Latin American Upstream Overview Selected Countries Overview

1. Latin American Upstream Overview Selected Countries Overview Houston, November 2006

2. 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:

3. -Selected Countries Overview - Argentina 3 Argentina National name: República Argentina President: 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 = 35,466 Cumulative Production MMbo = 9,536 Bcfg = 33,467 Remaining Proven and probable Reserves MMbo = 3,269 Bcfg = 27,230

4. -Selected Countries Overview - Argentina 3 Production & Consumption Source: EIA

5. -Selected Countries Overview - Argentina 3 Operating Companies

6. -Selected Countries Overview - Argentina 3 • 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

7. -Selected Countries Overview - Brazil 3 Brazil National name: República Federativa do Brasil President: Luiz Inácio Lula da Silva (2003) Land area: 3,265,059 sq mi (8,456,511 sq km); Population 188,078,227 Capital Brasília, 2,160,100 Largest 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 = 1,711,216 Cumulative Production MMbo = 8,477 Bcf = 8,616 Remaining Reserves MMbo = 11,77 Bcf = 10,813

8. -Selected Countries Overview - Brazil 3 Oil Production & Consumption *Despite market liberalization, Petrobras still controls over 90 percent of Brazil’s crude oil production. Source: EIA

9. -Selected Countries Overview - Brazil 3 Exploration Area under Concession Source: ANP

10. -Selected Countries Overview - Brazil 3

11. -Selected Countries Overview - Brazil 3 Operating Companies

12. -Selected Countries Overview - Brazil 3 • 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

13. -Selected Countries Overview - Colombia 3 Colombia National name: República de Colombia President: 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, 7,594,000 Total exploratory wells drilled 2323 (Onshore) / 55 (Offshore) Current Production Mbo/d =525.3 MMcf/d = 3,521 Cumulative Production MMbo = 6,441 Bcf = 15,416 Remaining Reserves MMbo = 1,453 Bcf = 6,711

14. -Selected Countries Overview - Colombia 3 Oil Production & Consumption Source: IEA

15. Top 10 Operators -Selected Countries Overview - Colombia 3 2003 2006 Source: IHS Source: ANH

16. -Selected Countries Overview - Colombia 3 Source: ANH

17. -Selected Countries Overview - Colombia 3 Source: ANH

18. -Selected Countries Overview - Colombia 3 Operating Companies

19. -Selected Countries Overview - Colombia 3 • 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

20. -Selected Countries Overview - Ecuador 3 Ecuador National name: República del Ecuador President: Alfredo Palacio (2005) Land area: 106,888 sq mi (276,840 sq km Population: 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 = 771 Remaining Reserves MMbo = 4,600 Bcf = 345

21. -Selected Countries Overview - Ecuador 3 Production & Consumption Source: EIA

22. -Selected Countries Overview - Ecuador 3 Production by Sector Source: IEA

23. -Selected Countries Overview - Ecuador 3 Operating Companies

24. -Selected Countries Overview - Ecuador 3 • 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

25. -Selected Countries Overview - Mexico 3 Mexico Official name: Estados Unidos Mexicanos President: 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 = 4,817,367 Cumulative Production MMbo = 33,703 Bcfg = 54,948 Remaining Reserves MMbo = 23,500 Bcfg = 40,000

26. -Selected Countries Overview - Mexico 3 Oil Production & Consumption Source: EIA

27. -Selected Countries Overview - Mexico 3 Proyected Oil Production & Consumption(US$ 10bn/year Investment Scenario) Source: Pemex

28. -Selected Countries Overview - Mexico 3 Import / ExportGas and Refined Products

29. -Selected Countries Overview - Mexico 3 Mexico Exploration Projects Source: Pemex

30. -Selected Countries Overview - Mexico 3 • 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

31. -Selected Countries Overview - Peru 3 Peru Capital Lima President 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 = 146 Cumulative Production MMbo = 2,320 - Bcfg = 3,253 Remaining Proven and probable Reserves MMbo = 1726 (2P) Tcfg = 16.65 (2P)

32. -Selected Countries Overview - Peru 3 Production & Consumption Source: EIA

33. -Selected Countries Overview - Peru 3 Operating Companies

34. -Selected Countries Overview - Peru 3 • 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

35. -Selected Countries Overview - Venezuela 3 Venezuela National name: República Bolivariana de Venezuela President: 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 b Cumulative Production Mmbo = 55,610 Bcf = 84,550 Remaining Reserves Mmbo = 76,560 Bcf = 147,860

36. -Selected Countries Overview - Venezuela 3 Production & Consumption Source: EIA

37. -Selected Countries Overview - Venezuela 3 Source: PDVSA

38. -Selected Countries Overview - Venezuela 3 Operating Companies

39. -Selected Countries Overview - Venezuela 3 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 beencouraged to bid. • 15 new mixed companies in fieldsthroughout the country. • Most of the fields are likely to belocated 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

40. -Selected Countries Overview - Venezuela 3 New bid round for marginal fields in the works… Source: PDVSA/IPD

41. -Selected Countries Overview - Venezuela 3 • 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?

42. Oil & Gas Investment Scenario How can ChileConsulthelp? • 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 Why can ChileConsulthelp? • 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 www.chileconsult.com

43. Oil & Gas Investment Scenario ChileConsultLeading Partner Alberto Harambour aharambour@chileconsult.com 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 Alberto Harambour 2004 Buffalo Terrace Houston, TX 77019, USA +1 713 521 2664 +1 713 922 9007 (mobile) www.chileconsult.com