Regional Refining Outlook

Special Presentation

For ICE Market Forum

Michael Dei-Michei JBC Energy GmbH June 2013

25 June 2013

Research - Energy Studies - Consulting - Training

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 Energys current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things statements expressing JBC Energys expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-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 a nd similar terms and phrases. All forward-looking statements contained in this speech/presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers/audience should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of this presentation. Neither JBC Energy nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this speech/presentation. Any persons acting on information contained in this presentation does so solely at their own risk. JBC Energy is not responsible for the accuracy of data collected from external sources and will not be held liable for any errors or omissions in facts or analysis contained in this presentation. JBCs third party sources provide data to JBC on an as-is basis and accept no responsibility and disclaim any liability relating to reliance on or use of their data by any party.

25 June 2013

Slide 2

Overview
Global CDU & Conversion Additions ['000 b/d] Title [unit]
150,000
140,000 Reforming Other Conversion

15,000
14,000

130,000
120,000

Coking Cat Cracking

Hydrocracking CDU Capacity

13,000 12,000 11,000 10,000

9,000

110,000
100,000

90,000
80,000

8,000 7,000
6,000

70,000
60,000

50,000
40,000

5,000 4,000
3,000
Demand growth of main products (gasoline, gas oil, jet, naphtha, fuel oil)

30,000
20,000

2,000 1,000
0

10,000
0

-10,000 2007 Stock 2007 Stock

-1,000 2007 - 2017 Additions 2007 -2017 Additions

25 June 2013

Slide 3

Overview
JBC Energy Margins by Region [$/bbl]
16.00 Asia 14.00 NWE USGC JBC Energy margins are based on an average of selected margin calculations. The margins are derived from three different set-ups, two crude baskets and three yield patterns for each region .

12.00

10.00

8.00

6.00

4.00

2.00
Source: JBC Energy calculations based on Platts data

0.00 2008 2009 2010 2011 2012 2013 ytd

25 June 2013

Slide 4

US
US Refinery Utilisation - 4-Week Average [%]
100
Last 2013 Avg 08-12 2012

96

2011 2009

2010 Avg 03-07

92

88

84

80

76

Source: EIA

72 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

25 June 2013

Slide 5

US
Approximate US Crude Price Change Over Last 6 Months (May vs. Nov) [$/bbl]
WCS November vs May: +$15 Syncrude November vs May: +$14

ANS November vs May: no change

Bakken November vs May: +$11

PADD V

Bakken vs ESPO: -$12

PADD II & IV

Bakken vs Bonny Light: -$15

PADD I

WTI November vs May: +$9

ESPO (CIF) November vs May: - $6 WTS November vs May: +$19 Bakken vs LLS: -$13

Bonny Light (CIF) November vs May: -$4

PADD III
Mars November vs May: -$3 LLS November vs May: -$1

Source: JBC Energy calculations based on Platts, Reuters

25 June 2013

Slide 6

US
Dumbbell Effect - PADD3 Average Refining Yields [%]
80 PADD3 Blend 70 Light/Heavy Blend

60

50

40

Light/Heavy blend consists of equal shares of Eagle Ford 50 , Eagle Ford 40 , Bakken, Maya, Merey and WCS

30

20

10

0
Light Distillates Middle Distallates Fuel Oil Coke/Asphalt

25 June 2013

Slide 7

US
Monthly Rate Utilisation Rates of USGCUtilisation Refineries 1985-2013 [%; API]
110

Monthly Utilisation Rate 100

90

CDU Utilisation [%]

80

70
Utilisation by secondary capacity 60

Utilisation by light product output

Source: JBC Energy, EIA

50 28 29 30 31 32 33 34 35 Average Gravity of Crude Intake [ API]

25 June 2013

Slide 8

US
US Products Trade Flows ['000 b/d]
6,000 Total Products Net-Imports - Right Scale Total Products Exports 5,000 Total Products Imports 3,000 4,000

4,000

2,000

3,000

1,000

2,000

1,000

-1,000

Source: EIA

0 -2,000 Jan 00 Jan 01 Jan 02 Jan 03 Jan 04 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13

25 June 2013

Slide 9

US / Global
Y-o-Y Changes to U.S. Crude Oil Imports & Production ['000 b/d]
2,500 Canada & Mexico 2,000 1,500 1,000 500 0 -500 -1,000 -1,500 -2,000
Source: EIA, JBC Energy calculations

Central & South America Africa U.S. Crude Production

Europe Middle East

Asia FSU East

February & March 2013 figures are JBC Estimates based on weekly EIA data Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13

-2,500 Jan-04

Jan-05

Jan-06

25 June 2013

Slide 10

Europe
Bonny Light Incentive in Medium Setup w. Complex Basket in NWE [$/bbl]
0.30
Bonny Light vs Arab Extra Light Bonny Light vs Forties Bonny Light vs Urals NWE Bonny Light vs Flotta

0.20

0.10

0.00

-0.10

-0.20 The incentive to run a crude is calculated by adding an extra 5% to the complex European crude basket Nov-12 Jan-13 Mar-13 May-13

Source: JBC Energy calculation based on H/Comet and Platts, Galbraith's, CR Weber

-0.30 May-12

Jul-12

Sep-12

25 June 2013

Slide 11

Europe / Global
Simple vs Complex Baseloads [$/bbl]
8.00 NWE 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 -1.00
Source: JBC Energy based on Platts data

Med USGC

Asia

-2.00 Source: JBC Energy using May 09 Nov 09 Platts data May 10

Nov 10

May 11

Nov 11

May 12

Nov 12

May 13

25 June 2013

Slide 12

Europe
US Total Product Trade with Europe ['000 b/d]
1,400
1,200

1,000 800 600 400 200 0 -200 -400 -600 Jan 04

Source: EIA
Total Products Net-Imports

US Exports to Europe US Imports from Europe

?
The chart displays exports of all products Jan 09 Jan 10 Jan 11 Jan 12 Jan 13

Jan 05

Jan 06

Jan 07

Jan 08

25 June 2013

Slide 13

Europe
OECD Europe - Refinery Intake by Stream ['000 b/d]
17,000
Crude NGLs Other Feedstocks

16,000

15,000

14,000

13,000

12,000

11,000

10,000 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13

Source: IEA

25 June 2013

Slide 14

Europe / Global
Refinery Utilisation Rates vs. Total Product Net-Imports in Various Countries
100%
Refinery Utilisation [%]

700 Total Product Net-Imports ['000 b/d] 600

90%
80%

500 70% 60%

50% 40%

400
France Ukraine Pakistan Mexico Chile Spain Australia Indonesia South Africa

300

200

30% 100 20%

10%

0% 2007 2008 2009 2010 2011 2012 2013 2014 2015

-100 2007 2008 2009 2010 2011 2012 2013 2014 2015

25 June 2013

Slide 15

Asia / Global
Middle Eastern Gasoline Exports by Destination ['000 b/d]
90 2012 2013
70

80

2014 2017

60

50

40

30

20

10

0
Europe FSU East OECD Asia Non-OECD Asia Middle East Africa North America Central & South America

25 June 2013

Slide 16

Asia / Global
Middle Eastern Gas Oil/Diesel Exports by Destination ['000 b/d]
250 2012 2013 200 2014 2017

150

100

50

0
Europe FSU East OECD Asia Non-OECD Asia Middle East Africa North America Central & South America

25 June 2013

Slide 17

Asia
South Korean Gas Oil/Diesel Exports by Destination ['000 b/d]
700 Europe 600 Africa Unknown 500 North America Middle East OECD Asia C&S America FSU East Non-OECD Asia

400

300

200

100

0 Jan-00

Source: IEA

Jan-01

Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

Jan-11

Jan-12

25 June 2013

Slide 18

Asia
Asian Demand Growth Indicator ['000 b/d]
1,200 1,000 800 600 400 200 0 -200 -400 -600
Source: IEA, official statistics, JODI, JBC Energy calculations

Gasoline Gasoline - 12 Month Mov. Avg.

Gas Oil/Diesel Gas Oil/Diesel - 12 Month Mov. Avg.

Figures between Mar-13 to Jun-13 are JBC Energy estimates Data represent over 80% of Asian demand in each product

-800 Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

Jan-11

Jan-12

Jan-13

25 June 2013

Slide 19

Conclusions
Gasoline, Jet/Kero & Gas Oil/Diesel Net Importers ['000 b/d]
5,000
Rest of World

4,000
New Exporters*

3,000
2,000

1,000 0 -1,000
-2,000

-3,000 -4,000 -5,000

2005

New Exporters: The USA China, India & South Korea Qatar, Saudi Arabia & UAE

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

25 June 2013

Slide 20

Conclusions
Key Transport Fuel Importers & Exporters ['000 b/d]
6,000 Other Middle East & Africa China, India & South Korea Americas Europe Qatar, Saudi Arabia & UAE Other America Asia FSU East Other Asia United States Mideast & Africa

4,000

2,000

-2,000

-4,000

Included are Imports of: gasoline jet/kero gas oil/diesel

-6,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

25 June 2013

Slide 21

Conclusions
Total Global Imports: Crude + Products ['000 b/d]
14,000 45,000

13,000

44,000

12,000

43,000

11,000

42,000

10,000

41,000

9,000

40,000

8,000
Total Product Imports (Gasoline + Jet/Kero + Gas Oil/Diesel)

39,000

7,000

Total Crude Imports - right scale

38,000

6,000

37,000

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

25 June 2013

Slide 22

Conclusions
Yearly Crude Intake Change by Region ['000 b/d]
3,000 2,500
2,000

1,500 1,000 500

0

-500 -1,000 -1,500

-2,000 -2,500 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

CENTRAL & SOUTH AMERICA NORTH AMERICA AFRICA MIDDLE EAST ASIA FSU EAST EUROPE

25 June 2013

Slide 23

Conclusions
Regional Refinery Utilisation [%]
90.00% 88.00%
86.00%

OECD Europe

Asia

Middle East

North America

C&S America

84.00% 82.00%
80.00%

78.00% 76.00%
74.00%

72.00% 70.00% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

25 June 2013

Slide 24

Thank You!

www.jbcenergy.com

Research Energy Studies Consulting Training

25 June 2013 Slide 25