ENTREPRISE TUNISIENNE D'ACTIVITES PETROLIERES

1. ENTREPRISE TUNISIENNE D'ACTIVITES PETROLIERES TUNISIA APRIL 2007

2. OIL & GAS EXPLORATION OPPORTUNITIES IN TUNISIA INTRODUCTION Tunisia has a continuous open policy towards international oil companies. Besides a prospective and challenging geology, Tunisia offers an excellent working climate and very friendly terms. These values have proved quite successful and they represent the key elements of our present and future strategy. LEGAL & FISCAL TERMS The legal and fiscal terms for Exploration and Production in Tunisia are included in a new Hydrocarbon Law n°99 – 93 that has been promulgated on 17 August 1999. This New Hydrocarbon Law is a unique document gathering all fiscal and legal regulations related to the hydrocarbon Exploration and Production activities in Tunisia. It also includes new incentives with new favorable fiscal regulations and additional legal flexibility of licensing procedures and terms. The main characteristics of these terms are the followings : * Simple procedures and easy granting of licenses, * Flexible Joint Venture or Production Sharing Agreements approved by Decree, * A taxation system giving the priority to the investors to recover costs enabling a quick pay out and a high rate of return, * An incentive gas price linked to the price of fuel oil with low sulfur content. * Independent Power Production (IPP) opportunities from produced gas. HOW TO EXPLORE IN TUNISIA The exploration procedures and ways together with agreements characteristics are summarized as follows.

3. HOW TO EXPLORE IN TUNISIA

4. LICENSING Choice of Block PROSPECTING AUTHORIZATION (Geological Option) Geological Work 1 Year PROSPECTING PERMIT (Seismic Option) Geological & New Geophysical Acquisition 2 Years with Possible Extension in Time (12 months maximum) EXPLORATION PERMIT New Geological/Geophysical Acquisition & Drilling 5 Years maximum - Renewal Rights with Possible Extension in Acreage and Time DISCOVERY PRODUCTION LICENCE 30 Years

5. HOW TO EXPLORE IN TUNISIA AGREEMENTS JOINT VENTURE PRODUCTION SHARING DOCUMENTS PERMIT HOLDERS EXPLORATION - Operating - Financing DEVELOPMENT & PRODUCTION - Participation - Financing ROYALTIES & TAXES - Royalty - Tax - Uplift on exploration expenses (gas targets, deep targets, difficult areas, well deepening) * Convention with the Granting Authority * Joint Venture Agreement with ETAP * ETAP and Partner as Co-Holders * Partner as Operator * Partner * ETAP may elect to participate after Partner development decision * ETAP pays by cash call its share of development & operating costs and reimburses its share of exploration expenses * Progressive rates according to profitability * As low as 2% paid by ETAP and Partner * As low as 50% paid by ETAP and Partner * If ETAP elects to participate at a rate equal or more than 40%, the Income Tax will be due at a flat rate of 50%. * 10 to 30% as amortization * Convention with the Granting Authority * Production Sharing Agreement with ETAP * ETAP as a Holder * Partner as a Contractor * Contractor * Partner * Partner finances all expenses and is paid back on cost oil (rate negotiable) * Profit oil is shared between Contractor & ETAP (rate negotiable) * As low as 2% paid only by ETAP with its share of the profit oil * Paid by ETAP on the contractor behalf, it’s equal to the value of the contractor share of the profit oil * 10 to 30% as cost recoverable. Agreements are approved by Decree  New Code

6. LEGAL TERMS FOR EXPLORATION AND DEVELOPMENT OF HYDROCARBON RESERVES IN TUNISIA NEW INCENTIVES

7. NEW INCENTIVES OF THE 1999 HYDROCARBON LAW 1. RIGHT TO USE ASSOCIATED OR NON ASSOCIATED GAS FOR POWER GENERATION 2. RIGHT TO BUILD UP A TAX DEDUCTIBLE PROVISION FOR ABADONMENT COST 3. RIGHT TO BUILD UP A DEDUCTIBLE PROVISIONUP TO 20% OF ANNUAL PROFITS FOR FURTHER EXPLORATION ACTIVITIES 4. RIGHT TO TREAT THE CUSTOMS HANDLING FEE (R.P.D.) ON EXPORTS OF HYDROCARBONS AS A CREDIT AGAINST ANY INCOME TAX DUE

8. GAS TERMS Priority to supply the domestic market with any Gas discovered and which is in excess of the holder’s own needs. The state guarantee priority of access to the local market to the extent of the demand.  Price for Gas sales to the local market is fixed by Decree, it’s set at 80% of the FOB price for low sulphur content fuel oil (1%). Holder will have the right to use Associated or non Associated Gas for powergeneration.

9. POWER GENERATION REGIME •  The Holder of the Hydrocarbon Concession may be Authorized to develop non Commercial Gas for Power Generation. •  The electricity will be exclusively sold to the National Utility Company (STEG) • Fiscal Regime : - Rate of Income Tax :35% - Exemptions from. certain duties and taxes such as VAT and import duties • The Parties negotiate in good faith a sale Contract that define the rights and obligations of the Parties (term, Sale Price ,quantity, technical and commercial conditions….)

10. OIL AND GAS SERVICESLaw of July 27th,2004 • Investments are made freely subject of a « Declaration » • Export of goods and services to oil &gas companies in foreign countries • Exemption of customs taxes and VAT on imports • Deduction of income originating from export from taxation basis for the first 10 years and 50% of those profits beyond that period

11. Access to Open Acreage Database The open acreage is divided into 12 blocks that correspond to the usual size of exploration permits. ETAP has a special data room for visiting companies that wish to explore in Tunisia. Data on available blocks including geophysical data (seismic lines, airmag and gravity surveys) and geological data (well reports, local and regional studies) may be accessed at free of charge. Visitors benefit from ETAP’s expertise in any area. We also take care of our visitors for any matter concerning travel and local arrangements.

16. For further information, please contact ETAP Direction Exploration 27 bis, Avenue Khereddine Pacha -1073 Montplaisir BP:83-Tunisia Phone (216 – 71) 782 288, Fax (216 –71) 784 092,786 141 Telex : 15503, 18877 E. Mail : dexprom @etap.com.tn ETAP web site www.etap.com.tn

18. THANK YOU FOR YOUR ATTENTION .... AND SEE YOU SOON IN TUNISIA