Wood Mackenzie Energy Angola’s Oil & Gas Revenue: Past, Present & Future Delivering commercial insight to the global energy industry www.woodmac.com Wood Mackenzie Energy Agenda Background to Wood Mackenzie Setting the background - Angola’s upstream industry in context Historical and possible future government revenues A brief international context Petroleum Revenue Management Workshops, Luanda, May 2006 2 Delivering commercial insight to the global energy industry Wood Mackenzie Energy 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) Petroleum Revenue Management Workshops, Luanda, May 2006 3 Delivering commercial insight to the global energy industry Wood Mackenzie Energy 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) Petroleum Revenue Management Workshops, Luanda, May 2006 4 Delivering commercial insight to the global energy industry Wood Mackenzie Energy …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 Petroleum Revenue Management Workshops, Luanda, May 2006 5 Delivering commercial insight to the global energy industry Wood Mackenzie Energy …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 Petroleum Revenue Management Workshops, Luanda, May 2006 6 Delivering commercial insight to the global energy industry Wood Mackenzie Energy 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) Petroleum Revenue Management Workshops, Luanda, May 2006 7 Delivering commercial insight to the global energy industry Wood Mackenzie Energy …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) Petroleum Revenue Management Workshops, Luanda, May 2006 8 Delivering commercial insight to the global energy industry Wood Mackenzie Energy 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$25/bbl 30 20 10 0 1990 1995 2000 2005 2010 2015 Source: Wood Mackenzie’s Global Economic Model (GEM) 2020 Petroleum Revenue Management Workshops, Luanda, May 2006 9 Delivering commercial insight to the global energy industry Wood Mackenzie Energy …which will transform the revenues received by the state… Angolan Government Revenue ($ billion) 60 50 40 US$75/bbl 30 US$45/bbl US$25/bbl 20 10 0 1990 1995 2000 2005 2010 2015 Source: Wood Mackenzie’s Global Economic Model (GEM) 2020 Petroleum Revenue Management Workshops, Luanda, May 2006 10 Delivering commercial insight to the global energy industry Wood Mackenzie Energy …dominated by profit share from deepwater PSCs… Government Revenue Split ($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 Petroleum Revenue Management Workshops, Luanda, May 2006 11 Delivering commercial insight to the global energy industry Wood Mackenzie Energy …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) Petroleum Revenue Management Workshops, Luanda, May 2006 12 Delivering commercial insight to the global energy industry Wood Mackenzie Energy 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 13 Delivering commercial insight to the global energy industry Wood Mackenzie Energy 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 14 Delivering commercial insight to the global energy industry Wood Mackenzie Energy 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 15 Delivering commercial insight to the global energy industry Wood Mackenzie Energy 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 16 Delivering commercial insight to the global energy industry Wood Mackenzie Energy 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 Petroleum Revenue Management Workshops, Luanda, May 2006 17 Delivering commercial insight to the global energy industry Wood Mackenzie Energy 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: [email protected] E: catriona.o’[email protected] Wood Mackenzie Head Office Global Contact Details Kintore House 74-77 Queens Street Edinburgh EH2 4NS Europe Americas Asia Pacific Email +44 (0)131 243 4400 +1 713 470 1600 +65 6549 7107 [email protected] Global Offices Beijing - Boston - Dubai - Edinburgh - Houston - Kuala Lumpur - London - Moscow - New Jersey - New York - Singapore - Sydney - Tokyo Wood Mackenzie has been providing its unique range of consulting services and research products to the Energy and Life Sciences industries for over 30 years. Wood Mackenzie’s market proposition is based on its ability to provide forward-looking commercial insight that enables clients to make better business decisions. For more information visit: www.woodmac.com Petroleum Revenue Management Workshops, Luanda, May 2006 18 Delivering commercial insight to the global energy industry
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