1. Ministry of Energy & Mines

2. Agenda

3. Ministry of Energy & Mines Venezuela Legal Framework up to 100% of private participation 34% Income Tax HOL …a solid and clear legal framework provided by the Organic Laws subjected to the Venezuelan Constitution… and open to Interantional Investors up to 49% of private participation (oil) 30% Royalty 50% Income Tax up to 100% of private participation 20% Royalty 34% Income Tax GHOL HOL: Hydrocarbon Organic Law GHOL: Gaseous Hydrocarbon Organic Law Upstream:Downstream: Partners Input 3First class exploration and development 3Technological and financial resources 3Environmental high performance 3Access to international LNG Re-Gas capacity & gas markets 3Committed to national sustainable development and maximize local content

4. Ministry of Energy & Mines

6. Offshore Potential Resources Source: PECA / Exploration Resource Base 2000 Blanquilla Plataforma Deltana* Golfo de Venezuela Carúpano 1.4 BBL 16 TCF 4.2 BBL 10 TCF Ensenada 1.3 BBL 1 TCF 7.0 BBL 22 TCF Falcon NE 1.5 BBL 9 TCF 3.2 BBL 38 TCF Mariscal Sucre 10-14 TCF P. GDP 2-3 TCF P. 7.6 TCF P.P.P. 97 WELLS; 35 EXPLORATORY: 15 PROVED HYDROCARBONS 121.775Kms Seismic 2D/12800 KM2 Seismic 3D POTENTIAL RESOURCES: OIL: 18 BBLGAS : 95 TCF

7. Ministry of Energy & Mines Eastern Offshore Development Golfo de Paria GUIRIA Mariscal Sucre GPO GPE MATURIN CIGMA INTERNATIONAL MARKET DOMESTIC MARKET Plataforma Deltana B2 B3 B4 B1 B5 T&T Other Areas IMPLEMENT THE MASTER PLAN: Maximize local content Sustainable development Technologies Business case Continuous review IMPLEMENT THE MASTER PLAN: Maximize local content Sustainable development Technologies Business case Continuous review

8. Ministry of Energy & Mines Plataforma Deltana 1 DORADO-1 4 3 LAULAU-1 LORAN-1 COCUINA-1 5 BORA 1X 2 DORADO-2 B1 - 64 KM 2 Reserved for business opportunities B4 - 1.433 KM 2 Licensee Statoil B5 - 3.743 KM 2 Future Growth B2 - 169 KM 2 Licensee ChevronTexaco & ConocoPhillips B3 - 4.031 KM 2 Licensee ChevronTexaco BLOCKS 2 & 4 Minimum Program: 6 exploratory wells Operation starts: August 2004 Partners Investment Plan 2004 = 107 MM$ - 4 wells Market Commitment PDVSA Participation up to 35% with commerciality

9. Ministry of Energy & Mines Plataforma Deltana Schedule 200020012002200320042005200620072008 First Production 2009 PHASE I 4 wells PDVSA 180 M$ PHASE II Licences INITIAL STUDIES PERMITS Exploration & Appraisal PDVSA DEVELOPMENT & INFRASTRUCTURE DEVELOPMENT DRILLING Business B2/B4 Exploration & Appraisal Partners 300 M$ Local Content Strategy UNITIZATION B3/B5 Local Content Strategy Partners DC FIRST PDVSA OFFSHORE OPERATION IN 20 YEARS GAS EXPLORATION PLATAFORMA DELTANA´S MODEL

10. Ministry of Energy & Mines Mariscal Sucre LNG Project 11º 10º40º45º50º55º62º05º15º20º25º30º35º40º45º 35º 40º 45º 50º 55º 11º 05º 10º 051015 Km Río Caribe (1.8) Mejillones (3.3) Patao (4.4) Dragón (4.8) PENINSULA DE PARIA LNG GUIRIA COES: 191 MMB PRELIMINARY DEVELOPMENT AGREEMENT: PDVSA: 60%, SHELL: 30%,MITSUBISHI: 8%, Venezuelan Entities: 2% NORTH PARIA FIELDS (14.3 TCF; 1.1 BCFD) ONE LIQUEFACTION TRAIN (4.7 MT/Y) INVESTMENT: US$ 2.7 B

11. Ministry of Energy & Mines LNG Value Chain T-E GÜIRIA AREA DE ORDEN ACIÓN HE LI DE C K RECREA-TIÓNRECREA-TIÓN INCLUDES: - SERVICE DOCK PLOTS: - LNG PLANTS - PETROCHEMICAL - REFINING - WAREHOUSING - INDUSTRIAL PARK 6,300 Ha ONSHORE 11,000 Ha OFFSHORE GOLFO DE PARIA San Juan de Unare Río San Juan Punta Campana Peninsula Paria San Juan de las Galdonas Querepare 11.000 ha Caño Morrocoy Irapa Yaguaraparo Isla Antica MAR CARIBE GÜIRI A Soro Yoco CIGMA 6.300 Mapire Mejillones Cacao Planicie Soro-Güiria

12. Ministry of Energy & Mines E&P- MARKET ALINGMENT BUSINESS CASE Natural Gas Growing demand 2025: 2.8% 90 to 176 TCF/year USA: Prices projection: 4-5 $/MillionBTU Demand: 23 to 31 TCF/year ( 63 to 85 MillionCF/d) LNG: 2,000 to 15,000 MillionCF/d E&P Net-Back Pipeline LNG MARKET Shipping LNG Terminals Sales Value Chain Annual Energy Outlook 2004 National Petroleum Council, Sept. 2003

13. Ministry of Energy & Mines 20032004 20052006 GOLFO VENEZUELA INTERNO + FALCON NE BLANQUILLA CARUPANO FACHADA ATLANTICA ENSENADA BARCELONA CUBAGUA PLATAFORMA BLOQUES 2, 3, 4 Y 5 2009 - 2012 2008 - 2010 2010 - 2012 2011 - 2012 2015 - 2020 2010 - 2012 2011 - 2012 2015 - 2016 TUY - CARIACO LICENSE GRANTING DATA BLOCKS DEFINITION PARTNERSHIP STRATEGY BIDDINGAPPROV. Spec. Survey or Group Shooting Exploration 2003-2008 800 Million$ Development: 2.5 MillionBPD 6.8 BCFD 6.0 B$ 2004/2009 (4.0 B$ by Partners) Exploration 2003-2008 800 Million$ Development: 2.5 MillionBPD 6.8 BCFD 6.0 B$ 2004/2009 (4.0 B$ by Partners) ¿ What is Next ?

14. Ministry of Energy & Mines

15. Synthetic crude oil and products Thbd 101 368 453 543 301 PETROZUATA CERRO NEGRO SINCOR HAMACA 556 BnB ORIGINAL OIL IN PLACE1,360 TOTAL RESOURCES272 PROVEN RESERVES37 PRODUCING RESERVES14 Only 5% of the total resources has been developed BnB ORIGINAL OIL IN PLACE1,360 TOTAL RESOURCES272 PROVEN RESERVES37 PRODUCING RESERVES14 Only 5% of the total resources has been developed On going Orinoco Belt Opportunities

16. Ministry of Energy & Mines Orinoco Belt Opportunities Synthetic crude oil and products Thbd 101 368 453 543 556 synthetic 301 PETROZUATA CERRO NEGRO SINCOR HAMACA 556 BnB ORIGINAL OIL IN PLACE1,360 TOTAL RESOURCES272 PROVEN RESERVES37 PRODUCING RESERVES14 Only 5% of the total resources has been developed BnB ORIGINAL OIL IN PLACE1,360 TOTAL RESOURCES272 PROVEN RESERVES37 PRODUCING RESERVES14 Only 5% of the total resources has been developed On going Potential 600 800 1000 400 400 ThBD (Synthetic crude oil) GRASS ROOT 765 850 1000 200 ThBD TIER II products (JET/DIESEL) or others 200 THBD High quality products TIER II or others (JET/DIESEL) 200 ThBD Quality products TIER II or others Industrialization opportunities potential expansions of on going business + sinergies SCO to Products

17. Ministry of Energy & Mines Orinoco Belt...Oil Productivity Evolution BD / WELL 8095852000 90 1500 - 3000 VERTICAL WELL GRAVEL PACK 1000 - 2000 HORIZONTAL WELLS 1500’, ESP, DILUENT INJECTION MULTILATERALS WELLS HORIZONTAL WELLS 4000 - 5000’, ESP, MULTIFASIC PUMPS 400 - 600 100 - 200 600 - 1200 MECHANNICAL PUMP Productivity per well was 300% improved in the last 20 years 8.0 $/Bl a 3.0 $/Bl 3.0 $/Bl a 1.0 $/Bl 2003

18. Ministry of Energy & Mines Cost Per Barrel Structure UPSTREAM COST:1 $/B UPGRADING COST:2 - 3 $/B TOTAL OPEX:3 - 4 $/B AMORTIZATIONS & FINANCIAL:4 - 5 $/B TOTAL COST/BARREL:7 - 9 $/B UPSTREAM COST:1 $/B UPGRADING COST:2 - 3 $/B TOTAL OPEX:3 - 4 $/B AMORTIZATIONS & FINANCIAL:4 - 5 $/B TOTAL COST/BARREL:7 - 9 $/B Compare with Canada Tar Sands - Bitumen: 9 to 13 $/Bl

19. Ministry of Energy & Mines

20. Petro América Initiative Petro Caribe On Going: San Jose and Caracas agreements Fuel suplly to Argentina CILA activities Petro SurPetro Andina Refining & Petrochemicals Marketing & Supply Gas Latin America and The Caribbean Exploration Production On Study: Gas from and to Colombia Grass root refinery in Brazil Petrocaribe

21. Ministry of Energy & Mines  On going projects show the level of commitment of Venezuela to become a major LNG supplier by IQ 2009 (MSP and PDP).  Major oil companies accepted to sign a PDA under the new Venezuelan Hydrocarbon law because it provides legal rights for foreign investors:  Major and medium Oil companies has submitted business proposals for upstream developments, Ex. Orinoco Belt, Exploratory areas.  So far 10.5* Bn USD have been announce by third parties as its commitment with PDVSA 2004-2009 Business Plan.  Complementary route map for business engagement final stages are on development, to be realeased soon. Facts speak louder than words * Source:AVHI

22. Ministry of Energy & Mines