CIS Oil&Gas
Agoria Carbon
Energy Club
th
Moscow, April 4 , 2011
Johan Vanderplaetse
VP CIS & Turkey
2
BRIC Gross Domestic Product (GDP)
Per Capita
2000-2010 GDP
Per Capita CAGR
China
$12
India
Russia
$3
2010-2020 GDP Per
Capita $ ∆ (000’s)
$15
$15
2010 GDP Per Capita $(000’s)
Brazil
Russia Offers an Established Market and Steady Growth
4
Macroeconomic Indicators Russia
Indicators
GDP, %
Inflation (year‐end), %
Unemployment rates, %
GFI, %
Industrial output
Rouble/$ (year‐end)
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
6.4
8.2
8.5
5.2
(7.8)
4.0
4.8
4.9
5.0
5.2
5.3
13.0
10.0
9.0
14.0
8.8
8.8
8.0
6.5
6.1
5.7
5.2
7.2
7.2
6.1
6.3
7.9
7.6
7.2
6.8
6.2
5.8
5.5
10.6
18.0
20.8
10.9
(15.9)
3.5
8.1
9.1
9.6
6.9
6.0
5.1
6.3
6.8
0.6
(9.3)
8.2
5.7
5.9
6.2
6.6
6.0
28.3
27.2
25.6
24.8
30.3
30.4
28.0
28.8
29.5
29.0
28.7
Recent Economic Developments
Investment Climate
•
But this also shows how dependent Russia remains from
natural resources
Lessons from 2008 crisis has accelerated the efforts by the
government to diversity its economy, with Skolkovo being
a pet-project for President Medvedev
•
•
Russia’s GDP growth at 4%, current account balance and
fiscal deficit perform better then expected
Fight against corruption continues, but stays until today
mostly on paper
•
•
Russia maintains enviable external account dynamics, with
a robust current account surplus, limited foreign debt and
high reserve holdings
Still, Russia ranked world’s 5th top priority recipient
economy for FDI for 2010-2012. The scheduled accession
to the WTO in 2012 will further boost the economy
•
Russia plans also the set-up of a “special sovereign fund”
to attract foreign capital
•
The government embarks on a massive new privatization
plan: 600 state-controlled companies to be sold through
2015
•
After a deep fall during the 2008 downturn, Russia’s
economy recuperated very fast (driven by high oil prices)
•
•
US $1trn public-private investment plan over the long term
will substantially modernise Russia’s transport,
communications, electricity and utilities infrastructure
5
Investments – Power
RUSSIA: ENERGY STRATEGY TILL 2030
IN THE PERIOD 2009-2030 RUSSIA IS PLANNED TO INVEST $1,500B IN POWER PRODUCTION AND SUPPLY
23.8 GW – 11%
Coal
47.2 GW – 21%
62 GW – 14%
26.5 GW
Gas
68.4 GW – 30%
73.6 GW
52%
Hydro-power &renewables
81.8 GW
63%
Nuclear
38.2 GW
62%
TOTAL
85.5 GW – 38%
Power generation in 2008,
Total 224.9 GW
220.1 GW
Capital expenditures in power
production, $B
600
129 GW – 29%
24%
112 GW – 25%
Power generation in 2030,
Total 445 GW
By 2030 power generation
capacity will almost double
49%
400
142 GW – 32%
Capital expenditures in power supply, $B
529$B
352$B
350
500
300
TOTAL (2009-2030): 900$B
400
TOTAL (2009-2030): 600$B
250
300
200
233$B
141$B
150
200
126$B
95$B
100
100
50
0
0
2015
Nuclear
2022
Hydro & renewables
2030
Coal & gas
Electricity grid
2015
Renewables
Centralized heating
2022
Off-grid power system
2030
Energy efficiency
Source: Ministry of Industry and Trade of the Russian Federation
6
Investments – Oil&Gas
RUSSIA: ENERGY STRATEGY TILL 2030
Capital expenditures in oil & gas (2009-2030,$B)
Oil production, mt
540
520
Gas: 590$B / 49%
Oil: 625$B / 51%
500
525
480
By 2030, 1,200$B is planned
to be invested in Oil & Gas
Russia (oil) –
$300bn, 20102020
487.6
495
2008 (actual)
2015
460
Capital expenditures in oil, $B
400
321$B
2030
1000
900
165$B
139$B
800
100
940
700
0
2015
2022
Upstream
2030
Refinery
600
664
Capital expenditures in gas, $B
400
745
837
500
Transportation
2008 (actual)
2015
2022
2030
Oil refinery, mt
299$B
300
200
2022
Gas production, bmc
300
200
535
350
300
155$B
136$B
250
100
200
0
150
2015
Gas production
2022
Transportation
2030
Storage facilities, refinery, etc.
Source: Ministry of Industry and Trade of the Russian Federation
311
237
239
260
100
2008 (actual)
2015
2022
2030
7
Investments – Oil&Gas: Global majors
RU: Sakhalin 2 (with Gazprom, Mitsui,
Mitsubishi)
RU: Gazprom and Shell agree global
cooperation
RU: Has started building a Lube blending plant
RU: Salym field (JV): total project cost is $1B
$24.5
B
$0.1B
$1B
RU: Black sea oil deal with Rosneft
RU: Sakhalin 1 (SODECO, ONGC Videsh,
Rosneft)
$12.8B
KZ: Tengiz field: Consortium is planning to
invest $15.2B from 2016
$15.2B
KZ: Kashagan field: total project cost is $136B.
Consortium.
KZ: Kashagan
JV, Zhemchuzhina
Russiafield
(oil), Arman
–
field$300bn,
, CPC. Till
2009 Shell invested more
2010than $3B2020
-
KZ: CPC (Caspian Pipeline Consortium).
Pipeline expansion
RU: Oil deal with Rosneft (Barents & Black seas)
-
AZ: Chirag field . Consortium: ExxonMobil’s
investment share is n/a
RU: Total buys 12% of Novatek and joins the
Yamal LNG project
RU: Shtokman gas field (Total, Gazprom, Statoil)
$4B
RU: Arctic oil deal with Rosneft (Kara sea)
$15B
RU: Share-swap agreement (BP – 9.5% of
Rosneft shares, Rosneft – 5% of BP’s)
RU: In 2010 acquired a 49% stake in Novatek’s
owned subsidiary, Terneftegas, for $44 m.
Investment plan is n/a
-
KZ: Kashagan field: total project cost is $136B.
Consortium.
-
KZ: Khvalynskoye field: total project cost is
$5B. Total SA and GDF Suez Group will
invest $1B
RU: TNK-BP: within 2011-2013 invests $14B
RU: Sakhalin IV , V (BP-Rosneft)
AZ: To date BP has invested in oil & gas projects
$1B
$1B
AZ: Chirag field . Consortium: BP’s investment
share is n/a
RU: Black sea oil deal with Rosneft
$5.4B
$6B
$1.4-2B
$14B
$5-7.6B
$28B
$6B
$32B
KZ: Total acquired a 50% interest in OTG
-
KZ: Tengiz field: Consortium is planning to
invest $15.2B from 2016
AZ: Shah Deniz field . Stage 2. Consortium:
Total’s investment share is n/a
-
KZ: CPC (Caspian Pipeline Consortium).
Pipeline expansion
$5.4B
$0.2B
AZ: Chirag field . Consortium: Chevron’s
investment share is n/a
$6B
AZ: Absheron block: the cost of the first
exploration work is approx $200M
$15.2B
8
Investments – Oil&Gas: Local majors
Gas reserves (proved, bcf)
Oil reserves (proved, mb)
22,850.0
13,696.0
Gas production (bcm/year)
Oil production (mt/year)
14.5
97.6
Market Capitalization
Russia &
CIS:
Abroad:
Gas reserves (A+B+C1, bcm)
Oil reserves (A+B+C1, mt)
33,578.0
1,785.0
Gas production (bcm/year)
Oil production (mt/year)
550.0
32
Market Capitalization
$59B
$189B
Upstream: RU (Western Siberia, Timan-Pechora, Urals and
Volga), KZ (Tengiz, Karachaganak), AZ (Shakh-Deniz), UZ
(Kandym, South-West Gissar)
Russia &
CIS:
RU (Yamal, North stream, South stream, Shtokman,
Sakhalin II, Eastern Gas Program), UZ (Dzhel gas field)
Russia (oil) –
Upstream: Egypt (Meleiha, WEEM), Iraq (WestQurna2)
$300bn, 20102020(proved, bcm)
Gas reserves
816.0
Abroad:
Vietnam, India, Venezuela, Libya (Elephant oil field) , Algeria,
Kyrgyzstan, Tajikistan, Iraq (Badra oil field),
Oil reserves (proved, mt)
Gas reserves (proved, bcm)
Oil reserves (proved, mt)
2,483.0
Gas production (bcm/year)
Oil production (mt/year)
12.7
109.0
Gas production (bcm/year)
Oil production (mt/year)
Market Capitalization
$96B
Market Capitalization
Russia &
CIS:
Upstream: RU (Timan-Pechora, Kharampurskoe gas field,
Western Siberia, Vankor, Eastern Siberia, Sakhalin 1,3,4,5,
Southern Siberia, Artic field, Black sea), KZ (Aday and
Kurmangazy blocks)
Russia &
CIS:
RU (Yamal-Nenets Autonomous region)
Abroad:
Upstream: Algeria (245-South Block)
Abroad:
-
Oil reserves (proved, mb)
Oil production (mt/year)
Market Capitalization
13,069.0
72.0
Western Siberia, Eastern Siberia, Volga-Ural region
Abroad:
Veneuela (PetroMonagas, PetroPerija, Boqueron), Vietnam
(offshore gas assets: Block 08-01, NamConSon gas pipeline,
Phu My 3 power plant)
37.8
3.6
$39B
Oil reserves (proved, mt)
760.0
Oil production (mt/year)
22.0
Market Capitalization (Razvedka Dobycha
KazMunayGaz AO)
$44B
Russia &
CIS:
1,144.0
73.0
Russia &
CIS:
44 oil and gas fields in Kazakhstan (Kashagan, Tengiz,
Kumkol, Kurmangazy, Khvalynskoe)
Abroad:
Romania (oil refinery), Iraq (Akkas gas field)
$10B
9
Customer Segmentation
“EASY”
●
FOREIGN CONTROLLED / MANAGED:
P
●
Decision Making Process: Western
INTERMEDIATE:
Centralized:
P
Decision Making Process
Decentralized:
●
LOCAL:
P
Decision Making Process: Russian Specifics
“DIFFICULT”
10
Drivers & Dimensions Relevant For All Segments
DRIVERS
●
Price
●
Quality of offering
●
–
product quality
–
address “pain”
“RANDOM 3”: you win
Financing
–
“RANDOM 2” : you could win
ducroire
●
Implementation
●
Relations
–
proper
–
improper
“RANDOM 1” : you loose
TYPE OF COMPETITION
- local competition
DIMENSIONS
- Western competition
●
Bottom-up : smaller deals
- Chinese competition
●
Bottom-up & Top-down: large deals
Get your political story right
11
Business Model & go-to market
● DIRECT MODEL
●
customer intimacy
●
master complexities
(customs , supply chain, etc.)
●
maintain margin
●
high direct costs
For large customers, large deals or “western” companies
● INDIRECT MODEL
●
low entry cost
●
lower customer intimacy
●
“outsource complexity”
●
Impact on margin
●
do you bet on right horse?
For smaller customer, smaller deals or “local” customers
Multinationals tend to go direct, SME’s more indirect
12
CIS distributors/integrators
Name
Globalstroy-Engineering, JSC,
Moscow
Region
CIS
Stroytransgaz, Moscow
Type
EPC
Industry
Oil&Gas
Accounts
Services
Lukoil, Rosneft, Salavatnefteorgsintez, Shurtansky EPC Oil and Gas + Civil
petrochemical complex (Uzbekistan)
and Structural projects
CIS, Near East, EPC
N. Africa,
Europe, S E Asia,
Central Asia
Oil&Gas, electric power
BOTAŞ, ConocoPhillips, DEPA, Dolphin Energy,
EPC O&G, industrial
GAIL, Gazprom, LUKOIL, Mosenergo, NIAEP,
building
Reliance Ind. Ltd, Rosneft, RUSAL, Saudi Aramco,
Sintez, SONATRACH, Syrian Gas Company, TNKBP, Transneft
GIPROGAZOOCHISTKA,
Moscow
CIS, E Eu, M East, EPC
S E Asia
Metallurgy, Oil&Gas,
Chemistry, Power
ROSNEFT, Surgutneftegas, Gasprom Neft +
Industrial and HC gas
purification, processes
related
HMS Group (HydroMash),
Moscow
CIS
OEM/EPC
Oil&Gas, power generation,
trunk pipe transport, water
utilities
Various
pump and oil&gas
equipment
OZNA AK, Ufa
CIS
OEM/EPC
Oil&Gas
Various
Industrial
equipment&solutions
RusGazEngineering, Podolsk,
Mosc. Reg.
CIS
EPC
Oil&Gas
Lukoil, Rosneft, Surgutneftegaz, NOVATEK
EPC Field facilities construction; Chemical
facilities design and constr.
Grasis, Moscow
CIS
OEM
All
Shell, Eni, Enel, ConocoPhillips, ExxonMobil,
Gazprom, Rosneft, TNK-BP, Lukoil, NOVATEK,
Surgutneftegaz, RITEC, Tatneft, Slavneft+
Gas production and
separation
KRUG, Moscow
CIS, Poland
OEM/SI
Various
METROLOGY AND
AUTOMATION, Samara
Russia, Volga
SI (System
Integrator)
O&G, Heat-electric power,
Municipal & civil constr. Ind.
Oil&Gas
ROSNEFT, Lukoil +
Industrial automation
systems and solutions
Automation
ARGOSY CJSC, Moscow
NPP "GKS", Kazan
Russia, Central
Russia, Volga,
Ural
D/SI
SI
Oil&Gas
Oil&Gas
Various
ROSNEFT, Gasprom, Gasprom Neft +
Automation
Automation
IDELE INTERNATIONAL GMBH,
St. Petersburg
Russia,
Northwest
D (Distrib.)
Oil&Gas
Various
Automation
Inkomsistem, Kazan
Russia
SI
Oil&Gas
Various
Automation, Custody
transf. skids
Nefteavtomatika, Ufa
Russia
SI
Oil&Gas
Various
Automation, Custody
transf. skids
13