Premier’s gas exports – powering Singapore’s growth The story to date and opportunities for the future 23 June 2010
Forward looking statements This presentation may contain forward-looking statements and information that both represents management's current expectations or beliefs concerning future events and are subject to known and unknown risks and uncertainties. A number of factors could cause actual results, performance or events to differ materially from those expressed or implied by these forward-looking statements. June 2010 | Page 1
West Natuna location map June 2010 | Page 2
West Natuna planned production facilities June 2010 | Page 3
Introduction West Natuna – Premier Position • We acquired an operator interest in West Natuna Block A PSC in 1996 and an interest in the Kakap PSC in 1997 which has led to our current net 14.3% overall share of the 1999 gas contract with Sembgas “GSA1”. • GSA1 has been tremendously successful, frequently producing above the Maximum Rate with a gas price linked to oil prices; we have benefitted from a four-fold increase in gas value. • 2008 saw our second gas sale “GSA2” with our Singapore buyers and two additional GSAs signed with new buyers in Batam. • By 2012 Premier will be selling more than 50% of total West Natuna gas, 15% net to Premier. • Premier’s Block A is a vitally important resource for Indonesia, annually generating in the order of $400 million in Government revenues over the next 10 years. June 2010 | Page 4
Oil prices track HSFO Brent vs HFSO (1 July 08 - 30 Sep 09) 900 800 700 600 HSFO $/mt 500 400 300 200 Our gas is in essence a Brent linked fuel 100 0 0 20 40 60 80 100 120 140 160 Brent $/bbl June 2010 | Page 5
The West Natuna Gas group WNG PSCs supply gas in market shares: • Block A (Premier) 37%; Block B (ConocoPhillips) 43%; Kakap (Star Energy) 20%. • Block A has strong export capacity and we have already captured > $200 million of extra revenue during periods when other PSCs have been unable to supply. • Block A which we operate with a 28.67% interest currently produces from the Anoa oil platform, the Anoa Gas Export (AGX) platform and the FPSO Anoa Natuna. • We also have an 18.75% share in the Kakap PSC. • Future new field developments will include Pelikan, Bison and Gajah Puteri for GSA1 and Gajah Baru, Naga and Iguana for GSA2. June 2010 | Page 6
West Natuna – gas demand to date • Our gas supply enabled Singapore to switch from liquid fuels to more efficient cleaner gas fired power generation; our gas is 15%* cheaper than the fuel mix used previously for electricity generation in Singapore and efficiency improved from 38% to 44%*. Gas is now 80%** of the Singapore energy market. • Singapore power generation is based around three main grid supplying power stations: Tuas Power (2670 MW), Power Seraya (3100 MW) and Senoko Power (3300 MW). These were all government owned until privatisation in 2008. In addition to these three main plants the Keppel 1 (500 MW IPP) was added in 2008**. • In addition to the main grid suppliers Singapore also has cogen and captive power. Sembcogen generates electricity (815 MW) used to make steam for the industrial complex on Jurong Island and any surplus power is sold into the grid. ExxonMobil and Shell have significant captive power generation used within their petrochemical sites, also on Jurong. * Singapore National Energy Policy Report ** Singapore Energy Market Authority June 2010 | Page 7
West Natuna – future gas demand Singapore • Gas demand by the main generators will increase as a result of Singapore’s economic growth (12% Q1 2010) and from population growth planned by the Government shown in the following charts. • New generation will come from expected new power projects such as IPPs • Keppel 2: up to 900 MW* • Island Power: up to 800 MW* • Captive power will increase as the petrochemical industries (notably ExxonMobil and Shell) add new generation in Jurong in support of their new polyethylene cracker plants. • Cogen requirements too will increase with planned projects such as by Sembcorp in support of industrial steam needs such as at Soxal’s new hydrogen plant and the Lanxess rubber plant. * Singapore Energy Market Authority June 2010 | Page 8
Singapore population growth Singapore population growth (2000 to 2020) 7.00 Actual 6.00 Projection 5.00 4.00 Millions 3.00 2.00 1.00 0.00 2000 2005 2010 2015 2020 Source: SingStat June 2010 | Page 9
Singapore GDP growth Singapore GDP growth (2000 to 2020) 10.0 8.0 6.0 4.0 2.0 Percent 0.0 -2.0 -4.0 Actual -6.0 Lower Range Higher Range -8.0 -10.0 2000 2005 2010 2015 2020 Source: MTI and Economic Strategies Committee June 2010 | Page 10
Singapore power demand Yearly electricity consumption by use 80,000 Domestic Manufacturing 70,000 Other industries Forecast (WoodMac) 60,000 50,000 40,000 30,000 20,000 10,000 0 1990 1995 2000 2005 2010 2015 2020 2025 2030 Source: EMA and WoodMac June 2010 | Page 11
Singapore gas demand by sector Singapore gas demand breakdown (2000-2030) 1800 On-grid power Captive power 1600 Non-power (direct sales to industry) Non-power (steam sales from Cogen) 1400 Non-power (residential and commercial) 1200 1000 BBtud 800 600 400 200 0 2000 2005 2010 2015 2020 2025 2030 Source: WoodMac June 2010 | Page 12
West Natuna – future gas demand Indonesia domestic gas – Government policy • Government policy is to prioritise domestic supply where possible. • Very little domestic demand is within easy connection reach of our gas. • Domestic pricing has historically been low but has risen recently to be in the $5 to $6/MMBtu range; domestic prices are understood to be increased in future to $12 to $13/MMBtu to match international gas pricing and attract external investment to ease domestic gas supply shortage*. • Accordingly Premier sees domestic gas as a further opportunity upside. Batam • Existing power generation is 250 MW which is fuelled by 35 BBtud of gas and, as more domestic and light industrial users get connected, is forecast to grow at up to 15% per year. • There is also 150 MW of diesel fuelled captive industrial generation but no grid connection is yet possible as there is insufficient external generating power. • Two new IPPs of about 120 MW each are to be built and exclusively supplied by Premier’s Block A gas at an initial 40 BBtud rising to 55 BBtud. * VP Boediono quoted in JakartaGlobe, June 2010 June 2010 | Page 13
West Natuna – other competition • LNG • Singapore will commission its first LNG re-gas terminal during 2013* • SLNG capacity will be 3 mtpa, roughly equal to 420 BBtud. • The main driver is to ensure energy diversification and the target market is new commercial power generation. • At current pricing LNG will be significantly more expensive than Premier gas from West Natuna. • Initial terminal throughput is expected to be in the order of 200 BBtud rising to nearly 300 BBtud by 2020. • Coal • A relatively small cogen project is in development by Tuas Power (160 MW*). • Due to Singapore’s limited land space and environmental concerns we do not expect coal to grow to major significance. * Singapore Energy Market Authority June 2010 | Page 14
Singapore gas balance Singapore gas demand – supply balance (2000-2030) 1800 Contracted and committed – DCQ LNG – uncontracted 1600 Natuna Sea Block A – uncontracted Natuna Sea – YTF 1400 South Sumatra – uncontracted South Sumatra – YTF 1200 TOTAL Demand 1000 BBtud 800 600 400 200 0 2005 2010 2015 2020 2025 2030 Source: WoodMac June 2010 | Page 15
Development plans to meet future gas demand • GSA1 • Our first field, Anoa, is a prolific producer and we continue to add to our ultimate field reserves estimates. • Three new fields Pelikan, Bison and Gajah Puteri will be developed for GSA1 to maintain our share of export capability. • Our next field development, Pelikan, is likely to be on stream by 2013. • GSA2 • We are currently developing the Gajah Baru field which is the first of three fields dedicated to GSA2; • Two more fields Naga and Iguana will be developed to maintain our contractual Maximum Rate and to be positioned to exploit any additional demand. June 2010 | Page 16
Natuna Block A sales gas reserves (1.5 TCF) Beruang 6. Iguana 2016 Lembu Petang Macan Tutul 5. Naga 2014 Iguana Naga Gajah Baru Bison Gajah Puteri Pelikan Anoa 2. WL drilling 2011 1. Gajah Baru 2011 3. Anoa Phase 4 2012 Plus 11mstb oil 6. Bison 2016 and condensate 4. Pelikan 2013 7. G.Puteri 2016+ June 2010 | Page 17
Natuna Block A gas sales forecast Natuna Block A gas sales forecast Potential Gajah Puteri 500 across nearby Kakap Exploration potential Extra available 450 Iguana export capacity Naga Possible additional Gajah Baru 400 compression Bison Gajah Puteri Double production over 3 years 350 Pelikan Exploration to Anoa increase production 300 Export capacity GSA2/3/4 BBtud GSA1 250 200 Today 150 100 50 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 June 2010 | Page 18
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