Market Research Report : Oil and gas market in china 2014 - Sample

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Oil and Gas Market – China
September 2014

2
OIL AND GAS MARKET IN CHINA 2014.PPT
Executive Summary
Market
Drivers & Challenges
Competition
Domestic oil demand is expected to reach x Mb/d in 20-- growing with a CAGR of x.y% during 20-- - --
Chinese Government is planning to boost the share of natural gas as part of total energy consumption to around x% by the end of 20-- and y% by 20--
Major Players
Company A
Company B
Company C
Company D
Company E
Government Initiatives
Chinese 12th Five Year Plan
Tax and Pricing Reforms
Drivers:
Untapped Potential
Rising Population and Urbanization
Growing Automobile Sector
Low Penetration
Growing Petrochemical Industry
Construction and Expansion of LNG Terminal
Construction and Upgrading of Oil Refineries
Overseas Investments
Reliance on Unconventional Gas
Trends
Challenges:
Foreign Dependence
Reduction in CO2 Emission
Increasing Focus on Renewable Energy

3
•Macro Economic Indicators
•Market Overview
•Global
•China
•Exports and Imports
•Drivers & Challenges
•Government Initiatives
•Key Trends
•Competitive Landscape
•Strategic Recommendation
•Appendix

4
Economic Indicators (2/3) SAMPLE
Lending Rate: Annual
0 A B C D E F G
%
Per Annum
2013 m
2012 z
2011 y
2010 x
Trade Balance: Annual
Commercial Bank Rates: Key Lending Rates as Prescribed by RBI (All
Commercial Banks including SBI) - Minimum Rate General
N.B.: 2012-13 encompasses figure for Apr – Nov 2012
FDI: Net Inflow
2009 2010 2011 2012
E
D
C
B
A
0
d
c
a b
USD bn
2009 2010 2011 2012
CC
BB
AA
0
USD bn
dd
cc
bb
aa

5
•Macro Economic Indicators
•Market Overview
•Global
•China
•Exports and Imports
•Drivers & Challenges
•Government Initiatives
•Key Trends
•Competitive Landscape
•Strategic Recommendation
•Appendix

6
SAMPLE Global oil production grew x% in 2013, registering an
increase of aa mn tons from 2010
• Global oil production reached xx mn tonnes in 2013 growing
with a CAGR ofa% during 20-- -13
 US recorded the largest growth in the world and accounted for
around x% of the Non OPEC output in 2013
• Global oil consumption reached aamn tonnes in 2013 growing
with a CAGR of x% during 20-- -13
 Non OECD countries now account for a% of global oil
consumption and they once again accounted for all of the net
growth in global consumption
• Global oil reserves increased from aaa thousand mn barrels in
20-- to bbb thousand mn barrels in 20--
Global Oil Market – Overview Global Oil Demand
A5
A4
A3
A2
A1
0
2010
c
2000
b
1990
a
Quadrillion BTUs
x
2040e
e
2025e
d
A3
A2
A1
0
Mn tonnes
2009
g
2008
f
2007
e
2006
d
2005
c
2004
b
2003
a
x
2013
k
2012
j
2011
i
2010
h
Global Oil Production

7
SAMPLE
In 2013,Middle east region accounted for x% proved oil
reserves
Global Gas – Proved Reserves
AA4
AA3
AA2
AA1
0
bcm
y
2013
k
2012
j
2011
i
2010
h
2009
g
2008
f
2007
e
2006
d
2005
c
2004
b
2003
a
Global Gas Consumption
A1 A2 A3 A4 A5 A6 A7 A8 A9 A10 A11 A12 A13 A14 A15 A16 A17 A18 A19 A20 A
TCM
c4 c5 c6
20-- b1 b2 b3 b4 b5 b6
19-- a1 a2 a3 a4 a5 a6 A
B
20-- c1 c2 c3 C
aa1 aa2 aa3 aa4 aa5 aa6
Note: TCM: Trillion Cubic Meters

8
SAMPLE In 2013, global R/P ratio of oil and gas was x and y
respectively
• At the end of 2013, global R/P ratio of oil was x
• In 2013, R/P ratio of oil was the highest for Middle
East at y
• In 2013, R/P ratio of oil was lowest for Asia Pacific at
Z
Global Oil Reserves Global Oil Reserve to Production Ratio
Global Gas Reserves Global Gas Reserve to Production Ratio
• At the end of 2013, global R/P ratio of gas was x
• In 2013, R/P ratio of gas was the highest for Africa at
y
• In 2013, R/P ratio was lowest for North America at z
Note: Reserves-to-production (R/P) ratio: If the reserves remaining at the end of any year are divided by the production in that year, the result is the length of time
(yrs.) that those remaining reserves would last if production were to continue at that rate
Proved reserves of natural gas – Generally taken to be those quantities that geological and engineering information indicates with reasonable certainty can be
recovered in the future from known reservoirs under existing economic and operating conditions
Oil R/P ratio for South and Central America and Gas R?P Ratio for Middle East region is not available
D
C
B
A
0
Asia Pacific
A5
Africa
A4
Middle East
A3
Europe and
Eurasia
A2
North
America
A1
B
A
0
Asia Pacific
A5
Africa
A4
Europe
and
Eurasia
A3
South and
Central
America
A2
North
America
A1

9
SAMPLE China’s oil production and consumption has increased over
the past decade at a remarkable rate in China…
Domestic Oil Market – Overview
C
B
A
0
Mb/d
X
2018e
x6
2017e
x5
2016e
x4
2015e
x3
2014e
x2
2013
x1
• Domestic oil demand is expected to reach a Mb/d in
20-- growing with a CAGR of x% during 2013-18
• In 2013 the R/P ratio of oil in China was y implying that
if oil production continues at the current rate the
reserves would last for only y years
• Domestic oil production reached aa mn tonnes in 2013
growing with a CAGR of a% during 2003-13
 China’s oil production is expected to increase to about x
million bbl/d by the end of 2014
• China’s oil consumption growth has been reduced
after a high of m% in 2009
 Domestic oil consumption reached a mn tonnes in 2013
growing with a CAGR of x% during 2003-13
• Country’s national oil companies dominate the oil and
gas upstream and downstream sectors
 However the Chinese government has granted international
oil companies more access to technically challenging
onshore and deep water of shore fields
Domestic Oil Demand
Oil Production from Overseas Acquisition
x4
x3
x2
x1
0.0
Mn barrels / day
A
2012
Y
2000
X

10
SAMPLE
Oil demand in China is expected to witness rapid growth in
the transportation sector
Sector –
Wise Oil
Demand
6
4
A
0
A
2035e
z
2020e
y
2010
x
Mboe/d
0.0
0.2
0.4
0.6
0.8 B
2035e
z
2020e
y
2010
x
Mboe/d
0.0
0.5
1.0
1.5
2.0
D
2035e
z
2020e
y
2010
x
Mboe/d
0.0
0.2
0.4
0.6
0.8
1.0
C
2035e
z
2020e
y
2010
x
Mboe/d
Road Transportation Aviation Sector
Rail and Domestic Navigation Marine Bunkers

11
SAMPLE
Gas production and consumption has increased rapidly over
the past decade in China and …
Domestic Gas Market – Overview
• Domestic gas production reached aa bcm in 2013
growing at a CAGR of x% during 2003-13
 Chinese Government is planning to produce about x Tcf of
natural gas by the end of 2015
 Gas production is expected to increase by x% from aa bcm in
2013 to bb bcm by the end of 2019
 Government is also planning to boost the share of natural
gas as part of total energy consumption to around x% by the
end of 20--and y% by 20--
• In the long term, China’s gas consumption is expected
to touch aa bcm in 20-- and bb bcm by 20--
 In general, industrial sector consume majority of the gas
produced in the country
 However, the share of gas consumption in power, residential
and transportation sectors have been rising over the past
decade
• In 2013 the R/P ratio for gas in China was x implying
that if gas production continues at the current rate the
gas reserves would last for another x years
•Natural gas demand is expected to reach aa bcm with a
CAGR of x% during 2013-18
 In the long term, the demand is expected to increase to x Tcf
in 20--and y Tcf by 20--
C
B
A
0
x
bcm
2018e
a6
2017e
a5
2016e
a4
2015e
a3
2014e
a2
2013
a1
Domestic Gas Demand
Sector – Wise Gas Demand (2012)
E
D
C
B
A
E
D
C
B
A

12
SAMPLE Saudi Arabia is a major oil exporter to China accounting for
x% of the total oil imports of China
Oil Market – Exports
Oil Market – Imports
E
D
C
B
A
0
USD mn
A
2013
A4
2012
A3
2011
A2
2010
A1
D
C
B
A
Malaysia
USA
Japan
Korea
E
D
C
B
A
0
USD mn
B
2013
A4
2012
A3
2011
A2
2010
A1
Exports Country Split – 2013
Imports Country Split – 2013
Note: Oil exports and imports under HS code 2709
E
D
C
B
A
Others
Russian Federation
Oman
Angola
Saudi Arabia

13
SAMPLE Growth in petrochemical industry acts as a major growth
driver for the oil and gas market in China
• In China, the total core business revenue of
petrochemical enterprises grew x% year on
year to ~USD a tn in 2013
• In 2013, Chinese petrochemical industry has
recorded y% growth in value added output
terms
 The value added output from Chinese
petrochemical industry accounted for a% of
country’s total
• Growth in the petrochemical industry is
expected to drive the oil market in China
Growth in Petrochemical Industry Oil Demand in Petrochemical Sector Impact
0 A B C D E F G H I J K
2014e c1 c2 c3 c4 c5 c5 c7 C
2013 b1 b2 B
‘000 barrels per day
b3 b4 b5 b6 b7
2012 a1 a2 a3 a4 a5 a6 a7 A
AA BB CC DD EE FF GG
Oil Demand by Product
z
y
x
0.0
Mboe/d
A
2035e
z1
2020e
y1
2010
x1

14
Increase in foreign dependence for oil and gas supply to act
as a major challenge to the Chinese oil and gas market
Foreign Dependence Impact
• XX
• XX
 XX1
Foreign Crude Oil Dependence
D
C
B
A
0
2030e
a4
2015e
a3
2012
a2
2009
a1
%
X
D
C
B
A
0
mn barrels per day
South
Korea
e
India
d
Japan
c
China
b
United
States
a
D
C
B
A
0
%
Nov-13
a6
Sep-13
a5
Jul-13
a4
May-13
a3
Mar-13
a2
Jan-13
a1
Rank – Net Oil Importers (2013)
Foreign Natural Gas Dependence

15
SAMPLE
Chinese 1-th five year plan has outlined several steps to develop the oil and gas industry in China
Initiatives
Target
•XX
•XX
•XX
•XX
•XX
•XX
•XX
Construction of Oil and Gas Pipe Networks
•XX
•XX
•XX
•XX
•XX
1-th Five Year Plan – Focus on Oil and Gas Market in China
Stabilizing Oil Production and Increasing Gas Production

16
SAMPLE
Mergers & Acquisitions in Chinese Oil and Gas Market
Overseas Investments (2/6)
Announced Date
Closed Date
Transaction Type
Target
Buyer/Investors
Sellers
Deal Size (USD mn)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

17
Chinese oil and gas players are venturing into construction and expansion of…
•XX
•XX
•XX
•XX
•XX
Construction and Expansion of LNG Terminal (1/3)
Players invest in LNG terminals to secure unhindered supply of natural gas
LNG Terminals – Current and Proposed Development Plans (1/3)
Terminal Name
Status/Online Date
Developer
Initial / Expansion Capacity (Mncf/d)
Possible Supplier
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Note: mncf/d= mn cubic ft per day

18
SAMPLE
Market Competition – Porter’s Five Forces Analysis
•XX
•XX
•XX
•XX
•XX
Bargaining Power of Suppliers
Threat of New Entrants
Competitive Rivalry
Bargaining Power of Buyers
Threat of Substitutes
Impact X
Impact X
Impact X
Impact
X
Impact
X

19
SAMPLE
Competitive Benchmarking (1/x)
Public Trading Comparables (FY 2013)
Company A
Company B
Company C
Market Capitalization (USD mn)
-
-
-
Share Price (USD)
-
-
-
EV/EBITDA (x)
-
-
-
EV/Revenue (x)
-
-
-
PE Ratio
-
-
-
Note: Top 3 Public companies based on the Market Capitalization; Market Capitalization is as on 25/06/20--, Share Price is as on 25/06/20-- and PE ratio is as on 24/06/20--

20
SAMPLE Key Ratios of Top 3 Companies – Operational Basis (FY 2013) (2/3)
Competitive Benchmarking (3/5)
Y
X
0
%
Company C
x3 y3
Company B
x2 y2
Company A
y1
x1
Return on Equity Return on Capital Employed
Z
Y
X
0.0
Company C
x3
Company B
x2
Company A
x1
Current Ratio
• XX
• XX
• XX
• XX
• XX

21
SAMPLE
Key People
Products and Services
Company Information
Locations – China
Corporate Address
XX
Tel No.
XX
Fax No.
XX
Website
XX
Year of Incorporation
XX
Ticker Symbol
XX
Stock Exchange
XX
Category
Products/Services
Oil and Gas
XX
Oil Refining
XX
Petrochemicals
XX
Services
XX
Name
Designation
Chunguang Li
XX
Xinhua Wang
XX
Xiyou Cai
XX
Houliang Dai
XX
Headquarters
Public: Domestic Company – Company A (1/4)

22
SAMPLE
Financial Snapshot Key Ratios
Financial Summary
• XXX
Financial Summary
Total Income Profit / Loss
10,248 10,924
10,887 11,615
0
5,000
10,000
XX 15,000
XX
XX
0
2011
398,831.9
2010
291,179.1
447,424.0
Total Income
USD mn
Profit
USD mn
2013
477,133.8
2012
Indicators Value (26/06/20--)
Market Capitalization (USD) XX
Total Enterprise Value (USD) XX
EPS (USD) XX
PE Ratio (Absolute) XX
Particulars
y-o-y
change
(2013-2012)
2013 2012 2011 2010
Profitability Ratios
Operating Margin -0.15 3.38% 3.53% 4.19% 6.11%
Net Margin 0.00 2.29% 2.29% 2.91% 3.74%
Profit Before Tax Margin 0.04 3.29% 3.25% 4.16% 5.40%
Return on Equity -1.02 10.64% 11.66% 14.43% 15.91%
Return on Capital Employed -1.18 12.05% 13.23% 15.06% 17.79%
Return on Working Capital 17.25 -49.17% -66.42% -103.89% -154%
Return on Assets -0.76 7.07% 7.83% 9.21% 11.78%
Return on Fixed Assets -1.23 11.77% 13.00% 15.57% 18.61%
Cost Ratios
Operating costs (% of Sales) 0.14 96.61% 96.46% 95.79% 93.87%
Administration costs (% of Sales)
0.30 4.35% 4.05% 4.17% 4.43%
Interest costs (% of Sales) -0.03 0.37% 0.40% 0.37% 0.42%
Liquidity Ratios
Current Ratio -8.26% 0.65 0.71 0.77 0.77
Cash Ratio 34.03% 0.16 0.12 0.16 0.19
Leverage Ratios
Debt to Equity Ratio -11.38% 0.42 0.48 0.38 0.45
Debt to Capital Ratio -7.99% 0.30 0.32 0.27 0.31
Interest Coverage Ratio 4.96% 9.22 8.78 11.41 14.72
Efficiency Ratios
Fixed Asset Turnover -5.62% 3.47 3.68 3.70 3.03
Asset Turnover -5.96% 2.08 2.21 2.19 1.92
Current Asset Turnover 1.16% 7.72 7.63 7.31 7.35
Working Capital Turnover -22.86% -14.48 -18.78 -24.69 -25.11
Capital Employed Turnover -5.37% 3.25 3.44 3.59 2.92
Improved Decline

23
SAMPLE Key Business Segments Key Geographic Segments
Key Recent Developments
Description News
Overview • XX
Reserves • XX
Business
highlights
• XX
27.8%
31.3% 30.9% 31.2% 31.0%
29.2% 27.8% 26.9% 27.0%
24.0% 26.0% 28.0%
9.9%
5.6% 5.4% 5.0%
0%
50%
100%
2013
9.0%
2012
8.7%
2011
9.7%
2010
5.6%
A C E B D
78% 75% 73%
22% 25% 27%
100%
0%
50%
100%
2010 2011 2012 2013
0%
A B

24
SAMPLE
•XX
•XX
•XX
•XX
T
O
W
S
Public: Domestic Company – Player A (4/4)
Strength
Weakness
Opportunity
Threat

25
SAMPLE
Strategic Recommendations
Focus on AA Sector
•XX
AAAAAA
Focus on BB Sector
•XX
CC
•XX

26
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Oil and Gas Market – China report is a part of Netscribes’ Energy Industry Series.
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Market Research Report : Oil and gas market in china 2014 - Sample