1403 Kurdistan Investor Field Trip (Final)

8/10/2019 1403 Kurdistan Investor Field Trip (Final)

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Oil Search L imitedARBN 055 079 868

March 2014

Kurdistan

Investor Field Trip

Kurdistan RegionOverview


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Kurdistan Region Overview

A semi-autonomous Region within Iraq and operates under dual Iraq (Federal) law and Kurdistan Region (KR) laws Policy and major decisions determined by Regional Council for Oil & Gas Affairs Prime Minister, Deputy PM, Ministers for

Finance, Planning & Natural Resources

KR population approx. 4.6 million with ~ 70% of workforce employed by the Government

3 major cities dominate Erbil (~ 1mill ion), Sulaymaniyah (~500000) & Dohuk (~300000). Many small centres and villages

KR covers approximately 40,000 square kilometres (excluding disputed territories)

Significant development over the last 10 years - infrastructure, real estate, education and essential services

Many Kurds are returning from Europe, North America and UK to participate in the opportunities presented

Industry base centred on petroleum, cement works, oil refineries, property development & small business (retail). A smallmanufacturing base

Reliance on imports for fruit, vegetables and processed foods. Self sufficient in other aspects

Mostly a cash based economy with little take up of banking system financial system is undeveloped

Extensive wireless based communications network with little fibre optic and no copper wire infrastructure

Mix of Sunni and Shia Muslims. Also Arabs, Turkmen & Assyrians

Strong tribal affiliations in addition to ethnic & religious identities

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Iraq & Kurdistan History

Ancient area with a traces of early settled existence 23rdCentury BC. Has been part of Mesopotamia, Roman occupation,and Ottoman control

Iraq established in 1920 under British rule after defeat of the Ottoman Empire. Kurdish ethnic homeland divided betweenIraq, Iran, Syria & Turkey under Treaty of Lausanne (1923)

From 1923 Kurds sought recognition and independence (led by Shayk Mahmud Barzani). Successive nationalistmovements resulted in autonomy being granted in 1970 under a peace accord with Iraq which collapsed 5 years later, with

physical conflict ongoing until the overthrow of Saddam Hussein in 2003

2005 pivotal year; Iraq National elections & Jalal Talabani elected as President. Constitution adopted recognizing Kurdistanas a provincial region within Iraq (retroactive to 1992) and requiring Kurdish representation on the Presidential Council

2007 Kurdistan Oil & Gas Law enacted and PSCs signed. Draft 2007 Iraq O&G Law not enacted

Census to be held by 2008 to determine boundaries not undertaken. Boundary line remains an open issue

Constrained by reliance on GOI - KR exports are minor; funding comes from an allocation from the GOI budget based onproportional population which is set at 17%. Allocations from Bagdad in 2013 were $11b & for 2014 are projected to be

~$12.5b

Key issues between Iraq (GOI) and Kurdistan (KRG): Boundary of the Region entitlement to Kirkuk & related fields (disputed territories)

Right to & control over management of the oil & gas resource and right to independently export (and receive revenue)

Share of Federal Budget funding

Compensation for Saddams Anfals claim for US$450B submitted to Baghdad in 2013

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Iraq constitution: negotiated & approved by referendum in 2005, establishing Iraq as a single federaldemocratic State including the KR & sharing certain powers with the Regions

Kurdistan Government: Parliamentary system with 111 elected members of which 11 seats arereserved for non-Kurdish minority communities of the KR. Elections held every four years

Power share: The two ruling parties (KDP & PUK) have operated under a 50/50 power sharingagreement since the formation of KRG in 1992. Contested the 2005 and 2009 elections as acoalition

Change in political landscape: Gorran Party established in 2007 (breakaway from the PUK) haschanged the political map of the region. Gorran polled second to KDP in the 2013 election, PUK 3rd

New KRG government (post Sept 2013): Yet to be formed, expected to comprise of representativesfrom the 3 parties with KDP retaining the majority

Iraqi parliament: (Council of Representatives COR) consists of 275 members. United Iraq Alliance(UIA 85 seats) is the largest bloc. Prime Minister Malikis Islamic Dawa Party is part of this bloc

Kurds are allocated 59 seats in COR and are largely grouped in the Democratic Patriotic Alliance (DPAK 53members) which acts as a unified voting bloc. Independent or non-affiliated Kurds hold the other 6 seats

COR elections (due in April 2014) dominate the relationship and negotiations between KRG and Iraq

KR Laws: Independent Judicial system like Iraq. New Federal laws not applicable in KR unlessendorsed through KR legislation

Government

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KR Area is Close to Fully Contracted- Prospective acreage, - resource estimate of 40 billion barrels oil and 60 Tcf gas (USGS, 2010)- Most of the available blocks have been taken up 28 IOCs in the Region

Block OperatorA Taza Oil SearchB Garmian WesternZagros

C Topkhana / Kurdamir Talisman

D Ain Sifni Hunt

E Akre-Bijeel MOL (Kalegran)

FAl Qush / Bashiqa / Pirmam /

Betwata / Qara-Hanjeer /Arbat East

ExxonMobil

G Atrush TAQA

H Bazian / South Sangaw KNOC

I Ber Behr / Chia Surkh / Miran GenelJ Dohuk / Tawke / Irbil DNO

K Sindi/Amedi Perenco

L Sarsang HKN Energy

M Central Dohuk Murphy

N Sulivani Petroquest

O Sheikh Adi / Shaikan Gulf Keystone

P Dinarta / Shakrok Hess

Q Rovi / Qara Dagh / Sarta Chevron

R Barda Rash Afren

S Hawler Oryx

T Khurmala Kurdistan NOC

U Harir / Safeen Marathon

V Bina Bawi OMV

W Taq Taq Kewa Chirmila TTOPCO

X Qala Dze / Piramagrum Repsol

Y Khalakan Gas Plus

Z Chemchemal / Kor Mor Pearl Pet

aa Baranan TOTAL

bb Shakal / Halabjah Gazprom

A

B

E

C

C

D

F

F F

F

F

F

G

H

H

I

I

I

J

J

J

K

LMN

O

O P

P

Q

Q

Q

R

S

T

U

U

V

W

X

X

Y

Z

Z

aabb

bb

Expl/Dev/Prodn Block

Taza Block

Open Block

Oil Field

Gas Field

Gas/Condensate Field

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Ongoing Development of Energy Infrastructure

to Serve the Progression of Discoveries

Current Exports to TurkeyReported ~70,000 bbl/d via truck

Oil pipelinesKirkuk Ceyhan: 2012 exports of 400,000mmbbl/d versus 1.6mmbbl/d capacity

Tawke Fish Khabur: 100,000 bbls/d

Taq Taq Khurmala: 20. Capacity ~150,000bbl/d.

Khurmala Fish Khabur: 24 - 36, Capacity~300,000 bbl/d

Gas pipelinesKor Mor Chemchemal Erbil power plants,174km, 350mmscf/d

Shaikan Field to Dohuk power plant: 50km (underconstruction)

Planned oil & gas pipeline South

Oil & gas pipel ine extension to the Garmian Blockplanned by KRG*

Refineries & Power Stations3 Refineries: (~150kbbl/d capacity). Plannedexpansions set to double capacity over 5 years

4 major Power Plants (2200MW). Plannedadditions set to double installed capacity over 5years

*As published in The Oil & Gas Year 2013, Kurdistan Region of Iraq

1

2

3

4

5

6

7

8

1

2

3

4

5

5

6

7

Miran

8

Fish Khabur

Khurmala

Kurdamir

Garmian

IRAN

TURKEY

Chemchemal

Power Plant

100% Gas

Erbil Power Plant

50-75% Gas

Balance Diesel

Dohuk

Power Plant

100% Diesel

New Khurmala

Power Plant

125mmscf/d

Initially Distillates

IRAQ

Dev/Prodn Block

Taza Block

Exploration/Open Block

Oil Field

Gas Field


Oil Pipeline

Gas Pipeline

Proposed Oil Pipeline

Power Plant

Refinery

Taq Taq OilField

Tawke Oil

Field

Kirkuk Oil

Field

Kor Mor

Liquids &Gas Field

Taza

PSC

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Export Infrastructure & Export Routes

Oil :

KRG 40 oil pipeline connecting Taq Taq field toFish Kabur on Iraq-Turkey border completedlate 2013. 1mmbbl/d capability (export pointCeyhan)

Approx. 1mmbbl of crude oil export injected intonew pipeline since January 2014 (in storage)

KRG building closer ties to Turkey, providinglong term alternative export route (Turkey-

Kurdistan Energy Accord signed March 2013) Significant step towards achieving sustainable

exports from region and unlocking value from oilfields

Turkey cautiously supports KRG export plan butwould like Baghdad endorsement

Current production capacity 400kbbl/d

Route to south & north via Turkey (Ceyhan)remains an option subject to agreement withGOI

Domestic refinery demand remains an openmarket

Gas:

Turkey export, domestic power generation,cement, ammonia/fertilizer options

Proposedpipeline

Fish Khabur - Turkey:- 40 500,000 bbl/d- 46 1 mmbbl/d

Fish Khabur

Khurmala

Kurdamir

Khurm ala - Dohuk:

- 36 300,000 bbl/d

Taq Taq - Khurmala:

- 20 150-200k bbl/d

IRAN

TURKEY

IRAQ

Garmian

Dev/Prodn Block

Taza Block

Exploration/Open Block

Oil Field

Gas Field


Oil Pipeline

Proposed Oil Pipeline

Taq Taq Field

Tawke Field

Kirkuk Field

Kor Mor Field

Taza

PSC

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Oil Export Projections

0

500

1000

1500

2000

2500

3000

3500

2013 2012 2011 2010 2009 2008

Iraq and KRG (est.) HistoricalProduction and Exports (EIA)

Iraq Production Iraq Exports KRG Production KRG Exports

KRG projection for KRI (December 2013 Minister Ashti Hawrami) -Production target of 1 mmbbl/d by 2015, 2 mmbbl/d by 2020

Iraq projections of 5 mmbbl/d by 2018 & 6 mmbbl/d by 2020 and to be aleader of OPEC production

53 rigs in the KRI as at late 2013 with more on order & for delivery in 2014

Many discoveries since 2007 with 11 fields declared commercial

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Op er at or Bl oc k Fi el d De cl ar at io n d ateDNO Internat ional E rbi l Bas tora Jun-11

DNO Internat ional Erbi l Benenan Jun-11

Afren

Rash Barda Rash Jul -11

Gulf Keystone Shaikan Shaikan Aug-12

DNO Internat ional Dohuk Summai l Oct-12

OMV Bina Bawi Bina Bawi Mar-13

Genel Energy Miran Miran Aug-13

Kalegran (MOL) Akri B ijeel B ijeel Oct-13

Hunt Oi l A in S ifni S imri t Nov-13

WesternZagros Garmian Sarqala Dec-13

Oryx Petroleum Hawler Demir Dagh Feb-14

11 Declarations of Commerciality


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1) Oct 2005

Iraqi constitution adopted2) Feb 2007

Draft federal petroleum law

3) Jun 2007Agreement on initial revenue sharing 17% of net oil revenues from allregions in Iraq go to Kurdistan

4) Aug 2007KRG petroleum law approved by KRG Parl iament

5) Feb 2011Iraqi Prime Minister announces Kurdistan PSCs will be respected. Oil

exports from Kurdistan resume via Federal system (Ceyhan)6) May 2011

Federal Ministry of Finance confirms release of the first oil export paymentto KRG contractor (approx. 50% of net revenues)

7) June & Sep 2011Kurdistan producers receive first 2 payments for oil exports from theFederal Ministry of Finance

8) Apr 2012KRG cease oil export in April due to dispute with the Federal Government

9) Aug 2012

KRG resumes oil exports to progress reconciliation with Federal Government overthe oil and gas law

10) Sep 2012Agreement signed with KRG and Federal Government to increase KurdistanRegions oil exports and ~$500m payment received from Baghdad

11) Dec 2012KRG cease oil exports due to ongoing dispute with the Federal Government

12) Jan & Feb 2013KRG approves trucked oil exports from Taq Taq field to Turkey. KRG (Ministry ofNatural Resources) announces intention to build its own export pipeline to Turkey

13) March 2013Agreements signed with Turkish government for gas supply from KRI. Turkeyindicates it will facilitate direct oil and gas exports

14) Nov 2013Construction completed on the Khurmala Fish Khabur oil Pipeline

15) Jan 2014Oil export shipments commence in KRG pipeline

2005 2006 2007 2008 2009 2010 2011 2012 2013 20141 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Significant Events in Development

of Kurdistan Region Oil Potential

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http://www.hess.com/


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Cost RecoveryUp to 40% of Net Available Oil

Reasonable Fiscal Terms

Summary of Taza PSC terms

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Total Oil Produced

100 bbls

Net Available Oil

Royalty Oil10% of Total Crude Oil

10 bbls90 bbls

36 bbls

Profit OilSharing based on R-factor(1)sliding range of 30% - 12%(2)

54 bbls

KRGContractor Group

38 bbls

70%30%

16 bbls

3 bbls10 bbls 3 bbls

OSH

60%

TOTAL

20%KRG

20%OSH

75%

TOTAL

25%

27 bbls 9 bbls

Entitlement

PSC Governance:

Management Committee (2 MNR reps & 2OSH reps) for all operational matters

Certain approvals require KRG (Minister)approval (e.g. Appraisal & Development plans)

Same structure for gas with a different (higher) R-Factor share to Contractor (40% 20%)


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0%

5%

10%

15%

20%

25%

30%

35%

40%

Tawke Garmian Kurdamir Taq Taq Taza Kurdamir Tawke* Barda Rash Atrush Taq Taq* Shaikan

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30%

0%

30%

40%

Contractor profit oi l allocation % (post capacity building payment %)

30%20%

3%

20%

3%

20%

capacity building payment %

0%

New terms introduced in early 2011

Reasonable Fiscal Terms

First mover advantage in Kurdistan


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March 2014

Kurdistan

Investor Field Trip

Kurdistan RegionalGeology / Exploration


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Kurdistan Geology Background

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Reproduced from Petroceltic Presentation


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Location and Regional Setting

Located on the NE collisionalmargin of the Arabian Plate

Structuration is a result of thecollision of Arabia/N Africa withEurasia

Comprises Low fold Zone in SW

to High Fold and Thrust Zone inN and NE

Geological setting andpetroleum systems arecontiguous with adjacent Iran

Iraq lies in one of the worlds

most prolific hydrocarbonprovinces with numerous super-giant fields, including Kirkuk(20bln bbls)

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Kurdistan


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Location and Regional Structural Map

Iraq lies on the northern part of the

Arabian Platform - a long-lived, gentlysubsiding, southern continental marginof the Tethys Ocean

The plate motions from the Cretaceousto Tertiary closed the Tethys Ocean,resulting in the coll ision of the northernedge of the Arabian plate with the

Eurasian plate

As the Arabian Platform collided withthe Iranian block, structural shorteningof the Arabian Platform resulted,forming the Zagros Fold Belt and theZagros foreland basin

Continued convergence through thelater Tertiary produced southwardfolding and thrusting and produced theanticlines that characterise the ZagrosFold and Thrust Belt.

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Taza


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Taza area located on Arabian Platepositioned in Tethys ocean until Miocenecollision

Marine carbonate reservoirs, high TOCsource, regional seals

KurdistanTaza Area

Zagros Evolution Plate Tectonics

Homke, 2007


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Taza Area Regional Structure and

Objectives

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SW NE

TazaTrend

Prospective section is younger and deepermoving from High Fold Zone (Cretaceous,

Jurassic and Triassic objectives) to Mioceneand Oligocene primary objectives in Taza area

Source: Western Zagros presentation


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Southern Kurdistan Licensing

Oil and Gas Fields

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Taza

Source: WoodMackenzie


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Kurdistan Region of Iraq

Zagros Fold Belt Stratigraphy-Taza Area

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Taza-1 Oil bearingOligo-Miocenereservoirs proven inLow Fold Zone fractured carbonates

plus dual porositysystem

Taza-2 plannedTD in ShiranishFormation, majorreservoir at Kirkukand Taq Taq

S

R

S

S

R

S

R

S

Main Sealing Units

Main Reservoir Units

Main Source Rocks

R

R

S

R

SR


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Example reservoir distribution:

Jeribe Formation

Jeribe Fm is widespread and its open fracture system will contribute to sustained flow

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Source: Oil Search 2013


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Kurdistan Region Iraq

Early Movers Pre 2005

The first two licences inKurdistan wereawarded in the early2000s - Taq Taq toAddax and Tawke toDNO

Most of the area wasvacant with muchearlier discoveries atKor Mor, Chem Chemaland Chia Surkh lyingdormant

OSL involved early onin a number of blocks,but divested due to lackof materiality, retainingTaza due to upsidepotential

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Source: TOGY 2009 Yearbook


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Kurdistan Contracted Acreage -

2013

Since 2007, licencingactivity has increasedsignificantly. By the end of2011 most of the territoryadministered by the KRGhad been licenced.

More than 50 blocks havebeen awarded.

The blocks have generallybeen awarded on anegotiated basis.

Almost all of the PSCs arepublished on the KRGsMinistry website.

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Taza


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Kurdistan Drilling Success

Exploration and Development in Kurdistan is steadily increasing.

Approximately 55 exploration wells drilled since 2003

More than 40 drilling rigs are currently active in the country

High overall success rate (60%) confirms highly prospective region.

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Major oil discoveries:

Shaikan (GKP) Tawke (DNO)

Barda Rash (Afren)

Atrush (Aspect)

Kurdamir (WZ)

Taza (Oil Search) Large gas

discoveries:

Miran West (Genel)

Topkana (Talisman)


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Zagros Basin Creaming Curves

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The initial discovery well, Naft Khaneh-1, was

drilled in 1920.

126 exploration wells have been drilled since

1920 resulting in the discovery of 68bn boe.

The largest field, Kirkuk, discovered in 1927.

There is significant remaining potential.

A number of key wells will be drilled during 2014.

Kurkuk

Shaikan Shaikan


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March 2014

Kurdistan

Investor Field Trip

Taza AppraisalProgramme


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Taza PSC

PSC Effective Date 1 November 2009; Exploration Period of 5 years Very encouraging results at Taza 1 (2013):

Positive test light oil, flow rates 1,100 bopd from Euphrates / Upper Kirkuk

Continuous shows over a c. 250m interval from top Jeribe

Currently in Second Sub Period of the Exploration Period, to 31 October 2014

Obligations in current Sub Period are 1 exploration well to be drilled to theCretaceous and optional seismic

Following Taza 1 discovery, our activity levels in country have increased

significantly Multi-disciplinary appraisal team formed

Appraisal data gathering with further wells, flow testing and 3D seismic during2014, in order to prepare for a decision on commerciality

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Taza 2 Update


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Taza 2 update

Taza 2 is the commitment exploration well of the Second Sub-period Located 10km NNW of Taza-1

To be completed by 31 October 2014

Taza 2 objectives:

Complete Taza PSC Second-Sub Period Commitment

Penetrate Cretaceous Shiranish Objective

Gain appraisal information on the Jeribe/Dhiban , Euphrates and Kirkukformations away from Taza-1

Facies distribution

Fracture distribution Pressure profile and communication

Fluid variations

Test deeper reservoirs Jaddala, Aliije, Shiranish in a near crestalposition on the Taza structure

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Taza 2 Location

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-

K42-10-06K42-10-04K42-10-02

L.Bakhtiari

U.Fars

L.Fars

Saliferous

Jeribe

Shiranish

Jurassic

Qamchuqa

Euphrates

NESW Taza2


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Taza-2 Predicted Stratigraphy

200m of Shiranish planned Depth as of 12 March 2014 is 2611m

at 13.5/8 casing point

Following the setting of the 13.5/8

casing, plan is to drill ahead in12.1/4 hole to just above the JeribeFormation, expected at c. 3200m MD.

A further casing string is planned tobe set at this depth before drillingahead into the first reservoirobjectives

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Further wells -

Taza 3, 4


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Taza 3 and 4 Locations

Approximate TopReservoir DepthStructure

Taza 3 southeast wellfor structural, reservoir

and fluid constraint nearplunge

Taza 4 Forelimb(western) well for

structural, fluid, andreservoir constraint,also fracturecharacterisation anddistribution

Taza 4

Potential Location

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Taza 3 Location


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Location of Taza 3

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Location Window for Taza 4

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Taza4Target Box


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Taza 3D

Seismic


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Euphrates ML Depth Map

Key contracts awarded andpreparatory work has started

Mobilisation of equipment andpersonnel to field initiated atend-February

Camp construction ongoing

ERW survey initiated Seismic acquisition expected to

begin this month

2D long-offset dip line to beacquired through potential Taza4 location

Acquire before 3D survey

Wide Azimuth processing toimage deep structure andsteeper dips

Use for 3D parameter testing

Taza 3D Seismic Survey

3D Survey Area

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Taza 3D - Status

ERW clearance mobilising into field Start-up meeting held with AOFS on Jan 29 in Erbil

AOFS mobilising camp

AOFS currently organising Security, arranging local hiring committeeand preparing HSES documents (Seismic Risk Plan, ERP, BridgingDocuments, etc.)

AOFS surveyors in field checking Control Stations from 2010 survey toensure that 3D survey is to a common datum.

Community engagement ongoing re duration and nature of work andlocal hiring opportunities

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Taza EarlyDevelopment

Potential


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Investigating the potential to bring in a 5,000 bopd facility for a long term testperiod on one of the existing or new Taza wells.

EWT / EPF has a number of strategically important objectives. Specifically todemonstrate:

Sustainable production rates with asafe, clean and reliable operation

Quality data to further evaluate the welland reservoir pressures, fluids,performance

Decision support for the EWT facility

expansion to EPF with 10,000 bopdcapacity as first phase of development

Longer term investigation of thepresence of H2S / CO2 which wereobserved in the Taza 1 well tests

Example 10,000 bopd EPF in Kurdistan

Taza Extended Well Test / Early

Production Facility

Shaikan 1 EPF

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Development Concept Select Study

Oil Search is conducting a prequalification process to identify and engage a ConceptSelect partner to carry out option selection studies for Taza Development and to ensurethe field is developed as efficiently as possible

We are in the process of identifying, screening, and selecting a group of specialistcontracting organisations capable of performing these concept selection option studieswho have prior MENA experience in similar reservoirs

Currently there are 5 contracting organisations completing a prequalification / EOIsubmission process

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March 2014

Kurdistan

Investor Field Trip

CommunityAffairs


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Taza Block Demographics

Approx. 1400 residents on site across 27 villages. 11 former (destroyed) villages uninhabited

Many former residents & family descendants have migrated to nearby towns

Subsistence lifestyle relying on seasonal agriculture & herding

Limited infrastructure which varies between villages

Predominantly Kurdish

10 villages with schools


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CA/CSR Activity

Dedicated Community Affairs team currently of 8 local staff and two expats

Working closely with local authorities on labour hire & work opportunities

Openly available to the community and enjoy a very good relationship

Community Development projects directed at high impact areas

schools

water and electricity supply

road upgrade projects general community projects


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Oil Search L imitedARBN 055 079 868 46


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Disclaimer

While every effort is made to provide accurate and complete information, Oil Search Limited does notwarrant that the information in this presentation is free from errors or omissions or is suitable for itsintended use. Subject to any terms implied by law which cannot be excluded, Oil Search Limited acceptsno responsibility for any loss, damage, cost or expense (whether direct or indirect) incurred by you as aresult of any error, omission or misrepresentation in information in this presentation. All information inthis presentation is subject to change without notice.

This presentation also contains forward-looking statements which are subject to particular risksassociated with the oil and gas industry. Oil Search Limited believes there are reasonable grounds forthe expectations on which the statements are based. However actual outcomes could differ materiallydue to a range of factors including oil and gas prices, demand for oil, currency fluctuations, drillingresults, field performance, the timing of well work-overs and field development, reserves depletion,progress on gas commercialisation and fiscal and other

government issues and approvals.