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    Shale Gas:A NEW FEEDSTOCK REALITY

    PETER L. CELLA, CEO

    CHEVRON PHILLIPS CHEMICAL COMPANY LLC

    DECEMBER 14, 2011

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    Chevron Phillips Chemical: Our Global Reach

    Marketing, Sales &Distribution Offices in23 Countries

    37 ManufacturingSites

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    Partnerships in Saudi Arabia and Qatar

    3

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    Olefin Investments Focused on the Middle Eastand China Since 2005

    Source: CMAI

    Where Will the Next Wave of Capacity Be Built?

    Net Capacity Addition 2005-10

    4

    ----

    2,000

    4,000

    6,000

    8,000

    10,000

    12,000

    14,000

    16,000

    Middle East China Other Europe Amercias

    KTons/A

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    North America Has Extensive ShaleFormations Rich In Hydrocarbons

    5

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    Economic Development of Shale FormationsCombines Two Proven Technologies

    Source: American Petroleum Institute

    HydraulicFracturing

    HorizontalDrilling

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    More Than 50% of North America Drilling RigsUse Horizontal Technologies on Shale Plays

    0

    500

    1,000

    1,500

    2,000

    2,500

    Directional Horizontal Vertical

    Source: Baker Hughes

    7

    NAActiveDrillingRigCount

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    Shale Drilling Economics Improve withProductivity Gains

    010

    20

    30

    40

    50

    1st Quarter2007

    2011 YTD

    Wells per Year perRig

    0

    1000

    2000

    3000

    1st Quarter 2007 2011 YTD

    30 Day Average InitialProduction (IP) Rate

    Mcf/d

    138%

    0

    20000

    40000

    60000

    80000

    100000

    120000

    1st Quarter 2007 2011 YTD

    IP Additions per Rig perYear Mcf/d

    410%

    X

    =

    114%

    Source: SouthwesternEnergy Financials forFayetteville region 8

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    -3

    -8

    80

    17

    3

    1

    -2

    21

    16

    16

    -5

    126

    1030

    5

    8

    342

    23

    153-7

    -2

    -8

    24

    1218

    10

    160

    23 26

    Dry Gas Focused Area

    Liquids-Rich/OilFocused Areas

    1,141

    Source: RigData,BENTEK: June 3, 2011

    MARCELLUS

    BAKKEN

    PERMIAN

    EAGLE FORD

    ANADARKO

    HAYNESVILLE

    DJ- PRB NIOBRARA

    Rig Additions Focus on Liquids-Rich Gas and OilShale Plays (Active Rig Additions Since May 2009 Lows)

    9

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    $0.00

    Liquids-Rich Formations Enjoy Much Lower PriceNeeded for Associated Gas to Earn Cost of Capital

    Source: RigData,BENTEK: June 3, 2011

    Barnett

    PRB

    Piceance

    San Juan

    $4.32

    $3.79

    $2.01

    $5.13

    Haynesville$3.79

    Pinedale$2.52

    Marcellus

    Eagle Ford $0.00

    FayettevilleGranite Wash

    Woodford

    $4.16$3.97

    Cana Woodford

    $0.00

    Bakken

    $0.00

    Permian

    $3.25

    $0.00

    $0.00

    10

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    United States Ethane Supply Expectedto Double by 2016

    -

    200

    400

    600

    800

    1,000

    1,200

    1,4001,600

    Mbbl/day

    Source: Bentek

    11

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    United States Ethane Re-Emerges as aGlobally Competitive Cracker Feedstock

    12

    0

    200

    400

    600

    800

    1,000

    1,200

    1,400

    - 25,000 50,000 75,000 100,000 125,000 150,000

    $/Ton

    Cumulative Ethylene Capacity, KMT

    Ethylene Cash Costs By Region

    2011 average Sept YTD

    2005

    Source: CMAI

    Middle East

    USPropane

    US Butane

    W. Europe

    NA Naphtha

    SE Asia NE Asia

    USEthane

    USPropane

    US Butane

    W. EuropeSE Asia

    NE Asia

    NA Naphtha

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    North America Midstream and PetroChem Trends

    North America midstream companies have announced investments of >$15Bto build pipelines and fractionation capacity

    Pipeline capacity increasing by a factor of 3

    Fractionation capacity increasing by a factor of 2

    American Chemistry Council economic analysis of ethane supply growthimpact on United States

    $132B in economic output

    $4.4B in tax revenue

    17,000 new chemical industry jobs

    395,000 new jobs outside chemical industry

    Chevron Phillips Chemical announced a world scale cracker and derivativestudy

    13

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    Shale Gas is a Global Opportunity

    14

    Legend

    Assessed basins with resource estimateAssessed basins without resource estimateCountries within scope of reportCountries outside scope of report

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    Looking Ahead: Chevron Phillips ChemicalWill Be There

    Ethylene demand growth is forecast to require 50-75 world-scale crackers by 2025 The Middle East and China will continue to see development

    Development of global shale resources will also drive new petrochemicalinvestment

    0

    50

    100

    150

    200

    250

    2010 2025

    Global Ethylene Demand

    Mton/yr50-75

    Crackers

    WhereBuilt?

    GrowingDemand

    CompetitiveFeedstocks

    15Source: CMAI

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    ShukranTHANK YOU