Post on 30-Dec-2015
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Brian Reinsborough
PresidentNexen Petroleum U.S.A., Inc.
Friday, December 5, 2008
Challenges in the Deepwater Gulf of Mexico
Challenges in the Deepwater Gulf of Mexico
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AgendaAgenda
Why Deepwater Gulf of Mexico?
Challenges Our Industry Faces
The Path Forward
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Why Deepwater GoM?Why Deepwater GoM?
Long-Term Demand for Oil Remains Strong
Deepwater has Large Yet-to-Find Resources
Fiscal Regime is Stable and Attractive
Proximity to a Consuming Market
Deepwater Drilling will Account for 25% of Offshore Production
Technology Breakthroughs will Drive Activity
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Challenges Our Industry Faces: External EnvironmentChallenges Our Industry Faces: External Environment
ExternalEnvironment
CompetitiveLandscape
Access
TechnologyInfrastructure
Development
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Players / New Entrants
Access
Costs CompetitiveLandscape
Competitive LandscapeCompetitive Landscape Infrastructure Development
CompetitiveLandscape Access Technology
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AccessAccess
Access
Infrastructure DevelopmentCompetitiveLandscape Access Technology
Lease Sales
M&A
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Technology
TechnologyTechnologyInfrastructure Development
CompetitiveLandscape Access Technology
Seismic
New Plays
Complex Geology
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InfrastructureInfrastructure
Infrastructure
Infrastructure DevelopmentCompetitiveLandscape Access Technology
InfrastructureDevelopment
Tie-backs
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Development
DevelopmentDevelopmentInfrastructure Development
CompetitiveLandscape Access Technology
Resource Constraints
Execution
Knowledge
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Response
Credit Tightness
Lower Oil Price
Majors
Exploit “opportunistic” M&A
Maintain low debt levels (reduce buy-backs?)
Seek to reduce costs
Exploration review
Type of Company
Large Caps
Delay /phase major projects
Asset rationalisation for some
Conserve cash
Reduce discretionary expenditure
E&P
Sell assets to fund developments
Struggle to raise finance
Cut exploration activity
Seek financially strong partners
Lack of project finance
Domestic budget pressures
NOC – Resource Holder
Service Companies
Become more competitive seeking service contracts with NOCs
Slow investment in new equipment
Margins at risk as activity falls
Impact of Lower Prices & RecessionImpact of Lower Prices & Recession
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The Path ForwardThe Path Forward
Longer-Term Oil Price Forecast Remains Strong recession believed to be short term worldwide supply/demand equation will balance
Projects may Slow Short Term industry consolidation expected to occur some companies will conserve capital
Deepwater Projects are Long-Term Focused
Deepwater Rigs will keep Drilling assumes capital is available for contract owners deepwater rigs still in short supply
Technology Advancements will Improve Economics of New Plays