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Regional Oil & Gas Summary - 15 Jul 2015

Core Content Overview

The document provides an analysis of the regional oil and gas market as of 14 and 15 July 2015, focusing on price movements, key developments, and company valuations. It includes news headlines and reports from various regions, such as Iran, Qatar, Malaysia, India, and others, alongside financial data and analyst ratings.

Key Market Developments

• Oil Prices:

  • Brent Crude: Increased by 1.1% to USD58.51/b, with a 1-day change of +0.66 USD/bbl.
  • WTI Crude: Rose by 1.6% to USD53.04/b, with a 1-day change of +0.84 USD/bbl.
  • Dubai Fateh Spot: Declined by 1.9% to USD55.95/b, with a 1-day change of -1.10 USD/bbl.
  • China Daqing Spot: Fell by 1.7% to USD51.73/b, with a 1-day change of -0.89 USD/bbl.
  • Natural Gas (Henry Hub): Dropped by 0.8% to USD2.84/MMBtu, with a 1-day change of -0.02 USD/MMBtu.
  • LNG Northeast Asia CFR: Declined by 1.7% to USD7.40/MMBtu, with a 1-day change of 0.00 USD/MMBtu.
  • Singapore 92 RON Spot: Decreased by 1.9% to USD73.00/b, with a 1-day change of +0.73 USD/bbl.
  • Gasoil 500 ppm SG Spot: Dropped by 1.9% to USD69.42/b, with a 1-day change of -1.35 USD/bbl.
  • 3.5% 180cst Fuel SG Spot: Fell by 3.4% to USD316.29/mt, with a 1-day change of -11.07 USD/mt.
  • Gold: Decreased by 0.2% to USD1,156.06/Oz, with a 1-day change of -1.92 USD/Oz.
  • USD-CNY: Remained stable at 6.21.
  • DJI: Rose by 0.4% to 18,053.58.
  • S&P 500: Increased by 0.4% to 2,108.95.

• Iran and Qatar:

  • Iran, despite having the second-largest gas reserves in the world, cannot match Qatar's economic success due to high domestic consumption and the oil industry's use of gas for production.
  • Qatar's gas exports rank second globally, contributing USD86 billion last year.
  • The Iranian nuclear deal led to a temporary recovery in crude prices, but it did not result in a significant increase in exports in 2015.

• Petronas and Tembikai Field:

  • Petronas achieved first oil production from the Tembikai field in Malaysia.
  • Production is currently from a single well, with two more to be drilled.
  • Peak output from the three wells is expected to be around 2000 barrels per day.
  • Petronas also has five other RSCs, with some in production and others in early development stages.

• Saudi Arabia's Output:

  • Saudi Arabia's crude oil production reached a record 10.6m b/d in June 2015, up by over 200,000 b/d from the previous month.
  • This highlights Saudi's role as a key player in the global oil market.

• China's Commodity Imports:

  • Low oil prices are expected to boost imports of crude oil, iron ore, and soybeans.
  • China's crude oil imports rose by 27% year-on-year in June 2015, reaching the second-highest level on record.

Analyst Ratings and Reports

• Petronas Chemicals:

  • Rating: HOLD
  • Target price raised to MYR6.60 (from MYR5.35).
  • Petrochemical ASPs are down -25% YTD in USD and -13% in MYR.
  • Positive outlook for ASPs and weaker MYR against USD could support earnings.

• NewOcean Energy:

  • Rating: BUY
  • Target price: HKD7.70 (105% upside).
  • Volume and margin are on track for FY15 projections, indicating upside potential.

• Trans-Asia Oil & Energy Development:

  • Rating: BUY
  • Earnings and target price reduced due to delays in plant commissioning and lower Feed-in Tariff.
  • Earnings are expected to more than triple in 2016 with the operation of SLTEC's 2×135 MW coal-fired power plant.

• Gas Malaysia:

  • Rating: HOLD
  • FY15 spread guidance increased to MYR1.58/mmBTU from MYR1.10, but down from MYR2.02.
  • Target price lowered to MYR2.65 (-12%), with potential for an IBR in Jan 2016.

Company Valuations

Key Points

• Oil and Gas Prices: Prices showed mixed movements, with some rising and others falling due to geopolitical developments and market dynamics.
• Iran's Nuclear Deal: Had a limited impact on oil prices, as the market anticipated no significant increase in exports in 2015.
• Petronas: Achieved first oil production from the Tembikai field, indicating progress in its upstream operations.
• China's Imports: Increased due to low oil prices, particularly for crude oil, iron ore, and soybeans.
• Valuation Trends: Some companies, like CNOOC and Petronas, are seen as having attractive valuations, while others, such as Thai Oil, are under pressure.

Analyst Contact Information

• Howard Wong (HK/CHINA): (852) 22680648, howardwong@kimeng.com.hk
• Jigar Shah (INDIA): (91) 226623 2632, jigar@maybank-ke.co.in
• Pandu Anugrah (INDONESIA): (62) 21 2557 1137, pandu.anugrah@maybank-ke.co.id
• Liaw Thong Jung (MALAYSIA): (603) 2297 8688, tjiaw@maybank-ib.com
• Michael Bengson (PHILIPPINES): (63) 28498840, micheal_bengson@maybank-atrke.com
• Yeah Chee Keong (SINGAPORE): (65) 6231 5842, yeakcheeong@maybank-ke.com.sg
• Sutthichai Kumworachai (THAILAND): (66) 2658 6300 x 1400, sutthichai.k@maybank-ke.co.th
• Le Nguyen Nhat Chuyen (VIETNAM): (84) 844555888 × 8082, chuyen.le@maybank-kimeng.com.vn
• Truong Quang Binh (VIETNAM): (84) 444555888 × 8087, binh.truong@maybank-kimeng.com.vn

This summary captures the core content, key developments, and analyst insights relevant to the regional oil and gas market as of 15 July 2015.