Institut Franais des Relations Internationales Energy Roundtable - PowerPoint PPT Presentation

Institut Français des Relations Internationales Energy Roundtable Brussels – March 21 st , 2013 New Energy Resources in East Africa Pushing back the continent’s last hydrocarbon frontier Roger CARVALHO CEO - SPTEC Advisory

Introduction to SPTEC Advisory  SPTEC Advisory was founded in 1994 as an independent advisory firm focusing on Oil & Gas in Africa and the Middle East, based in Paris.  The firm specialises in strategic and commercial advisory, mergers - acquisitions and divestitures advisory, as well as financial structuring and fund raising advisory.  Our client base includes corporations, financial institutions, governments and individuals related to our focus industry. The management has an extensive network of relationships with access to industry leaders and decision makers globally.  In February 2013, SPTEC Advisory and Upstream Advisors, a niche consultancy firm, have entered into a strategic alliance agreement to leverage their complementary expertise. 2

Contacts  For further information, please contact: Mustapha K. FAID Roger M. CARVALHO President Chief Executive Officer Cell: +33 6 82 84 52 38 Cell: +33 6 50 88 48 64 mkf@sptec-advisory.com rmc@sptec-advisory.com 72, rue du Faubourg Saint-Honoré 75 008 Paris 3

Gas has taken a large proportion in World’s Energy mix World Energy Consumption (Million tonnes oil equivalent) 4 942 12 384 17 197 3 463 5 612 1 479 6 772 100% +3.4 +9.1 +4.2 +3.2 5.4% 4.9% 5.6% 8.1% 8.8% 9.8% 0.1% 0.4% 0.5% 17.9% 1.6% 90% 4.8% 8.7% 25.5% 30.3% 80% (882) 6.6% -5.9 (1 499) 41.7% -0.2 19.6% 30.1% -2.9 38.8% (617) 70% (1 099) (3 724) (2 626) -5.6 24.5% (4 218) 19.4% 60% 18.2% (673) +5.3 (898) 24.7% +5.3 50% 15.2% (1 386) 23.5% +0.4 (225) +7.2 (2 906) 22.4% 23.9% 40% (1 520) (4 106) 30% 49.0% -11.7 45.7% -12.9 (1 697) 38.1% (2 260) 37.3% 20% -18.1 32.8% -5.7 (563) 29.0% (2 092) 27.1% (4 059) (1 967) (4 656) 10% 0% 1970 2011 2035 1970 2011 1970 2011 Total World Non-OECD OECD Liquids Natural Gas Coal Nuclear Other (Renewables, Hydro…) 4 Source: BP Statistical Review of World Energy June 2012

China and Asia will be the most demanding regions World Gas demand (bcm/a) 3229 2011 5

LNG importers: Demand is revised upwards with China and India reaching top ranks LNG import countries in 2011 Top four LNG importers in 2025 2009 Forecast bcm bcm 2012 Forecast 160 160 141 140 140 114 120 120 107 100 90 100 80 70 80 61 53 52 52 60 49 60 40 40 25 24 17 17 16 15 20 20 0 0 Japan South UK Spain India China Taiwan France Japan China India South Korea Korea Source: BP Statistical Review of World Energy June 2012 Source: BG Group interpretation of Wood Mackenzie data (Nov 2009 and Aug 2012 forecasts) 6

World LNG supply challenge: 232 bcm/a gap by 2025 = 232 bcm/a 7

LNG trades in 2011: 331 bcm representing 1/3 of total gas trade LNG vs Pipeline trade (bcm) 32 % LNG 330.8 Europe Europe Total 1025.4 Pipeline 68 % 694.6 Asia Asia 8

Top 10 New discoveries in 2012 Gas discoveries: 84.4 TCF Oil discoveries: 5 bnbbl 9

Mozambique accounted for 1/3 of the new volumes and Tanzania ranked 2 nd overall 10

Mozambique / Tanzania: Gas discoveries and prospects •  Songo Songo-1: drilled by ENI in Tanzania 1974 •  Mnazi Bay-1: drilled by ENI in Tanzania 1981 • 2006  Mkuranga-1: drilled by Maurel et Prom in Tanzania •  Kiliwani-North-1: drilled by Aminex in Tanzania 2008 •  Mafia-deep-1: drilled by Maurel et Prom in Tanzania 2009 •  Windjammer-1: drilled by Anadarko in Mozambique 2010  Barquentine-1: drilled by Anadarko in Mozambique  Lagosta-1: drilled by Anadarko in Mozambique  Pweza-1:drilled by BG in Tanzania  Chewa-1: drilled by BG in Tanzania •  Tubarao-1: drilled by Anadarko in Mozambique 2011  Camarao-1: drilled by Anadarko in Mozambique  Mamba south-1: drilled by ENI in Mozambique •  Zafarani-1: drilled by Statoil in Tanzania 2012  Mamba North-1: drilled by ENI in Mozambique  Golfinho-1: drilled by Anadarko in Mozambique  Chaza-1: drilled by BG in Tanzania  Jodari-1:drilled by BG in Tanzania  Mzia-1: drilled by BG in Tanzania  Atum-1: drilled by Anadarko in Mozambique  Ntorya-1: drilled by Aminex in Tanzania  Lavani-1: drilled by Statoil in Tanzania  Mamba North east-1: drilled by ENI in Mozambique  Coral-1: drilled by ENI in Mozambique  Papa-1: drilled by BG in Tanzania Source: Maurel et Prom •  Coral-3: drilled by ENI in Mozambique 2013 11 Legend: Tanzania discoveries  Tagawizi-1: drilled by Statoil in Tanzania Mozambique discoveries

Gas discoveries by actor in Mozambique & Tanzania Statoil BG Block 1 Block 2  2012  2012  9 TCF  8.7 – 13.7 TCF  2013  4 – 6 TCF Block 3  2012 14 TCF (estimated)  0.5 – 2 TCF Aminex 12.5 TCF (estimated) Mtwara Block  2012  1.5 TCF ENI 1.5 TCF (estimated) Area 4 Anadarko  2011  22.5 TCF Area 1  2012  2010/2011  43.5 TCF  17 – 30+ TCF  2013  2012  4 TCF  15 – 35 TCF 75 TCF (estimated) 50 TCF (estimated) 12

Mozambique ranks #12 in gas reserves globally 127 TCF in 2012, and more still to confirm Gas Proven Reserves (Tcf) Russia 1 575 Iran 1 169 Qatar 885 Turkmenistan 859 USA 300 Saudi Arabia 288 UAE 215 Venezuela 195 Nigeria 181 Algeria 159 Australia 133 Mozambique (e) 127 Iraq 127 Indonésie 105 Malaysia 86 Egypt 77 Norway 73 Canada 70 Kazakhstan 66 Kuwait 63 Uzbekistan 57 Libya 53 Tanzania (e) 28 0 100 200 300 400 500 13 Source: BP Statistical Review of World Energy June 2012, EIA, SPTEC Advisory

New supply for Asia by 2025: East Africa & North America (?) Egypt Qatar Japan 6,314 n miles Japan 7,573 Japan n miles 3,683 n miles Australia Existing supply New supply 14 Source: Dataloy (2013)

Mozambican fields development will cost $42.7 bn Total costs by field (billion USD) Capital Costs for potential LNG Plants 25 (as at December 2012) across the Globe (USD/tpa) 22.3 20 9.8 15 11.1 10 4.5 12.5 4.5 5 2.8 1.4 2.1 6.6 1.2 0.5 3.1 1.6 1.6 0 Prosperidade / Golfinho / Atum Tubarao Coral Others Mamba Pre-FID Post-FID (In June 2012) Total Exploration & Development Capital Costs Total O&M Costs 15 Source: ICF International, Credit Suisse

Current prices and forecasts make Mozambique projects profitable World LNG Estimated March 2013 Landed Prices NBP & Brent (85%), Long Term: JCC Henry Hub/ Other Hubs NBP (15%) Short Term: Nymex NBP/Other hubs UK $9.94 Belgium Korea $9.86 $17.75 Spain Cove Point $15.25 $3.34 Japan Lake Charles $19.75 China Altamira $3.01 $19.35 India $3.55 $15.70 Henry Hub since 2010 Rio de Janeiro $16.84 Bahia Blanca $18.09 16 Source: Waterborne Energy, Inc. Data in $US/MMBtu Updated: February 7, 2013

Mozambique will become a major player in LNG market LNG Nominal Capacity bcm 170 y 39 y 87 y 39 y 127 y 130 y 84 y 58 y 10 y 261 y 74 y 140 116 120 100 80 60 48 41 40 33 30 28 27 27 21 20 14 13 0 Qatar Indonesia Mozambique(e) Malaysia Nigeria Mozambique(e) Australia Algeria Trinidad & Tobago Mozambique(e) Russia with 6 LNG trains* with 4 LNG trains* with 2 LNG trains* Years (Reserves/Production) 17 * Mozambican exports does not take into account internal gas consumption Source: GIIGNL, ICF International, SPTEC Advisory

Challenges for Mozambique Financing Human Resources Infrastructure  Negotiate with Anadarko and  Training of decision makers  Roads ENI to get LNG development  Adequate labor force  Ports  Public ownership and funding  General education  Rails  Public-Private Partnership  Sustainability and  Airports  ENH’s financing structure environmental protection  Telecom  Financing ENH’s equity shares  Power grid Local Power Market Institutional Framework Other Industries  Energy Mix (Gas, Coal, Hydro)  Uses of revenues  Methanol  Gas Master Plan Development  USD or gas taken in-kind  Fertilizers (ammonia, urea) allocation  Decisions about downstream  Gas to liquids (GTL)  Regulatory mega-project development clarity in the  Cement Energy Sector  Local market and SME  Steel  Marketing structure promotion 18

A promising future  A New Giant in Natural Resources  Gas (127 TCF proven and more to come)  Coal (25 billion tons, 25% of the world’s coking coal by 2025)  A New Player in Energy Geopolitics  Asia  Europe  A Land of Opportunities in all sectors  European Industry players 19

SPTEC Advisory was established in 1994 as an independent advisory firm focusing on the Oil & Gas industry in Africa and the Middle-East SPTEC Advisory delivers un-biased advice supported by an in-depth knowledge of the sector value chain SPTEC Advisory specialises in strategic and commercial advisory, investments and divestitures advisory, as well as financial structuring and fund raising advisory www.sptec-advisory.com