Expect the unexpected - Mirae asset

Asia-Pacific Petro Patrol 

Oil & Gas/Energy Update 

Gordon Kwan, Head of Regional Energy, 852 3653 8646 gordon.kwan@miraeasset.hk 

Jae-Chul Park, Chemical/Refinery Analyst, 822 3774 6896 parkjc@miraeasset.com 

Ricky Ng, Gas utilities Analyst, 852 3653 8634 ricky.ng@miraeasset.hk 

Nipun Sharma, India Energy Analyst, 852 3653 8624 nipun.sharma@miraeasset.hk 

Expect the unexpected 

» Latest sector insights 

Contrary to market perceptions, Saudi Arabia has increased oil production 

from 8.62m bopd in December to 9.38m bopd in February, well before the 

eruption of the Libya civil war. Theoretically speaking Saudi Arabia can 

produce up to 12.5m bopd, allowing the OPEC kingpin to replace the 1.5m 

bopd loss of Libyan crude exports, with plenty to spare. But in reality and 

actual operation, accelerating production from oil fields could potentially 

damage the subsurface oil flow dynamics permanently, leading to lower 

recoverable reserves in the long term. This translates to higher oil prices 

and more opportunities for oil field services providers with the right 

technologies. US is liaising with the International Energy Agency to 

prepare for the release of strategic stocks if needed. However, there are 

problems with releasing oil from the strategic reserves when prices are 

high, especially with benchmark US crude futures in contango. The 

government runs the risk of paying more when it refills the reserve at a 

later date. There is no silver bullet and the MENA crisis could be a big 

overhang on the equity markets for quite some time. The energy sector is 

a compelling buy even without the MENA crisis because of attractive 

valuation and good earnings visibility amidst synchronized global 

economic recovery. The MENA crisis now makes the energy sector offers 

a safe haven BUY story, with most stocks reflecting long term USD80/bbl 

Brent crude price. We expect oil prices to stabilize well above USD100/bbl 

once the MENA tensions abate. This will rerate the global energy/oil field 

services sector. CNOOC, COSL, Cairn India, and S-Oil are top picks in 

Asia. 

News and Comment 

See the last page of this report for important disclosures 

OVERWEIGHT 

11 March 2011 

Company Rec Price Target price 

China 

PetroChina (857) BUY HKD10.94 HKD12.0 

Sinopec (386) BUY HKD7.95 HKD11.0 

CNOOC (883) BUY HKD18.08 HKD23.0 

COSL (2883) BUY HKD16.02 HKD23.0 

Korea 

Hanhwa Chem (009830) BUY KRW38,500 KRW47,000 

S-Oil (010950) BUY KRW126,000 KRW145,000 

SK Innovation (096770) BUY KRW191,500 KRW230,000 

LG Chem (051910) BUY KRW401,000 KRW550,000 

Kogas (036460) BUY KRW35,400 KRW55,000 

India 

ONGC BUY INR276.05 INR350 

Oil India (OINL) BUY INR1,254.3 INR1,550 

Cairn India (CAIR) BUY INR343.5 INR420 

Note: Prices are as of 3 Mar. 2011 

Source: Bloomberg, Mirae Research estimates 

1

Gordon Kwan, Head of Regional Energy, +852 3653 8646, gordon.kwan@miraeasset.hk 

Jae-Chul Park, Chemical/Refinery Analyst, +822 3774 6896 parkjc@miraeasset.com Asia-Pacific 11 March 2011 

Ricky Ng, Gas utilities Analyst, + 852 3653 8634 ricky.ng@miraeasset.hk 

Nipun Sharma, India Energy Analyst, +852 3653 8624 nipun.sharma@miraeasset.hk 

Petro Patrol 

Company News flow Analyst comments 

COSL 

2883 HK, BUY 

TP: HKD23.0 

ExxonMobil to spend 

USD100m a day to 

drill for oil and gas 

China Guangdong 

Nuclear Power bid 

for overseas 

uranium reserves 

While ExxonMobil's biggest contracts Halliburton and Schlumberger will be the most 

prominent beneficiaries; the news is generally bullish for the global oil field services sector. 

COSL (2883 HK - BUY) and Anton Oil (3337 HK) could be potential beneficiaries in Asia 

following similar announcements by their key customers. The step up in capital spending is 

almost entirely due to increased deployments toward unconventional projects. ExxonMobil 

has budgeted USD34bn for capital projects this year, up 5.6% YoY, and as much as 

USD37bn annually through 2015 according to CEO Rex Tillerson. ExxonMobil expects to 

increase oil/gas production by 4% this year. ExxonMobil is spending more to expand 

drilling in areas previously deemed as impenetrable and now has 50 rigs drilling in fields 

considered unconventional prospects because of the intensive techniques required to 

harvest the oil/gas. 

Together with China's latest Five Year Plan call for more nuclear reactors to be built, the 

news is bullish for uranium prices in the long term. China Guangdong Nuclear Power Group 

is the second-largest reactor builder in China. It has made this week a USD1.2bn bid for 

Kalahari Minerals because the Chinese must seek more uranium to meet the atomic 

generation goals in the long term. The proposed acquisition would give the state-owned 

company access to Namibia's Husab uranium mine, the world's fifth biggest. China may 

raise its 2020 target for atomic power generation to 86 gigawatts, with annual investment 

of Rmb70bn, vs. current capacity of 11.7bn according to the National Energy 

Administration. 

2





Petro Patrol 

T A B L E O F C O N T E N T S 

News and Comment 1 

Petroleum margins by product 4 

AP peer valuation 5 

AP peer valuation 6 

U.S. petroleum inventory overview 7 

U.S. petroleum inventory overview 8 

Commodity futures trading 9 

Prices by major product 10 

Margins by major product 11 



Korea import/export trends 14 

China import/export trends 15 

China petrochemical production statistics 16 

Performance 17 




Performance – Pair Trade Monitor 21 


3





Petro Patrol 

Petroleum margins by product 

Figure 1. Singapore refining margins (long-term) Figure 2. Weekly and quarterly complex margin trend 

(USD/bbl) 

70 

60 

50 

40 

30 

20 

10 

0 

(10) 

Singapore crack margin 

Singapore complex margin 

Singapore Simple margin 

1995 1997 1999 2001 2003 2005 2007 2009 2011 

(USD/bbl) 

Source: Mirae Asset Research, Datastream Source: Mirae Asset Research, Datastream 

12 

10 

8 

6 

4 

2 

0 

7.3 

3.9 

4.7 

Weekly Singapore C omplex margin 

Q uarterly av erage 

4.5 

7.9 

7.5 

8.6 

9.5 

10.4 

1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 3Q 10 4Q 10 1Q 11E 

Figure 3. Gasoline - Dubai spread Figure 4. Diesel - Dubai spread 

(USD/bbl) Gasoline-Dubai Spread 

35 

30 

25 

20 

15 

10 

5 

0 

(5) 

2006 2007 2008 2009 2010 2011 

(USD/bbl) Diesel-Dubai Spread 


50 

45 

40 

35 

30 

25 

20 

15 

10 

5 

0 

2006 2007 2008 2009 2010 2011 

Figure 5. Bunker-C - Dubai spread Figure 6. Naphtha - Dubai spread 

(USD/bbl) Bunker-C -Dubai Spread 

0 

(5) 

(10) 

(15) 

(20) 

(25) 

(30) 

(35) 

(40) 

2006 2007 2008 2009 2010 2011 

(USD/bbl) Naphtha-Dubai Spread 


20 

15 

10 

5 

0 

(5) 

(10) 

(15) 

(20) 

(25) 

(30) 

2006 2007 2008 2009 2010 2011 

4

AP peer valuation 

Price Market cap Year end P/E P/B ROE Div. Yield EV/T12 EBITDA 

(Local) (US$bn) FY1 FY0 FY1 FY2 FY0 FY1 FY2 FY0 FY1 FY2 FY0 FY1 FY2 FY0 FY1 FY2 

Oil Majors 

Exxon Mobil 84.38 420.1 12/31/2011 14.1 11.3 10.2 2.8 2.6 1.9 22.0 24.7 24.2 2.1 2.2 2.3 6.4 5.2 4.9 

RD Shell 2,152.50 216.9 12/31/2011 11.3 9.0 7.8 1.5 1.3 1.2 13.2 15.0 16.2 4.8 4.9 5.1 5.2 4.6 4.1 

BP 483.40 147.0 12/31/2011 6.9 7.1 6.7 1.5 1.3 1.2 21.7 19.9 18.3 1.0 3.8 4.1 4.3 4.0 3.8 

Chevron 102.14 205.0 12/31/2011 11.0 9.2 8.7 1.9 1.6 1.4 18.5 20.0 18.7 2.8 2.9 3.1 4.5 3.9 3.8 

Total 60.11 141.2 12/31/2011 9.5 8.5 8.2 1.8 1.6 - 18.5 18.7 - 5.2 5.4 5.7 - - - 

ConocoPhillips 78.04 111.6 12/31/2011 13.2 11.3 9.9 1.6 1.5 1.4 13.4 14.2 16.2 2.7 3.2 3.4 4.4 4.2 3.9 

Repsol 23.95 40.4 12/31/2011 13.9 11.0 9.4 1.3 1.2 1.1 10.5 11.0 12.5 4.1 4.7 5.1 5.3 4.7 4.3 

Chinese Oil Majors 

11.4 9.7 8.7 1.8 1.6 1.4 16.8 17.6 17.7 3.2 3.9 4.1 5.0 4.4 4.1 

PetroChina(*) 10.94 323.2 12/31/2010 16.1 12.5 10.9 2.1 1.8 1.7 13.3 15.1 15.9 2.7 3.6 4.1 9.7 7.7 6.7 

Sinopec(*) 7.95 108.8 12/31/2010 9.8 8.0 7.5 1.6 1.3 1.2 16.8 17.7 16.6 2.7 3.2 3.5 7.1 5.9 5.4 

CNOOC(*) 18.08 103.7 12/31/2010 23.4 13.0 11.0 4.0 3.3 2.7 17.6 27.1 26.8 2.0 2.8 3.4 13.0 6.9 5.8 

Emerging Market Players 

16.5 11.2 9.8 2.6 2.1 1.9 15.9 19.9 19.8 2.5 3.2 3.6 10.0 6.8 6.0 

Petrobras 28.55 244.3 12/31/2011 8.7 9.9 9.1 1.1 1.1 1.0 13.8 10.7 11.1 2.6 2.8 2.7 7.5 6.7 6.0 

Gazprom 7.59 179.7 12/31/2010 7.9 5.6 5.1 1.0 0.8 0.7 13.3 15.0 14.5 1.0 1.3 1.8 6.2 4.6 4.1 

Rosneft 9.49 100.5 12/31/2010 13.2 9.0 8.8 2.0 1.7 1.5 16.2 20.3 17.2 0.6 1.0 1.2 8.9 6.1 5.9 

Lukoil 71.80 61.1 12/31/2010 8.2 6.3 6.1 1.1 1.0 0.9 13.7 15.2 14.9 2.2 2.9 3.4 5.0 4.4 4.1 

Reliance industries 984.75 71.4 03/31/2011 18.6 15.3 13.4 2.1 2.1 1.8 14.2 13.8 14.8 0.8 0.8 1.0 12.0 9.7 8.7 

ONGC 276.05 52.3 03/31/2011 12.5 9.8 9.0 - 2.1 1.9 21.1 22.1 21.2 2.9 4.3 4.4 6.5 4.7 4.4 

Oil India(*) 1,254.30 6.7 03/31/2011 11.6 9.6 9.0 2.3 1.9 1.6 22.3 20.7 19.5 2.6 3.2 3.4 5.8 4.7 4.3 

PTT 346.00 32.5 12/31/2011 12.8 10.7 9.4 2.0 1.8 1.6 16.5 17.3 17.8 2.9 3.3 3.7 7.8 6.9 6.0 

PTT E&P 185.00 20.2 12/31/2011 15.6 13.4 11.1 3.6 3.1 2.6 25.0 24.0 24.3 2.5 3.0 3.5 6.4 5.4 4.5 

OGDC 156.10 7.9 06/30/2011 12.0 10.3 8.9 - - - - 38.2 35.8 - 5.4 6.4 - - - 

Pakistan Petroleum 213.00 3.0 06/30/2011 10.1 7.9 7.2 3.3 2.5 2.2 28.0 32.7 30.2 7.9 5.7 6.8 5.2 4.2 4.0 

E&P Players 

11.9 9.8 8.8 2.1 1.8 1.6 18.4 20.9 20.1 2.6 3.1 3.5 7.1 5.7 5.2 

Apache 120.67 46.2 12/31/2011 13.0 11.2 9.8 1.8 1.6 1.4 15.9 15.6 16.0 0.5 0.5 0.5 6.3 4.8 4.3 

Devon Energy 89.71 38.3 12/31/2011 15.1 15.0 11.5 2.1 1.8 1.6 17.5 12.7 16.0 0.7 0.8 0.7 6.7 6.7 5.5 

Eog resources 105.80 26.9 12/31/2011 98.1 31.0 17.3 2.6 2.3 2.0 2.1 6.8 12.0 0.6 0.6 0.6 10.3 7.0 5.1 

Chesapeake Energy 33.55 22.1 12/31/2011 11.5 12.2 10.9 1.5 1.4 1.3 13.9 12.6 12.5 0.9 0.9 0.9 7.5 7.1 6.1 

Suncor Energy 43.07 69.6 12/31/2011 28.1 17.2 14.0 1.9 1.6 1.4 6.9 10.4 11.7 0.9 1.0 1.0 10.4 7.9 6.5 

Encana 30.77 23.3 12/31/2011 34.0 46.1 27.1 1.4 1.4 1.4 6.7 2.6 6.3 2.7 2.5 2.6 5.5 6.9 5.9 

Husky Energy 28.85 26.5 12/31/2011 20.1 14.8 13.3 1.6 1.6 1.5 8.5 10.8 11.4 4.1 4.1 4.2 7.8 6.3 5.8 

Talisman Energy 22.96 24.3 12/31/2011 36.8 20.6 16.1 2.1 2.0 1.8 6.3 9.7 11.8 1.1 1.1 1.1 6.2 4.7 4.1 

Woodside Petroleum 42.20 33.2 12/31/2011 20.8 22.3 15.0 2.9 2.7 2.5 14.9 12.9 17.7 2.5 2.4 3.2 12.4 11.6 7.6 

Santos 14.45 12.7 12/31/2011 33.3 30.7 22.6 1.6 1.5 1.5 5.2 5.6 6.8 2.6 2.1 2.1 10.3 9.4 7.5 

Oil Search 6.56 8.6 12/31/2011 63.9 59.9 56.7 3.1 3.0 2.8 5.0 5.2 5.3 0.6 0.6 0.7 22.7 22.0 20.5 

Cairn India 343.50 14.5 03/31/2011 13.2 - - - - - 12.8 - - 0.1 0.7 1.2 - - - 

32.3 25.5 19.5 2.1 1.9 1.7 9.6 9.5 11.6 1.4 1.4 1.6 9.6 8.6 7.2 

5 


Jae-Chul Park, Chemical/Refinery Analyst, +822 3774 6896 parkjc@miraeasset.com 


Nipun Sharma, India Energy Analyst, +852 3653 8624 nipun.sharma@miraeasset.hk Asia-Pacific Petro Patrol 11 March 2011

AP peer valuation 

Price Market cap Year end P/E P/B ROE Div. Yield EV/T12 EBITDA 

(Local) (US$bn) FY1 FY0 FY1 FY2 FY0 FY1 FY2 FY0 FY1 FY2 FY0 FY1 FY2 FY0 FY1 FY2 

Refiners 

SK Energy(*) 191,500 15.8 12/31/2011 13.1 9.0 9.1 1.8 1.5 1.3 15.5 17.8 15.8 1.1 1.2 1.3 10.2 8.3 7.6 

S-Oil(*) 126,000 12.6 12/31/2011 23.4 11.5 10.3 3.3 2.7 2.3 15.2 25.2 23.5 1.5 3.1 3.8 17.0 8.4 7.5 

GS Holdings(*) 79,000 6.5 12/31/2011 9.5 8.6 8.1 1.5 1.3 1.1 17.2 16.8 15.1 1.5 1.9 2.0 9.3 8.2 7.8 

Indian Oil 304.45 16.4 03/31/2011 10.5 8.9 8.0 1.6 1.3 1.2 13.8 14.3 14.6 3.1 3.4 3.7 9.2 7.8 6.9 

PTT A&R 36.75 3.6 12/31/2011 20.9 11.5 9.5 1.7 1.6 1.4 8.8 14.3 15.1 2.4 3.6 4.4 12.9 8.5 7.5 

Valero 27.71 15.8 12/31/2011 17.5 10.1 8.5 1.0 1.0 0.9 5.8 9.0 9.8 0.7 0.7 0.9 6.5 4.6 4.4 

Sunoco 42.31 5.1 12/31/2011 25.1 22.3 15.9 1.8 1.6 1.5 8.5 6.1 9.0 1.4 1.4 1.6 7.3 7.3 6.3 

Tesoro 23.74 3.4 12/31/2011 - 11.4 9.4 1.1 1.0 0.9 -0.5 8.0 9.3 0.0 0.5 0.6 9.0 4.5 4.2 

Petroplus 14.42 1.5 12/31/2011 - 9.7 6.0 0.7 0.7 0.6 -8.7 4.3 11.5 0.3 0.7 1.6 7.0 4.4 3.9 

Petrochemicals-KR 

17.1 11.5 9.4 1.6 1.4 1.2 8.4 12.9 13.7 1.3 1.9 2.2 9.8 6.9 6.2 

LG Chemical(*) 401,000 23.7 12/31/2011 12.8 11.1 10.0 3.8 3.0 2.4 33.5 29.3 25.3 1.0 1.1 1.2 8.3 6.9 6.3 

Honam PC 355,500 10.1 12/31/2011 14.4 11.3 10.0 2.5 2.1 1.7 19.7 21.0 19.5 0.4 0.5 0.6 10.0 8.5 7.7 

Cheil Ind(*) 113,500 5.1 12/31/2011 20.0 16.5 13.8 2.4 2.0 1.8 12.9 12.9 13.9 0.7 0.7 0.8 11.7 10.0 8.5 

Hyosung 85,500 2.7 12/31/2011 7.4 7.4 6.1 1.0 0.9 0.8 14.2 12.8 13.6 1.1 1.2 1.2 6.2 6.1 5.5 

Hanwha Chemical(*) 38,300 4.8 12/31/2011 12.1 10.0 8.9 1.7 1.5 1.3 16.0 17.3 16.8 1.2 1.3 1.4 11.5 10.1 9.2 

Samsung Fine Chem(*) 71,100 1.6 12/31/2011 18.7 16.3 15.3 1.9 1.8 1.6 10.8 11.8 11.0 0.9 1.0 1.0 12.9 10.9 9.7 

SK Chemical 61,700 1.1 12/31/2011 5.7 16.6 13.0 1.5 1.3 1.2 28.7 8.2 9.5 0.7 0.9 0.6 13.1 11.0 9.1 

Kumho PC 141,000 3.2 12/31/2011 13.0 8.2 7.8 4.6 2.9 2.1 45.4 42.4 30.7 0.3 0.4 0.5 11.5 8.2 7.4 

Kolon Industries(*) 77,300 1.6 12/31/2010 - 7.9 7.2 - 1.6 1.4 - 25.7 19.3 - 1.7 1.9 - 7.0 6.6 

SKC(*) 40,200 1.3 12/31/2011 11.7 8.6 7.2 1.4 1.2 1.1 13.8 16.2 16.7 0.7 1.4 1.4 8.5 7.1 6.1 

Petrochemicals-AP 

12.9 11.4 9.9 2.3 1.8 1.5 21.7 19.8 17.6 0.8 1.0 1.0 10.4 8.6 7.6 

Sinopec Shanghai PC 4.05 7.7 12/31/2010 13.7 10.2 10.4 1.7 1.4 1.3 13.8 14.9 14.2 2.3 2.7 3.1 13.2 12.3 11.1 

Sinopec Yizheng chem 3.46 5.2 12/31/2010 24.7 8.5 6.6 1.7 1.4 1.1 6.6 16.4 17.5 0.5 8.8 6.3 31.0 19.3 14.7 

Formosa PC 89.00 28.8 12/31/2011 24.1 18.6 16.5 3.6 3.4 3.3 15.3 18.7 20.3 3.8 4.5 5.1 14.2 12.2 11.5 

Nan Ya Plastics 81.00 21.6 12/31/2011 15.9 12.8 11.7 2.3 2.1 2.1 14.8 17.0 17.7 4.8 6.4 7.0 19.9 15.5 15.0 

Formosa Plastics 92.20 19.1 12/31/2011 13.5 11.6 10.9 2.3 2.1 2.1 17.4 18.8 19.4 5.8 7.1 7.5 14.6 13.3 13.1 

Formosa C&F 99.10 19.1 12/31/2011 13.3 11.1 10.4 2.3 2.1 2.0 17.1 19.5 19.4 5.5 7.3 7.3 15.5 12.5 12.1 

Siam Cement 324.00 12.8 12/31/2011 13.9 12.3 10.5 3.1 2.6 2.3 24.3 21.9 22.7 3.2 3.9 4.5 10.5 8.9 8.0 

PTT chemical 144.00 7.2 12/31/2011 21.8 11.8 9.5 2.1 1.8 1.6 9.8 17.0 18.6 2.1 3.7 4.7 13.1 8.0 6.9 

Fertilizers 

17.6 12.1 10.8 2.4 2.1 2.0 14.9 18.0 18.7 3.5 5.5 5.7 16.5 12.8 11.5 

Potash 55.85 47.7 12/31/2011 28.0 17.3 15.0 6.8 5.1 3.9 26.3 34.2 28.6 0.2 0.5 0.5 18.1 12.2 10.7 

Mosaic 78.84 35.2 05/31/2011 40.8 18.9 14.8 3.9 3.2 2.6 9.8 20.0 20.0 1.9 0.3 0.3 19.5 10.8 8.9 

Agrium 91.03 14.4 12/31/2011 19.4 12.4 11.8 2.7 2.2 1.9 15.1 18.3 16.1 0.1 0.1 0.1 11.9 8.1 7.9 

CF Industries 126.53 9.0 12/31/2011 17.5 9.2 10.2 1.9 1.7 1.5 13.8 19.4 14.3 0.3 0.3 0.3 8.2 5.0 5.4 

Taiwan Fertilizer 91.60 3.0 12/31/2010 47.8 34.9 25.9 1.9 1.8 1.7 3.7 4.7 6.4 1.6 2.0 2.8 31.6 53.8 36.4 

Namhae Chemical 15,300 0.7 12/31/2011 18.3 11.6 9.1 1.9 1.7 1.5 11.1 15.7 17.3 1.2 0.7 0.9 14.4 8.7 7.1 

Petrochemical-Global 

28.6 17.4 14.5 3.2 2.6 2.2 13.3 18.7 17.1 0.9 0.6 0.8 17.3 16.4 12.7 

SABIC 101.50 81.2 12/31/2011 14.5 11.9 10.3 2.5 2.2 2.0 18.1 20.7 21.0 3.1 3.8 4.2 8.6 7.4 6.7 

BASF 58.84 74.8 12/31/2011 10.8 9.8 9.0 2.8 2.3 2.1 25.4 24.3 23.8 3.6 4.0 4.3 6.1 5.5 5.2 

DuPont 53.71 49.5 12/31/2011 17.2 14.6 13.0 5.5 4.8 3.9 34.3 32.0 29.6 3.1 3.0 3.1 9.5 8.6 7.8 

Dow Chemical 37.91 44.3 12/31/2011 20.3 14.5 11.3 2.0 1.9 1.7 10.9 14.6 16.1 1.6 1.6 1.6 9.1 7.8 6.9 

Akzo Nobel 48.12 15.5 12/31/2011 14.8 12.5 11.1 1.4 1.2 1.1 9.2 9.4 10.1 2.9 3.3 3.5 6.6 5.9 5.5 

Eastman Chemical 95 6.8 12/31/2011 13.2 11.9 10.9 3.1 2.9 2.4 28.8 29.2 24.7 1.9 1.9 2.0 6.6 6.3 5.9 

15.1 12.5 10.9 2.9 2.5 2.2 21.1 21.7 20.9 2.7 2.9 3.1 7.8 6.9 6.4 

6 







Ricky Ng, Gas utilities Analyst, +852 3653 8634 ricky.ng@miraeasset.hk 


Petro Patrol 

U.S. petroleum inventory overview 

Figure 7. U.S. petroleum inventory trends 

(1,000 bbl) Date Crude Oil (ex. SPR) Gasoline Distillate Heating Oil 

2 years ago Mar 06, 2009 351,339 212,517 145,404 37,827 

1 year ago Mar 05, 2010 343,003 228,984 149,604 41,764 

1 month ago Feb 04, 2011 345,057 240,891 164,366 38,644 

1 week ago Feb 25, 2011 346,375 234,708 159,186 38,015 

Current Mar 04, 2011 348,891 229,214 155,209 37,607 

Source: EIA, Mirae Asset Research 

Figure 8. Change in U.S. petroleum inventory 

(1,000 bbl,%) 


Figure 9. U.S. crude oil treatment volume and refinery facility utilization rate 

(1,000 bbl, %) Date Net Import Input Operable capacity Utilization Rate 

2 years ago Mar 06, 2009 10,737 14,116 17,621 82.7 

1 year ago Mar 05, 2010 9,352 13,925 17,688 80.7 

1 month ago Feb 04, 2011 9,616 14,344 17,594 84.7 

1 week ago Feb 25, 2011 8,058 13,798 17,594 80.9 

Current Mar 04, 2011 8,554 13,943 17,594 82.0 


Change from last 

Stock 1 week ago 1 month ago 1 year ago 2 years ago 

Crude Oil (ex. SPR) 348,891 0.7% 1.1% 1.7% -0.7% 

Total Petroleum products 695,919 -1.2% -5.1% -0.3% 1.2% 

Gasoline 229,214 -2.3% -4.8% 0.1% 7.9% 

Distillate 155,209 -2.5% -5.6% 3.7% 6.7% 

Heating Oil 37,607 -1.1% -2.7% -10.0% -0.6% 

7





Petro Patrol 

U.S. petroleum inventory overview 

Figure 10. U.S. crude oil stock (ex. SPR) Figure 11. U.S. gasoline stock 

(m bbl) Inv entory Band 2008 

390 

2009 

2011 

2010 

370 

350 

330 

310 

290 

270 

250 

Jan F eb Mar A pr May Jun Jul A ug Sep O ct Nov Dec 

Source: EIA, Mirae Asset Research Source: EIA, Mirae Asset Research 


250 

2009 

2011 

2010 

240 

230 

220 

210 

200 

190 

180 


Figure 12. U.S. distillate stock Figure 13. U.S. heating oil stock 


180 

170 

2009 

2011 

2010 

160 

150 

140 

130 

120 

110 

100 




70 

2009 

2011 

2010 

60 

50 

40 

30 

20 

10 


Figure 14. U.S. weekly refinery utilization ratio Figure 15. U.S. weekly refinery utilization ratio by year 

(% ) 

110 

100 

90 

80 

70 

60 

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 


(% ) 2008 2009 2010 2011 

95 

90 

85 

80 

75 

70 

65 

60 


8





Petro Patrol 

Commodity futures trading 

Figure 16. Commitments of traders (Non-commercial) 

(1,000 contracts) Date Open interest Long positions Short positions Net long positions 

Source: CFTC, Mirae Asset Research 

Figure 17. Crude oil vs. open interest Figure 18. Crude oil vs. net position 

(1,000 contracts) 

3,500 

3,000 

2,500 

2,000 

1,500 

1,000 

500 

0 

5 years ago Mar 07, 2006 1,589,852 135,328 102,252 33,076 

3 years ago Mar 04, 2008 2,821,364 292,115 140,971 151,144 

2 years ago Mar 03, 2009 2,897,056 222,310 144,592 77,718 

1 year ago Mar 02, 2010 2,580,257 265,830 94,041 171,789 

1 month ago Feb 01, 2011 2,774,740 342,736 125,742 216,994 

1 week ago Feb 22, 2011 2,756,990 380,917 100,836 280,081 

Current Mar 01, 2011 2,940,658 430,118 94,444 335,674 

O pen interest (LHS) 

O il price (RHS) 

(USD/bbl) 

160 

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 

140 

120 

100 

80 

60 

40 

20 

0 

(1,000 contracts) 

400 

350 

300 

250 

200 

150 

100 

50 

0 

(50) 

(100) 

Net position (LHS) 


Source: CFTC, Mirae Asset Research Source: CFTC, Mirae Asset Research 

(USD/bbl) 

160 

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 

140 

120 

100 

80 

60 

40 

20 

0 

9

Prices by major product 

(US$/Ton) 

1Q10 2Q10 

Quarterly average 

3Q10 4Q10 QTD QoQ YoY W-4 

Weekly Average 

W-1 W-0 WoW MoM 

Feed Stock 

Crude Oil 

Naphtha 

76.0 

723 

78.0 

710 

74.1 

666 

84.4 

807 

98.1 

903 

16% 

12% 

29% 

25% 

96.9 

874 

108.1 

978 

110.7 

1,008 

2.4% 

3.0% 

14.3% 

15.2% 

Ethylene 1,232 1,113 913 1,051 1,225 17% -1% 1,230 1,310 1,310 0.0% 6.5% 

Olefin 

Propylene 

Butadiene 

1,232 

1,848 

1,201 

2,068 

1,128 

1,701 

1,233 

1,944 

1,365 

2,219 

11% 

14% 

11% 

20% 

1,335 

2,175 

1,455 

2,475 

1,515 

2,525 

4.1% 

2.0% 

13.5% 

16.1% 

Crude C4 944 1,138 1,172 1,134 1,285 13% 36% 1,301 1,373 1,440 4.9% 10.7% 

Benzene 972 910 833 952 1,120 18% 15% 1,140 1,173 1,183 0.9% 3.7% 

BTX Toluene 884 822 755 893 976 9% 10% 980 1,020 1,035 1.5% 5.6% 

Xylene 874 819 762 906 976 8% 12% 970 1,010 1,020 1.0% 5.2% 

SM 1,279 1,175 1,063 1,259 1,400 11% 9% 1,410 1,445 1,433 -0.9% 1.6% 

PX 1,038 971 915 1,245 1,577 27% 52% 1,625 1,640 1,633 -0.5% 0.5% 

Intermediate OX 1,115 1,043 943 1,113 1,238 11% 11% 1,245 1,275 1,268 -0.6% 1.8% 

MMA 2,089 2,644 2,838 3,104 2,898 -7% 39% 2,878 2,935 2,963 0.9% 3.0% 

PO 1,953 1,920 1,713 1,976 2,134 8% 9% 2,163 2,240 2,255 0.7% 4.3% 

HDPE 1,303 1,215 1,100 1,253 1,310 5% 1% 1,315 1,325 1,330 0.4% 1.1% 

LDPE 1,520 1,410 1,316 1,580 1,696 7% 12% 1,710 1,700 1,700 0.0% -0.6% 

Synthetic LLDPE 1,401 1,277 1,138 1,342 1,396 4% 0% 1,400 1,395 1,415 1.4% 1.1% 

Resin PP 1,294 1,282 1,217 1,376 1,509 10% 17% 1,530 1,560 1,595 2.2% 4.2% 

PS(GP) 1,396 1,298 1,187 1,333 1,434 8% 3% 1,435 1,490 1,500 0.7% 4.5% 

ABS 1,802 1,917 1,889 2,093 2,244 7% 25% 2,250 2,310 2,305 -0.2% 2.4% 

AN 2,123 2,414 2,067 2,152 2,423 13% 14% 2,435 2,540 2,610 2.8% 7.2% 

Synthetic Caprolactam 2,394 2,612 2,507 2,790 3,296 18% 38% 3,300 3,595 3,550 -1.3% 7.6% 

Fiber MEG 961 817 757 993 1,199 21% 25% 1,203 1,238 1,253 1.2% 4.2% 

PTA 957 914 876 1,110 1,403 26% 47% 1,433 1,475 1,510 2.4% 5.4% 

PET 1,181 1,184 1,109 1,388 1,669 20% 41% 1,700 1,780 1,780 0.0% 4.7% 

Caustic Soda 194 227 248 390 372 -5% 92% 355 355 355 0.0% 0.0% 

Vinyl EDC 488 512 457 535 486 -9% 0% 470 530 533 0.5% 13.3% 

Chain VCM 838 830 781 887 902 2% 8% 898 905 938 3.6% 4.5% 

PVC 992 962 918 977 1,022 5% 3% 1,010 1,070 1,075 0.5% 6.4% 

MDI 2,478 2,563 2,462 3,123 2,981 -5% 20% 2,940 3,080 3,080 0.0% 4.8% 

TDI 3,281 2,977 2,512 2,704 2,523 -7% -23% 2,475 2,600 2,600 0.0% 5.1% 

Ammonia 373 393 373 450 469 4% 26% 468 495 495 0.0% 5.9% 

Others DAP 459 458 494 578 602 4% 31% 598 616 620 0.6% 3.8% 

BPA 1,640 1,880 1,963 2,267 2,339 3% 43% 2,365 2,415 2,415 0.0% 2.1% 

2EH 1,624 1,747 1,617 1,786 1,896 6% 17% 1,910 1,975 1,980 0.3% 3.7% 

DOP 1,630 1,664 1,537 1,749 1,793 2% 10% 1,800 1,830 1,825 -0.3% 1.4% 

Increase from prior week or quarter Decrease from prior week or quarter 

10 



Ricky Ng, Gas utilities Analyst, ++852 3653 8634 ricky.ng@miraeasset.hk 


Margins by major product 

(US$/Ton) Quarterly average Weekly Average 

Product Feedstock 1Q10 2Q10 3Q10 4Q10 QTD QoQ YoY W-4 W-1 W-0 WoW MoM 

Mixed olefin/BTX Naphtha 540 519 395 399 471 18% -13% 489 500 495 -0.9% 1.2% 

Ethylene Naphtha 509 404 246 244 322 32% -37% 356 332 302 -8.9% -15.0% 

Propylene Naphtha 510 491 461 427 462 8% -9% 461 477 507 6.4% 10.1% 

Butadiene Naphtha 1,125 1,359 1,034 1,137 1,316 16% 17% 1,301 1,497 1,517 1.4% 16.7% 

Benzene Naphtha 249 201 166 145 218 50% -13% 266 194 175 -10.0% -34.2% 

Toluene Naphtha 161 112 89 87 74 -15% -54% 106 42 27 -34.5% -74.1% 

Xylene Naphtha 151 109 96 100 73 -27% -52% 96 32 12 -61.1% -87.1% 

SM Naphtha 556 465 397 452 497 10% -11% 536 467 425 -9.0% -20.7% 

PX Naphtha 315 261 249 438 674 54% 114% 751 662 625 -5.6% -16.8% 

OX Naphtha 392 333 277 307 335 9% -15% 371 297 260 -12.4% -29.9% 

HDPE Naphtha 580 505 434 446 407 -9% -30% 441 347 322 -7.0% -26.8% 

LDPE Naphtha 797 700 650 774 793 3% 0% 836 722 692 -4.1% -17.2% 

LLDPE Naphtha 678 567 472 535 493 -8% -27% 526 417 407 -2.3% -22.5% 

HDPE Ethylene 34 68 160 170 48 -72% 43% 48 (24) (19) -20.6% -140.1% 

LDPE Ethylene 250 263 376 498 435 -13% 74% 443 351 351 0.0% -20.9% 

LLDPE Ethylene 243 230 280 354 244 -31% 1% 244 164 184 12.2% -24.7% 

PP Naphtha 572 572 550 569 606 6% 6% 656 582 587 1.0% -10.4% 

PS Naphtha 674 588 520 526 531 1% -21% 561 512 492 -3.8% -12.2% 

PVC Ethylene 391 418 472 464 424 -9% 9% 410 431 436 1.2% 6.3% 

ABS AN/BD/SM 188 237 434 463 413 -11% 120% 418 374 347 -7.1% -17.0% 

ABS Naphtha 1,080 1,207 1,223 1,286 1,342 4% 24% 1,376 1,332 1,297 -2.6% -5.7% 

MEG Naphtha 238 107 91 187 296 59% 24% 328 259 245 -5.6% -25.4% 

Caprolactam Benzene 1,491 1,765 1,733 1,905 2,254 18% 51% 2,240 2,505 2,450 -2.2% 9.4% 

PTA Mixed-Xylene 225 228 238 351 586 67% 161% 620 629 656 4.2% 5.7% 

PET PTA/EG 28 116 93 90 47 -47% 70% 51 82 47 -43.1% -8.3% 

PA OX 155 149 106 145 106 -26% -31% 107 120 127 5.7% 18.2% 

DOP 2EH 493 441 405 498 465 -7% -6% 463 448 439 -1.9% -5.2% 

BPA Benzene/Propylene 491 793 962 1,136 1,028 -9% 109% 1,044 1,037 1,014 -2.2% -2.9% 

ECH Propylene 830 1,050 1,185 1,164 1,053 -10% 27% 1,057 1,121 1,093 -2.5% 3.4% 

Increase from prior week or quarter Decrease from prior week or quarter 

11 



Ricky Ng, Gas utilities Analyst, ++852 3653 8634 ricky.ng@miraeasset.hk 






Petro Patrol 


Figure 19. NCC Spread Figure 20. PE-Naphtha 

(USD/MT) NC C spread 

800 

700 

600 

500 

400 

300 

200 

100 

0 

2008 2009 2010 2011 

(USD/MT) 

Source: Datastream, Mirae Asset Research Source: Datastream, Mirae Asset Research 

Figure 21. MEG-Naphtha Figure 22. PP-Naphtha 

(USD/MT) MEG-Naphtha 

700 

600 

500 

400 

300 

200 

100 

0 

(100) 

(200) 

2008 2009 2010 2011 


Figure 23. ABS-Naphtha Figure 24. PVC-Ethylene 

(USD/MT) A BS-Naphtha 

1,500 

1,400 

1,300 

1,200 

1,100 

1,000 

900 

800 

700 

600 

500 

2008 2009 2010 2011 

1,100 

1,000 

900 

800 

700 

600 

500 

400 

300 

1,000 

900 

800 

700 

600 

500 

400 

300 

LDPE-Naphtha 

LLDPE-Naphtha 

HDPE-Naphtha 

2008 2009 2010 2011 

(USD/MT) PP-Naphtha 


600 

550 

500 

450 

400 

350 

300 

250 

2008 2009 2010 2011 

(USD/MT) PV C -Ethy lene 

2008 2009 2010 2011 

12





Petro Patrol 


Figure 25. BTX-Naphtha Figure 26. Caprolactam - Benzene 

(USD/MT) Benzene-Naphtha 

400 

350 

300 

250 

200 

150 

100 

50 

0 

(50) 

(100) 

Toluene-Naphtha 

Xy lene-Naphtha 

2008 2009 2010 2011 


Figure 27. PTA-Mixed Xylene Figure 28. PX-Naphtha 

(USD/MT) PTA -Mixed Xy lene 

700 

600 

500 

400 

300 

200 

100 

0 

(100) 

2008 2009 2010 2011 


(USD/MT) C aprolactam-Benzene 

2,600 

2,400 

2,200 

2,000 

1,800 

1,600 

1,400 

1,200 

1,000 

800 

600 

800 

700 

600 

500 

400 

300 

200 

100 

0 

2008 2009 2010 2011 

(USD/MT) PX-Naphtha 

2008 2009 2010 2011 

Figure 29. PA, DOP spread Figure 30. 2EH(Octanol)-Propylene 

(USD/MT) 

300 

250 

200 

150 

100 

50 

0 

PA -O X DO P-2EH(rhs) 

2008 2009 2010 2011 

(USD/MT) 

700 

600 

500 

400 

300 

200 

100 

0 

1,100 

1,000 


(USD/MT) 2EH-Propy lene 

900 

800 

700 

600 

500 

400 

300 

200 

2008 2009 2010 2011 

13





Petro Patrol 

Korea import/export trends 

Figure 31. Refining margin for exports and oil price Figure 32. Petrochemicals export amount growth 

(USD/bbl) 

50 

40 

30 

20 

10 

0 

(10) 

(20) 

(30) 

Refining margin (LHS) 


(USD/bbl) 

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 

Source: KITA, Mirae Asset Research Source: KITA, Mirae Asset Research 

140 

120 

100 

80 

60 

40 

20 

0 

(% ) 

100 

80 

60 

40 

20 

0 

(20) 

(40) 

(60) 

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 

Figure 33. Petrochemical product export volume and price Figure 34. Petrochemicals export volume growth 

(% ) Petrochemical product export v alue grow th (% ) 

80 

60 

40 

20 

0 

(20) 

(40) 

(60) 

A SP grow th (% ) 

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 


(% ) 

20 

15 

10 

5 

0 

(5) 

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 

Figure 35. Synthetic resin export volume Figure 36. Petrochemical product export price and spread 

(% ) 

20 

15 

10 

5 

0 

(5) 

(10) 

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 

(USD/MT) 

2,000 

1,800 

1,600 

1,400 

1,200 

1,000 

800 

600 

400 

200 

0 

Petrochemical export price 

Spread 


2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 

14





Petro Patrol 

China import/export trends 

Figure 37. Crude oil import (amount) Figure 38. Crude oil import (volume) 

(USDbn) 

16 

14 

12 

10 

8 

6 

4 

2 

0 

C rude oil import (lhs) 

Grow th rate (rhs) 

2002 2003 2004 2005 2006 2007 2008 2009 2010 

50 

0 

(% ) 

200 

150 

100 

(50) 

(100) 

(mn Ton) 

Source: CEIC, Mirae Asset Research Source: CEIC, Mirae Asset Research 

25 

20 

15 

10 

5 

0 

2002 2003 2004 2005 2006 2007 2008 2009 2010 

Figure 39. Bunker-C net export Figure 40. Gasoline net export 

(1,000 Ton) 

0 

(500) 

(1,000) 

(1,500) 

(2,000) 

(2,500) 

(3,000) 

(3,500) 

2002 2003 2004 2005 2006 2007 2008 2009 2010 

(1,000 Ton) 

1,200 

1,000 

800 

600 

400 

200 

0 

(200) 

(400) 

(600) 


C rude oil import (lhs) 


2002 2003 2004 2005 2006 2007 2008 2009 2010 

Figure 41. Crude oil processing Figure 42. Petroleum products net export 

(mn bpd) 

10.0 

9.0 

8.0 

7.0 

6.0 

5.0 

4.0 

3.0 

2.0 

1.0 

0.0 

processed crude oil per day (lhs) 


2002 2003 2004 2005 2006 2007 2008 2009 2010 

(% ) 

35 

30 

25 

20 

15 

10 

5 

0 

(5) 

(10) 

(15) 

(mn Ton) 

1.0 

0.5 

0.0 

(0.5) 

(1.0) 

(1.5) 

(2.0) 

(2.5) 

(3.0) 

(3.5) 

(4.0) 


Net export 

Net import 

2002 2003 2004 2005 2006 2007 2008 2009 2010 

(% ) 

100 

80 

60 

40 

20 

0 

-20 

-40 

15





Petro Patrol 

China petrochemical production statistics 

Figure 43. PE demand Figure 44. Production; synthetic rubber 

(1,000 Ton) 

1,800 

1,600 

1,400 

1,200 

1,000 

800 

600 

400 

200 

0 

PE Net import 

PE Production 

2002 2003 2004 2005 2006 2007 2008 2009 2010 

(1,000 Ton) 


350 

300 

250 

200 

150 

100 

50 

0 

Production (lhs) 


2002 2003 2004 2005 2006 2007 2008 2009 2010 

Figure 45. PP demand Figure 46. Production; synthetic fiber polymer 

(1,000 Ton) 

1,400 

1,200 

1,000 

800 

600 

400 

200 

0 

PP Net import 

PP Production 

2002 2003 2004 2005 2006 2007 2008 2009 2010 

(1,000 Ton) 


1,400 

1,200 

1,000 

800 

600 

400 

200 

0 

Production (lhs) 


2002 2003 2004 2005 2006 2007 2008 2009 2010 

Figure 47. PVC demand Figure 48. Production; plastic products 

(1,000 Ton) 

1,200 

1,000 

800 

600 

400 

200 

0 

PV C Net import 

PV C Production 

2002 2003 2004 2005 2006 2007 2008 2009 2010 

(1,000 Ton) 

6,000 

5,000 

4,000 

3,000 

2,000 

1,000 

0 

Production, 3ma (lhs) 



2002 2003 2004 2005 2006 2007 2008 2009 2010 

(% ) 

60 

50 

40 

30 

20 

10 

0 

(10) 

(20) 

(30) 

(40) 

(% ) 

80 

70 

60 

50 

40 

30 

20 

10 

0 

(10) 

(20) 

(30) 

(% ) 

70 

60 

50 

40 

30 

20 

10 

0 

-10 

-20 

16





Petro Patrol 

Performance 

Figure 49. Best AP oil & chemical performers of the week Figure 50. Asia Oil & Gas/Chem Top 10 ( %chg -5D ) 

Company Country 

Honam Petrochemical 

KP C hem 

Hanw ha C hemical 

O C I 

Hy osung 

Engro C hemical Pakistan 

Korea Petrochem 

F auji F ertilizer 

GS Holdings 

Source: Mirae Asset Research Source: Mirae Asset Research 

S-O il 

(% ) 

0 2 4 6 8 10 12 14 

Figure 51. Worst AP oil & chemical performers of the week Figure 52. Asia Oil & Gas/Chem Top 10 ( %chg -1M ) 

Company Country 

Mkt. Cap 

(USD mn) 

Mkt. Cap 

(USD mn) 

-5D -1M -3M 

S-Oil SOUTH KOREA 12,816.4 12.9 15.1 65.8 

GS Holdings SOUTH KOREA 6,619.9 10.7 14.5 50.4 

Fauji Fertilizer PAKISTAN 1,315.2 10.5 12.7 43.3 

Korea Petrochem SOUTH KOREA 559.1 10.4 12.6 43.1 

Engro Chemical Pakistan PAKISTAN 910.8 9.7 12.5 35.9 

Hyosung SOUTH KOREA 2,552.7 8.6 12.2 28.3 

-5D -1M -3M 

Cheil Indu. SOUTH KOREA 5,064.5 (8.1) (6.5) 1.8 

Bharat Petroleum INDIA 4,372.6 (4.6) (5.6) (18.0) 

Caltex Australia AUSTRALIA 4,063.1 (3.9) 12.7 12.8 

Nan Ya Plastics TAIWAN 21,175.3 (3.7) (1.8) 16.7 

Formosa Plastics TAIWAN 19,255.5 (3.0) (6.5) (0.3) 

Hindustan Petroleum INDIA 2,373.9 (2.5) (5.1) (19.1) 


Energi Mega Persada 

Yanzhou C oal Mining 

C NO O C 

S-O il 

IRPC PC L 

Petronas Dagangan Bhd 

C altex A ustralia 

O C I 

Bumi Resources 

Source: Mirae Asset Research Source: Mirae Asset Research 

(% ) 

0 5 10 15 20 

17

Performance 

Mkt. Cap Current % below % above % change 

Company Country (US$mn) Price 52W H 52W L 52W H 52W L -1W -1M -3M -6M -52W -3Y -5Y 

PetroChina HONG KONG 255,724 10.9 11.3 7.9 (3.4) 38.4 0.9 4.2 10.2 28.7 19.6 4.4 50.4 

China Petroleum & Chemical HONG KONG 87,599 7.9 8.9 5.7 (11.8) 36.8 1.2 (3.9) 11.3 25.6 28.0 5.2 84.9 

CNOOC HONG KONG 103,143 18.0 19.6 11.4 (8.3) 57.7 2.2 11.6 1.0 33.7 45.4 50.2 197.9 

Yanzhou Coal Mining HONG KONG 15,096 23.9 26.2 14.5 (8.8) 64.8 (0.2) 10.8 8.9 46.5 42.7 116.9 289.7 

Reliance Industries INDIA 71,999 990.0 1,187.0 840.6 (16.6) 17.8 1.2 9.0 1.0 3.8 0.4 (11.6) 173.5 

Oil & Natural Gas INDIA 51,403 270.4 368.0 249.3 (26.5) 8.4 0.3 (1.4) (17.9) (20.0) (1.0) 13.5 42.5 

Bharat Petroleum INDIA 4,373 544.3 814.9 488.5 (33.2) 11.4 (4.6) (5.6) (18.0) (26.5) 2.9 26.8 31.4 

Hindustan Petroleum INDIA 2,374 315.9 555.5 293.3 (43.1) 7.7 (2.5) (5.1) (19.1) (39.4) (6.7) 14.1 (0.9) 

Woodside Petroleum AUSTRALIA 33,344 42.2 48.3 39.6 (12.5) 6.5 (2.3) (0.0) (1.7) (1.6) (6.6) (24.6) 7.0 

Santos AUSTRALIA 12,767 14.5 15.1 11.2 (4.3) 28.6 (0.3) 6.2 19.2 16.0 5.4 29.6 48.0 

Origin Energy AUSTRALIA 14,094 15.8 17.3 13.9 (8.9) 13.8 (2.4) (6.1) (3.2) 3.6 (6.3) 71.7 132.5 

Caltex Australia AUSTRALIA 4,063 14.9 16.2 9.0 (7.9) 66.4 (3.9) 12.7 12.8 37.2 44.7 31.4 (11.0) 

Paladin Resources AUSTRALIA 3,796 4.8 5.6 3.4 (13.9) 43.3 (0.8) (5.3) (0.6) 30.9 32.3 (17.8) 33 

Formosa Petrochemical TAIWAN 28,897 89.1 99.7 71.0 (10.6) 25.5 2.1 (7.2) (2.1) 18.3 8.7 (0.0) NA 

PTT PCL THAILAND 32,456 345.0 351.0 233.0 (1.7) 48.1 3.9 4.2 6.2 20.7 45.1 6.2 39.8 

PTT Exploration & Production PCL THAILAND 20,210 184.5 196.5 136.5 (6.1) 35.2 4.8 7.0 2.8 24.7 32.9 20.3 76.9 

IRPC PCL THAILAND 3,814 5.7 6.7 3.8 (14.3) 51.6 0.0 12.5 10.4 46.3 35.4 (1.7) (17.0) 

Banpu PCL THAILAND 6,514 726.0 868.0 552.0 (16.4) 31.5 2.0 1.4 (9.0) 12.6 27.5 63.4 442.2 

SK Energy SOUTH KOREA 15,709 189,500 209,000 94,300 (9.3) 101.0 5.0 (1.0) 12.6 47.1 66.2 NA NA 

S-Oil SOUTH KOREA 12,816 126,500 124,500 49,000 1.6 158.2 12.9 12.2 43.1 91.8 118.4 95.8 83.1 

GS Holdings SOUTH KOREA 6,620 79,400 85,900 32,250 (7.6) 146.2 10.7 0.5 17.1 50.9 99.7 78.1 NA 

Bumi Resources INDONESIA 6,573 3,050.0 3,300 1,280 (7.6) 138.3 (0.8) 15.1 0.8 77.3 22.0 (56.4) 224.5 

Oil & Gas Development PAKISTAN 7,906 156.9 185.0 118.8 (15.2) 32.0 3.5 (8.3) (6.9) 7.9 31.9 15.1 NA 

Pakistan Petroleum PAKISTAN 2,947 210.5 229.8 147.4 (8.4) 42.8 0.9 (1.3) 1.0 20.2 30.8 26.1 NA 

Petronas Dagangan Bhd MALAYSIA 4,716 14.4 14.5 8.7 (1.0) 65.3 2.7 12.6 18.8 26.3 59.4 73.5 246.6 

Energi Mega Persada INDONESIA 545 118.0 172.0 67.0 (31.4) 76.1 5.4 10.7 (14.3) 28.1 (28.8) (91.1) NA 

18 





Performance 

Mkt. Cap Current % below % above % change 

Company Country (US$mn) Price 52W H 52W L 52W H 52W L -1W -1M -3M -6M -52W -3Y -5Y 

LG Chem SOUTH KOREA 23,692 401,000 425,500 221,500 (5.8) 81.0 3.4 2.4 3.6 17.5 76.9 448.1 774.9 

Honam Petrochemical SOUTH KOREA 10,081 353,500 369,000 111,000 (4.2) 218.5 6.5 3.3 35.9 89.4 171.2 308.6 490.7 

Hanwha Chemical SOUTH KOREA 4,791 38,150 41,450 13,350 (8.0) 185.8 7.5 (3.9) 16.0 41.4 151.9 128.7 222.8 

OCI SOUTH KOREA 8,425 417,500 419,500 174,500 (0.5) 139.3 8.4 14.5 23.3 24.3 130.7 28.5 1,165 

Cheil Indu. SOUTH KOREA 5,065 113,000 128,000 59,600 (11.7) 89.6 (8.1) (6.5) 1.8 7.5 87.9 163.2 221.2 

KCC SOUTH KOREA 2,845 324,000 404,000 254,500 (19.8) 27.3 3.3 (0.3) (4.0) (3.4) (6.0) (39.2) 86.6 

Hyosung SOUTH KOREA 2,553 85,600 137,500 61,000 (37.7) 40.3 8.6 (8.0) (24.4) (24.7) (3.5) 27.0 459.5 

KP Chem SOUTH KOREA 2,292 25,950 29,400 7,720 (11.7) 236.1 6.6 1.8 50.4 106.9 215.3 192.4 408.5 

KKPC SOUTH KOREA 2,507 140,500 153,000 19,200 (8.2) 631.8 6.0 (6.7) 65.8 98.4 552.7 153.8 332.3 

Samsung Fine Chemicals SOUTH KOREA 1,563 71,100 89,000 48,450 (20.1) 46.7 1.3 (14.6) (15.6) 6.1 45.4 28.0 144.9 

SK Chemicals SOUTH KOREA 986 61,400 71,500 48,050 (14.1) 27.8 5.9 0.0 3.5 (10.6) 6.1 5.2 102.4 

Korea Petrochem SOUTH KOREA 559 101,000 124,500 39,000 (18.9) 159.0 10.4 (4.1) 28.3 47.5 130.8 127.1 363.9 

SINOPEC Shanghai Petrochemical HONG KONG 3,782 4.1 5.0 2.6 (17.9) 56.7 0.7 (9.4) 5.6 28.1 35.2 22.8 (5.7) 

SINOPEC Yizheng Chemical Fibre HONG KONG 1,798 3.5 4.6 1.5 (24.1) 136.5 (2.0) (16.2) (7.1) 88.8 70.5 77.4 72.2 

Nan Ya Plastics TAIWAN 21,175 81.2 88.9 49.6 (8.7) 63.7 (3.7) (1.8) 16.7 30.0 28.2 6.6 89.4 

Formosa Plastics TAIWAN 19,255 92.3 105.0 61.8 (12.1) 49.4 (3.0) (6.5) (0.3) 32.4 35.6 8.7 106.7 

Formosa Chemicals & Fibre TAIWAN 19,219 99.3 110.5 67.5 (10.1) 47.1 (1.8) (1.9) 9.2 41.2 37.0 33.3 116.6 

Taiwan Fertilizer TAIWAN 3,066 91.8 118.0 82.1 (22.2) 11.8 (1.1) (15.6) (14.9) (5.8) (12.9) (22.3) 132.0 

Oriental Union Chemical TAIWAN 1,145 41.7 47.5 22.1 (12.2) 88.7 0.8 (6.2) 18.2 66.5 64.3 31.7 115.1 

Eternal Chemical TAIWAN 1,043 32.4 36.8 27.6 (12.0) 17.3 (0.3) (6.2) (6.2) 2.2 5.8 0.5 23.5 

Orica AUSTRALIA 9,237 25.2 26.9 21.7 (6.3) 16.4 (1.1) (2.3) 2.4 2.6 13.4 3.4 26.8 

PTT Chemical PCL THAILAND 7,232 144.5 167.0 78.3 (13.5) 84.7 1.0 0.3 (3.3) 21.3 84.7 35.5 72.6 

PTT Aromatics & Refining PCL THAILAND 3,600 36.8 41.5 22.0 (11.4) 67.0 1.4 (2.0) (2.6) 44.7 49.6 (10.2) 

Asian Paints (India) INDIA 5,334 2,502.5 3,027.0 1,879.0 (17.3) 33.2 (1.4) 0.9 (5.9) (11.1) 28.6 124.0 286.9 

Fauji Fertilizer PAKISTAN 1,315 132.4 132.5 82.0 (0.1) 61.4 10.5 9.9 43.3 58.3 58.3 59.3 75.5 

Engro Chemical Pakistan PAKISTAN 911 237.2 237.6 166.1 (0.2) 42.8 9.7 10.1 26.8 38.2 28.8 (2.0) 78.6 

ICI Pakistan PAKISTAN 259 159.4 166.3 110.3 (4.1) 44.6 (0.8) 6.8 15.7 30.6 (1.3) (17.8) 6.6 

19 









Petro Patrol 

Performance 

Figure 53. MSCI World & Oil&Gas Figure 54. MSCI EM OIL&GAS 

130 

120 

110 

100 

90 

80 

MSC I World MSC I World O il&Gas 

Mar10 May 10 Jul10 Sep10 Nov 10 Jan11 

130 

120 

110 

100 

90 

80 

70 



MSC I EM MSC I EM O IL & GA S 

Figure 55. MSCI World Chem Figure 56. MSCI EM Chemicals vs. MSCI EM 

130 

120 

110 

100 

90 

80 

MSC I World MSC I World C hem 


170 

160 

150 

140 

130 

120 

110 

100 

90 

80 

MSC I EM MSC I EM C hemicals 



Figure 57. Korea refiner vs. KOSPI Figure 58. Korea Chem vs. KOSPI 

200 

180 

160 

140 

120 

100 

80 

KO SPI Korea refiners 


200 

180 

160 

140 

120 

100 

80 

KO SPI Korea chemical 



20





Petro Patrol 

Performance – Pair Trade Monitor 

Figure 59. Long Petro China, Short ExxonMobil Figure 60. Long COSL, Short CNOOC 

130 

125 

120 

115 

110 

105 

100 

95 

90 

85 

80 

Jan Mar May Jul Sep Nov Jan 

857 HK XO M US 

200 

180 

160 

140 

120 

100 

80 


Source: Bloomberg, Mirae Asset Research Source: Bloomberg, Mirae Asset Research 

2883 HK 883 HK 

Figure 61. Long PetroChina, Short Sinopec Figure 62. Long CNOOC, Short Woodside Petroleum 

140 

130 

120 

110 

100 

90 

80 


857 HK 386 HK 

170 

160 

150 

140 

130 

120 

110 

100 

90 

80 



Figure 63. Long Sinopec, Short BP Figure 64. Long Oil, Short Gold 

140 

130 

120 

110 

100 

90 

80 

70 

60 

50 

40 


386 HK BP/LN 

140 

130 

120 

110 

100 

90 

80 

883 HK WPL A U 



WTI C rude ($/bbl) Gold ($/ounce) 

21





Petro Patrol 

Performance 

Figure 65. Global Oil & Gas/Chem Top 10 ( %chg -5D ) Figure 66. Global Oil & Gas/Chem Top 10 ( %chg -1M ) 

A nadarko 

O ccidental 

C hev ron 

Total 

ExxonMobil 

Dev on 

Imperial O il 

Repsol 

ENI 

-4 -3 -2 -1 0 1 2 

BP 

(% ) 

ExxonMobil 

A nadarko 

Repsol 

O ccidental 

Dev on 

C hev ron 

Imperial O il 


ENI 

Total 

BP 

(% ) 

-5 0 5 10 15 

Figure 67. Asia Oil Top 10 ( %chg -5D ) Figure 68. Asia Oil Top 10 ( %chg -1M ) 

F ormosa Petrochemical 

C NO O C 


O il & Gas Dev elopment 

PTT PC L 

PTT Exploration & Production PC L 

SK Energy 


GS Holdings 

S-O il 

(% ) 

0 2 4 6 8 10 12 14 

PTT Exploration & Production PC L 

Reliance Industries 


Yanzhou C oal Mining 

C NO O C 

S-O il 

IRPC PC L 



Bumi Resources 


(% ) 

0 5 10 15 20 

Figure 69. Asia Chem Top 10 ( %chg -5D ) Figure 70. Asia Chem Top 10 ( %chg -1M ) 

SK C hemicals 

KKPC 


KP C hem 


O C I 

Hy osung 


Korea Petrochem 

F auji F ertilizer 

(% ) 

0 2 4 6 8 10 12 

O riental Union C hemical 

PTT A romatics & Refining PC L 

PTT C hemical PC L 

Samsung F ine C hemicals 

SINO PEC Shanghai Petrochemical 

SINO PEC Yizheng C hemical F ibre 

SK C hemicals 

Taiw an F ertilizer 


O C I 

O rica 

(% ) 

0 5 10 15 20 

Figure 71. China Oil & Gas/Chem Top 10 ( %chg -5D ) Figure 72. China Oil & Gas/Chem Top 10 ( %chg -1M ) 

PetroC hina 

SINO PEC 

C NO O C 

(% ) 

0 1 1 2 2 3 

SINO PEC 

PetroC hina 

C NO O C 


(% ) 

(5) 0 5 10 15 

22





Petro Patrol 

Figure 73. Korea Oil & Gas/Chem Top 10 ( %chg -5D ) Figure 74. Korea Oil & Gas/Chem Top 10 ( %chg -1M ) 

SK Energy 

SK C hemicals 

Korea Kumho Petrochemical 


KP C hemical 


DC C hemical 

Korea Petrochemical Industrial 

GS Holdings 

S-O il 

(% ) 

0 2 4 6 8 10 12 14 


SK Energy 

KC C 

SK C hemicals 

GS Holdings 

KP C hemical 

LG C hem Ltd. 


S-O il 

DC C hemical 


(% ) 

(5) 0 5 10 15 20 

Figure 75. Taiwan Oil & Gas/Chem Top 10 ( %chg -5D ) Figure 76. Taiwan Oil & Gas/Chem Top 10 ( %chg -1M ) 

Nan Ya Plastics 

F ormosa Plastics 

F ormosa C hemicals & F ibre 


Eternal C hemical 

O riental Union C hemical C orp. 

F PC C 

(% ) 

(4) (3) (2) (1) 0 1 2 3 



F PC C 

F ormosa Plastics 

Eternal C hemical 

O riental Union C hemical C orp. 

F ormosa C hemicals & F ibre 

Nan Ya Plastics 

(% ) 

(20) (15) (10) (5) 0 

Figure 77. India Oil & Gas/Chem Top 10 ( %chg -5D ) Figure 78. India Oil & Gas/Chem Top 10 ( %chg -1M ) 

Bharat Petroleum 

Hindustan 

Petroleum 

A sian Paints 

(India) 

O il & Natural Gas 


(% ) 

-5 -4 -3 -2 -1 0 1 2 

Bharat Petroleum 

Hindustan 

Petroleum 

O il & Natural Gas 

A sian Paints 

(India) 



(% ) 

(10) (5) 0 5 10 

Figure 79. Australia Oil & Gas/Chem Top 10 ( %chg -5D ) Figure 80. Australia Oil & Gas/Chem Top 10 ( %chg -1M ) 

O il Search 

A ustralian Worldw ide Exploration 


O rigin Energy 

Woodside Petroleum 

O rica 

Paladin Resources 

(% ) 

Santos 

(6) (5) (4) (3) (2) (1) 0 

A ustralian Worldw ide Exploration 

O rigin Energy 

Paladin Resources 

O rica 

Woodside Petroleum 

O il Search 

Santos 



(% ) 

(10) (5) 0 5 10 15 

23





Petro Patrol 

Recommendations 

By stock (12 months) 

Buy: A target price + 10% or more above the current price, 

Hold: Target price within - 10% to +10% of the current price 

Reduce: A target price of –10% or less below the current price 

Earnings quality score 

By industry 

Overweight: over +10% of the current industry index 

Neutral: -10% to +10% of the current industry index 

Underweight: -10% or less than the current industry index 

Earnings Quality Score = 0.70*(Historical Earnings Stability) + 0.15*(Consensus Forecast Certainty) + 0.15*(Consensus Forecast Accuracy) 

1. Historical Earnings Stability 

- The variability of the net profit growth rate (YOY) over the last 20 quarters was translated into percentage terms. 

- Earnings growth variability was calculated based on MAD (Median Absolute Deviation), rather than SD (Standard Deviation) in order to 

minimize distortion from outliers. 

- The lower the earnings growth variability, the higher this indicator. 

2. Consensus Forecast Certainty 

- The gap between analysts' views on 12-month forward EPS was translated into percentage terms. 

- The gap is calculated by dividing the SD of 12-month forward EPS with the average value. 

- The narrower the gap, the higher this indicator. 

3. Consensus Forecast Accuracy 

- The median value of absolute EPS surprise over the last 3-year was translated into percentage terms. 

- EPS surprise was calculated based on 'the actual figure at the end of the year / the consensus estimate at the beginning of the year - 1'. 

- The lower the absolute EPS surprise, the higher this indicator. 

* Reference 

1) Consensus Forecast Certainty and Consensus Forecast Accuracy were applied only to companies with more than 5 years of EPS 

estimates. 

2) We gave the average score of 50 to cases in which the aforementioned indicators could not be produced. 

REMARK: Korean analyst is only responsible for Korean securities and relevant sectors only. 

Korea Compliance Notice 

This report is distributed to our clients only, and none of the report material may be copied or distributed to any other party. While we have 

taken all reasonable care to ensure its reliability, we do not guarantee that it is accurate or complete. Therefore, Mirae Asset shall not be 

liable for any result from the use of this report. This report has never been provided to any institutional investor or third party. This report 

has been prepared without any undue external influence or interference, and accurately reflects the personal views of the analyst on the 

company herein. Mirae Asset Securities is an ELW issuer of LG Chemical, S-Oil and Hanwha Chemical. 

[Analyst: Jae-Chul Park] 

24





Petro Patrol 

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