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Regional Oil & Gas Summary - 18 June 2014

Core Content Overview

The document provides a summary of the oil and gas market dynamics as of 17 June 2014, highlighting price movements, major news headlines, and recent reports from Maybank Kim Eng. It includes insights on key players in the industry and valuation comparisons across various regions.

Major News Headlines

• Shell and CNOOC inks global alliance pact: A joint statement reveals that Shell and CNOOC have signed a global alliance agreement to collaborate on upstream and downstream projects worldwide.
• Vietnam's proven oil reserves total 4.4b barrels: Vietnam has 4.4 billion barrels of proven oil reserves, with a current daily production rate of 0.3 mbpd. The country aims to increase production to 1.0 mbpd by 2020.
• CNOOC inks USD20b LNG import deal with BP: CNOOC has signed a 20-year contract to import 2.0-2.5 mtpa of LNG from BP's international portfolio, valued at USD20 billion.
• Singapore May petchem exports up 30.7% YoY: Singapore's petrochemical exports increased by 30.7% in May 2014 compared to the previous year, while NODX showed a 6.6% YoY contraction.
• Shell unloads USD5b stake in Woodside: Shell plans to sell USD5 billion worth of its stake in Woodside, involving the sale of 78.3 million shares on 18 June 2014.
• Gazprom cuts Ukraine off completely: Gazprom has halted gas supply to Ukraine due to unpaid debts, with Ukraine demanding a refund for overpayments made from 2010.

Our Latest Reports

Offshore & Marine - Insights from key OSV players (NEUTRAL)

• OSV operators/owners remain optimistic about the long-term fundamentals of the offshore oil and gas sector.
• They are cautious about near-term headwinds.
• Demand for newer vessels is expected to drive replacement demand.
• Maintain NEUTRAL on the sector. Recommended exposure includes Ezion, Mermaid Maritime, Nam Cheong, and Vard.

SapuraKencana Petroleum - Bags USD700m rigs contracts (BUY, TP MYR5.30)

• SAKP has secured 3 new rig contracts and 1 rig charter extension totaling USD700 million.
• Contracts have fixed term tenure ranging from 1 to 5 years.
• The new DCRs are comparable to previous contracts.
• The company's 7 and 10-year-old rigs are securing decent rates, transforming the status of T-10 rigs from ready-stacked to active.
• Deepwater rigs are experiencing short-term softness in DCRs.
• Expected core net profit for 1QFY1/15 is between MYR250m and MYR270m, accounting for up to 20% of full-year forecast.
• Maintain BUY with a target price of MYR5.30.

China Oil & Gas (initiation) - Energy revolution, unstoppable force (BUY)

• Initiate coverage with a NEUTRAL view.
• BUY recommendations for PetroChina and NewOcean Energy.
• HOLD recommendations for CNOOC and Sinopec.
• Phase II of the energy reform is underway, leading to structural changes in the industry and energy landscape.
• Three key themes: natural gas liberalization, unconventional gas production, and natural gas vehicles.

Valuation Comparison

Asia Oil & Gas Valuation Comparison

Asia Oil Service Valuation Comparison

Analysts Contact Information