1. Energy Market Challenges in Latin America and the Caribbean Philippe Reichstul President & CEO 18th World Energy Congress Keynote Address Session 2

2. High potential energy markets, attracting major international companies to the region Economic growth rates above the world average Reestructuring process in the energy sector, conducted by nearly all the countries Low energy consumption by inhabitant and a significant part of the population without access to commercial energy sources Growing environmental concerns and the search for sustainable development stimulate the use of cleaner energy sources Energy supply and demand unbalances in the countries create opportunities for a regional, integrated energy market

3. Natural Gas –Bolivia to Brazil –Argentina to Chile and, in the short term, to Brazil and Uruguay Electricity –Paraguay-Brazil –Argentina-Chile –Argentina-Brazil –Venezuela-Colombia –Central America (SIEPAC) Energy integration is starting to become a reality...

4. Natural Gas –GNL from Bolivia and Peru to Mexico and USA –GNL from Trinidad y Tobago and Venezuela to Central America, the Caribbean and Southern Cone –Gas pipeline across Central America from Mexico or Venezuela/Colombia Electricity –Interconnections Venezuela- Brazil (Guri) and Ecuador-Peru –Corpus Christi hydropower plant (Argentina-Paraguay)... that might be consolidated by other projects

5. Natural gas is the key driver to energy integration in the region Venezuela, Mexico, Argentina, Trinidad y Tobago and Bolivia: the biggest reserves and exportable surpluses Brazil and Chile: the biggest potential markets Distant markets can be reached through pipelines, LNG facilities and, in the future, gas-to-liquids (GTL) technology Share in the regional energy matrix leveraged by increasing power generation needs (gas and electricity convergence)

6. Stable fundamentals of regional economies Improved regulatory framework to grant economic rationality to the energy sector, besides consumer and environment protection Harmonized tax policies Preservation of relative energy prices among countries Compatible specifications for energy products and services Transparent rules to assure the operation of energy wholesale markets for oil, natural gas and electricity, with price determination by the free game between the players Creation of future markets to reduce energy price volatility Challenges to a regional, integrated energy market: how to overcome ?