© - Copyright Bureau Veritas
East Mediterranean Oil & Gas Opportunities for French Companies
20 June 2013
Marcel HocharVice President for Middle East
2© - Copyright Bureau Veritas GEP Presentation – 20 June 2013
Contents
1 The East - Med zone presentation
2 Positioning on the global O&G stage: what is changing how does it impact
3 Doing business / Infrastructures / barriers to entry and strengthes
4 What stage of development of O&G , what can we offer
5 E&P Associated Opportunities
6 Downstream Associated Opportunities
7 Positioning of the French Companies.
3© - Copyright Bureau Veritas GEP Presentation – 20 June 2013
The East - Med zone presentation
► Energy and Water deficient Region
► Home to many long lasting conflicts
Arab-Israeli
Turkish-Greek over Cyprus
► Levant Basin Estimated Reserves
> 125 tcf of recoverable gas
> 1.7 mbl of recoverable oil
► Contested water territory frontiers
Israel and Lebanon
Israel and Palestinian Territory
Turkey and Cyprus
► Cyprus provides privileged access to the EU market
4© - Copyright Bureau Veritas GEP Presentation – 20 June 2013
East - Med positionning on the global O&G stage
The East Med region is centric to an energy Stage facing unplanned evolutions:
Arrival of NA as a major Oil & Gas producer
Consumption and the Petrochem Industry shifting East
Unstable conditions in M.East and N. Africa
Oil price is one of a single market, driven by the transport industry. The prices of gas vary from 1 to 4.
The US are gradually disappearing as a major Importer of O&G, changing the trading geomarket.
N. America added 1 mBPD output in 2012, they’ll be at par with KSA in a few months (12 mbpd ).
5© - Copyright Bureau Veritas GEP Presentation – 20 June 2013
Doing Business, Infrastructures, barriers to entry and strengths
►Enforcing Contracts is a concern
►Starting a business and Protecting Investors more difficult in Lebanon and Syria
►No barriers to workforce entry and residence, No imposed local content
►No particular barriers and levies for import of equipment and material
►Good level of education of local population
Ease of Doing Business Rank Starting a
BusinessProtecting Investors
Trading Across Borders
Enforcing Contracts
Saudi Arabia 22 78 19 36 124France 34 27 82 27 8Cyprus 36 37 32 18 108Israel 38 41 6 10 94Lebanon 115 114 100 95 121Syria 144 132 117 125 176
6© - Copyright Bureau Veritas GEP Presentation – 20 June 2013
Cyprus Israel Lebanon Syria France KSA
Population Million 1.2 8.0 4.1 22.5
Unemployment % 14% 6.3% 10% 18%
GDP/capita USD 29,100 31,000 15,600 5,100
Power/capita kWh/yr 4675 7011 3130 1637 6847 7427
Water/capita m3/ca/yr 213 282 315 817 512 959
Road Density km/sq.km 135 85 70 40
Rail Network Km 1,001 2,500
Int'l Airports # 2 2 1 3
Ports # 2 6 2 4
Doing Business, Infrastructures, barriers to entry and strengths
WATER SHORTAGE
POWER SHORTAGE
HIGH UNEMPLOYMENT
7© - Copyright Bureau Veritas GEP Presentation – 20 June 2013
Cyprus Israel Lebanon
► Gas reserves ̴ 60 tcf
► Block 12 NOBLE started Appraisal Well Drilling
► Blocks 10 & 11 TOTAL drilling in 2015
► Blocks 2, 3 & 9 ENI/KOGAS drilling in 2015
► Mari-B, 1st offshore gasproduction facility 2004
► Dalit, Dolphin, Tanin, Noa, Pinnacles
► Tamar 10tcf Production started in April 2013
► Leviathan 18tcf (NOBLE & WOODSIDE)
► Gas reserves > 30 tcf
► No appraisal well drilled offshore
► 7 appraisal wells drilled onshore
► May – Nov 2013 Ongoing Bidding Process
► Feb 2014 Award
No surveys carried in Syria’s offshore EEZ
8© - Copyright Bureau Veritas GEP Presentation – 20 June 2013
• Drilling
• FSO / FPSO
Exploration&
Production
• Onshore LNG
• FLNG
• Pipeline
Processing&
Export
• Subsea pipelines
• Tank Farms
Transportation&
Storage
E&P Associated Opportunities
Building a tissue of local industries and resources
9© - Copyright Bureau Veritas GEP Presentation – 20 June 2013
E&P Associated Opportunities
►New Blocks attribution
► Fabrication, Logistics and Supply Infrastructures
►EPC for deep offshore fields development
► LNG Terminals (Vassilikos to start in 2015 $6B)
►Gas Pipelines (Israel to Jordan)
► FLNG Terminals
►Design and Consulting for Infrastructures
►Procurement, Supply Chain, Storage, …
10© - Copyright Bureau Veritas GEP Presentation – 20 June 2013
Downstream Associated Opportunities
►East Med Gas Reserves are estimated at 125tcf
► 15% of reserves cover Energy Needs of countries for 100 years
►Which strategy to adopt for the excess Gas?
LNG export, lower cost & easy to connect to future gas highways to Europe (Nabuco)
Petrochemical Industry, resources intensive (Chemicals, Plastics, …)
Gas energy – power – water desalination
Develop high energy consuming industries, (Aluminum, Metals, …)
11© - Copyright Bureau Veritas GEP Presentation – 20 June 2013
Possibilities for the Region : Which Value Chain?
Rawgasentry LNG
Onshore Gas treatment
Liquefaction
PowerIndustries
Grid
Desalination
Petrochemicals
Consumption (Power, LNG, Petrochem, Domestic Usage)
► The Region is in need of Power, Water, Jobs
►Gas turbines are the most ‘’environmentally friendly’’ approach
12© - Copyright Bureau Veritas GEP Presentation – 20 June 2013
Possibilities for the Region: LNG Export
►LNG export from East Med is feasible and a serious option
►Lower cost
►Easy to connect to future gas highways to Europe
(Nabucco, Southern Gas Corridor, White Stream, …)
►Cyprus (EU member) can federate gas from other countries to facilitate access to European markets
►Asia is already in talks with Israel on the Leviathan reserves
13© - Copyright Bureau Veritas GEP Presentation – 20 June 2013
Possibilities for the Region: Petrochemicals
The Petrochemical industry is a real possibility with a global Growth of plastic consumption expected to be at a steady 5% for the years to come .
The East Med zone is very competitive
and needs the jobs :
14© - Copyright Bureau Veritas GEP Presentation – 20 June 2013
Possibilities for the Region: Power / Water
Energy & Water deficient countries with high consumption growth
Gas is cheap and environmentally friendlier that coal/fuel
►Build networks for domestic gas distribution
►Plant Conversion (Fuel/Coal Gas)
►Upgrade & Extension of electricity grid
Large facades on the Mediterranean most suitable for
Desalination plants to solve water shortage and ease tensions
►Reverse Osmosis
►Multi Stage Flash
►Distillation
15© - Copyright Bureau Veritas GEP Presentation – 20 June 2013
Possibilities for the Region: Industries
Energy intensive industries►Aluminum (replicate examples of UAE, Bahrain)
► Foundries, Metals, Iron/Steel
► Fabricated Metals
►Paper
►Glass,….
►Rail (train, metros, tram, …)
Stronger manufacturing, Economic Expansion, Job creation
16© - Copyright Bureau Veritas GEP Presentation – 20 June 2013
Positioning of French Companies
►Robust expertise of the French industry in the O&G sector
…quoted last week by Agence France Presse for the NA Shales : "Il s'agit d'une grande tradition française d'avoir des groupes à la pointe de la technologie pétrolière … il n'y a pas d'autres pays qui dispose de l'intégralité de la filière"
Total, Maurel & Prom, Imerys, Vallourec, Technip, Schlumberger, Trouvay-Cauvin, Bureau Veritas.….
► Lebanon and Syria ex French protectorates and French speaking
►Europe could be one of the major gas export destinations
►Ease of entry through Cyprus, a fellow EU country
► 70% of Human capital expected to be expatriates
© - Copyright Bureau Veritas
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