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ENERGY & NATURAL RESOURCES

Business Reporting and Communications - A Key Corporate Governance Tool in the Global Petroleum Industry

Andrew Jackson Chief Executive Officer, KPMG Saudi Arabia

Tuesday December 5, 2006

INDUSTRIAL MARKETS

2© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.

Oil and Gas Investment Requirements*

• US$6 trillion to 2030

*:Based on 2003 version of IEA World Energy Investment Outlook

3© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.

Oil and Gas Investment Requirements*

• US$ 6 trillion to 2030

• Global per annum requirements:

Today By 2030 Inc.

Oil US$92 billion US$114 billion 24 percent

Gas US$80 billion US$116 billion 45 percent

*:Based on 2003 version of IEA World Energy Investment Outlook

4© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.

Oil and Gas Investment Requirements*

• US$ 6 trillion to 2030

• Global per annum requirements:

Today By 2030 Inc.

Oil US$92 billion US$114 billion 24 percent

Gas US$80 billion US$116 billion 45 percent

• African per annum requirements:

Today By 2030 Inc.

Oil US$10 billion US$14 billion 40 percent

Gas US$5 billion US$10 billion 100 percent

*:Based on 2003 version of IEA World Energy Investment Outlook

5© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.

Major Constraints on Closing Investment Gap

Capital ConstraintReporting Constraint

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Reporting Constraint

Decision-making orientation

Past financial performance

Strategy and business model

Insights - drivers and risks

Outlook

Boards Making Investment Decisions

/ CEOsLooking Out and

Requesting Capital

Major Constraints on Closing Investment Gap

7© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.

Major Constraints on Closing Investment Gap

Business Constraint

Current reporting formats

External forces

Fragmented capital markets

Inter-sector capital race

Reporting Constraint

Decision-making orientation

Past financial performance

Strategy & business model

Insights - drivers & risks

Outlook

Capital Markets Looking In and Allocating

Capital Between Competing Investment

Propositions

8© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.

The Performance Reward Equation

Performance = Reward

Capital Licences to operate Reputation

9© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.

The Performance Reward Equation

Performance = Reward

Reporting

Strategy

Performance

Insights

Capital Licences to operate Reputation

10© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.

The Performance Reward Equation

Performance = Reward

Reporting Communications

Strategy Understanding

Performance Synchronization

Insights Precision

Capital Licences to operate Reputation

11© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.

Business Reporting & Communications Framework

Balanced reports portfolio Effective communications

12© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.

Business Reporting & Communications Framework

Balanced reports portfolio

• Flagship business report

• Special purpose reports

Effective communications

13© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.

Business Reporting & Communications Framework

Balanced reports portfolio

• Flagship business report

• Special purpose reports

Effective communications

• Careful report selection

• Common template

• Stakeholder perspectives

Decision-making models

Credibility

14© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.

Business Reporting & Communications Framework

Balanced reports portfolio

• Flagship business report

• Special purpose reports

Effective communications

• Careful report selection

• Common template

• Stakeholder perspectives

Decision-making models

Credibility

Driven by a ‘fit-for-purpose’

reporting and communications strategy

15© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.

Evolution

2005/2006 - Conformance ‘dividends’

2007/2008 - Performance ‘dividends’

2008 and beyond – oil and gas sector ‘dividends’

16© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.

Evolution

2005/2006 - Conformance ‘dividends’

Compliance

Clarity

Reputation

2007/2008 - Performance ‘dividends’

2008 and beyond – O&G sector ‘dividends’

17© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.

Evolution

2005/2006 - Conformance ‘dividends’

Compliance

Reputation

Clarity

2007/2008 - Performance ‘dividends’

Performance insight

Sustainability

2008 and beyond – O&G sector ‘dividends’

18© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.

Evolution

2005/2006 - Conformance ‘dividends’

Compliance

Reputation

Clarity

2007/2008 - Performance ‘dividends’

Performance insight

Sustainability

2008 and beyond – O&G sector ‘dividends’

19© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.

Oil & Gas Sector Investment Gap

US$6 trillion to 2030

Global per annum requirements:

By 2030 Inc.

Oil US$114 billion 24 percent

Gas US$116 billion 45 percent

African per annum requirements:

By 2030 Inc.

Oil US$14 billion 40 percent

Gas US$10 billion 100 percent

*:Based on 2003 version of IEA World Energy Investment Outlook

20© 2004 KPMG LLP, a UK limited liability partnership and the UK member firm of KPMG International, a Swiss cooperative. All rights reserved.

Thank you

Q&A

Presenter’s contact detailsPresenter’s contact details

Andrew JacksonAndrew Jackson

KPMG Al Fozan & BannagaKPMG Al Fozan & Bannaga

jandrew@kpmg.comjandrew@kpmg.com

www.kpmg.comwww.kpmg.com