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                                                                                                                                                                                                                                                              21 February 2013


Asia Energy in Focus
Energy policies could surprise in China                                                                                                                                                                                          INDUSTRY UPDATE


                                                                                                                                                                                                                                 Asia ex-Japan Oil & Gas

Upside risk to Chinese oil demand: Our Commodities Research team recently                                                                                                                                                        POSITIVE
                                                                                                                                                                                                                                 Unchanged
highlighted that implementation of some energy policies may see more upside risk to
our oil demand growth forecast of 5% y/y this year in China. These measures include:
                                                                                                                                                                                                                                 Asia ex-Japan Oil & Gas
1) tax changes, if implemented could increase gasoline demand as blendstocks become
                                                                                                                                                                                                                                 Scott Darling
unprofitable; 2) government mandates on closure of independent teapot refineries with
                                                                                                                                                                                                                                 +852 2903 3998
capacity <40 kb/d and granting of licenses for crude imports may lead to stronger
                                                                                                                                                                                                                                 scott.darling@barclays.com
demand for crude oil over traditional fuel oil imports; 3) new airport expansion in China                                                                                                                                        Barclays Bank, Hong Kong
may increase jet fuel use; and 4) government stimulus on infrastructure, although not
our base-case scenario. An improving macro picture in China supports our positive                                                                                                                                                Clement Chen
                                                                                                                                                                                                                                 +852 2903 2498
view on the Asia ex-Japan Oil & Gas industry, with CNOOC (OW, PT HK$21) and
                                                                                                                                                                                                                                 clement.chen@barclays.com
PetroChina (OW, PT HK$13) our preferred picks in the sector.
                                                                                                                                                                                                                                 Barclays Bank, Hong Kong
Chinese fuel specifications – limited margin impact: China’s State Council aims to                                                                                                                                               Rita Wu
accelerate gasoline upgrading for refiners with a target to change the country’s fuel                                                                                                                                            +852 2903 4262
specifications for gasoline from Euro III to Euro IV nationwide by 2014. Refiners are                                                                                                                                            rita.wu@barclays.com
likely to be able to charge higher prices for fuel that meets higher standards, which we                                                                                                                                         Barclays Bank, Hong Kong
believe can be passed on to the consumer. However, we see any price improvement as
                                                                                                                                                                                                                                 Somshankar Sinha
offset by the higher costs and investment in upgrading capacity and therefore do not                                                                                                                                             +91 22 6719 6031
expect the transition towards tighter fuel specifications to lead to a significant change                                                                                                                                        somshankar.sinha@barclays.com
in downstream margins for the industry.                                                                                                                                                                                          BSIPL, Mumbai

                                                                                                                                                                                                                                 Sidney Yeh
FIGURE 1                                                                                                                                                                                                                         +886 2 663 84677
Chinese oil demand has recovered since last summer                                                                                                                                                                               sidney.yeh@barclays.com
1,350                                                                                                                                                                                                                            BCSTW, Taiwan

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Source: CEIC, Barclays Research. Chart shows implied Chinese oil demand in kb/d on a monthly basis




Barclays Capital Inc. and/or one of its affiliates does and seeks to do business with companies covered
in its research reports. As a result, investors should be aware that the firm may have a conflict of interest
that could affect the objectivity of this report.
Investors should consider this report as only a single factor in making their investment decision.
This research report has been prepared in whole or in part by equity research analysts based outside the
US who are not registered/qualified as research analysts with FINRA.
PLEASE SEE ANALYST(S) CERTIFICATION(S) AND IMPORTANT DISCLOSURES BEGINNING ON PAGE 26.
Barclays | Asia Energy in Focus



CHINESE OIL DEMAND IN 2013: RECOVERY ON TRACK, POLICIES COULD
SURPRISE

                                          In this issue of our Asia Energy in Focus, we highlight some of the energy policy changes
                                          which may provide further support to a recovering oil demand outlook in China. This is
                                          an excerpt from Commodities Research, Oil Flash: Chinese oil demand in 2013: Recovery
                                          on track, policies could surprise, published on 6 February 2013. For analyst certifications
                                          and important disclosures, please refer to the full report.

                                          Demand recovering, with upside surprise possible
COMMODITIES RESEARCH                      China’s oil demand staged a sharp rebound in 4Q12, reaching a historical high of 10.6 mb/d
Sijin Cheng*                              in December, after languishing near the 9 mb/d mark during the summer. Strength into the
+65 6308 6320                             year-end propelled FY 12 oil demand to 9.6 mb/d, 360 kb/d higher y/y. As we pointed out
sijin.cheng@barclays.com
                                          previously (China oil demand on path to modest recovery, 31 October 2012), faster
Miswin Mahesh*                            industrial activities, new refining capacity and better margins combined to fuel the recovery.
+44 (0)20 7773 4291                       Since then, China’s headline data have confirmed a revival of manufacturing activities, and
miswin.mahesh@barclays.com                we expect China’s oil demand to grow by 480 kb/d in 2013, or 5% y/y.

* These authors are members of
the Fixed Income, Currencies and          FIGURE 2
Commodities Research department           Chinese implied oil demand growth, kb/d
and are not equity research
                                           1,350
analysts
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                                                                                                                                                                                                                                                             Nov-12
                                          Source: CEIC, Barclays Research


FIGURE 3                                                                                                       FIGURE 4
Oil demand recovered with industrial activities                                                                Diesel demand followed truck traffic up

              Power generation vs. oil demand 3mma                                                                                          Truck traffic vs. diesel demand, 3mma

                Powergen (LHS)             App oil demand (adj)                                                  25%                                                 App diesel demand (adj)
                                                                                                                                                                     Truck traffic on select tollroads
  30%                                                                                0.25                        20%
                                        Q4'10 power
  25%                                    shortage                                    0.2                         15%
  20%                                                                                0.15
                                                                                                                 10%
  15%
                                                                                     0.1
  10%                                                                                                                 5%
                                                                                     0.05
   5%
                                                                                                                      0%
   0%                                                                                0
                                                                                     -0.05                        -5%
  -5%
 -10%                                                                                -0.1                       -10%
    Jan-08        Jan-09      Jan-10   Jan-11         Jan-12                                                       Jun-10                          Dec-10                     Jun-11                    Dec-11                     Jun-12                    Dec-12

Source: CEIC, Barclays Research                                                                                Source: CEIC, company data, Barclays Research


21 February 2013                                                                                                                                                                                                                                                               2
Barclays | Asia Energy in Focus



                                  While the outlook for Chinese oil demand remains positive, the very strong 4Q12 showing
                                  may have been inflated by seasonal and one-off factors. Seasonal stock building, the
                                  concentration of new capacity additions to 4Q12 and an unusually cold winter likely helped
                                  push up refinery runs. Real demand was softer, evidenced by soft rack prices and increased
                                  product exports, counter to seasonal trends. As industrial activities are likely to stay muted
                                  in 1Q13, real oil demand may hit a soft patch before picking up again in 2Q.

                                  Several government policies could affect Chinese oil demand growth in 2013, with upside
                                  risks more likely on balance:

                                  • an initiative to waive highway tolls during four major holidays will offer 20 days of toll-
                                     free holiday driving in 2013, supporting gasoline demand (which has grown y/y by 221
                                     kb/d, 11% in 2012);

                                  • a new tax on aromatics could decrease the attractiveness of blended gasoline and shift
                                     more demand to refinery products, but implementation is still in flux;

                                  • the government has also signalled that it would push for more responsive and
                                     transparent fuel price reforms, and refinery runs could be affected by whether the
                                     government chooses to defend refining margins;

                                  • a changing landscape for China’s independent teapot refineries (government mandates on
                                     closure of those with capacity of less than 2 mt/year, as well as granting licenses for crude
                                     imports) is likely to see a strong call for crude oil over traditional fuel oil imports; and

                                  • as negatives however, heavy smog across northern China in January has forced the
                                     government to make pollution a priority, and any potential restrictions on industrial
                                     activities and driving could pose a threat to oil demand.

                                  Industrial activities revived oil demand
                                  Oil demand recovered along with industrial activities growth, most accurately reflected in
                                  power generation. PMI has risen from 49.2 in August 2012 to 50.6 in December 2012,
                                  confirming that manufacturing has been expanding and driving a modest recovery (Optimism
                                  is in the air, 11 January 2013). Property sales shot up sharply after China lowered interest rates
                                  during the summer, and housing construction began to gain momentum from a low base.

                                  As a result, driving indicators, such as traffic and truck sales, continued to improve. Truck
                                  sales fell by 10% y/y in June 2012 but gradually rose to report 5% y/y growth in December
                                  2012. Truck traffic on select tollroads also rose from a 4% y/y contraction in May 2012 to
                                  3% growth in 4Q12. The traffic we monitored also showed a divergence of fortunes; traffic
                                  was more cyclical in the export-oriented areas but resilient in areas dominated by consumer
                                  driving. Passenger vehicle driving was also more insulated from the downturn, which seems
                                  corroborated by consistently faster gasoline demand growth in recent years. Gasoline
                                  demand finished the year at an average of 2 mb/d after adjusting for stock changes, up by
                                  11% y/y, and diesel demand averaged 3.5 mb/d, up by 2% y/y.

                                  Fuel oil and naphtha demand also rose in 4Q, driven by stronger demand for fuel and
                                  petrochemicals as well as improvement in teapot refinery margins when the NDRC raised
                                  prices in August and September. Overall, for the year, fuel oil demand registered a small
                                  gain of 2% y/y to 624 kb/d, and naphtha demand rose 14% to 732 kb/d.

                                  Downstream manufacturing and construction activities are quiet during the Chinese New
                                  Year, and real oil demand could see a soft patch in the first two months of 2013. Migrant
                                  workers return home for a traditional two-week holiday break. This year a major
                                  government reshuffle will be announced during the March legislative meetings, which could
                                  mean that projects are put on hold until important personnel decisions are made. Real

21 February 2013                                                                                                                   3
Barclays | Asia Energy in Focus



                                  diesel demand is therefore likely to stay moderate during 1Q. Gasoline demand, on the
                                  other hand, may be elevated during the holidays but then smooth out.

                                  New refineries and stock building amplified demand in 4Q12
                                  Refining capacity

                                  While underlying growth was on a solid upward trajectory, the startup of new refining
                                  capacity and stockbuilding also amplified demand. Market wholesale fuel prices softened
                                  into year end, as cold weather slowed construction activities in many areas, and China
                                  exported diesel against seasonal trends in 4Q12.

                                  A slew of refinery projects started trial runs in 4Q12, including major CDU units such as the
                                  200 kb/d Maoming and 120 kb/d Daqing as well as secondary upgrades that allowed
                                  refineries to increase effective throughput. They helped boost runs to 10.2 mb/d in
                                  November and December. This year, China is expected to see around 700 thousand b/d of
                                  CDU capacity coming online, with about half of it concentrated in 1Q13.


                                  FIGURE 5
                                  Refinery capacity additions in 2013

                                   Scheduled to come online                   Refinery        CDU capacity   Desulphurization
                                               Q1 13                    PetroChina Huabei         100              100
                                               Q1 13                    PetroChina Sichuan        200
                                               Q1 13                     Sinopec Yanshan                            52
                                               Q2 13                       Sinopec Dalian                           45
                                               Q2 13                      Sinopec Anqing          60
                                               Q2 13                      Sinopec Wuhan                             36
                                               Q4 13                   Sinochem Quanzhou          240
                                               Q4 13                      Sinopec Jiujiang        30                65
                                               Q4 13                      Yanchang Group                           116
                                               Q4 13                   Sinopec Shijiazhuang       60               110
                                            2013 total                                            690              524
                                  Source: Reuters, company reports, Barclays Research


                                  A significant portion of desulphurisation capacity is also being added this year (around 500
                                  thousand b/d), which would help in producing fuels with tighter sulphur standards.

                                  Teapot refinery landscape changes and the impact on crude oil

                                  Not including the slated capacity by domestic majors planned this year, teapot refineries are
                                  expected to step up in terms of expansion (partly to dodge the regulators bullet). These
                                  independent refining complexes are generally small with a typical capacity of around 40
                                  thousand b/d, but in total the industry as a whole comprises an estimated 2 mb/d (~20% of
                                  the nation’s nameplate capacity). They are largely concentrated in the Shandong and
                                  Guangdong provinces and provide a useful function of being the swing supplier for
                                  domestic refined products. When refining margins are strong, teapot refineries boost runs
                                  to help alleviate product shortages. Likewise, given the slightest hint of weak demand and
                                  poor margins from increasing feedstock prices, they are able to instantly reduce utilisation
                                  rates with greater flexibility than their larger peers.

                                  The Chinese government has in the past tried to rationalise the growth of these small
                                  independent refineries in order to slow the overheated growth in the market. They have had
                                  to rely on fuel oil as a feedstock given they required licenses to import crude oil. More



21 February 2013                                                                                                                4
Barclays | Asia Energy in Focus



                                                recently, however, the measures have become more direct with a mandate by the end of
                                                this year to shut down teapot refineries that are smaller than 40 thousand b/d.

                                                In order to get around this restriction, some of these teapot refineries are responding by
                                                expanding above this threshold or forging alliances with larger established refineries. The
                                                alliances would mean they can easily source crude from their parent company, and would
                                                result in a stronger call on crude by the majors, in addition to their requirements. Following
                                                a comprehensive framework agreement with the independent Dongming, PetroChina has
                                                agreed to supply 120 kb/d of crude oil and just completed a 200 kb/d crude pipeline to the
                                                refinery in December 2012. Dongming, now the largest independent with a capacity of 230
                                                kb/d after doubling its size in 2012, was among the first to secure crude oil from a major.

                                                Also, a few teapot refineries acquired by state-owned companies have also been given
                                                licenses to begin importing crude this year. After acquiring six teapots, ChemChina (China
                                                National Chemical Corporation) has acquired a quota from the Chinese government for the
                                                use of 10 mt of imported crude this year. The crude is expected to be supplied by Sinopec
                                                whose import crude slate mainly comprises of sour grades from the Middle East. The first
                                                cargo is expected to be loaded in March, with Sinopec choosing Oman as the source. As a
                                                result of the change in feedstock, ChemChina’s refineries are expected to boost their
                                                throughput by about 80% to 14.1 mt in 2013.

                                                Between PetroChina’s arrangement with Dongming and ChemChina’s imports for its teapot
                                                refineries, an estimated 320 kb/d of crude oil imports might displace fuel oil this year. These
                                                examples do not necessarily suggest that other teapots can follow, as the government
                                                remains wary of refining overcapacity and it has taken years for these developments to
                                                come through. But we expect the effects of these new licenses, alliances with majors, as
                                                well as expansion of teapot refineries to provide a strong source of growth for crude oil
                                                imports this year.

                                                Stock building

                                                Refiners were also building winter stocks ahead of the holidays. While the unusually cold
                                                winter slowed manufacturing activities, it likely drove downstream users to build additional
                                                cover in case of emergencies. Refiners built gasoline stocks from 50 mb in end-September
                                                to 62 mb by end-December, but robust gasoline demand meant that the stock-to-use ratio
                                                was still at the 2012 average of 27 days.

 FIGURE 6                                                                         FIGURE 7
 Refiners built gasoline stocks                                                   Diesel exports picked up in Q4 12

  mn barrels            Refiner gasoline stocks (est)                               kb/d                            Diesel exports

  65                                     2010        2011             2012        160                  5yr range             2011        2012
                                                                                  140

  60                                                                              120
                                                                                  100

  55                                                                               80
                                                                                   60

  50                                                                               40
                                                                                   20
                                                                  months                                                                     months
  45                                                                                 0
       12   1    2     3     4       5    6     7    8    9      10    11    12          12   1    2     3    4     5    6     7     8   9   10   11   12

 Source: Xinhua, Barclays Research                                                Source: CEIC, Barclays Research




21 February 2013                                                                                                                                            5
Barclays | Asia Energy in Focus



                                             Although overall implied oil demand readings have been robust, there are a few
                                             undercurrents on domestic product consumption. Falling market prices and fuel exports
                                             suggest that demand was softer than meets the eye. Industry reports showed that prices
                                             eased gradually in December 2012 and January 2013, as high throughput has kept the
                                             market well supplied. Diesel exports rose to 88 kb/d in December. While small, exports were
                                             unusual during the winter when refiners were building stocks. Refiners continued to slash
                                             diesel yield, with diesel-to-gasoline ratio falling below 1.6, lowest since mid-2009. These
                                             trends suggest that diesel demand remained weak, and refiners did not want to build diesel
                                             stocks while meeting healthy gasoline demand. However, stock levels from select provinces
                                             in January are at average or slightly below-average levels, suggesting a low risk of stock
                                             overhang when manufacturing picks up in the spring.

                                             SPR filling has ground to a halt in 2H12 following a surge earlier in the year. The amount of
                                             unaccounted barrels, the difference between crude supply and throughput plus commercial
                                             stockbuilding, averaged 480 kb/d in 1H12 but fell to a small negative in 2H12. A report by
                                             CNPC recently confirmed that the government increased filling in 2012 when downstream
                                             demand was weak and new SPR sites totalling around 120 million barrels came online in
                                             late 2011. Such a dynamic may not repeat in 2013, as the remainder of the phase two sites
                                             are underground and require a longer construction period. Currently five underground sites
                                             including Huangdao, Huizhou and Zhanjiang are under construction, with an estimated 130
                                             million barrels of capacity. The first may come online in early 2014.

                                             New government policies may impact oil demand
                                             We expect an improvement in industrial activities and continued additions of new refining
                                             capacity to lift Chinese oil demand by 5% in 2013, an increase of 480 kb/d, given our
                                             current assumptions of a solid but moderate recovery. A faster-than-expected rebound
                                             could of course present an upside risk to our forecast. The government may also choose to
                                             introduce new stimulus measures following the March legislative meetings, when the new
                                             leadership completes its takeover, although our economists do not consider that the base-
                                             case scenario for China. A slew of new and potential government policies, on the other
                                             hand, could also affect oil demand, with an upside surprise more likely on balance.



FIGURE 8                                                                  FIGURE 9
SPR filling has slowed in 2H12                                            Commercial crude stocks down to average levels

   Kb/d          Unaccounted missing barrels (SPR fill)                                         Commercial crude stocks (est)
                                                                           mn barrels
 1,500                                                                                                             2010       2011         2012
                                                                           240

                                                                           230
 1,000
                                                                           220

   500                                                                     210

                                                                           200
      0
                                                                           190
                                                                                                                                       months
  -500                                                                     180
     Jan-10      Jul-10    Jan-11   Jul-11     Jan-12     Jul-12                 12   1     2    3     4       5    6     7   8   9   10    11    12

Source: CEIC, Barclays Research                                           Source: Reuters, Barclays Research




21 February 2013                                                                                                                                       6
Barclays | Asia Energy in Focus



                                           Tax change may boost apparent gasoline demand
                                           Apparent gasoline demand may receive a boost from the implementation of new taxes that
                                           would make it too costly to blend MTBE and aromatics into gasoline. Industry analysts
                                           estimate that as much as 10-15% of China’s actual gasoline demand is met by independent
                                           blenders, who use MTBE or aromatics to blend with off-spec gasoline. This part of gasoline
                                           demand is not properly captured in the official numbers. In addition to private gas stations,
                                           state-run refiners source from these independent blenders to meet their own retail targets.
                                           In the past two years, multiple complaints involving low-quality blended gasoline bought at
                                           gas stations operated by the majors have brought headache and compensation claims
                                           against them, and they have scaled back purchases from independent blenders.

                                           However, it is the tax change that could more meaningfully reduce blended gasoline and
                                           increase apparent gasoline demand. Under the new rules passed by the tax authorities, said
                                           to be effective 1 January 2013, the same 1 RMB/litre tax already in place for gasoline will be
                                           levied on MTBE and aromatics, and the tax is charged directly to the producer. The tax
                                           change would mean an additional cost of about 650 RMB/ton, using the average of 0.4t of
                                           MTBE and aromatics for 1t of finished gasoline. Without the cost advantage, the blending
                                           industry may well shrink as consumers prefer higher-quality fuel at the same price.

                                           But the implementation of this rule has been delayed, likely due to lobbying by local
                                           governments that rely on teapots for revenue. Shandong, the heartland of independent
                                           refineries, issued a local rule that effectively suspended the new policy, and local
                                           governments are reportedly lobbying for exemptions under the rule. Elsewhere the tax has
                                           also yet to be collected, but the fear that it may be implemented at some point and back
                                           taxes be collected is likely to keep blendstock demand subdued. Official gasoline demand
                                           growth, which has already outpaced diesel demand growth, may rise even more rapidly.

                                           Toll waivers could encourage driving
                                           In September 2012, the government decided to waive highway tolls during the four holiday
                                           periods of Chinese New Year, Tomb-Sweeping Day, Labor Day and National Day (Golden
                                           Week). As the practice of paid leave is not widely observed in China, these four official
                                           holidays are the most important holiday periods for the working population and add up to a
                                           total of 20 days off, adding 20% to the 104 weekend days.


FIGURE 10                                                                FIGURE 11
Official gasoline demand has outpaced diesel demand                      Refiners prioritized gasoline output as a result

               Gasoline and diesel demand growth                                              Diesel to gasoline output (ratio)
  16%                        App gasoline demand (adj)
                                                                          2.1
  14%                                                                                          5yr range           2011           2012
                             App diesel demand (adj)
  12%                                                                     2.0
  10%
                                                                          1.9
   8%
   6%                                                                     1.8
   4%
                                                                          1.7
   2%
   0%                                                                     1.6
                                                                                                                                         months
  -2%
                                                                          1.5
    Dec-10                        Dec-11                    Dec-12
                                                                                12   1    2     3    4     5   6     7    8       9   10   11     12

Source: CEIC, Barclays Research                                          Source: CEIC, Barclays Research




21 February 2013                                                                                                                                       7
Barclays | Asia Energy in Focus



                                  As a testament of its appeal and the size of the car fleet, the toll waiver led to a nation-wide,
                                  paralysing traffic jam on all major highways during the Golden Week of 2012, the first time it was
                                  applied. Despite criticism, the government confirmed earlier this year that the policy stands.
                                  Drivers also appear undeterred by the congestion. As a result, leisure driving is likely to receive a
                                  modest boost this year, though traffic conditions may limit the extent of driving in some areas.

                                  Fuel price reforms to have limited impact on demand
                                  The government also vowed to deepen fuel price reforms at its energy conference in
                                  January, raising expectations for measures to make fuel price adjustments more transparent
                                  and responsive. Policies reportedly under consideration include cutting the window of
                                  response time from 22 working days to 10 and delegating some decisions to the oil majors.

                                  These changes, if carried out, are unlikely to have a major impact on demand, as they will
                                  only change current pricing policies at the margins. Fuel costs remain small in the overall
                                  cost of owning a car in China, as fixed costs, such as taxes and insurance account, for a
                                  bigger burden. The fact that prices have remained elevated through most of 2012 also
                                  means that drivers are used to a steady, higher-cost environment.

                                  The more important question is whether the NDRC will continue to defend refiner margins if
                                  crude prices rise faster. The government remains sensitive to inflationary pressures, and if
                                  prices rally sharply and quickly, it is still possible that the NDRC will consider shifting some
                                  of the burden to refiners – at least for the time being. However, recent efforts to liberalise
                                  coal prices and allow for a cost pass-through to power tariffs suggest that the government
                                  is willing to raise energy prices over time, so long as the price increase is gradual. A steady
                                  margin will encourage refiners to raise runs.

                                  Jet fuel demand expected to be well supported
                                  The aviation sector in China continues to expand. In 2012, the Beijing Capital International
                                  Airport (largest in the country) handled close to 82 million passenger movements (up y/y
                                  by 4.2%). Given the high congestion levels at this airport, the Chinese government has given
                                  final approval for the construction of a new international airport in Beijing with the capacity
                                  to handle another 70 million passengers a year. The airport is expected to open by the end
                                  of 2018, with expansion phases ranging through to 2025. Further, last year the NDRC also
                                  approved 24 new airports and expansion projects to be commissioned over the coming
                                  years. This adds the 12th Five-Year plan envisioning 82 new airports in the 2011-15 period.
                                  This year, the Chinese Civil Aviation Administration estimates passenger transportation
                                  volumes to grow by 9.4% y/y (bringing total traffic to 350 million passengers). We expect
                                  these structural growth factors to continue supporting jet fuel demand in the country,
                                  which has grown by 9.8% y/y (32 thousand b/d) in 2012.

                                  Heavy pollution could trigger restrictions on driving, manufacturing
                                  One public policy challenge, however, could present a distinct downside risk to oil demand.
                                  Heavy smog across China in January is headline news throughout the world, as cities were
                                  enshrouded in pollutants several times higher than the level considered hazardous to public
                                  health. The public debate that ensued has raised awareness of the significant health hazards
                                  posed by the smog. Several local governments introduced emergency measures, including
                                  limits on driving and on industrial activities, and the national government vowed to make
                                  the issue a top priority.

                                  Oil demand may suffer if the government adopts lasting curbs on driving or industrial activities
                                  around major cities. First-tier cities already have measures in place to limit the size of the car
                                  fleet, but given pollution levels despite these efforts, tougher policies may be taken. Local
                                  governments may introduce a congestion charge or make parking prohibitive in city centers.
                                  Small factories that burn coal or are energy-intensive around major cities may be shut down
                                  ahead of schedule. While these measures run counter to the urge to grow the local economy,
                                  the high profile issue of pollution could make it a political task for local governments.

21 February 2013                                                                                                                      8
Barclays | Asia Energy in Focus



                                  China’s oil demand will continue to benefit from faster economic growth and new refining
                                  capacity in 2013. While actual demand growth may have lagged the very strong headline
                                  numbers recently, the recovery is on a solid footing. Several government policies, including
                                  new tax policies and toll waivers, could further boost demand, especially gasoline demand,
                                  but an initiative to combat pollution could pose a threat to the downside.




21 February 2013                                                                                                             9
Barclays | Asia Energy in Focus



ASIA EX-JAPAN ENERGY – POTENTIAL CATALYST EVENTS
               Timing     Catalyst                          Barclays Research comments
Anton Oil
              Mid-Mar     FY12 results                      Watch for revenue growth and net margins within guidance of 13-15%
              Mid-Apr     1Q13 operational update           Watch for potential outlook on new orders from Schlumberger JV
              Mid-Jul     Mid-Jul 2Q13 operational update   Watch for an acceleration in tight gas drilling
              Aug         1H13 results                      Revenue and margin contribution from down-hole operations
              2013        Potential investments             Rig management and technology-driven targets
CNOOC
              Feb         Nexen acquisition                 Completion of CNOOC’s proposed Nexen acquisition
              1Q13        FY12 results                      Watch for oil realisations and cost management
              2013        Liwan 3-1                         NDRC ODP approval of development
              1Q13        Strategy update                   Higher capex and limited production guidance in 2013
              2013        Natural gas pricing               NDRC comments on natural gas pilot pricing rollout
COSL
              1H13        CNOOC-Nexen                       Potential comments on potential new awards from CNOOC-Nexen acquisition
              1Q13        FY12 results                      Watch for margins in drilling segment and costs from sub-contracting
CBC
              2013        Resolution of Hualu dispute       CBC to coordinate with local government for Hualu project
              2013        Huahe urea project                Construction progress on 520ktpa coal-based urea project
              2013        Sino-Arabia M&A                   Potential M&A opportunities on Sino-Arabia Compound Fertilizer acquisition
              2H13        Export tariffs                    Lower export tariff and higher base price for fertilizer exporters
              1Q13        FY12 results                      Watch for higher urea exports
Dongyue
              1H13        Government subsidies              New policy on subsidizing energy saving housing appliances
              1Q13        Start-up of R134a and R22 units   Capacity additions of +10-15ktpa and +20ktpa of these products respectively
              1Q13        Start-up of R125 unit             Capacity addition of +10ktpa
              1H13        Start-up of TFE and PTFE units    Capacity additions of +10ktpa and +7ktpa of these products respectively
              2013        Tax rebate discussions            Tax rebate on high-technology, with the potential to cut tax rate by 10%
Ezra
              Apr         2Q13 results                      Watch for subsea and OSV margin improvement
Keppel
               Jan        FY12 results                      Reiteration of medium-term margins and industry outlook
               1Q13       New contract                      Signing of contract with Naftogaz
Formosa Grp
              1Q13        Grp prelim results (prelim result) Watch for improving chemical demand and margins
PetroChina
              1Q13        FY12 results                      Watch for further refining profitability and recovery in marketing segment
              2013        Fuel price reforms                State Council approval of proposed fuel price mechanism
              2013        Natural gas pricing               NDRC comments on natural gas pilot pricing rollout
PCG
               1Q13       FY12 results                      Watch for olefins and methanol plant utilisation; writedown MYR560m from vinyl business
               2Q13       Malaysian elections               Possible continuation of existing government
               2H13       Cracker maintenance               Scheduled turnaround (possibly 30-40 days or more) at PCG main cracker units
               Mid-2013   RAPID project                     Clarification on scope and participation in RAPID project post any PETRONAS Group
                                                            announcement
               2013       Fertilizer expansion              Progress on new urea/ammonia capacity of 1.2mtpa and 0.74mtpa respectively
               2013       Asset divestment                  Potential sale of PCG’s PVC plant in Vietnam
PTTEP
              1Q13        Exploration in Myanmar            Drilling first deepwater well at block M11
              1Q13        Montara field start-up            Re-start of Australian oil field post oil spill in 2009
Sembmarine
              1H13        Singapore yard progress           Two docks + other facilities to be put in place
              2H13        Singapore yard ramp-up            Full commercialisation of yard
              4Q12        Contract confirmation             Semi-sub contract confirmation from Prosafe
              Feb         4Q12 results                      Singapore and Brazil yard progress and reiteration of margin outlook
Sinofert
              Nov         Phosphate mine site visit         Sinofert will arrange a site visit for its new phosphate mines from Lomon acquisition
              1H13        Potash contract negotiation       Lower potash contract price
              2013        Phosphate asset upside            New 500ktpa phosphate capacity and progress on 300ktpa addition in 2014
Sinopec
              1Q13        FY12 results                      Watch for further refining profitability
              2013        Natural gas pricing               NDRC comments on natural gas pilot pricing rollout
              2013        Fuel price reforms                State Council approval of proposed fuel price mechanism
SPC
              1H13        Ethanolamine project              Commercialisation of new ethanolamine
              2013        Fuel price reform                 Possible announcement by NDRC on oil product pricing mechanism
Thai Oil
               2013       Aromatics upgrading               Increased paraxylene volumes post commercial operations in September 2012
               2013       New project progress              Progress on refinery upgrading projects; power expansion
               4Q13       Sak Chaisidhi solvent expansion   Start-up of new solvent capacity (from 80ktpa to 160ktpa)
Source: Company data, Barclays Research estimates




21 February 2013                                                                                                                                      10
Barclays | Asia Energy in Focus



ENERGY TRENDS READ-ACROSS FOR ASIA EX-JAPAN COVERAGE

                                                Asia refining margins rise sharply: We see a heavier than normal maintenance period in
                                                South Korea (see Oil Focus: Brent curve backwardation: Trade winds, supply shifts and
                                                unwritten formulae, 15 February 2013) and this together with further maintenance in Asia
                                                which may see refining margins remain robust this quarter.


                                                FIGURE 12
                                                Singapore refining margins rise
Singapore margins averaged
                                                 16
US$10.66/bl last week, the                               US$/bl
highest weekly average since                     14
August last year – a period                      12
where global refining outages
                                                 10
created oil product tightness
                                                   8

                                                   6

                                                   4

                                                   2

                                                   0
                                                   Jan-08    Jul-08    Jan-09    Jul-09       Jan-10   Jul-10   Jan-11     Jul-11   Jan-12    Jul-12   Jan-13
                                                Note: Chart shows weekly average refining margins in Asia in US$/bl
                                                Source: Bloomberg, Barclays Research


                                                China-Dubai crude oil price spread widens: While Libya’s oil production has started to fall
                                                and more outages may see some risk to oil facilities especially in the wake of recent militant
                                                activity in North Africa (see Geopolitical Update: Libya: Incubator of instability, 15 February
                                                2013). Lower Libyan oil production is positive for Asian crude spreads to international
                                                benchmarks supportive of upstream realisations for CNOOC (OW) and PetroChina (OW).


FIGURE 13                                                                            FIGURE 14
Libya’s oil production has been falling…                                             …Daqing-Dubai spread has been recovering
2,000                                                                                  20
                                                                                                US$/bl
1,800
                                                                                       15
1,600
1,400                                                                                  10

1,200                                                                                     5
1,000
                                                                                          0
  800
                     Libyan oil production
  600                ('000 b/d)                                                        (5)
                     Libyan civil war (Feb-11
  400
                     to Oct-11)                                                      (10)
  200
     0                                                                               (15)
     Jan-04      Nov-05       Sep-07      Jun-09          Apr-11       Jan-13           Jan-08         Jan-09         Jan-10    Jan-11       Jan-12     Jan-13
Chart shows monthly oil production from Libya                                        Chart shows average weekly price spread between Daqing and Dubai crude oil
Source: Bloomberg, Barclays Research                                                 Source: Bloomberg, Barclays Research




21 February 2013                                                                                                                                                 11
Barclays | Asia Energy in Focus



CRUDE OIL AND NATURAL GAS PRICES
                                                                                                                                  Natural gas                       Japan LNG
                                                             Crude - $/bl                                   Henry Hub   Rockies       Russia    UK-NBP        Zee   import price

Date                Brent         WTI         ANS Kern River           Dubai    OPEC WTI-Maya Brent-Urals     $/mBtu    $/mBtu         $/kcf    p/therm   p/therm       $/mBtu
11-Feb-13           119.0         96.9       115.7         117.9       113.2    114.6    (11.7)       2.6        3.26      3.27            -      68.07     66.31         19.40
04-Feb-13           116.8         96.2       112.1         116.9       111.9    113.4    (10.9)       1.7        3.32      3.35            -      67.83     66.20         19.40
28-Jan-13           115.8         97.4       111.9         115.5       109.5    111.1     (7.4)       1.8        3.26      3.31            -      66.05     64.72         19.00
21-Jan-13           114.1         95.3       109.6         115.2       107.9    109.6     (4.2)       2.1        3.54      3.50            -      67.69     66.02         18.70


Feb-13              117.9         96.6       113.9         117.4       112.6    114.0    (11.3)       2.1        3.29      3.31                   67.95     66.26             -
Jan-13              113.0         94.8       109.8         112.8       107.6    109.3     (4.2)       1.7        3.33      3.38        11.62      66.53     65.11        18.08
Dec-12              109.6         88.2       107.0         109.6       105.7    106.7     (2.9)       1.5        3.34      3.35        11.87      65.85     64.66        16.43
Nov-12              110.0         86.8       105.6         109.0       107.2    106.9     (4.4)       1.4        3.56      3.51        11.87      65.81     64.12        14.31


1Q 2013             114.4         95.3       110.9         114.1       109.1    110.6     (6.2)       1.8        3.31      3.34        12.61      67.24     65.68        18.74
4Q 2012             110.5         88.2       106.4         109.5       107.2    107.3     (5.0)       1.6        3.41      3.41        12.79      65.39     63.97        14.61
3Q 2012             109.9         92.1       108.7         109.4       106.1    106.3     (4.9)       1.2        2.88      2.75        12.89      56.86     57.27        13.39
2Q 2012             109.5         93.9       110.2         109.1       106.9    107.4     (3.7)       2.4        2.29      2.15        13.03      57.17     57.59        17.31
1Q 2012             118.6      103.0         118.2         119.5       116.0    117.3     (5.9)       1.6        2.45      2.41        12.62      58.80     58.46        15.30
4Q 2011             109.3         94.2       110.3         110.7       106.3    108.0     (9.3)       0.5        3.31      3.31        12.95      56.69     57.50        17.26


2013                114.4         95.3       110.9         114.1       109.1    110.6     (6.2)       1.8        3.31      3.34        11.62      67.24     65.68        18.74
2012                112.1         94.3       110.9         111.9       109.1    109.6     (5.5)       1.7        2.75      2.68        12.22      59.56     59.32        15.15
2011                111.0         95.1       109.6         112.4       106.1    107.6     (3.6)       1.7        3.94      3.79        10.81      56.84     57.56        13.89
2010                 79.7         79.5        78.9          82.8         78.1    77.5      9.2        1.4        4.37      3.94         8.39      42.52     43.06        11.13
2009                 62.2         62.1        61.1          64.6         62.1    61.1      5.8        0.6        3.94      3.17         9.03      30.81     31.20         8.91
2008                 97.2         99.1        97.9          91.5         93.2    93.5     15.5        3.3        8.82      6.30        13.40      58.11     58.99        11.42
2007                 72.7         72.3        71.7          62.3         68.4    68.8     12.5        3.2        6.94      4.10         8.30      29.85     30.38         6.96
2006                 65.8         66.2        63.6          55.1         61.6    61.0     15.1        4.9        6.75      5.27         8.38      40.20     43.33         6.46
2005                 55.0         56.6        53.7          45.0         49.4    50.7     11.4        4.5        8.91      7.15         6.03      38.30     40.94         5.60
2004                 38.4         41.2        38.9          33.0         33.8    36.0     14.3        3.7        5.89      5.10         3.83      24.45     23.92         4.86
Source: Bloomberg, Natural Gas Week, European Gas Markets, Barclays Research




21 February 2013                                                                                                                                                              12
Barclays | Asia Energy in Focus



REFINING AND MARKETING MARGINS
                                      Refining margins - $/bl                                 European marketing margins - $/bl              US gasoline marketing margins - $/bl

                       NW            US        US W.
Date                Europe          Gulf       Coast      Singapore          Med      Eur 6    France    Germany        Italy      UK     PADD1    PADD2    PADD3     PADD4         PADD5
11-Feb-13               1.90       22.75        19.98          10.66          3.64    13.81      11.75      16.82       19.32      1.82     7.09     5.16    (0.68)     11.54       (17.24)
04-Feb-13               3.29       19.71        23.80            9.88         3.94    16.28      20.39      16.86       21.45      1.45    10.62     8.19     3.11      12.01       (23.38)
28-Jan-13               1.55       16.42        19.46            8.35         2.32    14.80      13.24      16.23       21.41      1.50     5.87     0.03    (2.70)      6.42       (25.73)
21-Jan-13               0.38       14.60        11.33            7.89         1.81    15.71      13.51      16.51       22.01      4.73    10.57     3.18     2.68       8.05        (9.75)


Feb-13                  2.60       21.23        21.89          10.27          3.79    15.04      16.07      16.84       20.39      1.63     8.86     6.67     1.21      11.78       (20.31)
Jan-13                  0.32       15.34        10.04            7.76         1.33    16.81      13.07      18.48       24.16      6.19    10.46     1.85     2.04       9.80        (7.80)
Dec-12                (0.54)       15.69         3.30            6.84         0.26    18.67      13.16      18.71       26.35     13.60    17.31     9.77     8.07      31.81         7.49
Nov-12                  0.29       18.63        10.95            5.83         0.69    17.73      11.37      21.86       23.29     14.28    17.48    13.89    10.42      41.26         9.20


1Q 2013                 0.97       17.02        13.43            8.48         2.03    15.93      14.57      17.66       22.27      3.91     9.66     4.26     1.63      10.79       (14.06)
4Q 2012                 1.57       19.37        12.34            7.24         2.18    18.55      12.21      20.36       25.68     13.65    18.51    13.37    10.54      37.63         9.46
3Q 2012                 4.73       21.77        13.32          10.16          5.12    13.89       6.89      19.00       19.24      5.07    10.22    13.08     5.65      28.02         4.55
2Q 2012                 3.30       17.51        10.13            8.19         5.12    19.85      14.00      18.98       28.30     15.08    15.98    17.28    13.56      39.46        15.95
1Q 2012                 0.85       16.00         9.47            8.22         1.96    14.95      12.03      16.24       21.36      5.21     5.44     2.30     1.30       8.58        (2.18)
4Q 2011                 0.81       12.65         5.33            8.35         0.21    17.00      13.49      13.12       26.21     10.57    11.95     9.73     7.22      32.10         6.70


2013                    0.97       17.02        13.43            8.48         2.03    16.22      14.07      17.93       22.90      4.67    10.01     3.23     1.80      10.37       (11.37)
2012                    2.61       18.66        11.31            8.45         3.59    16.69      11.16      18.58       23.46      9.56    12.52    11.46     7.72      28.38         6.87
2011                    0.22       15.02         6.91            8.49         1.33    17.74      14.18      14.27       27.47      9.01    11.65    11.46     8.57      17.26         7.08
2010                    1.42        1.29         8.37            4.66         2.46    13.81      10.34      11.36       22.55      6.20     9.07     9.42     7.62      14.49         6.14
2009                    1.53        1.68        10.34            3.15         2.95     8.03       7.68        9.22      11.91      3.32     8.26     7.55     6.85       9.02         1.41
2008                    3.94        1.42         9.51            8.43         6.54    12.54      11.71        9.76      19.83      8.85    13.30    10.86    11.52      13.87         7.58
2007                    2.63        5.72        17.56            6.65         6.08     9.32       7.87        8.10      14.90      6.39    10.56    11.35     8.99      13.02         2.39
2006                    1.26        3.53        16.94            5.00         6.05     7.60       5.61        5.80      13.61      5.36    12.52     8.64    10.27      11.49         2.60
2005                    2.90        4.62        14.16            6.39         6.40     6.55       4.32        3.01      10.87      4.17     9.08     7.16     8.16       8.73         2.64
2004                    2.79        1.75        11.59            6.24         6.42     6.14       2.78        1.50       7.95      0.95    10.02     7.94     6.82       9.18         5.04
Source: Bloomberg, European Energy Commission, Oil & Gas Journal, Barclays Research




21 February 2013                                                                                                                                                                     13
Barclays | Asia Energy in Focus



PETROCHEMICAL PRICES
US$/ton                Ethylene           Propylene              Benzene           Butadiene                  MEG                 PX       Polyester chip                    PE                   PP                 AN
11-Feb-13                  1,370                1,360               1,450               1,950                1,185             1,714                10,950                1,492               1,550                2,327
04-Feb-13                  1,350                1,330               1,410               1,880                1,175             1,705                10,850                1,482               1,550                2,327
28-Jan-13                  1,350                1,295               1,436               1,845                1,170             1,692                10,850                1,480               1,535                2,281
21-Jan-13                  1,325                1,285               1,454               1,800                1,185             1,674                10,900                1,455               1,505                2,186


Feb 13                     1,360                1,345               1,430               1,915                1,180             1,709                10,900                1,487               1,550                2,327
Jan 13                     1,288                1,275               1,452               1,759                1,186             1,677                10,938                1,447               1,496                2,197
Dec 12                     1,188                1,226               1,493               1,576                1,120             1,640                10,425                1,381               1,441                2,153
Nov 12                     1,175                1,281               1,393               1,619                1,064             1,569                  9,925               1,342               1,418                1,944


1Q2013                     1,324                1,310               1,441               1,837                1,183             1,693                10,919                1,467               1,523                2,262
4Q2012                     1,211                1,261               1,395               1,685                1,093             1,590                10,192                1,356               1,423                2,098
3Q2012                     1,174                1,302               1,205               2,119                1,013             1,464                 1,547                1,308               1,407                2,195
2Q2012                     1,134                1,305               1,134               2,419                  937             1,419                  1,558               1,340               1,412                2,168
1Q2012                     1,272                1,360               1,204               3,467                1,068             1,615                  1,740               1,357               1,398                2,648
4Q2011                     1,054                1,226               1,016               2,239                1,115             1,470                  1,727               1,305               1,377                2,187


2013                       1,324                1,310               1,441               1,837                1,183             1,693                10,919                1,467               1,523                2,262
2012                       1,198                1,307               1,234               2,423                1,028             1,522                10,214                1,340               1,410                2,277
2011                       1,164                1,404               1,114               2,960                1,181             1,563                12,296                1,417               1,544                2,798
2010                       1,083                1,178                 929               1,914                  886             1,059                10,181                1,335               1,328                2,180
2009                         831                  890                 693               1,003                  634               993                 8,308                1,167               1,101                1,264
2008                       1,173                1,189                 996               2,021                  936             1,187                 9,896                1,545               1,511                1,866
2007                       1,137                1,067               1,028               1,049                1,121             1,147                10,983                1,394               1,348                1,772
2006                       1,134                1,087                 873               1,353                  858             1,167                11,004                1,244               1,246                1,506
2005                         877                  915                 856               1,224                  887               913                10,487                1,079               1,086                1,345
2004                         897                  797                 847                 942                  940               811                10,201                1,006                 972                1,120
Note: Ethylene FOB Korea, Propylene FOB Korea, Butadiene FOB Korea, Mono Ethylene Glycol (MEG) CFR South East Asia, Paraxylene (PX) CFR Taiwan, Polyester chip China market price, Polyethylene (PE) CFR South East Asia,
Polypropylene (PP) CFR South East Asia, Acrylonitrile (AN) CFR South East Asia
Source: Bloomberg, Oilchem, Wind, Barclays Research




21 February 2013                                                                                                                                                                                                       14
Barclays | Asia Energy in Focus



FERTILIZER AND RELATED FEEDSTOCK PRICES
                                              Methanol cfr      China     China     China      China   China anthracite        China          China
                          US gulf urea              China        Urea      DAP        KCl   Methanol               coal   coking coal   thermal coal

US$/ton                       US$/ton              US$/ton    RMB/ton   RMB/ton   RMB/ton   RMB/ton           RMB/ton       RMB/ton        RMB/ton
11-Feb-13                           410                 355     2,180     3,350     2,700      2,775             1,020           870            620
04-Feb-13                           410                 355     2,180     3,350     2,700      2,775             1,020           870            620
28-Jan-13                           410                 355     2,180     3,350     2,700      2,775             1,020           870            620
21-Jan-13                           410                 355     2,180     3,350     2,700      2,785             1,020           840            620


Feb 13                              410                 355     2,180     3,350     2,700      2,775             1,020           870            620
Jan 13                              410                 355     2,165     3,350     2,700      2,773             1,020           840            625
Dec 12                              409                 359     2,025     3,350     2,700      2,754             1,020           840            628
Nov 12                              408                 360     1,950     3,350     2,900      2,799             1,000           768            636


1Q2013                              410                 355     2,173     3,350     2,700      2,774             1,020           855            623
4Q2012                              417                 361     2,000     3,350     2,931      2,809             1,002           772            637
3Q2012                              446                 363     2,068     3,330     3,350      2,953             1,010           779            639
2Q2012                              639                 389     2,376     3,400     3,200      2,972             1,161         1,033            772
1Q2012                              456                 378     2,164     3,400     3,200      2,921             1,240         1,143            781
4Q2011                              457                 378     2,068     3,330     3,350      2,953             1,240         1,195            785


2013                                410                 355     2,173     3,350     2,700      2,774             1,020           855            623
2012                                490                 373     2,270     3,400     3,200      2,946             1,137           985            730
2011                                431                 364     2,110     3,440     3,199      2,904             1,232         1,172            791
2010                                315                 297     1,920     3,221     3,026      2,750               888           968            751
Notes: Diammonium phosphate (DAP), Potassium Chloride (KCl)
Source: Bloomberg, Wind, Barclays Research




21 February 2013                                                                                                                                  15
Barclays | Asia Energy in Focus



TANKER AND EXCHANGE RATES
                                            Tanker rates - $/ship/day                                                Exchange rates

Date                       Suezmax             Aframax              Clean    Dirty   RMB/USD    WON/USD    THB/USD      NTS/USD       MYR/USD    RUP/USD   USD/AUS
11-Feb-13                       7,488             12,073           13,200   20,440     11-Feb       6.23      1087           29.8         29.7      3.09      53.9
04-Feb-13                       8,195             11,857           12,766   21,323     04-Feb       6.23      1089           29.8         29.5      3.09      53.3
28-Jan-13                       9,608             15,217           12,311   21,693     28-Jan       6.22      1090           29.8         29.5      3.08      53.5
21-Jan-13                       9,997             12,325           13,959   22,077     21-Jan       6.22      1067           29.8         29.0      3.04      53.8


Feb-13                          8,430             13,049           12,759   21,152     Feb-13       6.23      1097           29.8         29.6      3.11      53.2
Jan-13                        14,458              12,674           13,743   21,217     Jan-13       6.23      1071           30.6         29.0      3.06      54.8
Dec-12                        20,689              16,011           17,964   19,862     Dec-12       6.23      1083           30.7         29.1      3.04      54.7
Nov-12                        10,251              13,966           16,954   14,833     Nov-12       6.24      1092           30.7         29.2      3.05      53.8


1Q 2013                       11,875              12,835           13,321   21,189    1Q 2013       6.23      1078           29.9         29.7      3.09      54.2
4Q 2012                       11,577              13,954           15,610   15,348    4Q 2012       6.23      1087           30.7         29.1      3.06      54.8
3Q 2012                       10,176              13,638           11,069    9,467    3Q 2012       6.36      1130           31.6         30.0      3.12      55.8
2Q 2012                       20,986              16,017           18,545   10,934    2Q 2012       6.32      1154           31.3         29.5      3.08      53.8
1Q 2012                       26,317              15,755           12,689   15,642    1Q 2012       6.30      1122           30.8         29.5      3.04      49.3
4Q 2011                       25,066              17,402            9,768   13,395    4Q 2011       6.35      1126           30.8         30.2      3.15      50.7


2013                          11,875              12,835           13,321   21,189      2013        6.23      1071           30.6         29.0      3.06      54.8
2012                          17,738              14,881           14,769   13,162      2012        6.29      1152           31.6         30.3      3.17      53.1
2011                          19,239              13,528           10,535   12,644      2011        6.59      1126           30.1         29.1      3.06      44.7
2010                          31,259              19,745           14,956   11,292      2010        6.83      1164           33.3         32.0      3.42      46.5
2009                          28,205              15,969           12,738    8,869      2009        6.82      1260           34.8         32.8      3.46      48.7
2008                          78,573              50,923           37,239   25,508      2008        7.30       936           33.7         32.4      3.31      39.4
2007                          44,781              35,865           30,533   26,018      2007        7.81       930           36.2         32.6      3.53      44.3
2006                          52,931              39,338           30,758   27,227      2006        8.07      1011           41.0         32.8      3.78      45.0
2005                          53,579              41,650           37,639   31,145      2005        8.28      1038           38.9         31.7      3.80      43.4
2004                          74,236              49,227           39,054   29,010      2004        8.28      1192           39.6         34.0      3.80      45.6
Source: Clarkson Shipping Weekly, Datastream, Barclays Research




21 February 2013                                                                                                                                                 16
Barclays | Asia Energy in Focus



CHINA PRODUCTION AND APPARENT CONSUMPTION

Crude oil, kt                                              Natural gas, mn cubic metre                                Crude oil processing, kt
                         Crude Oil Apparent consumption                           Natural Gas Apparent consumption                    Crude Oil Processed Apparent consumption
                         Crude Oil Production                                     Natural Gas Production                              Crude Oil Processed Production
50,000                                                     15,000                                                     50,000
40,000                                                     12,000                                                     40,000
30,000                                                      9,000                                                     30,000
20,000                                                      6,000                                                     20,000
10,000                                                      3,000                                                     10,000
      0                                                            0                                                          0
      Jan-08 Oct-08 Jul-09 Apr-10 Jan-11 Oct-11 Jul-12             Jan-08 Oct-08 Jul-09 Apr-10 Jan-11 Oct-11 Jul-12            Jan-08 Oct-08 Jul-09 Apr-10 Jan-11 Oct-11 Jul-12
Gasoline, kt                                               Diesel, kt                                                 Naphtha, kt
                       Gasoline Apparent consumption                               Diesel Apparent consumption                                Naphtha Apparent consumption
                       Gasoline Production                                         Diesel Production                                          Naphtha Production
9,000                                                      17,500                                                     3,000

7,200                                                      14,000                                                     2,500
                                                                                                                      2,000
5,400                                                      10,500
                                                                                                                      1,500
3,600                                                       7,000
                                                                                                                      1,000
1,800                                                       3,500                                                      500
    0                                                              0                                                     0
     Jan-08 Oct-08 Jul-09 Apr-10 Jan-11 Oct-11 Jul-12              Jan-08 Oct-08 Jul-09 Apr-10 Jan-11 Oct-11 Jul-12      Jan-08 Oct-08 Jul-09 Apr-10 Jan-11 Oct-11 Jul-12
Nitrogen fertilizer (converted to 100% N), kt              Phosphate fertilizer (converted to 100% P), kt             Potassium fertilizer (converted to 100% K), kt
                      Nitrogen 100% Apparent consumption                     Phosphate 100% Apparent consumption                         Potassium 100% Apparent consumption
                      Nitrogen 100% Production                               Phosphate 100% Production                                   Potassium 100% Production
5,000                                                      2,500                                                      1,250

4,000                                                      2,000                                                      1,000

3,000                                                      1,500                                                       750

2,000                                                      1,000                                                       500

1,000                                                       500                                                        250

    0                                                          0                                                         0
     Jan-08 Oct-08 Jul-09 Apr-10 Jan-11 Oct-11 Jul-12           Jan-08 Oct-08 Jul-09 Apr-10 Jan-11 Oct-11 Jul-12         Jan-08 Oct-08 Jul-09 Apr-10 Jan-11 Oct-11 Jul-12
Source: CEIC, Barclays Research




21 February 2013                                                                                                                                                                  17
Barclays | Asia Energy in Focus



CRACK SPREADS
Singapore Gasoline Dubai crack spread, $/bl                                       Singapore Gasoil Dubai crack spread, $/bl                                   Singapore Jet Kerosene Dubai crack spread, $/bl
 32                                                                               50                                                                          50

 24                                                                               40                                                                          40

 16                                                                               30                                                                          30

  8                                                                               20                                                                          20

  0                                                                               10                                                                          10

 -8                                                                                0                                                                           0
          1   5     9      13    17      21    25 29 33 37      41 45    49 53          1    5     9      13    17   21    25 29 33 37      41 45    49 53          1    5     9      13    17   21   25 29 33 37       41 45    49 53
      Week                                      10 Year Min     2012       2013     Week                                    10 Year Min     2012       2013     Week                                   10 Year Min      2012       2013



Singapore HFO Dubai crack spread, $/bl                                            Brent Dubai spread, $/bl                                                    Gasoline HFO spread, $/bl
 10                                                                               16                                                                          50

      0                                                                           12                                                                          40

 -10                                                                               8                                                                          30

 -20                                                                               4                                                                          20

 -30                                                                               0                                                                          10

 -40                                                                               -4                                                                          0
          1   5      9     13     17     21    25 29 33 37      41 45    49 53          1    5     9      13    17   21    25 29 33 37      41 45    49 53          1    5     9      13    17   21   25 29 33 37       41 45    49 53
      Week                                      10 Year Min     2012       2013     Week                                    10 Year Min     2012       2013     Week                                   10 Year Min      2012       2013



Brent-Urals crude spread, $/bl                                                    Brent-WTI spread, $/bl                                                      Brent spot price $/bl

 9                                                                                 30                                                                         150
 7
 5                                                                                 20                                                                         120

 3
                                                                                   10                                                                          90
 1
 -1                                                                                 0                                                                          60
 -3
 -5                                                                               -10                                                                          30
  Feb-07          Feb-08        Feb-09        Feb-10   Feb-11   Feb-12   Feb-13     Feb-07       Feb-08        Feb-09     Feb-10   Feb-11   Feb-12   Feb-13     Feb-07       Feb-08        Feb-09     Feb-10   Feb-11   Feb-12   Feb-13


Source: Energy Information Administration (EIA), Commitments of Traders report - US CFTC, American Petroleum Institute (API), Bloomberg, Datastream, Barclays Research




21 February 2013                                                                                                                                                                                                                      18
Barclays | Asia Energy in Focus



PETROCHEMICAL SPREADS
Ethylene to naphtha spread, $/ton                                       Propylene to naphtha spread, $/ton                                      Butadiene to naphtha spread, $/ton
900                                                                     900                                                                     3,500

720                                                                     720                                                                     2,800

540                                                                     540                                                                     2,100

360                                                                     360                                                                     1,400

180                                                                     180                                                                       700

   0                                                                       0                                                                         0
       Jan    Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec                      Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec                           Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
           Month       10 Year Range        2012     2013                       Month       10 Year Range        2012     2013                           Month       10 Year Range         2012     2013


Paraxylene to naphtha spread, $/ton                                     Polyethylene to naphtha spread, $/ton                                   MEG to ethylene spread, $/bl
1,000                                                                    720                                                                    1,000

  800                                                                    540                                                                      760

  600                                                                    360                                                                      520

  400                                                                    180                                                                      280

  200                                                                       0                                                                       40

       0                                                                -180                                                                     -200
           Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec                      Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec                          Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
           Month       10 Year Range         2012     2013                       Month       10 Year Range        2012     2013                          Month       10 Year Range         2012     2013


Polypropylene to propylene spread, $/ton                                Polyester to PTA MEG spread, $/ton                                      Acrylonitrile to propylene spread, $/ton
 500                                                                    550                                                                     2,500

 380                                                                    440                                                                     2,000

 260                                                                    330                                                                     1,500

 140                                                                    220                                                                     1,000

  20                                                                    110                                                                       500

-100                                                                       0                                                                         0
       Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec                         Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec                           Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
        Month       10 Year Range        2012     2013                          Month       10 Year Range        2012     2013                           Month       10 Year Range         2012     2013
Source: Energy Information Administration (EIA), Commitments of Traders report - US CFTC, American Petroleum Institute (API), Bloomberg, Datastream, Barclays Research




21 February 2013                                                                                                                                                                                       19
Barclays | Asia Energy in Focus



OIL SERVICES/RIG-BUILDERS
Worldwide jackup utilisation                                             Worldwide semisubmersible utilisation                                     Worldwide drillship utilisation
95%                                                                      100%                                                                      100%
90%
85%                                                                       95%                                                                       95%

80%
                                                                          90%                                                                       90%
75%
70%                                                                       85%                                                                       85%
65%
60%                                                                       80%                                                                       80%
  Jan-08      Dec-08      Nov-09    Oct-10     Sep-11      Aug-12           Jan-08       Dec-08    Nov-09    Oct-10      Sep-11         Aug-12        Jan-08          Dec-08    Nov-09    Oct-10       Sep-11      Aug-12


Regional jackup dayrates                                                 US Gulf of Mexico. semisubmersible dayrates                               North Sea semisubmersible dayrates
250   US$000/day                                        Asia Pacific     700    US$000/day                            Deepwater (5,000-7,499ft)    600       US$000/day
                                                                                                                                                                                              Harsh standard       Harsh high spec
                                                        Gulf of Mexico                                                Ultra Deepwater (>7,500ft)
                                                        North Sea        600                                                                       500
200                                                     West Africa
                                                                         500
                                                                                                                                                   400
150                                                                      400
                                                                                                                                                   300
100                                                                      300
                                                                                                                                                   200
                                                                         200
 50                                                                                                                                                100
                                                                         100
  0                                                                           0                                                                      0
  Jan-08 Oct-08        Jul-09   Apr-10 Jan-11 Oct-11         Jul-12           Jan-08 Oct-08     Jul-09   Apr-10 Jan-11 Oct-11             Jul-12     Jan-08        Oct-08   Jul-09   Apr-10   Jan-11      Oct-11     Jul-12


Monthly jackups fixtures                                                 Monthly floater fixtures                                                  Monthly subsea tree awards
90                                                                       60                                                                        1,000 No. of awards                   Africa/Medit.          Asia/Pacific
80                                                                                                                                                                                       N. Sea                 N. America
                                                                         50                                                                         800                                  S. America
70
60                                                                       40
                                                                                                                                                    600
50
                                                                         30
40                                                                                                                                                  400
30                                                                       20
20                                                                                                                                                  200
                                                                         10
10
 0                                                                        0                                                                              0
  Jan-08     Dec-08      Nov-09    Oct-10      Sep-11      Aug-12          Jan-08      Dec-08     Nov-09    Oct-10      Sep-11          Aug-12               2000A 2002A 2004A 2006A 2008A 2010A 2012E 2014E 2016E
Source: ODS-Petrodata, Quest Offshore, Barclays Research




21 February 2013                                                                                                                                                                                                                     20
Barclays | Asia Energy in Focus



VALUATIONS – ASIA EX-JAPAN OIL & GAS (POSITIVE)
                                                                                                   Potential
                                                                         Price        Price      up/downside                P/E (x)                 EV/EBITDA (x)                 P/B (x)            Div yield (%)

Company                               Ticker              Rating        target     19-Feb-13        to PT (%)         2012E 2013E 2014E          2012E 2013E 2014E           2012E 2013E 2014E    2012E 2013E 2014E
China
Anton Oilfield Services               3337.HK        Overweight           4.4         4.22              4%              28.7    19.5    14.0        19.2       13.8   10.3     3.9   3.4    2.9   1.0%   1.5%   2.1%
CNOOC                                 0883.HK        Overweight           21         15.66             34%               8.4     8.1     7.8         4.2        4.1    3.9     1.8   1.5    1.3   2.0%   2.5%   2.5%
COSL                                  2883.HK        Underweight          13         16.46            -21%              13.2    12.1    11.8         9.0        8.4    8.1     1.8   1.5    1.3   1.5%   1.7%   1.7%
PetroChina                            0857.HK        Overweight           13         10.44             25%              12.3     9.3     8.4         5.8        4.5    4.1     1.1   1.0    1.0   3.7%   4.9%   5.4%
Sinopec                               0386.HK        Equal Weight          9         8.84               2%              11.1     8.4     7.6         5.2        4.6    4.4     1.2   1.0    1.0   3.0%   3.6%   3.9%
China Blue Chemical                   3983.HK        Overweight           7.5         5.51             36%               9.9     8.7     8.6         4.9        4.2    4.0     1.5   1.4    1.2   3.7%   4.3%   4.3%
Sinopec Shanghai Petrochem            0338.HK        Equal Weight         2.8         3.24            -14%               n.a.   30.0    16.9         n.a.      11.5    9.7     1.2   1.2    1.1   0.0%   1.3%   2.2%
Sinofert Holdings                     0297.HK        Overweight           2.3         1.99             16%              13.6    10.7     9.4        12.1        9.2    8.1     0.8   0.8    0.7   0.9%   1.1%   1.3%
Dongyue                               0189.HK        Overweight           4.9         5.15             -5%              14.4     9.2     7.6         6.2        4.7    3.8     1.7   1.5    1.2   0.7%   1.2%   1.4%
Arithmetic average                                                                                                      11.8    12.1     9.8         6.8        6.4    5.8     1.4   1.2    1.1   1.9%   2.5%   2.8%
Taiwan
Formosa Chemicals                     1326.TW        Underweight         64.7         77.1            -16%              62.2    23.3    18.7        29.3       21.0   17.4     1.9   1.8    1.7   1.2%   3.2%   4.0%
Formosa Petrochemicals                6505.TW        Underweight          72          83.6            -14%             225.3    33.6    31.7        35.4       18.5   18.2     3.8   3.5    3.4   0.4%   2.4%   2.5%
Formosa Plastics                      1301.TW        Equal Weight        72.5         78.9             -8%              28.6    18.1    16.4        24.1       20.7   19.9     2.1   2.0    1.9   2.8%   4.4%   4.9%
Nan Ya Plastics                       1303.TW        Overweight           69          58.4             18%             150.5    20.9    18.7        34.7       21.9   20.9     1.8   1.7    1.6   0.5%   3.6%   4.0%
TSRC Corp                             2103.TW        Equal Weight        58.7         60.9             -4%              18.3    18.1    16.6         9.8       10.1    9.7     2.5   2.4    2.3   3.6%   3.6%   3.9%
Arithmetic average                                                                                                      97.0    22.8    20.4        26.7       18.4   17.2     2.4   2.3    2.2   1.7%   3.4%   3.9%
SE Asia
PTT E&P                               PTTE.BK        Equal Weight        190          161             18%               10.4     9.9     8.4         4.4        4.4    3.6     1.6   1.5    1.3   3.8%   4.0%   4.8%
Petronas Chemicals                    PCGB.KL        Overweight           7.4         6.17            20%               14.2    12.5    11.2         7.4        6.4    5.7     2.0   1.8    1.6   3.5%   4.0%   4.4%
Thai Oil                              TOP.BK         Equal Weight         75           73             3%                14.1    12.2    11.4         8.6        8.0    7.3     1.7   1.6    1.5   3.2%   3.7%   4.0%
Ezra Holdings                         EZRA.SI        Overweight           1.5         1.16            29%               13.2    12.9     8.7        14.0       12.4   10.1     0.8   0.9    0.8   0.0%   0.0%   0.0%
Keppel Corp                           KPLM.SI        Equal Weight        13.5        11.65            16%               10.7    12.2    11.7        10.3       11.2   10.6     2.4   2.2    1.9   4.7%   4.1%   4.3%
Sembcorp Marine                       SCMN.SI        Overweight           6.2         4.73            31%               18.0    13.4    10.5        13.1        9.1    6.9     3.8   3.5    3.1   3.8%   4.9%   5.7%
Arithmetic average                                                                                                      13.4    12.2    10.3         9.6        8.6    7.4     2.1   1.9    1.7   3.2%   3.4%   3.9%
India
Bharat Petroleum                      BPCL.NS        Overweight           510        381.65           34%               35.6 10.1       11.9         6.5        4.9    5.6     1.7   1.6    1.5   1.5%   3.4%   2.9%
Cairn India                           CAIL.NS        Overweight           430        310.35           39%                7.4   5.0       5.3         4.7        3.1    2.7     1.2   1.2    1.0   0.0%   3.2%   3.2%
Gail India                            GAIL.NS        Overweight           430         334.5           29%               11.6   9.9       9.0         7.1        6.7    6.6     2.0   1.7    1.5   2.6%   3.0%   3.6%
Hindustan Petroleum                   HPCL.NS        Underweight          330        311.55            6%               11.6 113.3      13.5         5.0        8.0    7.2     0.8   0.8    0.8   2.7%   0.0%   2.2%
Indian Oil Corp                       IOC.NS         Underweight          350         314.2           11%               18.1 13.8        7.7         5.7        7.2    6.0     1.3   1.2    1.1   1.6%   1.6%   3.8%
ONGC                                  ONGC.NS        Equal Weight         350        330.25           6%                10.0 10.2        8.6         4.2        4.8    3.8     2.1   1.8    1.6   3.0%   3.0%   3.0%
Oil India                             OILI.NS        Overweight           675         549.7           23%                9.6   8.7       7.2         3.3        3.4    2.7     1.9   1.6    1.4   3.5%   3.8%   3.8%
Petronet LNG                          PLNG.NS        Equal Weight         175         151.3           16%               10.7   9.3      13.1         7.5        6.8    7.4     3.2   2.6    2.3   1.7%   2.3%   2.3%
Reliance Industries                   RELI.NS        Equal Weight         870         848.8            2%               13.9 13.2       13.3         8.4        8.9    9.2     1.6   1.5    1.4   1.0%   1.1%   1.1%
Arithmetic average                                                                                                      12.5 11.0       10.0         5.8        6.2    5.8     2.0   1.7    1.6   2.1%   2.4%   2.8%

Notes: Prices as of the market close on 19 February 2013. Prices and price targets in local currency. Industry view for Asia ex-Japan Oil & Gas is Positive.
For full disclosures on each covered company, including details of our company-specific valuation methodology and risks, please refer to http://publicresearch.barcap.com.
Source: Bloomberg, Barclays Research estimates




21 February 2013                                                                                                                                                                                                     21
Barclays | Asia Energy in Focus



RECENT ASIA EX-JAPAN ENERGY EQUITY RESEARCH PUBLICATIONS

Please click on title to view     Cairn India: In value zone now despite the onset of natural decline in Mangala in FY14 – 19
report on Barclays Live           February 2013
                                  Sembcorp Marine: Recognition of drillship margins and downtime from jackup delays – 18
                                  February 2013
                                  Gail India: A headline beat, but mixed internals; retain OW with a lower PT of Rs430 – 15
                                  February 2013
                                  India Oil & Gas: Duty calls: budget expectations – 14 February 2013
                                  Bharat Petroleum Corp., Ltd.: A strong 3QFY13 and on track for a record FY13; among our
                                  top picks – 14 February 2013
                                  Indian Oil Corp., Ltd.: Reasonable 3QFY13; prefer IOCL to HPCL but BPCL remains top pick –
                                  14 February 2013
                                  Oil India: Conference call highlights; maintain OW – 13 February 2013
                                  Oil India: A steady 3Q; still cheaper than ONGC – 13 February 2013
                                  Hindustan Petroleum Corp., Ltd.: On a knife's edge – 13 February 2013
                                  Global Oil & Gas Weekly: Production shortfalls drive oil prices higher – 12 February 2013
                                  Oil & Natural Gas Corp., Ltd.: A modest beat; maintain EW – 12 February 2013
                                  Cairn India: Trouble with the curve? – 11 February 2013
                                  Bharat Petroleum Corp., Ltd.: Steady progress on upstream ventures – 8 February 2013
                                  Anton Oilfield Services (3337 HK; OW; PT HK$4.40): Bazhou divestment a small positive – 7
                                  February 2013
                                  PetroChina (OW, PT HK$13): Accelerating natural gas reforms; preferred over Sinopec Corp
                                  – 7 February 2013
                                  Asia Energy in Focus: Higher costs promoting reforms in India – 7 February 2013
                                  Anton Oilfield Services (OW; PT HK$4.40): More shale gas tenders; positive for drilling capex
                                  – 6 February 2013
                                  India Oil & Gas: Of mice and men – 6 February 2013
                                  Sinopec: Restructuring likely to take time – 5 February 2013
                                  Sinopec (386 HK, EW, PT HK$9.5): Restructuring likely to take time – 5 February 2013
                                  Sinopec (386 HK, EW, PT HK$9.5): Funding for upstream asset injection or downstream
                                  upgrading? – 5 February 2013
                                  Nan Ya Plastics: Turnaround at core and non-core units – 5 February 2013
                                  Oil & Natural Gas Corp., Ltd.: Upping the M&A ante; ACG near closure – 1 February 2013
                                  Results snapshot: PTTEP (EW; PT THB 190): Disappointing on higher costs – 1 February
                                  2013
                                  China Steel Chemical: Niche chemical player with sustainable profitability – 1 February 2013
                                  India Oil & Gas: Higher gas prices: the real McCoy? – 1 February 2013
                                  COSL (2883.HK; UW; PT: HK$13.0): Still China focused despite overseas emphasis – 31
                                  January 2013
                                  Asia Energy in Focus: Asia to benefit from offshore spending – 31 January 2013
                                  India Oil & Gas: Curb your enthusiasm – 30 January 2013
                                  CNOOC: Higher capex, lower growth ... again – 30 January 2013
                                  Asia ex-Japan oil services & rig-builders: Limited read across from Saipem woes – 30 January
                                  2013
                                  Dongyue Group (189 HK; OW; PT HK$4.9): Positive move downstream despite fragile
                                  fluorochemical recovery – 28 January 2013
                                  Results snapshot: Keppel Corp (KEP SP; EW; PT: S$13.50) - dividend surprise, outlook robust
                                  – 24 January 2013
                                  Anton Oilfield Services: Still a good fracking opportunity – 24 January 2013
                                  Asia Energy in Focus: Acceleration of natural gas reforms in China – 24 January 2013




21 February 2013                                                                                                             22
Barclays | Asia Energy in Focus


                                  Anton Oil (3337 HK; OW; PT HK$3.50): Strategy reiterated; operationally in line – 23 January
                                  2013
                                  Anton Oil (3337 HK; OW; PT HK$3.50): Shale gas opportunity increasingly positive – 22
                                  January 2013
                                  Global Oil & Gas Weekly: Limited growth in supply from non-US shale – 22 January 2013
                                  PETRONAS Chemicals (PCHEM, OW, PT MYR 7.40): Exerting strategic advantage – 22
                                  January 2013
                                  PTT Exploration & Production: Higher capex ... likely to rise again – 22 January 2013
                                  Singapore Rig-builders: Positive outlook on semi-submersibles – 21 January 2013
                                  Keppel Corp.: Offshore strength, property & infrastructure may surprise – 21 January 2013
                                  Asia Energy in Focus: China oil demand recovery well underway – 17 January 2013
                                  Sinopec Shanghai Petrochemical (338 HK, EW, PT HK$2.80): Positive outlook; benefits from
                                  upgrading – 16 January 2013
                                  Sinofert (297 HK, OW, PT HK$2.30): Confident on delivery; resources still a focus – 16
                                  January 2013
                                  China Blue Chemical (3983 HK, OW, PT HK$7.50): Positive on methanol and urea – 16
                                  January 2013
                                  Global Oil & Gas Weekly: Opportunity for Brazilian incumbents – 15 January 2013
                                  EZRA Holdings: Margin improvement a key focus – 15 January 2013
                                  PETRONAS Chemicals (PCHEM MK; OW; PT MYR 7.40): Strategically advantaged;
                                  operationally improving – 13 January 2013
                                  CNOOC (883 HK, OW, PT HK$21): Confident on medium-term growth; some near-term
                                  challenges – 7 January 2013
                                  India Oil & Gas: A new year miracle? – 6 January 2013
                                  Cairn India: Exploration approvals in Rajasthan – 4 January 2013
                                  Oil & Natural Gas Corp., Ltd.: Poised for a rebound; maintain EW – 3 January 2013
                                  Gail India: At its cheapest in eight years; maintain OW – 3 January 2013
                                  Petronet LNG: Near-term headwinds; maintain EW – 2 January 2013
                                  Reliance Industries: Another tepid quarter; rising gas prices – 2 January 2013
                                  Cairn India: Our top pick in India Oil & Gas – 2 January 2013
                                  Bharat Petroleum Corp., Ltd.: Undervalued upstream; retain OW – 2 January 2013
                                  Asia ex-Japan Oil & Gas: Rangarajan Committee report submitted; US$8/mmbtu gas price?
                                  – 26 December 2012
                                  Global Oil & Gas Weekly: Finding value in 2013 – 18 December 2012
                                  Thai Oil: Value in integration, initiate at EW – 13 December 2012
                                  PETRONAS Chemicals: Strategically advantaged; initiate at OW – 13 December 2012
                                  Keppel Corp (KEPLM.SI; EW; PT: S$13.50): Contract win from Mexico's national oil company
                                  as momentum continues – 12 December 2012
                                  India Oil & Gas: Is a rollback on LPG caps coming? – 12 December 2012
                                  India Oil & Gas: Higher gas prices likely in India – 11 December 2012
                                  Global Oil & Gas Weekly: Spending on the rise – 11 December 2012
                                  CNOOC (883 HK; OW; PT HK$21): Canadian government approval - a key step toward
                                  Nexen – 9 December 2012
                                  Sembcorp Marine (SMM SP; OW; PT S$6.50): Positive outlook; further order momentum in
                                  2013 – 6 December 2012
                                  Asia Ex-Japan Oil & Gas (Positive): Barclays 2013 Global E&P spending survey: Another year
                                  of record spending – 4 December 2012
                                  Global Oil & Gas Weekly: $100/bl: the new norm for Brent – 6 December 2012
                                  India Oil & Gas: Initiating coverage: top pick Cairn India – 3 December 2012
                                  Sembcorp Marine (SMM SP; OW; PT S$6.50): Order momentum picking up – 28 November
                                  2012
                                  Global Oil & Gas Weekly: Multiple winners from Chinese shale – 27 November 2012
                                  Anton Oil (3337 HK; OW; PT HK$3.5): Another fracking tender – 26 November 2012


21 February 2013                                                                                                            23
Barclays | Asia Energy in Focus


                                  Anton Oilfield Services: A fracking opportunity; initiate at OW – 26 November 2012
                                  Asia Energy in Focus: Impacts from Chinese coal-to-petrochemicals expansion on Asia – 22
                                  November 2012
                                  Keppel Corp (EW; PT: S$13.50): National oil company orders coming through – 21
                                  November 2012
                                  Asia ex-Japan Oil & Gas (Positive): Asian LNG pricing de-linking with oil? – 20 November
                                  2012
                                  Global Oil & Gas Weekly: Surprising convergence in LNG – 20 November 2012
                                  Sinofert Holdings Ltd.: Phosphate resource to improve returns – 19 November 2012
                                  Ezra Holdings (EZRA SP, OW, PT: S$1.65): Value emerges from recent weakness – 18
                                  November 2012
                                  China refining: Slight profitability erosion – 15 November 2012
                                  Asia Energy in Focus: Floating LNG - a new frontier for Asia – 14 November 2012
                                  Global Oil & Gas Weekly: Unravelling Russian risk perceptions – 13 November 2012
                                  Honam Petrochemical: Negatives priced in but positives not yet – 12 November 2012
                                  Ezra (EZRA SP, OW, PT: S$1.65): Subsea orders continue, growth on track – 7 November
                                  2012
                                  Asia Energy In Focus: Impact of oil price differentials on China Oils' profitability – 7
                                  November 2012
                                  China Blue Chemical (3983 HK; OW; PT HK$7.5): Urea exports near two-year highs; upside
                                  to guidance – 6 November 2012
                                  Global Oil & Gas Weekly: Refining margins fading fast – 6 November 2012
                                  Sembcorp Marine: Strong margins momentum; 'projects in the pipeline' – 5 November 2012
                                  PTTEP (PTTEP TB, EW, PT THB220): Long-term growth target 'a stretch' – 2 November 2012
                                  Formosa Petrochemical: Watch for investment write-down risk – 1 November 2012
                                  S-Oil Corporation: Better results and guidance – 1 November 2012
                                  Asia Energy in Focus: Slowdown in Chinese oil and chemicals demand over; recovery on
                                  track? – 1 November 2012
                                  Global Oil & Gas Weekly: Nigeria problems highlight supply risk – 30 October 2012
                                  Sinopec: Returning to refining profitability...just – 29 October 2012
                                  China Blue Chemical (3983 HK; OW; PT HK$7.5) - Positive read for urea/methanol from
                                  China XLX – 26 October 2012
                                  EZRA Holdings: Subsea turnaround underway; robust earnings outlook – 25 October 2012
                                  Sinofert (OW; PT HK$2.1) - Positive restructuring – 25 October 2012
                                  Asia ex-Japan Oil & Gas: Impacts of LNG pricing on China – 25 October 2012
                                  Global Oil & Gas Weekly: China oil demand: 'Worst of slowdown is behind us' – 23 October
                                  2012
                                  Energy: Canadian energy: PETRONAS denial raises questions about future M&A – 22
                                  October 2012
                                  Asia ex-Japan Oil & Gas (Positive): China Oil demand: 'Worst of slowdown is behind us' – 16
                                  October 2012
                                  Global Oil & Gas Weekly: Oil indexed gas prices to stay in Asia – 16 October 2012
                                  Asia Oil Services & Rig-Builders: Improving margins for Sembcorp Marine – 16 October
                                  2012
                                  Asia ex-Japan Oil & Gas: Focus on growth; stay upstream leveraged – 16 October 2012
                                  Taiwan Petrochemicals: Still challenged heading into 2013; initiate on 6 companies – 11
                                  October 2012
                                  China Blue Chem (OW; PT HK$7.50): Higher Chinese coal price positive for urea – 4 October
                                  2012
                                  CNOOC (883 HK, OW, PT HK$21): Confident over operational delivery – 25 September 2012
                                  COSL: Tightening global seismic market, but still capacity constrained – 24 September 2012
                                  Sembcorp Marine: Africa after Brazil? – 14 September 2012
                                  China shale gas: Combining technology and low cost leverage – 14 September 2012


21 February 2013                                                                                                           24
Barclays | Asia Energy in Focus


                                  China Refining: Getting closer to breakeven; demand recovery a concern – 10 September
                                  2012
                                  Global Oil & Gas Weekly: CEO Energy conference takeaways – 11 September 2012
                                  Barclays CEO Energy Conference feedback: US natural gas replacement for transport fuels -
                                  a model for China? – 6 September 2012
                                  Barclays CEO Energy Conference feedback: Positive read for CNOOC, less so for PTTEP – 6
                                  September 2012
                                  Barclays CEO Energy Conference feedback: Positive on Singapore rig builders – 4 September
                                  2012
                                  PTT Exploration & Production: Downgrade to Equal Weight – 31 August 2012
                                  Global Oil Benchmarks 2012 – 30 August 2012
                                  Asian Rigs and Shipbuilders: Korean yard capital raising reflects exposure to commodity
                                  shipping – 28 August 2012
                                  Global Oil & Gas Weekly: Singapore yards - quality and quantity – 21 August 2012
                                  Korea Refining and Chemicals: Honam offers best value for a chemicals upcycle; initiate on
                                  5 petrochemical companies – 14 August 2012




21 February 2013                                                                                                          25
Barclays | Asia Energy in Focus



ANALYST(S) CERTIFICATION(S)
I, Scott Darling, hereby certify (1) that the views expressed in this research report accurately reflect my personal views about any or all of the
subject securities or issuers referred to in this research report and (2) no part of my compensation was, is or will be directly or indirectly related to
the specific recommendations or views expressed in this research report.



IMPORTANT DISCLOSURES CONTINUED
Barclays Research is a part of the Corporate and Investment Banking division of Barclays Bank PLC and its affiliates (collectively and each
individually, "Barclays"). For current important disclosures regarding companies that are the subject of this research report, please send a written
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The analysts responsible for preparing this research report have received compensation based upon various factors including the firm's total
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Research analysts employed outside the US by affiliates of Barclays Capital Inc. are not registered/qualified as research analysts with FINRA.
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otherwise.
Materially Mentioned Stocks (Ticker, Date, Price)
Anton Oilfield Services (3337.HK, 20-Feb-2013, HKD 4.49), Overweight/Positive
Bharat Petroleum Corp., Ltd. (BPCL.NS, 19-Feb-2013, INR 381.65), Overweight/Positive
Cairn India (CAIL.NS, 19-Feb-2013, INR 310.35), Overweight/Positive
China Bluechemical Ltd. (3983.HK, 20-Feb-2013, HKD 5.29), Overweight/Positive
China Oilfield Services (COSL) (2883.HK, 20-Feb-2013, HKD 16.78), Underweight/Positive
China Steel Chemical (1723.TW, 20-Feb-2013, TWD 145.00), Overweight/Positive
CNOOC (0883.HK, 20-Feb-2013, HKD 15.72), Overweight/Positive
Dongyue Group (0189.HK, 20-Feb-2013, HKD 5.18), Overweight/Positive
EZRA Holdings (EZRA.SI, 20-Feb-2013, SGD 1.16), Overweight/Positive
Formosa Chemicals (1326.TW, 20-Feb-2013, TWD 77.80), Underweight/Positive
Formosa Petrochemical (6505.TW, 20-Feb-2013, TWD 84.40), Underweight/Positive
Formosa Plastics (1301.TW, 20-Feb-2013, TWD 78.60), Equal Weight/Positive
Gail India (GAIL.NS, 19-Feb-2013, INR 334.50), Overweight/Positive
Hindustan Petroleum Corp., Ltd. (HPCL.NS, 19-Feb-2013, INR 311.55), Underweight/Positive
Indian Oil Corp., Ltd. (IOC.NS, 19-Feb-2013, INR 314.20), Underweight/Positive
Keppel Corp. (KPLM.SI, 20-Feb-2013, SGD 11.71), Equal Weight/Positive
Nan Ya Plastics (1303.TW, 20-Feb-2013, TWD 60.00), Overweight/Positive
Oil & Natural Gas Corp., Ltd. (ONGC.NS, 19-Feb-2013, INR 330.25), Equal Weight/Positive
Oil India (OILI.NS, 19-Feb-2013, INR 549.70), Overweight/Positive
PetroChina (0857.HK, 20-Feb-2013, HKD 10.74), Overweight/Positive
PETRONAS Chemicals (PCGB.KL, 20-Feb-2013, MYR 6.21), Overweight/Positive
Petronet LNG (PLNG.NS, 19-Feb-2013, INR 151.30), Equal Weight/Positive
PTT Exploration & Production (PTTE.BK, 20-Feb-2013, THB 160.50), Equal Weight/Positive
Reliance Industries (RELI.NS, 19-Feb-2013, INR 848.80), Equal Weight/Positive
Sembcorp Marine (SCMN.SI, 20-Feb-2013, SGD 4.72), Overweight/Positive
Sinofert Holdings Ltd. (0297.HK, 20-Feb-2013, HKD 2.01), Overweight/Positive
Sinopec (0386.HK, 20-Feb-2013, HKD 8.88), Equal Weight/Positive



21 February 2013                                                                                                                                      26
Barclays | Asia Energy in Focus



IMPORTANT DISCLOSURES CONTINUED
Sinopec Shanghai Petrochemical Co., Ltd. (0338.HK, 20-Feb-2013, HKD 3.25), Equal Weight/Positive
Thai Oil (TOP.BK, 20-Feb-2013, THB 73.75), Equal Weight/Positive
TSRC Corp. (2103.TW, 20-Feb-2013, TWD 61.40), Equal Weight/Positive
Other Material Conflicts
0883.HK: The Corporate and Investment Banking division of Barclays is providing investment banking services to BG Group PLC in connection
with the sale of certain interests in Queensland Curtis LNG to China National Offshore Oil Corporation (CNOOC). The effects of this transaction
has not been incorporated into the analysts views due to Barclays role in this potential transaction.
Guide to the Barclays Fundamental Equity Research Rating System:
Our coverage analysts use a relative rating system in which they rate stocks as Overweight, Equal Weight or Underweight (see definitions below)
relative to other companies covered by the analyst or a team of analysts that are deemed to be in the same industry (the "industry coverage
universe").
In addition to the stock rating, we provide industry views which rate the outlook for the industry coverage universe as Positive, Neutral or
Negative (see definitions below). A rating system using terms such as buy, hold and sell is not the equivalent of our rating system. Investors
should carefully read the entire research report including the definitions of all ratings and not infer its contents from ratings alone.
Stock Rating
Overweight - The stock is expected to outperform the unweighted expected total return of the industry coverage universe over a 12-month
investment horizon.
Equal Weight - The stock is expected to perform in line with the unweighted expected total return of the industry coverage universe over a 12-
month investment horizon.
Underweight - The stock is expected to underperform the unweighted expected total return of the industry coverage universe over a 12-month
investment horizon.
Rating Suspended - The rating and target price have been suspended temporarily due to market events that made coverage impracticable or to
comply with applicable regulations and/or firm policies in certain circumstances including where the Corporate and Investment Banking Division
of Barclays is acting in an advisory capacity in a merger or strategic transaction involving the company.
Industry View
Positive - industry coverage universe fundamentals/valuations are improving.
Neutral - industry coverage universe fundamentals/valuations are steady, neither improving nor deteriorating.
Negative - industry coverage universe fundamentals/valuations are deteriorating.
Below is the list of companies that constitute the "industry coverage universe":

Asia ex-Japan Oil & Gas
Anton Oilfield Services (3337.HK)                         Bharat Petroleum Corp., Ltd. (BPCL.NS)        Cairn India (CAIL.NS)
China Bluechemical Ltd. (3983.HK)                         China Oilfield Services (COSL) (2883.HK)      China Steel Chemical (1723.TW)
CNOOC (0883.HK)                                           Dongyue Group (0189.HK)                       EZRA Holdings (EZRA.SI)
Formosa Chemicals (1326.TW)                               Formosa Petrochemical (6505.TW)               Formosa Plastics (1301.TW)
Gail India (GAIL.NS)                                      Hindustan Petroleum Corp., Ltd. (HPCL.NS)     Indian Oil Corp., Ltd. (IOC.NS)
Keppel Corp. (KPLM.SI)                                    Nan Ya Plastics (1303.TW)                     Oil & Natural Gas Corp., Ltd. (ONGC.NS)
Oil India (OILI.NS)                                       PetroChina (0857.HK)                          PETRONAS Chemicals (PCGB.KL)
Petronet LNG (PLNG.NS)                                    PTT Exploration & Production (PTTE.BK)        Reliance Industries (RELI.NS)
Sembcorp Marine (SCMN.SI)                                 Sinofert Holdings Ltd. (0297.HK)              Sinopec (0386.HK)
Sinopec Shanghai Petrochemical Co., Ltd. (0338.HK)        Thai Oil (TOP.BK)                             TSRC Corp. (2103.TW)


Distribution of Ratings:
Barclays Equity Research has 2501 companies under coverage.
43% have been assigned an Overweight rating which, for purposes of mandatory regulatory disclosures, is classified as a Buy rating; 53% of
companies with this rating are investment banking clients of the Firm.
41% have been assigned an Equal Weight rating which, for purposes of mandatory regulatory disclosures, is classified as a Hold rating; 47% of
companies with this rating are investment banking clients of the Firm.
14% have been assigned an Underweight rating which, for purposes of mandatory regulatory disclosures, is classified as a Sell rating; 43% of
companies with this rating are investment banking clients of the Firm.
Guide to the Barclays Research Price Target:
Each analyst has a single price target on the stocks that they cover. The price target represents that analyst's expectation of where the stock will
trade in the next 12 months. Upside/downside scenarios, where provided, represent potential upside/potential downside to each analyst's price


21 February 2013                                                                                                                                 27
Barclays | Asia Energy in Focus



IMPORTANT DISCLOSURES CONTINUED
target over the same 12-month period.
Barclays offices involved in the production of equity research:
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Barclays Bank PLC (Barclays, London)
New York
Barclays Capital Inc. (BCI, New York)
Tokyo
Barclays Securities Japan Limited (BSJL, Tokyo)
São Paulo
Banco Barclays S.A. (BBSA, São Paulo)
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Barclays Bank PLC, Hong Kong branch (Barclays Bank, Hong Kong)
Toronto
Barclays Capital Canada Inc. (BCCI, Toronto)
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Absa Capital, a division of Absa Bank Limited (Absa Capital, Johannesburg)
Mexico City
Barclays Bank Mexico, S.A. (BBMX, Mexico City)
Taiwan
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Seoul
Barclays Capital Securities Limited (BCSL, Seoul)
Mumbai
Barclays Securities (India) Private Limited (BSIPL, Mumbai)
Singapore
Barclays Bank PLC, Singapore branch (Barclays Bank, Singapore)




21 February 2013                                                             28
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