Book Club – Industry Model Enterprise introduction

1. Book Club – Industry Model Enterprise introduction Table of Contents • Project Scope • Project Outline • Project Structure • Antitrust guidelines • Bob Werner (Equiva Trading) contact information

2. Project Scope The Book Club has had an initiative underway since May, 2000 to develop an “industry solution” for mid to back office processing for USA refined products. The Book Club vision is to create an industry owned and led company to build and maintain a state-of-the-art solution as shown below: Front-end deal analysis and back-end financials are not be part of the solution. All the processing in the “Blue Box”, however, would be performed in a common environment that manages transactions of the six major processes among Book Club members. Translation Translation Market Data Capture Deal Capture Nominating Scheduling Delivery Settlement Houston Street A/P, A/R G/L RedMeteor ProprietarySystems Translation InfoServices Pipelines, Partners

3. Project Outline The overall Book Club objective is to help members realize cost savings. This new business model will achieve benefits via: streamlined data handling, improved inter-company communication, transaction visibility and reduced reconciliation effort. PwC has been asked to assist a consortium of 15 companies led by the Business Formation Committee of the US Petroleum Products Supply Advisory Council in a study to define and develop: “A feasibility/business case…define the size of the prize…not exact technology - but technology options”...per David Kirshner 9/27/00). The scope of this effort is the USA refined product processes only. This activity involves an 11 week project over 13 weeks of elapsed time. All work will be accomplished by a joint team, begin on October 30, 2000 and be completed in January 2001.

4. Project Structure – Industry membership • Steering Team Members ... Cliff Cook – Marathon Andy Esterer Premcor John Fitzgerald – Hess Dave Kirshner – Exxon/Mobil Mary Kole - Chevron Ray Kurkjy – Tosco Bill Esslinger – BP Herb Whitney – Citgo Hal Zesch – Valero • Extended Steering Team Members … Jim Wood/Don Hinderhofer – Sunoco Randy Boelkes/Doug Gleason - Chevron Tom Nichta - UDS Marty Power – ElPaso/Coastal Eric Schlueter - Conoco Bob Werner – Equiva (details attached) • Outside Legal Counsel … Steve Van Heyde – Baker & Hostetler • Legal Liaison … Tommy Stuchell – Exxon/Mobil • PwC Work Team

5. Antitrust Guidelines • Information exchange is necessary for the formation and operation of any joint venture. Exchange of confidential, competitively sensitive information among competitors, however, is particularly sensitive under the antitrust laws because such information exchange can facilitate price collusion or other anti-competitive coordinated conduct. • Exchange of confidential, competitively sensitive information should take place only when necessary to effectuate the formation of the Venture. Exchange the least sensitive information whenever possible. If competitively sensitive information must be exchanged, it should first be reviewed by antitrust counsel (either corporate or antitrust counsel). • “Confidential information” means all non-public information, the unauthorized disclosure of which could be detrimental to a party’s interests, and includes without limitation research, technical, manufacturing, cost, pricing, marketing, financial, personnel and other business information and plans, whether in oral, written, graphic or electronic form. • “Competitively sensitive information” means all confidential information that, if known by a party’s competitor would enhance the competitor’s ability to predict the party’s future price and output strategies, including the Party’s likely responses to price and output initiatives of the competitor. • Absent prior legal clearance and legal guidance, there should be no discussion or exchange of information among committee or team members regarding the following subjects concerning their respective Companies: • prices, price changes, price quotations, bids, or pricing policies; • any element of price, including freight, credit, warranties, and other terms and conditions of sale; • output, capacity, down time, inventory levels or costs (including production, inventory, distribution, or wage, salary or benefits cost); • the customers to whom a Company sells, or the territories in which a Company sells; • the amount that a Company pays for goods or services; future plans concerning the production, distribution, or marketing of particular products; discussion about the Venture’s future plans is acceptable. • Absent prior legal clearance and legal guidance, there should be no solicitation, acceptance, or exchange of documents or information relating to the subjects listed above. • An accurate record of each committee or team meeting should be prepared.

6. Bob Werner Contact Information Bob Werner of Equiva Trading provided legal liaison to the Book Club consortium… Bob Werner – Equiva Trading 500 Dallas, Room 32040 Houston, TX 77002 713/277-5503 (o) 713/277-6321 (cell) rfwerner@equiva.com