1. Venezuela: Political and Economic Update University of Miami Center for Hemispheric Policy October 30, 2007 Coral Gables, FL

2. Venezuela: Political and Economic Update …first some definitions: Monetization Conventional Oil Unconventional Oil

3. Venezuela: Political and Economic Update World Largest Oil Reserves Venezuela 79 / 250 / 329 Saudi Arabia 264 / 0 / 264 Canada 16 / 163 / 179 Iran 137 / 0 / 137 Iraq 115 / 0 / 115 Kuwait 101 / 0 / 101 UAE 98 / 0 / 98 EIA 2006, Billion Barrels, Conventional Proven/ Unconventional Undiscovered/Total Reserves

4. Venezuela: Political and Economic Update Venezuela’s Crude Oil Production ≈ 3 million barrels per day PDVSA’s 2012 Crude Oil Production Target 5.8 million barrels per day EIA/PDVSA 2006

5. Venezuela: Political and Economic Update Oil Patch Enablers Geology Capital Technology Know-How Stewardship

6. Venezuela: Political and Economic Update Venezuela’s Crude Oil Average Price 2003 $24.82 2004 $32.88 2005 $46.15 2006 $56.45 2007 $60.66 10/19 YTD PDVSA

7. Venezuela: Political and Economic Update PDVSA 2006 Income Statement Revenues:$99 Billion Royalties: ($18) Social Programs: ($14) Corp. Taxes: ($ 4) Net Income: $5.5 Billion PDVSA 2006

8. Venezuela: Political and Economic Update

9. PDVSA’s 2012 Opportunity Costs Crude Oil, Domestic Price Subsidies, Natural Gas, Petrochemicals $64 billion in Revenues At Current Prices 2012 Est. Low Case at $60/bll Ven Basket