September 2009 Petrochemical Sector

Agenda Trends of Petrochemical Industry in Colombia. Potentiality for Petrochemical industry in Colombia. Conclusions

Trends of Petrochemical Industry in Colombia.

Potentiality for Petrochemical industry in Colombia.

Conclusions

Apparent Consume of main platics resins (Thousand Tons) Consume in constantly growth: 23% in three years Although consume has growth in all resines, It is important to highlight the consume in PET, polymers and polyethylene. Source: Acoplásticos, Plásticos en Colombia 2008 -2009

19,8% In just three years the installed capacity has benn growth 20% The increase in consuption is watched in the increase of productivity in the petrochemical industry, which is reflected in the fasst growth that is taking its installed capacity Source: Acoplásticos, Plásticos en Colombia 2008 -2009

Employment, production and sales in plasticas have been growing constantly Soure: Dane, Banco de la República , Colombia y Fedesarrollo.

Plastic Products Exports Exports of platic products have growth in the last three years Over the past three years, exports have increased in value by 52% and volume by 21% Source: Acoplásticos, Plásticos en Colombia 2008 -2009

Source: DANE Major purchasers of Plastics It has seen that the main countries which we exports plastic products are countries that belong to the region including United States. Colombia begins to be the distributor of countries in the region

However, It has no covered local demand with domestic production. Fuente: Fedesarrollo and ANIF. Stock level and Volume of orders for the production of plastics (2005 -2007) Current volume of Orders Stock Level

Agenda Trends of Petrochemical Industry in Colombia. Potentiality for Petrochemical industry in Colombia. Conclusions

Trends of Petrochemical Industry in Colombia.

Potentiality for Petrochemical industry in Colombia.

Conclusions

Colombia has a potential of 47 trillion of barrels Colombia has proven reserves of 1.4 Trillion barrels , while its proven natural gas reserve stand at 6.7trn cubic feet (Ft 3). The Colombian petrochemical sector produces 600,000 tones per a nnum of polymers including polyethylene (PE), PP, PVC, polystyrene (PS) and others polyolefin. A large part of Colombia territory has not yet been explored. Blocks handed over for E&P: 2007: 7 blocks adjudicated. 2008: 51 blocks adjudicated MAPA DE TIERRAS Source: Business Monitor International Ltd. – Colombia Petrochemicals Report 2008 ; Study of IHS –International Conusltant

Colombia has proven reserves of 1.4 Trillion barrels , while its proven natural gas reserve stand at 6.7trn cubic feet (Ft 3).

The Colombian petrochemical sector produces 600,000 tones per a nnum of polymers including polyethylene (PE), PP, PVC, polystyrene (PS) and others polyolefin.

A large part of Colombia territory has not yet been explored.

Blocks handed over for E&P:

2007: 7 blocks adjudicated.

2008: 51 blocks adjudicated

Source: Banco de la República, Colombia TCN: 2001: 2.300; 2004: 2.626; 2007:2738, pesos por dólar The increase in oil production due to an increase in exploration Petroleum production US$ million The value of oil production, natural gas and minerals if uranium and thourium have an increase of US$ 3.905 million in 2004 to US$ 5.080 million in 2007

Colombia strategy for modernizing refineries Cartagena y Barranquilla, the two largest refineries, are undergoing significant expansions, capacity is forecast to reach 360,000b/d in 2007/2008, which will provide potential for naphtha feedstock. The production capcity will increase in almost 100% from 75 KBPD to 140 KBPD in 2010. Souercce Business Monitor International Ltd. – Colombia Petrochemicals Report 2008 . We could produce all resins that we are importing nowdays

Cartagena y Barranquilla, the two largest refineries, are undergoing significant expansions, capacity is forecast to reach 360,000b/d in 2007/2008, which will provide potential for naphtha feedstock.

The production capcity will increase in almost 100% from 75 KBPD to 140 KBPD in 2010.

A domestic market with potential Olefins and aromatics demand not covered due to non-existence of a cracking plant for this purpose. Polyethylene and other polymers and resins demand not covered are worth over US$ 508 million and approximately 226,000 tones. Colombia has about 230 plastic processing companies, most of which are small sized and require access to international prices and other resins in order to remain competitive and stay afloat. The large multinationals established in Colombia supply the local supply to the local market and export to the Andean Community as well.

Olefins and aromatics demand not covered due to non-existence of a cracking plant for this purpose.

Polyethylene and other polymers and resins demand not covered are worth over US$ 508 million and approximately 226,000 tones.

Colombia has about 230 plastic processing companies, most of which are small sized and require access to international prices and other resins in order to remain competitive and stay afloat.

The large multinationals established in Colombia supply the local supply to the local market and export to the Andean Community as well.

Fuente: Acoplásticos This sector is backed by a Development Master Plan, which supports growth of the industry and integration of the Production chain, thus facilitating viability and development of refining and petrochemical projects in the Mamonal Industrial Zone, thereby consolidating the leading industrial complex in South America. The Chemical and Petrochemical processing industries are located in industrial parks as Barrancabermeja and free trade zones at Barranquilla and Cartagena, and are considered to be the largest users of industrial inorganic chemicals (Fuente: Acoplásticos – Asociación Colombiana de Productores de la Cadena Petroquímica ) In Colombia is a petrochemical cluster

This sector is backed by a Development Master Plan, which supports growth of the industry and integration of the Production chain, thus facilitating viability and development of refining and petrochemical projects in the Mamonal Industrial Zone, thereby consolidating the leading industrial complex in South America.

The Chemical and Petrochemical processing industries are located in industrial parks as Barrancabermeja and free trade zones at Barranquilla and Cartagena, and are considered to be the largest users of industrial inorganic chemicals

(Fuente: Acoplásticos – Asociación Colombiana de Productores de la Cadena Petroquímica )

Energy tariff byKw Colombia with the best infrastructure of energy and a good tariff Source: IMD, World Competitiviness Year Book, 2008 Country US$/Kw Brasil 0,12 Argentina 0,07 Venezuela 0,03 México 0,10 Chile 0,09 Colombia 0,09

Agenda Trends of Petrochemical Industry in Colombia. Potentiality for Petrochemical industry in Colombia. Conclusions

Trends of Petrochemical Industry in Colombia.

Potentiality for Petrochemical industry in Colombia.

Conclusions

Conclusions The behaivor of the production, consumption, employment and exports in the sector, show that in a market in continous development in Colombia However, the Colombian potential is reflected in that despite the steady growt, it is still not enough to meet domestic and external demand. The Colombian strategy to expand the capacity of the exisiting refineries, which will make easier the production of raw materials There is a field of oil exploration in the relevant country

The behaivor of the production, consumption, employment and exports in the sector, show that in a market in continous development in Colombia

However, the Colombian potential is reflected in that despite the steady growt, it is still not enough to meet domestic and external demand.

The Colombian strategy to expand the capacity of the exisiting refineries, which will make easier the production of raw materials

There is a field of oil exploration in the relevant country