URUGUAY ROUND II EXPLORATION OPPORTUNITIES OFFSHORE URUGUAY ANCAP

URUGUAY ROUND II EXPLORATION OPPORTUNITIES OFFSHORE URUGUAY

• ANCAP is the National Oil Company of Uruguay • ANCAP will sign with the Oil Company the Exploration-Exploitation Contract after approval and on behalf of the República Oriental del Uruguay Executive Branch • ANCAP is the one to execute the activities, business and operations of hydrocarbons industry, by itself or by third parties.

Public and Private Sectors Involvement • Fields are State property (original domain). • Extracted substances are State property (common domain). • The Executive Branch is the responsible of fixing the policy and everything related to activities of hydrocarbon exploration and exploitation. • IOC enter into agreements with ANCAP through competitive bids or through direct contracting subject to Executive Branch’s approval. • OFFSHORE: Bidding rounds • ONSHORE: Direct Negotiation – Open door system

SCHEDULE – URUGUAY ROUND II • Promotion activities (since July 2009 to April 2012): AAPG, APPEX, NAPE, EAGE, SPE, SEG • Data room in Rio de Janeiro (9 th November 2010) • Data room in Houston (February 2011) • Data rooms in Montevideo, to be arranged at any time • 1 st announcement (Montevideo, September 2011) • Road Show in Houston (October 2011) • Road Show in Rio de Janeiro (November 2011) • Qualification of interested oil companies (September 2011 – February 2012) • Submission of bids (March to April 2012) • Opening of bids (April 2012) The definitive bidding round terms and contract model will be available since the 1 st announcement in Montevideo.

Promoción en revistas del upstream

Contract Model • PSA: Production Sharing Agreements for which Contractor assumes all risks, costs and responsibilities of the activity. • No royalty is applied • No signature or production bonuses. • No surface rentals • No taxes paid to provinces or municipalities • Term: 30 years plus a maximum + 10 year extension • Exploration period: 4 + 2 + 1 (UR 09)

BLOCKS • Blocks delimited by ANCAP • Only offshore • 3. 000 to 10. 000 Km 2 • Available areas (subject to modifications) + other areas in shallow and ultra deep waters

ANCAP’s OIL COMPANIES REGISTER • QUALIFICATION – Technical Information • The Energy Intelligence Top 100 Ranking • Submit information stating yearly production and experience of operations (5000 BOED, operations offshore) – Economical & Financial information • The Energy Intelligence Top 100 Ranking • Investment grade credit by rating agencies • Submit audited balance sheets of the last 3 years (stating US$ 2 billion stock market capitalization or US$1 billion shareholders’ equity) – Legal issues

BIDDING ROUND TERMS - OFFERS • Offers will be compared according to: – Exploratory program • wells, 2 D and 3 D seismic, EM, piston coring, etc. • The purchasing of Multiclient and ANCAP’s geological and geophysical data will count as a Working Unit • Minimum exploratory program by area (tailored for each block) • No mandatory drilling in the first exploration period – Economic terms: • % of profit oil • Maximum ANCAP’s association will be biddable, offered by the Oil Company (20% minimum)

DATABASE • ANCAP’s “old data” – 2 D SEISMIC: 12. 000 Km, surveys from 1970 to 1982 – Well logs (LAS): • Caliper - CALD, Caliper - CALS, DRHO, Sonic, Gamma Ray, LN, NPHI, RHOB, SN, Spontaneous Potential – Well Reports • MULTICLIENT GEOPHYSICAL INFORMATION – 2 D SEISMIC: • CGG 2002, 1840 Km • CGG 2007, 7125 Km y 2008, 2909 Km

Exploratory Background ANCAP’S VINTAGE DATA From 1970 to 1982 • 2 D SEISMIC: 12. 123 Km, • Well logs • Well reports Exploratory wells

Geophysic Multiclient Data Pozos exploratorios

Contractor Economy • The Contractor is paid with the part of hydrocarbons produced corresponding to Cost Oil and the Profit Oil • PROFIT OIL URUGUAY • PROFIT OIL IOC • COST OIL (recovery limit 70%) % PROFIT OIL to be offered by Oil Company. -Different Profit Oil % based on R factor (total income/ total expenditures) • Contractor is entitled to freely dispose and export such oil, but ANCAP has the preferential right to totally or partially purchase the oil, for domestic consumption • Oil and gas price fixed at real value of the international market for hydrocarbons of similar characteristics.

• Tax on Net Worth (IPAT) • Consumption Taxes – Value Added Tax (IVA) – Specific Consumption Tax (IMESI) • Custom Taxes • Social Security Contributions (CESS) (Hydrocarbons Law) – Corporate Income Tax (IRAE) – Income Tax on Non Residents (IRNR) EXEMPTED • Income Tax INVESTMENT PROMOTION REGIME GENERAL TAX REGIME ON CORPORATIONS ONLY GOVERNMENT’S TAKE IS ITS SHARE OF THE PROFIT OIL

Government take

Regulatory Aspects ENVIRONMENTAL PROTECTION: • The Contractor must develop the activities in a way compatible with the environmental conservation INSURANCES The Contractor shall appropriately transfer the risk of suffering and/or causing damages or losses that the activity related to the Contract might generate. GUARANTEES • The Contractor must deposit a guarantee in favor of ANCAP in US Dollars (cash, bank letters, public assets or any kind of guarantee that fully satisfy ANCAP).

RESULTS OF URUGUAY ROUND 2009 Qualification Bids • Consortium formed by: 40% 20% • Submitted offers for blocks 3 and 4

Block 3: Operator YPF Block 4: Operator Petrobras

ON SHORE: Prospection Contract with Schuepbach Energy LLC • ONSHORE: Open door system • Only qualified companies may offer. • Offers are analyzed every quarter.

New Surveys • Better and higher knowledge about our geology through multiclient surveys § GXT/ION. Contract signed for the acquisition, processing and interpretation of 3000 Km of 2 D seismic. § FUGRO. We are finishing the contract terms for an aero magnetic survey of all offshore. § Negotiating to have access to the satellite images for identification of oil seeps. § Assessing the technical and economic feasibility of an EM survey for offshore prospects, to make a proposal on the multiclient basis § Negotiating a reprocessing of old seismic data. § Negotiating a multiclient fluid inclusions analysis and report § New 2 D seismic survey (5. 000 Km), regional and infill. • Definition of more leads and prospects with higher detail and technical and economic evaluation

EXPLORATORY POTENTIAL LEADS & PROSPECTS 20 50 100 200 500 1000 1500 2000 2500 3000 3500 4000 Prerift & Synrift Cretaceous Post-rift Cenozoic Post-rift

WEB PAGE AND CONTACT INFO www. rondauruguay. gub. uy info@rondauruguay. gub. uy • • Geological information about Uruguayan offshore basins Available E&P database Bidding round terms Map of offered areas Contract Model FAQs Contact information Videos and presentations

STRENGTHS OF URUGUAY • Political, Economic and Social Stability • Energy Strategy agreed by all political parties • Optimal business environment for investments, marked by history of certainties, seriousness and security • An interesting, unexplored and intriguing geology, with many analogies and correlations with exploratory and geological features of producing basins of the Atlantic margin, showing promising alternatives • Sound and fair bidding round terms and contract model

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