Latin America Overview Latin American Upstream Overview Selected Countries Overview Houston,...

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Latin American Upstream Overview

Selected Countries Overview

Houston, November 2006

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RESERVES ARE LIKE FISH

• The fish is on the boat. You have weighed him; you can smell him and you will eat him.

• The fish is on your hook in the water by the boat and you are ready to net him. You can tell how big he looks (they always look bigger in the water)

• There are fish in the lake. You may have caught some yesterday. You may be able to see them, but you have not caught any today.

• There is water in the lake. Someone may have told you there are fish in the lake. You have your boat on the trailer but you may go play golf instead.

•PROVED DEVELOPED:

•PROVED UNDEVELOPED:

•PROBABLE:

•POSSIBLE:




National name: República ArgentinaPresident: Néstor Kirchner (2003) Land area: 1,056,636 sq mi (2,736,690 sq km); Population 39,921,833 Capital and largest city Buenos Aires, 13,349,000

Total exploratory wells drilled 7,648 (Onshore) / 188 (Offshore)Current Production Mbo/d = 665 MMcf/d = 5,042 bc/d = 35,466Cumulative Production MMbo = 9,536 Bcfg = 33,467Remaining Proven and probable Reserves MMbo = 3,269 Bcfg = 27,230

33 -Selected Countries Overview - Argentina

Argentina




Source: EIA


Production & Consumption




El Paso Corp

Empresa Desarrollo Hidrocarburifero Provincial SA

Empresa Nacional del Petroleo

Energia Argentina SA (ENARSA)

Eni SpA

EPP Petroleo SA

Equitable Resources Energy Co

Exploraciones Oromin SA

Exxon Mobil Corp

EZ Holding SA

Foxpetrol SA

Gener SA

Grecoil y Compania

Gyapro SA

Havana Group

Hidraco SA

Hinton Production Co Inc

Huayqui SA de Construcciones

Ingeniera SIMA SA

Ingenieria Alpa SA

International Finance Corp

ITSA SA

Kilwer SA

Korea National Oil Corp

Ledesma SAAI

Medanito SA

Metro Holdings SA

Misahar Argentina SA

Alianza Petrolera Argentina SA

Antrim Energy Inc

Apache Corp

Australian Worldwide Explor NL

BASF Group

BP plc

Bridas SA

Burlington Resources Inc

Central International Corp

Chanares Herrados SA

ChevronTexaco Corp

Chubut Province Govt

Cia Argentina Comodoro Rivadavia

Cia de Minas SA

Cia General de Combustibles SA

Clear SRL

Codi SA

Codipa SA

Colhue Huapi SA

Conevial SA

Connacher Oil and Gas Ltd

Corpet SA

Cutral Co SA

Desarrollo Petrolero Ganadero SA

Devon Energy Corp

Dong Won Corp

East Asia Gas Co Ltd

EHRENCAP SA


Operating Companies

Norwest Energy NL

Ormas SAICIC

Petro Andina Resources Inc

Petro Uruguay SA

Petroleo Brasileiro SA (Petrobras)

Petroleos Sud Americanos SA

Petrolera del Comahue SA

Petroquimica Comodoro Rivadavia SA

Pioneer Natural Resources Co

Produmet SA

Repsol-YPF SA

Rio de la Plata SRL

Roch SA

Royal Dutch/Shell

Rutilex Hidrocarburos Argentina (RHA) SA

San Enrique Petrolera SA

Santa Cruz Province Govt

Sebastian Maronese e Hijos SA

Servoil Int'l Ltd Argentina SA

Silsy SA

Techint Cia.Tecnica Int.SA

Tecnicagua SAICA

TOTAL SA

Tripetrol E & P Co

Tyax SA

Williams Companies Inc





• Five mayor prospective basins currently producing in the country. Activity heavily concentrated in Neuquén and San Jorge basins

• Policy downturn may have reached bottom. Good long term stability prospect

• Struggle to maintain hydrocarbon self-sufficiency may bring some new incentives

• Strong economic recovery underway, giving room to gradual increase of domestic gas prices

• Expansion of TGN and TGS pipelines easy restrictions in the gas market

• Comparatively high M&A activity. Still room for consolidation due to a substantial number of smaller operators




National name: República Federativa do BrasilPresident: Luiz Inácio Lula da Silva (2003)Land area: 3,265,059 sq mi (8,456,511 sq km); Population 188,078,227 Capital Brasília, 2,160,100Largest cities: São Paulo, 18,333,000; Rio de Janeiro, 11,469,000

Total exploratory wells drilled 3,754 (Onshore) / 2,216 (Offshore)Current Production Bo/d = 1,630,384 Mcf/d = 1,711,216Cumulative Production MMbo = 8,477 Bcf = 8,616 Remaining Reserves MMbo = 11,77 Bcf = 10,813

33 -Selected Countries Overview - Brazil

Brazil




Source: EIA

*Despite market liberalization, Petrobras still controls over 90 percent of Brazil’s crude oil production.


Oil Production & Consumption





Exploration Area under Concession

Source: ANP




A.P. Moeller (Maersk)

Amerada Hess Corp

Anadarko Petroleum Corp

Arbi Petroleo Ltda

Aspen

Aurizonia Empreendimentos Ltda

BASF Group

BG Group plc

BHP Billiton

BP plc

ChevronTexaco Corp

Cia Brasileira de Petroleo Ipiranga

Devon Energy Corp

Dover Technology Inc

EDP-Energias de Portugal SA

El Paso Corp

EnCana Corp

Eni SpA

Exinvest

Exxon Mobil Corp

Grupo Iberdrola

Japan National Oil Corp

Kerr-McGee Corp

Koch Industries Inc


Maritima

Mitsubishi Corp

Mitsui & Co Ltd

Newfield Exploration Co

Nexen Inc

Northern Oil ASA

Other partner(s)


Petropar

PetroSantander Inc

Petroserv SA

PortSea Oil & Gas NL

Queiroz Galvao SA

Rede Electrica Nacional (REN)

Repsol-YPF SA

Royal Dutch/Shell

SK Corp

Sojitz Corp

Starfish Oil & Gas SA

Statoil ASA

TDC Engineering Inc

Teikoku Oil Co Ltd (TOC)

TOTAL SA

W. Washington-SP

Operating Companies





• Political stability secured with recent reelection of Lula da Silva

• Regional success story, reaching self-sufficiency in spite of growing consumption

• Shelf to ultra-deepwater off-shore believed to offer a number of giant discoveries

• ANP taking measures to reduce Petrobras disproportionate presence.

· Limiting number of bids per operator in recent round· Requesting relinquishment of up to 200 mature fields

• Expanding market and distribution infrastructure generates good gas price scenario




National name: República de ColombiaPresident: Alvaro Uribe (2006) Land area: 401,042 sq mi (1,038,699 sq km); Population (2006 est.): 43,593,035 Capital and largest city: Bogotá, 7,594,000Total exploratory wells drilled 2323 (Onshore) / 55 (Offshore)Current Production Mbo/d =525.3 MMcf/d = 3,521Cumulative Production MMbo = 6,441 Bcf = 15,416Remaining Reserves MMbo = 1,453 Bcf = 6,711

33 -Selected Countries Overview - Colombia

Colombia






Source: IEA





Top 10 Operators

2003 2006

Source: ANH

Source: IHS





Source: ANH





Operating Companies

Adulis Resources Inc

Alpha Consultores Ltd

Andina Electrica

Apple Oil & Gas Ltd

Aviva Petroleum Inc

Baker Hughes Inc

BHP Billiton

Bob Moore

BP plc

Burlington Resources Inc

C & C Energy

ChevronTexaco Corp

Claudio Avila Geopozos y Cia

Colombian Holsan Ltda

Colregistros

Comercial de Oriente Ltda

Conequipos

ConocoPhillips

Drummond Ltd

Ecopetrol SA

Emerald Energy Plc

Empresa Nacional del Petroleo

Eni SpA

Erazo Valencia y Cia

Exxon Mobil Corp

Geoadinpro

Geoconsult Ltd

Geopetrocol Ltda

Geoproduction Oil & Gas

Halliburton Co

Harken Energy Corp

Houston American Energy Corp

Hughes, Dan R.

Ismocol de Colombia SA

Joshi Technologies Int'l Inc

Kappa Resources Colombia Ltd

Knightsbridge Investments

Loon Energy Inc

Mercantile Int'l Petroleum Inc

META Petroleum Co Ltd

Mohave Oil & Gas Corp

Montecz Ltda

Nexen Inc

Occidental Petroleum Corp

Omimex Resources Inc

Operaciones Petroleras Andinas (OPA)

Pacific Stratus Ventures Ltd

Parko Services SA

Perenco plc

Petrobank Energy & Resources Ltd


Petroleos Carbon Ltda (Petcar)

Petroleos Exploration-Petex SA

Petroleos Nacionales SA

Petroleum Equipment International Ltda (PEI)

PetroSantander Inc

Petrotesting Colombia SA

Prime Natural Resources Inc

Quadra Resources Inc

R-3 Exploracion y Production S.A.

Rancho Hermoso

Rangel Petroleos Ltd (Ranpetrol)

Ray Oil Tool Co

Repsol-YPF SA

San Domingo Group

Sheridan Corp

Sismopetrol

Talisman Energy Inc

Tecnicontrol

Tecnopetrol Inc

Texican Oil Plc

TOTAL SA

Union Fenosa SA

Winchester Oil & Gas





• Alvaro Uribe’s pro-business policies to be enhanced under new mandate

• ANH’s aggressively working to revert production decline. Bidding activity second only to Brazil

• Number of local players and small independents in the E&P sector creates M&A opportunities

• Mixed system of bidding rounds and open acreage makes possible to enter low exposure TEA’s

• Best economic terms in the region, and great prospectivity (don’t believe PEPS!)

• Improved security, but still a concern in the Llanos and Putumayo




National name: República del EcuadorPresident: Alfredo Palacio (2005)Land area: 106,888 sq mi (276,840 sq kmPopulation: 13,547,510 Capital: Quito 1,780,700 Largest cities: Guayaquil, 2,597,600

Total exploratory wells drilled 513 (Onshore) / 93 (Offshore)Current Production Bo/d = 531,817 Mcf/d = 25,383 Cumulative Production MMbo = 3,836 Bcf = 771Remaining Reserves MMbo = 4,600 Bcf = 345

33 -Selected Countries Overview - Ecuador

Ecuador




Source: EIA







Production by Sector

Source: IEA




Operating Companies


Agip Oil Ecuador BV

Andes Petroleum Co

Andipetroleos

Burlington Resources International

Canada Grande

Cayman Int'l Exploration Co

China National Petroleum Corp


City Oriente Ltd

Ecuador TLC SA

EDC Ecuador Ltd

Fosforocomp SA

International Sovereign Energy

Murphy Ecuador Oil Ltd

Occidental E & P Co

OMV AG

Overseas Petroleum & Investment

Pacifpetrol SA

Perenco Ecuador Ltd

Petrobras Energia Ecuador SA

Petroleos Sud Americanos SA

Petromanabi

Petroriva SA

Repsol-YPF Ecuador Inc

Santa Elena Oil & Gas

Sinochem

Southern Mineral Corp

Tecnie SA

TecpEcuador SA

Tripetrol Ecuador Inc





• Substantial increase in exploration and production due to the OCP oil pipeline 2003 completion

• Good prospectivity. Abundant exploration and rehabilitation opportunities if a future government brings some stability

• Marginal fields round failed to attract established operators. ITT will likely be different. Offshore, who knows?

• Actions to capture a portion of the high-oil-price driven windfall profits shouldn’t scare investors (C’mon, it’s happening in Louisiana!)

• French IFP working with Ecuadorian government on new model contract and fiscal regime

• Finding your way in the bureaucratic jungle can be a burden, but it can be done. Security, on the other hand, is good




Official name: Estados Unidos MexicanosPresident: Felipe Calderon (2006)Land area: 742,485 sq mi (1,923,039 sq km); total area: 761,606 sq mi (1,972,550 sq km)Population (2006 est.): 107,449,525 Capital and largest city: Mexico City, 19,013,000

Total exploratory wells drilled 5,034 est.Current Production b/d = 3,333,953 Mcfg/d = 4,817,367Cumulative Production MMbo = 33,703 Bcfg = 54,948Remaining Reserves MMbo = 23,500 Bcfg = 40,000

33 -Selected Countries Overview - Mexico

Mexico




Source: EIA







Proyected Oil Production & Consumption(US$ 10bn/year Investment Scenario)

Source: Pemex





Import / ExportGas and Refined Products




Mexico Exploration Projects

Source: Pemex






• Closed to direct foreign (or private, to that matter) investment in the energy sector since 1938 nationalization

• Pro-business PAN government was tentatively opening spaces (Burgos MSC’s). Vicente Calderon is thought to have a better political chance to enhance that policy

• Opening should be driven by necessity. Mexico’s critically low reserve to production ratio’s problem is now compounded by the production decline. (Cantarell, the second largest field in the world, (and producing 65% of the total Mexican oil output) is declining at about 14% a year)

• Pemex, most highly indebted company in the world, can not possibly undertake the needed investment

• Opportunities without equal in the Western hemisphere, where highly prospective country is mostly unexplored

• Scores of fields needing development or reactivation since Pemex concentrated in a few giants




33 -Selected Countries Overview - Peru

Peru

Capital LimaPresident Alan García Pérez (2006)Area 1,285,216 km² Population 27,968,000

Total exploratory wells drilled 1541 (Onshore) 361 (Offshore)Current Production Mbo/d = 111 - MMcf/d = 146Cumulative Production MMbo = 2,320 - Bcfg = 3,253Remaining Proven and probable Reserves MMbo = 1726 (2P) Tcfg = 16.65 (2P)




Source: EIA






Aguaytia Energy del Peru SRL

Andean Energy Corp SA

Barrett Resources Corp

BPZ Energy Inc, Peru

Burlington Resources Peru Ltd

Cia Petrolera Rio Bravo SA

Cia. Consultora de Petroleo

Daewoo International Corp, Suc. Peruana

Edegel SA

Empresa Petrolera Unipetro ABC S.A.

Fugro Robertson Ltd

Grana y Montero Petrolera SA

Hess Corp

Hunt Oil Co


Maple Production del Peru Ltd

Mercantile Peru Oil & Gas SA

Occidental Petrolera del Peru Inc

Olympic Peru Inc

Oracle Energy Corp


Operating Companies

Pan Andean Resources Plc (Peru)


Petrolera Monterrico SA

Petrolifera Petroleum del Peru SAC

Petro-Tech Peruana SA

Pluspetrol Peru Corp SA

Radial Energy Inc

Ramshorn International

Repsol Exploracion Peru SA

Sapet Development Peru Inc

Serpet Consult SA

Shona

Sibirskaya NefteGazovaya (Siberian O&G Co)

SK Corp

Sonatrach

Talisman Energy Inc

Tecpetrol SA

Upstream Consultants Ltd

Ziegler





• Hopes of political stability after the Ollanta Humala scare. Alan Garcia’s initial steps seem to show he has learned from past mistakes

• Dramatically improved contract terms in 2003, generating a high number of awards in 2005. Exploration activity will be revitalized, but probably not to the 1998 level

• Blocks promoted by Perupetro are open to direct negotiation in a first-come first-served basis. Formal bidding rounds too

• Gas potential (currently 17 TCF 2p) should be unleashed with the construction of the Camisea LNG plant, and domestic transportation infrastructure

• Investor-friendly environment may attract companies willing to take exploration risk. Limited M&A opportunities




National name: República Bolivariana de VenezuelaPresident: Hugo Chavez (1999) Land area: 340,560 sq mi (882,050 sq km); total area: 352,144 sq mi (912,050 sq km)Population 25,730,435 Capital (2003 est.): Caracas, 3,517,300

Total exploratory wells drilled 13,215 (Onshore) / 156 (Offshore)Current Production Mbo/pd = 3,216 Mmcf/d = 6,646 bCumulative Production Mmbo = 55,610 Bcf = 84,550 Remaining Reserves Mmbo = 76,560 Bcf = 147,860

33 -Selected Countries Overview - Venezuela

Venezuela




Source: EIA







Source: PDVSA




Operating Companies


Agencia Operadora La Ceiba CA

Amoco Venezuela Petroleum Co

Astra Quiamare SA

Bitumenes Orinoco SA

BP Exploracion de Venezuela SA

CARDON IV SA

Cartera de Inv. Venezolanas CA

Cerro Negro

Chevron Cardon III SA

Chevron Latinoamerica SA

ChevronTexaco Global

China National Petroleum Corp (CNPC)


CMS NOMECO Venezuela LDC

ConocoPhillips Venezuela BV

Coparex Latina de Petroleos SA

Corepli de Venezuela

Corod Produccion

Corporacion Venezolana del Petroleo

Cosa Ingenieros Consultores

Ecopek SA

Eni Venezuela BV

Exploracion y Produccion Colectiva SA

Fivenez-Distral

Harvest-Vinccler, C.A.

Hocol Venezuela BV

Inelectra SACA

IneParia

Inversiones Mata


LASMO BV

Maxus Venezuela (C.I.) Ltd

MORUY II SA

OLEOLUZ SA

OMV AG

Overseas Petroleum & Investment Corp

Perenco plc

Petrobras Energia Venezuela SA

Petrolera Ameriven SA

Petrolera San Carlos SA

Petrolera Zuata CA

Petroleum Technical Services Corp

PETROUDO SA

Phoenix International CA

Pluspetrol Venezuela SA

Polar Uno CA

Repsol YPF Venezuela SA

RME Venezuela

Samson Hydrocarbons SRL

Shell Venezuela SA

Sincrudos de Oriente SINCOR CA

Statoil Venezuela AS

Suelopetrol

Tecpetrol de Venezuela SA

Teikoku Oil Co Ltd

Total Oil & Gas Venezuela BV

Trio Placer Consortium

Urdaneta Gazprom SA

Veba Oel Venezuela Exploration

Vinccler Oil and Gas CA

Williams Companies Inc

YPF SA




New bid round for marginal fields in the works…

Bidding process likely to be announced Jan – Feb, 2007

No plans to favor NOC’s over IOC’s. Independents expected to be encouraged to

bid. 15 new mixed companies in fields

throughout the country. Most of the fields are likely to be located in

eastern Venezuela, specifically in the Oficina area.

•Fields will range from small (reserves

less than 30 MMBBL) to medium (reserves greater than 150 MMBBL).


Source: IPD





New bid round for marginal fields in the works…

Source: PDVSA/IPD





• Largest proven oil reserves outside the Middle East. (largest, period, if you count the Orinoco Belt). Two thirds of total Latin American gas reserves

• Don’t take at face value what the media (and Hugo Chavez) are telling you. The “Bolivarian Revolution’s” actual effect in the oil industry needs a second reading:

- Increased rate of return per working interest point- IOC’s no longer mere service contractors: now have direct title on the concession

by partnering with PDVSA in the Empresas Mixtas- The new regime gives the IOC access to price and production upsides- IOC’s may even be remunerated for performing operator-like functions

• Upper level PDVSA’ personnel fired after the 2003 strike, creating a technical and managerial vacuum (and the corresponding need)

• Highly prospective basins, including gas-prone offshore.

• Both direct negotiations and access through bidding available

• The perfect “counter-move” field?




How can ChileConsultChileConsult help?• Latin America business development, including entry strategy

planning and implementation

• Country risk assessment and mitigation

• Regulatory authorities’ relationship building

• Business opportunity screening and targeting

• Contact facilitation with international and domestic players

• Contract Negotiations

• Tax and contract analysis and evaluation

• Due diligence processes, including environmental risk assessment

• Establishing foreign branches and securing local professional services

www.chileconsult.com

Why can ChileConsultChileConsult help?• Inside understanding of the cultural and economic forces in play

• Extensive contact base all throughout Latin America

• Deep knowledge of the regional oil & gas industry

• Proven track record of deals closed

Oil & Gas Investment Scenario




An Attorney by education with extensive experience in the fields of international negotiations and new business development, as well as in business opportunity screening, project management and asset evaluation, primarily in the energy industry. Alberto has been exposed to a rich and varied experience through a career of more than 25 years, working efficiently with people from different professional and cultural backgrounds, and enjoys an extensive contact network in the international oil & gas business community as well as in government and entrepreneurial circles throughout Latin America

Self-motivated and possessing a creative problem-solving mentality, is fluent in English and his native Spanish, and has working knowledge of French and Portuguese.

Based in Houston, Alberto is an active member of the Association of International Petroleum Negotiators and the Chilean bar association. In his spare time enjoys motorcycling, tennis and shooting sports

www.chileconsult.com

ChileConsultChileConsult Leading Partner

Alberto [email protected]

Alberto Harambour2004 Buffalo TerraceHouston, TX 77019, USA+1 713 521 2664+1 713 922 9007 (mobile)

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