john anderson - santos - asia and the northern australia opportunity
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Asia and the northern Australia opportunity
John Anderson Vice President Asia Pacific, WA & NT
PNG LNG, near Port Moresby
Disclaimer and important notice
This presentation contains forward looking statements that are subject to risk factors associated with the oil and gas industry. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a range of variables which could cause actual results or trends to differ materially, including but not limited to: price fluctuations, actual demand, currency fluctuations, geotechnical factors, drilling and production results, gas commercialisation, development progress, operating results, engineering estimates, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial markets conditions in various countries, approvals and cost estimates.
All references to dollars, cents or $ in this document are to Australian currency, unless otherwise stated. All references to project completion percentages are on a value of work done basis, unless otherwise stated.
2 | SANTOS SEAAOC 2014
Norm Dixon, Delhi Camp Manager, at Gidgealpa-2 the site of the first hydrocarbon discovery in the Cooper Basin, February 1964
In the beginning… Santos has a proud history of oil & gas exploration which started 60 years ago in Central Australia
SANTOS SEAAOC 2014 3 |
Santos Strategy Our vision is to be a leading energy company in Australia and Asia
4 |
Otway
Phu Khanh
Nam Con Son
South Sumatra Papuan
Carnarvon
Browse
Timor Sea Bonaparte
Amadeus
Cooper Surat/Bowen
Gippsland
Narrabri
East Java
Bay of Bengal
McArthur
Santos assets by basin
West Natuna
Ceduna
Growing our strong domestic base business
Delivering our transformational LNG portfolio
Building a focused, exploration-led portfolio
SANTOS SEAAOC 2014
0
10
20
30
40
2005 2010 2015 2020 2025 2030
0
10
20
30
40
2005 2010 2015 2020 2025 2030
0
10
20
30
40
2005 2010 2015 2020 2025 2030
Gas and LNG demand growth
Asia’s appetite for gas grows with LNG meeting over half of gas demand by 2030
5 |
Source: EIA; Wood Mackenzie, Contracted LNG represents supply volumes from operating, under construction and planned projects
North America OECD Europe Asia Pacific tcf
Local production + pipeline imports
x% Gas CAGR 2005-30
4.1%
1.3%
0.5%
Contracted LNG
5 | SANTOS SEAAOC 2014
Indigenous/Pipeline LNG
-
50
100
150
200
250
300
350
400
450
2010 2015 2020 2025 2030
Strong Asian demand for LNG
Large opportunity exists for new projects to supply into the Asian market
SANTOS SEAAOC 2014 6 |
Source: Wood Mackenzie, LNG supply represents contracted volumes sold into Asia Pacific from global operating and under construction projects.
mtpa
127 mtpa
217 mtpa
Contracted Asian LNG supply
Asia leads global LNG demand with LNG forecast to meet over 50% of Asia’s gas needs
− Asian LNG demand grows at CAGR of 5.5%
− By 2030, over 71% of global LNG demand comes from Asia
Large opportunity for new LNG supply
− Over 127 mtpa of uncontracted demand by 2025 (~ 32 new LNG trains)
− Over 217 mtpa of uncontracted demand by 2030 (~ 54 new LNG
trains)
Asian LNG supply and demand
0
50
100
150
200
250
300
350
2000 2005 2010 2015 2020 2025
Nov 2009
Nov 2013
Nov 2010
Nov 2011
Nov 2012
Asia Pacific LNG demand Pacific basin LNG demand estimates: multiple upward revisions
mtpa
7 |
Source: Wood Mackenzie
%
China’s gas consumption Security of supply increasingly important as China’s gas imports increase to meet rapid demand growth
8 |
4
21
2010 2030
China’s Gas Demand (2010-2030) tcf
Source: Wood Mackenzie
1
8
2010 2030
China’s Gas Imports (2010-2030) tcf
CAGR 2010-30
SANTOS SEAAOC 2014
9%
15%
0
50
100
2010 2015 2020 2025 2030
mtp
a
Australia
Other Pacific
Middle East
Atlantic
Chinese LNG estimates China to become world’s second largest LNG buyer by 2017
9 |
Contracted China LNG Supply
LNG Demand by Country
Source: Wood Mackenzie, Contracted LNG represents supply volumes from operating, under construction and planned projects
LNG supply/demand estimates
SANTOS SEAAOC 2014
Uncontracted demand
Source: Wood Mackenzie, May 2014
2014
24
2012 2013 2011 2015
US$17b
2017 2016
7
LNG plant CAPEX for already sanctioned Australian LNG projects (US$b)
Cost pressures should abate from 2015 onwards Australian LNG costs
SANTOS SEAAOC 2014 10 |
11 |
On the road to becoming a significant exporter of LNG Santos’ strong resource position, existing and under development
SANTOS SEAAOC 2014 11 |
Darwin LNG
First LNG in 2006, over 400 cargoes delivered
PNG LNG
First LNG cargo May 2014
GLNG
First LNG in 2015
Northern Australia A Growth Opportunity
Barossa-Caldita Three well appraisal campaign underway with first well completed and next well to spud in 4Q 14
Bayu Undan Phase 3 offshore expansion programme underway with drilling to commence in 4Q 14
Darwin LNG Continues excellent performance with major shutdown in 3Q 14 and work being progressed to investigate backfill options
Greater Crown Major discovery in 2012 with assessment of development options underway
Lasseter Exploration well adjacent to the Greater Crown structure
Petrel-Tern Assessment of concept alternatives underway
NT/P84 New exploration block awarded with potential for multi-tcf structures
SANTOS SEAAOC 2014 12 |
Asia Pacific Business Unit Fourth largest Independent Oil Company in Asia
Source: Wood Mackenzie
0
10
20
30
40
50
60
Murp
hy
Talism
an
Hess
Santo
s
Pre
mie
r
Husk
y
Oil S
earch
Mubadala
Nik
o
SO
CO
Anadark
o
Noble
Kris E
nerg
y2
01
4 E
nti
tle
me
nt
pro
du
cti
on
(m
mb
oe
)
13 |
Asia Pacific Business Unit An overview of production and exploration activities across Asia Pacific
Northwest Natuna PSC (Indonesia) Recently acquired PSC containing the Ande-Ande Lumut oil field
Block 123 (Vietnam) Exploration drilling likely in 2016
Sampang and Madura Offshore (Indonesia) 3 producing fields (Wortel,
Maleo and Oyong) Peluang gas field successfully
delivered in March 2014
Indian blocks 2 PSCs currently in Force Majeure
SS-11 (Bangladesh) Seismic campaign in 2015
Block 12W (Vietnam) Producing Chim Sao field Successful tie-back of Dua oil
field in July 2014
PNG LNG 13.5% partner in foundation project
Warim PSC (Indonesia) Data acquisition planning underway by operator
PNG Forelands Recently concluded exploration campaign with plans for further drilling in 2015-16
PNG Gulf Successfully awarded minority interest in PRL 38 containing the Pandora discovery
SANTOS SEAAOC 2014 14 |
15 |
Existing infrastructure can support potential future expansion
PNG LNG potential expansion
SANTOS SEAAOC 2014 15 |
LNG production began ahead of schedule from the first LNG train in April and second train in May
Multiple options for potential expansion:
Hides 3P potential within base project
Hides Deep (Santos 24%)
Exploration prospect beneath the existing Hides field Exploration well scheduled to spud in Q4 2014
Utilise ownership in foundation project for other sources of gas
Longer term exploration potential in Western Province
Asia and the northern Australia opportunity
Thank you
Jack Bates, Lasseter, Browse Basin
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