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CLEAN FUELS UPGRADE at PETROTRIN’S POINTE- A-PIERRE

REFINERY Mendoza, Argentina

October 31, 2006

Steve Hilaire

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OUTLINE

Introduction Business Background Scope Economics Capital Expenditure Results & Benefits Project Risks Status Financing Template

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LOCATION MAP OF TRINIDAD

HONDURAS

NICARAGUA

COSTA RICA PANAMA

JAMAICA HISPANIOLA PUERTORICO

TRINIDAD

TOBAGO

GUATEMALA

ELSALVADOR

COLOMBIA

90 W 80 W 70 W 60 W

20 N

30 N

10 N

90 W 80 W 70 W

20 N

30 N

10 N

Caribbean Sea

60 W

SEE INSET

VENEZUELA

Atlantic Ocean

C a r i b b e a n S e a

N

Gulf of

Paria

C o l u m b u s C h a n n e l

TRINIDAD

INSETTOBAGO

Geostar1-lmot.cdr-1996

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Introduction – About Trinidad & Tobago

Access to emerging & developed markets

Highly skilled and trained workforce Stable economic/political

environment Global leader in

Export of Methanol Export of Ammonia Export of LNG to USA

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Introduction – PETROTRIN History 1917: Commence Operations of P-a-P Refinery 1940/41: Eastern Refinery Established 1952: FCCU Installed 1956: Acquisition by Texaco 1958: No 1 CRU – Gasoline Upgrade & BTX 1960/62: No 8 CDU, No 1 HTU, No 2 CRU 1964/66: Lube Oil & Normal Paraffins 1972: No 4 VDU & No 2 HTU –Fuel Oil Desulf 1985: Acquisition by State 1992/96: Refinery Upgrade – Phase 1

Increased Conversion & Full Refining Capacity Partial Revamp of FCCU Rehab of No 2 HTU, No 2 CRU, New Units: VBU, Hydrogen, Sulfur, MTBE DCS Controls

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Introduction – PETROTRIN OVERVIEW

Fully State-owned Commercially operated Integrated

Exploration Production Refining Marketing

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Introduction – Crude Oil Supply Crude capacity – 168 MBPCD Current conversion capacity 150 MBPD

Local crude 40 – 45 % (low cetane gas oil) Imported crudes

Venezuela Brazil Columbia Ecuador West Africa (high cetane)

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Introduction – Product Supply Markets

Local 100 % - 18% of Volume Regional 75 % - 30% of Volume Extra regional 5 % - 20% of Volume International - 32% of Volume

Approx 10 % volume- unfinished/low value products

CRU naphtha Low octane mogas FCCU feed (VGO)

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Introduction: Operational Performance – R&M

Financial Performance

Profitability

Cash Flow

ROACE

Market Price

Mix + Volumes

Direct Cost

Other

Sustaining

Growth

Sales Revenue

OPEX

CAPEX

There are multiple areas where changes could improve future financial performance

Performance Factors

Petrotrin is highly sensitive to market price because it is a merchant refinerHigh fuel oil cut & low value products reduces profitsLacks clean fuels capacity

High unit operating costs compared to peers

Indigenous crude only supplies 40% of needs

High spend on maintaining competitiveness of old infrastructure

Project delays / deferrals have led to missed opportunities

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Introduction: Operational Performance –

R&M

Performance

Profitability

Cash Flow

ROACE

Market Price

Mix + Volumes

Direct Cost

Other

Sustaining

Growth

Sales Revenue

OPEX

CAPEX

Current and Planned R&M Improvement Initiatives

A mixture of upgrades and operational changes to improve performance

Clean fuels upgrade – in progress

Refinery business improvement project (SGSI)

E&P oil winning projects (halt production decline)

Infrastructure upgrade (planning stage)

Bottom of Barrel Upgrade (conceptual stage)

Gasoline upgrade (implementation stage)

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BUSINESS BACKGROUND – Driving Forces

Gasoline Optimisation Program Equipment Integrity

No 1 CRU: 3 of 4 Rxs Changed – Expect 3 years Max No 2 CRU: Remaining Life Estimated at 6 – 8 years

Sale of Unfinished Low Value Product Reformer Feed Low Octane Gasoline VGO as FCCU Feed

Tighter Specifications Elimination of Lead & MTBE– Octane & Volume Loss Lower Benzene, Sulfur, Olefins and RVP Increased Octane Demand Shortfall of Premium Gasoline to some markets

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BUSINESS BACKGROUND – Driving Forces (Cont’d)

Tighter Diesel Specifications Sulfur Reduction Cetane Increase Decrease in aromatics

Phase II - BOB Upgrade High Fuel percent of Product Sales Shrinking Fuel Oil Market

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BUSINESS BACKGROUND – Options

1. Discontinue Refining Operations

Huge economic impact on country and South in particular.

2. New refinery Grassroots facility US$3-4 Bn

3. Upgrade Current refinery

Performance and Technology

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Scope Identified

Gasoline Optimisation Program FCCU: Upgrade

Capacity from 26,000 BPSD to 35,000 BPSD Product Octane from 81 MON to 83 MON

Pre-Fractionation Remove Benzene from CRU feed Provide feed for Isomerisation

Isomerisation New 7,400 BPSD using C5/C6 Naphtha Feed Improve Octane from 70 MON to 80 MON

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PROGRAM SCOPE (Cont’d)

CCR Platformer Replace Fixed Bed Platformers Improve product Octane from 86 MON to 90 MON

Alkylation New using C3/C4 ex FCCU New Acid Regen Plant Optimize LPG Production

Offsites & Utilities New Boiler & Water Treating Tanks, Transfer Systems Power Supply Control equipment Flare System

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PROGRAM SCOPE (Cont’d)

New ULSD Hydrogenator 35,000 BPSD unit 8 – 9 point cetane lift < 25% aromatics 8 ppm S

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Economics & Approval

LP model Runs Delta economics

Base case vs enhanced Price/markets scenario forecast Optimum configuration determined

Capex Estimates Published/licensor data Inflated for time/location/experience

Economics developed Increased margin DCFROR NPV Payback

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Economics & Approval

Income statement/Cash Flows generated

Sensitivity/ Risk Analyses developed Approval Process

Executive management Board Shareholder - Cabinet

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CAPITAL EXPENDITURE

New Units ISBL 630 MM OSBL, Project Mgmt Other 170 MM

TOTAL (2006) 800 MM

ORIGINAL ESTIMATE 650 MM (2005)

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PROGRAM BENEFITS

Gasoline Optimisation Program Increase Gasoline Quantity

Total from 24% to 30% Eliminate Unfinished Products (Naphtha &

VGO) Improve Gasoline Quality

Increase MON from 83 to 86 Reduce Benzene from 1.6% to 0.7% Reduce sulphur fron 41 ppm to 8 ppm

Customer Satisfaction Lower Olefins in LPG Ability to eliminate MTBE

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PROGRAM BENEFITS (Cont’d) ULSD HTU

Improve Gas Oil Quality Increase Pool Cetane Reduce Aromatics/ Pool Sulfur

Improved Operations of the P-a-P Refinery Energy Efficiency & Environmental Compliance Increase full refining capacity to 168 MBPCD Ability to process sour, low cetane crudes

Petrocaribe (New) Products displaced from regional market Improved Quality can be marketed elsewhere

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COUNTRY BENEFITS

Local Content:20% or US$ 160 million Maximize local sub contractors Offsite Works by Petrotrin

Construction Labor: 14million hours Peak Site Labor: 2,800 Corp Tax / UL: US$ 375 million Sustained Operations of P-a-P Refinery

Security of Fuel Supply / Prices Economic Activity

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PROJECT RISKS

Market / Product Pricing Delay in Tighter Specs / Conservative Prices

Used Capital Cost Overrun

Scope of Work EPC Contracts – Hybrid vs Lump Sum

Schedule Delays Statutory Approval Experienced EPC Contractors Industrial relations problems Skilled sub-contractor labour

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PROJECT RISKS

Technology: Well Proven / State-of –the Art

Environmental: No new type of effluent Refinery systems (current and

proposed) adequate Funding:

Current Market Conditions Ideal for Loan

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Status

Pre Frac/Isomerization EPC awarded Piling commenced Commercial production Dec 2007

FCCU upgrade Discussions on EPC award – Hybrid contract Project completion date April 2008

CCR Platformer EPC Negotiations complete ETC December 2008

Alky / Acid Hybrid contract

Lump sum for services Re imbursable for Equipment/materials

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Status – Points to Note

Get Project Manager on board early. Licensor estimates normally low. Don’t forget infrastructure and

services Industry quite busy – Innovative bid

requests required. Fast track procurement on long lead

items Monitoring and control essential

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GAS OPT PROGRAM- FINANCING PLAN

MAJOR FINANCING OPTIONS

MAJOR OPTION COMMENTS

Bank Loan

Corporate Bond

Structured Commodity Finance

Pre-export loan

Note: Fixed Rate funding with minimum 10 Year tenor and minimum 2 Year moratorium is preferred.

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FINANCING SCHEDULE

TASK START DATE

END DATE

Approvals from Government

Credit Rating Review by Moody’s and Standard & Poors

Approvals from IADB, JBIC, EIB, CDB, MBIA

Engagement of Financial Advisor

Expressions of Interest from, and short-listing of financial institutions

Tendering, Selection & engagement of placement institution

Engagement of Lawyer

Loan Sourcing, Negotiation and Conclusion

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Muchas Gracias