Investment Opportunities in Hydrocarbons and Production in Peru

“Investment Opportunities in Hydrocarbons and Production in Peru” "PERU New Bidding Round 2008 New Exploration Opportunities" Ronald Egúsquiza General Manager 2008

Peru is located in a strategic location in the South American. It is becoming a "regional hub" in the South American Pacific Area. With more than 2, 000 km shore in front the Pacif Ocean

Peru 83 E&P Contracts Coalbed Methane 19 Exploitation 64 Exploration 09 TEA Diesel from Bitumen

Peru 83 E&P Contracts 19 Exploitation Heavy Oil Modernization Talara Ref. LNG Project 64 Exploration Petrochemical Industry

New Opportunities in E&P License Contracts Ø Contract Stability Ø Competitive Royalties Ø Flexible work programs Ø Huge Natural Gas Potential Ø Heavy and Light Oil discoveries Perupetro S. A. : Is launching 2008 Bidding Round in Peru Open acreage for E&P License Contract

Stability: Macroeconomics Sustained economic growth with average annual forecast greater than 7% for 2006 – 2010* Peru 8, 9 8 7, 6 GDP Growth (Annual variation %) 6, 4 6 5, 2 3, 9 4 Developed 2 World 0 80 82 84 86 88 90 92 94 96 98 00 02 04 06 07* (*)Forecasted by Central Reserve Bank of Peru and the Ministry of Economy and Finance. Source: International Monetary Fund and the Central Reserve Bank of Peru.

Sustained lower country risk compared with Latinamerica average risk index Updated October, 20 th 2007 Source: Bloomberg

Dec 31, 2003: 27 (12 Ex, 15 Prod. )

Actions already taken to improve exploration in Peru Three lines of action: • Improved technical information accessibility. • Enhanced economic incentives for contracting. Let the market fix new level of royalties for the State. • Improved contract model allowing shorter period of negotiations. PERUPETRO S. A.

STABILITY OF CONTRACTS IS BASED ON: ü Contract approved by Presidential Decree – same level as a Congress Law - “Contract–Law”. ü ü Contract signed by Peru-Petro S. A. as a “Sociedad Anonima” follows corporate rules So this Contract is signed “Enterprise to enterprise”. International Arbitration is part of the Contract – there is a specific Clause for this. ü Present Government – Took Political Decision not to modifiy the current Hydrocarbons Contract Model. PERUPETRO S. A. DEC- 2007

Peru’s Signed Contracts 2000 1 2004 6 2001 4 2005 15 2002 2 2006 16 2003 2 2007 24 2008 ?

Dec 31, 2004 31 (14 Ex, 17 Prod. ) August, 2007, 64 (45 Ex, 19 Prod) PERUPETRO S. A. DEC, 2007

2007 Bidding Round in Peru August, 2007, 64 (45 Ex, 19 Prod) From 19 Blocks offered, 14 Blocks were signed PERUPETRO S. A. DEC, 2007

Dec, 2007, 84 (65 Ex, 19 Prod) Peru offers: Open areas Competitive Contract Royalty scheme Information Free of cost Bidding Round Recent discoveries of Natural Gas and Heavy and Light Oil PERUPETRO S. A. SEPT, 2007

HC PRODUCTION PERU LIQUIDS NEAR 120, 000 BOPD OIL CONDENSATES

HC PRODUCTION PERU GAS 255 MMCFD

Cuenca Maranón Cuenca Lima Cuenca Pisco Cuenca Titicaca Cuenca Huallaga Cuenca Ucayali Cuenca Madre De Dios

Yellow Areas represent OPEN ACREAGE in Sedimentary Basins • Open for License Contracts Presentations • • • MARANON BASIN HUALLAGA BASIN UCAYALI LIMA & PISCO BASINS MADRE DE DIOS BASIN TITICACA BASIN

6 MARAÑON 1 HUALLAGA 6 OFFSHORE 1 MADRE DE DIOS 3 TITICACA Total 17 Lotes

PROPOSAL EVALUATION BIDDING ROUND FINAL SCORE = TECHNICAL PROPOSAL SCORE + ECONOMIC PROPOSAL SCORE + GROSS REVENUES INDEX FINAL SCORE - ONSHORE FINAL SCORE = (OT * 0. 30) + (OE * 0. 40) + (PE * 0. 30) PUNTAJE FINAL - OFFSHORE FINAL SCORE = (OT * 0. 30) + (OE * 0. 30) + (PE * 0. 40)

PROPOSAL EVALUATION FINAL SCORE = TECHNICAL PROPOSAL SCORE + ECONOMIC PROPOSAL SCORE + GROSS REVENUES INDEX Application Letter FAIL PASS Documents for qualifications required by law FAIL PROPOSAL (Two sealed envelopes) ENVELOPE N° 1 TECHNICAL PROPOSAL PASS Two sealed envelopes: Technical proposal (envelope N° 1) and Economic Proposal (envelope N° 2). ENVELOPE N° 2 ECONOMIC PROPOSAL

You are welcomed to join us to our Roadshow 2008, Houston(Jun 10), Calgary(Jun 13), London(Jun 17), Tokyo (Jun 20), and join us to our booth IP 31 here at AAPG 2008 THANK YOU ALL VERY MUCH Ronald Egúsquiza ronald. egusquiza@perupetro. com. pe PERUPETRO S. A. Luis Aldana 320 – San Borja Tlf. 6171800 – Fax. 6171801