What’s in Store for the Asia Pacific Oil & Gas Markets in 2012?

Subramanya Bettadapura, DirectorEnergy and Power Systems

9/12/2011

2

Executive Summary—CEO’s Perspective

2 Exploration & Production capital spending to increase in 2012

3 Deepwater market to see increased activity in 2012

4 LNG imports to Southeast Asia set to increase

5 Asia refining capacity additions in 2012 double of 2011 levels

1 Average oil prices (Brent crude) forecast to be above $ 90 in 2012

Source: Frost & Sullivan analysis.

3

Opportunities Highlights

4

Highlights: Southeast Asia Upstream Sector

Growth Potential 2012

0

1

2 3

4

5

4.5

1-2 Years

3-6 Years

7-10 Years

High GrowthMedium GrowthLow Growth

Source: Frost & Sullivan analysis.

Anticipated Investments

E&P Capital Expenditure, Southeast Asia (2012): $38.7 billion

Growth Rate in 2012

10.6%

Attractive Countries

• Malaysia• Indonesia

Segments to Watch

• Deepwater• Enhanced Oil Recovery (EOR)

• Marginal Fields

Stable IncreasingDecreasing

5

Highlights: Malaysia and Indonesia Upstream Sector

Stable IncreasingDecreasing

Anticipated Investments

E&P Expenditure, Indonesia (2012): ~ $21 billion

Growth Rate in 2012

23.5%

Segments to Watch

• Deepwater Projects

Indonesia Upstream Sector

Anticipated Investments

E&P Expenditure, Malaysia (2012): ~ $15 billion

Growth Rate in 2012

16.6%

Segments to Watch

• Deepwater Projects• Enhanced Oil Recovery (EOR)

• Marginal Fields

Malaysia Upstream Sector

6

OUTLOOK EXPLAINED

7

Brent crude average price to remain upwards of $90 , even in weak economy

Oil Prices

Oil Price Outlook

• The wide range forecast for Brent crude in 2012 is $90 - $115 per barrel (annual average)

• Even if the global economy contracts by 1%, Brent crude to average over $90

• Demand for petroleum products from China and India expected to remain strong thereby increasing the average oil price to $ 115

0

20

40

60

80

100

120

2007 2008 2009 2010 2011 2012E

72.5

96.8

61.5

79.5

111.7 105

Brent Crude, Spot Prices (Annual Average)

$ / B

arre

l

8

• Some independent E&P companies in North America have indicated that they may spend less in 2012 compared to 2011

• Increased spending in Middle East and South America

• Increased spending in Asia Pacific, specifically in Southeast Asia

• F&S forecasts the global E&P capital spending to increase to $545 billion.

Global E&P capital spending to increase in 2012 to $545 billion

E&P Capital Spending

Global E&P Capital Spending Outlook

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

$0

$100

$200

$300

$400

$500

$600

2007 2008 2009 2010 2011 (e) 2012 (e)

$ B

n

490 545442395454400

Gro

wth

Rat

eSource: Barclays Capital E&P Spending Survey; Frost & Sullivan estimates for 2012

11.2%10.9%11.9%13.5%

(13.0)%

9

• New areas being explored

• Exploration and development of deepwater blocks

• Rejuvenation of mature fields – especially in Indonesia and Malaysia

• Development of marginal fields in Malaysia and Indonesia

• Increased complexity of projects driving up costs

E&P capital spending in Southeast Asia to be around $ 38.7billion

E&P Capital Spending

Southeast Asia Capital Spending Outlook

Source: Frost & Sullivan estimates based on annual reports of E&P companies and NOCs

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

2007 2008 2009 2010 2011 (e) 2012 (e)

$ B

n

Gro

wth

Rat

e

19.9

22.6

25.1

29.8

35.0

38.7

13.7% 11.1

%

18.6% 17.2

%

10.6%

10

• Concerns about tightening supply of high specification rigs led to the swelling of orders in 2010

• Though there are indications of oversupply globally, rig demand, especially for high spec rigs, is expected to increase in 2012

• High-end Jack-up utilization is over 75% in Southeast Asia

• Rigs operating in Southeast Asia are currently posting dayrates that exceed the global average for jackups

• The outlook for high end Jack-ups and Drillships looks good as dayrates and utilization rates improve

A record number of rigs that were ordered in 2010 will enter the fleet beginning mid-2012

Offshore Rigs Orders

Southeast Asia Offshore Rigs Outlook

Source: Compiled by Frost & Sullivan

42

4

5

1

0 10 20 30 40 50

Jackup

Tender

Semisub

Drillship

Rigs under Construction in the Southeast Asian Region

End of 2010 End of 2011 (e)

End of 2012 (e)

Global Jack-up Fleet

356 380 395

Drivers for Rig Construction

To upgrade to High Spec Rigs for • Enhanced Technical Capabilities• Higher Operational and Safety

Standards

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Australia to add the largest LNG liquefaction capacity during 2012 to 2016

LNG Imports to the Asia Pacific Region Set to Increase Further in 2012

LNG Imports

Asia Pacific LNG Re-gasification Sector Outlook

Source: Compiled by Frost & Sullivan

Location : Jakarta Bay, West Java, IndonesiaStart up : 2012Capacity : 3 MTPA

Location : Melaka, MalaysiaStart up : 2012Capacity : 3.8 MTPA

Location : Map Ta Phut, ThailandStart up : Phase 1, 2011Capacity : 5.0 MTPA

Location : Kochi, IndiaStart up : 2012Capacity : 5.0 MTPA

Location : Dabhol, IndiaStart up : 2011Capacity : 1.2 MMTPA

Location : Jurong Island, SingaporeStart up : 2013Capacity : 3 MTPA

LNG Exports

LNG Re-gasification Terminals – ongoing projects; Commission period during Q3, 2011-2013

Location : Zhuhai, ChinaStart up : Phase 1, 2013Capacity : 3.5 MTPA

Location : Jieyang, ChinaStart up : ~ 2012/2013Capacity : 2.0 MTPA

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26.5

27.0

27.5

28.0

28.5

29.0

29.5

30.0

2009 2010 2011E 2012E

Asian refining capacity to increase by 850,000 barrels per day in 2012 compared to 400,000 barrels per day in 2011

Refining Capacity

Asia Pacific Refining Capacity Outlook

BP Statistical Review, F&S Forecast

28.4

28.8

29.6

27.6Mill

ion

Bar

rels

/Day

Asia Pacific Refining Capacity

• A major portion of the capacity addition investment is by NOCs

• China is expected to add 600,000 barrels per day refining capacity in 2012

• China and India adding refinery capacity in a bid to become self-sufficient

• India to become the second largest refiner in Asia overtaking Japan

• With refining capacity projected to increase by 3.1% and demand in major export markets projected to stay flat in 2012, margins are expected to be under pressure

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For Additional Information

Donna JeremiahCorporate CommunicationsAsia Pacific+603 6204 5832djeremiah@frost.com

Carrie LowCorporate CommunicationsAsia Pacific+603 6204 5910carrie.low@frost.com

Subramanya BettadapuraDirectorEnergy & Power Systemsapacfrost@frost.com