December 6, 1999

1. “An Integrated Solution to the Supply-Trading Challenge”PricewaterhouseCoopers*STARSand its integration capabilities December 6, 1999

2. Discussion Outline • PricewaterhouseCoopers Petroleum Industry Capability • Downstream Business Challenges - The PwC PinPoint Solution • PricewaterhouseCoopers*STARS Discussion • Integration Features Discussion • Summary • Related Staff and Citations

3. Worldwide Petroleum Industry Services Group • PricewaterhouseCoopers has the most extensive experience in the petroleum industry of any professional services firm. The Group's consulting goal is performance improvement for our clients. We help companies who produce, process, transport and market crude, gas and petroleum products become more competitive and profitable. • We have over 400 dedicated Petroleum industry consultants throughout the world with the following specialties • Strategic Business Planning • Market & Operations Assessments • Risk Management Programs • Change Integration / Business Process Transformation • Information Systems Planning • PwC Proprietary Software Products • Systems Development and Implementation • Financial and Accounting Restructuring • Rate and Regulatory Compliance • Merger, Acquisition and Privatization Services • Our clients are companies who seek to achieve a high return on their investments. Our worldwide consultants help clients become more efficient in the rapidly changing petroleum industry. PricewaterhouseCoopers consultants have extensive skills in implementing best practices for critical business activities, and our proprietary software products have been developed with a best practices view.

4. International Petroleum Clients • PricewaterhouseCoopers believes strongly in its ability to help petroleum and chemical clients implement major change and dramatically improve bottom line performance. This confidence is based on a history of satisfying and exceeding client expectations on a variety of consulting projects in the petroleum industry. • Listed below are representative international clients in the petroleum and chemicals industry where PricewaterhouseCoopers has assisted with the implementation of better change through business process improvement and/or major information system implementations. • Amerada Hess • Amoco (now BPAmoco) • Amoco/Exxon Chemical Joint Venture • Amoco Malaysia • British Gas • British Petroleum • Chevron • Clark Refining • Equiva Trading • Exxon Chemical • Exxon Company, U.S.A. • Exxon International • DuPont • Indian Oil • Koch Industries • Lagoven. S.A. • Maraven. S.A. • Neste Oy • NZRC • SAMAREC • Saudi Aramco • Shell Austria • Shell Oil - Commercial Products • Shell Trading • SONAT Exploration • Star Enterprise • Total’ • Westlake Chemicals 4 4 4 4 4 4 4 4 4 4 Citations Included

5. Integrated, Enterprise-Wide Solutions Petroleum performance systems developed and supported in a software environment PinPoint Upstream Operations Downstream Operations Shared Processes “Integrate Industry Best in Class”

6. Integrated, Enterprise-Wide Petroleum Solutions PwC FieldHand PwC PREMAS Plus Landmark PwC STARS IBS Acquire&AdministerLeases Explore & Develop Reserves Produce Crude, Gas & NGLs Supply, Market & Transport Market & Distribute Wholesale Products Refine & Process Feedstocks Sell Retail Products Project Planning & Control Operations &Maintenance HumanResources Finance &Accounting (APS) I2, Logility, Manugistics (Pricing) Saladin (Risk Mgmt.) Zai*Net, Primo Operations Integration SAP, Oracle & Other

7. PwC*STARS Downstream Coverage • PricewaterhouseCoopers*STARS - A fully integrated, client/server based information system designed specifically for the management of physical trading, supply, distribution and wholesale marketing from the purchase of crude to the sale of refined products at the rack. Distribute & Wholesale Mkt Sell Retail Supply & Transport Refinery PricewaterhouseCoopersSTARS Integration: Paper Trading, APS, Financials

8. Capturing Data at the Source Deal information captured by Traders Movement information captured by schedulers Terminal transactions captured via EDI Integrating Business Processes and Data Executed agreements automatically plan movements Movements automatically reflected in rolling inventory Actualized movements automatically create invoices Eliminating Non-Value Added Activities Eliminate "pass off" business processes Eliminate rekeying, multiple approval processes Eliminate data reconciliation Use of “Best in Class” Principles Benefits • Reduction in working inventories • Significant reduction in backouts and re-bills • Same number of staff can handle more trades • Contracts less than 24 hours after deal • Invoice in less than 24 hours • Accurate • Real time • Flexible reporting

9. Designed for Operations Operations Personnel Pricing Agreements Operations Information Financials Movements Terminal Forecasts Refinery Plan Inventory

10. Key Functions by Job Type Legal Contracts Rack Price Management Trading/ Agreements Movements, Logistics & Exchanges Pricing & Valuation Refinery Runs & Yields Taxes & Tariffs Inventory Management & Evaluation Profitability & Deal Performance Position Monitoring & Risk Management Settlement & Invoicing Rack Demand Forecast Contract Administration Traders/Marketers Schedulers Accountants

11. Supply - Trading needs Full Featured Business Functions Front Office Middle Office Back Office Interfaces • Price Formulae • Fixed Price • Term & Spot • Position vs. Inventory Data • Confirmations • Invoices-Payments • Credit/Authority Limits • EDI interfaces • User Defined Reports • Physical position interface to risk systems Zai*Net, Primo, et. al. • Consistent position data interface to APS optimization • User-Driven interface to Accounting & and G/L Packages • Nominations & Schedules • Realized and Unrealized P&L • Mark-to-Market Measurement Audit Trail and Security • Date/Time Stamps • As of Reporting • Screen-Based Security • Function-Based Security

12. Interfaces: Paper Trading & Optimization APS Optimization Legal Contracts Rack Price Management Trading/ Agreements Movements, Logistics & Exchanges Pricing & Valuation Paper Trading Refinery Runs & Yields Taxes & Tariffs Inventory Management & Evaluation Profitability & Deal Performance Position Monitoring & Risk Management Settlement & Invoicing Rack Demand Forecast Contract Administration Traders/Marketers Schedulers Accountants

13. PwC*STARS Features Summary • End-to-end bulk supply solution: agreement to invoice • Operations heritage - inventory centric • “Best in class” principles developed with major clients: • BPUSA • Lagoven • Koch • Agreement driven with business associate hierarchies • Structured to simplify integration (internal & external) • Adaptable, 3-tier architecture, user friendly, on-line help

14. Related Project & Staff Experience 100 Koch Refining EQUIVA Trading Star Enterprise BP Supply NZRC BP OTI Koch S&T Lagoven Neste’ Koch Supply Degree of Process Improvement Stasco Clark 0 Degree of Change 100

15. Experienced Industry Practitioners • Marty Stetzer (BME, MBA) • 18 years operating experience with Esso, Superior and Mobil • 10+ years downstream operations and IT consulting experience • Expertise in refining, trading, supply and wholesale marketing • Lynn Sievers (BA, MBA) • 15 years experience with Superior Oil, Burlington & Torch Energy • 3 years consulting experience • Expertise in oil, gas and NGL marketing and trading • Wes Clavey (BS, MBA) • 5 years logistics operations experience with Sysco, Exxon • 13 years software and consulting experience experience with Manugisitics, Group 88 • Expertise in distribution planning and optimization • Paul Feder (BSChE) • 14 years planning experience with Marathon & Gulf • 17 years experience with Bonner & Moore and Wright Killen • Expertise in crude selection, supply modeling & LP solutions • Daniel Celta (BSChemistry, MS & PhD Mineral Economics) • 8 years plant optimization experience with PDVSA • Expertise in APS vendors, supply chain management, inventory management, demand and refinery planning • Kevin Waguespak (BSChE) • 8years planning and operations experience with Lyondell • 7 years consulting experience with Bonner & Moore and AA • Expertise in web applications, supply and operations planning

16. Supply and Trading Citations BP UK - Oil Trading Inc. (OTI) British Petroleum - Supply BP’s OTI affiliate is considered by many in the industry to be the global benchmark for effective centralized supply, trading and risk management performance. PwC was requested to do a detailed redesign study of the front, middle and back office operations to improve service to internal and external customers. Six distinct acquisition and sale processes were reviewed: crude & feedstocks, products, LPG, futures/options, derivatives and outside processing. Over 200+ OTI staff were involved with detailed validation sessions and six cross-functional workshops to define a vision for the new OTI business. Ultimately all divergent processes were standardized and new performance measures were implemented to tighten control in a constantly volatile environment. High level system requirements were also defined to give OTI a responsive, unified decision making tool and data repository. British Petroleum (USA) contracted with PwC to reengineer their downstream petroleum business using our Business Process Transformation(BPT) methodology and to develop client/server applications to support these radically redesigned businesses. Both BP and PwC staff made up the three BPT teams: Crude, Product Operations and Trading. The functional direction for the work centers around accounting for both crude and product movement from inception of the deal through operations and invoicing, as well as exposure position analysis and reporting. The specific business functions were: Deal Entry, Contract Administration, Supply/Demand Forecasting, Allocation, Operations and Scheduling, Inventory Management and Reporting, Performance Measurements, Valuation, Settlement, Invoicing and Statements and Pricing. The role of PwC was to provide functional (downstream petroleum) and software development expertise, define the technical and application architecture, and manage the project. PwC also assisted BP in creating and establishing a client/server technical architecture for the new system.

17. Supply and Trading Citations EQUIVA - Crude & Products Trading Clark Oil - Risk Management The primary project objective was to define a world class, integrated front-middle-back office deal flow process for a 500+ man operation handling over 7 million BCD of crude, products & feedstocks of the newly merged Shell/Texaco/StarEnterprise operations - encompassing Equilon (West half of USA) and Motiva (East half of USA). The PwC joint project team covered: assessment, mapping, detailed process documentation, risk/control review and change management for the USA trading operation. In the words of Art Nicoletti, the Equiva President: " World Class Deal Flow is using I/T and work processes to drive cost and understand & manage every aspect of our business…Take every aspect of a deal: (1) follow it through the books & records, (2) understand what parts are adding value, what parts are cost and (3) what parts are losing value." Another objective was to anticipate a major system upgrade initiative. The benefits of the project were estimated by EQUIVA to exceed $1 million/week. Equiva Trading ranks with STASCO and BP's OTI in size and scope - one of the world's top oil industry trading organizations. • After a large refinery acquisition, this Midwest refiner needed to strengthen their crude purchase and risk management systems and processes. PwC was asked to review, critique and define improvements to the crude acquisition, hedging and basis risk management operation to give Clark a more predictable crude acquisition cost. • A combined team of PwC risk management and audit professionals constructed a three tiered analysis model which mapped the processes deficiencies in: • Transaction effects due to different purchase values, • Position effects on how the daily trading position changed, and • Basis exposure effects to measure whether hedges neutralized market variability. • Changes were recommended to the risk management strategies which were reviewed and approved by the Clark Board of Directors.

18. Supply and Trading Citations Koch Industries - Supply & Trading Koch Industries - Supply PW conducted an Assessment, Benefits & Costs (ABC) re-engineering project at Koch Supply and Trading (KS&T). It included trading and risk management for crude (domestic & international), feedstocks and all refined products and chemicals for Koch's domestic and global supply operations. The project identified a range of process and system improvements to streamline the front-middle-back office measurement and accounting processes. It also developed a new process orientation within Koch Supply and Trading's functional organization. The analysis includes all processes behind the traders: trade capture, analyze risk, scheduling, operations, paper & physical settlement, accounting, compliance (FASB 119) and decision reporting. The project scope covered physical products and derivative instruments--both exchange traded and over-the-counter. Key project outputs included: high-level business model, integrated deal flow process model, quantification of current costs for each process (staff FTE's and other costs), a risk assessment & controls review, definition of which solutions to pursue and definition of next steps. Koch Industries is the second largest privately owned company in the USA. Their businesses are primarily oil and gas, with three refineries, 30 terminals and extensive pipelines. PwC completed a CI/BPT reengineering project for all refined product movements downstream of the refinery. A joint PwC/client team developed five improvement projects with over $20 million of potential savings in reduced inventory, better customer service and less price risk. PwC recently completed implementation of the latest version of PW&STARS to capture the benefits identified in the initial process improvement project. PwC was also selected by Koch Oil to assist with the development of a Deal Tracking System for their Crude Oil Acquisition and Trading organization. With literally thousands of active crude oil purchasing agreements, Koch Oil wanted a system that would automatically analyze each one based on profitability, and then utilize this analysis to improve their decision-making process. The crude system development was completed with a joint PwC/Koch team.

19. Supply and Trading Citations Lagoven, S.A. - Export Supply Neste Oy - Trading As part of a reengineering effort in their export supply operation, Lagoven intended to adapt their new business processes to the integrated PwC*STARS software. PwC*STARS was designed to support reengineered business processes and major process improvements expected at Lagoven. PwC*STARS is a proprietary software package designed to support crude oil and refined products supply and trading operations and accounting. Primary project tasks include process redesign, system installation, data conversion, development of interfaces and analysis, design and construction of modifications to PwC*STARS to satisfy specific Venezuelan requirements and to extend functionality in the areas of contract negotiation, marine operations and pricing. The project included the business systems design of a front-end trading support system for the national oil company of Finland. Functions included deal capture, real time position reporting, market-to-market analysis, trading profit and loss. A new system approach was used to capture the time-critical, event-driven processes used by the Neste Trading and Scheduling organization. System was prototyped under UNIX using open systems technologies. The design basis was used for the PwC*STARS software product.

20. Supply and Trading Citations Shell International Trading Inc. Star Enterprise - Supply/Marketing Shell International (STASCO) is the largest of three worldwide regional supply trading organizations operating in London. PwC was retained to act as primary facilitator to help build on an internal re-engineering project by conducting over a dozen top and mid level vision sessions with 40-50 key Shell decision making staff. The project was primarily a “mid and back office” efficiency improvement which started when the trading deal had been completed. The Shell “As-Is” work followed every process needed to accurately track and close the deal transaction for both crude and products. The workshops reached consensus on a valid and achievable “To-Be” vision which became the basis for future implementation work by the Shell team. Star Enterprise, the $6.0 billion joint venture of Texaco and Saudi Aramco, refines and markets petroleum products in 26 Northeastern states. PwC was selected to conduct a highly focused ten week reengineering “Assessment” of Star’s downstream crude & products supply processes. The objective of the Assessment was to identify revenue improvement projects as Star faced decreased refinery margins and increased competition in the market. The work was conducted with joint PwC & Star cross- functional teams and covered the entire supply chain: planning, crude selection & acquisition; product supply and trading; terminalling, distribution and rack sales. The team enhanced the PwC CI/BPT Methodology with: off-site facilitated workshops with 60+ Star staff, management interviews, identification of 350+ issues, definition of a business model with key communication links and development of new performance measures. Reengineering design projects were completed to capture benefits that were quantified in three priority areas: Improved crude selection & acquisition ($18.0 MM/yr), Improved distillate disposition ($9.0 MM/yr) and Development of a Star marine chartering capability ($1.5 MM/yr). PwC developed plans for Star managed implementation teams.

21. Refinery - Supply Integration Citations New Zealand Refinery Koch Refining • PricewaterhouseCoopers was engaged in mid-1997 to reengineer the New Zealand Refining Company Ltd. (NZRC) with major shareholdings by: British Petroleum, Mobil, Caltex, Petrocorp and Shell. The client's overall aim was to reduce manpower costs by at least 25% over the next five years. • This assignment encompassed the supply chain and refinery support processes: Manage the Business, Prepare Production Plans, Receive, Produce and Distribute Product, Maintenance, Develop and Improve Facilities, and Provide Support Services. • The first phase of the project was the evaluation and redesign of existing processes and review of the organisational structure, IT, people/culture and communications. • The project also included training the client in Change Integration/BPT techniques and providing a structured methodology, tools and best practices to help the client conduct benchmarking nationally and internationally. • At Koch Refining, the joint project team set up systems to improve profitability by $2/bbl ($1/bbl in cost reduction; $1/bbl in increased value add) at two refineries. The operations, planning, maintenance and capital projects areas were integrated using a common database. The goal for Koch is to leverage the knowledge to other affiliates. • The project’s scope included business process redesign, organizational design, data system improvements, performance measurements, control and oil movement upgrades and training. • One application (CAP) provides operators with an integrated vision of the schedule plan versus actual for key operating parameters, support information, activities, as well as a mechanism for feedback to schedulers, planners and engineers. • Another application (LOG) allows plant operators to view the plant's performance, quality, and environmental information. Koch utilizes Resolution Integration Services software, which allows for collection, manipulation, and messaging of information from other remote refinery systems. • PricewaterhouseCoopers assisted the client with the implementation and integration of a data warehouse/refinery decision support system. The project involved a mixture of IT and Change Integration using standard & custom application development.