Transcript SLIDE 1 WORLD ECONOMIC GROWTH (%)

MIDDLE EAST JET FUEL CONFERENCE
(MEJET 2004)
12 – 13 MAY, 2004
5
JET FUEL TRADING IN THE GULF REGION
PRESENTED BY : ZAKARIA SULAIMAN
CONTENTS
•WORLD ECONOMIC GROWTH
•PASSENGER TRAFFIC
•WORLD AND GULF REGION DEMAND
•GULF PRODUCTION AND BALANCES
•GCC COUNTRIES EXPORTS OF JET/KERO
•JET/KERO BULK AND INTO-PLANE PRICES
SLIDE 1
WORLD ECONOMIC GROWTH (%)
2000
2003
2005
USA
LATIN AMERICA
W. EUROPE
E. EUROPE
FSU
ATLANTIC BASIN
3.8
4.5
3.6
3.8
9.1
3.9
2.9
1.0
0.8
3.3
6.1
2.0
4.0
3.8
2.4
4.0
4.6
3.4
MIDDLE EAST
5.6
3.7
3.6
ASIA PACIFIC
4.6
3.9
3.7
TOTAL WORLD
4.1
2.5
3.5
SLIDE 2
WORLD ECONOMIC GROWTH (%)
BY COUNTRY
10
8
6
8.0
7.5
5.4 5.5
4.2
%
8.2
8.0
5.0
7.3
5.8
6.1 6.0
6.0
5.0
4.7
4
2
0
2000
2001
CHINA
2002
INDIA
2003
VIETNAM
2005
Africa
2003
134
141
150
771
802
852
Europe
110
116
124
779
817
873
Asia Pacific
68
72
76
1400
1200
1000
800
600
400
200
0
1,062
1125
1,170
SLIDE 3
PASSENGER TRAFFIC
PASSENGERS – KILOMETERS PERFORMED (BILLION)
Middle East N. America L. America
2004
2005
SLIDE 4
WORLD WIDE AND GCC PASSENGERS TRAFFIC
(MILLION)
2,200
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
1,800
1,872
1,947
59
63
67
2002
2004
2006
GCC
WORLD WIDE
SLIDE 5
WORLD DEMAND FOR JET FUEL/KERO
(MILLION BPD)
2000
2003
2005
ASIA PACIFIC
2.65
2.60
2.74
MIDDLE EAST
0.36
0.36
0.37
ATLANTIC BASIN
3.37
3.25
3.44
TOTAL WORLD
6.38
6.21
6.55
SLIDE 6
GULF REGION DEMAND FOR JET FUEL/KERO
(MBPD)
2000
2003
2005
BAHRAIN
IRAN
IRAQ
KUWAIT
OMAN
QATAR
S. ARABIA
UAE
8.4
184.0
32.0
11.0
4.0
4.0
55.0
18.0
8.9
168.0
35.0
11.3
4.9
4.6
59.2
20.5
9.2
158.0
50.0
11.5
5.3
4.7
61.9
22.7
TOTAL GULF
318.0
312.4
323.2
SLIDE 7
GULF REGION PRODUCTS DEMAND
(MBPD)
2000
2003
2005
LPG
NAPHTHA
GASOLINE
KERO/JET
GASOIL
FUEL OIL
OTHERS
379
99
698
318
1,055
651
127
542
150
832
312
1,109
826
139
715
209
929
323
1,136
910
149
TOTAL
3,327
3,911
4,371
SLIDE 8
POTENTIAL ADDITION OF REFINING UNITS BY 2008
COUNTRY
CDU
HDC
FCC/RCC
VBU
COKING
REFORM
BAHRAIN
IRAN
IRAQ
KUWAIT
OMAN
QATAR
S. ARABIA
UAE
538
160
18
116
140
80
40
2
-
75
70
75
100
-
28
-
-
154
18
-
TOTAL
1052
42
320
28
-
199
CUMUL.
7134
552
588
379
68
833
27
SLIDE 9
PRODUCTION OF JET FUEL/KERO IN THE GULF REGION
(MBPD)
2003
2005
2008
BAHRAIN
IRAN
IRAQ
KUWAIT
OMAN
QATAR
S. ARABIA
UAE
52.0
190.1
25.0
193.6
5.7
19.3
185.0
124.5
48.1
182.1
48.7
194.1
12.5
20.8
209.0
141.6
55.0
243.9
69.5
212.5
26.1
33.0
249.1
160.4
TOTAL GULF
795.2
856.9
1,049.5
SLIDE 10
JET FUEL/KERO BALANCE IN THE GULF REGION
(MBPD)
________________________________________________
PRODUCTION
DEMAND
EXPORT
________________________________________________
2003
2004
2005
2007
2008
2010
795
798
857
948
1,049
1,052
312
319
323
332
344
358
490
498
535
616
706
693
175.3
164.4
Far East
Japan
2000
2001
India Sub Cont
2002
19.7
6.6
8.8
2.2
19.7
17.5
24.1
6.6
6.6
8.8
11.0
54.8
107.4
Mid East/Africa
52.6
50.4
50.4
32.9
61.4
41.6
32.9
35.1
220
200
180
160
140
120
100
80
60
40
20
0
210.4
SLIDE 11
GCC EXPORTS OF JET/KERO
Americas
2003
Europe/Med
SLIDE 12
BULK JET FUEL/KERO PRICES
40
2001
2002
30.7
33.0
32.7
33.7
26.4
28.0
26.8
26.7
10
25.9
28.3
27.3
28.8
20
32.3
34.3
34.3
35.5
$/BBL
30
0
2000
AG
SINGAPORE
MED
2003
NWE
SLIDE 13
JET/KERO FLOW FROM AG TO CIF NWE & S’PORE
(ARBITRAGE)
$/M T300
294.9
280
260
274.2
258.3
100$/MT
282.4
240
244.5
220
226.5
200
180
207.1
36.6
160
140
120
15.8
245.6
70
230.2
223.9
211.3
37.4
19.4
264
90
80
60
36.9
18.9
12.6
18.5
100
50
40
30
20
10
0
2000
SPREAD (CIFNWE - AG)
2001
2002
SPREAD SPORE - AG)
2003
AG
CIF NWE
S'PORE
82.8
74.4
102.4
78.8
76.5
67.1
94.5
66.6
92.7
79.5
97.1
94
120
110
100
90
80
70
60
50
40
30
20
10
95.9
92.7
110.1
91.9
USC/USG
SLIDE 14
JET A-1 INTO PLANE PRICES
2000
2001
2002
2003
London
S'pore
Dubai
New York
SLIDE 15
THE REASONS FOR HIGH INTO-PLANE
PRICES IN THE GULF REGION
1 - Gulf Region is a thin market in relation to the other major
markets
2 - In US, Europe and Asia, volume is a price sensitive (more
competition between airports in those major markets).
3 - Prices in major markets are more transparent than the Gulf. Jet
Fuel is a commodity fuel whereas the Gulf is not.
4 - More players in the major markets than in the Gulf.
5 - Economic of refinery in the Gulf is tide to one source of crude
i.e. M / E crude. Where in Europe, it is mostly influenced by North
Sea/IPE Brent crude and in US by WTI / NYMEX.
6 - Refinery margins in the Gulf are poor relative to US, NWE or
Far East.
SLIDE 16
CONCLUSION
Middle East Jet Fuel availability will continue to grow
during this decade due to the increase in refinery
investment and additional condensate splitting
projects.
Majority of Jet Fuel export will continue to move to
European destinations even if price differentials
sometimes does not support such movement.
Product movement has been mostly governed by price
hedging mechanism from the Gulf into Europe. Those
mechanism are tide to expectation of higher price
prospective in Europe due to seasonal demand.