Operator

Daewoo International Corporation
April 2014
Contents
I.
II.
III.
IV.
COMPANY PROFILE
VISION & LONG-TERM STRATEGY
RESOURCES DEVELOPMENT ACTIVITIES
MYANMAR GAS PROJECT
Disclaimer
This presentation may contain forward-looking statements. Statements that are not historical facts, including statements about our
belief and expectations, are forward-looking statements. Actual results may differ materially from those expressed or implied by
these forward-looking statements .
Part Ⅰ. COMPANY PROFILE
Overview
Business Information
Profit Structure
Overseas Network
Overview
 After collapse of Daewoo group, DWI has become the largest general trading house in Korea
with incorporation into POSCO group
 1967 : Founded as Daewoo Industry Co., Ltd
 1982 : Changed to Daewoo Corporation
(Trading+Construction)
Individuals
10.4%
Organization
Foreigners
10.1%
beginning of debt-workout
 2000 : Established as Daewoo Int’l Corp.
POSCO
60.3%
Domestic
Institutions
19.2%
Sales : 5 division, Mgt. : 2 division
Overseas
(94)
Trading (Subsidiary / Branch) : 73
Domestic
*Total outstanding shares: 113,876,291
Discovery of Giant gas
field in block A-1 / A-3,
Myanmar(2004)
4.3
3.5
4.1
5.0
5.1
‘01
‘02
‘03
‘04
‘05
Share Transfer Agreement
b/w KAMCO and POSCO
(Aug 2010)
6.4
Investment subsidiary : 21*
Department store(Masan)
*Excluded subsidiaries with ongoing disposal process
or minor equity shares
Employees
(8,033)
 Oct 2010 : Incorporated into POSCO Group
(※ Takeover price : 49,100 won per share)
HQ
Etc.
 1999 : Daewoo Corporation Dismantlement,
Completed
debt-workout program
(Dec 2003)
[Organization & Employees]
[Shareholder Structure]
[Company History]
11.0
11.1
‘08
‘09
HQ : 878, Dispatched : 228
(1,316)
Department Store : 210
Local
(6,717)
Global Staff (Trading) : 956
Overseas production employees :
5,761
(As of Dec. 2013)
18.5
15.5
16.8
16.6
‘12
‘13
7.8
Sales
(Wt, IFRS Separated)
4
※ Excluded discontinued operation sales in 2010 to 2013
‘06
‘07
‘10
‘11
Business Information
 Business Expansion from Trading to Resources Development, Infra and New Biz.
Trading
Export, Triangular trade
Key items :
Industrial Materials including
Steel, Raw materials, Chemicals,
Nonferrous metal, Electronics,
Auto-parts, Machinery etc.
Infrastructure
PJT Develop, Organize,
Equipment Supply & Mgt.
5
Resources Development
Resources Exploration,
Development and Production
Ongoing PJT (Total 18) :
- Oil&Gas(9) : Myanmar Gas Field etc.
- Mineral(7) : Narrabri coal mine etc.
- Agro(2) : Indonesia Oil palm etc.
New Biz.
Real Estate, Distribution/Logistics
Overseas Investment
Key Industry :
Key business :
Plant, Power/IPP, Communications,
Ships, Road, Bridge etc. Infra SOC
- Real Estate : NEATT, Myanmar hotel etc.
- Distribution : Department store, Chartering
- Overseas Investment : Uzbek textile etc.
Profit Structure
 Profit expansion from Overseas Trading Centered to Resources & PJT business
Sales in 2013
[ Sales Breakdown ]
IFRS Separated
[ Breakdown by Items ]
Infra 14%
(Wt)
Resources 1%
6.2
4.3
 Trading(85%) centered expansion
3.7
 Export & Trilateral Trade centered
2.3
Trading
85%
0.1
Steel
Infra
Mater
-ials
Chemi
-cals
Resour
-ces
- Asia (29%), China (19%),
Europe (10%), N.America (7%)
Pretax Profit
[ Pretax Profit Breakdown ]
[ Breakdown by Items ]
(Wb)
Infra
20%
Trading
40%
Resources
40%
68.5
45.7
35.6
6.0
Steel
Infra
Mater
-ials
15.2
Chemi
-cals
- Proportion of Resources (total pretax profit)
Resour
-ces
※ Excluded Department Store/Management,
6
 Increased proportion of
Resources(40%) and Infra(20%)
20%(’12)40%(‘13)58%(‘14P)
Overseas Network
•As of Dec. 2013
(Sum of Branch & Trading firm sales)
CIS 9
Europe 14
 Branch 5 (Sub-branch 1)
 Trading 2 (Sub-branch 1)
N. America 12
 Manufacturing Subsidiary 5
 Branch 5
 Manufacturing Subsidiary 3
China 24
 Resources 1
 Sales Volume U$ 1,188M
 Sales Volume U$ 1,185M
 Branch 1
 Trading 4 (Sub-branch 12)
 Manufacturing Subsidiary 4
 Sales Volume U$ 5,160M
 Trading 2 (Sub-branch 5)
 Manufacturing Subsidiary 5
Japan 4
MENA 11
 Resources 1
 Sales Volume U$ 1,435M
 Branch 5 (Sub-branch 5)
 Manufacturing Subsidiary 1
 Sales Volume U$ 735M
S. America 6
Africa 7
Asia 26
 Sales Volume U$ 962M
 Branch 4
 Branch 7
 Resources 3
 Trading 5 (Sub-branch 1)
 Sales Volume U$ 173M
 Manufacturing Subsidiary 10
 Resources 3
 Sales Volume U$ 5,785M
7
 Manufacturing Subsidiary 1
 Sales Volume U$ 765M
[Overseas Networks]
 Branch 5
 Manufacturing Subsidiary 1
 Trading 1 (Sub-branch 2)
 Branch 32
- Sub-branch 6
 Trading 14
- Sub-branch 21
 Manufacturing 32
- Liquidated or
Dormant 6
 Resources 8
PartⅡ. Vision & Long-term Strategy
DWI Business Map
Establishment of High value added Trading Booster
Expansion of Resources Business
DWI Business Map
 Creating a balanced biz. portfolio and switching the profit source
from trading to resources development Biz.
Blueprint for Long-term Business
“Challenging towards Global Top Company”
Making a balanced Biz. Portfolio
The Best Trade-Investment Company
High added value of Trading
Global Top
Trading Company
The overseas project leader
among POSCO Family
Trading
Infra
New Biz.
Aiming for Product – Finance – Logistics Total Provider
• Steel : Strengthening overseas marketing and
Promoting strategic items
• Raw Material : Trade combined with minority equity
investment & development
Strengthening of Infra · New biz.
Secure growth momentum
through development of strategic countries
• Infra : Securing third income source through IPP & SOC biz
• New biz. : commercialization of logistics & development
of strategic countries
Expansion of resources development biz.
Resources Global Top 100
Development Resources Dev. Com.
Discovering the next ‘Myanmar gas field’ &
Promoting customized strategy (e.g. Strategic mineral)
• Oil & Gas : Discovering the next ’Myanmar gas field‘
• Mineral · Food : Securing stable future revenue
9
Establishment of High value added Trading Booster
’08
PP
Margin
0.7%
Equity Investment &
’12
Development of value added activities
1.0%
(Trading margin→
Dividend income + Finance / Logistics income)
’17
Enhanced Trading
competitiveness
in Global market
1.6%
Settlement of total Biz system & Strengthening of overseas marketing
Building up Infra biz
“Expanding raw material / processing biz.
& Establishing Domestic/Import network“
“Focusing on IPP &
Plant/SOC Capabilities”
 Expanding steel related Biz.
- Securing raw material supply through
mine investment :
Cocking coal + Iron ore (10k ton)
Target amount 50 (‘12)  400 (’15)
- Focusing on promotion of steel import
 Development of strategic item market
- Energy steel
• staple products : offshore plant, pipe,
oilsand, offshore windpower etc.
- Automotive steel
• Strengthening the relationship with
key customers
: Honda, Nissan, Suzuki etc.
• Developing new car Project in SE Asia
10
 Promoting investment in demand Industry
 Full-scale Dev. of IPP* & ROMM* Biz.
- Strengthening cooperation & expanding customer :
Promoting investment linked raw material supply &
product sales
- Automotive Components company / steel structure
company / pipe mill company etc.
- IPP : Focusing on SEA/MEA/Africa etc.
- ROMM : Focusing on NA/EE/Africa etc.
 Expansion of investment in global
processing centers
- POSCO’s overseas processing center
: 7 (1H13)  Targeting 12 (’15)
Operating center
Reviewing&Promoting
- Iron/chemical plant & infra in Asia
- Ongoing PJTs w/ POSCO Family : 55 PJTs
 Maximizing Equity investment &
EPC related earnings ratio
Profit ratio of power biz.: 3.3%(’12)6.2% (‘17)
6.2%
Ratio
U.S.A AAPC
(w/ whole
company)
Mexico MPPC(3)
Brazil BSPC
 Strengthening the capability of obtaining
order of industrial plant & SOC PJT
Indonesia
IJPC(2)
PP
(100Wm)
2.7%
25
2008
* IPP : Independent Power Producer / ROMM : Rehabilitation, Operation, Maintenance and Management
3.3%
623
41
2012
2017
Expansion of Resources Business
’12
Establishment business foundation
for new oil & gas field
0.6Wt
development
Investment
expansion
’17
2.5Wt
Expansion oil&gas development biz. Strengthening mineral resources biz.
“Expanding investment on
new production oil fields”
“Securing stable profit through
diversification of investment”
- 3 mines(current)  7 mines(Targeting by ’17)
- Peru8 / Vietnam 11-2 / Oman KOLNG
 1st Private operator among korean companies
- Myanmar gas field, East sea 6-1S mine
 Expanding into unconventional resources
development biz.
- Actively seek POSCO Family cooperation
 Investment in Exploration : Securing of Ownership
- Expand investment in small scale mines
 Securing stable profit : Minority Investment
- Minority investment on middle & large
sized companies
 Focus on development of strategic minerals
• Strategic mineral : Iron, Copper,
Bituminous coal
• Scarce metal : Nickel, Tungsten, Lithium,
Chrome etc.
[New biz. Expansion plan]
[Investment ratio of minerals]
 Expanding production mine
Expanding into operator Biz.
Expanding E&P PJTs in Asia
Minority Equity Investment.
Obtaining early stage
tech./capability
1st Stage (‘12~’15)
11
2nd
stage (‘16~’20)
Etc. (11%)
Scarce
metal (11%)
Iron (13%)
Bituminous
coal (24%)
Copper
(41%)
’20
World’s top 100
E&P company
4.5Wt
Securing biz foundation for food resources
“Building future strategic biz”
 Expanding overseas production base
- Expanded food resources biz in SEA · CIS countries
• Strategic items : Palm oil, Soy bean, Wheat, Corn etc.
• Strategic countries : Indonesia, Myanmar,
Laos, Ukraine, Russia etc.
 High value-added strategy
: Entering processing & Bio Energy Biz.
Production
Distribution
Bio
Fuel
Securing plantation base
Establishment of Processing Facility
· Distribution Network
Utilizing affiliates ·
R&D investment
Part Ⅲ. RESOURCES DEVELOPMENT
ACTIVITIES
E&P Portfolio – Geographical Spread
Oil & Gas Resource PJTs
Mineral / Agro-Resource PJTs
E&P Portfolio – Geographical Spread
(Dec. 2013)
RUSSIA
Tomsk (forest resources)
MYANMAR
MYANMAR
MYANMAR
A-1/A-3 (gas)
(Operator)
Onshore P/L
(SEAGP)
RSF-7 / MOGE-8
(Operator)
CANADA
CANADA
Baptiste (Tight Oil&Gas)
Kiggavik (uranium)
KOREA
6-1, South
(Operator)
OMAN
KOLNG
MYANMAR
VIETNAM
AD-7
(Operator)
11-2 (gas)
CAMEROON
INDONESIA
Mayo Darle (tin)
Papua (oil palm)
MADAGASCAR
AUSTRALIA
Marree (uranium)
AUSTRALIA
Narrabri (coal)
PERU
BOLIVIA
8 (oil)
Corocoro (copper)
Ambatovy (nickel)
8 Oil/Gas PJTs
13
6 Mineral Resource PJTs
2 Agro-Resource PJTs
Oil & Gas Resource PJTs
14
Equity
Reserve
Peru block 8
(Oil field)
11.7%
38 MM bbl
- 1996: Participation (operator : Pluspetrol)
- Earnings (Gross profit) : U$ 10.9mn (‘13)
U$17.2mn (‘12), U$10.5mn (‘11)
Vietnam offshore
block 11-2
(Gas field)
4.9%
0.8 TCF
17 MM bbl
- 1992: Participation (operator : KNOC)
- Dec 2006: Commercial gas production
- Earnings (Gross profit) : U$ 5.1mn (‘13)
U$ 4.4mn (‘12),
U$ 4.9mn (‘11)
14 TCF
- 1997: Participation (operator : Shell)
- 2000: Production (dividend since 2002)
- Earnings (Equity Income) : U$ 20.1mn (‘13)
U$ 18.9mn (‘12), U$ 16.1mn (‘11)
- Form of Biz. : Consortium
4 TCF
- Jan 2004: Discovery of Shwe gas field
- Mar 2005: Discovery of Shwe-Phyu gas field
- Jan 2006: Discovery of Mya gas field
- Dec 2008: Signing GSPA (CNUOC)
- Jul 2013: Initial Gas Production
Oman
KOLNG
(LNG plant)
Myanmar
PRODUCTION /
DEVELOPMENT
EXPLORATION
OIL & GAS RESOURCES
PRODUCTION
Project
Offshore block
A-1 / A-3
(Gas field)
South-east
Asia gas Pipeline
(Onshore P/L)
20.0%
(1% of OLNG)
51%
(*Operator)
25.0%
History & Status
Remarks
- Parties : Daewoo Int’l 51%
ONGC 17%, GAIL 8.5%
KOGAS 8.5%, MOGE 15%
n/a
- Jun 2010: Company(SPC) establishment
- Jun 2013: Completion of pipeline construction
- Form of Biz. : Joint Venture (SEAGP)
- Parties : CNPC (Major shareholder (50.9%))
A-1/A-3 Consortium (49.1%)
- Form of Biz. : Consortium
- Parties(Cardium) : Bellatrix 40.7%
Devonian PEF 30.5%, DWIC 10.2%
Others 19.6%
Canada
Tight Oil&Gas
Cardium
10.2%,
Notikewin
6.9%
52 MMBOE
- Aug 2013: PSA signed
- Jan 2014: 11 wells drilled
(Total 74 wells will be drilled by the end of 2015)
Myanmar offshore
block AD-7
60%
(*Operator)
n/a
- Mar 2013: Farm-out 40% Participating Interest
to Woodside
- Jul 2013: Joint Exploration Period
- Parties: DWIC 60%
Woodside(Australia) 40%
Myanmar
Onshore block
RSF-7 / MOGE-8
90%
(*Operator)
n/a
- Apr 2013: Signing MOA(Study·Exploration right)
- Apr 2013: Study period
- Parties: DWIC 90%
Shwe Sandar(Myanmar) 10%
Korea offshore
block 6-1S
70%
(*Operator)
n/a
- Aug 2011: Acquisition of exploration permit
- Sep 2012: 3D seismic data in progress
- Parties: DWIC 70%, KNOC 30%
Mineral / Agro-Resource PJTs
EXPLORATION
MINERAL RESOURCES
PRODUCTION
Project
Madagascar
Ambatovy
(Nickel)
Australia
Narrabri
(Coal)
Development
AGRO-RESOURCES
4.0%
5.0%
Canada
Kiggavik
(Uranium)
1.7%
Australia
Marree
(Uranium)
10%
Bolivia
Corocoro
(Copper)
5.0%
Cameroon
Mayo Darle
(Tin)
15
Equity
Indonesia
(Oil Palm
Plantation)
Russia
(Forest Resources
Development)
Reserve
History & Status
170
MM tons
- 2006: Participation
- Jun 2012 Completion of refinery plant /
Initiation of production
- Annual Capacity: Nickel 60,000 MT, Cobalt 5,600 MT,
Ammonium sulfate 200,000 MT
- Production period: 29 years
430
MM tons
112
MM lbs
(51,000 tons)
n/a
- Aug 2009: Participation
- Oct 2012: Mass production via long-wall
- Annual Capacity: 6 mm MT
-
1983: Participation
2005: Reorganization of project team
2006~2011 Conduct viability study, Initial F/S
2012~2015 Definitive F/S,
Environmental impact assessment
- 2008: Participation
- Exploration in progress
Remarks
- Parties: Sherritt 40%(Canadian, Operator),
Sumitomo 27.5%, SNC-Lavalin 5%,
KC (Korean Consortium) 27.5%
(KORES 22.5%, DWIC 4%, STX 1%)
- Parties: Whitehaven 70%(Australian, Operator),
Yudean 7.5%, J-Power 7.5%, EDF 7.5%,
KC 7.5% (DWIC 5%, KORES 2.5%)
- Parties: AREVA 64.8%(Canadian, Operator),
JCU Canada 33.5%, DWIC 1.7%
- Parties: Scimitar 60%(Australian, Operator),
KC 40%
(KORES 20%, LGI 10%, DWIC 10%)
100%
(Operator)
85%
50%
n/a
n/a
- 2008: Participation
- Exploration in progress
- Parties: COMIBOL 55%(Bolivian, Operator),
KC 45% (KORES 23%, Others)
- July 2011: Acquisition of mining rights
- Exploration in progress
-
- 2011: Exploitation
- 2015 Commercial production : 2015
- Investment (E) : U$ 50mn (payment ‘11 ~ ‘18)
- Period : 30 years (Add. extension of 60 years
(1st 25 years, 2nd 35 years) is capable)
- Acreage : 34,195 Ha
(Actual plantation area : 27,000 Ha)
-
-
- Period : 49 years
- Acreage : 209,446 Ha
2012 Exploitation
4Q 2012 Commercial production
2014 Mass production (E)
Investment (E) : U$ 3mn
Part Ⅳ. MYANMAR GAS PROJECT
Overview and GSPA
Development Concept
Gas Production Schedule
Overview and GSPA
 After finding Gas fields in 2004, DWI successfully completed the development
after a 10 year and commenced the gas sale on July, 2013
Overview
ㅇ Myanmar Offshore Blocks : A-1 / A-3
ㅇ Certified Reserve : 4TCF
MOGE-8
* 4TCF : Equivalent to 0.7 billion barrel / 80 million ton of LNG
Equivalent to the domestic consumption of natural gas for 3 years
RSF-7
AD-7
ㅇ Contract Type : Production Sharing Contract (PSC)
ㅇ Exploration : Discovery of Shwe gas field (Jan 2004)
Discovery of Shwe Phyu gas field (Mar 2005)
Discovery of Mya gas field (Jan 2006)
ㅇ Parties : Daewoo International 51% (Operator)
ONGC 17%, MOGE 15%, KOGAS 8.5%, GAIL 8.5%
A-1
A-3
* ONGC : Oil and Natural Gas Corporation Ltd, (India)
MOGE : Myanma Oil and Gas Enterprise / GAIL : Gas Authority of India Ltd,
GSPA (Gas Sales & Purchase Agreement)
1. Signing Date : 24 Dec 2008
2. Initial Gas Sales Date : 15 Jul 2013
3. Contract Parties
- Seller : DWIC / ONGC / MOGE / GAIL / KOGAS
- Buyer : CNUOC / MOGE
Block A-1
Shwe Phyu
Shwe
* CNPC (China National Petroleum Corporation)
CNUOC (China National United Oil Company, CNPC Subsidiary)
Mya
105 km
Block A-3
Kyaukpyu
(OGT)
Ramree Island
17
4. Main Contents
1) Supply Period : 30 years
2) Supply object : Gas from Shwe, Shwe phyu and Mya
3) Supply amount : 500MMscf/day
4) Gas sales price : Floating with International oil price
& Inflation index (U.S. CPI/PPI)
Development Concept
 Myanmar Gas Project is composed with Three Businesses;
Gas Production, Offshore Transportation and Onshore Transportation in Myanmar.
Scope
Upstream
(Gas Production)
Offshore Midstream
(Transportation)
Onshore Midstream
(Transportation)
Chinese
Onshore Pipeline
Production Platform (Shwe)
Seabed Production Facility (Mya N.)
14” Pipeline
32” Offshore Pipeline
(Platform~OGT)
Onshore Gas Terminal (OGT)
40” Onshore Pipeline
40” Onshore Pipeline
(OGT~ Myanmar/Chinese Border)
(Ruili ~ Guigang)
Bangladesh
Ruili
Overall
Field
Kunming
Myanmar
Guigang
Vietnam
Laos
Consortium
Form of Biz.
Daewoo International 51%(Operator)
Parties
ONGC 17% / GAIL 8.5%
KOGAS 8.5% / MOGE 15%
13km
Length
(Mya North ↔ Shwe Platform)
110km
Joint Venture
Unilateral Operation
(South-East Asia Gas Pipeline)
(CNPC)
CNPC 50.9%(Major shareholder)
Daewoo Int’l 25.04%
ONGC 8.35% / GAIL 4.17%
KOGAS 4.17% / MOGE 7.36%
793km
Length between Gas Fields and Myanmar/Chinese Border : About 900km
18
CNPC 100%
1,726km
(Excluded branch line,
858km)
Gas Production Schedule
 Production schedule
Initial Gas Production
(22 Jun)
* CDD (Nov)
(Contractual Delivery Date)
Initial Gas Sales
(15 Jul)
Gas Supply /
Co-trial run of facilities
Test run of facilities /
Gas production
1 Jun 2013
1 Jul
1 Aug
Overview : Investment plan & Facilities
1. Investment plan
1 Nov
Time
1 Jan 2014
Ramp-up Schedule
○ Normalizing production(E) : Dec 2014 (500 MMscf/day)
- Total Investment : U$4.3bn
- Total Investment of DWIC : U$1.7bn
(Excluded U$ 0.3bn exploration cost in A-1/A-3)
Investment Plan
(U$1.7bn)
Build-up Period
’09~’13
U$ 1.4bn
’14~
U$ 0.3bn
- Gradual increase of gas sales : Build-up period (Shwe Field)
- Gradual increase of pretax profit with Build-up phase
- Plateau Period (Maximum producing period) : 20 years
[ Scheduled build-up to daily production]
2. Scales of facilities
1) Offshore Platform & Pipeline
- Offshore production & processing platform
• Production CAPA : 640 MMscf/day
(Additional extension of 320MMscf/day is capable)
Production in
Mya North
Drilling production
wells in Shwe
(Build Up,
Jan to Dec 2014)
500
400
• Daily supply during the Plateau Period : 500MMscf/day
- Offshore Pipeline : 32” X 110km
* EPCIC : Hyundai Heavy Industries
Normalizing
production
(MMscfd)
200
Dec
2013
Jan
2014
300
2) Myanmar Onshore Pipeline
- Onshore Pipeline : 40” X 782km
* EPCIC : 5 Sections in progress (Operator : CNPC)
19
Apr
2014
Aug
2014
Dec
2014
[Ref.] Steel Business with POSCO
(Dec 2013)
 Joint Venture (Steel Biz) with POSCO
United States
POSCO-AAPC
Mexico
POSCO-MPPC
Turkey
POSCO ASSAN TST Steel Industry
Slovenia
POSCO-ESDC
Malaysia
POSCO Malaysia SDN
Brazil
POSCO-BSPC
Indonesia
POSCO-IJPC
 DWIC Sales portion in POSCO Steel Sales and Exports
(Unit : mnMT)
2010
2011
2012
2013
31.5
34.5
35.1
33.9
POSCO Sales
POSCO Export
11.1
(35%)
13.3
(39%)
14.6
(42%)
14.5
(43%)
DWIC
2.3
(21%)
3.3
(25%)
4.2
(29%)
4.0
(28%)
(Unit : mnMT / tn KRW)
 DWIC Sales of POSCO Steel Products
2010
Volume
2011
Sales
Volume
2012
Sales
Volume
2013
Sales
Volume
Sales
Hot Rolled Products
0.88
0.7
1.43
1.2
2.00
1.6
1.72
1.2
Cold Rolled Products
1.15
1.2
1.41
1.4
1.61
1.6
1.69
1.5
Special Steel Products
0.30
0.9
0.46
1.2
0.60
1.5
0.59
1.2
Total
2.33
2.8
3.30
3.8
4.21
4.7
4.00
3.9
20 ※ Volume of DWIC sales : POSCO’s domestic product sales volume + POSCO’s oversea product sales volume(Excluded processing mill)
Thank you!