Empresa Nacional del Petróleo Third Quarter Results - ENAP

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Empresa Nacional del Petróleo

Third Quarter Results

December 2010

0

Private and Confidential


Disclaimer

Forward-looking statements are based on the beliefs and assumptions of ENAP´s management and on information currently available to the Company, They involve risks, uncertainties and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future, Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of ENAP and could cause results to differ materially from those expressed in such forward-looking statements,

This presentation contains certain performance measures that do not represent Chilean GAAP and IFRS definitions, as “EBITDA” and “Net financial debt”, These measures cannot be compared with the same previously used by ENAP and the same used by other companies.

Strictly private and confidential


Agenda

Financial PerformanceSection 3.

Earthquake EffectsSection 4.

3Q 2010 and Recent HighlightsSection 2.

ENAP OverviewSection 1.


� Created in 1950

� Is the largest and most significant oil producer and the only refiner in Chile, and the Chilean market leader in the refined oil products market

� 100% Chilean State ownership, second largest Chilean state-owned company

� Among the five largest companies in Chile based on revenues

� Revenues of US$6,001 millions and EBITDA of US$220 millions as of September 30, 2010.

� 3 refineries with a total aggregated amount refining capacity of 229,000 bbl/day.

� Extensive network for transportation, storage and distribution of crude oil, natural gas and refined products in Chile

� Represents approximately 40% of the energy matrix for the country

� Satisfies approximately 72% of internal demand of refined oil products

� Strong access to local and international financial markets

� Stable and long-term relationships with suppliers and buyers

� The highest rated oil and gas credit in Latin America (A3 / BBB- / A by Moody’s/ S&P/ Fitch Ratings respectively).

The Only Oil Refiner in Chile


� Government ownership with strong support as evidenced by:

– US$250 million capital contribution in 2008

– Capitalization of retained earnings at the ENAP subsidiary level

– Temporary suspension of dividends to The Republic of Chile

– Confirmation of ENAP’s management after new presidential administration took office

� The Republic of Chile is the highest rated country in Latin America: A1 (Positive Outlook) / A+ (Positive Outlook) / A (Stable Outlook) by Moody’s/ S&P / Fitch Ratings respectively.

� Relationship with the owner

– Managed with an autonomous administration by professional managers

– Chilean government and its agencies closely supervise and regulate ENAP’s operations

– The Chairman of the Board is the Minister of Energy

– ENAP requires authorization from the Ministry of Finance for budget approval and debt issuance

Strong Support by The Republic of Chile


Agenda






� In September ENAP started the works in “Plan C”, the third alternative put in place in Mina San José in order to rescue the 33 miners trapped in the mine. The drilling reached 509 meters in 23 days of work.

� ENAP closed a loan for up to US$200MM to finance the construction of an alkylation plant in the Aconcagua Refinery.

� ENAP renewed it contracts with Ecuador, gaining a new block in the process.

� As part of a cost reduction and restructuring process, ENAP reduced its labor force in approximately 13% (478 employees).

� ENAP signed an agreement with Universidad de Chile to develop a Knowledge Administration Program together in order to develop technological support in innovation and sustainability in processes related to energy savings and renewable energies.

� ENAP bought the remaining participations in its subsidiaries Etalsa, Petrosul, Enercon and Prodisa.

� ENAP is beginning a process inviting international oil companies to associate with ENAP and request to the State of Chile a Special Operations Contract (CEOP) to explore for hydrocarbons in 5 offered areas in Tierra del Fuego.

� New commercial contracts were signed with Terpel and Santa Elena for 2011. The commercial contracts with the other clients for 2011 are been negotiated and are expected to be closed at the beginning of next year

� S&P changed ENAP´s outlook from stable to positive and Fitch Ratings ratified the current rating.

� The insurance policies for ENAP and its related companies are in the process of been renewed.

3Q 2010 and Recent Highlights


86,4%82,4%

87,1%80,8% 84,1%

0%

25%

50%

75%

100%

2006 2007 2008 2009 Sep'10

Use

Rat

e

Refining and Logistics (R&L)

The average price of crude oil for the period January-September 2010 was US$77,7/bbl, which increased a 35,6% from US$57,3/bbl for the same period in 2009.

The international refining margin of ENAP’s products mix as of September 30, 2010 reached an average of US$ 6.8/bbl, which represents a 1,5% increase in comparison with the same period ofthe previous year, where the average refining margin reached US$6.7/bbl.

The utilization rate as of Sep’10 reached 84,1%, level which is in line with the average of the last 4 years and represents a full recovery from the 65% shown as of Jun’10 (which represented the diminished capacity at the moment of the Bio Bio Refinery as a consequence of the earthquake).

WTI Prices

Downstream Highlights

International Refining Margins

-15

-10

-5

0

5

10

15

20Dec

-09

Jan-

10

Feb-1

0

Mar-1

0

Apr-1

0

May-1

0

May-1

0

Jun-

10

Jul-1

0

Aug-10

Sep-1

0

US$/bbl

Gasoline Diesel Fuel Oil Crack 6:2:3:1

-

20

40

60

80

100

120

140

160

w1

w3

w5

w7

w9

w11

w13

w15

w17

w19

w21

w23

w25

w27

w29

w31

w33

w35

w37

w39

w41

w43

w45

w47

w49

w51

w53

US$/bb

l

2009 2008 2010


1.224

4.201

2.035

2.522

1.182

1.955

3.454

1.106

0

2.323

4.645

Light Medium Heavy Other grossinputs

Cub

ic M

eter

s (T

hous

ands

)

Sep-09 Sep-103.188

2.396

975

1.421

607

966

2.330

1.939

9381.133

546725

0

500

1.000

1.500

2.000

2.500

3.000

3.500

Diesel Gasoline LPG Fuel Oil Kerosene Others

Cub

ic M

eter

s (T

hous

ands

)

Sep-09 Sep-10

Refining and Logistics Performance (R&L)

Market Share 2010 in Chile

Refined Products Production

63,36%

93,77%

59,14%

95,64% 95,94%85,42%

72,02%62,11%

79,92%

62,51%

100,00% 97,56%

78,49% 74,64%

Diesel Gasoline LPG Fuel oil Kerosene Other Average

Sep-09 Sep-10

Crude Oil Processed Volume


Exploration & Production PerformanceCrude oil

� Production of crude oil occurs in Argentina (10,634 barrels per day), Ecuador (3,277 barrels of per day), Egypt (3,366 barrels per day) and Chile (2,520 barrels per day)

Natural Gas

� Main natural gas reserves and production facilities are in the Magallanes region (Chile) and Cuenca Austral (Argentina)

� In 2009, ENAP produced 9.3 mm boe of natural gas in Magallanes and 2.2 mm boe of natural gas in Cuenca Austral

2,6 2,6 2,6 2,5

10,3 11,3 11,0 10,6

4,14,0 3,8 3,3

2,2 2,2 2,3 3,4

2007 2008 2009 Sep-10

Chile Argentina Ecuador Egypt

19.2 20.2 19.8

Oil Production (thousand barrels per day)

19.6 33.7 34.6

Gas Production (thousand boe per day)

31.5 29.0

32,5 29,525,5 22,7

5,16,0

6,3

1,3

2007 2008 2009 Sep-10

Chile Argentina


Agenda






Source: ENAP. Data as of June 2009. Chilean GAAP EBITDA is the sum of operating profit plus depreciation expenses.

220425546(723)430EBITDA

11.5x

N/A

N/A

(956)

(6.0%)

(744)

(12,927)

$12,183

FY2008

IFRS

6.5x

2.5x

6.7x

200

6.1%

278

(6,819)

$7,098

FY2009

3.7%8.5%4.8%EBITDA Margin

Net Financial Debt / Total Equity

EBITDA / Financial Expense

Net Financial Debt / EBITDA (LTM)

Net Profit

Gross Margin

Cost of Sales

Revenues

US$ mm

8.4x

3.23x

N.A.

22

276

(4,695)

$4,971

Sep’09

IFRS

0.9x

3.0x

2.0x

51

291

(8,729)

$9,019

FY2007

Chilean GAAP

11.2x

1.72x

11.6x

(8)

82

(5,919)

$6,001

Sep’10

Consolidated Financial Highlights 2007 – 2010


Source: ENAP. Data as of June 2009. Chilean GAAP EBITDA is the sum of operating profit plus depreciation expenses.

444

5,116

3,939

2,965

2,151

5,560

2,598

2,231

77

Dec’09

IFRS

352

5,457

3,959

3,452

2,004

5,808

2,574

2,441

73

Sep’10

197

5,121

2,271

2,246

2,875

5,318

2,463

2,203

150

FY2008

IFRS

444

5,116

2,890

2,965

2,151

5,560

2,597

2,231

77

FY2009

879Net Financial Debt

Total Equity

Total Liabilities

Long-Term Liabilities

Current Liabilities

Total Assets

Properties Plant & Equipment Net

Current Assets

Cash and Equivalents

US$ mm

990

4,451

1,598

2,853

5,441

1,794

3,321

133

FY2007

Chilean GAAP

Consolidated Financial Highlights 2007 – 2010


6.0017.098

12.185

9.0197.8246.674

Dic-05 Dic-06 Dic-07 Dic-08 Dic-09 Sep-10

Financial Summary

Consolidated Sales – US$ millions

Consolidated EBITDA and EBITDA Margin – US$ millions and percentage

546220

-641

430457

6453,7%

7,7%

-5,3%

4,8%5,8%

9,7%

Dic-05 Dic-06 Dic-07 Dic-08 Dic-09 Sep-10

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%EBITDA EBITDA Margin


Debt Profile as of September 2010

Figures revealed correspond to ENAP’s direct debt plus a US$65MM Sipetrol credit that dues in December 2010.

In spite the raise of a 2,28% in the international price of crude oil between the 4Q 2009 and 1-3Q of 2010, the company’s financial debt plus the supplier’s credit increased a 0,4%, maintaining the indebtness level and showing an optimization of ENAP’sworking capital structure.

Financial Debt and Supplier Credit – US$ Millions

Net Debt Maturity Profile as of Sep’10 – US$ millions

Average life = 5.59 yrs

25

133

243 270

65

227

143

430

290

150

300

500

0

100

200

300

400

500

600

700

800

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

LT Bank Debt ST Bank Debt

Local Bonds International Bonds

4.016

2.968

1.048

3.171

928

3.318

714

Dec-09 Jun-10 Sep-10

Supplier´s Credit

Financial Debt (Banksand Bonds)

4.099 4.032

With the 2020 Bond Issuance the he outstandingdebt average life changedfrom 4,03 to 5,59 years.


Agenda






Earthquake Effects

� The total estimation of loss due to the earthquake for ENAP is approximately US$154MM, where US$78MM correspond to Business Interruption and US$76MM correspond to physical damage

� As of September 30, 2010 ENAP’s Financial Statements have incorporated US$86,1MM as claimed amounts resulted from the earthquake.

� Of the claimed amount, US$30,9MM correspond to Business Interruption and US$55,2 for physical damage.

� Currently ENAP is in the process of claiming the earthquake’s insurance policies.


Empresa Nacional del Petróleo Third Quarter Results - ENAP

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