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Delivering commercial insight to the global energy industry www.woodmac.com Wood MackenzieEnergy Angolas Oil & Gas Revenue: Past, Present & Future.

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Presentation on theme: "Delivering commercial insight to the global energy industry www.woodmac.com Wood MackenzieEnergy Angolas Oil & Gas Revenue: Past, Present & Future."— Presentation transcript:

1 Delivering commercial insight to the global energy industry Wood MackenzieEnergy Angolas Oil & Gas Revenue: Past, Present & Future

2 Delivering commercial insight to the global energy industry Wood MackenzieEnergy 2 Petroleum Revenue Management Workshops, Luanda, May 2006 Background to Wood Mackenzie Setting the background - Angolas upstream industry in context Historical and possible future government revenues A brief international context Agenda

3 Delivering commercial insight to the global energy industry Wood MackenzieEnergy 3 Petroleum Revenue Management Workshops, Luanda, May 2006 Background to Wood Mackenzie Providing information and analysis on the upstream industry for over 30 years Asset level information - field by field or block by block Started West African coverage in 1990 Research and analysis held in proprietary databases and economic models Asset data, field profiles, contract terms etc derived from many sources Public information Government information Company information Conversations with operators, partners… Ultimately all asset profiles and values are WM own best estimates Data here comes from Wood Mackenzies Global Economic Model (GEM)

4 Delivering commercial insight to the global energy industry Wood MackenzieEnergy 4 Petroleum Revenue Management Workshops, Luanda, May 2006 Angola has seen spectacular growth in its deepwater resource base… Source: Wood Mackenzies Global Economic Model (GEM)

5 Delivering commercial insight to the global energy industry Wood MackenzieEnergy 5 Petroleum Revenue Management Workshops, Luanda, May 2006 …resulting in ongoing upward revision of production profiles… Source: Wood Mackenzies Global Economic Model (GEM)

6 Delivering commercial insight to the global energy industry Wood MackenzieEnergy 6 Petroleum Revenue Management Workshops, Luanda, May 2006 …driven by deepwater developments Source: Wood Mackenzies Global Economic Model (GEM)

7 Delivering commercial insight to the global energy industry Wood MackenzieEnergy 7 Petroleum Revenue Management Workshops, Luanda, May 2006 Lead times from discovery to development sanction have been increasing… Source: Wood Mackenzies Global Economic Model (GEM)

8 Delivering commercial insight to the global energy industry Wood MackenzieEnergy 8 Petroleum Revenue Management Workshops, Luanda, May 2006 …and need to be accelerated to stem decline from the first tranche of developments Source: Wood Mackenzies Global Economic Model (GEM)

9 Delivering commercial insight to the global energy industry Wood MackenzieEnergy 9 Petroleum Revenue Management Workshops, Luanda, May 2006 Huge investment required to generate massive revenues… Source: Wood Mackenzies Global Economic Model (GEM)

10 Delivering commercial insight to the global energy industry Wood MackenzieEnergy 10 Petroleum Revenue Management Workshops, Luanda, May 2006 …which will transform the revenues received by the state… Source: Wood Mackenzies Global Economic Model (GEM)

11 Delivering commercial insight to the global energy industry Wood MackenzieEnergy 11 Petroleum Revenue Management Workshops, Luanda, May 2006 …dominated by profit share from deepwater PSCs… Source: Wood Mackenzies Global Economic Model (GEM)

12 Delivering commercial insight to the global energy industry Wood MackenzieEnergy 12 Petroleum Revenue Management Workshops, Luanda, May 2006 …with total state revenue at least 50% of gross revenue and could be as high as 80% Source: Wood Mackenzies Global Economic Model (GEM)

13 Delivering commercial insight to the global energy industry Wood MackenzieEnergy 13 Petroleum Revenue Management Workshops, Luanda, May 2006 UK comparison Source: Wood Mackenzies Global Economic Model (GEM)

14 Delivering commercial insight to the global energy industry Wood MackenzieEnergy 14 Petroleum Revenue Management Workshops, Luanda, May 2006 UK comparison Source: Wood Mackenzies Global Economic Model (GEM)

15 Delivering commercial insight to the global energy industry Wood MackenzieEnergy 15 Petroleum Revenue Management Workshops, Luanda, May 2006 Norway comparison Source: Wood Mackenzies Global Economic Model (GEM)

16 Delivering commercial insight to the global energy industry Wood MackenzieEnergy 16 Petroleum Revenue Management Workshops, Luanda, May 2006 Norway comparison Source: Wood Mackenzies Global Economic Model (GEM)

17 Delivering commercial insight to the global energy industry Wood MackenzieEnergy 17 Petroleum Revenue Management Workshops, Luanda, May 2006 Conclusions What are the upsides? High prices – progressive government take Further discoveries Spectacular bonuses for some deepwater licences What are the downsides or risks? Low prices Very high cost inflation throughout industry Very steep production decline without further discoveries Disappointment in ultra-deep water Small number of partners

18 Delivering commercial insight to the global energy industry Wood MackenzieEnergy 18 Petroleum Revenue Management Workshops, Luanda, May 2006 Wood Mackenzie Head Office Kintore House Queens Street Edinburgh EH2 4NS Global Contact Details Europe+44 (0) Americas Asia Pacific Global Offices Beijing - Boston - Dubai - Edinburgh - Houston - Kuala Lumpur - London - Moscow - New Jersey - New York - Singapore - Sydney - Tokyo Wood Mackenzie has been providing its unique range of consulting services and research products to the Energy and Life Sciences industries for over 30 years. Wood Mackenzies market proposition is based on its ability to provide forward-looking commercial insight that enables clients to make better business decisions. For more information visit: David Morrison Chairman, Energy T: E: Thank you for your attention Catriona ORourke Senior Angola Analyst T: E:


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