Strategy - SBM Offshore

Strategy
Øivind Tangen
Group Strategy Director
September 19, 2014
© SBM Offshore 2014. All rights reserved. www.sbmoffshore.com
Disclaimer
Some of the statements contained in this presentation that are not historical facts are
statements of future expectations and other forward-looking statements based on
management’s current views and assumptions and involve known and unknown risks
and uncertainties that could cause actual results, performance, or events to differ
materially from those in such statements. Such forward-looking statements are subject
to various risks and uncertainties, which may cause actual results and performance of
the Company’s business to differ materially and adversely from the forward-looking
statements.
Should one or more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those described in
this presentation as anticipated, believed, or expected. SBM Offshore NV does not
intend, and does not assume any obligation, to update any industry information or
forward-looking statements set forth in this presentation to reflect subsequent events or
circumstances.
IR - 19/09/2014
2
Agenda
Attractive market & opportunities
Enlarging our footprint
Changing industry conditions
Our response
Ready to Grow
IR - 19/09/2014
3
Oil Market
120
NGLs+
Unconventional
• Shale oil supply growth is a surge,
not an evergreen
World Supply/ Demand Outlook (MMb/d)
100
• Growth of unconventionals(1)
will just match growth in demand,
but not compensate for declining
productionof existing fields
• Supply gap to be filled by conventional
oil fields yet-to-be-developed / discovered
80
60
40
20
Including
(ultra)deepwater
Conventional
• Oil demand to grow due to
motorizing of China and India
0
Refinery
processing gains
Biofuels
Other
unconventionals
Light Tight Oil
(LTO)
Natural gas liquids
Enhanced oil
recovery
Yet-to-be found
Yet-to-bedeveloped
Existing fields
• Middle East, Venezuela and (ultra)deepwater will be the single largest
contributors
• Supply/demand balance will tighten again once shale growth slows down in 3-4
years time
Tighter supply/demand balance foreseen by the end of this decade
IR - 19/09/2014
(1)
Unconventionals includes NGLs, Light Tight Oil, Canadian oil sands, biofuels, and refinery processing gains.
Source: IEA, Shell, JOSCO Energy Finance & Strategy Consultancy.
4
Global Oil Price Vision
Breakeven Price ($/bbl)
Top 400 Breakeven of Non-Producing Oil Assets
110
100
Heavy Oil
Deepwater
90
80
Ultradeepwater
“Shale Oil”
70
60
50
• Oil prices expected to stay flat
until end of the decade
Traditional
Shale oil has led to a considerable
flattening of the cost curve at
around $ 80-85/bbl
40
30
20
Cumulative Peak Production (1,000 bbls/d)
Oil Price Expectation
• Risk skewed to the upside over
time when U.S. shale oil
reaches production plateau and
no new surge of oil is imminent
• Post-2020 increase of oil price
expected due to growing supply
gap
Long-term Oil Price Trend
($/bbl)
1
Supplyconstrained
World
Supplyconstrained Oil Substitution
World
World
Event-driven World
$90-120/bl Brent
• Today’s deepwater FIDs will
see First Oil most likely at times
of higher oil prices
Demand-led World
$15-20/bl Brent
0
1990
IR - 19/09/2014
2000
2010
2020
2030
Source: Bernstein Research ; Goldman Sachs ; JOSCO Energy Finance & Strategy Consultancy
Oil price supports (Ultra) Deepwater
developments
5
Trends in Exploration
Global Discoveries (Number)
600
Volumes Discovered (MMboe)
Volumes by Commerciality
25,000
Volume Discovered (bnboe)
500
120
20,000
400
15,000
300
10,000
200
5,000
100
0
0
2003
2005
Onshore
2007
Shelf
2009
2011
2003
Deepwater
2005
Onshore
2007
2009
Shelf
2011
Deepwater
100
80
60
40
20
0
Onshore
Commercial
Shelf
Technical
Deepwater
Contingent
• Explorers drilled 16,000 wells since 2003, of which 2,350 in deepwater (>400m)
• Deepwater discoveries stable over the years (~50/yr), whereas Onshore and
Shelf are in decline since 2008
• Dramatic increase of deepwater contribution in volume discovered
• Deepwater discoveries have highest ratio of commercial volumes
In any scenario, (ultra)deepwater will grow in importance
IR - 19/09/2014
Source: Wood Mackenzie; Deepwater is > 400m water depth
6
Many Countries with (Ultra)Deepwater
Basins
Our Playing Field
(Ultra)Deepwater Yet-to-Find vs Value
30
Nigeria: Niger
Delta
Value Creation @ Base price (US$Bn)
25
• 48 countries with 58 (ultra)deepwater oil &
gas basins
Brazil: Santos
Ghana: Cote
d'Ivoire
20
– 20 countries with deepwater oil basins,
14 with ultra-deepwater oil basins
Angola: Kwanza
– 16 countries with deepwater gas
basins, 6 with ultra-deepwater gas
basins
Brazil: Campos
Angola: Lower
Congo
US (GoM
Deepwater): East
Gulf Coast
Cote d`Ivoire: Cote
d'Ivoire
15
10
Mozambique:
Rovuma
French Guiana:
Guyana
• Potential offshore field developments
– 1,500-5,000 feet of water depth: 371
US (GoM
Deepwater): West
Gulf Coast
5
– 5,000+ feet of water depth: 202
• Total (ultra)deepwater Yet-to-Find is
estimated at 175 billion boe
0
– 11 recent deepwater discoveries
-5
0
5
10
15
20
Commercial Yet-to-Find Volumes (bnboe)
New discoveries to drive future deepwater developments
IR - 19/09/2014
Source: Wood Mackenzie, Clarkson Research Services.
7
The Industry’s CapEx Outlook
Capital Spending (US$ Bn)
Global E&P CapEx Spending Outlook
$1,200
$1,000
$800
$600
$400
$200
$0
1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015
United States
Canada
Outside North America
Top 400 CapEx – Shale vs. Deepwater
$450
$400
$350
US$Bn
$300
$250
Deep Water
$200
$150
$100
$50
$0
Other Top 400
IR - 19/09/2014
Deepwater
US Shales
Source: Barclays Capital, Clarkson Capital Markets; Goldman Sachs.
• No CapEx contraction in any region,
despite a slight pullback on the part
of the Majors
• The new era of oil forces oil
companies to become more cost
efficient and effective
• This will lead to some CapEx and
OpEx cost-cutting, but mainly costcontrol by:
– Portfolio optimization /
rationalization, divesting non-core /
non-performing assets
– Reengineering pre-FID
developments throughout their
portfolio
On an unrisked basis, Deepwater CapEx
will grow to a 25% in total Top-400 CapEx
8
(Ultra)Deepwater CapEx
Top 400 (Ultra)Deepwater (750m+) CapEx Growth – Unrisked
$120
• No visibility of any slowdown in
deepwater CapEx
$100
US$Bn
North America
$80
Middle East
$60
Latin America
Europe
$40
• Golden Triangle continues to
dominate the Deepwater business for
the foreseeable future
Asia-Pacific
$20
Asia
Africa
2018E
2017E
2016E
2015E
2013
2014E
2012
2011
2010
2009
2008
2007
2006
2005
2004
$0
Top 400 Deepwater CapEx Growth – Risked
• Even taking historic delays into
account or the marginal projects out,
then still Deepwater CapEx
continues its long-term growth trend
$120
US$Bn
$100
$80
$60
$40
Slowdown due
to Macondo
$20
Deepwater (>US$85 breakeven not sancioned)
Deepwater (2014-18 sanctions risked)
Deepwater capex unrisked
IR - 19/09/2014
Source: Goldman Sachs.
2018E
2017E
2016E
2015E
2014E
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
$0
Long-term growth trend intact
9
What’s Changed?
2013 & Beyond
2000-2012
Rapid growth in the Deepwater frontier
Experience from past (complex) projects
Technology & local capabilities stretched to
the limit; poorly developed supply chain
Improved upfront project scoping / more
front-end engineering; avoid re-scoping
Tight offshore marine contracting market
Better supply-chain capacity & management
Playing
catch-up
Overly
optimistic on
time, effort
and budget
Lack of
project
maturation &
development
Downward trend in
cost and timing
overruns
Improved profitability
for client &
contractor
Slow Down to Speed Up!
IR - 19/09/2014
10
SBM Strategic Actions
Client Issues & Trends
IR - 19/09/2014
SBM Response
Increased technical complexity
Technology development &
leverage
Cost pressure
Cost reduction initiatives
Search for new (ultra) deepwater
resources
Entering new areas & breaking
new grounds
Industry capacity & capabilities
Preferred partner & closer
relationships
11
Enlarging the Envelope
TECHNOLOGY
PROJECT EXECUTION
OPERATIONS
FINANCE & LEASE
Current:
Focus on top-end segment
• FPSOs
• Turret Moorings
• Turnkey Sale or Lease & Operate
Way forward:
Enlarging the envelope
• Floating LNG (FLNG)
• Semisubmersible & TLP
production units
SBM Vision: To be the trusted partner of choice in the development
of complete Floating Production Systems
IR - 19/09/2014
12
Top Contractor to Our Clients
SBM’s Value Added Proposition
• We enable our clients to differentiate themselves in
the marketplace
• We strive to offer the greatest return on investment
through pursuit of collaborative opportunities
• We represent significant spend and are crucial to
our client’s business operations
Top
Risk / Value
• We provide highly customized strategic solutions to
our clients
Bottleneck
Critical
Core
Routine
Leverage
Base
Spend
• We operate with our clients across multiple geographies, categories, business units
• There are few alternatives in the marketplace to the products and services we provide
• We invest substantial time and effort in building & strengthening relationships with our
clients to identify and create new opportunities as well as coordinate new technology
development
Product Leadership – Customer Intimacy – Operational Excellence
IR - 19/09/2014
13
Full Value Chain Involvement
FEED
Identify &
Assess
Project
Initiation
Select
Concept
Selection
Field
Development
Plan
Feasibility
Study
Low cost options
FID
Define
Basis for
Design
Operate
Design,
Construct
Project Spec &
Execution Plan
Increase predictability
Execute
Produce,
Maintain
Install,
Commission,
Test
Flawless execution
Reservoir –
FPSO
Optimization
Safe operations
SBM brings value in all phases of the project
• Earlier involvement provides the greatest opportunity for SBM to add value
• Latest knowhow and experience from recent and current projects
– Technology
– Costs & scheduling
– Project management
IR - 19/09/2014
Partnerships in technology
14
Conclusions
Attractive market & opportunities
Enlarging our footprint
Changing industry conditions
Our response
Ready to Grow
IR - 19/09/2014
15
Q&A
© SBM Offshore 2014. All rights reserved. www.sbmoffshore.com
© SBM Offshore 2014. All rights reserved. www.sbmoffshore.com

Download Report