platts crude oil markets asia 2013 - latest oil, energy & metals news, market · pdf...

Johannes Benigni

JBC Asia

September 2013

Oil Market Consulting & Training

The Rising Tide II: ESPO, Russia & CIS

Platts Crude Oil Markets Asia 2013

Disclaimer

DISCLAIMER OF WARRANTIES AND LIMITATIONS OF LIABILITIES

1 The Services and all components thereof are provided on an “as is” basis, without any representation or warranty,

express or implied, by or on behalf of JBC ASIA, its affiliates or their suppliers and Client’s use of the Services is at

Client’s own risk. In particular, without limitation, no representation or warranty is made or given regarding the

adequacy, timeliness or completeness of the Services or any component thereof, the merchantability or fitness for a

particular purpose of the Services, the information, analysis, advise, data, software or products contained therein or

the results obtained by their use.

2 Neither JBC ASIA nor any of its affiliates, subcontractors, licensees, partners, agents or employees shall be liable

to Client for any damages, loss or other liability whatsoever in connection with the provision of the Services unless

arising through the wilful misconduct of the respective person.

3 Notwithstanding anything to the contrary in this document, in no event whatsoever shall

(a) JBC ASIA or any of its affiliates, subcontractors, licensees, partners, agents or employees be liable

for any indirect, consequential or punitive damages of whatever nature, including, but not limited to, loss of profits,

lost time and good will and third party claims, even if they have been advised of the possibility of such damages,

whether in contract, tort (including negligence), strict liability or otherwise; and

(b) the maximum cumulative liability of JBC ASIA, its affiliates, subcontractors, licensees, partners,

agents or employees in connection with the Services and/or this Agreement, regardless of the form of action, exceed

the fees paid by Client to JBC ASIA under the applicable schedule for the Services in question in the month such

liability is alleged to have arisen.

4 No action of whatever nature arising from or pertaining to the Services may be brought by Client more than one (1)

month after the incident constituting the factual basis of such action has occurred for the first time.

Slide 2

Russia - Output

Slide 3

-20%

-15%

-10%

-5%

0%

5%

10%

15%

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Total Russian Liquids Output Annual Growth - right scale

Russian Supply Growth ['000 b/d; %]

Source: JBC Energy SuDeP, BP

Russia

Slide 4

0

1,000

2,000

3,000

4,000

5,000

6,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Domestic Crude Use Crude Exports

Russian Refinery Crude Intake vs Export Volumes ['000 b/d]

Russia - Seaborn

Slide 5

1.8

2.0

2.2

2.4

2.6

2.8

3.0

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

2009 2010 2011 2012 2013 Average 2009-2012

Urals Seaborne Loadings [million b/d]

Source: Energy Intelligence, Bloomberg, Various

Russia

Slide 6

0

200

400

600

800

1,000

1,200

1,400

1,600

Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13

Med NWE Russia

Maintenance Adjusted to Actual Urals Intake* ['000 b/d]

Source: SuDeP, JBC Energy Calculations, Argus Media, Bloomberg, Various

*Theoretical additional Urals availability due to maintainance

Russia - Urals

-3.0

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13

Urals NWE vs Urals Med Urals Med vs. Dated Brent

Urals NWE vs. Fwd Dated Brent

Urals Med & NWE vs. North Sea Benchmark [$/bbl]

Source: Platts

0

100

200

300

400

500

600

700

800

900

1,000

Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13

Other Verkhnechonsk Talakan Vankor

East Siberian Oil Output ['000 b/d]

Source: JBC Energy, Argus

H2 2013 values are JBC Energy forecasts.

Russia – East Siberia

Russia – Output Growth

Slide 9

-100

0

100

200

300

400

500

600

700

800

Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13

3 Major East Siberian Fields

East Siberian Total

Total Russian Crude and Condensate Production

Selected Russian Output Growth vs Jan 2009 ['000 b/d]

Source: Russian Ministry of Energy, Argus

Russian Crude Pipeline Projects

RUSSIA

CHINA

KAZAKHSTAN

Skovorodino

Kozmino

Daqing Refinery120,000 b/d

Pipeline Under Construction

Existing Pipeline

Legend:

Samotlor

Taishet

Novorossiysk

Primorsk

Ust-Luga

Source: JBC Energy

Unecha

Komsomolsk

BPS-2

BPS

Druzhba

ESPO

Yaroslavl

Purpe

Zapolyarnoe

The Skovorodino-Kozmino pipeline has a capacity of

600,000 b/d

Zapolyarnoe-Purpe to be completed in three phases by 2016

Taishet-Skovorodino line's capacity is increased to 1

million b/d

Vankor

Russia - Pipelines

Russia - Capacity

Slide 11

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

1

2

3

4

5

6

7

8

9

10

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Western pipelines (Druzhba, Belarus, Ukraine) Omsk-Pavlodar

CPC (Russia's share - 31%) Other routes

BPS-1 BPS-2

ESPO Crude Available for Exports

Implied Export Capacity Utilisation - right scale

Russian Crude Export Capacity versus Export Volumes [ mbpd; % ]

Source: JBC Energy SuDeP, Various

1.641.35

1.06

1.64

1.73

1.92

1.061.27 1.34

0.94 0.770.57

0

1

2

3

4

5

6

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

South East North West

Crude Exports out of Russia by Direction [million b/d]

Russia - Exports

0

200

400

600

800

1,000

1,200

1,400

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Rosneft TNK-BP Surgutneftegaz Independents Gazprom Neft

Projected East Siberian Oil Output by Company ['000 b/d]

Source: JBC Energy estimates, Argus

Russia – East Siberia

0

100

200

300

400

500

600

700

2010-H1 2013 H2 2013 2014 2015-2017 2018-2037

Rosneft plannes pipeline exports to China ['000 b/d]

Source: Various

Russia - Rosneft

Russia - ESPO

0

200

400

600

800

1,000

1,200

1,400

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Exports Domestic Refinery Intake

ESPO Exports vs Domestic Intake ['000 b/d]

Source: JBC Energy estimates

Russia - ESPO

Slide 16

ESPO Pipeline

Source: JBC Energy

Skovorodino

Daqing Refinery

Taishet

Tomsk

Kozmino

Khabarovsk

Komsomolsk

Taishet-Skovorodino line's capacity increased from

600,000 b/d to 1 million b/d.

The 600,000 b/d Skovorodino-Kozmino pipeline is now completed.

Angarsk

CHINA

MONGOLIA

ESPO Pipeline

The 300,000 b/d Skovorodino-Daqing spur capacity is due to be increased by 100,000 b/d by 2015.

Transneft intends to connect the 70,000 b/d Khabarovsk (2014) and the 160,000 b/d

Komsomolsk (2015) refineries to the ESPO

system. Once this is done, around 200,000 b/d of ESPO volumes will be sent to the two Russian refineries in Russia's Far East.

Nakhodka??

Russia – Export Schedule

Slide 17

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

22%

-800

-600

-400

-200

0

200

400

600

800

1,000

1,200

1,400

Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13

Primorsk Loadings (Urals, Baltic) Novorossiysk Loadings (Urals, Black Sea)

Gdansk Loadings (Urals, Baltic) Ust-Luga Loadings (Urals, Baltics)

Yuzhny Loadings (Urals, Black Sea) Odessa Loadings (Urals, Black Sea)

Tuapse (Sib. Light, Black Sea) Kozmino Loadings (ESPO Blend, Pacific)

Novorossiysk Loadings (Sib. Light, Black Sea) Kozmino share - right scale

Y-o-Y Changes in Russian Seaborne Crude Export Schedules by Route ['000 b/d]

Source: Transneft, Thomson Reuters, Platts, ArgusMedia, Bloomberg

0

100

200

300

400

500

600

May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13

xxx

Japan China US Singapore South Korea Phillipines Thailand Peru Other

ESPO Trades by Destination ['000 b/d]

Source: ArgusMedia

Russia - ESPO

0

1

2

3

4

5

6

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Russia Caspian

Turkmenistan

Kazakhstan

Azerbaijan

Upside Scenario

Downside Scenario

Caspian Total Liquids Output [million b/d]

Upside scenario: + 1.4 million b/d by 2020Kashagan Phase II as of 2018

Better performance ACGIncreased output from offshore Russia and

TurkmenistanNo output from Iran Caspian to be expected by 2020 even in the most optimistic scenario

Downside scenario: - 1.1 million b/d by 2020Kashagan Phase I delayed

High decline rates ACGTurkmenistan fields do not live up to

expectations

Caspian - Output

Pavlodar

Turkmenabat

Shymkent

Atasu

Alashankou

Omsk

Kenkiyak

Samara

Novorossiysk

Ceyhan

Makhachkala

Turkmenbashi

Atyrau

Supsa

Refining & Oil Infrastructure in the Caspian Region

RUSSIA

TURKMENISTAN

KAZAKHSTAN

UZBEKISTAN

BTC

CPC

Kazakhstan-China

Aktau

Source: Various IRAN

China

TURKEY

Legend:

Crude Pipeline

Major Crude Field

Ref inery

Proposed Crude Pipeline

Marine Transportation Route

Major Port

Baku

Caspian

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Central Azeri West Azeri East Azeri Deepwater Gunlashli Chirag Other Crude NGLs

Azerbaijan Total Liquids Output by Source [million b/d]

Chirag Oil Project

Shah Deniz II

ACG fields are on decline since 2010 - much earlier than initially estimated by BP.

On top of technical issues with the platforms, the reservoirs' performances are lower then expected.

Huge investments are needed to keep up production.

Azerbaijan - Output

Azerbaijan - BTC

-3.00

-2.00

-1.00

0.00

1.00

2.00

3.00

4.00

5.00


2008 2009 2010

2011 2012 2013

BTC Blend vs. Dated Brent [$/bbl]

Source: Platts

Kazakhstan - Output

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2011 2012 2013 2014 2015 2016 2017 2018

Tengiz Aktobe Uzen Mangistau Kumkol

Emba North Buzachi Kazgermunai Karazhanbas Other Crude

Kashagan Karachanganak Other NGLs

Kazakhstan Total Liquids Output by Source [million b/d]

Kashagan Phase I

Kashagan production commenced in September, with initial reported

volumes of 40,000 b/d. We expect 2013 production from the field to

come in at 35,000 b/d on an annualised basis.

Kazakhstan

Slide 24

VVIIEENNNNAA

Ch

art

Kazakhstan - China Pipeline

Uzbekistan

Kazakhstan ChinaAtyrau

Kumkol

Atasu

Tengiz

Alashankou

Russia

Russia

Kenkiyak

Kashagan

Kurmangazy

Uzen

Karachaganak Aktobe

Oilfield

Kazakhstan China pipeline

Legend:

Refinery

Pavlodar Refinery

Pavlodar Refinery

Shymkent Refinery

Source: JBC Energy

Existing Part: Kenkiyak Atyrau (to be reversed: 2014) Capacity: 120,000 b/d

Kenkiyak Kumkol (Undergoing Expansion)Capacity: 205,000 b/dExpansion: 405,000 b/d (2013)

Kumkol AtasuCapacity: 405,000 b/d

Atasu Alashankou (Undergoing Expansion)Capacity: 205,000 b/dExpansion: 405,000 b/d (2014 - 2015)

Pavlodar

Turkmenabat

Shymkent

Atasu

Alashankou

Omsk

Kenkiyak

Samara

Novorossiysk

Ceyhan

Makhachkala

Turkmenbashi

Atyrau

Supsa

Kazakh Exports in H1 2013 ('000 b/d)

RUSSIA

TURKMENISTAN

KAZAKHSTAN

UZBEKISTAN

BTC

CPC

Kazakhstan-China

Aktau

Source: Argus, JBC Energy IRAN

China

TURKEY

Legend:

Crude Pipeline

Major Crude Field

Ref inery

Proposed Crude Pipeline

Marine Transportation Route

Major Port

Baku

Kazakhstan - Exports

Slide 25

To China ~ 240

Via Russia ~ 370

CPC ~ 650

By rail via Black

Sea ports~ 190

Kazakhstan - CPC

-5.00

-4.00

-3.00

-2.00

-1.00

0.00

1.00

2.00

3.00


2008 2009 2010

2011 2012 2013

CPC Blend vs. Dated Brent [$/bbl]

Source: Platts

CPC vs BTC

-8.00

-7.00

-6.00

-5.00

-4.00

-3.00

-2.00

-1.00

0.00


2012 2013

2011 2010

CPC Blend vs BTC Blend [$/bbl]

Asia - Requirements

Slide 28

-5

-4

-3

-2

-1

0

1

2

3

4

5

0.0

2.5

5.0

7.5

10.0

12.5

15.0

17.5

20.0

22.5

25.0

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Asian Net Crude Imports

Russian Exports to the East

Global Middle Eastern Exports

(Asian Net Imports) - (Middle East Exports) - (Russian exports to East)_Right Scale

Asian Crude Requirements [million b/d]

The higher the black line, the more dependent Asia is on crudes that are

NOT located in the Middle East or

Russia.

2.9 3.2 3.23.7

1.51.9 1.9

2.30.6

1.2 1.2

1.4

1.3

1.3 1.1

1.0

11.6

12.1 12.3

12.4

0

5

10

15

20

25

2011 2013 2014 2017

Middle East Asia Americas Europe & FSU East Africa

16.0% 16.0% 16.2% 17.8%

8.6% 9.5% 9.8%11.1%

3.6%6.3% 6.1%

6.6%7.1%6.5% 5.7%

4.9%

64.7%61.6% 62.3%

59.5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2011 2013 2014 2017

Asian Crude Imports By Region 2011-2017 [million b/d; %]

Slide 29

Source: JBC Energy

Asia - Imports

Major Interregional Crude Oil Flows - 2012/2013/2015/2017 ['000 b/d]

North America

Europe

FSU

AsiaMiddle East

Africa

Source: JBC Energy estimates

121 108 98

1803

1542

1358

846

495

345

2179

2048

1811

2803

2806

2785

2200

2146

2196

4587 4529 4469

421

454

434

18181969

2285

12120 12190

12419

3150 3585 3718

11381192

1323

South America

2013

2015

2017

Flows >500,000 b/d displayed

2012

1984

2318

1168

874

3017

474

2677

133

4681

12014

23561730

Asia – Oil Flows

www.jbcasia.com

[email protected]

Consulting – Research – Training

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