IHS Global Scenarios to 2030 OilExp International Conference Moscow 30 September 2010 CONFIDENTIAL © 2009, All rights reserved, Cambridge Energy Research Associates, Inc., 55 Cambridge Parkway, Cambridge, Massachusetts No portion of this presentation may be reproduced, reused or otherwise distributed in any form without prior written consent.

CONFIDENTIAL - Copyright © 2009 IHS Inc. All Rights Reserved 1 IHS Global Scenarios and IHS CERA Energy Scenarios Introduction The IHS Global Scenarios provide three distinct views of the future to 2030 based on geopolitical, macroeconomic, and security trends. Launched in summer 2010, the IHS Global Scenarios to 2030 and the IHS CERA Energy Scenarios constitute a major, wide-ranging project designed to help companies and organizations to plan for the future, evaluate strategy, test investment decisions, and understand the forces of change in the world. It is the product of a collaborative effort among IHS CERA, IHS Global Insight, IHS Automotive, IHS Jane's, IHS Herold, IHS Fairplay, member companies and organizations, and distinguished experts. -Scenarios are a framework for thinking about the future and its many uncertainties. -Scenarios are different than forecasts. They are a tool for decision makers to build robust strategies that stand up under a range of alternative futures. The IHS CERA Energy Scenarios focus and provide detail on the energy industry consistent with this global framework. The global oil market is a key element of this energy analysis. This slide deck is meant to provide a high-level understanding of the scenarios as they pertain to the global oil market. IHS CERA_Global Energy Scenarios_1010

CONFIDENTIAL - Copyright © 2009 IHS Inc. All Rights Reserved 2 Scenario Framework: The 3 Big Questions Will major powers cooperate to enhance global security and prosperity-or will cooperation fail? How quickly and to what degree will the world shift to a low carbon economy? Will major powers avoid a reoccurrence of economic turbulence and preclude long-term weakness in the global economy ? Global GHG deal? Technology innovations? Growth in China and India? Nuclear proliferation? Future of the dollar? Protectionism?Enough oil? Financial imbalances? Role of US and Europe? State v. Market?

CONFIDENTIAL - Copyright © 2009 IHS Inc. All Rights Reserved 3 3 Scenarios Provide Distinct Views on the Big Questions Global Redesign Metamorphosis Vortex

CONFIDENTIAL - Copyright © 2009 IHS Inc. All Rights Reserved 4 Summary of the 3 Scenarios GLOBAL REDESIGN. Anxious, difficult transition from world of concentrated power to broader distribution of wealth and influence METAMORPHOSIS. Strong move toward low carbon economy, but with difficult trade-offs VORTEX. Severe volatility in economic growth and poor global cooperation

CONFIDENTIAL - Copyright © 2009 IHS Inc. All Rights Reserved 5 Global Redesign The Planning Scenario Level of Global Cooperation and Security The reinvigoration of market forces and shared interest among major powers to expand global trade and investment foster robust economic growth. Low-carbon Economy? Greenhouse gas (GHG) reductions fall short of aspirations, but the long-term trend of declining carbon intensity of the global economy continues. Historically high oil prices and government policy sustain a steady, long- term decline in the energy intensity of the global economy, but not large or fast enough to satisfy environmental goals. Economic Growth International dialogue on macroeconomic issues helps to moderate volatility in economic growth. IHS CERA_Global Energy Scenarios_1010

CONFIDENTIAL - Copyright © 2009 IHS Inc. All Rights Reserved 6 Meta(morphosis) Alternative Scenario Level of Global Cooperation and Security Intense global competition to gain advantage in lower-carbon technology. Major GHG emitters agree to multispeed approaches to GHG reductions and clean energy policies, which encourages investments and attract other countries over time. Low-carbon Economy? High oil prices and technological innovations lead to a distinct slowdown in the pace of global GHG emissions. Electric vehicles take an increasing share of the light transport market, and wind, solar, nuclear, and biofuels all play a role in the transformation of the energy system. Economic Growth The transformation of the energy system requires reallocation of investment and resources, creating new economic winners and losers. Toward the end of the Meta era, economic growth is boosted as more of the world’s population has access to energy. IHS CERA_Global Energy Scenarios_1010

CONFIDENTIAL - Copyright © 2009 IHS Inc. All Rights Reserved 7 Vortex Alternative Scenario Level of Global Cooperation and Security Global cooperation suffers during the “Long Slowdown”—an extended period of weak economic growth following the recession. This impairs progress in international trade, diplomatic relations, and efforts to address climate change. Low-carbon Economy? Environmental and climate change concerns become secondary to more pressing domestic economic issues. However, weak economic performance, rather than policy-induced actions, help to moderate growth in GHG emissions during the late 2010s. Economic Growth Volatile economic growth returns with a vengeance in the early 2010s as a second “Great Recession” emerges and hits Asia as well as North America and Europe. The world enters a period of greater volatility in economic cycles than had been experienced during the previous three decades. IHS CERA_Global Energy Scenarios_1010

CONFIDENTIAL - Copyright © 2009 IHS Inc. All Rights Reserved 8 IHS CERA_Global Energy Scenarios_1010 Global GDP Across IHS Scenarios Source: IHS Global Insight, IHS CERA Energy Scenarios Summer 2010 data set. *Calculated on an exchange rate basis

CONFIDENTIAL - Copyright © 2009 IHS Inc. All Rights Reserved 9 World Annual Economic Growth Across IHS Scenarios Annual Average Percent Change in Real GDP Source: IHS Global Insight, IHS CERA Energy Scenarios Summer 2010 data set. IHS CERA_Global Energy Scenarios_1010

CONFIDENTIAL - Copyright © 2009 IHS Inc. All Rights Reserved Global Liquids Demand to 2030 by Scenario 10 IHS CERA_Global Energy Scenarios_1010 Source: IHS CERA Energy Scenarios Summer 2010 data set. Note: Liquids demand includes petroleum products, biofuels, and synthetic fuels (gas-to-liquids, coal-to-liquids).

CONFIDENTIAL - Copyright © 2009 IHS Inc. All Rights Reserved Shifts in World Liquids Capacity to 2030 (mbd) Source: IHS CERA IHS CERA_GO_Rome_RT_

CONFIDENTIAL - Copyright © 2009 IHS Inc. All Rights Reserved Oil Price Trends Across IHS Scenarios Very high prices in early 2010s due to supply difficulties. High prices foster innovation and policy response. Electricity begins a major entry into transportation. Oil prices low by end of period. Meta Return to “boom and bust” leads to cycles in oil prices. Investments and price hard hit by downturn—paves the way for future price spikes. Oil alternatives are limited. Volatile supply growth. Vortex Global Redesign 12 “Long Aftershock” increases prices until late 2010s; then prices fall and flatten in real terms. Demand growth driven by non-OECD countries. Demand growth slows in latter half of scenario period. Tight distillate market. IHS CERA_Global Energy Scenarios_1010

CONFIDENTIAL - Copyright © 2009 IHS Inc. All Rights Reserved WTI Benchmark Crude Price by Scenario 13 IHS CERA_Global Energy Scenarios_1010 Source: IHS CERA Energy Scenarios Summer 2010 data set. Real Prices US Nominal Prices US

CONFIDENTIAL - Copyright © 2009 IHS Inc. All Rights Reserved Global Sales of Plug-in Electric and Battery Electric Light-duty Vehicles 14 IHS CERA_Global Energy Scenarios_1010 Source: IHS Automotive Scenarios Summer 2010 data set.

CONFIDENTIAL - Copyright © 2009 IHS Inc. All Rights Reserved Global Biofuels Supply to 2030 by Scenario 15 IHS CERA_Global Energy Scenarios_1010 Source: IHS CERA Energy Scenarios Summer 2010 data set. Note: Biofuels include ethanol, biodiesel, and next-generation biofuels (e.g., cellulosic derived gasoline and diesel).

CONFIDENTIAL - Copyright © 2009 IHS Inc. All Rights Reserved 16 Degree of Global Cooperation on Key Issues Across the Scenarios Source: IHS CERA Economic Policy Greenhouse Gas Limits Prevention Of Nuclear Proliferation LowMediumHigh

CONFIDENTIAL - Copyright © 2009 IHS Inc. All Rights Reserved 17 Comparison of Key Metrics Across Scenarios Oil price volatility Security Crisis Technology Innovation LowMediumHigh

Few Words About Short Term CONFIDENTIAL © 2009, All rights reserved, Cambridge Energy Research Associates, Inc., 55 Cambridge Parkway, Cambridge, Massachusetts No portion of this presentation may be reproduced, reused or otherwise distributed in any form without prior written consent.

CONFIDENTIAL - Copyright © 2009 IHS Inc. All Rights Reserved A Multi-Speed Global Economy Economies are resilient; the expansion will continue But recoveries from financial crises are usually slow Asia is on the fast track; Europe is in the slow lane Wage and price inflation will stay mild in most regions Governments need an “exit strategy” from deficits or financial markets will impose one After a near-term rally, the dollar will depreciate Globalization means business cycle synchronization and volatility

Thank You! CONFIDENTIAL © 2009, All rights reserved, Cambridge Energy Research Associates, Inc., 55 Cambridge Parkway, Cambridge, Massachusetts No portion of this presentation may be reproduced, reused or otherwise distributed in any form without prior written consent.