Oil and Gas_Machinery_from_MelchersRaffel

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Evolving landscape of global energy resources

Strategic and M&A Implications

for Machinery and Parts Suppliers

Hong Kong / Shanghai / Munich, October 2013

Raffel GmbH 80333 München Tel +49 89 242 086 590 Email [email protected]

© Raffel GmbH Corporate Development All rights reserved. Proprietary and confidential.

Oil & Gas_Machinery_from_MelchersRaffel.pptx

www.raffel.euRaffel GmbH 80333 München Tel +49 89 242 086 590 Email [email protected]

© Raffel GmbH Corporate Development All rights reserved. Proprietary and confidential. 1

Index

0. Preliminary remarks 2

1. Global energy supply landscape 4

2. Market structure and competition – O&G machinery manufacturers 12

3. Market structure and competition – O&G machinery parts manufacturers 25

4. Future challenges & developments 35

5. M&A landscape 43

About MelchersRaffel 50




▐0. Preliminary Remarks




This paper intends to share the market landscape overview of global energy

resources, especially focusing in shale gas discovery and our main perspectives on

the future development in this sector

It is also designed to present the huge possible business opportunities but at the

same time, to highlight the key strategic challenges that every company should

watch out when participating in the market

The data shown in this paper is for reference only to understand the general trend

and competitive environment, whereas some of the numbers being best estimates.

Examples given here are selected for illustrative purpose and should not be

considered as an exhaustive list

More information is available upon request

This paper is a brief excerpt. The full document has about 50 to 60 pages.

Preliminary Remarks

3




▐1. Global energy supply landscape




Key oil production countries have quite steady production rate and supply in the

past few years

5

Source: BP Statistical Review of World Energy; Raffel CD analysis

Annual oil production volume of top 5 oil production countries, 2006 – 2012

Million tonnes

X%Compounded annual

growth rate, 2006 – 2012

1% 1%

4%

2%3%




Production of natural gas has seen an increasing trend in the major production

countries

6

Annual natural gas production volume of top 5 natural gas production countries, 2006 – 2012

Billion cubic meters

4% 0%

7%21%

-3%

X%Compounded annual

growth rate, 2006 – 2012





Despite Russia, Turkmenistan and UAE have abundant reserves, their gas production rate

is quite slow, while China, India and Nigeria are producing gas much more aggressively

7

Africa

Asia Pacific

Europe & Eurasia

Middle East

North America

S. & Central America

Reserve/

Production ratio

Natural gas proved reserve & production by geography – Top 20 countries1

1. Iraq is an outlier with extremely high reserve/production ratio (>4,000), hence it is excluded in this graphic presentation

Production growth rate

CAGR 08-12


Size of bubble

represents the proved

reserve by 2012 in

trillion cubic meters




The increase in technically recoverable wet natural gas resources including shale gas

may change the world energy supply landscape significantly

8

Total technically recoverable resources(TRR) of wet natural gas1 by region, 2013

Trillion cubic meters

Source: US Energy Information Administration (EIA); Advanced Resources International (ARI); Raffel CD

EIA/ARI unproved wet shale gas TRR

USGS conventional unproved wet natural

gas TRR, including reserve growth

Estimated proved natural gas reserves by

end 2012

23

134

163122

70 41

95

1. "Wet" natural gas is a mixture of gas that includes methane and higher hydrocarbons that become liquified

Shale gas is extracted primarily through

a combination of horizontal drilling and

fracking (hydraulic fracturing)




China is estimated to be the largest reserve of technically recoverable shale gas

9

Top 10 countries with technically recoverable shale gas resources, 2013 estimate

Trillion cubic meters

Source: US Energy Information Administration (EIA); Raffel CD




Shale gas, which has to be extracted by horizontal drilling and fracking, is going

to be a very significant natural gas source by 2035-2040

10

Natural gas production in China, Canada, and US, 2008 vs. 2035

Trillion cubic feet

Natural gas production by source in US, 1990-2040

Trillion cubic feet

2.7

7.36.0

9.0

20.2

26.4

Unconventional gas

(tight gas, shale gas,

coalbed methane)

Conventional

(all other gas)

1819

21

27

30

33

AlaskaCoalbed methane

Lower 48 Offshore

Lower 48 Onshore

Conventional

Tight gas

Shale gas

(c.50%)

Source: US Energy Information Administration (EIA); Raffel CD




This evolving landscape has significant implications for the related machinery,

e.g. demand for “Mud Motor” has hugely increased as a result

Source: Raffel CD

1. By 2035, more than half of the world’s energy will likely come from oil and

natural gas, and require deeper and even more complicated drilling

2. The great success of new methods of extracting unconventional oil and gas

(‘the shale revolution’) has had extraordinary effects, particularly in the US.

Similar drilling and production methods are being applied to ‘shale oil’. The

result is that crude oil production in the US is rising after many years of decline

3. Mud motors are more value for money, especially for land wells

What are “Mud Motors”?

■“Mud Motors” use the technical principle of progressive cavity pumps in an inverted direction.

■Drilling heads are driven by mud which is pressed into a stator to make the rotor turn.

■Mud Motors are used for horizontal oil and gas drilling.

− Horizontal drills are essential for “Fracking”




FULL DOCUMENT IS AVAILABLE UPON

REQUEST

Please send an email to [email protected] with your name, position and

company name. Thank you for your interest.

12

mailto:[email protected]




Founded: 1806 in Bremen, Germany

Group Companies: more than

50 in the world – focusing on

Europe, Southeast Asia, and

Greater China

Branches and representative offices in Asia: 25

Other locations: South Africa, Ethiopia

Employees in Europe: ca. 600 (ca. 500 in Germany)

Employees worldwide: 1,700 (1,000 in Asia).

Experience in advising

companies in the larger

middle class.

The employees of Raffel CD

have both industrial and consulting experience in

the international environment.

For M&A activities (purchase and sale of companies

and business units), Raffel CD combines the necessary

M&A technique, strong strategy and market expertise.

This allows the creation of outstanding value for

the customer.

MelchersRaffel is the company for successful Euro-Asia endeavours

Access to Know-how and network of 1,700

employees in technology, consumer and luxury

markets in Europe and in 25 offices in Asia

Experience from 150 years of successful business

in China

Offices in Shanghai, Hongkong, Singapore

and Munich, Germany

Client Service:

Strategy

Business Development

Designing Business Models

M&A

Acquisition and Desinvestment of Companies

Structuring Joint Ventures and Alliances

Contact:

www.melchersraffel.com

E-mail: [email protected]




MelchersRaffel has offices and access to networks in all relevant Asian countries

MelchersRaffel Shanghai

13 floor, East Ocean Centre

588 Yan-An Road (East)

Shanghai 200001 / PRC

[email protected]

MelchersRaffel Ltd. Hongkong

Shun Tak Centre West Tower

168-200 Connaught Road Central

Hong Kong

[email protected]

MelchersRaffel Singapore

101, Thomson Road

# 24-01/05 United Square

Singapore 307591

[email protected]

office location of the Melchers group office location of MelchersRaffel

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