The economy – what next? An oil & gas industry perspective Leo Koot, managing director, TAQA Bratani
Jun 25, 2015
The economy – what next? An oil & gas industry perspective
Leo Koot, managing director, TAQA Bratani
Who is TAQA?
• Abu Dhabi National Energy Company • 72.5% Government owned• Listed on ADX • USD 31.6 billion asset base • Strategic focus on
• Oil & Gas - 135 MMBOE/D• Building the largest European gas
storage facility • Power & Water - 6th largest
independent power producer in
the world• Geographically diversified
• Operated (100%)• North Cormorant• South Cormorant• Tern, Hudson & Falcon• Eider & Otter • Pelican• Brent System (16%)
• Non operated (17% - 24%)• Brae• Hudson• Sullom Voe Terminal
TAQA Bratani
Global supply & demand picture
0
20
40
60
80
100
120
2010 2012 2014 2016 2018 2020
Oil
flow
s (m
ln b
bl p
d)
Biofuels, other
NGLs declining at 2% pa
Crude declining at 7% pa
Flat demand
IEA Demand forecast WEO2010 (Nov '10)
Oil demand vs. supply from existing fields
38 mmbbl/d2010 demand level, 88 mln bpd
47 mmbbl/d
Source: Lambert Energy Advisory, November 2011
34 UK North Seas
Oil & Gas delivers 20% of UK’s corporation taxes
• £293 billion in tax revenues over the
last 40 years• In 2010/11, the industry paid £8.8
billion in corporate tax on production• Currently, oil and gas provide 75% of
the UK’s total primary energy• In 2020, 70% of primary energy in the
UK is still expected to come from oil
and gas, even if the 15% target for
renewable energy is met
*Source: http://www.oilandgasuk.co.uk/economics and Oil & Gas UK
Economics Report 2011
UK Government Low Carbon Transition Plan 2020 TargetsFor Power Generation
*Source: The UK Low Carbon Transition Plan, National strategy for climate and energy
Around 75% of our electricity is currently generated from gas and coal today; renewables will expand to around 30% of our generation by 2020*
The importance of the energy sector to Aberdeen City & Shire• Economic growth• Labour market• Population growth• Infrastructure• Renewable energy
UKCS remains an important province
• Just over 40 billion boe already
produced from UKCS*• 14-24 billion boe still to be recovered*
*Source: Oil & Gas UK Economic Report 2011
The business model for the future?
Operating modelPartner of choice
Capable operatorAccess to capital
• Northern North Sea
• Capital intensive
• Long investment horizon
• Material decommissioning liabilities
• Not obviously suited for PE or AIM
• ‘Lean’ business approach not enough
Operating modelPartner of choice
Capable operatorAccess to capital
An ideal operating model
• Key responsibilities in-house
• Operator
• Dutyholder
• Strategic Maintenance
Operating modelPartner of choice
Capable operatorAccess to capital
Building capability
Operating modelPartner of choice
Capable operatorAccess to capital
25,000 to 43,000 boe/d
• Make it Safe• Make it Work• Make it Grow
Mature asset strategy
• Operations• Engineering & Subsea• Development engineering
Be partner of choice
• Operate reliable assets • Extend field life• A good partner providing a
service
Operating modelPartner of choice
Capable operatorAccess to capital
Third party business is important to maximise reserves
Current and future issues
• Global debt crisis & access to capital
• Fiscal stability & field specific allowances
• Marginal new fields
• PRT paying critical infrastructure
• Increasing regulation
• Around 60 new standards/legislation
• Increased lead-time
• Decommissioning – opportunity / threat?
Post tax decommissioning security
Increasing regulation post Macondo
Fiscal stability