Energy Security in the Western Hemisphere: Venezuela as the Cornerstone

© ChevronTexaco 2004 Confidential

Energy Security in the Western Hemisphere:

Venezuela as the Cornerstone

Ali Moshiri

President ChevronTexaco Latin America

Washington, June 22 2004

2Confidential

The world is growing faster than we think

The world will grow 50% by 2050

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Population growth requires energy growth

Oil and Gas are growing at 1.9 and 2.2% respectively

Total World Energy Demand

0

20

40

60

80

100

120

1980 1985 1990 1995 2000 2005 2010 2015 2020

Oil

Natural Gas

Coal

Renewable, Hydro, Etc

Nuclear

Million Barrels of Oil Equivalent per Day

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Naturally, the global energy supply/demand is in balance

0

500

1000

1500

2000

Discovered Undiscovered Resrves Growth Total

Worldwide Oil Consumption: Approximate 75,000 MMBOD

It will probably still be in balance without any radical changes for the next 30 years, but what happens regionally?

US Geological survey has 2 Trillion barrels of conventional oil using only 30-40% of Oil in place

Oil Resources (Bbbl)

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In the Oil Sector

0

1

2

3

4

5

6

0 1 2 3 4 5 6

0

1

2

3

4

5

6

0 1 2 3 4 5 6

0

1

2

3

4

5

6

0 1 2 3 4 5 6

Production: 20800

Consumpt: 28000

Balance: -7,200

Production: 8000

Consumpt: 2500

Balance: +5,500

Production: 21000

Consumpt: 4300

Balance: +16,700

Production: 8000

Consumpt: 21500

Balance: -13,500

Production: 16200

Consumpt: 19400

Balance: -3,200

Middle East reserve base is two times larger than the rest of the world. ME will gain even more strength - Remember the 70’s?

Americas

Europe & Eurasia

Africa Middle East Asia-Pacific

Reserves

Production

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Lets take a closer look at our HemisphereFirst at Latin America

000 BOD000 BOD Production

Consumption

Balance

Mexico 3600 1800 1800

Venezuela

3000 500 2500

Brazil 1500 1850 -350

Argentina 800 350 450

Colombia 600 200 400

Ecuador 400 150 250

T&T 150 NA NA

Peru 100 150 -50

Total LA 10,200 6,400 3,800The net consumption of other Latin American Countries= 1200mbod

Venezuela largest oil contributor to the region

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Now lets add US & Canada Production and Consumption

000 BOD000 BOD Production

Consumption Balance

USA & Can

10,600 21,600 - 11,000

Total LA 10,200 6,400 3,800

Americas -7,200Venezuela holds 52% of the Oil in the region

0 10 20 30 40 50 60 70 80

BBbls

Peru

T&T

Colombia

Other

Argentina

Ecuador

Canada

Brazil

Mexico

USA

Venezuela

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Can Venezuela Improve the future Western Hemisphere supply/demand balance?

Venezuela seems to be the cornerstone for any oil supply dependency improvements in the region given a 75 year R/P ratio

0

5000

10000

15000

20000

25000

30000

35000

40000

2002 2020

New Venezuela Heavy OilVenezuelaProduction (Ex- Venezuela)Americas Demand

How much more ?Venezuela 75

Ecuador 30Brazil 15T&T 15USA 10Argentina 10Other naMexico 10Peru 10Colombia 10Canada 10

R/P Ratio (years)

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Now, In the Gas Sector

253

250 1979

1931963

418445

NA S. Central America ME Europe Eurasia Africa AsiaPacific

R/P: 9YRS

R/P: 68YRS

R/P: 9OYRS

R/P: 20YRS

R/P: 80YRS

R/P: 42YRS

R/P: 240YRS

Latin America is in prime location to supply a gas hungry U.S market

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Mexico

Venezuela

Trinidad

Brazil

Argentina

Bolivia

Peru

Colombia

Mexico

Venezuela

Trinidad

Brazil

Argentina

Bolivia

Peru

Colombia

There are 362 TCF of natural gas searching monetization

POTENTIAL NET EXPORTERS

ATLANTIC BASIN:VenezuelaTrinidad

ColombiaBrazil - ?

PACIFIC BASIN:Peru

Bolivia

Reserves (Tcf) 1P 2PVenezuela 148 176Bolivia 24 52Argentina 27 38Mexico 9 32Trinidad 23 28Brazil 8 12+Peru 9 11Colombia 4 5TOTAL 252 362

PeruBolivia

Colombia

TrinidadBrazil

Venezuela

MexicoArgentina

0

40

80

120

160

200

R/P Ratio (2P)

R/P average of 100 Yr (2P basis)

Venezuela is in first place with 176 TCF of gas and with a large potential for new reserves offshore

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U.S needs in average 20 LNG trains of 4.7 mtpa to fulfill its local supply/demand gap

65

70

75

80

85

90

95

100

2000 2005 2010 2015 2020

Supply/Demand Gap

2010 2020High Case 9 BCFD 25 BCFD

Low Case 3 BCFD 8 BCFD

SUPPLY RANGE DEMAND RANGE

Latin America could easily provide 50% of those trains – Venezuela by itself can provide 20% of the average gap

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Conclusions

Western Hemisphere oil and gas supply/demand is highly unbalanced

Latin America surplus of Oil and Gas resources could potentially contribute to the security of oil and gas supply

Venezuela plays the critical role. Its large oil and gas resource base will help maintain a healthier and diversified portfolio of supply:

It Needs support of a Western Hemisphere energy policy that is efficient and effective

And business thinking should drive decision making.

The execution of a strategy to promote and develop important energy projects will require “Strategic Partnership”, “Timely Development” and “Efficient Capital Investment and Operational Cost”

ChevronTexaco is committed to the region with an emphasis in Venezuela

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Here are two examples of our commitment

a

Caracas

Puerto La CruzUpgrader @

J ose Industrial Site

20”Diluent

Returen Line

42”Pipeline

30”Pipeline

Drilling Central ProcessingFacilities

Reservoirs

Batching

Facilities

16”Pipeline

Caracas

Hamaca

Orinoco River

Puerto La Cruz

HAMACA PROJECTHAMACA PROJECT

ChevronTexaco 30%ConocoPhillips 40%

PDVSA 30%

Operating Agent:

Petrolera Ameriven

aa

Caracas

Puerto

La CruzUpgrader @J ose Industrial Site

20”Diluent

Return Line

42”Pipeline

30”Pipeline

Drilling Central ProcessingFacilities

Reservoirs

Batching Facilities

16”Pipeline

Caracas

Hamaca

Orinoco River

Puerto La Cruz

HAMACA PROJECTHAMACA PROJECT

ChevronTexaco 30%ConocoPhillips 40%

PDVSA 30%

Operating Agent:

Petrolera Ameriven

aa

Caracas

Puerto La CruzUpgrader @

J ose Industrial Site

20”Diluent

Returen Line

42”Pipeline

30”Pipeline

Drilling Central ProcessingFacilities

Reservoirs

Batching

Facilities

16”Pipeline

Caracas

Hamaca

Orinoco River

Puerto La Cruz

HAMACA PROJECTHAMACA PROJECT

ChevronTexaco 30%ConocoPhillips 40%

PDVSA 30%

Operating Agent:

Petrolera Ameriven

Caracas

Puerto La CruzUpgrader @

J ose Industrial Site

20”Diluent

Returen Line

42”Pipeline

30”Pipeline

Drilling Central ProcessingFacilities

Reservoirs

Batching

Facilities

16”Pipeline

Caracas

Hamaca

Orinoco River

Puerto La Cruz

HAMACA PROJECTHAMACA PROJECT

ChevronTexaco 30%ConocoPhillips 40%

PDVSA 30%

Operating Agent:

Petrolera Ameriven

aaaa

Caracas

Puerto

La CruzUpgrader @J ose Industrial Site

20”Diluent

Return Line

42”Pipeline

30”Pipeline

Drilling Central ProcessingFacilities

Reservoirs

Batching Facilities

16”Pipeline

Caracas

Hamaca

Orinoco River

Puerto La Cruz

HAMACA PROJECTHAMACA PROJECT

ChevronTexaco 30%ConocoPhillips 40%

PDVSA 30%

Operating Agent:

Petrolera Ameriven

Caracas

Puerto

La CruzUpgrader @J ose Industrial Site

20”Diluent

Return Line

42”Pipeline

30”Pipeline

Drilling Central ProcessingFacilities

Reservoirs

Batching Facilities

16”Pipeline

Caracas

Hamaca

Orinoco River

Puerto La Cruz

HAMACA PROJECTHAMACA PROJECT

ChevronTexaco 30%ConocoPhillips 40%

PDVSA 30%

Operating Agent:

Petrolera Ameriven

Two Integrated projects in oil and gas in Venezuela with investment levels of $5 and $2.5 billion

10 30' N

V e n e z u e l a

Ped ernale s

San Ferna ndo

C hagu aram a s

PO R T O F S PA IN

Golfo de Paria

Península de Paria

10 00' N

59 30' W60 30' W 60 00'' W61 00' W61 30' W62 00' W

D elta de l O rinoco

Bloque 6(d)

B loqu e 2

Bloque 4

10 00' N

P lata form a D eltana

B loque 3

09 30' N

Loran-1x

C o noco P hillips 3 2.5 %A gip 2 6%O pic 6 .5%P D V S A 35 %

B lo qu e O e ste d e l G o lfo d e P aria

Esm era lda-1

C orocoro-1 ,2 ,3 ,4 ,5

10 00' N

C a m p o C o roc o roC o n o co P hil lip s TD 13 ,7 60'

POSA

B lo qu e E ste de l G o lfo d eP a ria

C on o co P hillipsEN IO PICIne pa ria

G PA-01X“Punta Sur“

D elfin -1 x

Mercado en EEUU

Regas – Henry Hub

2010

Gasoducto

ALNG

10 30' N

V e n e z u e l a

Ped ernale s

San Ferna ndo

C hagu aram a s

PO R T O F S PA IN

Golfo de Paria

Península de Paria

10 00' N

59 30' W60 30' W 60 00'' W61 00' W61 30' W62 00' W

D elta de l O rinoco

Bloque 6(d)

B loqu e 2

Bloque 4

10 00' N

P lata form a D eltana

B loque 3

09 30' N

Loran-1x

C o noco P hillips 3 2.5 %A gip 2 6%O pic 6 .5%P D V S A 35 %

B lo qu e O e ste d e l G o lfo d e P aria

Esm era lda-1

C orocoro-1 ,2 ,3 ,4 ,5

10 00' N

C a m p o C o roc o roC o n o co P hil lip s TD 13 ,7 60'

POSA

B lo qu e E ste de l G o lfo d eP a ria

C on o co P hillipsEN IO PICIne pa ria

G PA-01X“Punta Sur“

D elfin -1 x

Mercado en EEUU

Regas – Henry Hub

2010

Gasoducto

ALNG

PLATAFORMA DELTANA

© ChevronTexaco 2004 Confidential

Additional Information

15Confidential

In GasWe will double our production by 2010 and still in search of new opportunities

Brazil

Argentina

Colombia

Venezuela

Argentina

Colombia

Trinidad

Headquarters

Gas Production

Gas Exploration

Brazil

Argentina

Colombia

Venezuela

Argentina

Colombia

Trinidad

Headquarters

Gas Production

Gas Exploration

Brazil

Argentina

Colombia

Venezuela

Argentina

Colombia

Trinidad

Headquarters

Gas Production

Gas Exploration

Brazil

Argentina

Colombia

Venezuela

Argentina

Colombia

Trinidad

Headquarters

Gas Production

Gas Exploration

Venezuela

Argentina

Colombia

Trinidad

Headquarters

Gas Production

Gas Exploration

Venezuela

Argentina

Colombia

Trinidad

Headquarters

Gas Production

Gas Exploration

Venezuela contributes with 50% of that growth