johannes benigni's presentation slides from the 2010 world national oil companies congress

28 June 2010

Global Product Market TrendsThe Outlook for NOCs

Johannes Benigni Johannes Benigni JBC Energy GmbHJBC Energy GmbH

June 24, 2010June 24, 2010

Research Research -- Energy Studies Energy Studies -- Consulting Consulting -- TrainingTraining

World National Oil Companies Congress

28 June 2010 Slide 2

Disclaimer

All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements (including those depicted in graphical form) are statements of future expectations that are based on JBC Energy’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things statements expressing JBC Energy’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘intend’’, ‘‘may’’, ‘‘plan’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘probably’’, ‘‘project’’, ‘‘will’’, “forecast”, “predict”, “think”, ‘‘seek’’, ‘‘target’’, ‘‘risks’’, ‘‘goals’’, ‘‘should’’ and similar terms and phrases. All forward-looking statements contained in this speech/presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers/audience should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of this presentation. Neither JBC Energy nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this speech/presentation. Any persons acting on information contained in this presentation does so solely at their own risk. JBC Energy is not responsible for the accuracy of data collected from external sources and will not be held liable for any errors or omissions in facts or analysis contained in this presentation.


Price Formation

40.00

50.00

60.00

70.00

80.00

90.00

100.00

Jun 09 Aug 09 Oct 09 Dec 09 Feb 10 Apr 10 Jun 10-10.00

-7.50

-5.00

-2.50

0.00

2.50

5.00

Nymex WTI Vs ICE Brent FL - right scaleICE Brent FLNymex WTI FL

Nymex WTI and ICE Brent (FL) [$/bbl]

Source: CME Group, ICE


Price Formation

0.00

2.00

4.00

6.00

8.00

10.00

12.00

Oct-03 Jul-04 Apr-05 Jan-06 Oct-06 Jul-07 Apr-08 Jan-09 Oct-09 Jul-10

Light/Heavy to US

Light/Heavy to Asia

Light/Heavy to Europe (NWE)

Q1 2010 avg: $78.75/bbl

Arab Light/Arab Heavy Differentials By Region [$/bbl]

Source: Saudi Aramco

Outright price of WTI Cushing in Oct 2003:

$29.65/bbl


Crude Prices & Markets

0

0.2

0.4

0.6

0.8

1

1.2

FloatingStorage

2009[mbbls]

end-Jan end-Feb end-Mar end-Apr end-May end-June end-July end-Aug end-Sept end-OctSource: JBC Energy estimate based on info from SSY, Platts, Charles R. Weber, Argus, WSJ, Gibson, Poten, Thomson Reuters

Estimated Oil in Floating Storage as of End-May 2010

USGC

WAF

EUROPE

18-22 million barrels crude



22 - 25 million barrels of middle distillates

Asia/Pacific

PG





Crudeend-Apr '09 100-105end-May'09 80-90end-Jun '09 65-70end-Jul '09 55end-Aug '09 40-50end-Sep '09 34-46end-Oct '09 40-45end-Nov '09 34-40end-Dec '09 40-45end-Jan '10 30-38end-Feb '10 25-30end-Mar '10 35-45end-Apr '10 50-70end-May '10 80-96

90-95

43-5555-65

33-4032-39

95-10075-85

Floating Storage [mbbls]Gas Oil/ Jet-Kero

20-2530-3550-5555-6045-5560-7085-95


Demand – Short-Term Picture

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

Germany Italy France UK Spain US Mexico Brazil ArgentinaSouthKorea

Japan China India Taiwan Russia Iran SaudiArabia

2008 Gasoline Demand over Q1 2007 2009 Gasoline Demand over Q1 20072010 Gasoline Demand over Q1 2007 2008 Gas Oil/Diesel Demand over Q1 20072009 Gas Oil/Diesel Demand over Q1 2007 2010 Gas Oil/Diesel Demand over Q1 2007

2008/2009/2010 Q1 Gasoline and Gas Oil/Diesel Demand Change on Q1 2007 ['000 b/d]

Source: Official Data, JODI


Demand – Short-Term Picture

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Jan 07 Apr 07 Jul 07 Oct 07 Jan 08 Apr 08 Jul 08 Oct 08 Jan 09 Apr 09 Jul 09 Oct 09 Jan 10 Apr 10

Gas Oil

Gasoline

Naphtha

Chinese Apparent Oil Product Demand ['000 b/d]

Source: Official Government Data, Thomson Reuters


China Products

0.55

0.575

0.6

0.625

0.65

0.675

Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-100.2

0.225

0.25

0.275

0.3

0.325

Gasoline+diesel output in % of total output

Naphtha+LPG+Jet/kero output in % of total output - right

Chinese Product Yields [%]

Sources: Official Government Data, JBC Energy calculations


Demand – Long-Term Outlook

-1

0

1

2

3

4

5

6

NorthAmerica

OECDEurope

OECD AsiaNon-OECDEurope

FSU EastAfricaCentral &South

America

Middle EastNon-OECDAsia

LPG Naphtha GasolineJet/Kero Gas Oil/Diesel Fuel OilOther Products

Regional Oil Demand Growth by Products 2009-2015 [mbpd]


Demand – Road Transportation Fuels

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0

9.5

2009 2020

Components of US Gasoline Demand 2009-2020 [mbpd]

2009 Refinery Based

Gasoline Demand

8.3 million b/d

Additional Demand for Bioethanol - 219,000 b/d*

*: energy adjusted

Change in Passenger

Kilometers and Travel Mode + 988,000 b/d

Change in the fleet structure (gasoline vs.

diesel)- 304,000 b/d

Hybrids, LPG, CNG, Full

Electric- 404,000 b/d

Efficiency Gain- 2.48 mbpd

2020 Refinery Based

Gasoline Demand

5.88 million b/d



2.50

2.75

3.00

3.25

3.50

3.75

4.00

2009 2020

Components of EU-27 Transportation Diesel Demand 2009-2020 [mbpd]

2008 Refinery Based Diesel

Demand3.7 mbpd

Additional Demand for

Biodiesel - 154,000

b/d*

*: energy adjusted

Change in Passenger Kilometers and Travel

Mode + 68,000 b/d

Change in Tonne

Kilometers and Freight

Mode+ 259,000 b/d

Hybrids, LPG, CNG,

Full Electric- 34,000 b/d

Efficiency Gain in Goods

Vehicles and Busses- 208,000 b/d

Change in the fleet structure (gasoline vs. diesel)-47,000 b/d

Efficiency Gain in

Passenger Cars

- 192,000 b/d

2020 Refinery Based Diesel

Demand3.4 mbpd



1.2

1.5

1.8

2.1

2.4

2.7

3.0

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

JBC Energy SuDeP - base caseModerate ScenarioHigh Impact Scenario

China Gasoline Demand - Electrification/Hybridisation Scenarios [mbpd]

By 2020, gasoline demand in the "high impact" scenario is 380,000 b/d lower than in the base

case.

Due to scrapped gasoline cars being replaced by EVs, demand growth continuous to flatten.

JBC Energy estimates

"Passenger car density" only relates to passenger vehiclesand does not take account of larger vans or LCVs

Scenario Fleet Size Fleet Share of EV Fleet Share of HEV Fleet Share of PHEVBase Case 85 million (60/1000 inh.) 6.0% 1.5% 1.5%

Moderate Scenario 85 million (60/1000 inh.) 10.0% 1.25% 3.75%High Impact Scenario 85 million (60/1000 inh.) 25.0% 7.5% 7.5%

Scenario Assumptions for 2020

General Assumption: Average fuel consumption will decline from 8.5 l/100 km to 5.5l/100 km by 2020


6,683

5,404

4,097

282 444 472 1,220

1,886

2,858

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Scenario Actual Difference - right scale

Total Oil Demand - China ['000 b/d]

Oil demand is assumed to be a function of GDP, (retail) prices, and pre-period

demand

Scenario Demand based on constant oil price of $24.46 / bbl

LPG Naphtha Gasoline Jet/Kero Gas Oil Fuel OilPrice -0.112 -0.072 -0.056 -0.060 -0.171 -0.219Income 0.101 0.210 0.414 0.741 0.409 0.144Demand (t-1) 0.950 0.802 0.586 0.000 0.692 0.950

(Retail) Price and Income Elasticities of Oil Demand used to calibrate Model - China

Scenario


Demand – Fuel Oil

-150

-100

-50

0

50

100

150

Middle East C & S America Non-OECDAsia

FSU East Africa NorthAmerica

Europe OECD Asia

Gas OilFuel OilCrude Oil

Regional Change in Oil Consumption for Power Generation 2009-2015 [´000 b/d]


Long-Term Bunker Fuel Outlook

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2005 2010 2015 2020 2025 2030

GlobalECA

ECA And Global Sulphur Limits [%]

Source: IMO



World Shipping Routes



100

75

60

90

50

1480

0 200 400 600 800 1000 1200 1400 1600

Global Impact of 0.5% (2025est)

Mediterranean (2020 est)

Japan & Korea (2018 est)

North Sea (2016 est)

US & Canada (2012)

Baltic Sea & English Channel(2006/07)

Impact of Regulation on Bunker Fuel Demand from 2015 onwards ['000 b/d, %]

XX

0.4%

0.4%

2%

XX%5%

32%

9%

Bunker Fuel Oil that has to be replaced by Gas Oil in 2015 or year or later year of new legislation['000 b/d]

Share of ships with scrubbers installed in 2015 or year or later year of new legislation [%]


0

1

2

3

4

5

6

7

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 20300%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Gas Oil Demand Without AdjustmentShift from FO to GOFuel Oil Demand Before AdjustmentScrubber Implementation Rate

Regulatory Change and Bunker Fuel Demand & Scrubber Adoption rate [mbpd / %]



Refining Capacity Outlook

20

25

30

35

40

45

50

55

60

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

OECD Oil Products DemandNon-OECD Products DemandOECD Refinery Capacity (forecast disregards likely shutdowns)Non-OECD Refinery Capacity

Oil Market's Shift from OECD to non-OECD - Demand & Refining Capacity [mbpd]


Refining

0

2

4

6

8

10

12

14

16

US EU15 + Norway Japan South Korea India China Russia

Q1-2008 Q1-2009 Q1-2010

Q1 2008-2009-2010 Refinery Throughput in Selected Countries [million bpd]

Source: National Statistics

US Q1 2010 vs. Q1 2008: -750 kbdEU Q1 2010 vs. Q1 2008: -1.33 mbd

China Q1 2010 vs. Q1 2008: +1.35 mbdIndia Q1 2010 vs. Q1 2008: +630 kbd


Refining

75%

80%

85%

90%

95%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Avg 05-09 20102006 20072008 2009

EU-15 & Norway Refinery Utilisation [%]

Source: Euroilstock


Refining

0

500

1,000

1,500

2,000

2,500

3,000

2010 2011 2012 2013 2014 2015

IOCNOC

World Refining Capacity By Ownership, projects >50,000 b/d ['000 b/d]

78% of additional crude distillation capacity expected to come onstream is owned by NOCs.


Refining

Selected Refining Capacity Increases in Middle East & Asia ['000 b/d]

SyriaExpected: 0Known: 380

ChinaExpected: 4.216Known: 9.351

EgyptExpected: 0Known: 350

IndiaExpected: 1.071Known: 3.931

IranExpected: 505Known: 1.215

IrakExpected: 230Known: 1.310

KuwaitExpected: 64Known: 14

LebanonExpected: 0Known: 100

LibyaExpected: 220Known: 960

OmanExpected: 0Known: 300

PakistanExpected: 250Known: 573

QatarExpected: 0Known: 250

Saudi ArabiaExpected: 1.200Known: 1.750

UAEExpected: 417Known: 417

YemenExpected: 320Known: 1.410

JBC Energy Expectation: 8.5 million b/dKnown projects: 22 million b/d


FSU East Special

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2008 2020 2008 2020 2008 2020 2008 2020 2008 2020 2008 2020

Russia Europe Middle East US OECD Asia World

Desulphuriatonconversion

Regional Comparison of Downstream Complexity [%]


Refining Capacity Outlook

Refinery Shutdown Potential & Expected CDU Additions By 2020 ['000 b/d]

Source: JBC Energy estimates

Shutdown potential in '000 b/d

Resulting utilisation in 2020

-4500 84.2%

-400 87.0%

-3400 81.7%

-200 86.6%

-200 79.9%

-1800 87.1%

Asia

-300 80.7%846

731

723

375

2651

630

6310

Gross additions

-3654

331

-2677

175

2451

330

4510

Net change

Africa

Middle East

Europe

North America

FSU East

Latin America


Product Balances, Flows & Margins

Major Non-OECD Asian Gas Oil/Diesel Flows (2008-2013-2018) ['000 b/d]

149 147 230

132 196 104

Only trade flows higher than 50,000 b/d

are displayed.

Source: JBC Energy estimates

200820132018

GasOil

Middle East

North America

C&S America

Europe254 210 203

FSU East

390290260

100120128

11116123060

64

106 OECDAsia

OECDAsia

Non-OECD Asia

Africa


Thank You!

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johannes benigni's presentation slides from the 2010 world national oil companies congress

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