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March 2006

Oil & Gas Business Cooperation Between Nigeria and Korea. March 2006. Korea National Oil Corporation. Table of Contents. Ⅰ. Oil & Gas Demand & Production Outlook. Ⅱ. Korean Overseas Oil and Gas E&P Activities. Ⅲ. Potential Area of Cooperation. IV . Conclusion / Strategical Recommendations.

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March 2006

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  1. Oil & Gas Business Cooperation Between Nigeria and Korea March 2006 Korea National Oil Corporation

  2. Table of Contents Ⅰ.Oil & Gas Demand & Production Outlook Ⅱ.Korean Overseas Oil and Gas E&P Activities Ⅲ. Potential Area of Cooperation IV.Conclusion / Strategical Recommendations 2

  3. Ⅰ. Oil & Gas Demand & Production Outlook

  4. Oil + Gas = 64% Projections History 250 39% Share of World Total + 200 25% Oil 47% 150 Quadrillion Btu 23% Natural Gas 100 Coal Renewable 8% 50 5% Nuclear 0 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 ■World Oil/Gas Demand Outlook - World Oil & Gas Demand will stay up 64% until 2025 Source: EIA, International Energy Outlook 2004. 4.19, 2010 Energy Vision, MOCIE 4

  5. 60.1% 57.7% ■ Korean Energy Mix will stay same trend ■ Korea (‘05) 57.7% → (‘20)60.1% Source: BP Statistical Review 2005, Ministry of Commerce, Industry and Energy 5

  6. ■ World oil dependency on ME should be diversified (mmb/d) Source: BP Statistical Review 2002, International Energy Outlook (IEA) 6

  7. 11 25 26 Former Soviet Union Former Soviet Union Former Soviet Union Former Soviet Union North America North America 16 Europe Europe 4 14 6 23 5 Africa Africa Middle East Asia Pacific Middle East Asia Pacific 9 8 South & Central America South & Central America 3 7 5 supply demand ■ Asia/Pacific needs more crude supply → Investment made by Asian Countries is important 2004 World Oil Supply & Demand (MMBPD) 2004 World Oil Supply & Demand (MMBPD) 14 Asia Pacific Asia Pacific 7 Source: BP Statistical Review 2005 Source: BP Statistical Review 2005 ■ Crude oil imported from Nigeria to Korea (Unit: Thousand bbl) 7

  8. Energy Consumption (mmtoe) Oil Consumption (mmb/d) Refining Capacity (mb/d) Electricity Consumption (TWh) 1st US 2,332 US 20,517 US 17,042 US 3,803 2nd CHINA 1,386 CHINA 6,684 CHINA 5,818 CHINA 1,776 3rd RUSSIA 669 JAPAN 5,288 RUSSIA 5,412 JAPAN 997 4th JAPAN 515 GERMANY 2,625 JAPAN 4,531 RUSSIA 792 5th INDIA 376 RUSSIA 2,547 KOREA 2,598 GERMANY 569 6th GERMANY 330 INDIA 2,555 INDIA 2,513 CANADA 547 7th KOREA (10) 217 KOREA 2,280 GERMANY 2,314 KOREA(11) 336 ■ Korea is a major player in the global energy sector Source : KEY WORLD ENERGY STATISTICS from IEA, BP Statistical 2004~2005 8

  9. II. Korean Overseas E&P Activities

  10. ■ Overseas E&P Activities [As of March, 2006] 10

  11. Global E&P Activities of KNOC (’06. 3) Co-Operation : 4 Global E&P Activities of KNOC (’06. 3) Production : 6 Development: 4 Exploration : 22 Operation : 15 Kazakhstan-Zhambyl Kazakhstan ADA UK Captain Kazakhstan-Zhubantam North Sea 13/22d Kazakhstan-Zhubantam Russia Tigil Uzbekistan-Aral Sea Russia Icha China Mahwangsan West Russia West Kamchatka Yemen LNG Vietnam 15-1 Yemen 4 Vietnam 11-2 Yemen 70 Yemen 39 Indonesia SES Yemen 16 Indonesia Wokam Indonesia NEM Ⅰ Peru 8 Indonesia NEM Ⅱ Venezuela Onado Eritrea Offshore Libya Elephant Benin 2 Australia Vic P56 Benin 3 Australia Vic P49 Nigeria 323 Nigeria 321 11

  12. New Acquisition in 2005 - Participated in Promising Area M East(Yemen), W Africa(Nigeria), Caspian(Kazakhstan) Russia(West Kamchatka) - Expanded to Core Area Operating Projects (4 Projects in Yemen, 2 Projects in Nigeria, etc.) England 13/22d Canada Harley Kazakstan Zhambyl Kazakhatan ADA USA Iberia North Russia W. Kamchatka Kazakhatan W. Bozoba Kamchatka Icha Kazakhstan Sarkramabas Kamchatka Tigil Brazil BMC-30 Brazil BMC-32 Yemen 70 Nigeria 323 Yemen 16 Peru 56 Nigeria 321 Yemen 39 Yemen 4 Australia Vic P56 Argentina La Brea Australia Vic P49 12

  13. Government Facilitation & Promotion Private Companies Technical Capability + Capital + Managerial Experience KNOC Leading Korean Upstream Business Alliance with KNOC as Investors 13 ■ Korea’s Overseas E&P Consortium Mechanism

  14. III. Potential Area of Cooperation

  15. ■ Nigeria - High Potential, Large Capacity Country Very prospective in Oil & Gas Business - Crude Oil : 35.3 Billion bbl (10th large amount) - Natural Gas : 176 tcf(7th large amount) Needs more investment On the way of rapid development - High potentiality with many skilled workers - With rich natural resources Needs foreign investment and business making Limitless economic growth potential -Major Oil & Gas producer in West Africa Needs more social Infrastructure to be invested 15

  16. ■ Korea – Potential Economic Cooperation Korea Needs Oil & Gas Supply Stability as a Large Consumer - Nigeria is one of KNOC’s Core Strategic Countries - Many Korean Companies Focusing at Nigeria also Cooperative Field In Oil & Gas and other Business Sectors - Oil and Gas E & P - Downstream Facilities and Power Houses Synergy Effect by Joining Korean Companies’ Strength and Nigerian Needs - Linking Oil and Gas E&P with other Energy Development - Transplanting Korean Companies’ Strength - Enlarge Economic and Social Interchange Between two countries 16

  17. KNOC E&P Key Player, Stockpile Player, Operator Petroleum E&P Company Samsung Corporation Leading Downstream Companies World Class Trading Houses SK, GS Caltex (Refinery and Petrochemical) LG International Daewoo international Top Electric Company Korea Electric Power Corporation ■ Strength of Korean Consortium 17

  18. West Africa ■ Nigeria – KNOC’s Major Global Strategic Area Northeast Asia Caspian Sea Middle East Southeast Asia Central & South America 18

  19. IV. Conclusion / Strategical Recommendations

  20. Creating new E&P business through multiple Cooperation Channels - Government – Government - KNOC(Korean Companies) – MPR/NNPC(Nigerian Companies) Technical assist to Nigerian Government and Companies - Oil/gas stockpiling facility Construction, Pipeline, etc. New Business Strategy (Win-Win strategy) - Business development on needs between Nigeria and Korea - Organizing for joint business opportunities in Oil and Gas E&P Cooperation in Energy Facilities and Social Infra Construction - Gas Power House, refining and petrochemical facility - Refining facilities, Upgrading Projects Up Stream Middle & Down Stream ■ Nigeria- Korea Cooperation Strategy 20

  21. ■ Korea Overseas Energy Development and Promotion Ass. launched to create new business opportunity Construction Plant Tele Infra Combinated business Making LNG Electricity E&P ■ Nigeria- Korea Cooperation Strategy Non- Conventional Oil Business GTL Business Using Stranded Gas LNG / NG Storage Business as a big Buyer and Producer 21

  22. Successful Business Model – E&P and Electricity Co-Investment Downstream Upstream • - Electronic Power Business • Building 2 Electronic Power • Station [2,250MW], • Gas Pipeline [1,200km] - OPL 321 & OPL323 - Co-Biz Structure - Korea 60%, India 30%, Nigeria Local 10% Kaduna (Electric Power station) Abuja (Electric Power station) 22

  23. Bring Up Pro–Nigeria Mood Enhancing Mutual Cooperation Bring Up Pro–Korea Mood High potentiality of Nigeria Creating mutual benefit High tech with capital of Korea Nigeria : Leading Developing Country Korea : Enlarging Overseas Investment ■ Developmental Cooperation Scheme 23

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  25. Thank you for your participation !! KNOC has grown successfully for more than a quarter century due to our great efforts. NOW is the right time to be a global oil company.

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