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Published byBrett Underwood Modified over 9 years ago
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Nexen Inc. Brian Reinsborough President Nexen Petroleum U.S.A., Inc. Friday, December 5, 2008 Challenges in the Deepwater Gulf of Mexico
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Nexen Inc. Agenda Why Deepwater Gulf of Mexico? Challenges Our Industry Faces The Path Forward
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Nexen Inc. Why Deepwater GoM? Long-Term Demand for Oil Remains Strong Deepwater has Large Yet-to-Find Resources Fiscal Regime is Stable and Attractive Proximity to a Consuming Market Deepwater Drilling will Account for 25% of Offshore Production Technology Breakthroughs will Drive Activity
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Nexen Inc. Challenges Our Industry Faces: External Environment External Environment Competitive Landscape Access Technology Infrastructure Development
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Nexen Inc. Players / New Entrants Access Costs Competitive Landscape InfrastructureDevelopment Competitive Landscape AccessTechnology
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Nexen Inc. Access InfrastructureDevelopment Competitive Landscape AccessTechnology Lease Sales M&A
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Nexen Inc. Technology InfrastructureDevelopment Competitive Landscape AccessTechnology Seismic New Plays Complex Geology
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Nexen Inc. Infrastructure Development Competitive Landscape AccessTechnology Infrastructure Development Tie-backs
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Nexen Inc. Development InfrastructureDevelopment Competitive Landscape AccessTechnology Resource Constraints Execution Knowledge
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Nexen Inc. Response Credit Tightness Lower Oil Price Majors Exploit “opportunistic” M&A Maintain low debt levels (reduce buy- backs?) Seek to reduce costs Exploration review Type of Company Large Caps Delay /phase major projects Asset rationalisation for some Conserve cash Reduce discretionary expenditure E&P Sell assets to fund developments Struggle to raise finance Cut exploration activity Seek financially strong partners Lack of project finance Domestic budget pressures NOC – Resource Holder Service Companies Become more competitive seeking service contracts with NOCs Slow investment in new equipment Margins at risk as activity falls Impact of Lower Prices & Recession
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Nexen Inc. The Path Forward Longer-Term Oil Price Forecast Remains Strong recession believed to be short term worldwide supply/demand equation will balance Projects may Slow Short Term industry consolidation expected to occur some companies will conserve capital Deepwater Projects are Long-Term Focused Deepwater Rigs will keep Drilling assumes capital is available for contract owners deepwater rigs still in short supply Technology Advancements will Improve Economics of New Plays
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