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Regional Oil & Gas Summary - 29 Jun 2015

Core Content

The document provides an overview of the regional oil and gas market, including price movements, recent news, and analyst reports from Maybank Kim Eng. It highlights developments in the Asia-Pacific region, particularly in China, India, Malaysia, and Vietnam, along with key players and their valuations.

Key Market Movements

• Brent Crude Oil: Increased by 0.1% to USD63.26/b.
• WTI Crude Oil: Decreased by 0.1% to USD59.63/b.
• LNG Northeast Asia CFR: Decreased by 1.6% to USD7.24/MMBtu.
• Crude Oil (China Daqing Spot): Decreased by 1.6% to USD58.67/b.
• Gold: Increased by 0.2% to USD1,175.52/Oz.
• USD-CNY Exchange Rate: Remained stable at 6.21.
• Dow Jones Industrial Average (DJI): Increased by 0.3% to 17,946.68.
• S&P 500: Decreased by 0.1% to 2,101.49.

News Highlights

1. Peru's Oil Block Bidding

   • Three oil firms (Perenco Ltd, Pluspetrol, and Pacific Rubiales Energy) are interested in bidding for Peru's largest oil block.
   • The block, previously known as block 1-AB, is currently operated by Pluspetrol since 2001 and produces about 12,000 barrels per day.

2. China's Rig Shift Towards Vietnam

   • China moved an oil rig closer to Vietnam in the South China Sea, signaling potential for new outposts and land reclamation projects.

3. China's Crude Oil Stocks

   • China's commercial crude stocks rose by 1.28% to 33.94m tonnes in late May.
   • Crude production increased by 3.63%, while imports fell by 23.28% and exports dropped by 70.45%.

4. China's Natural Gas Consumption

   • Natural gas use is expected to grow more slowly due to economic cooling, increasing the risk of oversupply and delaying import plans.

5. CNOOC's LNG Terminal in Wuhu

   • CNOOC Gas and Power Group signed a cooperation agreement with Huainan Mining Industry Group to develop an LNG terminal in Wuhu, Anhui province.
   • The terminal will reach a final annual capacity of 3 million tons by 2030, with the first phase operational in 2017.

Analyst Reports

Petronas Chemicals

• Rating: HOLD
• Target Price: MYR6.60 (up from MYR5.35)
• Key Points: Petrochemical ASPs are -25% YTD in USD and -13% in MYR, but the promising ASP outlook and weaker MYR against USD could provide upside potential.

NewOcean Energy

• Rating: BUY
• Target Price: HKD7.70 (implies 105% upside)
• Key Points: Volume and margin are on track to meet FY15 projections, with margin trend and forex impact being frequently discussed.

Trans-Asia Oil & Energy Development

• Rating: BUY
• Key Points: Earnings and target price were reduced due to delays in plant commissioning and lower Feed-in Tariff.
• Outlook: Earnings expected to triple in 2016 with the operation of the coal-fired power plant.

Gas Malaysia

• Rating: HOLD
• Target Price: MYR2.65 (down 12%)
• Key Points: FY15 spread guidance increased slightly, but the spread is lower than previous levels.
• IBR: Potentially starts in January 2016 with pass-through mechanisms.

Valuation Overview

Asia Oil & Gas Companies

Asia Oil-Service Companies

Analyst Contacts

• 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) 22978688, tjiaw@maybank-ib.com
• Michael Bengson (PHILIPPINES): (63) 28498840, micheal_bengson@maybank-atrke.com
• Yeah Chee Keong (SINGAPORE): (65) 6231 5842, yeakcheekeong@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

Notes

• All forward-looking estimates and multiples for companies not under Maybank Kim Eng's coverage are from Bloomberg consensus.
• Average multiples and yields are weighted by market capitalization.