THE ADDAX & ORYX GROUP Using Gas for Africa’s Energy Future Thierry Genthialon Chief Operating Officer of ORYX Oil & Gas 11th African Oil and Gas, Trade.

THE ADDAX & ORYX GROUPTHE ADDAX & ORYX GROUP

Using Gas for Africa’s Energy Using Gas for Africa’s Energy FutureFuture

Thierry GenthialonThierry GenthialonChief Operating Officer of ORYX Oil & GasChief Operating Officer of ORYX Oil & Gas

11th African Oil and Gas, Trade and Finance Conference & Exhibition11th African Oil and Gas, Trade and Finance Conference & Exhibition22-25 May 2007, Kenyatta International Conference Centre, Nairobi, Kenya22-25 May 2007, Kenyatta International Conference Centre, Nairobi, Kenya

NOT AN OFFICIAL UNCTAD RECORD

Table of ContentTable of Content

1. Addax & Oryx Group (AOG)

2. Downstream division: Oryx Oil & Gas

3. Macro-economic Data / Status of Africa

4. Focus on LP Gas

5. Using LP Gas for Africa’s Energy Future

1. Addax & Oryx Group Profile1. Addax & Oryx Group ProfileAn integrated petroleum and mining company - A fast-growing group

1.1 Addax & Oryx Group Mission1.1 Addax & Oryx Group Mission

To be a major player in the oil & gas industry in selected areas where we have a competitive edge

To continuously improve our safety and environmental performance

To add value in the communities in which we operate

2. Downstream Division: ORYX Oil & 2. Downstream Division: ORYX Oil & Gas Gas

A dynamic policy of investments in assets and networks

An essential player in the establishment and expansion of

the Addax & Oryx Group in Africa

2.1 ORYX Oil & Gas Portfolio2.1 ORYX Oil & Gas Portfolio

Storage: 5 key terminals providing 24 hour service +300,000 m3 HC & + 6,500 m3 LPG in 2005 Dakar, Abidjan, Cotonou, Freetown, Dar Es Salaam

Distribution 5 LPG cylinder filling plants

(Abidjan, Cotonou, Dar Es Salaam + satellites) +600 LPG retail outlets +100 Service stations network

(Tanzania, Cameroon, Nigeria, Benin, Burkina Faso)

+500 industrial installations Lubricants and Specialties

ISO 9000 Blending Plant, Dar Es Salaam Lubes and Bitumen network in East & West Africa

2.2 ORYX Oil & Gas Presence in Africa2.2 ORYX Oil & Gas Presence in Africa

40 10

2

3

1

45512

36

45

5

4

Network of 10 service stations

HC depot 10’000 m3

Gas terminal 2’000 m3

Gas filling center

Lubricant blending plant

Bunkering terminal

10

2

10

2 3

2

Using local competencies

Subsidiarity principle

Tailored marketing responses

Appropriate standards

2.3 ORYX Oil & Gas Specific 2.3 ORYX Oil & Gas Specific ApproachApproach

Synergies with AOG Trading arm

3. Macro-economic Data / Status of Africa3. Macro-economic Data / Status of Africa

3.1 World Energy Consumption

3.2 Africa’s Energy Consumption

3.3 Demographic data & estimates

3.4 Evolution of Gross Domestic Product

3.1 World Energy Consumption3.1 World Energy Consumption

World Energy Consumption by country in 2005

Europe & Eurasia28%

South &Central America

5%

North America27%

Asia Pacific32%

Middle East5%

Africa3%

World Energy consumption is projected to increase by 71% from

2003 to 2030.

The most rapid growth in energy demand is projected for nations

outside the Organization for Economic Cooperation and

Development (non-OECD nations).

3.7

2.82.6

2.4

1.8

1.3

1

0.7

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

%

Non-OECD Asia Central & SouthAmerica

Africa Middle East Non-OECD Europe &Eurasia

North America Asia Europe

Average Annual Percent Change per Year 2003-2030 in World Marketed Energy Consumption by Country

International Energy Outlook 2006, Energy Information Administration

3.2 Africa’s Energy Consumption by 3.2 Africa’s Energy Consumption by FuelFuel

International Energy Outlook 2006, Energy Information Administration

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

Qua

dril

lion

Btu

1990 2002 2003 2010 2015 2020 2025 2030

Africa's Total Energy Consumption by fuel reference case 1990-2030

Oil

Natural Gas

Coal

Nuclear

Other

3.3 Demographic Data and Estimates3.3 Demographic Data and EstimatesDemographic estimates

700

41387

7171355

4739

0

1000

2000

3000

4000

5000

Asia Africa Europe Latin America &Caribbean

NorthernAmerica

Oceania

Millio

nsPop mid-2006 Projected Pop mid-2025 Projected Pop mid-2050

Rate of Natural Demographic Increase %

1%

-0.10%

1.50%

0.60%

2.30%

1.20%

Asia Africa Europe LatinAmerica &Caribbean

NorthernAmerica

Oceania

Urban Population 2006

Africa37%

Northern America

79%

Oceania73%

Asia38%

Europe75%

Latin America & Caribbean

76%

© 2006 World Population Data Sheet, Population Reference Bureau

3.4 Evolution of Gross Domestic 3.4 Evolution of Gross Domestic Product Product

Gross Domestic Product (GDP) by Region Using Purchasing Power Parity Reference Case 1990-2030

0

10'000

20'000

30'000

40'000

50'000

60'000

70'000

Middle East Africa Central andSouth America

North America Asia Europe andEurasia

Billi

on 2

000

Dolla

rs1990

2002

2003

2010

2015

2020

2025

2030

GDP by Region Using PPP Reference Case 2010 in Billion 2000 Dollars

Africa3'073

Middle East

1'946

Europe and Eurasia

35'142

Central and South

America

4'136

Asia

19'639

North America

15'503

© International Energy Outlook 2006, Report #: DOE/EIA-0484(2006)

4. Focus on LP Gas 4. Focus on LP Gas

4.1 What is LP Gas ?

4.2 World LP Gas Production & Consumption

4.3 Incremental LP Gas Supply & Demand Growth

4.4 LP Gas in Africa

4.1 What is LPG ?4.1 What is LPG ?

World Energy Consumption 2005

Other 35.60%

LPG3.10%

Oil36.40%

Natural gas23.50%

A mixture of gaseous hydrocarbons, very rich in energy content, easy to store in liquid form at low pressure (contrary to natural gas)

What is LPG ?

It originates from the refining process of crude oil or comes as associated gas in natural gas or crude oil wells

Why is it so little known ?

Table 1: the weight of LPG in world energy consumption in million Tonnes oil equivalent

4.34.3 Incremental LP Gas Supply & Demand Incremental LP Gas Supply & Demand GrowthGrowth

31.133.5

23.3

17.9

38.9

35.2

0

5

10

15

20

25

30

35

40

Mill

ion to

nnes

1995-2000 2000-2005 2005-2010

Worldwide

Supply

Demand

Sousce: Purvin & Gertz’ presentation World LP Gas Forum Chicago, October 18, 2006

6.8

1.7

3.5

1.7

6

2.1

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Mill

ion to

nnes

1995-2000 2000-2005 2005-2010

Africa

SupplyDemand

5. Using LP Gas for Africa’s Energy 5. Using LP Gas for Africa’s Energy Future Future

5.1 Benefits of LPG

5.2 LPG: tailored for Africa

5.3 Structural Barriers to LPG Development

5.4 Making it work

5.1 Benefits of LPG5.1 Benefits of LPG

Main benefits Portable and powerful:

high calorific value for the same volume

Practical:6kg cylinders for domestic use, right at the heart of the family

Economical:non-perishable, non-degradable

“Clean”: non-toxic

Environmentally-friendly• an alternative to wood• an efficient way of fighting• deforestation

“Democratic”• beneficial for areas with

weak energy infrastructure• labour intensive• making life easier for women

5.2 LPG: 5.2 LPG: “Tailored” for Africa“Tailored” for Africa

5.3 Structural Barriers to LPG 5.3 Structural Barriers to LPG DevelopmentDevelopment

Lack of supply and/or infrastructure terminals and

plants

Inadequate regulations Cylinder property

right Cylinder exchanges

and cross-filling practices

Lack of standards (cylinders, appliances and filling plants)

Limited access for poorer classes cost of cylinder and appliances

Inappropriate taxation

cost of gas itself

import taxes indirect LPG subsidies to “traditional

fuels” subsidies: a “curse in disguise”

Lack of awareness from government authorities from the public in general

5.3 Structural Barriers to LPG 5.3 Structural Barriers to LPG DevelopmentDevelopment

5.4 Making it work5.4 Making it work

Supply and infrastructure

Role of private sector

Support from international institutions

Full involvement of investors & distribution companies

Capital intensive industry Slow but steady returns Involvement in the whole supply chain Consumer education

Commitment from international institutions Financing collective infrastructures Support for micro-credits Exchange of good practices

5.4 Making it work5.4 Making it work

Regulations developing adequate framework using experience from

well established and structured market opting for a cylinder deposit system banning cross-filling establishing a licensing system

Access for poorer classes and implication of taxes developing an efficient network financing solutions such as micro-credit eliminate taxation of LPG and cylinders (import duties

and VAT) harmonizing the tax system (in case partial taxation is

maintained) Support from governments Stability of the political and legal systems Rules governing trade and investment Regulations concerning industry operating and

safety standards Involvement in fair tax / duty treatment

Awareness & Consumer’s Adherence Openness to change

education campaigns (schools, associations, role of village heads)

- safety- applications

advertising campaigns by marketers

5.4 Making it work5.4 Making it work

ConclusionConclusion

Access to modern energy is a pre-requisite to economic and social development.

L.P.G. = Long-term Progress Generator

Africa with its increasing production of LPG and weak infrastructure has a solution within easy reach.It is only by combining the efforts of all stakeholders (private sector, government bodies, international institutions and public in general) that we will be able to grasp this historic opportunity.