Factset Research Systems Inc. · NYSE:FDS

Factset Research Systems — CFA Brazil presentation (December 2013)

39 slides from Factset Research Systems's conference presentation, Dec 11, 2013

  1. Slide 1: Is 2014 the year of oil?

    Is 2014 the year of oil? + Will conflict in the Middle East lead to a major oil shock? + Which oil companies are poised for major gains or losses? + How have key relationships in the supply-chain of oil companies evolved? + Which regions are generating the most revenue for Brazilian companies and ho

  2. Slide 2: Macro Themes

    Macro Themes December 4, 2013 PRESENTATION FROM FACTSET RESEARCH SYSTEMS Copyright © 2013 FactSet Research Systems Inc. All rights reserved. 2

  3. Slide 3: Oil Prices have been on the decline this quarter

    Oil Prices have been on the decline this quarter December 4, 2013 PRESENTATION FROM FACTSET RESEARCH SYSTEMS Copyright © 2013 FactSet Research Systems Inc. All rights reserved. 3

  4. Slide 4: Top Oil Producing Countries

    Top Oil Producing Countries The International Energy Agency announced in November 2013 that they predict the US will overtake Saudi Arabia as the world’s leading energy producer by 2015. (last year they predicted this rank would be achieved in 2017) December 4, 2013 PRESENTATION FROM FACTSET RESEARC

  5. Slide 5: Market Share: OPEC vs Non-OPEC

    Market Share: OPEC vs Non-OPEC + Increase of oil production from Brazil and North America is threatening the ability of OPEC (Organization of the Petroleum Exporting Countries) countries to influence the price of oil. + Rising volumes from these areas may mean OPEC may need to cut output in the seco

  6. Slide 6: Iran's Importance in OPEC

    Iran’s Importance in OPEC + Iran and Iraq have gone back and forth fighting for the spot of second largest oil producer in OPEC. December 4, 2013 PRESENTATION FROM FACTSET RESEARCH SYSTEMS Copyright © 2013 FactSet Research Systems Inc. All rights reserved. 6

  7. Slide 7: Oil's Importance on Iran

    Oil’s Importance on Iran + Tensions in the Middle East have helped keep oil prices high by crimping supplies and raising fears that supplies could be cut further. + Western nations have taken steps to slow the flow of oil out of Iran to try to convince the country to stop their nuclear weapon progra

  8. Slide 8: Iran & Oil

    Iran & Oil + Oil exports provide half of Iran's government revenues, while crude oil and its derivatives account for nearly 80 percent of Iran's total export. + Many OPEC countries can’t afford for the price of oil to drop below a certain level in order for their economy to maintain. December 4, 201

  9. Slide 9: Iran Top Export Destinations

    Iran Top Export Destinations + Iran is still exporting to many countries especially in Asia December 4, 2013 PRESENTATION FROM FACTSET RESEARCH SYSTEMS Copyright © 2013 FactSet Research Systems Inc. All rights reserved. 9

  10. Slide 10: Crude Oil Falls on Interim Iran Nuclear Deal

    Crude Oil Falls on Interim Iran Nuclear Deal + On November 24th, a deal was announced between Iran and six major world powers. + In exchange for Iran halting progress of its nuclear program, some sanctions were lifted. + The oil embargo was kept in place for a further six months, but raised potentia

  11. Slide 11: OPEC Revenue Threatened by the Americas

    OPEC Revenue Threatened by the Americas + Increasing oil production in North America and Brazil reduces the need for OPEC oil due to technological advancement, shale gas developments, and new resources such as tight oil and ultra-deepwater fields. December 4, 2013 PRESENTATION FROM FACTSET RESEARCH

  12. Slide 12: Pace of World Oil Demand has Slowed

    Pace of World Oil Demand has Slowed December 4, 2013 PRESENTATION FROM FACTSET RESEARCH SYSTEMS Copyright © 2013 FactSet Research Systems Inc. All rights reserved. 12

  13. Slide 13: However, China's Oil Consumption Continues to Grow at a Strong Pace

    However, China’s Oil Consumption Continues to Grow at a Strong Pace December 4, 2013 PRESENTATION FROM FACTSET RESEARCH SYSTEMS Copyright © 2013 FactSet Research Systems Inc. All rights reserved. 13

  14. Slide 14: Global Growth Forecasts

    Global Growth Forecasts + The growth forecasts for LAC's two largest economies, Brazil and Mexico, were lowered by the IMF. December 4, 2013 PRESENTATION FROM FACTSET RESEARCH SYSTEMS Copyright © 2013 FactSet Research Systems Inc. All rights reserved. 14

  15. Slide 15: Impact on Commodity Companies

    Impact on Commodity Companies December 4, 2013 PRESENTATION FROM FACTSET RESEARCH SYSTEMS Copyright © 2013 FactSet Research Systems Inc. All rights reserved. 15

  16. Slide 16: How does this impact commodity producers?

    How does this impact commodity producers? + Commodities producers are facing lower prices due to: + Possibility of easing of Iran sanctions + Dominance of non-OPEC countries and advances in production by the Americas + Mixed Global Demand December 4, 2013 PRESENTATION FROM FACTSET RESEARCH SYSTEMS C

  17. Slide 17: CSN – Integrated Steel Producer

    CSN – Integrated Steel Producer Decreasing domestic revenue dependence 2009 2.7% 1.0% 0.3% 4.7% 2010 9.3% 3.0% 1.3% 0.3% 6.8% 2011 82.1% 17.7% 3.0% 0.9% 0.2% 8.6% 2012 70.9% Brazil 3.6% 1.2% 0.0% 25.9% Asia/Pacific 61.4% Europe 13.9% United States , Canada Central and South America , Mexico 19.2% 62

  18. Slide 18: Cosan SA: Becoming less of a Brazilian focused company

    Cosan SA: Becoming less of a Brazilian focused company and more of an international player 80 70 60 Increasing exposure to 50 markets outside of Brazil 40 Revenue (%) 30 20 10 0 Brazil Europe Middle East, Other North America Asia/Pacific 2011 2012 2013 December 4, 2013 PRESENTATION FROM FACTSET RESE

  19. Slide 19: Cosan's Dependence on Asia-Pacific

    Cosan’s Dependence on Asia-Pacific + 2011: Asia-Pac and Middle East accounted for 1% of Cosan’s Revenue + 2013: Asia-Pac and Middle East accounted for 9% of Cosan’s Revenue December 4, 2013 PRESENTATION FROM FACTSET RESEARCH SYSTEMS Copyright © 2013 FactSet Research Systems Inc. All rights reserved.

  20. Slide 20: Cosan's View on Oil Prices

    Cosan’s View on Oil Prices December 4, 2013 PRESENTATION FROM FACTSET RESEARCH SYSTEMS Copyright © 2013 FactSet Research Systems Inc. All rights reserved. 20

  21. Slide 21: Govt of Brazil owns 53% of Petrobras

    Govt of Brazil owns 53% of Petrobras December 4, 2013 PRESENTATION FROM FACTSET RESEARCH SYSTEMS Copyright © 2013 FactSet Research Systems Inc. All rights reserved. 21

  22. Slide 22: Petrobras Exploration Expansion

    Petrobras Exploration Expansion December 5, 2013 PRESENTATION FROM FACTSET RESEARCH SYSTEMS Copyright © 2013 FactSet Research Systems Inc. All rights reserved. 22

  23. Slide 23: In 2012, Exploration Expenses increased but recoverable energy declined

    In 2012, Exploration Expenses increased but the amount of recoverable energy declined December 5, 2013 PRESENTATION FROM FACTSET RESEARCH SYSTEMS Copyright © 2013 FactSet Research Systems Inc. All rights reserved. 23

  24. Slide 24: Looking Ahead: Petrobras Estimates for Next Year

    Looking Ahead: Petrobras Estimates for Next Year + …Nonetheless, expect Petrobras to post large growth in production volumes over the next several years. + Growth expected with addition of new oil fields starting production in 2014. + Analysts are expecting exploration expenses to decline. December

  25. Slide 25: Petrobras Debt & Losses

    Petrobras Debt & Losses + This month the stock price of Petrobras has been on the decline after the government failed to disclose a clear policy for phasing out fuel subsidies that have cut Petrobras’s earnings and increased their debt. + Strong oil demand in Brazil has forced the company to continu

  26. Slide 26: Batista Bankruptcy

    Batista Bankruptcy + One of Batista’s five companies, OGX, filed for bankruptcy last month. + OGX is an oil & gas drilling company but as of today does not produce a single barrel of oil. + In May of 2011, OGX borrowed $2.56 billion with a coupon of 8.5 percent. The unsecured bonds were due to matur

  27. Slide 27: Petrobras M&A Activity

    Petrobras M&A Activity December 4, 2013 PRESENTATION FROM FACTSET RESEARCH SYSTEMS Copyright © 2013 FactSet Research Systems Inc. All rights reserved. 27

  28. Slide 28: US & Brazil Energy Partnerships

    US & Brazil Energy Partnerships + On November 12th, Chevron confirmed that an oil platform at the Papa-Terra oil and gas field off the coast of Brazil began producing oil for the first time. + Papa-Terra was discovered in 2003 and it contains Brazil’s first tension-leg wellhead platform. + A second

  29. Slide 29: Who else depends on Petrobras?

    Who else depends on Petrobras? Revenue Suppliers as disclosed by Suppliers as disclosed dependency Petrobras by others % 38 33.3 32 29 TOTAL 3 TOTAL 106 December 4, 2013 PRESENTATION FROM FACTSET RESEARCH SYSTEMS Copyright © 2013 FactSet Research Systems Inc. All rights reserved. 29

  30. Slide 30: Supply Chain: Illuminating Opaque Suppliers

    Supply Chain Illuminating Opaque Suppliers Suppliers as disclosed by Suppliers as disclosed International Paper by others Fibria is a Brazilian manufacturer of pulp, the raw material from which paper products are made. Market Cap: $6.4 billion (December 2, 2013) TOTAL 0 TOTAL 17 December 4, 2013 PRE

  31. Slide 31: Summary of Trends & Forecasts

    Summary of Trends & Forecasts December 4, 2013 PRESENTATION FROM FACTSET RESEARCH SYSTEMS Copyright © 2013 FactSet Research Systems Inc. All rights reserved. 31

  32. Slide 32: Brazil Investors have been selling out of energy

    Brazil Investors have been selling out of energy December 4, 2013 PRESENTATION FROM FACTSET RESEARCH SYSTEMS Copyright © 2013 FactSet Research Systems Inc. All rights reserved. 32

  33. Slide 33: US Investors are more bullish on energy

    US Investors are more bullish on energy December 4, 2013 PRESENTATION FROM FACTSET RESEARCH SYSTEMS Copyright © 2013 FactSet Research Systems Inc. All rights reserved. 33

  34. Slide 34: Oil Price Forecasts 2014

    Oil Price Forecasts 2014 + Historically when there has been a boost in production OPEC countries cut production and maintain price level. + But now, if non-OPEC is producing more it will affect OPEC’s ability to influence price levels and keep significant market share. December 4, 2013 PRESENTATION

  35. Slide 35: Commentary from the International Energy Agency

    Commentary from the International Energy Agency + The BRIC countries, as well as other rapidly expanding economies, will be the primary force in the global oil market next year, pushing demand to a record high level, International Energy Agency (IEA) data showed. + The IEA predicted that in 2014 eme

  36. Slide 36: Commentary from OPEC Meeting in Vienna

    Commentary from OPEC Meeting in Vienna "We have no limitations for U.S. companies." - Bijan Zanganeh, Iran’s Oil Minister December 4, 2013 + Iran wants U.S. companies such as Chevron Corp. and ConocoPhillips to develop its oil and gas fields and this is the first time Iran has named specific U.S. co

  37. Slide 37: OPEC Meeting Last Week Maintained Production

    OPEC Meeting Last Week Maintained Production + OPEC meeting on December 4th + The production target of 30 million barrels per day was maintained. + Output from Libya and Iran has not returned to the market yet, but this development will likely be discussed at the next meeting. + Crude oil hits 5-wee

  38. Slide 38: Summary

    Summary + Excess supply from a resurgence in exports from Iran, Libya, and Iraq coupled with advances by the US and Brazil may push prices lower next year. + Many uncertainties about outlook for supply and demand and there is a risk of a supply surplus on the global oil market, especially with world

  39. Slide 39: Questions?

    Questions? + For more information or a copy of the slides, please email LKline@factset.com or Sales@factset.com December 5, 2013 Copyright © 2013 FactSet Research Systems Inc. All rights reserved. 39

FactSet Research Systems — CFA Brazil presentation (December 2013) on 6ix