Upload
others
View
0
Download
0
Embed Size (px)
Citation preview
UPSTREAM | MIDSTREAM | DOWNSTREAM | FUEL & TRANSPORT
www.stratasadvisors.com
Changing Oil and Gas Landscape
John Paisie President
TEL +1.713.260.4628 / MOBILE +1.832.517.7544
© Stratas Advisors. All rights reserved. 2
• Stratas Advisors is a global consulting and advisory firm that
covers the full spectrum of the energy sector and closely
linked industries
• The world’s leading businesses, governments and
institutions turn to us for data, analysis and insight (IOCs,
NOCs, independents, energy consumers and financial
entities)
• We help our clients achieve tangible results through informed
strategic decision-making and implementation planning
• Key differentiators include
– Global coverage with deep local knowledge
– Integrated analysis across the entire energy value
chain, including macro-level analysis (geopolitics,
macro-economics, policies and regulations)
• Our research and consulting staff comprises professionals
located on the ground in key global energy market centers
• Combined, our team brings over 500 years of combined
energy industry expertise, including
– Technical (Petroleum Engineers, Geologists, Process Engineers)
– Economists
– Political Scientists
– Financial Analysts
Who We Are
www.stratasadvisors.com
© Stratas Advisors. All rights reserved. 3
Strategic insights across the energy value chain
Dedicated Teams for Each Segment
Upstream
Drill down with a ground-
level look at the fields,
wells and companies
involved in E&P.
Midstream
Move confidently in
new frontiers that are
being shaped by
changing supply/
demand dynamics
coupled with
investments in pipeline,
rail and ship logistics.
Downstream
Thrive in an
environment where
crude oil supply
dynamics and product
demand trends are
structurally evolving.
Fuel & Transport
Accelerate innovation with
a comprehensive
understanding of policies
pertaining to petroleum-
based fuels, biofuels and
other alternative fuels.
© Stratas Advisors. All rights reserved. 4
Integrated Service Offering
Upstream
Macro & Geo-Political
Midstream
Downstream
Fuel & Transport
LT & ST Price Forecasting
© Stratas Advisors. All rights reserved. 5
Services
An innovative online portal of
data, information and insights
across the oil & gas value
chain and macro-level issues
that includes GIS mapping
and interactive data tools
Advisory
Customized retainer
arrangements with access to
senior Stratas Advisors staff
who will answer your
questions about:
• Macro-level developments
• Energy markets
• Industry events and trends
• Investment risks and
opportunities
Consulting
A full range of consulting
support, allowing you to gain
an external perspective on
strategic matters and to
respond proactively by
implementing the
appropriate initiatives for
success
Helping clients achieve tangible results
What We Offer
© Stratas Advisors. All rights reserved. 6
Service Matrix
Macro Upstream Midstream DownstreamFuel &
Transportation
Stratas Energy
Perspectives
Enhanced Shale
Service
North American
Shale-Related
Infrastructure
Global Refining &
Products
Global Fuel
Specifications
Long-term Price
ForecastingStratasScope
North American
Midstream (Oil,
Natural Gas, NGLs)
North American Refining
& Products
Global Alternative
Fuels
Short-term Price
Forecasting
Global Hydrocarbon
Supply
Global Natural Gas
OutlookBase Petrochemicals
Global Biofuels
Assessment
Global Heavy Crude
OutlookGlobal LNG Catalyst Market Outlook
Global Biofuels
Outlook
Global Upstream
Projects AnalyticsGlobal NGLs Outlook
Global Syngas
Conversion
Global Transport
Fuel Outlook
Global Automotive
© Stratas Advisors. All rights reserved. 7
Examples of Consulting Offerings
Strategic
Alignment
Competitive
Assessment
Portfolio
Management
Organization
Development
Market
Studies
Value
Management
Transaction
Support
Risk
Management
Energy
Supply
Opportunity
Assessment
Supply
Chain
Strategic Initiatives
Performance Improvement Programs
Communication
Management
External Assessment
Client-Focused
© Stratas Advisors. All rights reserved. 8
Examples of Advisory Retainers
Macro-Level
Energy Markets
Transactions &
Investment
Analysis
Competitive
Assessment
Providing coverage of the geopolitical issues, economic trends and policy and
regulatory developments that will shape the future environment
Providing integrated coverage of the energy markets including crude oil, oil
products, natural gas, NGLs, coal and renewables (prices)
Providing a forward-looking assessment of the competitive landscape of the oil &
gas sector across the entire value chain from a global and regional perspective
including comparisons of strategy, structural positioning and financial performance
Providing analysis of transactions and capital investments associated with the oil &
gas sector across the entire value chain from a global and regional perspective
In addition to the above retainers, Stratas Advisors can develop a retainer that is
customized for a client’s specific needs
© Stratas Advisors. All rights reserved. 9
Agenda
Item Time slot
Introduction and Key Themes 8:30 – 9:00 A
Assessment of Hydrocarbon Supply and Crude Markets 9:00 – 9:45A
Assessment of Transport Sector 9:45 – 10:30A
Break 10:30 – 11:00 A
Outlook for Refining 11:00 – 11:45A
Outlook for Fuel Specifications 11:45 – 12:15P
Lunch 12:15 -1:15P
Assessment of NGLs and Feedstocks 1:15 -1:45P
Outlook for Petrochemicals 1:45 – 2:30P
Opportunities and Challenges Facing GCC-based refiners
and Final Remarks
2:30 – 3:00P
Major Themes
© Stratas Advisors. All rights reserved. 11
Major Themes
Changing
Energy Mix
Intensifying
Regulatory
Environment
Shifting
Energy Flows
Evolving
Transportation
Sector
© Stratas Advisors. All rights reserved. 12
• Shale – North America and
beyond
• Non-shale – growth areas,
declining areas
• Natural gas – new importance
Changing Energy Mix
• Clean sources of energy –
increased focus
• Alternative fuels –
transportation & non-
transportation
Source of marginal production –
across time horizons
Supply/Demand Dynamics
© Stratas Advisors. All rights reserved. 13
GDP Forecast
2016 Total GDP: 76.24 trillion USD 2035 Total GDP: 123.47 trillion USD
Source: Stratas Advisors , 2010 prices and exchange rates
Africa, 2.37, 3.1%
Asia, 24.58, 32.2%
Europe, 20.61, 27.0%
Latin America,
5.65, 7.4%
Middle East, 2.25, 2.9%
North America,
18.66, 24.5%
Russia & CIS, 2.12,
2.8%
Africa, 4.63, 4%
Asia, 48.69, 39%
Europe, 26.71, 22%Latin
America, 9.42, 8%
Middle East, 3.76, 3%
North America,
27.05, 22%
Russia & CIS, 3.22,
2%
© Stratas Advisors. All rights reserved. 14
Oil Demand by Region
0
20
40
60
80
100
120
140
2016 2025 2035
MM
BD
Africa Asia Europe Latin America Middle East North America
Source: Stratas Advisors
• Global oil demand is expected to continued to increase
• Asia will represent the overwhelming portion of future demand growth
• Demand in North America and Europe is expected to decline
© Stratas Advisors. All rights reserved. 15
Natural Gas Demand by Region
0
50
100
150
200
250
300
350
400
450
2016 2025 2035
BC
FD
Africa Asia Europe Latin America Middle East North America
Source: Stratas Advisors
• Global demand for natural gas is expected to continued to increase
• Asia will represent the overwhelming portion of future demand growth
© Stratas Advisors. All rights reserved. 16
Shifting Energy Flows
Differing rates of
economic growth
Expanding role of US as an
energy supplier
Shifting focus from Atlantic
Basin to Pacific Basin
Geopolitics – OPEC, Russia,
Middle East, China/US
Bottlenecks, dislocations and
investment needs
© Stratas Advisors. All rights reserved. 17
US Crude Production / Exports
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
20172018201920202021202220232024202520262027
MB
D
Crude Production
0
500
1000
1500
2000
2500
3000
3500
4000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
MB
D
Crude ExportsSource: Stratas Advisors
Source: Stratas Advisors
• US crude oil production is
forecasted to increase from 9.4
MMBD to 13.6 MMBD by 2027
• Simultaneously, US crude
exports are forecasted to
increase from 728 MBD to nearly
3.4 MMBD by 2027
© Stratas Advisors. All rights reserved. 18
US Crude Flows − 2027
Units | MBPD
2,119
544
408315
© Stratas Advisors. All rights reserved. 19
Intensifying Regulatory Environment
Upstream-
Related
Standards
Tightening Fuel
Specifications
GHG
Subsidies and
Mandates
• The expansion
and the impact
will ebb and flow
• Regulations,
however. will
continue…
• …to impact
future supply
and demand
© Stratas Advisors. All rights reserved. 20
Evolving Transportation Sector
• Electrification
• Digitization
• Autonomous
• Efficiency
• Clean
Common Drivers Light-Duty
Size of fleet, Powertrain
Heavy-duty and Off-Road
Still dependent on diesel
Marine
IMO, Shipping Patterns
Rail
Freight, Passengers
Aviation
Number of flights, Point-to-Point
© Stratas Advisors. All rights reserved. 21
Importance of Transportation
0
20
40
60
80
100
120
2015 2035
MM
BD
Oil Demand
Transportation Other
• The portion of oil demand in 2015 represented by the transportation sector was 57%
• By 2035 the portion of oil demand represented by the transportation is forecasted to
still remain around 60%
Source: Stratas Advisors
Conclusions
© Stratas Advisors. All rights reserved. 23
Scenario Narratives
• Upside Case: Shifting to a New Global Framework
– Technology / carbon reduction focus
• Reference Case: Muddling Through
– Business as usual / focus on efficiency
• Downside Case: Breakdown into Multi-Polarization
– Energy Security Focus
© Stratas Advisors. All rights reserved. 24
Scenario Inputs
Factor Reference Upside Downside
GDP Growth Moderate Strong Weak
Technology
penetration
Power-focused;
efficiency gains
strong but new tech
minimal on
transportation
Aggressive
penetration of
renewables and
EVs; strong
efficiency gains
Moderate, but
based on
energy security,
not carbon
Geopolitical
stability
Regional conflicts Focus on global
cooperation
Trade wars,
conflict ridden
Policy Limited meaningful
action; some
countries take action
Widespread
carbon-reduction
focus
Energy-security
focused
Relative Impact of Factors
© Stratas Advisors. All rights reserved. 25
Oil Price Outlook – Brent Crude
0
20
40
60
80
100
120
140
2010 2015 2020 2025 2030 2035
$/B
BL
(n
om
inal)
Upside Case Downside Case Reference Case
Business as usual –
increasing demand with
cost inflation
Demand pops on strong
growth, but wanes as
fracking spreads and world
moves away from CO2
Demand weak; price
oscillates as OPEC invests
to suppress new
investment and gain share
© Stratas Advisors. All rights reserved. 26
Natural Gas Price Outlook – Henry Hub
Exports drive greater demand –
both through LNG and pipeline –
setting marginal price
Strong gas demand as world
becomes more CO2
focused; price increases
temper as fracking spreads
Price remains US centric as trade
is stymied and carbon reduction
remains of minimal concern
0
1
2
3
4
5
6
7
8
9
10
2010 2015 2020 2025 2030 2035
$/M
Mb
tu(n
om
ina
l)
Upside Case Downside Case Base Case
© Stratas Advisors. All rights reserved. 27
Looking Forward
Hydrocarbons will remain an
important part of the energy mix
Economic
growth
Climate and
Environment
Geopolitics
Tomorrow will not be the
same as today
Volatility, Cyclicality and
Uncertainty
Tensions
Strategic Implications
© Stratas Advisors. All rights reserved. 29
Need to Take a Strategic Approach
• Understand your portfolio of businesses within the context of current environment and future
environment
• Invest only in assets and positions for which structural advantages can be established – structural
disadvantages cannot be overcome through improving operations
• Consider opportunities across time horizons and in terms of materiality – and the organizational
capabilities required for success
• Assess current and future risk factors – and the ability to manage – and the impact on ability to drive
risk-adjusted returns
• Utilize a comprehensive business model that links forward-looking strategies with capabilities,
assets and external network to drive value for all stakeholders
© Stratas Advisors. All rights reserved. 30
Portfolio Assessment
Key QuestionsSBU 1
SBU 2
SBU 3
SBU 4
Capital invested
Value
Value destroying
business unit Shareholder
value
Value creating business unit
Historical SBU
ROI relative to
cost of capital
Past growth in SBU asset base
Positive
Negative
No growth/decline Growth
• Which business units are creating
shareholder value?
• Which business units are
destroying shareholder value?
• Was the historical capital allocation
effective in creating optimal value?
• Has there been over-investment in
some of the mature business units
• Have growth opportunities been
adequately supported? Size of bubble
indicates revenue
© Stratas Advisors. All rights reserved. 31
Structural and Operational Factors
Invest only in assets and positions for which structural advantages can be established
– structural disadvantages cannot be overcome through improving operations
Midstream Processing Distribution Conversion Upstream
Level of profitability Level of profitability Level of profitability Level of profitability Level of profitability
Structural factors
Operational factors
Complexity
Scale
Location
Feedstock
Utilization
Energy costs
Overhead
Network efficiencies
Regional
balances
Terminal assets
Network density
Pricing policies
Throughputs
Clients
Cost structure
Inventory management
Operational flexibility
Storage capacity and location
Shipping assets
Integration with processing
Hydrocarbon balance
Quality characteristics
Production
profile
F&D costs
Replacement costs
Lifting costs
Equipment restraints
Cost structure
Operational flexibility
Competitive landscape
Complexity
Scale
Location
Feedstock
© Stratas Advisors. All rights reserved. 32
Opportunity Screening
Sector Opportunities
0.0
2.0
4.0
6.0
8.0
10.0
Av
era
ge
An
nu
al
CA
PE
X (
Bil
lio
n U
SD
)
SHORT TERM CAPTURE LONG TERM CAPTURE
Long term nicheShort term niche
Long term strategicShort term strategic
Short term opportunities
(≤ 2 years)
Long term opportunities
(3+ years)
Size of bubble = return
on man-hours
Color of bubble = Level of
current capabilities
Medium
Low
High
Have current
capabilities
Some current
capabilities
Little or no
capabilities today
Consider opportunities across time horizons and in terms of materiality – and the
organizational capabilities required for success
© Stratas Advisors. All rights reserved. 33
Risk Management
Assess the current and future risk factors – and the ability to manage – and the
impact on risk-adjusted returns
© Stratas Advisors. All rights reserved. 34
Comprehensive Business Model
Strategic Intent
External Network
Core Capabilities Asset Portfolio
Strategic flexibility
Key differentiators
Internal and external alignment
Financial metrics
Operational metrics
Unique opportunities
Value Proposition
Customers
Other stakeholders
Relationships
Scope of offerings
Geographic coverage
Aspirations and goals
Strategic priorities
Performance requirements
Skill levels
Key processes
Supporting tools
Suppliers
Partners
Alliances
Tangible
Intangible
Value chain positioning
Leverage
points
Capital
intensity
Organizationscope
Utilize a comprehensive business model that links forward-looking strategies with
capabilities, assets and external network to drive value for all stakeholders
Bogotá | Brussels | Denver | Houston | London | Melbourne | Mexico City
New Delhi | New York | San Diego | São Paulo | Singapore | Washington, D.C.
Stratas Advisors, a Hart Energy company, is a global consulting and advisory firm that covers the full spectrum of the energy
sector and related industries. We can help you develop a deeper understanding of the developments that are shaping the future
of oil & gas. Our support includes customized consulting that is focused on a client’s specific strategic objectives, competitive
challenges and asset base. Additionally, we offer support through subscription services and comprehensive market studies
UPSTREAM | MIDSTREAM | DOWNSTREAM | FUEL & TRANSPORT
1616 South Voss Road Suite 675 | Houston, TX 77057 United States | TEL +1.713.260.6426 | stratasadvisors.com