A SUSTAINABLE AND DIVERSIFIED ENERGY SUPPLY Russian Oil & Gas Industry Week PARTNERSHIP FOR A SUSTAINABLE AND DIVERSIFIED ENERGY SUPPLY Eulogio Del Pino Minister, Popular Power, Petroleum and Mining Bolivarian Republic of Venezuela Eulogio Del Pino Minister, Popular Power, Petroleum and Mining Bolivarian Republic of Venezuela

WORLD SUPPLY DEMAND BALANCE Overproduction has intensify, thus balance is averaging an extra 1,97 MBD for 2016 Balance for 2016: +1.83 MBD Annual Balance: +2.05 MBD MBD USD/b Annual Balance : +0.93 MBD Annual Balance: -0.41 MBD Q3-15 +1.58 Q1-16 +1.95 Annual Balance : +0.05 MBD Q4-15 +2.31 Annual Balance: -0.61 MBD Q3-14 +0.49 Q2-15 +2.39 Q1-15 +1.94 Q1-16 +1.71 Annual Balance: -0.17 MBD Q2-14 +0.79 Q4-14 +1.90 Q1-14 +0.54 Source: US EIA *Forecasts

At crude oil prices between 60 – 80 $ a barrel, inventory CRUDE OIL PRICES AND INVENTORIES, 2009-2015 At crude oil prices between 60 – 80 $ a barrel, inventory levels are around 2700 MBl MBl Source: OPEC

VOLUME OF PRODUCTION TO INCORPORATE A 10% ANNUAL DECLINE (MBD)

PRODUCTION & EXPORTS FOR 18 COUNTRIES ATTENDING DOHA TALKS JANUARY 2016 Source: JODI Countries in Doha account over 50% of world production On exports, they are equivalent to 82% 50 72 534 637 779 793 1.012 1.136 1.770 2.145 2.260 2.558 3.000 3.204 3.370 4.775 10.180 10.230

PRODUCTION FREEZE Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 World Oil Supply 96,6 95,8 95,3 95,7 95,5 95,0 94,9 95,6 World Oil Demand 93,8 94,5 96,7 94,8 95,4 96,5 97,6 Inventory Volume 3.020,0 3.140,5 3.122,1 3.031,2 3.094,9 3.058,9 2.918,8 2.728,5 Production for 18 countries that attended Doha Meeting

IRAN´S PRODUCTION AND BRENT PRICES TBD $/Bls Source: JODI & OPEC

HOW CAN WE MAKE A DIFFERENCE?

GLOBAL CRUDE QUALITY OUTLOOK, 2010- 2040 Average crude API gravity is decreasing, thus creating opportunities for heavy oil producers. Global crude quality outlook, 2010 - 2040 Source: World Oil Outlook, OPEC, 2016

WORLD CRUDE PRODUCTION FORECAST 2016 - 2025 Crude Production MBD Heavy Crude Production MBD Crude Production Increase: US, Iraq, Canada Brazil and Iran will register the highest growth for 2016-2025, mainly on light and medium segmentations (except for Canada). Heavy Crude Increase: Canada, Venezuela, Iraq and the UK are the countries with highest growth on heavy crudes Production decline in Colombia, Brazil and Mexico opens a new set of opportunities Source: IHS CERA, PDVSA, 2015

COKING CAPACITY VS HEAVY CRUDE PRODUCTION 2016 – 2021 (TBD) Source: WoodMackenzie, IHS CERA Coking capacity increase Heavy crude production increase Available Capacity

has the largest reserves around the world To Diversify in a Low Cost and Low Risk Environment LA FAJA has the largest reserves around the world

ORINOCO OIL BELT (FAJA) WHERE CAN LOW COST AND LOW RISK, FOR HEAVY CRUDES, BE FOUND? 299,9 ORINOCO OIL BELT (FAJA) Bln Bls FAJA

National Petroleum Consortium ORINOCO OIL BELT CURRENT & NEW DEVELOPMENT Russian National Petroleum Consortium

ORINOCO OIL BELT - OIL PRODUCTION 2012 Year Average 1.177 TBD 2013 1.211 TBD 2014 1.247 TBD 2015 1.320 TBD 2016 ESTIMATED 1.372 TBD 2012 2013 2014 2015 2016

LOCATION OF JOINT VENTURES: RUSSIAN - VENEZUELAN PETROMIRANDA 14,628.0 MMBls PETROMONAGAS 3,178.43 MMBls PETROVICTORIA 15,596.04 MMBls BOQUERÓN 207.6 MMBls PETROPERIJÁ 266.7 MMBls PETROZAMORA 1,368.2 MMBls 2.718 MMBls 2.884 MMBls

JOINT PRODUCTION VENEZUELA-RUSSIA Production Forecast for six Venezuelan-Russian Mixed Enterprises, in the Orinoco Oil Belt, will add up over 800K barrels of heavy crude (8-10 °API) per day by 2025. Real Plan CURRENT PRODUCTION: 206 TBD PRODUCTION FORECAST 2025: 830 TBD

RECENT PARTNERSHIP CASE: PETROMONAGAS Under current price scenarios and unilateral sanctions imposed y US and EU, Rosneft has increased its investments in Venezuela, mainly through the rise of its participation share in Petromonagas. TBD Petromonagas JV, already being one of the most prolific partnerships in Venezuela. The joint plan to amplify its development by introducing state-of-the-art technologies and raising E&P management efficiency.

THE BLENDING STORY: A CASE FOR DIVERSIFICATION IN THE OIL MARKET Venezuelan-Russian Mixed Companies produce different crude segmentations, which are the base for a Blending Strategy. Blending Strategy allows to take over additional market share by creating an entire range of heavy and medium segmentations. Blending can be done using domestic or foreign crude, using Orinoco Oil Belt´s Heavy Crude as blending base. I.e. using Urals with heavy crudes.

Thank you