GLOBALOILS：WELCOMETOTHE$110+／BBLWORLD;UPGRADINGHESSTOBUY0107

1、top picks buy buy buy hold hold hold buy buy hold hold hold deutsche bank markets research north america united states industrials integrated oil industry global oils date 6 january 2013 forecast change paul sankey david t. clark, cfa welcome to the $110+/bbl world; research analyst (+1) 212 250-613

2、7 research analyst (+1) 212 250-8163 upgrading hess to buy upgrading hess to buy on operational inflection and wti rally we think the near term market relative outlook, certainly for q1 2013, for oil equities as opposed to natgas equities is strong, based on an expected relative rally in wti prices

3、that is already under-way. as we show in this note, illogical or not, it is wti that drives oils relative performance to the s 2) reduced overall capital intensity. we see a $2bn drop in capex yoy being confirmed by the end of january in the 2013 budget release. with strong disposal proceeds, we see

4、 a swing towards self-funding (2012 ocf-capex = -$2.8b shortfall, 2013e = -$0.6b only); 3) non-core disposals-to-focused exploration (russia, acg, declining north sea sold; exploration in just a few key regions). $2.4bn of disposals have been announced in 2012, with additional asset sales of $0.5bn-

5、1.5bn underway according to the company. in particular, they are pursuing the sale of its interests in russia. we have supported disposal programmes as a key valuation increase trigger to over-come the major discount of barrels on wall st (nav) vs barrels sold in asset markets. hess is now in the pr

6、ocess of triggering that arbitrage close. 4) ghana exploration success-to-commercial development. on this last point, the market seems to have almost ignored the organic exploration success in ghana, which we believe is significant to corporate value. we have raised our nav by $5/sh to reflect hesss

7、 emerging commercially viable oil development (pecan/almond/beech discoveries, which we estimate at 500mbbl combined). valuation looks relatively attractive, hess is trading at 3.2x 2013 ev/ebitda, well below the integrated average of 4.4x and us e upstream insight service for more information conta

8、ct l deutsche bank securities inc.page 17 2.00 6 january 2013 integrated oil global oils 2013 highlights demand the new paradigm the dominance of non-oecd the growth of non-oecd demand to over-take oecd demand sometime around 2013 is a remarkable shift in world oil markets. we are vague on the exact

9、 date of the “takeover” because of the very high level of imbalance in global oil source data, which reached over 1.5mb/d of “missing barrels” in q1 2012 being the difference between supply, stock change, and demand. the “missing barrels” are not simply a stock change, that number is tracked. the “m

10、issing barrels” are a statistical problem that indicates the balance does not add up. we think the majority of the balance is likely in more demand than currently reported, which is likely given the scale and pace of growth of emerging markets, where data tracking is weaker. supply-side statistics a

11、re generally more accurate, as they are required for operational and taxation reasons. our suspicion is that middle eastern, african, latin american and non-china/japan asian demand are all exceeding best- guess data. by extension, non-oecd demand may already exceed oecd, even if best- guess data su

12、ggests that will not occur until 2014. more demand than tracked is also bullish refining, globally, and that is supported by surprisingly strong refining margins given the weakness of the global economy. figure 26: non-oecd oil demand over-taking oecd source: deutsche bank figure 27: “missing barrel

13、s”: difference between supply, stock change, and demand 2012 all-time high missing barrels 1.50 1.00 0.50 0.00 q111 q211 q311 q411 q112 q212 q312 -0.50 source: deutsche bank currently five of the worlds top seven oil consumers are non-oecd countries (china #2, russia #4, india #5, brazil #7 in sep 2

14、012) and saudi arabia (#6). the us is, by a wide margin, still the single largest consumer; and will be for years to come, even as demand structurally has stopped growing and in due course will start declining. japan sits at #3; notably a country where population is now falling. page 18deutsche bank

15、 securities inc. yoygrowth(mb/d) jun-06jun-07jun-08 jun-09jun-10jun-11 dec-05dec-06dec-07dec-08dec-09dec-10dec-11jun-12 mb/d usus dec-12 us chinachinachina us 2009demand othernon-oecd 2010demand othernon-oecdothernon-oecd otheroecd china othernon-oecd otheroecdotheroecd 2011edemand2012edemand othero

16、ecd 2013edemand 3.0 0.8 6 january 2013 integrated oil global oils figure 28: peak oil market, structural step down in growth structural step down in global oil market demand growth on higher prices “the peak oil market” 2.0 1.0 0.0 -1.0 -2.0 -3.0 month iea forecast was made 2005-06 2009-10 2006-07 2

17、010-11 2007-08 2011-12 2008-09 2012-13 source: iea, deutsche bank again, it is notable that we saw a record high brent price average in 2012 in a market that seems to be growing at a structurally slower level than pre-2009 financial crisis. it would be logical that the elevated price environment wou

18、ld temper demand. figure 29: global oil demand dynamics, 2009-13 91.0 90.0 chinas and emerging market growth is key market driver. .that growth is pro-cyclical. 0.9 89.8 0.02 -0.3 0.4 90.6 89.0 0.8 88.9 -0.1 -0.1 0.2 88.0 87.0 86.0 0.4 0.2 0.9 1.2 88.1 -0.2 -0.2 0.4 . the higher the risk, the more a

19、ggressive the stock build. if we apply the same metrics to 2013, this implies that on an annualized basis chinas crude oil demand for operational stockpiling purposes associated with new refinery capacity will be 50kb/d. if china fills the new spr capacity that comes online next year, then that impl

20、ies crude oil need of 140kb/d on an annual average basis. assuming that crude oil for direct feedstock use will be about 320kb/d higher yoy in 2013 in line with forecasted demand growth, then that brings the aggregate implied incremental crude oil need for next year to 510kb/d, about 85kb/d higher t

21、han this years figure. deutsche bank securities inc.page 21 6 january 2013 integrated oil global oils we expect chinas refinery capacity growth next year will be 740kb/d, but we are not expecting refinery runs to ramp up by that amount given the demand outlook is more modest in comparison. one poten

22、tial source of upside demand is emerging crude oil demand from chinas teapot refineries. chinas largest teapot refiner chemchina was granted the right to import about 200kb/d of crude oil from next year, marking the first time a teapot was granted such a right. while storage and port constraints are

23、 likely to make chemchinas crude oil imports a gradual process over the course of 2013, ultimately margins will remain a key determinant in feedstock needs. to that extent, one key 2013 development will be steps to reform the fuel price, which will lead to a normalization of refinery margins. our ch

24、ina economists believe that the new leadership in beijing will move more swiftly on reforms. they believe resource price reforms which will include power, natgas and water tariffs and oil product prices are highly likely to be implemented over the course of the next few years. one potential reform c

25、ould be to allow more frequent fuel price adjustments rather than the current 22-day period. alternatively, the government could give oil companies the right to set prices within a wider price band. the average profit that a us refiner earned in q1-q3 this year on a net income per barrel basis was n

26、early usd10/bbl greater than that of chinas refiners, implying that a 10% rise in fuel prices would make chinas refiners profitability on par with that of its us counterparts. policymakers are expected to target a reasonable margin for refiners in light of the losses the sector has been incurring. t

27、he need to achieve the goals of energy saving and environmental protection is expected to pressure the new government to take concrete steps toward fuel pricing reform. that the governments commitment to reforming fuel prices is a part of the 12th five year plan, of which only three years remain, ad

28、ds further urgency. while this bodes well for refinery margins, which would imply higher run rates, we note that consumer response to higher prices also bears watching. on balance we see china again dominating global oil demand growth dynamics in 2013, with the bullish stock build and gdp strengthen

29、ing partly offset by price reform. bearish: japan and europe in the aftermath of the great east japan earthquake and the tsunami of march 2011 which wiped out nuclear/coal capacity, residual fuel oil and “other products” in japan have boomed as the replacement fuel for the power sector, adding some

30、200kb/d to oil demand yoy. the replacement effect will abate in 2013 as japan experiences a relatively mild winter, little growth, and as the full effect of post-tsunami demand changes feeds through into the comparison numbers as 2012 completes. there is downside to oil demand as nuclear/coal capaci

31、ty gradually return, which is uncertain, but essentially, with japanese population now officially declining, there is no growth, with downside in japan. latest data indicate that in q3, oil demand in oecd europe plummeted by nearly 1mb/d (-6% yoy) as high retail prices combined with recessionary con

32、ditions into some remarkable demand downturns, such as portugal (-13%), poland (-11%), italy, ireland and greece (all down -9%), spain (-8%) and germany (-7%). only 3 countries recorded year over year rises in demand. the current forecast is for demand in 2013 to contract by just 1.5% by the iea (20

33、0kb/d) which seems optimistic this is the key offset to the obvious bull call on brent of china strengthening and saudi producing near record highs. page 22deutsche bank securities inc. mb/d 2009 demand 2010 demand 2011e demand 2012e demand non-opec supplygrowth opecngls non-opec supplygrowth opecng

34、ls non-opec supplygrowth opecngls non-opec supplygrowth opecngls callonopeccallonopeccallonopec globalbiofuelsglobalbiofuelsglobalbiofuelsglobalbiofuels callonopec 2013e demand kb/d 1q08 2q08 3q08 4q08 1q09 2q09 3q09 4q09 1q10 2q10 3q10 4q10 1q11 2q11 3q11 4q11 1q12 2q12 3q12 4q12 1q13 2q13 3q13 4q1

35、3 6 january 2013 integrated oil global oils summary demand and supply with 700kb/d of growth expected from non-opec and just 800kb/d of demand growth globally, the call on opec is muted, but the range of outcomes seems equally relatively offsetting, and within the control of saudi arabia to the down

36、side. with demand and economies as weak as they are, it also seems unlikely that demand can boom and challenge saudi control to the upside. equally saudi has now successfully weathered the abrupt loss of libya, the almost-as-abrupt loss of iran, and managed the market successfully. they are, as we h

37、ave said, not only the undisputed central banker of oil, but also doing an excellent job of controlling prices, and we think that assuming that the saudis meet their $110/bbl “happy zone” price for 2013, is the most sensible view. figure 34: call on opec 92.0 call on opec: 30.2mb/d 91.0 90.0 89.0 ca

38、ll on opec: 30.0mb/d call on opec: 30.4mb/d 0.3 88.9 0.01 0.4 0.4 call on opec: 30.3mb/d 0.4 -0.03 89.8 0.1 0.7 0.3-0.1 90.6 0.9 88.1 0.03 0.1 88.0 87.0 1.0 0.5 86.0 85.4 0.2 85.0 84.0 source: deutsche bank figure 35: the risk is to the downside for opec and saudi arabia 4,000 3,000 2,000 1,000 0 -1

39、,000 -2,000 -3,000 -4,000 rising call on opec falling call on opec little increase in call on opec source: deutsche bank, iea deutsche bank securities inc. global demand growthnon opec growth page 23 2011 dec-97dec-98dec-99dec-00dec-01dec-02dec-03dec-04dec-05dec-06dec-07dec-08dec-09dec-10dec-11dec-1

40、2dec-97dec-98dec-99dec-00dec-01dec-02dec-03dec-04dec-05dec-06dec-07dec-08dec-09dec-10dec-11dec-12 6 january 2013 integrated oil global oils figure 36: price performance - 2012 / 2011 40% 30% rrc mro 20% rep rds cvx xom 10% bg stl wti nbl cop eog refiners total 0% oxy bpapctot pxd s values ex refinin

41、g, marketing and chemicals; note: a major disconnect between sec and wood mac valuations indicates an under-booked company. page 26deutsche bank securities inc. oxy.n cvx.nhes.n cnq.to rdsa.l mro.noxy.ncvx.n xom.n xom.nmur.ncop.n su.to totf.pa totf.pa su.tomro.n cnq.to mur.n rdsa.l cop.nhes.nbp.l bp

42、.l 6 january 2013 integrated oil global oils volume growth figure 48: absolute production growthfigure 49: per share production growth 20% 2013/20122012/20112013/2012 average 20% 2013/20122012/20112013/2012 average 15% 10% 5% 0% -5% source: deutsche bank, company figure 50: production growth growth

43、in production 15% 10% 5% 0% -5% source: deutsche bank, company ticker xom.n cvx.n cop.n oxy.n mro.n hes.n mur.n su.to cnq.to rdsa.l bp.l totf.pa company exxonmobil chevron conocophillips occidental petroleum marathon oil hess corporation murphy oil suncor energy canadian natural royal dutch shell pl

44、c bp total sa 2010/09 13.0% 2.2% -9.1% -0.3% -3.9% 2.5% 14.3% -14.6% 10.0% 5.5% -4.2% 4.3% 2011/10 1.4% -3.3% -22.1% 3.3% -3.8% -11.4% -3.6% -4.4% -5.4% -3.1% -10.0% -1.4% 2012e/11 -5.5% -2.6% -3.0% 4.3% 17.4% 10.0% 7.4% 1.2% 9.9% 2.9% -2.6% -1.1% 2013e/12e 3.0% 3.2% 1.3% 3.2% 7.6% 2.6% 3.1% 9.4% 3.

45、1% 8.0% 13.0% 2.6% source: deutsche bank deutsche bank securities inc.page 27 $/boe$/boe cvx.noxy.nhes.n cvx.n oxy.n xom.n bp.l rdsa.l mur.nsu.to mro.n cop.n cnq.to totf.patotf.pa tesoro valero westernrefining tesoro chevron westernrefining marathonpetroleum exxonmobil phillips66 chevron murphysunco

46、r valero bp delek bp marathonpetroleum exxonmobil phillips66 suncor delek hollyfrontier murphy hess hollyfrontier alonusa cvrenergycvrenergy alonusa hess totalshelltotalshell cnq.to xom.n su.to rdsa.l mro.nmur.ncop.n hes.n bp.l 6 january 2013 integrated oil global oils upstream net income per barrel

47、 produced figure 51:net income per barrel 2012e 30.0 25.0 20.0 15.0 10.0 5.0 0.0 figure 52:net income per barrel 2013e 30.0 25.0 20.0 15.0 10.0 5.0 0.0 source: deutsche bank average 2004-112012e source: deutsche bank 2012e2013e figure 53: yearly upstream net income per barrel ($/boe) company chevron

48、 occidental suncor exxonmobil hess shell total marathon conocophillips bp murphy canadian natural wti 2001 5.7 12.2 4.5 6.6 5.8 5.9 5.2 6.3 8.4 6.7 4.7 0.0 26.0 2002 4.9 7.2 6.0 6.3 4.6 4.8 5.0 4.6 1.8 5.7 3.9 2.4 26.2 2003 6.6 9.9 0.0 8.4 2.9 6.4 6.4 7.1 6.8 6.0 7.5 5.9 31.1 2004 9.1 12.9 0.0 10.7

49、5.5 7.1 7.7 9.6 10.0 9.7 13.3 5.5 41.4 2005 12.8 18.9 0.0 15.3 8.3 9.8 11.0 16.2 14.8 19.1 17.6 8.2 56.7 2006 13.8 19.3 18.4 17.0 12.6 11.5 12.7 15.1 14.0 18.9 15.5 6.3 66.2 2007 15.3 20.5 18.1 17.6 13.9 11.6 13.9 13.3 12.2 11.8 19.8 11.4 72.1 2008 22.4 30.7 12.3 23.5 17.4 19.4 18.9 18.3 18.4 18.1 3

50、0.7 16.1 99.8 2009 10.3 11.5 1.4 11.9 7.3 7.4 10.7 8.1 6.2 10.1 10.2 10.5 62.2 2010 17.5 17.1 11.1 14.8 12.8 11.9 13.1 12.6 10.6 13.5 11.8 10.3 79.6 2011 25.4 23.8 21.2 20.3 18.1 17.7 17.0 16.3 15.7 15.3 15.0 11.2 95.1 2012e 22.9 18.5 14.3 18.4 16.0 17.3 15.7 10.9 13.6 14.7 14.0 8.5 94.4 2013e 24.3

51、19.7 18.9 19.8 16.4 16.8 15.2 11.7 0.1 14.0 15.6 11.5 100.8 source: deutsche bank downstream net income per barrel refined figure 54:net income per barrel refined 2012efigure 55:net income per barrel refined 2013e 16.0 2004-2011 avg2012e 16.0 2012e2013e 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 source: deu

52、tsche bank page 28 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 source: deutsche bank deutsche bank securities inc. roce -40% . . . . . . . . . . 6 january 2013 integrated oil global oils share price premium/discount to nav figure 56: share price premium/discount to nav 30% 20% 10% 0% -10% -20% -30% our under

53、-valuing of kashagan by $1.75/sh adds another 1.3% to cops discount to nav and underlines that our nav discounts are -50% actually conservative -60% n m o x n d x p n c r r n g o e o t u s n n w s n l b n n l p u o t a c e n y x o n a p a n x v c n x f n n o r m n n v d n p o c o t q n c n r u m n c

54、 p a n s e h a p f t o t n k h c l p b l a s d r source: deutsche bank, wood mackenzie figure 57: share price premium/discount to nav vs roce 2012e 25% 20% 15% cvx.n apa.n xom.n 10% rdsa.l bp.l totf.pa hes.n cop.n mur.n mro.n cnq.to oxy.n su.to upl.n swn.n eog.n nbl.n pxd.n 5% apc.n dvn.neca.to 0% -

55、5% chk.n nfx.n rrc.n -60%-50%-40%-30%-20%-10%0%10%20%30% share price premium/discount to nav source: deutsche bank deutsche bank securities inc.page 29 9 7 6 january 2013 integrated oil global oils ceo ownership sensitivity to change in stock price figure 58: integrateds ceo ownership sensitivity to

56、 1% change in stock price $m 0.01.02.03.04.05.06.0 hes.njohn hess* 20 oxy.nsteve chazenray irani cnq.to cop.n cvx.n xom.n mur.n mro.n su.to murray edwards jim mulva* john watson* rex tillerson* steve coss/claiborne p. deming clarence cazalot* steve williams/john ferguson totf.pa rdsa.l bp.l christop

57、he de margerie peter voser/jorma ollila robert dudley/c-h svanberg ceo ($m)chairman ($m) source: deutsche bank, company filings page 30 *ceo as a result, the recommendations may differ and the price targets and estimates of each may vary widely. in august 2009, deutsche bank instituted a new policy

58、whereby analysts may choose not to set or maintain a target price of certain issuers under coverage with a hold rating. in particular, this will typically occur for hold rated stocks having a market cap smaller than most other companies in its sector or region. we believe that such policy will allow

59、 us to make best use of our resources. please visit our website at http:/ to determine the target price of any stock. the financial instruments discussed in this report may not be suitable for all investors and investors must make their own informed investment decisions. stock transactions can lead

60、to losses as a result of price fluctuations and other factors. if a financial instrument is denominated in a currency other than an investors currency, a change in exchange rates may adversely affect the investment. past performance is not necessarily indicative of future results. deutsche bank may