THE NORTH AMERICAN LNG OPPORTUNITY APEGGA, Calgary, Alberta Andrew Stephens Vice President, Planning and Corporate Communications October 13, 2005

Disclaimer LEGAL NOTICE - FORWARD LOOKING INFORMATION/RESERVES ESTIMATES This presentation contains forward-looking statements. Such statements are generally identifiable by the terminology used, such as “plan,” “anticipate,” “intend,” “expect,” “estimate,” “budget” or other similar wording. Forward-looking statements include, but are not limited to, references to future capital and other expenditures, drilling plans, construction activities, the submission of development plans, seismic activity, refining margins, oil and gas production levels and the sources of growth thereof, results of exploration activities and dates by which certain areas may be developed or may come on-stream, retail throughputs, pre-production and operating costs, reserves estimates, reserves life, natural gas export capacity and environmental matters. These forward-looking statements are subject to known and unknown risks and uncertainties and other factors which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such statements. Such factors include, but are not limited to: general economic, market and business conditions; industry capacity; competitive action by other companies; fluctuations in oil and gas prices; refining and marketing margins; the ability to produce and transport crude oil and natural gas to markets; the effects of weather conditions; the results of exploration and development drilling and related activities; fluctuation in interest rates and foreign currency exchange rates; the ability of suppliers to meet commitments; actions by governmental authorities including increases in taxes; decisions or approvals of administrative tribunals; changes in environmental and other regulations; risks attendant with oil and gas operations; expected rates of return; and other factors, many of which are beyond the control of Petro-Canada. These factors are discussed in greater detail in filings made by Petro-Canada with the Canadian provincial securities commissions and the United States (U.S.) Securities and Exchange Commission (SEC). Readers are cautioned that the foregoing list of important factors affecting forward-looking statements is not exhaustive. Furthermore, the forward-looking statements contained in this presentation are made as of the date of this presentation, and Petro-Canada does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this presentation are expressly qualified by this cautionary statement. Petro-Canada’s staff of qualified reserves evaluators generates the reserves estimates used by the Company. Our reserves staff and management are not considered independent of the Company for purposes of the Canadian provincial securities commissions. Petro- Canada has obtained an exemption from certain Canadian reserves disclosure requirements to permit it to make disclosure in accordance with SEC standards in order to provide comparability with U.S. and other international issuers. Therefore, Petro- Canada’s reserves data and other oil and gas formal disclosure is made in accordance with U.S. disclosure requirements and practices and may differ from Canadian domestic standards and practices. Where the term barrel of oil equivalent (boe) is used in this release it may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet (Mcf): one barrel (bbl) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. The use of terms such as “probable, “possible,” “recoverable” or "potential” reserves and resources in this presentation does not meet the guidelines of the SEC for inclusion in documents filed with the SEC.

Agenda Who is Petro-Canada Natural gas supply/demand outlook LNG value chain components and economics Cacouna Energy project Conclusion and questions

Five Core Businesses East Coast Oil Oil Sands North American Natural Gas Petro-Canada One of Canada’s largest integrated oil and gas companies A significant international player Five world-class core businesses 2004 production of 305,700 Bbl/d of liquids and 873 MMcf/d of gas (before royalties) Petro-Canada shares trade on the Toronto (PCA) and New York (PCZ) stock exchanges Market capitalization of CAD $23.5 Billion Corporate headquarters in Calgary (North America) and international headquarters in London (England) Petro-Canada’s Gas Business Focus Explore for, produce and market natural gas and associated liquids Strategy Maximize profitability in Western Canada and U.S. Rockies through focused exploration and development Pursue high-potential exploration plays in North America (Mackenzie Valley, East Coast offshore, Alaska and Unconventional Gas) Expand role in global LNG business beyond Trinidad with a proposed re-gas terminal in Quebec Lever position as one of Canada’s largest gas exporters Maximize value from Natural Gas Marketing in Canada and the United States International Downstream

Supply/Demand Outlook Natural Gas Supply/Demand Outlook

U.S. Gas Demand > Domestic Supply Tcf/year 30 25 Consumption Net imports Net imports 20 Production 15 Natural Gas Net Imports, 2003 and 2025 (Tcf) Natural Gas Net Imports, 2003 and 2025 (Tcf) 10 5 Pipeline LNG Pipeline LNG 1960 1970 1980 1990 2000 2010 2025 Source: EIA’s Annual Energy Outlook 2005

What’s Driving U.S. Gas Demand? U.S. Electricity Generation by Fuel, 2003 and 2025 (billion kilowatthours) U.S. Electricity Generation By Fuel, 2003 and 2025 billion kilowatt hours Share of Gas-Fired Generation increases 50% Share of Gas-Fired Generation Increases 50% Source: EIA’s Annual Energy Outlook 2005

LNG Helps Fill U.S. Supply Gap TCF/Y 15 20 25 30 2005 2010 2015 2020 2025 Growth in Alaskan production Growth in non- - associated unconventional Growth in LNG imports Base production (all sources) Source: Source: EIA’s Annual Energy Outlook 2005

Global Gas Supply And Consumption 57 72 79 50 30 18 76 73 10 Russia & FSU 23 27 261 Europe N. America 36 31 44 7 14 97 11 13 55 Middle East Asia Pacific C & S America Africa Consumption (BCF/D) Production (BCF/D) R/P Ratio (Years) Source: BP Statistical Review of World Energy

Testimony to U.S. House Energy Committee The Importance Of LNG “Access to world natural gas supplies will require a major extension of LNG terminal import capacity…. Without the flexibility that such facilities impart, imbalances in supply and demand will engender price volatility.” Alan Greenspan Testimony to U.S. House Energy Committee June 10, 2003

Components And Economics LNG Value Chain Components And Economics

Typical Investment (500 MMcfd / 3.5 Mt/yr) LNG Value Chain Typical Investment (500 MMcfd / 3.5 Mt/yr) Capex $ MM Upstream LNG Marketing Regas Transport Liquefaction Upstream

LNG Block Flow Diagram Natural Gas Acid Gas Removal Dehydration Mercury Gas Wells Reception Liquefaction Condensate Stabilisation Fractionation Utilities Storage and Loading LNG LPG Treatment

The Liquefaction Process

Heat Exchanger

Photos courtesy of CH-IV International LNG Carriers Tanker Details The standard LNG tanker size is 138,000 m3, carries about 2.9 bcf of gas after regasification, travels at 19-20 knots, has an unloading rate of 8,000-12,000 m3 per hour (taking 11-17 hours to unload), and has an average cool-down time of 20-40 hours Since 2000, the number of ships has increased from 127 to 175, resulting in a glut of 5-10 vessels on the current spot market Approximately 65 ships are on order New LNG carriers typically cost in the range of $150-$200 million (US) depending on size Ships as large as 250,000 m3 are being planned, but will require compatible terminals Only 8 shipyards in the world build LNG tankers: 3 in Japan, 3 in Korea and 2 in Europe New ships typically take 2 years to build, but orders are often placed 4-5 years in advance of delivery to secure a berth at a shipyard Source: EIA Photos courtesy of CH-IV International

Shipping - A Critical Cost Factor DISTANCES (in nautical miles from Dataloy AS) Quebec Gulf of Mexico Baltic 3,784 6,076 Nigeria 4,924 5,936 Qatar 8,113 9,753 Trinidad 2,684 2,232 Differentials: Baltic – Cacouna is 2,292 miles closer than GOM Nigeria – Cacouna is 1,072 miles closer than GOM Qatar – Cacouna is 1,640 miles closer than GOM Trinidad – GOM is only 452 miles closer than Cacouna Trinidad Shipping costs for Quebec LNG regasification terminals will be $0.15 to $0.25 lower than the Gulf of Mexico

Re-gasification Process

Existing And Proposed LNG Terminals In North America B C D E Source: FERC

Potential LNG Terminals In North America Source: FERC

At What Market Price Is LNG Economical For North America? The graph shows prices at which terminals in these areas return a fair cost of capital to LNG value chain participants. Given that today’s market prices are much higher, LNG is a very economical source of gas. These prices are for pipeline gas downstream of the regasification facility. In order to get current $ prices, you can probably add $0.20-0.25/mcf (assumes 3% inflation). Source: EIA’s 2005 Annual Energy Outlook

The Cacouna Energy Project

Project Overview Average send out capacity of about 500 MMcf/d TransCanada and Petro-Canada share construction costs of about $660 million TransCanada: facility operator with transportation expertise Petro-Canada: LNG supplier with marketing experience and international upstream supply business

Gros-Cacouna Terminal And Ship The Cacouna Energy Project Joint development by Petro-Canada and TransCanada LNG import terminal with capacity for regasification of 500 mmcf/d Two LNG storage tanks with total capacity for 7 bcf of LNG (320,000 cubic metres) Estimated capital cost of C$ 660 Million Approximately one LNG cargo each week The terminal will be designed to accommodate LNG carriers with capacities up to 216,000 cubic metres of LNG Siting based on water depth and berthing capabilities, storage capacity and take-away pipeline capacity. Artist’s Rendition

Stakeholder Relations Direct employment of 500 to 1,000 people during construction 30 to 50 long-term positions to operate facility Regulatory approval process to take two years Environmental impact statement filed in spring 2005 Public hearings in 2006 Community referendum supports project in September

Northeastern Canada and United States Market Advantage Absorption Advantage Northeastern Canada and United States Ontario, Quebec, New England and Mid-Atlantic Market Demand New England Market Demand Gros-Cacouna LNG easily absorbed: limited price ramification Other Canadian LNG has major impact: prices spiral down Impact of 10 Bcm/yr LNG into Each Market 7% 40% 20 40 60 80 100 120 140 160 Bcm/yr The Gros-Cacouna site has significant advantages over other potential Canadian Regasification sites with respect to arket absorption. Whereas other potential Canadian re-gasification sites are limited to serving the much smaller New England Market, Gros-Cacouna has the advantage of being able to serve markets in Ontario, Quebec, New England and the Mid-Atlantic US. Given their combined size, the markets we are targeting can more easily absorb incremental LNG volumes from Gros-Cacouna. Because other Canadian sites are targeting much smaller markets, there is a potential to cause a major downward pressure on prices in those markets.

Progress On Russian LNG Project Gas grid to feed LNG export Progress MOU – Oct. 2004 Feasibility report – May 2005 Commercial proposal – June 2005 Discussing Interim Development Agreement Risk mitigation Project financing Gazprom partnership Reciprocal investment Vyborg Primorsk We have been making progress on importing gas from Russia – through a joint LNG project with Gazprom. We call this Baltic LNG. Our strategic goal is to lever off high US gas prices by supplying NW US with Russian gas supply. We are developing an LNG project opportunity in the St. Petersburg oblast (region) with the aim of exporting 3.5 to 5 mmtpa (or 500 to 700 MMcf/d). The project has the potential to produce at this constant level for 30 plus years. Gas would be supplied from the vast Russian gas grid and has the potential to come on stream five years or more ahead of LNG from the Barents sea or Yamal peninsular. Recent progress has been encouraging. We signed an MOU with Gazprom in October of 2004, developed a feasibility report by May of this year and recently put forward a commercial proposal for the project. We are currently undergoing discussions with Gazprom with the goal of signing an Interim Development Agreement to progress this project. This project is well positioned with respect to risk mitigation and management: it entails project financing our partner - Gazprom – has significant control over domestic gas supplies and transportation links, and the project envisions reciprocal investment by Gazprom throughout the LNG value chain. – we and Gazprom want good alignment all throughout the value chain. This is a ground breaking project for Petro-Canada and Gazprom where we could gain first mover advantage in supplying Russian gas to US markets.

Project Schedule Sept 2004 – June 2005 Prepare and file regulatory applications July 2005 – Q4 2006 Application review and approval process 2007 – 2009 Design and construction Q4 2009 Facility start-up

Petro-Canada’s Capabilities Solid operator of large projects Track record of successful stakeholder relations Relationships with suppliers around the world Marketing expertise through upstream and downstream business Strong partners with TransCanada Pipelines and potential suppliers like Gazprom

Conclusions LNG will be a critical supply source to meet growing North American demand Siting of re-gasification facilities is based on economics and community acceptance A Quebec LNG facility has better access to markets and lower shipping costs Petro-Canada has the experience, capability and partners to bring LNG to North America