5 MIDDLE EAST JET FUEL CONFERENCE (MEJET 2004) 12 – 13 MAY, 2004 JET FUEL TRADING IN THE GULF REGION PRESENTED BY : ZAKARIA SULAIMAN

CONTENTS WORLD ECONOMIC GROWTH PASSENGER TRAFFIC WORLD AND GULF REGION DEMAND GULF PRODUCTION AND BALANCES GCC COUNTRIES EXPORTS OF JET/KERO JET/KERO BULK AND INTO-PLANE PRICES

SLIDE 1 WORLD ECONOMIC GROWTH (%) USA LATIN AMERICA W. EUROPE E. EUROPE FSU ATLANTIC BASIN MIDDLE EAST ASIA PACIFIC TOTAL WORLD SOURCE : PEL

SLIDE 2 WORLD ECONOMIC GROWTH (%) BY COUNTRY SOURCE : PEL

SLIDE 3 PASSENGER TRAFFIC PASSENGERS – KILOMETERS PERFORMED (BILLION) SOURCE : ICAO

SLIDE 4 WORLD WIDE AND GCC PASSENGERS TRAFFIC (MILLION) SOURCE : ICAO

SLIDE 5 WORLD DEMAND FOR JET FUEL/KERO (MILLION BPD) ASIA PACIFIC MIDDLE EAST ATLANTIC BASIN TOTAL WORLD SOURCE : PEL

SLIDE 6 GULF REGION DEMAND FOR JET FUEL/KERO (MBPD) BAHRAIN IRAN IRAQ KUWAIT OMAN QATAR S. ARABIA UAE TOTAL GULF SOURCE : FACTS

SLIDE 7 GULF REGION PRODUCTS DEMAND (MBPD) LPG NAPHTHA GASOLINE KERO/JET GASOIL1,055 1,109 1,136 FUEL OIL OTHERS TOTAL3,327 3,911 4,371 SOURCE : FACTS

SLIDE 8 POTENTIAL ADDITION OF REFINING UNITS BY 2008 SOURCE : FACTS

SLIDE 9 PRODUCTION OF JET FUEL/KERO IN THE GULF REGION (MBPD) BAHRAIN IRAN IRAQ KUWAIT OMAN QATAR S. ARABIA UAE TOTAL GULF ,049.5 SOURCE : FACTS

SLIDE 10 JET FUEL/KERO BALANCE IN THE GULF REGION (MBPD) ________________________________________________ PRODUCTION DEMAND EXPORT ________________________________________________ , , SOURCE : FACTS

SLIDE 11 GCC EXPORTS OF JET/KERO SOURCE : GCC SECRETARIATE

SLIDE 12 BULK JET FUEL/KERO PRICES SOURCE : PLATTS

SLIDE 13 JET/KERO FLOW FROM AG TO CIF NWE & S’PORE (ARBITRAGE) SOURCE : PLATTS NWE S’PORE AG

SLIDE 14 JET A-1 INTO PLANE PRICES SOURCE : JET FUEL INTELLIGENCE

SLIDE 15 THE REASONS FOR HIGH INTO-PLANE PRICES IN THE GULF REGION 1 - Gulf Region is a thin market in relation to the other major markets 2 - In US, Europe and Asia, volume is a price sensitive (more competition between airports in those major markets). 3 - Prices in major markets are more transparent than the Gulf. Jet Fuel is a commodity fuel whereas the Gulf is not. 4 - More players in the major markets than in the Gulf. 5 - Economic of refinery in the Gulf is tide to one source of crude i.e. M / E crude. Where in Europe, it is mostly influenced by North Sea/IPE Brent crude and in US by WTI / NYMEX. 6 - Refinery margins in the Gulf are poor relative to US, NWE or Far East.

SLIDE 16 CONCLUSION Middle East Jet Fuel availability will continue to grow during this decade due to the increase in refinery investment and additional condensate splitting projects. Majority of Jet Fuel export will continue to move to European destinations even if price differentials sometimes does not support such movement. Product movement has been mostly governed by price hedging mechanism from the Gulf into Europe. Those mechanism are tide to expectation of higher price prospective in Europe due to seasonal demand.