in Southeast Asia are

currently posting dayrates that

exceed the global average for jackups

• The outlook for high end Jack-ups

and Drillships looks good as dayrates

and utilization rates improve

A record number of rigs that were ordered in 2010 will

enter the fleet beginning mid-2012

Offshore Rigs

Orders

Southeast Asia Offshore Rigs Outlook

Source: Compiled by Frost & Sullivan

42

4

5

1

0 10 20 30 40 50

Jackup

Tender

Semisub

Drillship

Rigs under Construction in the Southeast

Asian Region

End of 2010 End of 2011

(e)

End of 2012

(e)

Global Jack-up

Fleet

356 380 395

Drivers for Rig Construction

To upgrade to High Spec Rigs for

• Enhanced Technical Capabilities

• Higher Operational and Safety

Standards

12

• The rig count expected to rise as drilling activity picks up. The active rig count is a good indicator of

demand for products used in the oil & gas industry

Currently 54 rigs (42 Land and 12 Offshore) are active in

Indonesia

Rig Count

Indonesia

Indonesia Rigs Outlook

Source: Baker Hughes; Compiled by Frost & Sullivan

Oil : 43Rigs

Gas :11

Rigs

0

10

20

30

40

50

60

1/07

4/07

7/07

10/07

1/08

4/08

7/08

10/08

1/09

4/09

7/09

10/09

1/10

4/10

7/10

10/10

1/11

4/11

7/11

10/11

1/12

Land

Offshore

54 rigs (2012)

42

12

13

Indonesia Deepwater Prospects Outlook

Source: Frost & Sullivan

Deepwater exploration and production are critical for Indonesia to increase domestic oil & gas

production Deepwater E&P Projects

Bangka

Development Stage

Depth: 1000m

Onstream: 2014

Operator: Chevron

Gandang

Development Stage

Depth: 1800m

Onstream: 2016

Operator: Chevron

Gehem

Development Stage

Depth: 1800m

Onstream: 2016

Operator: Chevron

Gendalo

Development Stage

Depth: 1800m

Onstream: 2016

Operator: Chevron

Maha

Development Stage

Depth: 1800m

Onstream: 2016

Operator: Chevron

Abadi

Development Stage

Depth: 1000m

FEED Contract during 2012

FID – 2014; Onstream: 2018

Operator: INPEX

Jangkrik

Development Planning Stage

CAPEX: ~ 2.9billionUSD

Depth: 400m

Onstream: 2015

Operator: Eni

Deepwater Exploration Prospects

• Surumana field by ExxonMobil

• Pasangkayu field by Marathon and Talisman

Energy

• Kuma field by ConocoPhillips and Statoil

• Karama field by Statoil Hydro and Pertamina

• Mandar field by ExxonMobil

• Sageri field by Talisman

14

Midstream Sector Trends

15

Australia to add the largest LNG liquefaction capacity

during 2012 to 2016

LNG Imports to the Asia Pacific Region Set to Increase

Further in 2012 LNG Imports

Asia Pacific LNG Re-gasification Sector Outlook

Source: Compiled by Frost & Sullivan

Location : Melaka, Malaysia

Start up : 2012

Capacity : 3.8 MTPA

Location : Map Ta Phut, Thailand

Start up : Phase 1, 2011

Capacity : 5.0 MTPA

Location : Kochi, India

Start up : 2012

Capacity : 5.0 MTPA

Location : Dabhol, India

Start up : 2011

Capacity : 1.2 MMTPA

Location : Jurong Island, Singapore

Start up : 2013

Capacity : 3 MTPA

LNG Exports

LNG Re-gasification Terminals – ongoing projects;

Commission period during Q3, 2011-2013

Location : Zhuhai, China

Start up : Phase 1, 2013

Capacity : 3.5 MTPA

Location : Jieyang, China

Start up : ~ 2012/2013

Capacity : 2.0 MTPA

Project: FSRU Jakarta Bay

Start up: 2012

Capacity: 3 MTPA

16

Indonesia LNG Industry: Challenges

Challenges:

Technical challenges: For eg; Masela FLNG project

High investments needed – Hence, projects require more partners: For eg. Natuna LNG

Financing for large domestic-oriented projects – domestic off-takers need to become creditworthy

Need to increase gas supplies

Increasing domestic demand for natural gas curtails opportunities for export-oriented LNG

projects

Need to develop gas supply and distribution infrastructure

Need to develop inter-country LNG distribution network

Need to adapt quickly to market changes

17

Increase in liquefaction capacity and development of an inter-country

LNG distribution network

Indonesia LNG and Regas Prospects Outlook

LNG and Regas Projects

Project: FSRU Jakarta

Bay

Commissioning: 2012

Capacity: 3 MTPA

Status: Under construction

Project: FSRU East Java

Commissioning: 2014

Capacity: 2-4 MTPA

Status: Planned

Project: FSRU Belawan

Commissioning: 2014

Capacity: 3 MTPA

Status: Planned

Project: Masela LNG Plant

Commissioning: 2018

Capacity: 2-4 MTPA

Status: Planned

Project: Donggi Senoro LNG Plant

Capacity: 2 MTPA (1 train)

Status: Under construction

Project: Tangguh LNG

Plant

Start date: 2014 - 2016

Capacity: 3rd train -

additional

Status: Planned

Project : Natuna LNG Plant

Start date: 2018

Status: Under discussion

Project: Conversion

of Arun LNG plant to

Receiving and Regas

Terminal

Commissioning: 2013

18

Downstream Sector Trends

19

Highlights: Asia Pacific Refining Sector

Growth Potential 2012

0

1

2 3

4

5

3.5

1-2 Years 3-6 Years 7-10 Years

High

Growth

Medium

Growth

Low

Growth

Source: Frost & Sullivan analysis.

Anticipated

Investments

Capital Expenditure,

APAC (2012): ~ $ 15

billion

Attractive Countries

• China

• India

Segments to Watch

• Refinery EPCIC

• MRO

Stable Increasing Decreasing

20

26.5

27.0

27.5

28.0

28.5

29.0

29.5

30.0

2009 2010 2011E 2012E

Asian refining capacity to increase by 850,000 barrels per

day in 2012 compared to 400,000 barrels per day in 2011

Refining

Capacity

Asia Pacific Refining Capacity Outlook

BP Statistical Review, F&S Forecast

28.4

28.8

29.6

27.6

Millio

n B

arr

els

/Day

Asia Pacific Refining Capacity

• A major portion of the capacity addition

investment is by NOCs

• China is expected to add 600,000

barrels per day refining capacity in 2012

• China and India adding refinery capacity

in a bid to become self-sufficient

• India to become the second largest

refiner in Asia overtaking Japan

• With refining capacity projected to

increase by 3.1% and demand in major

export markets projected to stay flat in

2012, margins are expected to be under

pressure

21

Though Indonesia is a very prospective location for new

refineries, investments have not been very forthcoming

Downstream

Outlook

Indonesia Refining Capacity Outlook

Source: Compiled by Frost & Sullivan

Th

ou

san

d B

arr

els

/Day

• Current refinery output leaves 30%

shortage (which is met by imports)

• This makes Indonesia a very prospective

target for building new or expanding

existing refineries

• There is increasing demand for middle

distillates – so new refineries

configuration would have to maximize

middle distillates production

• Declining crude oil production would be

a concern and so new refineries would

have to configured for Arabian or other

imported crudes apart from domestic

crude

0

200

400

600

800

1000

1200

1400

1600

2007 2008 2009 2010 2011 2012 2013 2014 2015

550,000 bpd shortage

assuming no capacity

addition till 2015

22

Indonesia Downstream Sector Outlook

Many of the refinery projects planned have been postponed due to market

developments and also for want of incentives from the government

Source: Frost & Sullivan

Downstream Outlook

Downstream Expansion

• Naphta cracker Refinery,

Kalimantan by Chinese Petroleum

Corp (150,000 to 200,000 bpd)

Status: Speculative

• Naphta Cracker refinery, Banten.

Investment of $8 billion. Status:

Speculative

• Dow Chemical Refinery

Expansion. Investment of $500

million. Status: Speculative

Project: Banten Bojonegoro, Phase 1

Commissioning: 2018

Capacity: 150,000 bpd

Status: planned

Project: Balongan Phase II

Commissioning: 2018

Capacity: 20,000 bpd

Status: planned

Project: Tuban

Commissioning: 2018

Capacity: 200,000 bpd

Status: under development

Project: Upgrading Balikpapan Refinery

Commissioning: 2015

Capacity: 40,000 bpd

Status: planned

23

Indonesia Opportunities Summary

Upstream

Market Opportunity (2012-2018) – Slightly Optimistic Scenario

Oil & Gas projects in Indonesia offer reasonable opportunities for equipment and service providers

over the next 5 to 6 years

$ 23.9

Billion

LNG Regas

Facilities

LNG

Liquefaction

Terminals, Tank Farms,

Pipelines, Gas Storage

$ 1.8

billion

$ 2.7

billion $ 1

billion

Midstream

FLNG

$ 8

billion

Downstream

Refinery

$ 5.1 billion $ 3.8 billion

Petrochemical

Source: Frost & Sullivan

Upstream Development