EXPLORATION PRODUCTION OPPORTUNITIES NEW TRENDS IN TUNISIA Entreprise

EXPLORATION & PRODUCTION OPPORTUNITIES & NEW TRENDS IN TUNISIA _______ Entreprise Tunisienne d’Activités Pétrolières

PLAN OF THE PRESENTATION I- INTRODUCTION: Location & Economic indicators II- EXPLORATION III- PRODUCTION IV- NEW EXPLORATION TRENDS – Open Blocks V- LEGAL TERMS FOR EXPLORATION & DEVELOPMENT OF HC RESERVES IN TUNISIA VI- OIL AND GAS SERVICES COMPANIES Entreprise Tunisienne d’Activités Pétrolières

TUNISIA

THE ADVANTAGES OF TUNISIA • Political Stability TUNISIA • Open & Growing Economy • Very Friendly Environment • Challenging and Promising Petroleum Potential • New Fiscal Incentives for Oil and Gas E&P • Broad Petroleum Infrastructure Entreprise Tunisienne d’Activités Pétrolières

ECONOMIC INDICATORS • From 1962 to 2001, the average growth rate reached 5% per year at constant prices, allowing an average annual increase in per capita income over 3% over the same period. • GDP/Capita (2004) : 3380 TND • Inflation Rate (2004) : 3. 8 % • Budget Deficit (2004) : 2. 1 % • External Debt (2004) : 49. 3 % • Debt service (2004) : 14. 4 % l Since the association and free trade agreement with the EU which come into effect on 1998, there has been a remarkable increase in Tunisian exports to the EU market (7586 MMTND in 2001). l Export Growth(2004) : 16. 6% (Cst Price) l In 2004 the Energy account for 5 % of exports. Entreprise Tunisienne d’Activités Pétrolières

EL JEM COLUSUEM Entreprise Tunisienne d’Activités Pétrolières

EXPLORATION ACTIVITY STATUS – 2004 Entreprise Tunisienne d’Activités Pétrolières

EVOLUTION OF INVESTMENTS IN EXPLORATION Entreprise Tunisienne d’Activités Pétrolières

GEOPHYSICS PROPORTION OF THE EXPLORATION INVESTMENTS Exploration Investments Evolution During 2004 • 2300 Sq Km of 3 D offshore seismic was aquired in Gulf of Gabes (BG , MP Zarat) • 1136 Km of 2 D was acquired onshore Southern Tunisia • (ENI , OMV ). • 480 sq Km 3 D onshore Seismic was acquired in the El Borma Concession (ENI). 2004 Entreprise Tunisienne d’Activités Pétrolières

2003 NEW DISCOVERIES • Chaâbet El Mercanti#1 : CEM#1 (Southern Tunisia) ANADARKO/PIONEER/ETAP • Tested 550 BCPD of 57° API & 3. 7 MMSCFGPD from the Ordovician quartzitic sandstones ****** • Samet El Anaguid#1: SEA#1 (Southern Tunisia) ANADARKO/PIONEER/ETAP • Contains gas/condensate columns within the Ordovician reservoir Entreprise Tunisienne d’Activités Pétrolières

2003 NEW DISCOVERIES • HAWA #1 : HWA#1 (Southern Tunisia) ENI/PIONEER/PALADIN/ETAP • Tested 6300 B 0 PD of 41° API & 1000 BCPD of 41° API from the Upper Silurian Acacus sandstones. Tested 14. 5 MMSCFGPD from the Lower Silurian Tannezuft sandstones ***** MAZRANE #1 : MZR#1 (Southeastern Tunisia) HBS/ETAP. Tested 600 BOPD from the Lower Cretaeous Meloussi sandstones Entreprise Tunisienne d’Activités Pétrolières

2003 NEW DISCOVERIES • Jugurtha#2 : JHA#2 (Eastern Offshore Tunisia) BG/ETAP • Tested 14. 5 MMSCFGPD (with nearly 60 -65% of inerts) from the Upper Cretaceous R 1 limestone reservoirs ****** • Cercina Sud#1: CERS#1 (Eastern Offshore Tunisia) OMV-PEI/ETAP • Tested 850 BOPD of 29° API from the Middle Eocene nummilitic limestones Entreprise Tunisienne d’Activités Pétrolières

2 003 NEW DISCOVERIES • Est Beni Khalled #1 : EBK#1(Northeastern Tunisia) EXXOIL/ETAP • Flowed oil of 52° API from the Lower Eocene Bou Dabbous fractured limestone 2 004 NEW DISCOVERY Dalia -1: South Tunisia ENI/PIONEER/PALADIN/ETAP Tested 3600 BOPD of 42° API from the Upper Silurian Acacus sandstones Entreprise Tunisienne d’Activités Pétrolières

2 005 NEW DISCOVERY • NOUR-1(NUR-1): Southern Tunisia ENI /PIONEER/PALADIN/ETAP During preliminary testing results to clean-up the well 2800 BOPD & 15. 6 MMCFGPD were produced from the Silurian Tanezzuft and Acacus sandstones Entreprise Tunisienne d’Activités Pétrolières

KSAR HADDADA Entreprise Tunisienne d’Activités Pétrolières

TUNISIAN OIL & GAS PRODUCTION Average Producing Cost (2002) : between 5 to 7 $/Bbl OIL National Production : 3. 34 MMT (25. 4 MMB)(2004) Main Producing Fields : El Borma, Ashtart, Adam & Didon GAS National Production : 2. 45 MMTOE (2420 MNm 3) (2004) Main Producing Field : Miskar Total Oil+Gas: 5. 8 MMTOE(2004) Entreprise Tunisienne d’Activités Pétrolières

UPCOMING FIELD DEVELOPMENT 2004 - 2006 l ADAM Oil & Gas Field First Gas : 2004 l l hawa OIL & gas Field First Oil : January 2004 l. Dalia OIL & gas Field l First Oil : July 2004 l CHARGUI Gas Field l l First Gas : 2 nd quarter 2006 OUDNA CHARGUI l HASDRUBAL Oil & Gas Field l First Oil : 2006 has been submitted for approval ZARAT HASDRUBAL l. POD ADAM l ZARAT Oil & Gas Field l First Oil : 2006 l OUDNA Oil & Gas Field l First Oil : 2006 HAWA Entreprise Tunisienne d’Activités Pétrolières

FINDING COSTS Entreprise Tunisienne d’Activités Pétrolières

MOSAIC ULYSSE Entreprise Tunisienne d’Activités Pétrolières

NEW EXPLORATION TRENDS Entreprise Tunisienne d’Activités Pétrolières

EMERGING PLAYS l SILURIAN ACACUS PLAY IN GHADAMES BASIN l ORDOVICIAN PLAY IN GHADAMES & CHOTT BASINS Entreprise Tunisienne d’Activités Pétrolières

EMERGING PLAYS Silurian and Ordovician in Ghadames Basin Entreprise Tunisienne d’Activités Pétrolières

POTENTIAL PLAYS l OLIGOCENE-MIOCENE THRUST BELT PLAY IN NORTHERN OFFSHORE TUNISIA l DEEP OBJECTIVES l Jurassic Play in Central Tunisia l Cretaceous, Jurassic & Triassic objectives in the Chotts Basin l Jurassic & Permian plays in Eastern Offshore Tunisia Entreprise Tunisienne d’Activités Pétrolières

OLIGOCENE-MIOCENE THRUST BELT PLAY IN NORTHERN OFFSHORE TUNISIA Entreprise Tunisienne d’Activités Pétrolières

DEEP OBJECTIVES Triassic (4000 m) Ordovician (4500 m) Cambrian (4600 m) Entreprise Tunisienne d’Activités Pétrolières

NEW PLAY CONCEPTS l STRATIGRAPHIC TRAPS l Telemzane Arch l Gulf of Gabes and Jeffara Basins l MIOCENE TURBIDITIC SYSTEM l Gulf of Hammamet Entreprise Tunisienne d’Activités Pétrolières

MIOCENE TURBIDITIC PLAY IN GULF OF HAMMAMET SSW NNE Entreprise Tunisienne d’Activités Pétrolières

Entreprise Tunisienne d’Activités Pétrolières

OPEN BLOCKS Entreprise Tunisienne d’Activités Pétrolières

HOW TO EXPLORE IN TUNISIA Entreprise Tunisienne d’Activités Pétrolières

LEGAL TERMS FOR EXPLORATION AND DEVELOPMENT OF HYDROCARBON RESERVES IN TUNISIA NEW INCENTIVES Entreprise Tunisienne d’Activités Pétrolières

NEW INCENTIVES OF THE 1999 HYDROCARBON LAW 1. RIGHT TO USE ASSOCIATED OR NON ASSOCIATED GAS FOR POWER GENERATION 2. RIGHT TO BUILD UP A TAX DEDUCTIBLE PROVISION FOR ABADONMENT COST 3. RIGHT TO BUILD UP A DEDUCTIBLE PROVISION UP TO 20% OF ANNUAL PROFITS FOR FURTHER EXPLORATION ACTIVITIES 4. RIGHT TO TREAT THE CUSTOMS HANDLING FEE (R. P. D. ) ON EXPORTS OF HYDROCARBONS AS A CREDIT AGAINST ANY INCOME TAX DUE Entreprise Tunisienne d’Activités Pétrolières

GAS TERMS Priority to supply the domestic market with any Gas discovered and which is in excess of the holder’s own needs. The state guarantee priority of access to the local market to the extent of the demand. Price for Gas sales to the local market is fixed by Decree, it’s set at 80% of the FOB price for low sulphur content fuel oil (1%). Holder will have the right to use Associated or non Associated Gas for power generation. Entreprise Tunisienne d’Activités Pétrolières

POWER GENERATION REGIME The Holder of the Hydrocarbon Concession may be Authorized to develop non Commercial Gas for Power Generation. The electricity will be exclusively sold to the National Utility Company (STEG) v Fiscal Regime : - Rate of Income Tax : 35% - Exemptions from. certain duties and taxes such as VAT and import duties The Parties negotiate in good faith a sale Contract that define the rights and obligations of the Parties (term, Sale Price , quantity, technical and commercial conditions…. ) Entreprise Tunisienne d’Activités Pétrolières

OIL AND GAS SERVICES Law of July 27 th, 2004 § Investments are made freely subject of a « Declaration » § Export of goods and services to oil &gas companies in foreign countries § Exemption of customs taxes and VAT on imports § Deduction of income originating from export from taxation basis for the first 10 years and 50% of those profits beyond that period Entreprise Tunisienne d’Activités Pétrolières