Andy brogan's presentation slides from the 2010 World National Oil Companies Congress that took place in June in London.

1. World NOC Congress
Andy Brogan

2. Andy Brogan, Ernst & Young
World National Oil Companies Congress
Page 2
Increasing global trade in oil
South
America
0.3
US
7.1
Europe
11.8
5.0
8.4
Africa
N/A
6.9
Russia
China
-0.2
4.8
Japan
Pacific
Region
5.6
5.0
17.8
Net oil importers
Net oil exporters
Figures = mb/d of oil imports/exports
Source: IEA
11.1
9.0
6.3
7.0
23.0
Middle East
3.8
2.3
1980
2015

3. Andy Brogan, Ernst & Young
World National Oil Companies Congress
Page 3
Upward trend in oil trade movements over
longer-term
Oil exports

4. Andy Brogan, Ernst & Young
World National Oil Companies Congress
Page 4
Growing importance of natural gas
Net inter-regional trade
flows between major
regions
2007

5. Andy Brogan, Ernst & Young
World National Oil Companies Congress
Page 5
Increasing globalisation in gas trade
Net inter-regional trade
flows between major
regions
2007
2030

6. Andy Brogan, Ernst & Young
World National Oil Companies Congress
Page 6
Mounting governmental intervention
“China Oil Firms Find
Partners Ease Deals”
Wall Street Journal, 23 March 2010
“President reverses
offshore drilling
expansion”
The Australian, 28 May 2010
“Australian resource
tax may delay CSG to
LNG projects”
Platts Commodity News, 18 May 2010
“Taking gentle aim at
oil sands; negative
global image may
force Ottawa's hand”
National Post, 2 February 2010
“Lawmakers again
taking aim at liability
caps for oil spills”
MarketWatch, 25 May 2010
“CNPC's Verenex
Acquisition Falters in
Increasingly Politicised
Libya”
IHS Global Insight, 9 September 2009

7. Heightened oversight of oil and gas industry
► Greater compliance and regulatory burden
► Cross border complexity in operations
► Varying reserves/financial reporting standards
► Corporate governance structure
► The expectations of minority shareholders
► Need for greater transparency (especially if capital
raising)
► Opposition from special interest groups
Andy Brogan, Ernst & Young
World National Oil Companies Congress
Page 7

8. Andy Brogan, Ernst & Young
World National Oil Companies Congress
Page 8
Evolving business models
► Independent E&P
► Junior oil and gas
► Private equity
► NOCS
► Oil traders
► Independent refiners
► Private equity
► Terminal/storage owners
► Petrochemical companies
► Product traders
► Distributors
► Independent
marketers
► Supermarkets
► Private equity
► Franchises
Typical Hydrocarbon Supply Chain
Refining and blending Trading and distributionE&P Marketing
CDU
upgrade
Treat Blend
Ship
Pipeline
Industrial
Construction
Transport
WholesalerSmall
customersTerminal
Products trading

9. A changing industry
For decades the leading industry players have focused on
► Global market coverage
► Vertical integration
► Economies of scale
► Operational supply chain efficiency
This model is currently undergoing change and an alternative model based upon
the following themes is emerging:
► Focus on core markets
► Divesting of ‘non core’ assets and businesses
► Relationship and contractor management
► Capital efficiency
The changing of this model presents opportunities/risks for NOCs as they
consider whether to enter new markets and new businesses
Andy Brogan, Ernst & Young
World National Oil Companies Congress
Page 9

10. There are both opportunities and risks
Key opportunities
► Access to new markets and
resources
► Acquisition of skills/technology
► Strengthening and internationalising
of the brand and organisation
► Synergies with existing businesses
► cost and efficiency savings
► supply chain benefits
► Buying at the right time in the
economic cycle
Andy Brogan, Ernst & Young
World National Oil Companies Congress
Page 10
Key risks
► Management skills
► Does current management have the skills
to manage the acquired asset(s)
effectively?
► Current liabilities and potential
future liabilities
► Are these fully understood and factored
into the purchase agreement and ongoing
business plan
► Political risks and reputational risks
► Moving into overseas markets has a
different risk profile. Is this risk profile
fully understood and can it be managed
effectively?
► Buying at the wrong time in the
economic cycle

11. Andy Brogan, Ernst & Young
World National Oil Companies Congress
Page 11
Currently there are many opportunities for
well capitalised NOCs
Chevron Puts Its Last
European Refinery On The
Market
3 March 2010
Business Monitor Online
Shell has agreed to sell its
downstream business in New
Zealand
29 March 2010
All Business
Exxon Mobil sells
petrol station
network to 7-
Eleven
27 May 2010
The Australian
BP AFRICA will sell its
marketing operations in five
southern African countries
3 March 2010
AllAfrica.com
Statoil sells Brazil oil
field stake to Sinochem
21 May 2010
Bullfax.com
Shell to divest
15% of its
refining capacity
16 March 2010
Oil & Gas Journal
ConocoPhillips To Shed
Refining Capacity
24 March 2010
Downstream Today
OMV In Talks To
Divest Exploration
Assets In Russia
20 May 2010
Businessweek
Total sells its
interests in the
Valhall and Hod fields
27 April 2010
Total.com

12. Andy Brogan, Ernst & Young
World National Oil Companies Congress
Page 12
JVs help to spread the risk
Source: IHS Herold

13. Future projects may look different
► Increased use of JVs to pool capital and mitigate risks in large
projects
► Governments are becoming increasingly active in encouraging and
brokering alliances in the oil & gas sector
► New partnerships emerging between reserves-rich NOCs and those
of import-dependent nations
► NOCs buying into existing joint ventures to gain access to
markets/generate new revenue streams
► Increased number of JV partners in individual projects due to their
cost and complexity
► There will be fewer listed upstream and oilfield services companies at
the end of the year than the start of the year
Andy Brogan, Ernst & Young
World National Oil Companies Congress
Page 13

14. Thank you