des de Negocios Marzo 2000ppt (1)

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PDVSA

1 March, 2000 

GROWTH & CONSOLIDATION IN

LATIN AMERICA´S ENERGY INDUSTRY

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PDVSA

2 March, 2000 

3,7

4,3

6,9

8,0

18,3

24,1

63,5

14

0 15 30 45 60 75 90 105 120 135 150

ARGENTINA

BOLIVIA

ECUADOR

MEXICO

BRASIL

COLOMBIA

TRINIDAD & TOBAGO

VENEZUELA 146

Non Associated Gas

Proven Reserves (TCF)

Seventh in the WorldSeventh in the World

Seventh in the WorldSeventh in the World

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PDVSA

3 March, 2000 

Gas Resources (TCF)

Proved =Proved =146146

ProbableProbablePossiblePossible

UndiscoveredUndiscovered

132132 1414

6-206-20

Non associatedNon associatedAssociatedAssociated

Onshore: 

40-6040-60Offshore: 

32323232

771111

Associated

Non-associated

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PDVSA

4 March, 2000 

Current Production/Consumption

Total = 5.7Oil Industry

4.2

4

8

47

Residential

Injection

Internal Use

 NGL

Others

27%73 %Domestic

Market

Oil Industry

Domestic Market

1.5

Power Gen.

Petrochemical

Steel/Alum.

Cement

Others

(%) (%)

32

21

21

65

15

32

Refinery

9

1999BCFD

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PDVSA

5 March, 2000 

Current Production / Consumption NGL & Methane

NGL181 MBPD

Methane1.5 BCFD

Power Gen.

Petrochemical

Steel/Alum

Oil Industry

(%)

Oil Industry

Domestic Market

Exports

Petrochemical

(%)

34

32

18

16

Manufacture

25

22

12

24

17

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PDVSA

6 March, 2000 

Forecast (1999 - 2009)

0

400

800

1.200

1.600

2.000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

MMBOED

(42 %)

(55 %)

(26 %)(17 %)

(32 %)(28 %)

Hydroelectric power 

Liquids

Natural Gas1.1

1.8Energy Matrix 

Natural Gas

0 

1

2 

34

5 

6 

1999 2001 2003 2005 2007 2009

POWER GENERATION 

BCFD

4.2

1.5

PETROCHEMICAL

STEEL / ALUMINUM 

MANUFACTURE 

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PDVSA

7 March, 2000 

Energy Policy

Economic GrowthEconomic GrowthEconomic GrowthEconomic Growth

Increase Gas Supply

Expand markets

- Domestic

- International

Facilitate Private participation

- E&P

- T&D

- Transformation & Industrialization

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PDVSA

8 March, 2000 

Legal Framework

Á Private participation in non associated gas E&Pand all gas downstream activities

Á 20% royaltyÁ Creation of a National Gas Regulatory BoardÁ

Regulation in T&D, TariffsÁ Vertical Disintegration

Á E&P Income tax rate reduced from 67% to 34%Á Tax credit on new investments (10%)

Gas Price =Commodity

Price

Transportation

Tariff 

Distribution

Tariff + +

.... Reasonable profitability

Income Tax Law

Price

Gas Law

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PDVSA

9 March, 2000 

BusinessPortfolio

Upstream• Exploration / Production• Gathering

Business Opportunities

Midstream• Existing Trans. Systems Expansion• New Transmission Systems

Downstream

• Distribution• Processing• Industrialization/Transformation• Power Generation• Exports

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PDVSA

10 March, 2000 

DemandDemand

·Domestic market·Oil industry·Export

yOpportunity inpotential demandyNeed to add flexibility

to the supply system

E&P Licenses for Non

Associated Gas

E&P Strategy

SupplySupply

PDVSA own effort

(Associated Gas)

Time

Volume

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PDVSA

11 March, 2000 

SAN CARLOS 

BARINAS

GUANARE

BARQUISIMETOMARACAIBO

ANACO

OFFSHORE

- INTEGRATED PROJECTS

- DIRECT NEGOTIATIONS

- EXPORTS

ONSHORE

- BIDDING OF 10 BLOCKS

- TERMS AND CONDITIONS IN PROGRESS

- FORMAL PUBLIC ANOUNCEMENT AND DATA

PACKAGES 2nd Q/ 2000

JOSE

ANACO

PDVSA OWN EFFORT

E&P Strategy

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PDVSA

12 March, 2000 

AnacoAnacoBarquisimetoBarquisimeto

Pto. OrdazPto. Ordaz

Pto. La CruzPto. La Cruz

Anaco -Barquisimeto

Anaco -Barquisimeto

Ulé -

Amuay

Ulé -Amuay

Anaco - Jose -PLC

Anaco - Jose -PLC

Anaco - Pto.

Ordaz

Anaco - Pto.

Ordaz

Expansion of Existing Transmission Systems

Spin off / Joint Venture

PDVSA GAS49%

or 

Lower 

Selected Partners51%

or 

Higher 

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PDVSA

13 March, 2000 

AnacoAnacoBarquisimetoBarquisimeto

Pto. OrdazPto. Ordaz

Pto. La CruzPto. La Cruz

New Transmission Systems

Gas pipelineto

Margarita

Gas pipelineto

Margarita

Gas pipeline toAcarigua

Gas pipeline toAcarigua

Central - West

Interconnection

Central - West

Interconnection

Construction

& Operation

Foster 100%PrivateCapital

Transport

Service

Contract

=

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PDVSA

14 March, 2000 

Gas Distribution Development

Economic Feasibility

Ample Markets 

Economies of scale

• Plan to increase number of users

• Recognized Operators

Bidding conditions:

• Domestic Capital Usage

• Distribution Tariff 

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PDVSA

15 March, 2000 

Hemispherical Integration

GTL

FEASIBILITY STUDY

PIPELINE

UNDER EVALUATION

GAS

  US 

CaribbeanCentral America

NGL 200 370 TBD

46% EXPORT

POWER: 60- 200 MW3er Q., 2000

Spain/Portugal 

  US East Coast 

US Gulf Coast 

 Puerto Rico

 Northeast Brasil 

Caribbean

Atlantic Basin LNG Market: 3.9 BCFD

LNG

2 Projects, 6 MTY

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PDVSA

16 March, 2000 

Á Vast resourcesÁ Strong support from

local suppliersÁ Long history of oil and

gas productionÁ Strategic geographic

location

Venezuelan Strengths

Excellent opportunity to

support major gas

developments

Excellent opportunity tosupport major gas

developmentsKey Player Energy Supplier 

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PDVSA

17 March 2000

Summary

In the mid term, Gas business in Venezuela

will reach its maximum development potential,based on:

New National Energy Policy

Excellent Base of ResourcesPrivate Investors

Potencial New Markets

NGL

Methane

Investment: 7 bn$

Domestic

Export