the information contained in this presentation is intended ... · the information contained in this...
TRANSCRIPT
The information contained in this presentation is intended solely for your own
reference only. In addition, information contained in this presentation includes
projections and forward-looking statements that reflect the Company’s current
views with respect to future events and financial performance. These views are
based on assumptions subject to various risks. No assurance can be given that
future events will occur, that projections will be achieved, or that the Company’s
assumptions are correct. Actual results may differ materially from those projected.
Past track record cannot be used as guidance for future performances.
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2. Company Prospects
1. Industry Outlook
Global E&P Spending Declined
4
Source: Barclays Capital
Declining worldwide E&P spending
Source: CNOOC
21%
67%
10% 2%
Exploration DevelopmentProduction Others
CNOOC’s CAPEX declined yoy
2015E
2014E
In the short term, oil companies are reducing
their investments, adding uncertainties to the
sector.
Global E&P CAPEX for 2015 will decline; that for
the Middle East region will stay unchanged; NOC
will decline by 1%, IOC will decline by 14.5%.
In the medium to long term, oil and gas remains
an important component in overall energy
consumption structure.
Million USD
Worldwide Middle
EastLatin
AmericaSE Asia Europe
CNOOC reduced CAPEX considerably in 2015, with
a relatively smaller investment change
appropriated for offshore China.
Guidance for CNOOC’s CAPEX in 2015: continue to
pursue projects in progress, cautiously implement
re-evaluate projects, reduce and slow down high-
risk projects; flexibly adjust investments along with
market and oil price changes for the short term and
be prepared for medium to long term development.
Shrinking Demand for Oilfield Services
Utilization rate of drilling rigs Demand and utilization rate of geophysical vessels
Due to CAPEX cuts by oil companies and project
delays or suspensions, the demand in global
drilling rig markets shrank. Different types of rigs
saw varying declines in utilization rates.
Global day rates were under pressure, day-rates of
deepwater and ultra-deepwater rigs are expected to
remain sluggish, also high-spec jack-ups saw
declines recently.
Global demand for and utilization rates of
geophysical vessels started to decline since the
third quarter of 2014, against a backdrop of
intensifying market competition.
Some companies engaging in geophysical
services are exiting or plan to exit the market.
Large-scale geophysical companies focused on
developing wide-band, wide-coordinate and high
density data collection techniques. The demand
for ocean-bed seismic services is on the rise.
Fleet Size
Demand
Utilization
Source：IHS Petrodata
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Re-positioning in the New Order of the Oil Sector
Weak oil prices
change demands of
oil companies Lower per-barrel
production cost
More competitive price tags for services, more flexible business model
Proven safe, high efficiency, and high-quality services, improvements in
drilling techniques and workflows to generate better operation efficiency
Competitive cost structure and robust financial health
Integrated service capability to lower clients’ coordination costs
Flexibility in coordinating resources to meet clients’ immediate increases in demand
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2
3
4
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Service companies need
to possess the following capabilities:
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2. Company Prospects
1. Industry Outlook
Strive to Become a World-class Oilfield Service Company
Global foothold facilitates resource allocation
Europe
MiddleEastAmericas
SE Asia
others
Persisting in strengthening of global competitiveness
0
5000
10000
2002 2005 2008 2011 2013
（RMB million）
Int’l markets
42%CAGR（2002-13）
Group
23%CAGR（2002-13）
Peers Average 1
15%CAGR（2002-13）
13
16
21
18
11
0
20
40
60
80
2010 2011 2012 2013 3Q2014
CNOOC’s new discoveries secured
Sustainable working volume for the future
0%
50%
100%
Drilling Well Service Marine Support Geophysical&Surveying
90%
60% 55%
90%
Reinforcing leading position in offshore China
Note 1: “International peers” refers to the top 4 oilfield service companies and top 6 drillers. Source：Bloomberg
China
Source：CNOOC Limited
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Leverage comparative advantages
Market
Principles
Strategic
cooperation
principle
Principle of
balancing long and
short term
Proactively design and implement innovative service models for oilfield development to lower clients’ costs and
improve efficiency
Secure exploration work volume in offshore China to achieve industry-leading utilization rates.
• Core offshore China
market
• Possess
unparalleled
financial and
operational
comparative
advantages over
industry peers
• Core offshore
China market
• Strong financing
capability
• Cater to both
short-term and
long term
investment plans
Long-term strategic partner
Emphasizes on core offshore China market
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Maintaining leadership in operation efficiency and competitiveness
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Reinforce presence in offshore China, maintain leading
market position
Reinforce and develop international markets including
the Norwegian North Sea, Mexico, Southeast Asia and
the Middle East, tapping opportunities for integrated
services
Focus on development of new target markets, e.g. Saudi
Arabia, Brazil and Russia
Flexible implementation of new business models
accommodating clients’ needs
More proactive market developmentMore detailed cost control
Enhance drilling techniques & workflows and inventory
structure, improve equipment management, ensure safe
operation, and effectively reduce downtime
Strict control on CAPEX scale and purpose
Speed up commercial application of self-developed
technologies to balance subcontracting and leasing costs
Strengthen management of suppliers to pass on cost
pressure
Declines in oil prices pushed down selected variable costs
Lower SG&A expenses
Leverage comparative advantages (cont’d)
Full
StageExploration Development Production
Synergies
15%
20%
25%
30%
2011 2012 20132014E
2015P
Continuous optimization
of rig fleet structure
Growing contribution from
the well service segment
34%
50%
16%
Over 25 yrsNo depreciation
(JUs+Semis)
Other semis
（high spec
/newly built）
Other Jack-ups
（high spec
/newly built）
Enhance flexibility with equipment and technology
Equipment
Segment
Technology
Segment Continuous optimization of
equipment structure
Exceptional equipment
operation efficiency
Unparalleled equipment
management capability
Maintained industry-leading
utilization rates
Self-developed Welleader®
and Drilog® systems
completed joint marine
operation
ELIS achieved major
technological breakthrough
Leverage comparative advantages (cont’d)
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Strong financial health and leading credit ratings
Abundant cash available for use1：RMB15 billion
Further improved gearing: debt-to-assets ratio: 46.9%
Net debt-to-equity ratio: 40.8%
Finance cost: 2.0%, lower than industry average
Moody’s S&P Fitch
Schlumberger Aa3(stable) AA-(stable) -
Halliburton A2 (stable)
A(under
negative watch
list）-
Baker Hughes A2 (stable)
A（under
negative watch
list）A- (stable）
COSL A3(stable) A-(stable) A (stable）
Diamond A3 (stable) A-（neg） -
Ensco Baa1(stable) BBB+ (neg） -
Noble Baa2(stable) BBB+ (stable） -
Oceaneering Intl Baa2(stable) BBB(stable）
Weatherford Baa3 (stable) -
Rowan Baa3 (stable) BBB-(stable）
Atwood Oceanics Ba2(stable) BB(pos）
CGG SA Ba3(neg) B+(neg）
Hercules Offshore B2(neg） B-(stable）
1. Cash available for use represents the sum of money market funds as
well as available-for-sale financial assets. Financial data as of 3Q2014
Source：Bloomberg, as of 22 Jan 2015
COSL's liquidity is very strong…
The company also has abundant
undrawn credit facilities from
domestic and overseas banks and
good access to the debt and equity
capital markets.
“……low cash cost and and
good liquidity help Asian oil
companies to manage
themselves against low oil
prices ……”
Leverage comparative advantages (cont’d)
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Rig Operation Status in 2015
Location Drilling Rig2015
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Domestic
20 Jack-ups
(contract terms until end-2015)
3 Semi-submersibles
(contract terms until end-2015)
COSLProspector Newly delivered
HYSY941
COSLGift
NH9
NH7
NH5
International
7 Jack-ups1
(contract terms until end-2015)
3 Semi-submersibles2
(contract terms until end-2015)
COSLPower
COSLSuperior 卡塔尔
HYSY937
COSLSeeker
NH6
Note: Data above as of 3 February 2015 and may subject to change; rigs under maintenance are not shown;
Jack-ups are marked in blue and semis are marked in green.
1.COSLHunter is serving a contract while a subsequent contract is pending confirmation.
2.COSLPioneer has suspended its operation and it is expected to resume operation in August. 13
New Delivered
Qatar
Under Maintenance in China
Indonesia
Australia
INA
Prudent CAPEX Principles
Drilling
With well-defined subsequent
targeted, dedicated rig models
for dedicated waters
No viable alternatives in the
market
Example: Two 400-ft large-pile-
leg jack-ups
Marine Support
Constructed specialty vessels,
boost market shares
14 utility vessels will commence
operation in 2015; 15 utility
vessels will commence operation
in 2016
In-house R&D for technical
equipment helps enhance the core
competitiveness and reduce
subcontracting costs
Replacement of obsolete
equipment, total equipment count
remained unchanged while
performance improved
significantly
Geophysical
Well Service
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Recap
Domestic and international business to improve in medium to long term;
Further enhance international
competitiveness and degree of
internationalization; maintain
intrinsic competitiveness and strive
to be a world first-class oilfield
services provider
Leverage comparative advantages
1. Offshore China as the core market
2.Cost leadership
Operational cost advantage
Finance cost advantage
3. Unique integrated service offering
Reduce costs and develop new
income streams, develop new
markets, tighten cost control
Prudent CAPEX policy in order to
reserve necessary capacity for
subsequent development needs
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