Wood Mackenzie`s Global Economic Model (GEM)

Wood Mackenzie
Energy
Angola’s Oil & Gas Revenue:
Past, Present & Future
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Agenda
Background to Wood Mackenzie
Setting the background - Angola’s upstream industry in context
Historical and possible future government revenues
A brief international context
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Background to Wood Mackenzie
Providing information and analysis on the upstream industry for over 30 years
Asset level information - field by field or block by block
• Started West African coverage in 1990
Research and analysis held in proprietary databases and economic models
Asset data, field profiles, contract terms etc derived from many sources
• Public information
• Government information
• Company information
• Conversations with operators, partners…
Ultimately all asset profiles and values are WM own best estimates
Data here comes from Wood Mackenzie’s Global Economic Model (GEM)
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Angola has seen spectacular growth in its deepwater resource
base…
9,000
Million barrels
Deepw ater
Remaining Undeveloped
7,000
Remaining Onstream or Under Development
5,000
Produced Liquids
3,000
Ultra-Deep
Cabinda
Offshore
1,000
-1,000
-3,000
Source: Wood Mackenzie’s Global Economic Model (GEM)
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…resulting in ongoing upward revision of production
profiles…
3,000
kb/d
2,500
WM View in 1990
WM View in 1995
2,000
WM View in 2000
WM View in 2006
1,500
1,000
500
0
1980
1985
1990
1995
2000
2005
Source: Wood Mackenzie’s Global Economic Model (GEM)
2010
2015
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…driven by deepwater developments
Angolan Oil Production (kb/d)
3,000
2,500
2,000
Ultra-Deepw ater
Deepw ater
1,500
Shallow Water
Cabinda
1,000
500
0
1990
1995
2000
2005
2010
2015
Source: Wood Mackenzie’s Global Economic Model (GEM)
2020
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Lead times from discovery to development sanction
have been increasing…
2012
2011
2010
2009
2008
2007
2006
Source: Wood Mackenzie
2005
2004
2003
2002
Onstream
2001
2000
1999
1998
Discovery
1997
1996
1995
1994
Angola
1993
Licence Awarded
Onstream Projects
Kuito - Blk 14 (CVX)
Girassol - Blk 17 (Total)
Jasmim - Blk 17 (Total)
Xikomba - Blk 15 (XOM)
Kizomba A - Blk 15 (XOM)
Kizomba B - Blk 15 (XOM)
BBLT - Blk 14 (CVX)
Projects Under Development
Dalia/Camelia - Blk 17 (Total)
Rosa - Blk 17 (Total)
Greater Plutonio - Blk 18 (BP)
Marimba - Blk 15 (ExxonMobil)
Probable Developments
Jimbao - Blk 4 (Sonangol)
Kizomba C - Blk 15 (ExxonMobil)
Mavacola - Blk 15 (ExxonMobil)
Tombua Landana - Blk 14 (CVX)
Cravo Lirio - Blk 17 (Total)
Negage - Blk 14 (ExxonMobil)
Block 18 West - Blk 18 (BP)
NE Development - Blk 31 (BP)
Acacia - Blk 17 (Total)
Kizomba D - Blk 15 (ExxonMobil)
Block 32 Development - Blk 32 (Total)
SE Development - Blk 31 (BP)
Source: Wood Mackenzie’s Global Economic Model (GEM)
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…and need to be accelerated to stem decline from the first
tranche of developments
Year 20
Year 19
Year 18
Year 17
Year 16
Year 15
Source: Wood Mackenzie
Year 14
Year 13
Year 12
Year 11
Onstream
Year 10
Year 9
Year 8
Year 7
Year 6
Year 5
Dev. Sanction
Year 4
Year 3
Year 2
Angola
Year 1
Discovery
Onstream Projects
Kuito - Blk 14 (CVX)
Girassol - Blk 17 (Total)
Jasmim - Blk 17 (Total)
Xikomba - Blk 15 (XOM)
Kizomba A - Blk 15 (XOM)
Kizomba B - Blk 15 (XOM)
BBLT - Blk 14 (CVX)
Projects Under Development
Dalia/Camelia - Blk 17 (Total)
Rosa - Blk 17 (Total)
Greater Plutonio - Blk 18 (BP)
Marimba - Blk 15 (ExxonMobil)
Probable Developments
Jimbao - Blk 4 (Sonangol)
Kizomba C - Blk 15 (ExxonMobil)
Mavacola - Blk 15 (ExxonMobil)
Tombua Landana - Blk 14 (CVX)
Cravo Lirio - Blk 17 (Total)
Negage - Blk 14 (ExxonMobil)
Block 18 West - Blk 18 (BP)
NE Development - Blk 31 (BP)
Acacia - Blk 17 (Total)
Kizomba D - Blk 15 (ExxonMobil)
Block 32 Development - Blk 32 (Total)
SE Development - Blk 31 (BP)
Source: Wood Mackenzie’s Global Economic Model (GEM)
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Huge investment required to generate massive revenues…
Angolan Gross Revenue & Costs ($ billion)
90
80
70
Opex
60
Capex
50
US$75/bbl
US$45/bbl
40
US$25/bbl
30
20
10
0
1990
1995
2000
2005
2010
2015
Source: Wood Mackenzie’s Global Economic Model (GEM)
2020
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…which will transform the revenues received by the state…
Angolan Government Revenue ($ billion)
60
50
40
US$75/bbl
30
US$45/bbl
US$25/bbl
20
10
0
1990
1995
2000
2005
2010
2015
Source: Wood Mackenzie’s Global Economic Model (GEM)
2020
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…dominated by profit share from deepwater PSCs…
Government Revenue Split
($billion; $45/bbl case)
30
25
SGL equity
20
PSC Tax
PSC Profit Share
15
Concession taxes
Royalty
10
Bonuses
5
0
1990
1995
2000
2005
2010
2015
Source: Wood Mackenzie’s Global Economic Model (GEM)
2020
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…with total state revenue at least 50% of gross revenue and
could be as high as 80%
Government Revenue % of Gross Revenue
100%
90%
80%
70%
60%
50%
40%
US$25/bbl
30%
US$45/bbl
20%
US$75/bbl
10%
0%
1990
1995
2000
2005
2010
2015
2020
Source: Wood Mackenzie’s Global Economic Model (GEM)
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UK comparison
$ billion
70
CT
60
PRT
SPD/APRT
50
Royalty
Gross Revenues
40
30
20
10
0
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
Source: Wood Mackenzie’s Global Economic Model (GEM)
Petroleum Revenue Management Workshops, Luanda, May 2006
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UK comparison
$ billion
70
CT
60
PRT
SPD/APRT
Royalty
50
% Take
Gross Revenues
40
30
20
10
0
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
Source: Wood Mackenzie’s Global Economic Model (GEM)
Petroleum Revenue Management Workshops, Luanda, May 2006
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Norway comparison
90
$ billion
80
CT
ST
Royalty
Gross revenues
70
60
50
40
30
20
10
0
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
Source: Wood Mackenzie’s Global Economic Model (GEM)
Petroleum Revenue Management Workshops, Luanda, May 2006
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Norway comparison
90
$ billion
80
CT
70
ST
Royalty
60
% take
Gross revenues
50
40
30
20
10
0
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
Source: Wood Mackenzie’s Global Economic Model (GEM)
Petroleum Revenue Management Workshops, Luanda, May 2006
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Conclusions
What are the upsides?
• High prices – progressive government take
• Further discoveries
• Spectacular bonuses for some deepwater licences
What are the downsides or risks?
• Low prices
• Very high cost inflation throughout industry
• Very steep production decline without further discoveries
• Disappointment in ultra-deep water
• Small number of partners
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Thank you for your attention
Thank you for your attention
David Morrison
Catriona O’Rourke
Chairman, Energy
Senior Angola Analyst
T: +44 207 877 0570
T: +44 131 243 4250
E: david.morrison@woodmac.com
E: catriona.o’rourke@woodmac.com
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