A View Towards 2020: The New Energy Landscape
Bob Fryklund , Chief Upstream Strategist , IHS
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The North American Renaissance
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First Wave-- The Shale Gale !
September 2012
64.7 Bcf per day
Henry Hub monthly
average cash price
NGL- and oil-rich
plays begin to drive
third wave
Avg $7.45
Jan 04 to Dec 08
July 2008
56.1 Bcf per day
Haynesville, Marcellus
shale plays drive second wave
Shale Gale starts with
Avg $3.75
Barnett, Fayetteville,
Jan 09 to Sept. 12
and Woodford shale plays
Hurricane Ike
Hurricanes Katrina, Rita
Source: IHS CERA, Intelligence Press, andFryklundANIMPMay2013
EIA.
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Inn of America
No Room
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Global LNG supply is diversifying geographically
Australia
Qatar
Indonesia
Algeria
Malaysia
Nigeria
Trinidad
Egypt
Oman
Russia
USA
Brunei
Yemen
Papua New Guinea
Abu Dhabi
Angola
Peru
Norway
Equatorial Guinea
Libya
Canada
Mozambique
Iran
Iraq
Cameroon
Brazil
Israel
Venezuela
Tanzania
TOTAL Inventory: 845 mt
Existing, 279 mt
Committed, 95 mt
Proposed, 472 mt
N.B. An "inventory" of projects,
not an outlook.
Proposed projects have varying
degrees of likelihood.
0
Source: IHS CERA.
Note: mt = million metric tons.
20
40
60
80
100
Million Tons per Year
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120
140
160
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Second Wave - U.S. Liquids Revival
mmboe/d
U.S. Oil and NGL Production: 1960 – 2020*
•
Reversing a trend that spanned the
previous four decades, U.S. liquids
production is expected to regain and
overtake its 1970 peak by 2020.
•
Driven solely by the growth in tight oil and
wet gas plays, total liquids production is
expected to reach >11.5 mmboe/d by the
end of this decade.
•
By 2020, tight oil production is on track to
reach 4.2 mmboe/d accounting for 36% of
total US liquids production (up from 21% in
2012).
14
12
10
8
6
4
2
0
1960
1970
1980
1990
2000
2010
Conventional Oil
NGLs
Tight Oil
2020
*Forecast numbers are production capacity
**Assumes recent high oil prices above $80/bbl are maintained throughout the forecast period
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U.S. & Canada Emerge On the World Stage
mmb/d
3.5
Top 10 Growth and Decline Countries for 2012-2020 Net Liquids Production Change
3
2.5
2
C
1.5
1
C
0.5
0
-0.5
-1
-1.5
Other countries predominantly unconventional (Canada oil sands), deepwater (Brazil,
Angola, Other Africa) or onshore OPEC categories (Iraq, Libya).
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North American oil production create higher OPEC
spare capacity
Year on Year Change in Total Crude Oil Production
(Thousand Barrels per Day)
Weak “call on OPEC” expected to result
in higher OPEC spare capacity and
reduce OPEC pricing power
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A New Map for Global trade flows of crude and refined product
We anticipate significant
growth in global trade
Trade Volumes
Thousand Barrels per Day
Gasoline Flows
Diesel Flows
OTPP CONFIDENTIAL
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North American LPG Exports Ramp Up
U.S. Imports and Exports of LPG,
Thousand Tonnes per Day
mmb/d
• Global LPG trade flows are
348
adjusting to accommodate
U.S. exports
290
• LPG production outside the
30
Canada Imports
Waterborne Imports
25
Mexico Land Exports
United States is also rising
Waterborne Exports
20
232
15
174
10
116
5
58
0
0
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
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OTPP CONFIDENTIAL
• Demand from international
markets will need to expand
to consume the new
production
The Industry Re Structures- Portfolio’s
Resource Base by Type, Proven + Non-Proven
100%
Arctic *
Unconv. Oil &
Gas**
Deepwater
80%
7%
13%
9%
3%
3%
22%
33%
9%
7%
22%
8%
19%
60%
13%
10%
21%
5%
34%
11%
LNG
32%
40%
21%
Heavy Oil & Oil
Sands
12%
60%
50%
20%
23%
Conv. O&G
28%
26%
RDS
CVX
0%
XOM
Source: IHS Herold
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BP
TOT
Global Hotspots
High Impact Wells
Dry Plays
Onshore
Deepwater
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Technology Hotspots
GTL – Planned/Under Construction
Mini LNG – Planned/Under Construction
GTL - Operating
Mini LNG - Operating
GTL – Deferred/Cancelled
Floating LNG
The Global Tight Oil Race
Producing
Scaling Up
Pilots
Frontier
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Mega Projects
Oil Sands
Shale/Tight Oil
US GOM
Qatar LNG
NW Shelf
East
Africa
Pre-Salt
Queensland
50 – 100 bil.
100 – 150 bil.
150 – 200 bil.
> 200 bil.
EPC – Capacity Issues Drive Delays
Australia
other Asia-Pacific
Atlantic
Middle East
EPC Investments in Liquefaction facilities (US$ Bn)
30
Africa
Russia & Caspian
25
Europe
Med. & Middle East
North America
20
Central America
South America
Asia-Pacific
15
21.9
10
17.5
17.4
15
10
5
8.2
3.7
0
20
0
11.8
5
Construction Delay ( Months)
25
1.0
1.3
0.9
1.4
2003
2004
2005
2006
2.5
2007
2008
2.6
2009
1.4
2010
2011
2012
2013
2014
2015
-5
-10
2000
2005
2010
Year of FID
Construction delay = difference between online
date at FID and actual or expected online date
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2015
Capex Costs Micro Bursts
Brazil Upstream Cost Index
Regional Upstream Indexes
600
500
400
Africa
Asia Pac
300
Europe
ME
200
Namerica
Russia
250
SAGD Capital Cost Index
200
100
Latin America
0
150
2000
2003
Q1 2006
Q3 2007
Q1 2009
Q4 2009
Q3 2010
Q2 2011
Q1 2012
Q4 2012
2013
2016
100
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The Local Content Multiplier - Brazil
Percent LC (percent)
0
50
100
Key Exploration and
Development Activities
Drilling &
Development
Production
& Storage Units
Topsides &
Processing
Equipment
Higher initial expat input on
(E&PM) is likely to increase cost
Project Management
Design
Access, cost, and quality are key
issues for local hull upgrade and
requires infrastructure upgrade
HUC
Large turbine drive rotary equipment
beyond local industry capabilities.
Large pumps and compressors
currently imported.
Top side fabrication
Piping
Electrical
Instruments
Higher local content can be
reached given scale and
technology transfer
Secondary Steel
Controls
Power Distribution
Gas Compressors Turbine Drive
Fine Filters
Necessary to transfer
capability/technology from other
industries shouldn’t present a major
hurdle
CO2 Removal
Power generation
Gas Compressor elect drive
Maximum LC Achievable
With Current Local
Capabilities
Pump Turbine Drive
Oil Export Pumps
A steep change in technical capability
likely to require large procurement
commitment
Heat Exchangers
Utilities
Vessels
Installation
76 percent
Higher local content is not a large
capability/technology stretch here
Moob/Demob & Towing
Marine commissioning
Tanker Project Mangement
Tanker Design
Mooring System
Higher initial expat input on
E&PM is likely to increase cost
Hull Upgrade-Materials
Hull Upgrade-Fabrication
Source: IHS CERA.
FPSO: Floating Production 19
Storage Offloading Vessel
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Labor- Dealing with Peaks and Valleys
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The New Face of Risk
FryklundKNOWApril23,2013
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The Road Ahead
• A Golden Era for Contracting ?
• Something for Everyone – Up/ Mid/
Downstream ?
• Mega projects- Diversity Continues
• New Technologies - Game Changers ?
• New Models of Cooperation
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For more information about this presentation or
IHS in general, please contact
Bob Fryklund
+1 713 369 0317
Bob.Fryklund@ihs.com
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55 Cambridge Parkway
Cambridge, Massachusetts 02142, USA
IHSCERA.com
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