GLOBAL REBALANCING
The energy sector seeks a new equilibrium
MOOD SWINGS
Where is the upside to oil prices?
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INSIGHT
December 2015
CONTENTS
GLOBAL REBALANCING: FINDING A NEW EQUILIBRIUM
Low oil, natural gas and coal prices should, in theory at least, prompt some
form of demand response. But demand growth in the last decade has come
primarily from China, where the economy is slowing, and the Middle East,
where oil revenues have been cut in half. Moreover, climate change policies
represent a big spanner in the works of normal market mechanisms.
Despite price, the demand outlook for hydrocarbons is highly uncertain.
20
25
28
The US shale oil revolution has fundamentally tilted the balance of the
global oil market and helped drive down prices. The resilience displayed
by US producers so far suggests low prices could be here to stay.
41
Growth in utility scale wind and solar power in the US is surging, bringing
opportunities and challenges
49
While the Russian oil sector has shown remarkable resilience in the face
of low oil prices and Western sanctions so far, those negative factors,
coupled with the national economic crisis and elusive hopes of nancial
help from China, are likely to present serious challenges to the industry if
they continue long-term. Early warning signs are already apparent.
54
The crude pride downturn has been something of a blessing for reners
worldwide as margins turned much healthier in 2015. But with a growing
rened product glut particularly of diesel, previously the great hope for
reners there may be clouds on the horizon.
40
The Clean Power Plan couldnt have come at a worse time for a US coal
industry already looking vulnerable in the face of low natural gas prices
and other regulatory challenges. While its too early to say what the
impact of the CPP will be and whether it will withstand legal challenges
the long-term outlook looks fairly bleak for coal. Still, it looks set to
remain a major energy source for the US and the world for decades to
come.
10
On the heels of the Paris COP21 summit in December, local, regional and
national carbon emissions mitigation eorts are likely to be aligned at the
international level for the rst time. For business, carbon risk is set to
become an increasingly important element in investment decisions,
aecting most obviously those sectors on the wrong side of
environmental legislation.
ON SHIFTING SANDS
COAL BLUES
58
MAGHREB MISERY
62
67
Private equity funding has spread from the US to become the largest
single source of nance for deals in the oil and gas sector but in the wake
of the dramatic decline of oil prices in the last 18 months, PE-backed deals
in Europe have taken a hit. Silvina Aldeco-Martinez and Olga Parryeva of
Platts sister company S&P Capital IQ and SNL analyze the deal-making
landscape in Northwest Europe.
36
The increasing complexity of calculating GHG savings for biofuels, and the
potential value that can be extracted in a system under self-regulation,
may place undue temptation in producers paths. The last thing the
industry needs now is a scandal.
90
ALISDAIR BOWLES
Editor
INSIGHT
December 2015
ISSN 2153-1528 (print)
ISSN 2153-1536 (online)
EDITORS NOTE
There are some things in life possibly
too many that you just cant do
anything about. Due to the inexible
nature of publishing schedules, a
couple of big meetings in the energy
sphere will have taken place after
Insights deadline but before actual
publication. OPEC will have met again
in Vienna, with production cuts very
much still on the agenda but no real
expectation of a change in the Saudi
market share policy. If thats the
case, it probably spells further pain for
oil producers.
Meanwhile, in Paris there is the small
matter of the COP21 UN climate
change summit. At the time of writing,
it looked probable that some sort of
meaningful agreement would come
out of the meeting, one that as it
unfolds is likely to have fairly profound
eects on the global energy sector for
many years to come. Whatever the
outcome, it looks a fairly safe bet that
it will mark a signicant landmark of
one kind or another.
FUDGING FORECASTS
Making forecasts is an important
business but fraught with obvious
diculties namely surprises. Its not
news that forecasts are often wrong;
its perhaps more noteworthy when a
prediction is actually correct, and so
criticism for being wrong can seem a
little bit unfair when being wrong is so
common.
PUBLISHER
Murray Fisher, 720-264-6644
murray.fisher@platts.com
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CUSTOM CONTENT
ROSS McCRACKEN
EDITOR
ENERGY ECONOMIST
GLOBAL REBALANCING:
FINDING A NEW EQUILIBRIUM
Low oil, natural gas and coal
prices should, in theory at least,
prompt some form of demand
response. But demand growth
in the last decade has come
primarily from China, where the
economy is slowing, and the
Middle East, where oil revenues
have been cut in half. Moreover,
climate change policies represent
a big spanner in the works of
normal market mechanisms.
Despite price, the demand
outlook for hydrocarbons is
highly uncertain.
HYDROCARBONS ECONOMY
Courtesy: iStock.com
China decarbonizing: heavy industry on the Yangzte river
GDP gures are man-made and therefore unreliable, Li Keqiang, then Communist
Party Secretary of Liaoning province, is reported to have said in 2007. Li said economic
growth can be measured relatively accurately by the volume of rail cargo, the amount of
loans disbursed and electricity consumption, giving rise to the Li Keqiang index. Li, who
is now prime minister of China, is reported to have said all other gures, especially GDP
statistics, are for reference only.
Chinas primary energy consumption grew by only 2.6% in 2014, compared with an
average 6.6% between 2004-2014. According to World Economics, Chinas ocial GDP
gure for second-quarter 2015 was 7.0%, but survey evidence from small and mediumscale industries suggest GDP growth at half that level.
HYDROCARBONS ECONOMY
(%)
6
10
5
Non-OECD (right)
0
World (right)
OECD (right)
-5
-10
-2
1996
1999
2002
2005
2008
2011
2014
(%)
(%)
6
10
Gas (right)
0
Coal (right)
Oil (right)
-5
-10
-2
1996
1999
2002
2005
2008
2011
2014
HYDROCARBONS ECONOMY
China PEC
15
10
0
1995
2000
2005
2010
2015
2020
HYDROCARBONS ECONOMY
OIL PRODUCERS
Another key source of hydrocarbon
demand growth over the past decade
has been oil producers themselves.
The Middle East saw crude oil demand
grow by an average of 3.9% a year to
8.706 million b/d in the decade to 2014,
compared with average global oil
demand growth of just 0.93%. Similarly
Sept 11
Sept 11
Sept 11
Aug 28
Aug 17
Aug 14
2015
Brent
53.70
56
54
55.66
57
54
2015
WTI
48.10
51
49
50.13
48
2016
Brent
49.50
62
61
55
55
53
2016
WTI
45
59
56
53
48
2017
Brent
65
73
61
65
2017
WTI
60
68
59
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FRANK WATSON
MANAGING EDITOR
CARBON MARKETS
OVERVIEW OF EXISTING, EMERGING, AND POTENTIAL REGIONAL, NATIONAL, AND SUBNATIONAL CARBON PRICING
INSTRUMENTS (ETS AND TAX)
M ANI TOBA
B RI T I S H
C O LU M B I A
A LB E RTA
WAS H I N GTO N
OREGON
QUE BE C
ONTAR I O
SWEDEN
I C E L AND
F INL AND
NORWAY
ESTONIA
DENMARK L AT VIA
I R E L AND
P OL AND
UK
UKR AINE
FR ANCE
K AZAK H STAN
SLOV ENI A
R GGI
PORT UGAL
C A LI F O R N I A
JA PA N
TURKEY
CH INA
REP UBLIC
OF KORE A
MEXICO
TH AIL AND
BR AZI L
Rio de Janeiro
Sao Paulo
C HI L E
SOUTH AF RICA
Beijing
Tianjin
Chongqing Hubei
Saitama
Saitama
NE W ZE AL AND
Kyoto Tokyo
Kyoto
Beijing
Guangdong
Taiwan
Shenzhen
The circles represent subnational jurisdictions. The circles are not representative of the size of the carbon pricing instrument, but show the
subnational regions (large circles) and cities (small circles).
Note: Carbon pricing instruments are considered scheduled for implementation once they have been formally adopted through legislation and have
an official, planned start date.
Source: World Bank Group: State and Trends of Carbon Pricing
ACTION AREAS
Eorts to limit greenhouse gas
emissions are happening in multiple
areas, driven by a number of forces.
The UN climate negotiations are only
part of that broader picture, and are
not necessarily the most powerful
driver, although the scale of
participation seen from countries in
the UN process in 2015 suggests the
negotiations are moving from the
sidelines into a more leading position.
CLIMATE FINANCE
Elsewhere, climate commitments
continue to emerge outside of the UN
climate process. The G7 group of richest
countries in June 2015 committed to a
decarbonization of the global economy
this century and supported scientists
recommendations to cut emissions by
40-70% by 2050 from 2010 levels,
recognizing that this challenge can
only be met by a global response.
HYDROCARBONS OUTLOOK
As the most emissions-intensive of
the fossil fuels, coal was always at risk
of being rst in line to feel the eects
Natural gas also has a strong longterm strategic position for several
reasons. Gas is around half as
emissions-intensive as coal per unit of
energy produced. Gas also has an
operational advantage: gas is a natural
partner for intermittent renewable
energy sources because gas-red
power units can quickly be ramped up
to balance electricity grids on days
when renewable generation is low or
when demand is unusually high.
Moreover, unless the world embraces
nuclear energy, it is hard to see how
the gap left by coal can be lled
without natural gas, at least in the
medium term.
European oil and gas companies
understand this strategic long-term
role for gas and thats partly why a
group of several majors started calling
for a global carbon price in 2015.
TRANSITION TIMING
However, under the COP process, the
future of energy belongs to
renewables, and the debate is really
over the timescale of the transition to
a low-carbon energy system. While the
market share of renewable energy in
the UK and US, for example, is still
small, solar and wind are already
inuencing when fossil fuel-powered
generating units operate in Germany.
Until now, the Achilles heel for
renewables has been intermittency: if
the wind isnt blowing and the sun isnt
shining, plants sit idle. But once the
installation costs have been paid, the
marginal cost of running renewables is
essentially zero because the operator
has no fuel costs to pay.
That means renewables are now the
fuel of choice in some countries,
VANDANA HARI
EDITORIAL DIRECTOR
ASIA
LOSING SUPPORT:
ASIAN FUEL SUBSIDY
REFORM STUTTERS
The thorny issue of fuel subsidy
reform across Asia seemed
to be taking some giant steps
forward, but is getting bogged
down again. All parties involved
would benet from the certainty
provided by a decisive move to
liberalization, allowing markets
to function without interference.
Energy eciency, energy
conservation, environmental
protection and the development
of alternatives will follow on
naturally.
ASIA
ASIA
ASIA
10
12
-5
-25
-20
-15
-10
Source: www.xe.com
MARGARET
MCQUAILE
SENIOR
CORRESPONDENT
ON SHIFTING SANDS
For OPECs members,
accustomed to oil prices of
more than $100 a barrel, the
world looks a very dierent
place now to how it did just two
years ago how dierent might
it look in another year?
Courtesy: iStock.com
OPEC
2010
40.11
49.38
9.69
72.23
51.59
61.75
47.25
67.03
43.37
214.90
74.64
62.32
794.24
2011
52.88
65.63
12.93
114.75
83.01
96.72
18.62
87.84
62.68
309.45
111.61
88.13
1,104.24
2012
49.99
69.954
13.750
101.468
94.103
112.933
60.188
94.642
65.065
329.327
119.986
93.569
1,204.977
2013
44.462
66.652
14.103
61.923
89.402
108.548
44.445
89.314
62.519
314.080
122.973
85.603
1,104.024
2014
40.639
57.609
11.401
53.652
84.303
97.537
14.897
76.925
56.912
285.139
107.853
77.776
964.643
OPEC has not forecast how much its members are likely to earn from petroleum exports this year. However, the US
Energy Information Administration projected in March that OPECs net oil export revenues excluding those of Iran
would fall to $380 billion this year from $824 billion in 2014, and then rebound to $515 billion in 2016.
Where applicable, petroleum product exports are included. Data for some countries may include condensates as
well as other NGLs. Some countries import substantial amounts of crude and products, resulting in lower net revenue from petroleum operations. Iraq excluding border trades.
Source: OPEC
OPEC
GEOPOLITICAL DANGERS
A remarkable sidebar to the price
collapse that took Brent from $115
per barrel in mid-June last year to
almost $42 in August this year has
been the fact that the geopolitical
dangers that have threatened supply
OPEC
2014
752
3.5
2015
666
3.2
2016
690
2.5
2017
765
3.0
2018
820
3.0
-6.1
3.9
-5.9
8.8
-0.6
16.5
0.3
22.0
Source: S&P
OPEC
STRATEGIC COSTS
And what of Saudi Arabia, OPEC kingpin
and architect of the defense-ofmarket-share policy embraced (albeit
not altogether wholeheartedly) by the
group late last year? On the one hand,
the Saudis may feel they can
congratulate themselves for pushing
and persisting with a strategy that is
undoubtedly having an impact on
non-OPEC supply, which the IEA has
forecast will fall by nearly 500,000 b/d
next year as a result of producers
having slashed spending on both
future projects and existing
production.
But that strategy has come at a price.
In embarking on its defense of market
share, Saudi Arabia had a very
powerful weapon in its armory huge
nancial reserves from which it has
been drawing to fund its spending not
only on maintaining oil production
capacity and other key energy projects
but also on a range of social and
infrastructural projects and on a
JEFF MOWER
REFINING
EDITORIAL DIRECTOR
US OIL
REFINING
10
0
US Gulf Coast
Northwest Europe
-5
Jan-14
Jul-14
Jan-15
Jul-15
Singapore
REFINING
VERGE OF COLLAPSE?
If gasoline demand growth does not hold
up in 2016, rening margins could
weaken, especially considering the rise in
diesel inventories and planned renery
expansions focused on diesel production.
40
20
Current year
0
Nov-14
Jan-15
Mar-15
Prior year
May-15
5-Year low
5-Year high
Jul-15
Sep-15
5-Year average
Nov-15
NICOLE LEONARD
PLATTS BENTEK
MOOD SWINGS
LOOKING FOR AN UPSIDE
TO OIL PRICES
The US shale oil revolution
has fundamentally tilted the
balance of the global oil market
and helped drive down prices.
The resilience displayed by US
producers so far suggests low
prices could be here to stay.
Courtesy: Shutterstock.com
US OIL
Africa/Asia
Canada/Mexico
South America
Middle East/Europe
10
8
6
4
2
0
2010
2011
2012
2013
2014
2015
Source: Platts
US RESILIENCE
Innovation and eciencies in drilling
for oil and gas in North America were
apparent long before the price
collapse as North American producers
improved fracturing technology every
year since the shale revolution began.
However, the global market failed to
anticipate the rate at which the US
producer could accelerate those
eciencies in the face of a substantial
price collapse.
The EIA estimates that US oil
production peaked at 9.6 million b/d in
April 2015, nearly 1 million b/d more
2014 Average
2015Q1 Average
8
15%
19%
9%
16%
14%
0
Permian
Williston
*Data sample comprised of 20+ Producers
Source: Platts
Eagle Ford
Marcellus
DJ
US OIL
(number of wells/rigs)
2.0
1.5
1000
1.0
500
0.5
0.0
0
Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15
*Data sample comprised of 20+ Producers
Source: Platts
(Number of wells/rigs)
(Days)
35
30
300
25
200
20
100
15
0
Nov-10
Nov-11
Nov-12
Nov-13
Nov-14
10
Nov-15
US OIL
(rigs)
1400
120
WTI (left)
Active rigs (right)
100
1200
80
1000
60
800
40
Jan-14 Mar-14 May-14 Jul-14
600
Sep-15 Nov-15
40
20
-20
-40
Q3 2010
Q3 2011
Q3 2012
Q3 2013
Q3 2014
Q3 2015
YTD
NICK COLEMAN
SENIOR EDITOR
OIL NEWS
SURVIVAL
OF THE FITTEST
The oil price collapse has
unleashed a battle for survival
within the upstream industry,
with winners and losers already
starting to emerge.
UPSTREAM INDUSTRY
RESETTING EXPECTATIONS
Some in the industry are more
optimistic however, viewing low oil
prices as a stimulus to eciency and a
reality check for governments. Some of
the more dire warnings of collapse, for
example in the North Sea, have not yet
come to pass the UK industry may
struggle to cope in the high-cost
Shetland area, but US operator Apache
has voiced condence in its North Sea
operations, for example.
The good thing about a price correction
is it resets government expectations
and demands and creates the
opportunity for a more collaborative
approach between governments and
industry, Tony Hayward, chief
executive of Genel Energy and a former
head of BP, said in October.
Meanwhile if the Saudi goal was to
knock out the US shale industry still
an open question some doubt that
Courtesy: iStock.com
UPSTREAM INDUSTRY
UPSTREAM INDUSTRY
TIM WORLEDGE
EDITOR IN CHIEF
AGRICULTURE
NOTES ON AN
EMISSIONS SCANDAL
The increasing complexity
of calculating GHG savings
for biofuels, and the potential
value that can be extracted in
a system under self-regulation,
may place undue temptation
in producers paths. The last
thing the industry needs now
is a scandal.
BIOFUELS
Courtesy: iStock.com
BIOFUELS
BIOFUELS
80%
60%
40%
20%
0%
20
40
60
80
100
ANDREW MOORE
MANAGING EDITOR
US COAL
COAL BLUES
The Clean Power Plan couldnt
have come at a worse time for a
US coal industry already looking
vulnerable in the face of low
natural gas prices and other
regulatory challenges. While its
too early to say what the impact
of the CPP will be and whether
it will withstand legal challenges
the long-term outlook looks
fairly bleak for coal. Still, it looks
set to remain a major energy
source for the US and the world
for decades to come.
Courtesy: iStock.com
JEFFREY RYSER
US POWER
SENIOR WRITER
NORTH AMERICAN
POWER
Courtesy: iStock.com
US COAL
Courtesy: iStock.com
US COAL
US COAL
CPP IN BRIEF
The Clean Power Plan, issued by the EPA on August 3 and establishing the USs rst
ever national standards to limit greenhouse gas emissions from existing power plants,
requires states to reduce carbon emissions from power plants 32% below 2005 levels
by 2030.
The new rules are intended to mark the beginning of a signicant shift away from coal
as a source of electricity
States must submit nal implementation plans for achieving compliance by 2018 and
start taking action by 2022.
Interim state-level compliance targets or glide paths for 2022 through 2029 are
specied. Targets are established based on carbon emissions per MWh of electricity
generated in 2012 and applying a Best System of Emissions Reduction. The BSER
comprises three building blocks for reducing emissions:
i) Improve heat rates at coal-red steam power plants.
ii) Increase generation from lower-emitting existing natural gas combined cycle
power plants while reducing generation from higher-emitting steam power
plants.
iii) Increase generation from new zero-emitting renewable energy generating
capacity while reducing generation from fossil fuel-red power plants.
The nal rule expands the Clean Energy Incentive Program to oer credits to states
acting quickly to invest in renewable energy and energy eciency.
EPA also issued a rule setting standards for new coal-red power plants. Meeting the
new standard will require the use of technologies such as carbon capture and storage
technology or co-ring with natural gas. It includes a carbon emissions limit of 1,400
lbs per MWh, more lenient than the proposed 1,100 lbs per MWh.
US COAL
US POWER
US
POW
OWER
ER
US POWER
US POWER
NADIA RODOVA
RUSSIAN OIL
MANAGING EDITOR
RUSSIA NEWS
RUSSIAN OIL
Courtesy: iStock.com
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
RUSSIAN OIL
Jan-Sep 2015
813,692
253,469
135,187
43,947
Jan-Sep 2014
626,113
239,083
100,076
62,934
Change %
29.6
6.0
35.1
-30.2
Jan-Sep 2015
418,857
346,363
85,919
118,139
99,344
10,740
Jan-Sep 2014
370,527
357,103
75,180
102,029
112,769
16,110
Change %
13
-3.0
14.3
15.8
-11.9
-33.3
RUSSIAN OIL
Jan-Sep 2014
Change %
Western direction:
Primorsk
Novorossiisk
Ust-Luga
Others*
Total
885,265
457,897
362,204
185,291
1,890,657
876,405
469,684
289,548
132,423
1,768,060
1
-2.5
25.1
39.9
6.9
Eastern direction:
Kozmino
Others**
Total
602,134
303,134
905,268
496,910
261,517
758,426
21.2
15.9
19.4
*Including Light Siberian and other grades supplies via terminals of Murmansk, Arkhangelsk and Varandei in the
north and Astrakhan and Makhachkala in the south
**Including Sokol and Sakhalin Blend supplies via the terminal of De-Kastri on the Pacific coast and from Sakhalin
Island
2014
526.8
223.0
2020
525 (516)
252 (239)
2025
525 (505)
266 (257)
2035
525 (476)
276 (242)
*Both the conservative and target forecasts take into account Western sanctions introduced in response to Russias
role in the conflict in Ukraine, which have targeted the banking and energy sectors, and have been expected to
significantly hamper new crude production in Russia in the long term. A drop is likely if oil prices fall to $40/barrel or
lower and stay at this level for a significant period of time, the ministry estimates.
RUSSIAN OIL
SIOBHAN HALL
SENIOR EDITOR
EU ENERGY POLICY
EUROPEAN ENERGY
Courtesy: iStock.com
EUROPEAN ENERGY
0.4
Combined
output
1.8 TWh
Installed capacity
13.6 GW
G ER MAN Y
1.4
8.2 GW
Installed
wind capacity
99.0 GW
Installed
solar capacity
79.1 GW
Solar output
1.9
0.5
Installed capacity
Wind
10.0 GW
Solar
6.1 GW
Wind output
Combined
output
5.9 TWh
Combined
output
1.7 TWh
Installed capacity
43.5 GW
4.0
39.4 GW
1.2
FR AN CE
Installed capacity
8.9 GW
0.7
1.4
Combined
output
2.6 TWh
1.2
18.4 GW
Combined
output
4.6 TWh
3.9
SPA I N
81.6
Installed capacity
23.0 GW
7.0 GW
Total
224.0 TWh
ITALY
142.5
EUROPEAN ENERGY
ANDREAS FRANKE
MANAGING EDITOR
EUROPEAN POWER
ENERGIEWENDING
PATH OF PARADOXES
Germanys energy transition is
throwing up a lot of challenges
as well as some curious,
unintended eects, but the
country seems set on the path
to a green energy future.
GERMANY
(billion Eur)
(ct KWh)
7
20
15
10
0
2010
2011
2012
2013
2014
2015
2016
Source: Platts
GERMANY
Wind
48.3
51.7
54.8
57.8
60.4
Solar
39.9
41.6
43.4
45.3
47.2
Total
97.1
102.3
107.2
112.2
116.8
GERMANY
DISRUPTIVE FORCES
The general trend of demand decline
due to increased energy eciency
may help in achieving the targets, but
for utilities this has become the real
game changer with the most
expensive plants falling o the grid
rst, starting a downward spiral for
wholesale power prices, which have
more than halved since 2011.
STUART ELLIOT
SENIOR WRITER
GAS AND LNG
MAGHREB MISERY
In a region already beset by
political problems, falling energy
prices and stagnant or falling
output are piling on the pressure
for North Africas energy
producers.
NORTH AFRICA
Courtesy: iStock.com
NORTH AFRICA
NORTH AFRICA
NORTH AFRICA
SILVINA ALDECO
MARTINEZ
OLGA PARFIRYEVA
S&P CAPITAL IQ AND SNL
PRIVATE EQUITY
PULLS BACK IN EUROPE
Private equity funding has steadily
spread to become a major source of
nance for the oil and gas sector.
Boosted by a few large deals at the
beginning of 2015, PE-backed M&A
deal volume accounted for 23% of
global deals in the rst three quarters
of 2015.
Traditionally a mainstay of the US, PE
activity has become increasingly
relevant in the high-cost North Sea
dened for the purposes of this
article as the Netherlands, the UK,
Germany, Denmark and Norway, with
total transaction value greater than
50 million. The last ve years has
seen unprecedented growth, with a
compound annual growth rate over
2010-2015 of 68.4% against 7.8% in
2005-2010.
While North America remains the
largest region for private equity funding
in the oil and gas sector, at 1.6 billion
(about $1.7 billion) in YTD 2015 (until
October 15), for the fth year running
the average deal size of private equity
investments made into the North Sea
surpassed the average North America
deal size of 870.6 million.
However, following the dramatic
decline of oil prices in 2014 and 2015,
FIGURE 1.
(EURmn)
(EUM)
100
5000
EMEA Transaction Volume
4000
80
3000
60
2000
40
1000
20
0
0
2000
2002
2004
2006
2008
2010
2012
FIGURE 2.
6%
3%
12%
Integrated
Drilling
Equipment & services
39%
Source: S&P Capital IQ, featuring total aggregated transactions in volume terms from 2010
till October 15th 2015. For illustrative purposes only.
2014
8000
North Sea
Rest of EMEA
6000
4000
2000
0
2010
2011
2012
2013
2014
2014YTD
2015YTD
2014YTD
2015YTD
Rest of EMEA
15
10
0
2010
2011
2012
2013
2014
LTM 20151
84,809
-5%
12,172
-22%
FY 2014
90,304
1%
14,707
-15%
FY 20142
8,644
23%
1,580
181%
LTM stands for Last Twelve Months and for public companies it has been calculated as of 15th October 2015.
Due to the fiscal year 2015 data have not yet been reported by most private companies, only FY2014 data is displayed.
Courtesy: iStock.com
Some bright spots in the North Sea.
ALTAAQA
ALTAAQA ALTERNATIVE SOLUTIONS
Established in 2004 by the Saudi conglomerate Zahid
Group, Altaaqa Alternative Solutions is Saudi Arabias
leading provider of total utility solutions, executing tailored
and turnkey projects for water, energy (1.3GW power
capacity) and cooling through seven strategically located
branches. The company is the largest provider of temporary
energy solutions in Saudi Arabia and oers zero initial
investment to its clients.
Altaaqas cutting-edge solutions, dynamic and seasoned
workforce, and enduring partnerships with the worlds
leading brands allow it to bridge the gap between supply and
demand, and provide a complete service to meet temporary
to long-term power, water and cooling requirements.
PETER
DEN BOOGERT
MARWAN
AZRAQ
CEO
DIRECTOR OF
OPERATIONS
ALTAAQA GLOBAL
Established in 2012, in partnership with Caterpillar, Inc., to
replicate the success of Altaaqa in Saudi Arabia on a global
scale, Altaaqa Global owns, mobilizes, installs and operates
large-scale rental power plants tailored to customers
specic applications. The company rapidly deploys exible,
scalable and reliable temporary power plant solutions from
20 MW and up.
Altaaqa Global oers services from designing to
demobilization to a range of industries, including Power
Generation, Transmission & Distribution, Government &
NGOs, Mining, Oil & Gas, Petrochemicals & Reneries, Ports
& Harbors, and process industries.
Altaaqa Global and Altaaqa have a combined eet capacity
of 1,600 MW.
ANADARKOS COMMITMENT
We recognize that the companys best assets are its people,
and we work to foster a culture that inspires an
entrepreneurial spirit and rewards innovation. That pursuit
of innovation has led to the achievements mentioned above,
as well as creative partnerships to study air quality and
reduce methane emissions, enhance water management
and conservation, and create a new ecosystem in the Gulf of
Mexico from a decommissioned oshore facility.
ANADARKOS OPERATIONS
For Anadarko, it all begins with safety. Our goal is to send
each of our employees and contractors home safely every
day. Anadarko also approaches its business with a focus
on prudent care of the environment, protection of public
health and with a drive for continuous improvement that
makes our operations more compatible with the areas in
which we operate.
Oil and natural gas are essential to modern life and critical to
the success of industrial and developing societies. Anadarko
will continue to operate in a fashion that preserves the
environment while adapting to evolving global politics,
cultures and priorities. The relentless drive, passion and
focus of Anadarkos employees will continue to make it a
better company that delivers upon its mission of developing
energy resources for the welfare of a global society.
STATISTICS
Dierentiating 5-Year Track Record
AUTOGRID
AutoGrid transforms data into the cleanest, cheapest
source of power. The companys Energy Data Platform
(EDP) and suite of Energy Internet applications enable
global utilities, energy service providers and Internet-ofThings (IoT) vendors to improve customer engagement,
enhance grid reliability, drive resource exibility and
increase protability.
EDP creates a comprehensive, dynamic portrait of the
power system, giving utilities the exibility to leverage the
power of the Energy Internet of Things, including smart
thermostats, lighting systems, energy storage devices,
HVAC systems, solar systems, and Electric Vehicle Supply
Equipment (EVSE). EDP enables utilities and energy
NISHI VASUDEVA
CHAIRMAN & MANAGING
DIRECTOR
BRUCE POWER
Bruce Power is Canadas rst private nuclear generator,
providing 30% of Ontarios power. Our eight units provide
over 4,000 full-time, direct jobs to highly skilled employees,
and thousands more indirectly. We inject billions of dollars
into Ontarios economy annually, while producing safe
energy that produces zero carbon emissions.
Bruce Power is the largest employer along the Lake Huron
shoreline, in southern Ontario, Canada. The company was
formed in 2001 as an innovative public-private partnership,
which sees it lease the site from the Government of Ontario,
while investing private dollars into these public assets. Since
it was formed, Bruce Power has invested over $7 billion into
its reactors, including returning four dormant units to service
3,000 megawatts of carbon-free electricity to Ontarios
electrical grid. This additional power provided the province
with 70% of the power it needed to close its remaining coal
plants; a goal that was achieved in 2014 and has been
deemed North Americas largest clean-air initiatives.
Bruce Power is a partnership among TransCanada Corp.,
Borealis Infrastructure (a trust established by the Ontario
Municipal Employees Retirement System), The Power
Workers Union and The Society of Energy Professionals.
Over 90% of employees also own a part of the company.
STATISTICS
CANDU reactors:
Megawatts:
6,300
30
Employees:
Over 4,000
CATERPILLAR INC
For more than 90 years, Caterpillar Inc. has been making
sustainable progress possible by driving positive change
on every continent. Caterpillar is a technology leader and
the worlds leading manufacturer of construction and
mining equipment, clean diesel and natural gas engines,
and industrial gas turbines.
Caterpillar Marine combines all the marketing and service
activities for Cat and MaKTM marine engines within
Caterpillar, and recently added the two-stroke EMD brand
into the portfolio along with Caterpillar Propulsion, one of
the worlds leading designers and producers of Controllable
Pitch Propellers. Caterpillar Marine is headquartered in
Hamburg (Germany), with major hubs in Grin, Miami
(USA), Sao Paolo (Brazil), Shanghai (China), Singapore and
Hn (Sweden), and eld oces around the world. In 2015,
in the strive to be at the forefront of technology
development and innovations, Caterpillar further expanded
their monitoring, analytics and prognostic capabilities to
the entire vessel through the addition of Cat Marine Asset
Intelligence solutions, based in Virginia Beach, Virginia. As a
result, Caterpillar Marine is evolving beyond engine-focused
monitoring to provide monitoring and diagnostic solutions
for an entire vessel, and now have the expertise to provide
meaningful recommendations to ship owners to help
increase eciency, reduce downtime on their vessels and
assist shipyards in reducing warranty expenses.
The company is honoured and proud to be associated with
global owners and operators, as well as the best shipyards,
naval architects, and OEMs in the world. With a
commitment to quality products and services, Caterpillar is
the primary solution provider for a wide array of marine
applications throughout the industry. By striving to gain a
deep understanding of customers needs, Caterpillar is
able to deliver highly-customised and eective solutions.
The business oers premier, single-source power solutions
for segments related to the global ocean-going, commercial,
and pleasure craft sectors in the medium- and high-speed
MYTRAH ENERGY
Operating in the most exciting power market in the world,
Mytrah is a pioneer in the renewable energy sector. Its
innovative approach has created a dynamic, cost ecient
power company poised for accelerating growth.
Through a diversied portfolio, Mytrah generates the
maximum amount of electricity from its wind and solar
farms using its strong end-to-end capabilities. Mytrahs
model enables it to identify, plan and execute projects
rapidly and cost eectively, ensuring a sustainable
competitive advantage.
Mytrahs fully integrated project team has delivered ten
sites with a generating capacity of 578 MW across six
States in India in just 5 years. With the largest wind data
bank among its peers, Mytrah has also created a highly
visible pipeline of 3500MW in wind and solar. This will
enable continued rapid growth as the Company looks to be
generating 5000 MW of renewable energy for India.
Mytrah Energy redened the renewable energy business in
India by breaking traditional perceptions.
PERCEPTION #1
The renewable energy industry is subsidy-dependant
Mytrahs wind energy is delivered to its customers at, or
below, the cost of energy based on fossil fuels. Wind farms
can be built faster than fossil fuel plants and hence are an
attractive solution for India, where electricity demand
exceeds supply. This is very dierent from many European
countries, where renewables have received substantial
subsidies and typically add new electricity supply into a
market where there is already enough supply from other
sources. We provide electricity to an undersupplied
market at a price competitive with fossil fuel.
PERCEPTION #2
Governance takes a backseat in fast growing companies.
Mytrah took a dierent view, and invested proactively in
governance from the rst day in business. The board of
Mytrah Energy, Ltd. brings together exceptional governance
NANCY
KING
PETER
SHERK
GLOBAL
CO HEAD
OF MORGAN
STANLEY
COMMODITIES
GLOBAL
CO HEAD
OF MORGAN
STANLEY
COMMODITIES
A TAILORED APPROACH
We begin every client engagement the same way: by taking
the time to listen. From there, we combine our passion for
innovation with our in-depth understanding of the
challenges each client faces. The result of this approach?
Truly bespoke solutions that are optimal for the needs of
each client.
A BESTINCLASS BUSINESS IN A BESTINCLASS BANK
As an integral part of Morgan Stanley, the Commodities
group is well positioned to deliver clients the full expertise
and talents of the rm. We collaborate with our industryleading colleagues around the world to provide ecient
access to capital and to help clients protect and grow their
businesses.
An Enduring
Commitment
to Commodities
Weve been helping clients in the energy sector
manage price risk for three decades. Today, that
commitment is stronger than ever.
Our longstanding expertise and exceptional energy
market intelligence are a powerful combination:
We partner with clients to develop sophisticated,
bespoke solutions for their unique and often
complex needs.
Learn how we can help you grow your business and
benefit from energy market opportunities.
To learn more:
New York +1 914 225 1460
London
+44 20 7677 3003
Singapore +65 6834 6918
NOBLE SOLUTIONS
Noble Solutions is a leading retail electricity service
provider in the United States. Headquartered in San Diego,
Calif., the company has regional oces in Texas, Illinois,
Ohio, Massachusetts, and New Jersey. It is the only ISO
(Intl. Organization for Standardization) 9001
2008-certied energy services provider in the country.
Nobles focus is on providing best in class energy risk
management solutions relating to the deregulated
electricity exposures of its clients.
Noble Solutions is part of a larger international
commodities provider Noble Group Ltd. In the US, the
Noble Solutions footprint covers all 17 US states that have
deregulated electricity markets plus natural gas in
California, Oregon and Nevada. Noble Americas Energy
Solutions serves more than 1,700 commercial and
Industrial customers who require more than 8,000 MW of
electricity.
The Noble Group (SGX:N21) manages a portfolio of global
supply chains covering a range of industrial and energy
products. Operating from over 60 locations and employing
more than 40 nationalities, Noble facilitates the
marketing, processing, nancing and transportation of
essential raw materials. Sourcing bulk commodities from
low cost regions such as South America, South Africa,
Australia and Indonesia, the Group supplies high growth
demand markets, particularly in Asia and the Middle East.
Noble is ranked number 77 in the 2015 Fortune Global 500.
Noble has been recognized for changing the face of US
deregulated power by providing an industry leading web
enabled risk management solution, PowerFolio3D. This
platform provides customers with an understanding of
their potential risks and rewards, helps them produce
optimal strategies to mitigate risk and drive value into
their portfolios, creates an ecient execution plan for
STATISTICS
STATISTICS
Established in 2013
PJM INTERCONNECTION
Terry Boston is retiring this year as president and chief
executive ocer of PJM Interconnection the nations
largest Regional Transmission Organization culminating a
43-year career in the electric utility industry. Before joining
PJM in 2008, Mr. Boston was executive vice president of
the Tennessee Valley Authoritys power system operations.
TVA is the nations largest wholesale public power provider.
Mr. Boston is past president of the Association of Edison
Illuminating Companies, Inc. and immediate past president of
GO 15, the association of the worlds largest power grid
operators. He also served as board chairman of the North
KEN ISONO
VIPUL SHAH
COO,
PETROCHEMICALS
REPSOL
RESTORE
REstore is an energy technology company focused on
automated Demand Response. It oers curtailable
capacity to energy utilities, balance responsible parties
and transmission system operators in the form of a virtual
power plant, oering specications that are fully
comparable to a gas-red power plant. The company is a
leading actor in the fast-growing European Primary
Reserve/Frequency control market, operating in all
ancillary service and capacity markets. REstores
proprietary platform Flexpond is used by over 125 of
Europes largest industrial energy consumers to reduce
power demand without aecting industrial processes.
Participants include ArcelorMittal, Barclays, Celsa Steel,
Total and Praxair. In exchange, REstores industrial
consumers receive signicant cash payments and
contribute to CO2 reductions. Jan-Willem Rombouts and
Pieter-Jan Mermans founded the company in 2010.
The principle behind REstore is similar to that of Uber or
AirBnB. REstore contracts industrial consumers that are
prepared to curtail electro-intensive machinery at times of
grid stress or imbalance. REstore aggregates and controls
these consumers in real-time to oer a large-scale,
reliable virtual power plant to TSOs and BRPs using its
cloud-based technology platform Flexpond. The cost
structure of this new type of VPP is more attractive than a
gas-red peaking plant in current market conditions: an
open cycle gas turbine needs CAPEX equal to 500,000/
MW, whereas REstores VPP costs 10,000/MW.
In October REstore won Frost & Sullivans 2015 European
Award for Competitive Strategy Innovation and
Leadership. The award was based on Frost & Sullivans
analysis of the Demand Response market, in which it
concluded: Boasting a broad range of DR solutions in all
key European energy markets, REstore is in an ideal
position to make the most of the growth opportunities in
the European market. On the strength of its sophisticated
JAN-WILLEM
ROMBOUTS
PIETER-JAN
MERMANS
CEO
CEO
ACTING
Education
Employment and Livelihood
Electrication and Basic Infrastructure
Environmental Stewardship
Emergency Preparedness
HIGHLIGHTS
FUELING A NATION
SMPC supplies around 24% of the Philippine coal requirements,
serving six (6) power plants and all domestic cement plants.
KEVIN SMITH
CEO
SOLARRESERVE
SolarReserve is a leading global developer of utility-scale
solar power projects, which include electricity generation
by solar thermal energy with energy storage, as well as
photovoltaic panels. The company has more than $1.8
billion of projects in construction and operation
worldwide, with development and long-term power
contracts for 482 megawatts of solar projects
representing $2.8 billion of project capital. In addition,
SolarReserve has commercialized a proprietary
advanced solar thermal technology with integrated
energy storage that solves the intermittency issues
experienced with other renewable energy sources.
SolarReserves U.S. developed technology uses mirrors
to concentrate sunlight to directly heat molten salt and
TERRAPOWER, LLC
Washington-based TerraPower develops sustainable,
carbon-free, cost-competitive generation technologies
and solutions for the nuclear energy sector. The companys
mission-driven innovation aims to bring new energy
technologies rapidly to market, such as the Traveling Wave
Reactor (TWR). TerraPower developed this fast-reactor
technology with the goal to make clean, carbon-free,
low-cost electricity available to the world, especially to the
1.6 billion people without access to dependable electricity.
As a rst-mover in a growing global market, TerraPowers TWR
is an attractive technology to sovereign nations and private
companies alike. This technology will simplify the nuclear
ALAN ARMSTRONG
PRESIDENT & CEO
WILLIAMS
Williams (NYSE: WMB) is a premier provider of large-scale
infrastructure connecting North American natural gas and
natural gas products to growing demand for cleaner fuel and
feedstocks. Headquartered in Tulsa, Okla., Williams owns
approximately 60% of Williams Partners L.P. (NYSE: WPZ),
including all of the 2% general-partner interest.
Williams Partners is an industry-leading, large-cap master
limited partnership with operations across the natural gas value
chain from gathering, processing and interstate transportation
of natural gas and natural gas liquids (NGLs) to petchem
production of ethylene, propylene and other olens. In addition,
Williams Partners processes oil sands o-gas in Canada.
YASREF
The Yanbu Aramco Sinopec Rening Company (YASREF) is
a joint venture between Saudi Aramco, Saudi Arabias
national oil company which owns 62.5% of YASREF, and
Sinopec, Chinas largest national oil company which owns
37.5 percent. YASREF operates a world class fullconversion renery constructed on the banks of the Red
Sea that processes 400,000 bpd of crude oil into gasoline,
high quality diesel, and liqueed petroleum gases (LPG) as
well as byproducts including sulfur and petroleum coke for
export. The rening complex was designed to process
predominantly Arabian heavy crude oil.
YASREF is a signicant addition to the impressive
downstream portfolio of Saudi Aramco, and it also further
serves to build on the strategic partnership with Sinopec,
Saudi Aramcos largest crude oil partner and buyer. Both
companies bring commercial and technical expertise to the
joint venture which will enhance the trading of transportation
fuels between a signicant energy producer and an equally
signicant consumer. In addition, YASREF represents a
continuing step forward in the strategies of Saudi Aramco
and Sinopec to drive integrated growth further downstream
to capture additional value along the hydrocarbon chain.
The Renery is a product of the Kingdom of Saudi Arabias
strategy to address global energy demand while attracting
foreign investment to expand the countrys economy. Due
to its diet of large quantities of heavy crude, not only does
the facility ease tight rening capacities but it also
addresses the mismatch between the available crude
supplies and current renery congurations that
complicate the industry worldwide.
YASREF was registered in January 2012 with the single
purpose to establish, operate, and manage a full
conversion-rening complex. Being on the Red Sea just
south of the Suez Canal, YASREF possesses the location
advantage to eectively and eciently supply both
international and domestic markets. The products include
90,000 bpd of gasoline, 263,000 bpd of ultra-low sulfur
diesel, 6,200 metric tons per day (mtd) of petcoke, 1,200
MURRAY FISHER
Senior Manager
Platts Global Energy
Awards
A NEW FOCUS ON
FINANCIAL OVERSIGHT
The Platts Global Energy Awards
program, now in its 17th year,
highlights corporate and individual
innovation, leadership and superior
performance from across the energy
arena. The 2015 winners were chosen
from nearly 200 nominees hailing
from nearly three dozen countries on
four continents.
Asias ongoing advancement in
global energy is evident in this years
CEO of the Year category, with nearly
75% of nalists hailing from the
region. The US also made a strong
showing, with some 55% of the
nalists in all categories; India and
the United Kingdom were also
well-represented. These gures are
not only indicative of a wide
geographic footprint, but also reect
several changes to long-standing
awards categories and the addition
of new ones.
More than 30 nalists competed in
2015s new or rened categories. The
Financial Deal of the Year category
showcases performance from private
equity, hedge funds and other
investment groups and the vital role
they are playing amid the energy
industrys consolidation and low oil
price environment. The new Industry
Infrastructure Management (a
division of the Ontario Municipal
Employees Retirement System),
TransCanada, the Power Workers
Union and the Society of Energy
Professionals.
The group came to an agreement in
which the site is leased from the
Province of Ontario under a long-term
arrangement where all of the assets
remain publicly owned, while the
company makes annual rent
payments and funds the cost of
operating and investing in the units, as
well as waste management and
eventual decommissioning of the
facilities. The initial lease term was for
18 years with options to extend up to
an additional 25 years.
Today, Bruce Power operates the
worlds largest operating nuclear
generating facility and is the source
of roughly 30% of Ontarios
electricity. The company employs
approximately 4,100 people, 87% of
whom are investors, and is the single
largest private investor in Ontarios
electricity infrastructure with a total
injection of $10 billion into the Bruce
Power site since 2001. Its eight
reactors produce a total of 6,300 MW
of energy.
Though the public was initially wary
of the project, support for
refurbishment of nuclear plants in
Ontario has now reached a record
high approval rating of 81%. Judges
approved as well, observing that
Bruce Power saved the Canadians a
lot of money by taking a mothballed
nuclear eet and turning it into
low-carbon power, setting a new
standard for creative solutions within
the industry.
CORPORATE SOCIAL
RESPONSIBILITY AWARD
Reliance Industries Limited
India
Character is at the core of the
Corporate Social Responsibility (CSR)
award: it lies at the convergence of
CONSTRUCTION PROJECT
OF THE YEAR
Yanbu Aramco Sinopec Rening
Company (YASREF)
Saudi Arabia
The Construction Project of the Year
award recognizes excellence in
project execution and management.
ENGINEERING PROJECT
OF THE YEAR
Royal Dutch Shell
Netherlands
Top honors for this years Engineering
Project go to a Netherlands-based
company that judges called the best
technical oil company in the world.
Royal Dutch Shells prolic Bonga
North West project, which ties into one
of the largest oating production,
COMMERCIAL APPLICATION
OF THE YEAR
Caterpillar Inc.
United States
The Commercial Application award
honors a company that is developing
a new technology and applying it to
boost efficiency, business
advantage and profits, with a
distinct focus on innovation that
results in commercial success.
Illinois-based Caterpillar, founded in
1925, is becoming synonymous with
innovation as it constantly works to
improve the construction and mining
equipment, diesel and natural gas
engines, industrial gas turbines and
diesel-electric locomotives it
manufactures.
Caterpillar Propulsion focuses on
moving beyond engines and parts to
supply fully-integrated vessel
systems for commercial marine
applications everything that
BREAKTHROUGH SOLUTION
OF THE YEAR
Algenol
United States
According to scientists, CO2 levels are
the highest in 650,000 years. These
ndings have spurred many regulatory
actions including the EPAs recent Clean
Power Plan acknowledging the value of
carbon capture and utilization (CCU).
This technology is the cornerstone of
the Direct to Ethanol method
developed by Algenol, this years
recipient of the Breakthrough Solution
of the Year Award, which honors the
vast potential of technologies not yet
commercially deployed.
Qatar
ENERGY
for life
Energy powers our world, it enriches our lives.
Qatari artist Yousef Ahmed uses energy as an inspiration for his art.
It fuels his imagination.
RasGas liqueed natural gas has a transformative and sustainable
effect on Qatars future.
Clean, reliable energy for Qatar and the world.
Energy for Life.