Oil Industry in (Exploration, Production, Refining, Petrochemical Infrastructure and Distribution) 10 April 2003

Production Estimated, 2002-2010

2002 - Crude 6 mil tons Domestic production - Natural gas 6 bn cm

2002 - 2010 - Domestic 46.5 mil tons Crude production - International 6 mil tons Natural gas production 48 bn cm

2010 - Total - Crude 7.7 mil tons Total production - Natural gas 6.3 bn cm

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1 Romania Sustainable Economic Growth Starting since 2000

CEE Oil Product Demand Russia 8 GDP (% yoy change) and Estimated Growth Rate % 6 Romania is the 4 2 Poland second largest

0 WARSAW market of the CEE -2 region with a 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003F 15 mnt -4 3% growth potential in -6 oil products -8 5mn t 3% demand above the Czech Republic CEE average 2 Slovakiamn t VIENNA 3.5% 1.8mn t 300 % 11 mnt Consumer prices (annual BUDAPEST 2.5% 250 Romania average % change) 2% Hungary6 mn t 200 2% 10 mnt Slovenia 150 2.2mn t 4 mn t 4% 100 2.5% % Bosnia 50 BELGRADE Croatia Herzegovina SARAJEVO 0 1993 1995 1997 1999 2001 2003F 4 mn t Adriatic Sea Montenegro3% SOFIA 4 mn t PODGORICA *Source: EU Pre-accesion Program, July 2002 SKOPJE 3% F.Y.R.O.M. 10 April 2003 TIRANA 3

Romanian Oil and Gas Industry

Oil and Gas Refining & Petrochemicals Exploration & Production • Petrom owns 2 of the 10 Petrom refineries in Romania • The operational capacity is • 2002 oil production: 5.8 mill tons of 8 million tons per year, • 2002 gas production: 6.06 bill Scm representing 38% of country’s overall capacity • 2002 gas production Regulatory Authorities products 7.4 bill Scm • National Agency for Mineral transport Resources

• National Authority for Petrotrans - sole operator of the national petroleum Regulation of Natural Gas products pipeline network

Oil transportation Marketing & Distribution

Conpet - sole operator of the Services • Total number of national oil retail stations: 2438 pipeline • Wells drilling: 20 companies network • Logging: ATLASGIP S.A. • Petrom retail network: • Special operations: 695 stations • Seismic survey: Prospectiuni

10 April 2003 SA,Western Atlas Romania 4

2 Romanian production accounts for 63% and 35% of CEE Oil and Gas production

North Sea Western Europe Baltic Sea Russia 9.5 mm tons 40 bn m3

CEE production Crude, 9.6 mn t Gas, 17.0 bn cm Western Europe Russia 3.32 bn m3 40.2 mm tons

Petrom production Crude, 5.8 mn t North Africa Black Sea Gas, 6.06 bn cm 3.0 mm tons

Natural Gas North Africa Middle East Oil 2.2 bn m3 9.8 mm tons

Source: 2001 BP Statistical review of world energy, Energy Information Administration

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Romanian - Oil and Gas Exploration Blocks

Petrom exploration blocks

• Romania provides free access for any foreign operator to the oil and gas blocks

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3 Strategic Objectives in Exploration & Production Sector

• Maintaining the crude production at a relatively constant level: 6 mn.tons per year until 2005 and 5.6 mn.tons until 2010; • Reducing operating production cost of crude oil; • Achieving reserve discovery costs of maximun 15 USD/ton and development costs of 25USD/ton; • New external concession fields for exploration and production purposes so as to reach a reserve level of 25 mn.tons and a production level of 2 mn . tons/year up until 2010; • Environmental reconstruction in compliance with the European environment standards.

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Processing Capacities in Refineries

8 Petrobrazi Arpechim 7 Installed Capacity 6 Lukoil Petromidia Operational Capacity 5 4 Rafo 3

Mil.t/year 2 Astra Darmanesti 1 Vega Steaua Petrolsub 0 Name of Refinery Installed Capacity Operational Capacity Nelson Index SNP PETROM SA- PETROBRAZI Branch 7.50 4.50 11.70 State owned: 8 m. t SNP PETROM SA- ARPECHIM Branch 7.00 3.50 9.40 SC PETROTEL LUKOIL SA Ploiesti 5.00 3.50 10.73 SC ROMPETROL SA - PETROMIDIA 5.30 4.80 8.69 SC RAFO SA ONESTI 5.20 3.50 9.54 Private: 14.3 m t SC ASTRA SA Ploiesti 1.00 0.70 4.52 SC ROMPETROL SA - VEGA Ploiesti 0.80 0.45 1.90 SC STEAUA ROMANA SA 0.60 0.35 3.52 SC DARMANESTI SA Refinery 1.15 0.60 5.49 SC PETROLSUB SA Suplacu de Barcau 0.45 0.40 2.50 T o t a l 34.00 22.30

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4 CRUDE REFINING DYNAMICS

14000

12000

10000

8000 000 ‘ tons/year 6000

4000

2000

0 2001 2002 2003 2004 2005 2010 Imported crude 5650 6300 6800 7200 8000 8450 Domestic crude 6000 6000 6000 6000 6000 5550 Total crude 11650 12300 12800 13200 14000 14000

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THE DYNAMICS OF EURO GASOLINE PRODUCTION (EN228) 3500

3000

2500

2000 000

‘ 1500 tons/year

1000

500

0 2001 2002 2003 2004 2005 2010

Total gasoline 2905 2737 2914 3091 3359 3384 Euro gasoline 236 402 1010 1380 2102 3384

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5 DYNAMICS OF EURO DIESEL PRODUCTION (EN 590)

5000

4000

3000 yaer 000 ‘ tons/ 2000

1000

0 2001 2002 2003 2004 2005 2010 Total 3656 3797 3944 4140 4439 4458 Euro diesel 424 1100 1465 2353 2778 4458

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Strategic Objectives in Refining & Petrochemical Sectors

• Ensuring the fuel quantities for the energy domestic needs of the country; • Meeting the throughput necessary for restarting petrochemical sector; • Meeting the domestic demand of fuels and petrochemicals; • Achieving compliance with EU standards for quality of products; • Decreasing pollution and environment reconstruction; • Increasing the security of operating the equipments;

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6 Transportation infrastructure

CONPET operates the pipeline • Storage capacity: 1.7 national transportation system mil cm/year for crude oil • Crude oil import capacity: 24 mil t/year •Network length: 4500 km • Petroleum products export capacity: 10 mil •Pipeline diameter: t/year between 2 and 28 inches •Annual Capacity 211.7 mil. bbl

OIL TERMINAL

Crude Oil Pipeline Network

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Petroleum Product Pipeline Network

Gasoline pipeline Diesel pipeline Light Fuel pipeline Network expansion programs Stand-by sector

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7 South-East European Pipeline (INOGATE Program)

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Distribution of the operators according to the number of stations

Lukoil 1400 1386 OMV 2% 2% Agip MOL 1200 2% 1%

1000

1250 633 80 39 16 21 800 695 Petrom 28% 600 Private 400 57%

200 121 83 46 42 60 25 Shell 3% 0 Rompetrol 5% Private

Number of retail sites (2002)

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8 Petrom Operations in CEE Marketing & Distribution

Russia

Distribution Facilities Poland WARSAW Local presence since 1998 Distribution Facilities PRAGUE Ukraine Czech Republic Local presence since 2000 Slovakia BRATISLAVA VIENNA Moldova Austria BUDAPEST Romania Hungary

LJUBLJANA Slovenia ZAGREB Croatia

BUCHAREST Bosnia BELGRADE Herzegovina Black Sea 2003 Project: SARAJEVO Serbia 2003 Project Bulgaria Distribution Facilities Adriatic Sea Montenegro SOFIA Distribution Facilities PODGORICA SKOPJE

TIRANA F.Y.R.O.M.

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Increasing International Presence

2 mil to KazakhstanKazakhstan

1.5 ExplorationExploration & & development development activities activities • Jusali RepRep of of Moldova Moldova 1 • Jusali • •SinelnikovskoeSinelnikovskoe • Tasbulat Distribution facilities • Tasbulat Distribution facilities 0.5

0 Hungary Hungary 2002 2003 2004 2005 2007 2010 Distribution facilities Distribution facilities India 2003 project India 2003 project Yugoslavia Yugoslavia Distribution facilities ExplorationExploration Distribution facilities activities and activities and TechnicalTechnical service service

TotalTotal International International Capex Capex

Iran 19981998 - -2002:2002: USDUSD 130 130 million million Drilling contracts Drilling contracts 20032003 - -2005:2005: USDUSD 200 200 million million Source: Petrom;

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9 Strategy for InternationalDevelopment

CEE è To significantly increase the presence in the region as fuel retailer and E&P services provider è To establish retail sales potential in countries where own refined fuel products could be efficiently distributed è Targeted 3-10% mid-term market share in key countries è Build well recognised premium fuel retail network brands è Experience in reconstructing and expanding service station networks in transition economies è Key markets: Hungary, Yugoslavia, Moldova Republic

Caspian Region and Middle East

è Pursuing research, exploration and production works of oil fields in ; è Achievment of the basic programme for exploration of the Indian off-shore block; è Atending farm – out agreement tenders in Qatar and Iran.

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