Im Fokus: Geopolitik & Ölpreis

ÖVFA

04 March 2016

Alexander Pögl

Special Presentation

Disclaimer

All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements (including those depicted in graphical form)are statements of future expectations that are based on JBC Energy’s current expectations andassumptions and involve known and unknown risks and uncertainties that could cause actualresults, performance or events to differ materially from those expressed or implied in thesestatements. Forward-looking statements include, among other things statements expressingJBC Energy’s expectations, beliefs, estimates, forecasts, projections and assumptions. Theseforward-looking statements are identified by their use of terms and phrases such as‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘intend’’, ‘‘may’’, ‘‘plan’’, ‘‘objectives’’,‘‘outlook’’, ‘‘probably’’, ‘‘project’’, ‘‘will’’, “forecast”, “predict”, “think”, ‘‘seek’’, ‘‘target’’, ‘‘risks’’,‘‘goals’’, ‘‘should’’ and similar terms and phrases. All forward-looking statements contained inthis speech/presentation are expressly qualified in their entirety by the cautionary statementscontained or referred to in this section. Readers/audience should not place undue reliance onforward-looking statements. Each forward-looking statement speaks only as of the date of thispresentation. Neither JBC Energy nor any of its subsidiaries undertake any obligation topublicly update or revise any forward-looking statement as a result of new information, futureevents or other information. In light of these risks, results could differ materially from thosestated, implied or inferred from the forward-looking statements contained in thisspeech/presentation. Any persons acting on information contained in this presentation does sosolely at their own risk. JBC Energy is not responsible for the accuracy of data collected fromexternal sources and will not be held liable for any errors or omissions in facts or analysiscontained in this presentation. JBC’s third party sources provide data to JBC on an “as-is” basisand accept no responsibility and disclaim any liability relating to reliance on or use of theirdata by any party.

Friday, 04 March 2016 www.jbcenergy.com Slide 2

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Monthly, Quarterly & Bi-Annually

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www.jbcenergy.com/modelling

Products & Services

Friday, 04 March 2016 www.jbcenergy.com Slide 3

The current down cycle is unusually deep and long – but not unprecedented: Key questions are what to make out of the last decade of high prices (one-off anomaly vs. new norm?) as well as the industry losing out on ca $7billion on a daily basis compared to the period 2011-14

Friday, 04 March 2016 www.jbcenergy.com Slide 4

The Current Picture

0

20

40

60

80

100

120

140

1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Brent Spot Price (FOB)

Brent Spot Price (FOB)

Brent Spot Price FOB [$/bbl]

-37.5% in 15 months

Source: EIA

-49.6% in 8 months

-57.4% in 28 months

-42.5% in 14 months

-23.6% in 9 months

-69.9% in 5 months

-71.0% in 19 months

The Outlook

After an unprecedented 10 quarterly stock builds, the market will start to tighten in H2 2016. But we now see a lengthening of the balance again in H1 2017, before things begin to improve on a more constant basis.

Friday, 04 March 2016 www.jbcenergy.com Slide 5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Q1 12 Q3 12 Q1 13 Q3 13 Q1 14 Q3 14 Q1 15 Q3 15 Q1 16 Q3 16 Q1 17 Q3 17

JBC Energy

IEA

OPEC

EIA

Sources: IEA, OPEC, EIA, JBC Energy

JBC Energy OPEC production estimates are used for IEA and OPEC

figures as of Q1 2016.

Implied Global Stockbuild/draw [million b/d]

Uncertainty - Supply

Irrespective of balances, the supply momentum is on the verge of a substantial change in non-OPEC markets. Besides the anticipated US output decline, we expect some baseline effects due to high output in 2015.

Friday, 04 March 2016 www.jbcenergy.com Slide 6

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16

US Europe FSU East

Asia Africa Middle East

North America excl. US Central & South America Total non-OPEC excl. US

Non-OPEC Crude Output Change Y-o-y by Region ['000 b/d]

Uncertainty - Cost Factor

The question is how many of the marginal resources will be required going forward. Lower break-even costs are only one factor in the equation – the other is higher supplies from low-cost producers (OPEC & Russia). Equilibrium is also very sensitive to demand movements.

Friday, 04 March 2016 www.jbcenergy.com Slide 7

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

100.00

110.00

120.00

130.00

140.00

2 12 22 32 42 52 62 72 82 92 102

Supply 2016 Demand 2016

Supply 2014 Demand 2014

Source: JBC Energy

Co

st t

o p

rod

uce

on

e b

arre

l of o

il

Quantity of Oil Supplied / Demanded

Marginal Cost of Oil Production [million b/d; $/bbl]

Middle East Onshore

North Sea

Oil sands heavy

US Shale Oil

WAF Offshore

FSU onshore

Biodiesel

Ethanol

Arctic

This is a snapshot of volumes supplied / demanded on an annualised basis.

Short term outages as well as future developments are not reflected.

Production costs (full cycle costs in this case) are only indicative as there are huge variations

within each category.

Oil sands upgraded

Additional cheap crude

Co

st re

du

ction

Uncertainty - Supply

An unchanged OPEC policy will keep output strong. Including returning member Indonesia, OPEC crude output is set to remain around 32.5 million b/d

Friday, 04 March 2016 www.jbcenergy.com Slide 8

28.0

28.5

29.0

29.5

30.0

30.5

31.0

31.5

32.0

32.5

33.0

33.5

34.0

Q1 14 Q3 14 Q1 15 Q3 15 Q1 16 Q3 16

OPEC Crude Supply

Call on OPEC

OPEC Crude Supply & Y-o-y Change [million b/d]

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Q1 14 Q3 14 Q1 15 Q3 15 Q1 16 Q3 16

Saudi Arabia IraqIran OPEC NAFOPEC WAF OPEC C&S AmericaOther

Uncertainty - Supply

Strong upside as well as downside uncertainty for global crude output - not only from the much discussed case of Iran

Friday, 04 March 2016 www.jbcenergy.com Slide 9

Total OPEC base case additions

Iran

Iraq

Kuwait

Saudi Arabia

Total non-OPEC base case declines

US

Canada

Russia

other non-OPEC

-1.4

-1.2

-1.0

-0.8

-0.6

-0.4

-0.2

0.00.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

OPEC Non-OPEC

Oil Output Changes 2016 (Y-o-y) [million b/d]

Additional upside:520,000 b/d

Additional downside:710,000 b/d

Base case total liquids output

growth:225,000 b/d

Uncertainty - Supply

A freeze at January levels might not do much unless Iraq, Iran and others join the club. Most importantly, the Jan level needs to be defined as well as enforcement would require a common production assessment system

Friday, 04 March 2016 www.jbcenergy.com Slide 10

10.3

10.5

10.7

10.9

11.1

Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16

Output "Freeze" vs. Base Case Forecast [million b/d, '000 b/d]

9.5

10.0

10.5

11.0

Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16Source:

2.3

2.4

2.5

2.6

Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16

Venezuela

0.60

0.65

0.70

0.75

Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16

Qatar

Russia

Saudi Arabia

0

50

100

150

200

250

Freeze vs. Base Case

QatarVenezuelaSaudi ArabiaRussia

Uncertainty – Geopolitical Risk

Oil producing countries have come under significant pressure and changes in budget policies could lead to instability.

Friday, 04 March 2016 www.jbcenergy.com Slide 11

298771

1212

159730

331

1938

9499

42084814 4645

0 0661

0

5,000

10,000

15,000

20,000

25,000

2011 2015

Available Budget from Crude Exports [$ per capita per year]

The chart shows JBC Energy estimates and not realised budget contributions including assumptions on realised crude prices, typical regional production costs and export and population data out of our in-house SuDeP model.

Uncertainty - Stocks

Storage can be seen as a new source of supply. According to Jan-16 preliminary available data, total stocks are at surplus of some 550 million barrels to the January average for 2011-2015. Arbitrarily assuming a balance of -0.5mb/d, it would take 1100 days to get back to the 5-year average.

Friday, 04 March 2016 www.jbcenergy.com Slide 12

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

2,600

2,800

3,000

3,200

3,400

3,600

3,800

4,000

4,200

4,400

4,600

Jan-12 Jan-13 Jan-14 Jan-15

Spare Capacity*

Actual Stocks Level

Spare Capacity, %, r.s.

World Storage Capacity and Spare Capacity [million barrels, %]

Source: IEA, EIA, JODI, Official customs data, Euroilstock, PAJ, KNOC, JBC Energy calculations

0%

3%

6%

9%

12%

15%

18%

21%

24%

27%

30%

1,300

1,400

1,500

1,600

1,700

1,800

1,900

2,000

2,100

2,200

2,300

Jan-12 Jan-13 Jan-14 Jan-15

* Maximum storage capacity is defined as a sum of maximum inventory levels per country in January 2010-present

Crude and Fuel Oil Gasoline and Middle Distillates

Uncertainty - Demand

Oil consumer prices have fallen by only a fraction of the oil price fall, limiting price and income effects. The Middle East has even seen rising retail prices as governments curtail subsidies to counterbalance lower oil income.

Friday, 04 March 2016 www.jbcenergy.com Slide 13

-70%-62%

-70%

-32%

-17%

-41%

-18%

92%

-28%-16%

-38%

-19%

46%

-80.0%

-60.0%

-40.0%

-20.0%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

Brent RBOB ICE gas oil China India US EU Middle East*

Diesel Gasoline

Price Changes since January 1st, 2014 [%]

*Middle East data is an average of retail price changes in Saudi Arabia, Kuwait, Bahrain, Oman, and the UAE.

Sources: ICE, Various

Price changes were calculated using local

currencies.

Uncertainty - Demand

Overall, we do not see oil demand much higher than before the price fall, but gasoline demand is now cumulatively 1.4 million b/d higher, while gas oil/diesel demand is 0.3 million b/d lower than assessed in early 2014. “Peak demand” is an issue – and limiting the upside for oil prices.

Friday, 04 March 2016 www.jbcenergy.com Slide 14

0

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1,200

1,400

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1,800

2,000

2011 2012 2013 2014 2015 2016 2017 2018

Oil Demand Growth - 2016/01

Oil demand Growth - 2014/01

-600

-400

-200

0

200

400

600

800

1,000

2011 2012 2013 2014 2015 2016 2017 2018

LPG

Naphtha

Gasoline

Kero/Jet

Gas Oil

Fuel Oil

Other

Title [unit]

Product by Product

Revisions from 2014 to 2016

Revisions of Oil Demand Growth 2016 vs 2014 ['000 b/d]

Total Product Demand

Comparison

Thank you!