63437 V3 March 2011 National Oil Companies and Value Creation Volume III Data Set Silvana Tordo with Brandon S. Tracy and Noora Arfaa W O R L D B A N K P A P E R National Oil Companies and Value Creation Silvana Tordo with Brandon S. Tracy and Noora Arfaa Volume III Copyright © 2011 The International Bank for Reconstruction and Development/The World Bank 1818 H Street, NW Washington, DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org World Bank and ESMAP papers are published to communicate the results of the Bank’s work to th e development community with the least possible delay. The manuscript of this paper therefore has not been prepared in accordance with the procedures appropriate to formally-edited texts. Some sources cited in this paper may be informal documents that are not readily available. This volume is a product of the staff of the International Bank for Reconstruction and Development/The World Bank and ESMAP. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. They are entirely those of the author(s) and should not be attributed in any manner to the World Bank, or its affiliated organizations, or to members of its board of executive directors for the countries they represent, or to ESMAP. The World Bank and ESMAP do not guarantee the accuracy of the data included in this publication and accepts no responsibility whatsoever for any consequence of their use. The boundaries, colors, denominations, other information shown on any map in this volume do not imply on the part of the World Bank Group any judgment on the legal status or any territory or the endorsement of acceptance of such boundaries. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development / The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. Queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: pubrights@worldbank.org. Contents 1. China National Offshore Oil Company (China) ................................................................................ 4 2. Ecopetrol S.A. (Colombia) .................................................................................................................. 10 3. Ente Nazionale Idrocarburi S.p.A. (Italy) ......................................................................................... 16 4. Open Joint Stock Company Gazprom (Russia) ................................................................................ 22 5. Gaz de France S.A. (France) ................................................................................................................ 28 6. Kazmunaigaz Exploration and Production (Kazakhstan) .............................................................. 34 7. Oil and Gas Development Corporation Ltd (Pakistan) .................................................................. 40 8. Oil and Natural Gas Corporation Ltd (India) .................................................................................. 46 9. Petróleos de Venezuela, S.A. (Venezuela) ........................................................................................ 52 10. Petróleos Mexicanos S.A. (Mexico) .................................................................................................... 58 11. The Petroleum Oil and Gas Corporation of South Africa (Pty) Limited (South Africa) ............ 64 12. Petróleos Brasileiro S.A. (Brazil) ........................................................................................................ 70 13. Petro China Company Limited (China) ............................................................................................ 76 14. Petroliam Nasional Berhad (Malaysia) ............................................................................................. 82 15. PTT Public Company Limited (Thailand) ........................................................................................ 88 16. Qatar Petroleum (Qatar) ..................................................................................................................... 94 17. Oil Company Rosneft (Russia) ......................................................................................................... 100 18. China Petroleum & Chemical Corporation (China) ...................................................................... 106 19. Sonatrach S.A. (Algeria) .................................................................................................................... 112 20. StatoilHydro ASA. (Norway) ........................................................................................................... 118 2 Acknowledgments National Oil Companies and Value Creation, Volume III, is part of a study aimed to explore the determinants of value creation by national oil companies (NOCs). The study comprises three volumes: volume I presents the findings of the study, volume II contains detailed case studies on the NOCs analyzed in the study, and volume III contains the full dataset and calculation of the value creation indices and value drivers for each NOC in the study sample. The study was undertaken and written by Silvana Tordo (lead energy economist – Oil, Gas, and Mining Policy Division, World Bank), with contributions from Brandon S. Tracy (econometrician, consultant), and Noora Arfaa (consultant), both with the Oil, Gas, and Mining Policy Division of the World Bank. The study draws on earlier drafts of chapters 1, 2, and 3 prepared by Christian O. Wolf (Economist, Cambridge University, United Kingdom). The data and material utilized in the calculation of the value creation index and value drivers were collected by Michelle M. Foss, Gurcan Gulen, Miranda Wainberg, Ruzanna Makaryan, and Dmitry Volkov (Center for Energy Economics, Bureau of Economic Geology, University of Texas at Austin – CEE), who also contributed to the definition of the statistical model of value creation and prepared the original version of the case studies. The comments of peer reviewers Alan H. Gelb (Center for Global Development ), Robert W. Bacon and Charles McPherson, both consultants (Oil, Gas, and Mining Policy Division, World Bank), Sunita Kikeri (Corporate Governance Department, World Bank), and Andre Plourde (professor, department of economics, University of Alberta) are gratefully acknowledged. Comments were also provided by PRMSP. Steven B. Kennedy and Fayre Makeig edited the paper. 3 1. China National Offshore Oil Company (China) (a) Value creation index components Operational Performance unit 2004 2005 2006 2007 2008 Company gas production BCF 128.00 135.00 179.00 208.00 239.00 Company oil production MM Bbls 116.00 130.00 136.00 134.00 155.00 E&P production (BOE) MM BOE 139.30 154.57 168.58 171.86 198.50 E&P production growth % 7.66 10.97 9.06 1.94 15.50 Total net additions proved oil reserves MM Bbls 130.00 107.00 126.00 209.00 172.00 Total net additions proved gas reserves BCF 465.00 324.00 295.00 199.00 -200.00 Total net additions proved gas reserves MM BOE 84.63 58.97 53.69 36.22 -36.40 Reserve additions (BOE) MM BOE 214.63 165.97 179.69 245.22 135.60 Reserves replacement rate % 1.54 1.07 1.07 1.43 0.68 Primary distillation capacity MBPD Total refining throughput MBPD Refinery utilization rate % Assets (national currency) MM 93,801.86 114,765.06 155,268.02 179,793.00 206,669.00 Assets $ MM 11,328.73 14,029.96 19,895.70 23,567.36 30,292.27 Output / total assets BOE/000$ 12.30 11.02 8.47 7.29 6.55 Employees # of people 2,524.00 2,696.00 2,929.00 3,288.00 3,584.00 Output / total employees BOE/000$ 55.19 57.33 57.55 52.27 55.38 Financial Performance unit 2004 2005 2006 2007 2008 Earnings before interest & taxes (national currency) MM 24,408.00 39,075.00 51,741.00 54,364.00 79,381.00 Direct expenditures on social/economic development MM 6.00 6.00 5.00 8.85 10.50 programs (national currency) Total revenue (national currency) MM 55,219.00 69,456.00 90,842.00 90,724.00 125,977.00 EBRTN MM 24,414.00 39,081.00 51,746.00 54,372.85 79,391.50 EBRTN / revenues % 44.21 56.27 56.96 59.93 63.02 EBRTN / total assets % 26.03 34.05 33.33 30.24 38.41 Total capital expenditures (national currency) MM 12,843.00 16,606.00 21,175.00 26,862.00 37,321.00 Net cash flow after taxes and dividends (national currency) MM 18,299.00 27,027.00 33,442.00 33,930.64 46,360.72 NCF/CAPEX % 1.42 1.63 1.58 1.26 1.24 National Mission Performance unit 2004 2005 2006 2007 2008 Total number of NOC local employees # of people 2,484.00 2,688.00 2,879.00 3,248.00 3,546.00 Total number of NOC non-local employees # of people 40.00 8.00 50.00 40.00 38.00 Share of nationals in NOC workforce % 0.98 1.00 0.98 0.99 0.89 NOC employment in native country (# people) # of people 1,524.00 1,780.00 2,029.00 2,351.00 2,684.00 NOC annual employment growth % 5.32 16.80 13.99 15.87 14.16 # of people Country Labor Force 754,509.40 760,627.0 0 766,465.20 771,078.90 776,881.00 (000) Country annual employment growth % 0.81 0.81 0.77 0.60 0.75 NOC - Country employment growth pp 4.51 15.99 13.22 15.27 13.41 NOC employment share of country workforce % 0.00 0.00 0.00 0.00 0.00 NOC local purchases goods and services $ MM NOC total purchases goods and services $ MM 19,274.00 23,912.00 29,996.00 38,679.00 52,288.00 Share of local content % NOC noncommercial expenditure (national currency) MM 6.00 6.00 5.00 8.85 10.50 NOC noncommercial expenditures $ MM Noncommercial expenditure/Total expenditure % 0.03 0.03 0.02 0.02 0.02 Net income from noncore commercial business activities $ MM Net income $ MM 1,949.00 3,096.00 3,963.00 3,704.94 6,504.25 Net income noncore commercial activities/Net income % Price subsidies provided by NOC MM Total NOC Revenues (national currency) MM 55,219.00 69,456.00 90,842.00 90,724.00 125,977.00 Price Subsidies/Revenues % NOC domestic petroleum products production MMBOE Country oil consumption MMBOE 2,471.87 2,549.20 2,694.35 2,825.90 2,919.58 Domestic output use % 4 (b) Value creation index 2004 2005 2006 2007 2008 Operational Performance E&P production growth (%) 7.66 10.97 9.06 1.94 15.50 Reserves replacement rate (BOE, %) 154.08 107.37 106.59 142.69 68.31 Refinery utilization rate (%) Output / total assets (BOE/'000$) 1229.58 1101.71 847.31 729.21 655.28 Output / total employees ('000 BOE) 5518.86 5733.31 5755.48 5226.76 5538.45 Financial Performance EBRTN / revenues (%) 44.21 56.27 56.96 59.93 63.02 EBRTN / total assets (%) 26.03 34.05 33.33 30.24 38.41 NCF / CAPEX (%) 142.48 162.75 157.93 126.31 124.22 National Mission Performance Share of nationals in NOC workforce (%) 98.42 99.70 98.29 98.78 88.94 NOC – Country employment growth (% points) 4.51 15.99 13.22 15.27 13.41 NOC employment share of country workforce (%) 0.00 0.00 0.00 0.00 0.00 Share of local content (%) Noncommercial expenditures/total expenditures (%) 0.03 0.03 0.02 0.02 0.02 Noncore commercial activities net income/Total net income (%) Price Subsidies/Revenues (%) Domestic output use (%) (c) Normalized value creation index 2004 2005 2006 2007 2008 Operational Performance 0.60 0.47 0.42 0.57 0.53 E&P production growth 0.46 0.07 0.41 0.53 0.80 Reserves replacement rate 0.68 0.53 0.15 0.83 0.41 Refinery utilization rate Output / total assets 0.24 0.26 0.24 0.22 0.19 Output / total employees 1.00 1.00 0.88 0.70 0.72 Financial Performance 0.54 0.52 0.49 0.50 0.52 EBRTN / revenues 0.50 0.60 0.59 0.63 0.68 EBRTN / total assets 0.41 0.35 0.29 0.36 0.55 NCF / CAPEX 0.73 0.60 0.61 0.50 0.34 National Mission Performance 0.41 0.41 0.45 0.35 0.32 Share of nationals in NOC workforce 0.98 1.00 0.98 0.98 0.86 NOC employment growth 0.67 0.65 0.82 0.41 0.41 NOC employment share of country workforce 0.00 0.00 0.00 0.00 0.00 Share of local content Noncommercial expenditures/total expenditures 0.01 0.00 0.00 0.00 0.00 Noncore commercial activities net income/Total net income Price Subsidies/Revenues Domestic output use VCI 0.52 0.46 0.45 0.47 0.46 5 (d) Value drivers 2004 2005 2006 2007 2008 Source GEOLOGY Country specific resource BP Statistical Review of World Energy June 2009 15,531 15,587 15,615 15,493 14,817 endowment oil MMBBL available at http://www.bp.com/statisticalreview Country specific resource BP Statistical Review of World Energy June 2009 1,448 1,535 1,684 2,255 2,455 endowment gas BCM available at http://www.bp.com/statisticalreview Country specific resource 24,640 25,240 26,204 29,678 30,261 CEE calculation endowment MMBOE STATE CONTEXT WGI: Voice and -1.45 -1.52 -1.68 -1.72 -1.72 http://info.worldbank.org/governance/wgi/index.asp Accountability WGI: Political Stability -0.14 -0.25 -0.31 -0.28 -0.32 http://info.worldbank.org/governance/wgi/index.asp WGI: Government -0.05 -0.12 0.06 0.19 0.24 http://info.worldbank.org/governance/wgi/index.asp Effectiveness WGI: Regulatory Quality -0.29 -0.25 -0.33 -0.24 -0.22 http://info.worldbank.org/governance/wgi/index.asp WGI: Rule of Law -0.36 -0.41 -0.48 -0.45 -0.33 http://info.worldbank.org/governance/wgi/index.asp WGI: Corruption Control -0.58 -0.67 -0.53 -0.61 -0.44 http://info.worldbank.org/governance/wgi/index.asp Hydrocarbon Revenues as % of Total Government Revenues Hydrocarbon Revenues as % of GDP WTO membership (yes- 1 1 1 1 1 www.wto.org 1/no-0) over five years OPEC membership (yes- 0 0 0 0 0 www.opec.org 1/no-0) over five years Country Crude Oil Exports 2008 OPEC Annual Statistical Bulletin at 109 161 126 76 77 -000 BPD www.opec.org US Energy Information Administration at Country Crude Oil 2,780 2,904 3,379 3,670 3,857 http://tonto.eia.doe.gov/country/country_energy_dat Imports-000 BPD a.cfm?fips=CH Exports valued at China Daiqing oil price and (Country Revenues Oil imports valued at nominal oil price as reported in Exports)-(Costs Oil -35 -51 -72 -91 -130 2008 OPEC Annual Statistical Bulletin at Imports) US $ Billion www.opec.org World Bank Development Indicators: Country Gross Domestic 1,930 2,240 2,660 3,380 4,333 http://data.worldbank.org/indicator Product US $ Billion Country Net Revenues (Costs) of Oil Exports -1.82 -2.26 -2.72 -2.68 -3.01 CEE calculation (Imports) as % of GDP Government Budget World Bank Development Indicators: Surplus/Deficit as % of -2.35 -2.12 -1.62 -1.44 http://data.worldbank.org/indicator Gross Domestic Product Stabilization Mechanisms such as petroleum funds (yes-1/no-0) PETROLEUM SECTOR ORGANIZATION AND GOVERANANCE Publicly disclosed national policy addressing 0 0 0 0 0 CEE assessment hydrocarbon sector issues (yes-1/no-0) Scoring: Independent NOC, Ministry and regulatory function (100); Regulatory function is performed by Institutional structure 66 66 66 66 66 ministry (66); Regulatory function is performed by NOC (33); All three functions combined in one entity (0). Country oil production BP Statistical Review of World Energy June 2009 1,271 1,324 1,345 1,366 1,385 MM Barrels available at http://www.bp.com/statisticalreview Country gas production BP Statistical Review of World Energy June 2009 1,460 1,742 2,068 2,445 2,679 BCF available at http://www.bp.com/statisticalreview 6 Country MMBOE 1,523 1,624 1,702 1,788 1,847 CEE calculation production NOC MMBOE Domestic CNOOC, Petro China and Sinopec Form 20Fs for 1,374 1,465 1,525 1,550 1,621 Production relevant year Non-NOC percentage of 9.8 9.8 10.4 13.3 12.2 CEE calculation oil and gas production (%) Country Refinery Capacity BP Statistical Review of World Energy June 2009 6,289 6,587 7,029 7,511 7,732 - 000 BPD available at http://www.bp.com/statisticalreview Net NOC Refinery CNOOC Form 20Fs for relevant year. CNOOC has Capacity - 000 BPD 5,300 5,552 5,847 6,042 6,193 no refining operations. Volumes are for Petro China (country level) and Sinopec. Non-NOC percentage of refinery capacity (%, 15.7 15.7 16.8 19.6 19.9 CEE calculation. country level) Total Revenues (local 55,219 69,456 90,842 90,724 125,977 CNOOC Form 20Fs for relevant year currency MM) Royalties and production 1,722 2,593 3,316 3,432 3,410 CNOOC Form 20Fs for relevant year taxes (local currency MM) Income taxes (local 6,930 10,978 13,477 12,052 13,505 CNOOC Form 20Fs for relevant year currency MM) Dividends paid to government (local 4,024 5,129 6,615 7,375 9,377 CNOOC Form 20Fs for relevant year currency MM) Royalties, production taxes, income taxes and dividends paid to 23.0 26.9 25.8 25.2 20.9 CEE Calculation government by NOC as percentage of total revenues (%) Effect of contract terms on No No No Sources: Fraser Institute Global Petroleum Survey 2.42 2.16 investment decisions survey survey survey 2007 and 2008 Effect of taxation regime No No No Sources: Fraser Institute Global Petroleum Survey 2.97 2.64 on decision to invest survey survey survey 2007 and 2008 Effect of cost of regulatory No No No Sources: Fraser Institute Global Petroleum Survey compliance on decision to 2.84 2.11 survey survey survey 2007 and 2008 invest Effect of regulatory No No No Sources: Fraser Institute Global Petroleum Survey uncertainty on decision to 3.03 2.6 survey survey survey 2007 and 2008 invest Effect of environmental No No No Sources: Fraser Institute Global Petroleum Survey regulations on decision to 2.16 1.78 survey survey survey 2007 and 2008 invest Scoring: Priority ranked publicly disclosed objectives exist and are publicly measured (100); Objectives publicly disclosed but not ranked and are publicly measured (75); Objectives publicly disclosed and ranked but not publicly measured NOC objectives 25 25 25 25 25 (50); Objectives publicly disclosed but not ranked and not publicly measured (25); No public documentation of NOC objectives (0). CNOOC Form 20Fs for relevant year and website material. NOC STRATEGY AND BEHAVIOR Percentage of NOC domestic upstream % operated not disclosed in Form 20Fs but production operated by 1 1 1 1 1 company appears to be a substantial operating specific NOC. If no data entity yes-1/no-0. 7 Percentage of NOC domestic refining production operated by CNOOC has no refining operations specific NOC. If no data yes-1/no-0. NOC upstream capital expenditures as percentage 100 100 100 100 100 CNOOC Form 20Fs for relevant year of total capital expenditures (%) NOC refining capital expenditures as percentage CNOOC has no refining operations of total capital expenditures (%) NOC upstream oil equity production as percentage of total NOC refining Not applicable throughput (%). If no data, yes/no. NOC international revenues as percentage of 10.0 10.0 10.0 14.0 28.0 CNOOC Form 20Fs for relevant year total NOC revenues (%). If no data yes-1/no-0. Scoring: NOC partnerships/JVs exist domestically and internationally (100); NOC partnerships exist domestically but not internationally (66); NOC partnerships exist internationally but not Joint ventures between the 100 100 100 100 100 domestically (33); NOC partnerships, JVs, alliances NOC and third parties do not exist (0). CNOOC Form 20Fs for relevant year and website material. NOC CORPORATE GOVERNANCE Percentage of non- government ownership of 34.0 34.0 34.0 36.0 36.0 CNOOC Forms 20Fs for relevant year specific NOC (%) Percentage of independent 42.0 42.0 42.0 45.0 45.0 CNOOC Forms 20Fs for relevant year BOD members (%) Scoring: (100)-The government has no participation in deciding who will fill the positions of Chairman/CEO; (50)-The government through its Appointment authority for control of required voting shares can influence, NOC chairman and chief 50 50 50 50 50 directly or indirectly, the appointments of executive officer Chairman/CEO and (0) The Chairman and/or CEO is a direct appointee of the government entity CNOOC Forms 20Fs for relevant year Scoring: No governmental approval of NOC budget required (100); No governmental approval of NOC budget required but certain capital expenditures require state approval (75);NOC budget is proposed Independence of NOC to and approved by one central government entity capital and budget 75 75 75 75 75 (50); NOC budget is proposed to and approved by processes multiple central government entities (25); NOC budget is part of the national budget (0). CNOOC Forms 20Fs for relevant year NOC net cash flow after taxes and dividends (local 18,299 27,027 33,442 33,931 46,361 currency MM) CNOOC Forms 20Fs for relevant year NOC capital expenditures 18,622 17,472 45,150 26,862 37,321 (local currency MM) CNOOC Forms 20Fs for relevant year Measured by net cash flow after taxes and NOC financial dividends as percentage of capital expenditures % 98.3 154.7 74.1 126.3 124.2 sustainability (%) CEE Calculation 8 Scoring: NOC financial statement auditing performed by independent international auditor and files reports with international exchange (100); FS auditing performed and publicly disclosed by independent international auditor (75); FS auditing NOC financial 100 100 100 100 100 performed and publicly disclosed by independent transparency domestic or government auditor (50) ; FS auditing performed internally by N OC and publicly disclosed (25); No publicly available auditing (0) CNOOC Forms 20Fs for relevant year Scoring: NOC oil & gas reserves auditing performed by independent international firm and files reports with international exchange (100); reserves auditing performed and publicly disclosed by independent international firm (75); reserves NOC upstream reserves 100 100 100 100 100 auditing performed and publicly disclosed by transparency independent domestic firm (50) ; reserves auditing performed internally and publicly disclosed (25); No publicly available reserves auditing (0). CNOOC Forms 20Fs for relevant year Note: Non-shaded areas indicate data used in the exploratory statistical analysis presented in National Oil Companies and Value Creation, volume I, chapter 4. 9 2. Ecopetrol S.A. (Colombia) (a) Value creation index components Operational Performance unit 2004 2005 2006 2007 2008 Company gas production BCF 123.00 130.00 113.60 118.80 136.00 Company oil production MM Bbls 111.69 113.52 95.70 99.20 111.00 E&P production (BOE) MM BOE 132.90 135.93 115.29 119.68 134.45 E&P production growth % -8.50 2.28 -15.19 3.81 12.34 Total net additions proved oil reserves MM Bbls 127.00 117.00 86.00 35.70 52.50 Total net additions proved gas reserves BCF 31.00 157.50 238.10 55.30 Total net additions proved gas reserves MM BOE 0.00 5.64 28.67 43.33 10.06 Reserve additions (BOE) MM BOE 127.00 122.64 114.67 79.03 62.56 Reserves replacement rate % 95.56 90.23 99.46 66.04 46.53 Primary distillation capacity MBPD 335.00 335.00 335.00 335.00 335.00 Total refining throughput MBPD 305.60 296.30 314.93 313.26 312.57 Refinery utilization rate % 91.22 88.45 94.01 93.51 93.30 Assets $ MM 11,702.00 14,300.00 18,821.00 29,699.50 40,303.40 Output / total assets BOE/000$ 20.88 17.07 12.23 7.88 6.17 Employees # of people 6,027.00 5,856.00 5,965.00 6,074.00 6,517.00 Output / total employees BOE/000$ 40.56 41.68 38.60 38.53 38.14 Financial Performance unit 2004 2005 2006 2007 2008 Earnings before interest & taxes (national currency) Bn 6,333.86 7,430.10 7,517.90 10,991.49 18,011.35 Direct expenditures on social/economic development Bn 30.51 34.51 40.46 73.15 125.80 programs (national currency) Total revenue (national currency) Bn 13,050.61 15,512.90 18,389.96 22,332.32 33,896.67 EBRTN Bn 6,364.38 7,464.61 7,558.36 11,064.64 18,137.15 EBRTN / revenues % 48.77 48.12 41.10 49.55 53.51 EBRTN / total assets % 22.76 22.87 16.57 23.00 37.24 Total capital expenditures (national currency) Bn 1,651.75 1,749.69 1,862.93 3,036.96 6,704.60 net cash flow after taxes and dividends Bn 1,364.30 1,232.39 4,353.69 5,809.09 7,604.00 NCF/CAPEX % 82.60 70.43 233.70 191.28 113.41 National Mission Performance unit 2004 2005 2006 2007 2008 Total number of NOC local employees # of people 6,027.00 5,856.00 5,965.00 6,074.00 6,515.00 Total number of NOC non-local employees # of people 0.0 0.0 0.0 0.0 2.0 Share of nationals in NOC workforce % 100.00 100.00 100.00 100.00 100.00 NOC employment in native country (# people) # of people 6,027.00 5,856.00 5,965.00 6,074.00 6,515.00 NOC annual employment growth % -4.30 -2.84 1.86 1.83 7.26 # of people Country Labor Force 16,889.04 17,312.09 17,710.82 18,082.42 18,550.11 (000) Country annual employment growth % 2.53 3 2.30 2.10 2.59 NOC - Country employment growth % points -6.83 -5.34 -0.44 -0.27 4.67 NOC employment share of country workforce % 0.04 0.03 0.03 0.03 0.04 NOC local purchases goods and services (national MM currency) NOC total purchases goods and services $ Bn 9,100.46 13,236.02 13,872.19 14,648.03 24,38.93 Share of local content % 58.00 91.00 88.00 79.00 NOC noncommercial expenditure (national currency) MM 30,510.30 34,509.20 40,461.00 73,148.00 125,800.00 NOC noncommercial expenditure $ MM Noncommercial expenditure/Total expenditure % 0.34 0.26 0.29 0.50 0.52 Net income from non-core commercial business activities $ MM Net income $ MM 788.58 1,395.44 1,399.00 2,570.92 5,183.51 Net income noncore commercial activities/Net income % Price subsidies provided by NOC (national currency) Bn 3,853.44 4,871.55 3,350.00 Total NOC Revenues (national currency) Bn 13,050.61 15,512.90 18,389.96 22,332.32 33,896.67 Price Subsidies/Revenues % 29.50 31.40 18.20 NOC domestic petroleum products production MMBOE 91.58 88.79 95.61 93.43 87.69 Country oil consumption MMBOE 81.41 83.81 87.63 85.56 85.55 Domestic output use % 112.49 106.94 109.11 109.19 102.50 10 (b) Value creation index 2004 2005 2006 2007 2008 Operational Performance E&P production growth (%) -8.50 2.28 -15.19 3.81 12.34 Reserves replacement rate (BOE, %) 95.56 90.23 99.46 66.04 46.53 Refinery utilization rate (%) 91.22 88.45 94.01 93.51 93.30 Output / total assets (BOE/'000$) 20.89 17.07 12.23 7.88 6.17 Output / total employees ('000 BOE) 40.56 41.68 38.60 38.53 38.14 Financial Performance EBRTN / revenues (%) 48.77 48.12 41.10 49.55 53.51 EBRTN / total assets (%) 22.76 22.87 16.57 23.00 37.24 NCF / CAPEX (%) 82.60 70.43 233.70 191.28 113.41 National Mission Performance Share of nationals in NOC workforce (%) 100.00 100.00 100.00 100.00 99.97 NOC – Country employment growth (% points) -6.83 -5.34 -0.44 -0.27 4.67 NOC employment share of country workforce (%) 0.04 0.03 0.03 0.03 0.04 Share of local content (%) 58.00 91.00 88.00 79.00 Noncommercial expenditures/total expenditures (%) 0.34 0.26 0.29 0.50 0.52 Noncore commercial activities net income/Total net income (%) Price Subsidies/Revenues (%) 29.53 31.40 18.22 Domestic output use (%) 112.49 105.94 109.11 109.19 102.50 (c) Normalized value creation index 2004 2005 2006 2007 2008 Operational Performance 0.44 0.42 0.29 0.47 0.40 E&P production growth 0.00 0.05 0.02 0.57 0.71 Reserves replacement rate 0.51 0.47 0.14 0.62 0.21 Refinery utilization rate 0.54 0.44 0.38 0.39 0.40 Output / total assets 0.43 0.42 0.35 0.24 0.18 Output / total employees 0.73 0.72 0.58 0.51 0.49 Financial Performance 0.45 0.27 0.46 0.50 0.47 EBRTN / revenues 0.56 0.50 0.39 0.50 0.57 EBRTN / total assets 0.35 0.19 0.00 0.23 0.53 NCF / CAPEX 0.42 0.12 1.00 0.78 0.30 National Mission Performance 0.49 0.47 0.58 0.46 0.49 Share of nationals in NOC workforce 1.00 1.00 1.00 1.00 1.00 NOC employment growth 0.29 0.24 0.55 0.20 0.27 NOC employment share of country workforce 0.02 0.02 0.02 0.03 0.03 Share of local content 0.53 1.00 1.00 0.84 Noncommercial expenditures/total expenditures 0.12 0.02 0.01 0.02 0.03 Noncore commercial activities net income/Total net income Price Subsidies/Revenues 1.00 1.00 0.91 Domestic output use 0.49 0.50 0.56 0.53 0.77 VCI 0.46 0.39 0.44 0.48 0.45 11 (d) Value drivers 2004 2005 2006 2007 2008 Source GEOLOGY Country specific resource BP Statistical Review of World Energy June 2009 1,478 1,453 1,509 1,510 1,362 endowment oil MMBBL available at http://www.bp.com/statisticalreview Country specific resource BP Statistical Review of World Energy June 2009 119 113 123 125 112 endowment gas BCM available at http://www.bp.com/statisticalreview Country specific resource 2,226 2,164 2,283 2,296 2,066 CEE calculation endowment MMBOE STATE CONTEXT WGI: Voice and -0.30 -0.24 -0.14 -0.25 -0.26 http://info.worldbank.org/governance/wgi/index.asp Accountability WGI: Political Stability -1.92 -1.75 -1.61 -1.57 -1.66 http://info.worldbank.org/governance/wgi/index.asp WGI: Government -0.08 -0.11 -0.01 0.03 0.13 http://info.worldbank.org/governance/wgi/index.asp Effectiveness WGI: Regulatory Quality -0.06 0.04 0.12 0.21 0.24 http://info.worldbank.org/governance/wgi/index.asp WGI: Rule of Law -0.82 -0.72 -0.58 -0.55 -0.50 http://info.worldbank.org/governance/wgi/index.asp WGI: Corruption Control -0.19 -0.17 -0.16 -0.24 -0.25 http://info.worldbank.org/governance/wgi/index.asp "Comparative Study on the Distribution of Oil Rents in Bolivia, Colombia, Ecuador and Peru," Joint UNDP/World Bank ESMAP, January 2005; Hydrocarbon Revenues as % "Colombia's Energy Industry," Embassy of of Total Government 5.0 7.0 10.0 10.0 10.0 Colombia, Washington DC available at Revenues http://www.iccair.com/linkandddb/html/data%20Ba se/Colombia/5495_COLOMBIAS_ENERGY_IND USTRY.pdf "Comparative Study on the Distribution of Oil Rents in Bolivia, Colombia, Ecuador and Peru," Joint UNDP/World Bank ESMAP, January 2005; Hydrocarbon Revenues as % "Colombia's Energy Industry," Embassy of 7.0 8.0 8.0 8.0 8.0 of GDP Colombia, Washington DC available at http://www.iccair.com/linkandddb/html/data%20Ba se/Colombia/5495_COLOMBIAS_ENERGY_IND USTRY.pdf WTO membership (yes- 1 1 1 1 1 www.wto.org 1/no-0) over five years OPEC membership (yes- 0 0 0 0 0 www.opec.org 1/no-0) over five years Country Crude Oil Exports - 2008 OPEC Annual Statistical Bulletin at 228 231 234 244 246 000 BPD www.opec.org Country Crude Oil Imports- 000 BPD (Country Revenues Oil Exports valued at Colombia Cano Limon oil price Exports)-(Costs Oil Imports) 3 4 5 6 9 as reported in 2008 OPEC Annual Statistical US $ Billion Bulletin at www.opec.org World Bank Development Indicators: Country Gross Domestic 114 145 162 208 244 http://data.worldbank.org/indicator Product US $ Billion Country Net Revenues (Costs) of Oil Exports 2.59 2.98 3.31 2.98 3.64 CEE calculation (Imports) as % of GDP Government Budget http://www.tradingeconomics.com/Economics/Gove Surplus/Deficit as % of -4.03 -8.47 -1.95 -3.24 -2.00 rnment-Budget.aspx?Symbol=COP Gross Domestic Product Stabilization Mechanisms http://www.sovereignwealthfundsnews.com/funds.p such as petroleum funds 1 1 1 1 1 hp; www.rigzone.com/news/article.asp?a_id=46654. (yes-1/no-0) PETROLEUM SECTOR ORGANIZATION AND GOVERANANCE Publicly disclosed national policy addressing Ecopetrol Forms 20F and annual reports for relevant 1 1 1 1 1 hydrocarbon sector issues years (yes-1/no-0) 12 Scoring: Independent NOC, Ministry and regulatory function (100); Regulatory function is performed by ministry (66); Regulatory function is performed by NOC (33); All three functions combined in one Institutional structure 100 100 100 100 100 entity (0). Ecopetrol Forms 20F and annual reports for relevant years Country oil production MM BP Statistical Review of World Energy June 2009 201 202 204 205 225 Barrels available at http://www.bp.com/statisticalreview BP Statistical Review of World Energy June 2009 Country gas production BCF 224 237 248 266 319 available at http://www.bp.com/statisticalreview Country MMBOE 240 243 247 251 280 CEE calculation production NOC MMBOE Domestic Ecopetrol Forms 20F and annual reports for relevant 114 115 116 121 135 Production years Non-NOC percentage of oil 52.4 52.6 53.0 51.8 51.8 CEE calculation and gas production (%) Country Refinery Capacity - Ecopetrol Forms 20F and annual reports for relevant 335 335 335 335 335 000 BPD years Net NOC Refinery Capacity Ecopetrol Forms 20F and annual reports for relevant 335 335 335 335 335 - 000 BPD (country level) years Non-NOC percentage of refinery capacity (%, 0.0 0.0 0.00 0.0 0.0 CEE calculation. country level) Total Revenues (local Ecopetrol Forms 20F and annual reports for relevant 13,100 15,500 18,390 22,332 33,897 currency Bn) years Royalties and production Ecopetrol Forms 20F and annual reports for relevant 2,400 2,899 3,310 4,020 6,101 taxes (local currency Bn) years Income taxes (local Ecopetrol Forms 20F and annual reports for relevant 806 1,035 4,382 1,886 1,500 currency Bn) years Dividends paid to Ecopetrol Forms 20F and annual reports for relevant government (local currency 1,158 1,298 2,000 4,028 4,189 years Bn) Royalties, production taxes, income taxes and dividends paid to government by NOC 33.3 33.8 52.7 44.5 34.8 CEE Calculation as percentage of total revenues (%) Effect of contract terms on No No No Sources: Fraser Institute Global Petroleum Survey 1.55 1.64 investment decisions survey survey survey 2007 and 2008 Effect of taxation regime on No No No Sources: Fraser Institute Global Petroleum Survey 1.89 1.98 decision to invest survey survey survey 2007 and 2008 Effect of cost of regulatory No No No Sources: Fraser Institute Global Petroleum Survey compliance on decision to 2.23 2.15 survey survey survey 2007 and 2008 invest Effect of regulatory No No No Sources: Fraser Institute Global Petroleum Survey uncertainty on decision to 1.93 2.1 survey survey survey 2007 and 2008 invest Effect of environmental No No No Sources: Fraser Institute Global Petroleum Survey regulations on decision to 2.35 1.95 survey survey survey 2007 and 2008 invest 13 Scoring: Priority ranked publicly disclosed objectives exist and are publicly measured (100); Objectives publicly disclosed but not ranked and are publicly measured (75); Objectives publicly disclosed and ranked but not publicly measured NOC objectives 25 25 75 75 75 (50); Objectives publicly disclosed but not ranked and not publicly measured (25); No public documentation of NOC objectives (0). Ecopetrol Form 20Fs for relevant year and website material. NOC STRATEGY AND BEHAVIOR Percentage of NOC domestic upstream production % operated not disclosed in Form 20Fs but company 1 1 1 1 1 operated by specific NOC. If appears to be a substantial operating entity no data yes-1/no-0. Percentage of NOC domestic refining production operated 100 100 100 88 88 CNOOC has no refining operations by specific NOC. If no data yes-1/no-0. NOC upstream capital expenditures as percentage Ecopetrol Form 20Fs for relevant year and website 76.0 75.0 70.3 88.2 73.3 of total capital expenditures material. (%) NOC refining capital expenditures as percentage Ecopetrol Form 20Fs for relevant year and website 17.0 18.0 23.4 7.7 11.6 of total capital expenditures material. (%) NOC upstream oil equity production as percentage of Ecopetrol Form 20Fs for relevant year and website total NOC refining 100.4 100.4 100.4 104.3 115.3 material. throughput (%). If no data, yes/no. NOC international revenues as percentage of total NOC Ecopetrol Form 20Fs for relevant year and website 0 0 0 1 1 revenues (%). If no data yes- material. 1/no-0. Scoring: NOC partnerships/JVs exist domestically and internationally (100); NOC partnerships exist domestically but not internationally (66); NOC partnerships exist internationally but not Joint ventures between the 66 66 66 100 100 domestically (33); NOC partnerships, JVs, alliances NOC and third parties do not exist (0). Ecopetrol Form 20Fs for relevant year and website material. NOC CORPORATE GOVERNANCE Percentage of non- Ecopetrol Form 20Fs for relevant year and website government ownership of 0 0 0 10 10 material. specific NOC (%) Percentage of independent Ecopetrol Form 20Fs for relevant year and website 33.0 33.0 33.0 66.0 66.0 BOD members (%) material. Scoring: (100)-The government has no participation in deciding who will fill the positions of Chairman/CEO; (50)-The government through its control of required voting shares can influence, Appointment authority for directly or indirectly, the appointments of NOC chairman and chief 50 50 50 50 50 Chairman/CEO and (0) The Chairman and/or CEO executive officer is a direct appointee of the government entity Ecopetrol Form 20Fs for relevant year and website material. Scoring: No governmental approval of NOC budget required (100); No governmental approval of NOC budget required but certain capital expenditures Independence of NOC 0 0 0 75 75 require state approval (75);NOC budget is proposed capital and budget processes to and approved by one central government entity (50); NOC budget is proposed to and approved by multiple central government entities (25); NOC 14 budget is part of the national budget (0). Ecopetrol Form 20Fs for relevant year and website material. NOC net cash flow after taxes and dividends (local 1,364 1,232 4,354 5,809 7,604 Ecopetrol Forms 20Fs for relevant year currency Bn) NOC capital expenditures 1,652 1,750 1,863 3,037 6,705 Ecopetrol Forms 20Fs for relevant year (local currency Bn) Measured by net cash flow after taxes and dividends NOC financial sustainability as percentage of capital expenditures % 82.6 70.4 233.7 191.3 113.4 (%) CEE Calculation Scoring: NOC financial statement auditing performed by independent international auditor and files reports with international exchange (100); FS auditing performed and publicly disclosed by independent international auditor (75); FS auditing NOC financial transparency 50 50 100 100 100 performed and publicly disclosed by independent domestic or government auditor (50) ; FS auditing performed internally by N OC and publicly disclosed (25); No publicly available auditing (0) Ecopetrol Forms 20Fs for relevant year Scoring: NOC oil & gas reserves auditing performed by independent international firm and files reports with international exchange (100); reserves auditing performed and publicly disclosed by independent international firm (75); reserves auditing performed NOC upstream reserves 0 0 0 0 100 and publicly disclosed by independent domestic transparency firm (50) ; reserves auditing performed internally and publicly disclosed (25); No publicly available reserves auditing (0). Ecopetrol Forms 20Fs for relevant year Note: Non-shaded areas indicate data used in the exploratory statistical analysis presented in National Oil Companies and Value Creation, volume I, chapter 4. 15 3. Ente Nazionale Idrocarburi S.p.A. (Italy) (a) Value creation index components Operational Performance unit 2004 2005 2006 2007 2008 Company gas production BCF 1,236.26 1,312.18 1,447.59 1,501.61 1,614.76 Company oil production MM Bbls 377.41 405.52 393.84 372.30 374.49 E&P production (BOE) MM BOE 602.41 644.33 657.30 645.59 668.38 E&P production growth % 5.66 6.96 2.01 -1.78 3.53 Total net additions proved oil reserves MM Bbls 284.00 89.00 273.00 -25.00 480.00 Total net additions proved gas reserves BCF 1,926.00 65.00 829.00 737.00 2,163.00 Total net additions proved gas reserves MM BOE 350.53 11.83 150.88 134.13 393.67 Reserve additions (BOE) MM BOE 634.53 100.83 423.88 109.13 873.67 Reserves replacement rate % 105.33 15.65 64.49 16.90 130.71 Primary distillation capacity MBPD 681.0 701.0 711.0 748.0 737.0 Total refining throughput MBPD 681.0 701.0 711.0 755.5 700.2 Refinery utilization rate % 100.00 100.00 100.00 101.00 95.00 Assets in USD MM 90,621.85 104,317.79 110,884.55 139,187.98 171,480.57 Output / total assets BOE/000$ 9.39 8.63 8.27 6.62 5.39 Employees # of people 70,348.00 72,258.00 73,572.00 75,862.00 78,880.00 Output / total employees BOE/000$ 12.10 12.46 12.46 12.14 11.71 Financial Performance Unit 2004 2005 2006 2007 2008 Earnings before interest & taxes (national currency) MM 13,163.00 17,817.00 20,160.00 19,648.00 19,519.00 Direct expenditures on social/economic development 31.61 62.01 74.70 85.90 84.20 MM programs (national currency) Total revenue (national currency) MM 57,545.00 73,728.00 86,105.00 87,256.00 108,148.00 EBRTN MM 13,194.61 17,879.01 20,234.70 19,733.90 19,603.20 EBRTN / revenues % 22.93 24.25 23.50 22.62 18.13 EBRTN / total assets % 18.11 21.32 22.91 19.43 16.81 Total capital expenditures (national currency) MM 7,499.00 7,560.00 7,928.00 20,502.00 18,867.00 Net cash flow after taxes and dividends MM 12,500.00 13,710.20 15,622.80 14,092.00 20,387.10 NCF/CAPEX % 166.69 181.35 197.06 68.73 108.06 National Mission Performance Unit 2004 2005 2006 2007 2008 Total number of NOC local employees # of people 40,761.00 40,192.00 39,765.00 39,427.00 39,480.0 Total number of NOC non-local employees # of people 29,587.00 32,066.00 33,807.00 36,435.00 39,400.0 Share of nationals in NOC workforce % 57.94 55.62 54.05 51.97 50.05 NOC employment in native country (# people) # of people 40,761.00 40,192.00 39,765.00 39,427.00 39,480.00 NOC annual employment growth % -3.49 -1.40 -1.06 -0.85 0.13 # of people Country Labor Force 24,658.62 24,591.63 24,783.52 24,814.16 25,211.84 (000) Country annual employment growth % 2.45 -0.27 0.78 0.12 1.60 NOC - Country employment growth % points -5.94 -1.12 -1.84 -0.97 -1.47 NOC employment share of country workforce % 0.17 0.16 0.16 0.16 0.16 NOC local purchases goods and services $ MM 17,166.88 16,312.64 NOC total purchases goods and services $ MM 57,027.84 69,827.60 82,138.84 107,832.31 140,130.47 Share of local content % 15.92 11.64 NOC noncommercial expenditure (national currency) MM 31.61 62.01 74.70 85.90 84.20 NOC noncommercial expenditure $ MM 39.32 77.15 93.79 117.73 123.84 Noncommercial expenditure/Total expenditure % 0.07 0.11 0.11 0.11 0.09 Net income from non-core commercial business $ MM activities Net income from total commercial activities $ MM 8,780.69 10,933.15 11,572.87 13,720.08 12,979.81 Net income noncore commercial activities/Net % income Price subsidies provided by NOC $ MM Total NOC Revenues $ MM 71,580.2 91,725.0 108,113.4 119,584.3 159,064.1 Price Subsidies/Revenues % NOC domestic petroleum products production MMBOE 237.83 242.63 239.25 231.15 215.85 Country oil consumption MMBOE 683.78 663.95 661.60 642.20 617.34 Domestic output use % 34.78 36.54 36.16 35.99 34.96 16 (b) Value creation index 2004 2005 2006 2007 2008 Operational Performance E&P production growth (%) 5.66 6.96 2.01 -1.78 3.53 Reserves replacement rate (BOE, %) 105.33 15.65 64.49 16.90 130.71 Refinery utilization rate (%) 100.00 100.00 100.00 101.00 95.00 Output / total assets (BOE/'000$) 9.39 8.63 8.27 6.62 5.39 Output / total employees ('000 BOE) 12.10 12.46 12.46 12.14 11.71 Financial Performance EBRTN / revenues (%) 22.93 24.25 23.50 22.62 18.13 EBRTN / total assets (%) 18.11 21.32 22.91 19.43 16.81 NCF / CAPEX (%) 166.69 181.35 197.06 68.73 108.06 National Mission Performance Share of nationals in NOC workforce (%) 57.94 55.62 54.05 51.97 50.05 NOC – Country employment growth (% points) -5.94 -1.12 -1.84 -0.97 -1.47 NOC employment share of country workforce (%) 0.17 0.16 0.16 0.16 0.16 Share of local content (%) 15.92 11.64 Noncommercial expenditures/total expenditures (%) 0.07 0.11 0.11 0.11 0.09 Noncore commercial activities net income/Total net income (%) Price Subsidies/Revenues (%) Domestic output use (%) 34.78 36.54 36.16 35.99 34.96 (c) Normalized value creation index 2004 2005 2006 2007 2008 Operational Performance 0.40 0.26 0.25 0.36 0.43 E&P production growth 0.41 0.06 0.30 0.44 0.44 Reserves replacement rate 0.54 0.22 0.05 0.48 1.00 Refinery utilization rate 0.67 0.61 0.48 0.52 0.42 Output / total assets 0.18 0.20 0.23 0.20 0.15 Output / total employees 0.20 0.21 0.18 0.15 0.15 Financial Performance 0.44 0.35 0.36 0.19 0.21 EBRTN / revenues 0.21 0.18 0.16 0.16 0.15 EBRTN / total assets 0.27 0.17 0.11 0.17 0.19 NCF / CAPEX 0.85 0.70 0.81 0.25 0.29 National Mission Performance 0.21 0.20 0.25 0.15 0.16 Share of nationals in NOC workforce 0.49 0.47 0.42 0.41 0.38 NOC - Country employment growth 0.32 0.32 0.52 0.19 0.18 NOC employment share of country workforce 0.08 0.09 0.11 0.13 0.13 Share of local content 0.00 0.00 Noncommercial expenditures/total expenditures 0.02 0.01 0.00 0.00 0.00 Noncore commercial activities net income/Total net income Price Subsidies/Revenues Domestic output use 0.14 0.15 0.18 0.16 0.24 VCI 0.35 0.27 0.29 0.23 0.27 17 (d) Value drivers 2004 2005 2006 2007 2008 Source GEOLOGY Country specific resource BP Statistical Review of World Energy June 2009 801 803 825 878 978 endowment oil MMBBL available at http://www.bp.com/statisticalreview Country specific resource BP Statistical Review of World Energy June 200 114 107 86 77 64 endowment gas BCM 9 available at http://www.bp.com/statisticalreview Country specific resource 1520 1475 1368 1361 1381 CEE calculation endowment MMBOE STATE CONTEXT WGI: Voice and 1.15 1.00 1.00 1.09 0.96 http://info.worldbank.org/governance/wgi/index.asp Accountability WGI: Political Stability 0.33 0.34 0.42 0.39 0.41 http://info.worldbank.org/governance/wgi/index.asp WGI: Government 0.79 0.66 0.47 0.32 0.39 http://info.worldbank.org/governance/wgi/index.asp Effectiveness WGI: Regulatory Quality 1.05 0.89 0.85 0.81 0.95 http://info.worldbank.org/governance/wgi/index.asp WGI: Rule of Law 0.66 0.34 0.41 0.43 http://info.worldbank.org/governance/wgi/index.asp 0.50 WGI: Corruption Control 0.49 0.25 0.33 0.32 0.13 http://info.worldbank.org/governance/wgi/index.asp Hydrocarbon Revenues as % of Total Government Revenues Hydrocarbon Revenues as % of GDP WTO membership (yes- 1 1 1 1 1 www.wto.org 1/no-0) over five years OPEC membership (yes- 0 0 0 0 0 www.opec.org 1/no-0) over five years Country Crude Oil Exports - 2008 OPEC Annual Statistical Bulletin at 000 BPD www.opec.org Country Crude Oil Imports- 2009 OPEC Annual Statistical Bulletin at 1747 1805 1753 1776 1651 000 BPD www.opec.org (Country Revenues Oil Italy's imports valued at nominal oil price as Exports)-(Costs Oil Imports) -23 -33 -39 -45 -57 reported in 2008 OPEC Annual Statistical Bulletin US $ Billion at www.opec.org Country Gross Domestic World Bank Development Indicators: 1730 1780 1860 2110 2300 Product US $ Billion http://data.worldbank.org/indicator Country Net Revenues (Costs) of Oil Exports -1.33 -1.87 -2.10 -2.12 -2.47 CEE calculation (Imports) as % of GDP Government Budget http://www.tradingeconomics.com/Economics/Gove Surplus/Deficit as % of -3.09 -2.57 -3.52 -2.24 -1.75 rnment-Budget.aspx?Symbol=ITL Gross Domestic Product Stabilization Mechanisms such as petroleum funds 0 0 0 0 0 http://www.swfinstitute.org/ (yes-1/no-0) PETROLEUM SECTOR ORGANIZATION AND GOVERANANCE Publicly disclosed national See "Regulation of the Italian Hydrocarbons policy addressing 1 1 1 1 1 Industry" in ENI Form 20Fs for the relevant year hydrocarbon sector issues available at www.eni.com (yes-1/no-0) Scoring: Independent NOC, Ministry and regulatory function (100); Regulatory function is performed by ministry (66); Regulatory function is performed by NOC (33); All three functions combined in one Institutional structure 66 66 66 66 66 entity (0). "Regulation of the Italian hydrocarbons Industry" in ENI Form 20Fs for the relevant year available at www.eni.com Country oil production MM BP Statistical Review of World Energy June 2009 41 46 44 44 40 Barrels available at http://www.bp.com/statisticalreview 18 BP Statistical Review of World Energy June 2009 Country gas production BCF 418 391 355 314 295 available at http://www.bp.com/statisticalreview Country MMBOE 113 113 105 98 91 CEE calculation production NOC MMBOE Domestic ENI Forms 20F and annual reports for relevant 99 95 87 77 73 Production years Non-NOC percentage of oil 12.8 16.0 17.4 21.2 20.1 CEE calculation and gas production (%) Country Refinery Capacity - ENI Forms 20F and annual reports for relevant 2497 2515 2526 2497 2486 000 BPD years Net NOC Refinery Capacity ENI Forms 20F and annual reports for relevant 860 860 860 860 860 - 000 BPD (country level) years Non-NOC percentage of refinery capacity (%, country 65.6 65.8 66.0 65.6 65.4 CEE calculation. level) Total Revenues (local ENI Forms 20F and annual reports for relevant 57,545 73,728 86,105 87,256 108,148 currency MM) years Royalties and production Italian production taxes only. ENI Forms 20F and 118 157 181 188 260 taxes (local currency MM) annual reports for relevant years Based on E&P income taxes paid in Italy. Other Income taxes (local 632 762 909 746 924 taxes not broken out geographically. ENI Forms currency MM) 20F and annual reports for relevant years Dividends paid to ENI Forms 20F and annual reports for relevant government (local currency 1,015 1,226 1,378 1,425 1,414 years MM) Royalties, production taxes, income taxes and dividends paid to government by NOC 3.1 2.9 2.9 2.7 2.4 CEE Calculation as percentage of total revenues (%) Effect of contract terms on No No No Sources: Fraser Institute Global Petroleum Survey 2.3 investment decisions survey survey survey 2007 and 2008 Effect of taxation regime on No No No Sources: Fraser Institute Global Petroleum Survey 2.4 decision to invest survey survey survey 2007 and 2008 Effect of cost of regulatory No No No Sources: Fraser Institute Global Petroleum Survey compliance on decision to 1.98 survey survey survey 2007 and 2008 invest Effect of regulatory No No No Sources: Fraser Institute Global Petroleum Survey uncertainty on decision to 2.67 survey survey survey 2007 and 2008 invest Effect of environmental No No No Sources: Fraser Institute Global Petroleum Survey regulations on decision to 3 survey survey survey 2007 and 2008 invest Scoring: Priority ranked publicly disclosed objectives exist and are publicly measured (100); Objectives publicly disclosed but not ranked and are publicly measured (75); Objectives publicly disclosed and ranked but not publicly measured NOC objectives 100 100 100 100 100 (50); Objectives publicly disclosed but not ranked and not publicly measured (25); No public documentation of NOC objectives (0). ENI annual reports and fact books for relevant years available at www.eni.com/en NOC STRATEGY AND BEHAVIOR Percentage of NOC domestic % operated not disclosed in Form 20Fs but upstream production 1 1 1 1 1 company appears to be a substantial operating entity operated by specific NOC. If 19 no data yes-1/no-0. Percentage of NOC domestic refining production operated ENI Form 20Fs for relevant year and website 100.0 100.0 100.0 100.0 100.0 by specific NOC. If no data material. yes-1/no-0. NOC upstream capital expenditures as percentage ENI Form 20Fs for relevant year and website 66.0 67.0 66.4 62.5 65.5 of total capital expenditures material. (%) NOC refining capital expenditures as percentage ENI Form 20Fs for relevant year and website 8.0 8.8 8.2 9.2 6.6 of total capital expenditures material. (%) NOC upstream oil equity production as percentage of ENI Form 20Fs for relevant year and website total NOC refining 96.0 97.0 97.0 85.0 83.0% material. throughput (%). If no data, yes/no. NOC international revenues as percentage of total NOC ENI Form 20Fs for relevant year and website 55.0 55.4 57.8 57.2 60.3 revenues (%). If no data yes- material. 1/no-0. Scoring: NOC partnerships/JVs exist domestically and internationally (100); NOC partnerships exist domestically but not internationally (66); NOC partnerships exist internationally but not Joint ventures between the 100 100 100 100 100 domestically (33); NOC partnerships, JVs, alliances NOC and third parties do not exist (0). ENI Form 20Fs for relevant year and website material. NOC CORPORATE GOVERNANCE Percentage of non- ENI Form 20Fs for relevant year and website government ownership of 69.7 69.7 69.7 69.7 69.7 material. specific NOC (%) Percentage of independent ENI Form 20Fs for relevant year and website 33.3 33.3 33.3 33.3 33.3 BOD members (%) material. Scoring: (100)-The government has no participation in deciding who will fill the positions of Chairman/CEO; (50)-The government through its control of required voting shares can influence, Appointment authority for directly or indirectly, the appointments of NOC chairman and chief 100 100 100 100 100 Chairman/CEO and (0) The Chairman and/or CEO executive officer is a direct appointee of the government entity ENI Form 20Fs for relevant year and website material. Scoring: No governmental approval of NOC budget required (100); No governmental approval of NOC budget required but certain capital expenditures require state approval (75);NOC budget is proposed to and approved by one central government entity Independence of NOC 75 75 75 75 75 (50); NOC budget is proposed to and approved by capital and budget processes multiple central government entities (25); NOC budget is part of the national budget (0). ENI Form 20Fs for relevant year and website material. NOC net cash flow after taxes and dividends (local 12,500 13,710 15,623 14,092 20,387 ENI Forms 20Fs for relevant year currency MM) NOC capital expenditures 7,499 7,560 7,928 20,502 18,867 ENI Forms 20Fs for relevant year (local currency MM) Measured by net cash flow after taxes and dividends NOC financial sustainability as percentage of capital expenditures % 166.7 181.4 197.1 68.7 108.1 (%) CEE Calculation 20 Scoring: NOC financial statement auditing performed by independent international auditor and files reports with international exchange (100); FS auditing performed and publicly disclosed by independent international auditor (75); FS auditing NOC financial transparency 100 100 100 100 100 performed and publicly disclosed by independent domestic or government auditor (50) ; FS auditing performed internally by N OC and publicly disclosed (25); No publicly available auditing (0) ENI Forms 20Fs for relevant year Scoring: NOC oil & gas reserves auditing performed by independent international firm and files reports with international exchange (100); reserves auditing performed and publicly disclosed by independent international firm (75); reserves NOC upstream reserves 100 100 100 100 100 auditing performed and publicly disclosed by transparency independent domestic firm (50) ; reserves auditing performed internally and publicly disclosed (25); No publicly available reserves auditing (0). ENI Forms 20Fs for relevant year Note: Non-shaded areas indicate data used in the exploratory statistical analysis presented in National Oil Companies and Value Creation, volume I, chapter 4. 21 4. Open Joint Stock Company Gazprom (Russia) (a) Value creation index components Operational Performance unit 2004 2005 2006 2007 2008 Company gas production BCF 19,499.21 19,586.70 19,622.10 19,360.09 19,398.91 Company oil production MM Bbls 89.88 157.40 340.42 339.43 322.26 E&P production (BOE) MM BOE 3,565.37 3,648.48 3,837.81 3,790.12 3,779.87 E&P production growth % 6.74 2.33 5.19 -1.24 -0.27 Total net additions proved oil reserves MM Bbls Total net additions proved gas reserves BCF Total net additions proved gas reserves MM BOE Reserve additions (BOE) MM BOE 1,690.00 5,785.00 17,715.00 4,869.00 3,967.00 Reserves replacement rate % 47.40 158.56 461.59 128.47 104.95 Primary distillation capacity MBPD 1,434.24 1,865.70 2,114.38 2,114.38 2,114.38 Total refining throughput MBPD 896.96 1,124.00 1,540.00 1,520.00 1,466.00 Refinery utilization rate % 96.00 60.25 72.83 71.89 69.33 Assets $ MM 111,234.87 153,379.07 195,217.83 265,334.22 288,125.72 Output / total assets BOE/000$ 35.00 26.46 22.54 16.38 14.98 Employees # of people 332,800.00 397,000.00 432,000.00 436,100.00 376,300.00 Output / total employees BOE/000$ 11.70 10.22 10.18 9.96 11.47 Financial Performance Unit 2004 2005 2006 2007 2008 Earnings before interest & taxes (national currency) Bn 334.89 567.95 975.43 931.55 1,519.28 Direct expenditures on social/economic development 13.34 15.67 18.56 18.27 22.64 Bn programs (national currency) Total revenue (national currency) Bn 976.78 1,383.55 2,152.11 2,423.25 3,518.96 EBRTN Bn 348.23 583.62 994.00 949.82 1,541.91 EBRTN / revenues % 35.65 42.18 46.19 39.20 43.82 EBRTN / total assets % 10.86 13.45 18.72 13.98 21.51 Total capital expenditures (national currency) Bn 241.44 352.62 485.64 576.89 801.33 net cash flow after taxes and dividends Bn 167.48 248.76 509.86 538.74 953.94 NCF/CAPEX % 69.37 70.55 104.99 93.39 119.04 National Mission Performance Unit 2004 2005 2006 2007 2008 Total number of NOC local employees # of people Total number of NOC non-local employees # of people Share of nationals in NOC workforce % 99.90 99.90 99.90 99.90 99.90 NOC employment in native country # of people 329,472.00 393,030.00 427,680.00 431,739.00 372,537.00 NOC annual employment growth % 19.29 8.82 0.95 -13.71 # of people Country Labor Force 73,887.91 74,389.25 75,135.02 76,116.87 76,025.81 (000) Country annual employment growth % 0.16 0.68 1.00 1.31 -0.12 NOC - Country employment growth % points -0.16 18.61 7.81 -0.36 -13.59 NOC employment share of country workforce % 0.45 0.53 0.57 0.57 0.49 NOC local purchases goods and services $ Bn NOC total purchases goods and services $ Bn 955.60 1,282.18 1,849.56 2,298.35 3,059.99 Share of local content % NOC noncommercial expenditure (national currency) MM 13,335.00 15,672.00 18,563.00 18,272.00 22,636.00 NOC noncommercial expenditure $ MM Noncommercial expenditure/Total expenditure % 1.40 1.22 1.00 0.80 0.74 Net income from non-core commercial business $ MM 336.22 756.45 1,139.71 1,484.38 1,475.08 activities Net income from total commercial activities $ MM 33,892.30 48,905.80 79,121.73 94,658.01 141,437.30 Net income noncore commercial activities/Net % 0.99 1.55 1.44 1.57 1.04 income Price subsidies provided by NOC $ MM Total NOC Revenues $ MM 33,892.30 48,905.80 79,121.73 94,658.01 141,437.30 Price Subsidies/Revenues % NOC domestic petroleum products production MMBOE 87.96 109.22 159.00 174.00 183.75 Country oil consumption MMBOE 955.78 949.52 988.79 987.67 1,020.77 Domestic output use % 9.20 11.50 16.08 17.62 18.00 22 (b) Value creation index 2004 2005 2006 2007 2008 Operational Performance E&P production growth (%) 6.74 2.33 5.19 -1.24 -0.27 Reserves replacement rate (BOE, %) 47.40 158.56 461.59 128.47 104.95 Refinery utilization rate (%) 96.00 60.25 72.83 71.89 69.33 Output / total assets (BOE/'000$) 35.00 26.46 22.54 16.38 14.98 Output / total employees ('000 BOE) 11.70 10.22 10.18 9.96 11.47 Financial Performance EBRTN / revenues (%) 35.65 42.18 46.19 39.20 43.82 EBRTN / total assets (%) 10.86 13.45 18.72 13.98 21.51 NCF / CAPEX (%) 69.37 70.55 104.99 93.39 119.04 National Mission Performance Share of nationals in NOC workforce (%) 99.00 99.00 99.00 99.00 99.00 NOC – Country employment growth (% points) -0.16 18.61 7.81 -0.36 -13.59 NOC employment share of country workforce (%) 0.45 0.53 0.57 0.57 0.49 Share of local content (%) Noncommercial expenditures/total expenditures (%) 1.40 1.22 1.00 0.80 0.74 Noncore commercial activities net income/Total net income (%) 0.99 1.55 1.44 1.57 1.04 Price Subsidies/Revenues (%) Domestic output use (%) 9.20 11.50 16.08 17.62 18.00 (c) Normalized value creation index 2004 2005 2006 2007 2008 Operational Performance 0.47 0.32 0.43 0.38 0.33 E&P production growth 0.44 0.05 0.35 0.45 0.32 Reserves replacement rate 0.36 0.70 0.97 0.79 0.76 Refinery utilization rate 0.61 0.00 0.00 0.02 0.00 Output / total assets 0.73 0.66 0.67 0.50 0.44 Output / total employees 0.19 0.17 0.14 0.12 0.15 Financial Performance 0.30 0.20 0.27 0.26 0.35 EBRTN / revenues 0.38 0.42 0.45 0.37 0.45 EBRTN / total assets 0.15 0.06 0.04 0.07 0.27 NCF / CAPEX 0.36 0.13 0.33 0.36 0.32 National Mission Performance 0.41 0.48 0.48 0.40 0.26 Share of nationals in NOC workforce 0.99 0.99 0.99 0.99 0.99 NOC employment growth 0.51 0.70 0.72 0.20 0.00 NOC employment share of country workforce 0.20 0.28 0.40 0.46 0.42 Share of local content Noncommercial expenditures/total expenditures 0.48 0.09 0.04 0.03 0.04 Noncore commercial activities net income/Total net income 0.23 0.82 0.70 0.67 0.44 Price Subsidies/Revenues Domestic output use 0.02 0.02 0.07 0.06 0.11 VCI 0.39 0.33 0.39 0.35 0.32 23 (d) Value drivers 2004 2005 2006 2007 2008 Source GEOLOGY Country specific resource BP Statistical Review of World Energy June 2009 75,791 76,561 73,482 74,067 74,277 endowment oil MMBBL available at http://www.bp.com/statisticalreview Country specific resource BP Statistical Review of World Energy June 2009 43,258 43,276 43,271 43,315 43,302 endowment gas BCM available at http://www.bp.com/statisticalreview Country specific resource 347,884 348,768 345,564 346,520 346,645 CEE calculation endowment MMBOE STATE CONTEXT WGI: Voice and -0.58 -0.65 -0.92 -0.98 -0.97 http://info.worldbank.org/governance/wgi/index.asp Accountability WGI: Political Stability -1.00 -0.94 -0.77 -0.72 -0.62 http://info.worldbank.org/governance/wgi/index.asp WGI: Government -0.28 -0.36 -0.45 -0.41 -0.32 http://info.worldbank.org/governance/wgi/index.asp Effectiveness WGI: Regulatory Quality -0.24 -0.33 -0.57 -0.44 -0.56 http://info.worldbank.org/governance/wgi/index.asp WGI: Rule of Law -0.82 -0.87 -0.95 -0.95 -0.91 http://info.worldbank.org/governance/wgi/index.asp WGI: Corruption Control -0.75 -0.74 -0.77 -0.91 -0.98 http://info.worldbank.org/governance/wgi/index.asp "Oil and Gas in the Russian Federation," by G. Kurlyandskaya, G. Pokatovich, M. Subbotin, Center for Fiscal Policy, Moscow, World Bank Conference Hydrocarbon Revenues as % on Oil and Gas in Federal Systems, March, 2010; of Total Government 17.0 25.0 33.0 44.0 50.0 "Natural Resource Endowments, Governance, and Revenues the Domestic Revenue Effort," F. Bornhorst, S. Gupta, J. Thornton, IMF Working Paper wp/08/170, July 2008. "Oil and Gas in the Russian Federation," by G. Kurlyandskaya, G. Pokatovich, M. Subbotin, Center for Fiscal Policy, Moscow, World Bank Conference Hydrocarbon Revenues as % on Oil and Gas in Federal Systems, March, 2010; 7.0 13.0 18.0 21.0 25.0 of GDP "Natural Resource Endowments, Governance, and the Domestic Revenue Effort," F. Bornhorst, S. Gupta, J. Thornton, IMF Working Paper wp/08/170, July 2008. WTO membership (yes- 1 1 1 1 1 www.wto.org 1/no-0) over five years OPEC membership (yes- 0 0 0 0 0 www.opec.org 1/no-0) over five years Country Crude Oil Exports - 2008 OPEC Annual Statistical Bulletin at 4,822 5,335 5,524 5,864 5,646 000 BPD www.opec.org Country Crude Oil Imports- 2009 OPEC Annual Statistical Bulletin at 40 40 44 62 48 000 BPD www.opec.org (Country Revenues Oil Exports valued at Russia Urals oil price and imports Exports)-(Costs Oil Imports) 60 98 123 147 194 valued at nominal oil price as reported in 2008 US $ Billion OPEC Annual Statistical Bulletin at www.opec.org Country Gross Domestic World Bank Development Indicators: 592 765 991 1,290 1,680 Product US $ Billion http://data.worldbank.org/indicator Country Net Revenues (Costs) of Oil Exports 10.2 12.8 12.4 11.4 11.5 CEE calculation (Imports) as % of GDP Government Budget http://www.tradingeconomics.com/Economics/Gove Surplus/Deficit as % of 9.9 8.0 6.0 rnment-Budget.aspx?Symbol=RUB Gross Domestic Product Oil and Gas in the Russian Federation, by G. Stabilization Mechanisms Kurlyandskaya, G. Pokatovich, M. Subbotin, Center such as petroleum funds 1 1 1 1 1 for Fiscal Policy, Moscow, World Bank Conference (yes-1/no-0) on Oil and Gas in Federal Systems, March, 2010. PETROLEUM SECTOR ORGANIZATION AND GOVERNANCE Publicly disclosed national Oil and Gas in the Russian Federation, by G. policy addressing Kurlyandskaya, G. Pokatovich, M. Subbotin, Center 0 0 0 0 0 hydrocarbon sector issues for Fiscal Policy, Moscow, World Bank Conference (yes-1/no-0) on Oil and Gas in Federal Systems, March, 2010. 24 Scoring: Independent NOC, Ministry and regulatory function (100); Regulatory function is performed by ministry (66); Regulatory function is performed by NOC (33); All three functions combined in one Institutional structure 66 66 66 66 66 entity (0). "Gazprom reports for relevant year and website material. Country oil production MM BP Statistical Review of World Energy June 2009 3,565 3,486 3,565 3,641 3,609 Barrels available at http://www.bp.com/statisticalreview BP Statistical Review of World Energy June 2009 Country gas production BCF 20,191 20,486 20,971 20,906 21,190 available at http://www.bp.com/statisticalreview Country MMBOE 7,046 7,018 7,181 7,245 7,262 CEE calculation production NOC MMBOE Domestic http://www.gazprom.com/f/posts/71/879403/2009_0 3,595 4,153 4,372 4,465 4,433 Production 7_07_gazprom_databook_update.xls Non-NOC percentage of oil CEE calculation. NOC volumes include Rosneft and 49.0 40.8 39.1 38.4 39.0 and gas production (%) Gazprom production. Country Refinery Capacity - BP Statistical Review of World Energy June 2009 5,371 5,421 5,473 5,522 5,547 000 BPD available at http://www.bp.com/statisticalreview Gazprom 2009 databook. Source: see cell H52. Also Net NOC Refinery Capacity includes Rosneft refinery volumes from Rosneft 367 781 1,179 1,577 1,796 - 000 BPD (country level) financial statements for relevant years available at www.rosneft.com Non-NOC percentage of CEE calculation. NOC volumes include Rosneft and refinery capacity (%, 93.2 85.6 78.5 71.4 67.6 Gazprom production. country level) Total Revenues (local 976,776 1,383,545 2,152,111 2,423,245 3,518,960 Gazprom 2009 databook. currency MM) Royalties and production 376,051 501,822 793,799 759,500 1,078,801 Gazprom 2009 databook. taxes (local currency MM) Income taxes (local 64,392 172,378 233,334 220,730 337,648 Gazprom 2009 databook. currency MM) Dividends paid to Gazprom Consolidated IFRS Financial Results for government (local currency 14,672 23,858 34,233 59,765 62,614 relevant years available at www.gazprom.com MM) Royalties, production taxes, income taxes and dividends paid to government by NOC 46.6 50.5 49.3 42.9 42.0 CEE Calculation as percentage of total revenues (%) Effect of contract terms on No No No Sources: Fraser Institute Global Petroleum Survey 3.15 3.06 investment decisions survey survey survey 2007 and 2008 Effect of taxation regime on No No No Sources: Fraser Institute Global Petroleum Survey 3.13 2.71 decision to invest survey survey survey 2007 and 2008 Effect of cost of regulatory No No No Sources: Fraser Institute Global Petroleum Survey compliance on decision to 3.54 3.07 survey survey survey 2007 and 2008 invest Effect of regulatory No No No Sources: Fraser Institute Global Petroleum Survey uncertainty on decision to 3.76 3.41 survey survey survey 2007 and 2008 invest Effect of environmental No No No Sources: Fraser Institute Global Petroleum Survey regulations on decision to 2.64 2.73 survey survey survey 2007 and 2008 invest 25 Scoring: Priority ranked publicly disclosed objectives exist and are publicly measured (100); Objectives publicly disclosed but not ranked and are publicly measured (75); Objectives publicly disclosed and ranked but not publicly measured NOC objectives 75 75 75 75 75 (50); Objectives publicly disclosed but not ranked and not publicly measured (25); No public documentation of NOC objectives (0). Gazprom reports and fact books for relevant years available at www.gazprom.com NOC STRATEGY AND BEHAVIOR Percentage of NOC domestic upstream production % operated not disclosed but company appears to be 1 1 1 1 1 operated by specific NOC. If a substantial operating entity no data yes-1/no-0. Percentage of NOC domestic refining production operated % operated not disclosed but company appears to be 1 1 1 1 1 by specific NOC. If no data a substantial operating entity yes-1/no-0. NOC upstream capital expenditures as percentage Gazprom reports for relevant year and website 39.6 33.4 38.5 43.7 43.3 of total capital expenditures material. (%) NOC refining capital expenditures as percentage Gazprom reports for relevant year and website 5.0 4.6 4.3 6.7 6.9 of total capital expenditures material. (%) NOC upstream oil equity production as percentage of Gazprom reports for relevant year and website total NOC refining 9.0 65.0 104.0 99.0 89.0 material. throughput (%). If no data, yes/no. NOC international revenues as percentage of total NOC Gazprom reports for relevant year and website 1 1 1 1 1 revenues (%). If no data yes- material.. 1/no-0. Scoring: NOC partnerships/JVs exist domestically and internationally (100); NOC partnerships exist domestically but not internationally (66); NOC partnerships exist internationally but not Joint ventures between the 100 100 100 100 100 domestically (33); NOC partnerships, JVs, alliances NOC and third parties do not exist (0). Gazprom reports for relevant year and website material. NOC CORPORATE GOVERANCE Percentage of non- Gazprom reports for relevant year and website government ownership of 62.0 50.0 50.0 50.0 50.0 material. specific NOC (%) Percentage of independent Gazprom reports for relevant year and website 20.0 20.0 20.0 20.0 20.0 BOD members (%) material. Scoring: (100)-The government has no participation in deciding who will fill the positions of Chairman/CEO; (50)-The government through its control of required voting shares can influence, Appointment authority for directly or indirectly, the appointments of NOC chairman and chief 0 0 0 0 0 Chairman/CEO and (0) The Chairman and/or CEO executive officer is a direct appointee of the government entity Gazprom reports for relevant year and website material. Scoring: No governmental approval of NOC budget required (100); No governmental approval of NOC Independence of NOC budget required but certain capital expenditures 75 75 75 75 75 capital and budget processes require state approval (75);NOC budget is proposed to and approved by one central government entity (50); NOC budget is proposed to and approved by 26 multiple central government entities (25); NOC budget is part of the national budget (0). Gazprom reports for relevant year and website material. NOC net cash flow after Gazprom reports for relevant year and website taxes and dividends (local 167,478 248,759 509,855 538,743 953,937 material. currency MM) NOC capital expenditures Gazprom reports for relevant year and website 241,437 352,620 485,640 576,885 801,331 (local currency MM) material. Measured by net cash flow after taxes and dividends NOC financial sustainability as percentage of capital expenditures % 69.4 70.5 105.0 93.0 119.0 (%) CEE Calculation Scoring: NOC financial statement auditing performed by independent international auditor and files reports with international exchange (100); FS auditing performed and publicly disclosed by independent international auditor (75); FS auditing performed and publicly disclosed by independent NOC financial transparency 100 100 100 100 100 domestic or government auditor (50) ; FS auditing performed internally by N OC and publicly disclosed (25); No publicly available auditing (0) Gazprom reports for relevant year and website material. Scoring: NOC oil & gas reserves auditing performed by independent international firm and files reports with international exchange (100); reserves auditing performed and publicly disclosed by independent international firm (75); reserves auditing performed NOC upstream reserves and publicly disclosed by independent domestic 0 0 0 0 0 transparency firm (50) ; reserves auditing performed internally and publicly disclosed (25); No publicly available reserves auditing (0). Gazprom reports for relevant year and website material. Note: Non-shaded areas indicate data used in the exploratory statistical analysis presented in National Oil Companies and Value Creation, volume I, chapter 4. 27 5. Gaz de France S.A. (France) (a) Value creation index components Operational Performance unit 2004 2005 2006 2007 2008 Company gas production BCF 270.00 232.84 175.28 172.80 211.52 Company oil production MM Bbls 13.20 11.60 13.50 E&P production (BOE) MM BOE 48.12 41.50 44.44 42.40 51.20 E&P production growth % 17.14 -13.76 7.09 -4.59 20.75 Total net additions proved oil reserves MM Bbls 12.30 9.40 45.40 Total net additions proved gas reserves BCF Total net additions proved gas reserves MM BOE 16.50 8.80 15.80 Reserve additions (BOE) MM BOE 73.94 98.71 28.80 18.20 61.20 Reserves replacement rate % 153.64 237.86 64.80 42.92 119.53 Primary distillation capacity MBPD Total refining throughput MBPD Refinery utilization rate % Assets in USD MM 39,689.12 49,684.38 53,876.54 108,443.83 245,929.53 Output / total assets BOE/000$ 1.21 0.84 0.82 0.39 0.21 Employees # of people 38,088.00 52,958.00 50,244.00 47,560.00 199,964.00 Output / total employees BOE/000$ 1.26 0.78 0.88 0.89 0.26 Financial Performance Unit 2004 2005 2006 2007 2008 Earnings before interest & taxes (national currency) MM 2,328.00 2,916.00 3,719.00 8,182.00 9,001.00 Direct expenditures on social/economic development MM 2.00 5.90 7.10 5.00 37.00 programs (national currency) Total revenue (national currency) MM 18,206.00 22,872.00 27,642.00 27,427.00 67,923.80 EBRTN MM 2,918.00 3,724.90 8,189.10 8,187.00 9,038.00 EBRTN / revenues % 16.03 16.29 29.63 29.85 13.31 EBRTN / total assets % 9.15 9.33 19.08 10.35 5.41 Total capital expenditures (national currency) MM 1,847.00 2,463.00 3,456.00 4,638.00 9,848.00 net cash flow after taxes and dividends MM 2,933.00 2,830.00 4,164.00 4,806.00 2,396.00 NCF/CAPEX % 158.80 114.90 120.49 103.62 24.33 National Mission Performance Unit 2004 2005 2006 2007 2008 Total number of NOC local employees # of people 25,138.08 33,929.00 34,293.00 31,917.00 101,552.00 Total number of NOC non-local employees # of people 12,949.92 19,029.00 15,951.00 15,643.00 98,412.00 Share of nationals in NOC workforce % 66.00 64.07 68.25 67.11 50.79 NOC employment in native country # of people 25,138.08 33,929.00 34,293.00 31,917.00 101,552.00 NOC annual employment growth % 0.55 34.97 1.07 -6.93 218.18 # of people Country Labor Force 27,630.48 27,856.78 28,084.86 28,405.93 28,611.25 (000.000) Country annual employment growth % 0.87 0.82 0.82 1.14 0.72 NOC - Country employment growth % points -0.32 34.15 0.25 -8.07 NOC employment share of country workforce % 0.09 0.12 0.12 0.11 0.35 NOC local purchases goods and services $ MM 2,609.00 17,306.49 14,944.85 NOC total purchases goods and services $ MM 3,193.09 3,894.03 25,081.87 26,219.04 52,770.83 Share of local content % 67.00 69.00 57.00 NOC noncommercial expenditure (national currency) MM 2.00 5.90 7.10 5.00 37.00 NOC noncommercial expenditure $ MM 2.49 7.34 8.91 6.85 54.42 Noncommercial expenditure/Total expenditure % 0.08 0.19 0.04 0.03 0.10 Net income from non-core commercial business % 35.00 87.00 122.00 423.00 725.00 activities Net income from total commercial activities $ MM 18,206.00 22,872.00 27,642.00 27,427.00 67,923.80 Net income noncore commercial activities/Net % 0.19 0.38 0.44 1.54 1.07 income Price subsidies provided by NOC $ MM Total NOC Revenues $ MM 22,646.44 28,455.06 34,707.30 37,588.70 99,902.33 Price Subsidies/Revenues % NOC domestic petroleum products production MMBOE Country oil consumption MMBOE 721.87 715.48 713.89 701.05 704.29 Domestic output use % 28 (b) Value creation index 2004 2005 2006 2007 2008 Operational Performance E&P production growth (%) 17.14 -13.76 7.09 -4.59 20.75 Reserves replacement rate (BOE, %) 153.64 237.86 64.80 42.92 119.53 Refinery utilization rate (%) Output / total assets (BOE/'000$) 1.21 0.84 0.82 0.39 0.21 Output / total employees ('000 BOE) 1.26 0.78 0.88 0.89 0.26 Financial Performance EBRTN / revenues (%) 16.03 16.29 29.63 29.85 13.31 EBRTN / total assets (%) 9.15 9.33 19.08 10.35 5.41 NCF / CAPEX (%) 158.80 114.90 120.49 103.62 24.33 National Mission Performance Share of nationals in NOC workforce (%) 66.00 64.07 68.25 67.11 50.79 NOC – Country employment growth (% points) -0.32 34.15 0.25 -8.07 NOC employment share of country workforce (%) 0.09 0.12 0.12 0.11 0.35 Share of local content (%) 67.00 69.00 57.00 Noncommercial expenditures/total expenditures (%) 0.08 0.19 0.04 0.03 0.10 Noncore commercial activities net income/Total net income (%) 0.19 0.38 0.44 1.54 1.07 Price Subsidies/Revenues (%) Domestic output use (%) (c) Normalized value creation index 2004 2005 2006 2007 2008 Operational Performance 0.35 0.24 0.11 0.23 0.46 E&P production growth 0.73 0.00 0.38 0.37 0.96 Reserves replacement rate 0.68 0.96 0.06 0.55 0.89 Refinery utilization rate Output / total assets 0.00 0.00 0.00 0.00 0.00 Output / total employees 0.00 0.00 0.00 0.00 0.00 Financial Performance 0.35 0.14 0.23 0.22 0.03 EBRTN / revenues 0.11 0.08 0.24 0.25 0.09 EBRTN / total assets 0.12 0.00 0.04 0.00 0.00 NCF / CAPEX 0.81 0.35 0.41 0.40 0.00 National Mission Performance 0.24 0.43 0.34 0.33 0.29 Share of nationals in NOC workforce 0.59 0.57 0.60 0.59 0.39 NOC employment growth 0.51 1.00 0.57 0.10 NOC employment share of country workforce 0.04 0.06 0.09 0.09 0.30 Share of local content 0.71 0.57 0.57 Noncommercial expenditures/total expenditures 0.03 0.01 0.00 0.00 0.00 Noncore commercial activities net income/Total net income 0.04 0.20 0.21 0.65 0.45 Price Subsidies/Revenues Domestic output use VCI 0.31 0.27 0.23 0.26 0.26 29 (d) Value drivers 2004 2005 2006 2007 2008 Source GEOLOGY Country specific resource BP Statistical Review of World Energy June 2009 148 146 158 122 120 endowment oil MMBBL available at http://www.bp.com/statisticalreview Country specific resource BP Statistical Review of World Energy June 2009 140 130 110 100 70 endowment gas BCM available at http://www.bp.com/statisticalreview Country specific resource 1,029 964 850 751 560 CEE calculation endowment MMBOE STATE CONTEXT WGI: Voice and 1.43 1.47 1.34 1.25 1.24 http://info.worldbank.org/governance/wgi/index.asp Accountability WGI: Political Stability 0.55 0.47 0.51 0.54 0.58 http://info.worldbank.org/governance/wgi/index.asp WGI: Government 1.67 1.57 1.47 1.36 1.54 http://info.worldbank.org/governance/wgi/index.asp Effectiveness WGI: Regulatory Quality 1.17 1.1 1.12 1.15 1.25 http://info.worldbank.org/governance/wgi/index.asp WGI: Rule of Law 1.43 1.37 1.38 1.35 1.4 http://info.worldbank.org/governance/wgi/index.asp WGI: Corruption Control 1.42 1.39 1.46 1.31 1.43 http://info.worldbank.org/governance/wgi/index.asp Hydrocarbon Revenues as % of Total Government Revenues Hydrocarbon Revenues as % of GDP WTO membership (yes- 1 1 1 1 1 www.wto.org 1/no-0) over five years OPEC membership (yes- 0 0 0 0 0 www.opec.org 1/no-0) over five years Country Crude Oil Exports - 2008 OPEC Annual Statistical Bulletin at 000 BPD www.opec.org Country Crude Oil Imports- 2009 OPEC Annual Statistical Bulletin at 000 BPD 1,737 1,722 1,670 1,646 1,682 www.opec.org (Country Revenues Oil Imports valued at nominal oil price as reported in Exports)-(Costs Oil Imports) -23 -32 -37 -42 -58 2008 OPEC Annual Statistical Bulletin at US $ Billion www.opec.org Country Gross Domestic World Bank Development Indicators: Product US $ Billion 2,060 2,150 2,270 2,590 2,860 http://data.worldbank.org/indicator Country Net Revenues (Costs) of Oil Exports -1.11 -1.48 -1.64 -1.60 -2.03 CEE calculation (Imports) as % of GDP Government Budget http://www.tradingeconomics.com/Economics/Gove Surplus/Deficit as % of -4.15 -3.49 -2.77 -2.24 -2.30 rnment-Budget.aspx?Symbol=FRF Gross Domestic Product Stabilization Mechanisms such as petroleum funds 0 0 0 0 0 http://www.swfinstitute.org/ (yes-1/no-0) PETROLEUM SECTOR ORGANIZATION AND GOVERANANCE Publicly disclosed national policy addressing 1 1 1 1 1 CEE assessment hydrocarbon sector issues (yes-1/no-0) Scoring: Independent NOC, Ministry and regulatory function (100); Regulatory function is performed by ministry (66); Regulatory function is performed by NOC (33); All three functions combined in one Institutional structure 100 100 100 100 100 entity (0). Commission de Régulation de l’Énergie, http://www.cre.fr/en/content/view/full/60 US Energy Information Administration, Country oil production MM 28 27 27 26 26 International Energy Statistics. Barrels Http://tonto.eia.doe.gov US Energy Information Administration, Country gas production BCF 49 41 43 38 32 International Energy Statistics. 30 Http://tonto.eia.doe.gov Country MMBOE 36 34 34 33 32 CEE calculation production Less than 5% of GDF's oil and gas production volumes are of French origin. French production NOC MMBOE Domestic volumes are not reported separately. See GDF Suez Production annual reports for the relevant years available at www.gdfsuez.com/en/finance/investors/publications Non-NOC percentage of oil CEE calculation and gas production (%) US Energy Information Administration, Country Refinery Capacity - International Energy Statistics. 000 BPD 1,982 1,978 1,959 1,962 1,962 Http://tonto.eia.doe.gov Net NOC Refinery Capacity GDF Suez has no refining operations in France - 000 BPD (country level) Non-NOC percentage of refinery capacity (%, country CEE calculation. level) Total Revenues (local GDF Suez annual reports for the relevant year at 17,526 22,394 44,289 47,475 67,924 currency MM) www.gdfsuez.com/en/finance/investors/publications Royalties and production Royalties and production taxes paid in France are taxes (local currency MM) not reported separately. Income taxes (local Based on E&P income taxes paid in France. GDF 358 572 48 -348 -520 currency MM) Suez annual reports for the relevant year Dividends paid to government (local currency 256 336 1,008 1,211 1,997 GDF Suez annual reports for the relevant year MM) Royalties, production taxes, income taxes and dividends paid to government by NOC 4 4 2 2 2 CEE Calculation as percentage of total revenues (%) Effect of contract terms on No No No Sources: Fraser Institute Global Petroleum Survey 1.7 2.48 investment decisions survey survey survey 2007 and 2008 Effect of taxation regime on No No No Sources: Fraser Institute Global Petroleum Survey 2.7 2.52 decision to invest survey survey survey 2007 and 2008 Effect of cost of regulatory No No No Sources: Fraser Institute Global Petroleum Survey compliance on decision to 2.78 2.09 survey survey survey 2007 and 2008 invest Effect of regulatory No No No Sources: Fraser Institute Global Petroleum Survey uncertainty on decision to 1.98 2.1 survey survey survey 2007 and 2008 invest Effect of environmental No No No Sources: Fraser Institute Global Petroleum Survey regulations on decision to 2.9 2.09 survey survey survey 2007 and 2008 invest Scoring: Priority ranked publicly disclosed objectives exist and are publicly measured (100); Objectives publicly disclosed but not ranked and are publicly measured (75); Objectives publicly NOC objectives 75 75 75 75 75 disclosed and ranked but not publicly measured (50); Objectives publicly disclosed but not ranked and not publicly measured (25); No public documentation of NOC objectives (0). GDF Suez annual reports for the relevant year NOC STRATEGY AND BEHAVIOR Percentage of NOC domestic upstream production 1 1 1 1 1 GDF Suez annual reports for the relevant year operated by specific NOC. If no data yes-1/no-0. 31 Percentage of NOC domestic refining production operated GDF Suez annual reports for the relevant year by specific NOC. If no data yes-1/no-0. NOC upstream capital expenditures as percentage Not reported. of total capital expenditures (%) NOC refining capital expenditures as percentage Not applicable. of total capital expenditures (%) NOC upstream oil equity production as percentage of total NOC refining Not applicable. throughput (%). If no data, yes/no. NOC international revenues as percentage of total NOC 30 36 76 75 69 GDF Suez annual reports for the relevant year revenues (%). If no data yes- 1/no-0. Scoring: NOC partnerships/JVs exist domestically and internationally (100); NOC partnerships exist domestically but not internationally (66); NOC Joint ventures between the partnerships exist internationally but not 100 100 100 100 100 NOC and third parties domestically (33); NOC partnerships, JVs, alliances do not exist (0). GDF Suez annual reports for the relevant year NOC CORPORATE GOVERNANCE Percentage of non- government ownership of 0.0 19.8 19.8 21.2 64.4 GDF Suez annual reports for the relevant year specific NOC (%) Percentage of independent 33.0 33.0 33.0 42.86 GDF Suez annual reports for the relevant year BOD members (%) Scoring: (100)-The government has no participation in deciding who will fill the positions of Chairman/CEO; (50)-The government through its Appointment authority for control of required voting shares can influence, NOC chairman and chief 50 50 50 50 36 directly or indirectly, the appointments of executive officer Chairman/CEO and (0) The Chairman and/or CEO is a direct appointee of the government entity GDF Suez annual reports for the relevant year Scoring: No governmental approval of NOC budget required (100); No governmental approval of NOC budget required but certain capital expenditures require state approval (75);NOC budget is proposed Independence of NOC to and approved by one central government entity 50 50 50 50 75 capital and budget processes (50); NOC budget is proposed to and approved by multiple central government entities (25); NOC budget is part of the national budget (0). GDF Suez annual reports for the relevant year NOC net cash flow after taxes and dividends (local 2,933 2,830 4,164 4,806 2,396 GDF Suez annual reports for the relevant years currency MM) NOC capital expenditures 1,847 2,463 3,456 4,638 9,848 GDF Suez annual reports for the relevant years (local currency MM) Measured by net cash flow after taxes and dividends NOC financial sustainability as percentage of capital expenditures % 159 115 120 104 24 (%) CEE Calculation Scoring: NOC financial statement auditing performed by independent international auditor and files reports with international exchange (100); FS auditing performed and publicly disclosed by NOC financial transparency 100 100 100 100 100 independent international auditor (75); FS auditing performed and publicly disclosed by independent domestic or government auditor (50) ; FS auditing performed internally by N OC and publicly disclosed (25); No publicly available auditing (0) 32 GDF Suez annual reports for the relevant years Scoring: NOC oil & gas reserves auditing performed by independent international firm and files reports with international exchange (100); reserves auditing performed and publicly disclosed by independent international firm (75); reserves NOC upstream reserves 30 30 30 35 35 auditing performed and publicly disclosed by transparency independent domestic firm (50); reserves auditing performed internally and publicly disclosed (25); No publicly available reserves auditing (0). GDF Suez annual reports for the relevant years Note: Non-shaded areas indicate data used in the exploratory statistical analysis presented in National Oil Companies and Value Creation, volume I, chapter 4. 33 6. Kazmunaigaz Exploration and Production (Kazakhstan) (a) Value creation index components Operational Performance unit 2004 2005 2006 2007 2008 Company gas production BCF 36.61 95.24 Company oil production MM Bbls 65.38 68.64 69.85 71.48 71.03 E&P production (BOE) MM BOE 65.38 68.64 69.85 78.0 88.0 E&P production growth % 13.36 4.99 1.70 11.66 12.82 Total net additions proved oil reserves MM Bbls Total net additions proved gas reserves BCF Total net additions proved gas reserves MM BOE Reserve additions (BOE) MM BOE 117.00 138.82 21.76 Reserves replacement rate % 167.14 177.97 24.72 Primary distillation capacity MBPD Total refining throughput MBPD Refinery utilization rate % Assets in USD MM 2,855.51 3,284.04 5,828.67 6,951.05 8,474.90 Output / total assets BOE/000$ 22.76 21.01 12.01 11.22 10.38 Employees # of people 25,272.00 22,322.00 21,113.00 34,000.00 34,000.00 Output / total employees BOE/000$ 2.57 3.09 3.32 2.29 2.59 Financial Performance Unit 2004 2005 2006 2007 2008 Earnings before interest & taxes (national currency) MM 95,433.86 166,613.00 242,868.00 336,503.36 442,524.87 Direct expenditures on social/economic development MM 500.00 1,791.55 7,850.40 3,660.17 1,649.10 programs (national currency) Total revenue (national currency) MM 237,103.22 348,887.82 412,207.79 486,974.88 604,993.42 EBRTN (national currency) MM 95,933.86 168,404.55 250,718.40 340,163.53 444,173.97 EBRTN / revenues % 40.46 48.27 60.82 69.85 73.42 EBRTN / total assets % 25.20 38.59 34.11 39.93 43.57 Total capital expenditures (national currency) MM 50,525.60 63,726.00 49,286.00 177,252.00 43,708.00 Net cash flow after taxes and dividends MM 71,645.00 106,298.00 150,386.73 138,406.02 NCF/CAPEX % 112.43 215.68 84.84 316.66 National Mission Performance Unit 2004 2005 2006 2007 2008 Total number of NOC local employees # of people Total number of NOC non-local employees # of people Share of nationals in NOC workforce % 99.00 99.00 99.00 99.00 99.00 NOC employment in native country (# people) # of people 25,019.28 22,098.78 20,901.87 33,660.00 33,660.00 NOC annual employment growth % -11.67 -5.42 61.04 0.00 # of people Country Labor Force 7,802.97 7,960.80 8,128.67 8,302.23 8,470.87 (000,000) Country annual employment growth % 0.58 2.02 2.11 2.14 2.03 NOC - Country employment growth % points -13.70 -7.52 58.90 -2.03 NOC employment share of country workforce % 0.32 0.28 0.26 0.41 0.40 NOC local purchases goods and services $ MM NOC total purchases goods and services $ MM 270,760.00 243,816.00 388,086.00 340,875.00 Share of local content % 67.30 NOC noncommercial expenditure (national currency) MM 500.00 1,791.55 7,850.40 3,660.17 1,649.10 NOC noncommercial expenditure $ MM Noncommercial expenditure/Total expenditure % 0.66 3.22 0.94 0.48 Net income from non-core commercial business activities $ MM Net income from total commercial activities $ MM 100.70 339.21 972.01 2,253.29 2,558.82 Net income noncore commercial activities/Net income % Price subsidies provided by NOC $ MM Total NOC Revenues $ MM 237,103.22 348,887.82 412,207.79 486,974.88 604,993.42 Price Subsidies/Revenues % NOC domestic petroleum products production MMBOE 15.80 20.50 2.63 Country oil consumption MMBOE 68.10 75.60 82.99 88.97 83.75 Domestic output use % 23.19 27.11 3.17 34 (b) Value creation index 2004 2005 2006 2007 2008 Operational Performance E&P production growth (%) 13.36 4.99 1.70 11.66 12.82 Reserves replacement rate (BOE, %) 167.14 177.97 24.72 Refinery utilization rate (%) Output / total assets (BOE/'000$) 22.76 21.01 12.01 11.22 10.38 Output / total employees ('000 BOE) 2.57 3.09 3.32 2.29 2.59 Financial Performance EBRTN / revenues (%) 40.46 48.27 60.82 69.85 73.42 EBRTN / total assets (%) 25.20 38.59 34.11 39.93 43.57 NCF / CAPEX (%) 112.43 215.68 84.84 316.66 National Mission Performance Share of nationals in NOC workforce (%) 99.00 99.00 99.00 99.00 99.00 NOC – Country employment growth (% points) -13.70 -7.52 58.90 -2.03 NOC employment share of country workforce (%) 0.32 0.28 0.26 0.41 0.40 Share of local content (%) 67.30 Noncommercial expenditures/total expenditures (%) 0.66 3.22 0.94 0.48 Noncore commercial activities net income/Total net income (%) Price Subsidies/Revenues (%) Domestic output use (%) 23.19 27.11 3.17 (c) Normalized value creation index 2004 2005 2006 2007 2008 Operational Performance 0.37 0.21 0.24 0.51 0.34 E&P production growth 0.61 0.06 0.29 0.76 0.72 Reserves replacement rate 0.29 0.92 0.00 Refinery utilization rate Output / total assets 0.47 0.52 0.35 0.34 0.30 Output / total employees 0.02 0.04 0.04 0.02 Financial Performance 0.42 0.42 0.61 0.54 0.81 EBRTN / revenues 0.45 0.50 0.63 0.75 0.80 EBRTN / total assets 0.39 0.41 0.30 0.54 0.64 NCF / CAPEX 0.34 0.91 0.32 1.00 National Mission Performance 0.41 0.27 0.34 0.59 0.44 Share of nationals in NOC workforce 0.99 0.99 0.99 0.99 0.99 NOC – Country employment growth 0.07 0.41 1.00 0.17 NOC employment share of country workforce 0.15 0.15 0.18 0.33 0.34 Share of local content 0.69 Noncommercial expenditures/total expenditures 0.05 0.13 0.04 0.03 Noncore commercial activities net income/Total net income Price Subsidies/Revenues Domestic output use 0.09 0.10 0.00 VCI 0.40 0.30 0.40 0.55 0.53 35 (d) Value drivers 2004 2005 2006 2007 2008 Source GEOLOGY Country specific resource BP Statistical Review of World Energy June 2009 39,620 39,828 39,828 39,828 39,828 endowment oil MMBBL available at http://www.bp.com/statisticalreview Country specific resource BP Statistical Review of World Energy June 2009 1,833 1,833 1,843 1,881 1,822 endowment gas BCM available at http://www.bp.com/statisticalreview Country specific resource 51,149 51,357 51,418 51,661 51,291 CEE calculation endowment MMBOE STATE CONTEXT WGI: Voice and -1.11 -0.94 -1.03 -1.07 -1.01 http://info.worldbank.org/governance/wgi/index.asp Accountability WGI: Political Stability -0.11 0.01 0.15 0.34 0.51 http://info.worldbank.org/governance/wgi/index.asp WGI: Government -0.67 -0.56 -0.44 -0.54 -0.47 http://info.worldbank.org/governance/wgi/index.asp Effectiveness WGI: Regulatory Quality -0.59 -0.46 -0.49 -0.45 -0.37 http://info.worldbank.org/governance/wgi/index.asp WGI: Rule of Law -1.01 -0.78 -0.9 -0.81 -0.78 http://info.worldbank.org/governance/wgi/index.asp WGI: Corruption Control -1.13 -0.89 -0.85 -0.88 -0.95 http://info.worldbank.org/governance/wgi/index.asp "Natural Resource Endowments, Governance, and the Domestic Revenue Effort," by F. Bornhorst, S. Hydrocarbon Revenues as % Gupta, J. Thornton, IMF Working Paper, of Total Government 22 22 38 38 38 WP/08/170, July 2008; Revenues http://www.revenuewatch.org/our- work/countries/kazakhstan-transparency.php "Natural Resource Endowments, Governance, and the Domestic Revenue Effort," by F. Bornhorst, S. Hydrocarbon Revenues as % Gupta, J. Thornton, IMF Working Paper, 6 6 11 11 11 of GDP WP/08/170, July 2008; http://www.revenuewatch.org/our- work/countries/kazakhstan-transparency.php WTO membership (yes- 0 0 0 0 0 www.wto.org 1/no-0) over five years OPEC membership (yes- 0 0 0 0 0 www.opec.org 1/no-0) over five years Country Crude Oil Exports - 2008 OPEC Annual Statistical Bulletin at 000 BPD 1,038 1,147 1,236 1,238 1,178 www.opec.org Country Crude Oil Imports- 2009 OPEC Annual Statistical Bulletin at 65 75 129 141 137 000 BPD www.opec.org (Country Revenues Oil Imports valued at nominal oil price as reported in Exports)-(Costs Oil Imports) 13 20 25 28 36 2008 OPEC Annual Statistical Bulletin at US $ Billion www.opec.org Country Gross Domestic World Bank Development Indicators: 43 57 81 105 133 Product US $ Billion http://data.worldbank.org/indicator Country Net Revenues (Costs) of Oil Exports 30 35 30 26 27 CEE calculation (Imports) as % of GDP OIC Outlook 08 May 2008 Government Government Budget Deficit/Surplus in the OIC Member Countries, Surplus/Deficit as % of 0 3 1 -3 -4 Organisation of the Islamic Conference; Gross Domestic Product http://www.adb.org/Documents/Books/ADO/2010/ KAZ.pdf Stabilization Mechanisms such as petroleum funds 1 1 1 1 1 http://www.swfinstitute.org/ (yes-1/no-0) PETROLEUM SECTOR ORGANIZATION AND GOVERANANCE Publicly disclosed national "Energy Policy of Kazakhstan," Ministry of Energy policy addressing 1 1 1 1 1 and Mineral Resources of the Republic of hydrocarbon sector issues Kazakhstan, London, 15 March 2006. (yes-1/no-0) Scoring: Independent NOC, Ministry and regulatory Institutional structure 66 66 66 66 66 function (100); Regulatory function is performed by 36 ministry (66); Regulatory function is performed by NOC (33); All three functions combined in one entity (0). Ministry of Energy and Mineral resources website. Country oil production MM BP Statistical Review of World Energy June 2009 473 495 520 542 567 Barrels available at http://www.bp.com/statisticalreview BP Statistical Review of World Energy June 2009 Country gas production BCF 704 798 843 934 1064 available at http://www.bp.com/statisticalreview Country MMBOE 594 633 665 703 750 CEE calculation production KMG EP volumes only. Its parent company, Kazmunaigas (100% state-owned) , has significant NOC MMBOE Domestic 65 69 70 78 88 interests in other upstream companies. KMG EP Production annual and financial reports and other website information available at www.kmgep.kz/eng/ Non-NOC percentage of oil 89 89 89 89 88 CEE calculation and gas production (%) US Energy Information Administration, Country Refinery Capacity - 427 345 345 345 345 International Energy Statistics. 000 BPD Http://tonto.eia.doe.gov KMG EP does not have refining assets. Its parent Net NOC Refinery Capacity 0 0 0 0 0 company, NG KMG, controls about two-thirds of - 000 BPD (country level) the country's refining capacity. Non-NOC percentage of refinery capacity (%, country 100 100 100 100 100 CEE calculation. level) Total Revenues (local KMG EP annual and financial reports and other 348,888 412,208 486,974 604,993 currency MM) website information Royalties and production KMG EP annual and financial reports and other 22,284 25,518 22,780 31,004 taxes (local currency MM) website information Based on E&P income taxes paid in Kazakhstan. Income taxes (local 99,193 94,673 150,511 167,091 KMG EP annual and financial reports and other currency MM) website information Dividends paid to KMG EP annual and financial reports and other government (local currency 3,409 15,912 22,574 25,448 website information MM) Royalties, production taxes, income taxes and dividends paid to government by NOC 36 33 40 37 CEE Calculation as percentage of total revenues (%) Effect of contract terms on No No No Sources: Fraser Institute Global Petroleum Survey 2.21 2.73 investment decisions survey survey survey 2007 and 2008 Effect of taxation regime on No No No Sources: Fraser Institute Global Petroleum Survey 2.7 2.7 decision to invest survey survey survey 2007 and 2008 Effect of cost of regulatory No No No Sources: Fraser Institute Global Petroleum Survey compliance on decision to 2.79 2.78 survey survey survey 2007 and 2008 invest Effect of regulatory No No No Sources: Fraser Institute Global Petroleum Survey uncertainty on decision to 3.09 3.2 survey survey survey 2007 and 2008 invest Effect of environmental No No No Sources: Fraser Institute Global Petroleum Survey regulations on decision to 2.61 2.33 survey survey survey 2007 and 2008 invest Scoring: Priority ranked publicly disclosed objectives exist and are publicly measured (100); NOC objectives 50 50 75 75 75 Objectives publicly disclosed but not ranked and are publicly measured (75); Objectives publicly disclosed and ranked but not publicly measured 37 (50); Objectives publicly disclosed but not ranked and not publicly measured (25); No public documentation of NOC objectives (0). KMG EP annual and financial reports and other website information NOC STRATEGY AND BEHAVIOR Percentage of NOC domestic upstream production KMG EP annual and financial reports and other 1 1 1 1 1 operated by specific NOC. If website information no data yes-1/no-0. Percentage of NOC domestic refining production operated KMG EP annual and financial reports and other 0 0 0 0 0 by specific NOC. If no data website information yes-1/no-0. NOC upstream capital expenditures as percentage KMG EP annual and financial reports and other 100.0 100.0 100.0 100.0 100.0 of total capital expenditures website information (%) NOC refining capital Company does not have refining operations. KMG expenditures as percentage EP annual and financial reports and other website of total capital expenditures information available at www.kmgep.kz/eng/. (%) NOC upstream oil equity production as percentage of total NOC refining Not applicable. throughput (%). If no data, yes/no. In December 2008, KMG EP signed an international NOC international revenues upstream cooperation agreement with BG Group. as percentage of total NOC 0 0 0 0 0 NG KMG has international operations. KMG EP revenues (%). If no data yes- annual and financial reports and other website 1/no-0. information available at www.kmgep.kz/eng/ Scoring: NOC partnerships/JVs exist domestically and internationally (100); NOC partnerships exist domestically but not internationally (66); NOC Joint ventures between the partnerships exist internationally but not 66 66 66 66 66 domestically (33); NOC partnerships, JVs, alliances NOC and third parties do not exist (0). KMG EP annual and financial reports for the relevant year NOC CORPORATE GOVERNANCE Percentage of non- KMG EP annual and financial reports for the government ownership of 0.0 0.0 38.0 38.0 38.0 relevant year specific NOC (%) Percentage of independent KMG EP annual and financial reports for the 0 0 37.5 37.5 37.5 BOD members (%) relevant year Scoring: (100)-The government has no participation in deciding who will fill the positions of Chairman/CEO; (50)-The government through its Appointment authority for control of required voting shares can influence, NOC chairman and chief 0 0 50 50 50 directly or indirectly, the appointments of executive officer Chairman/CEO and (0) The Chairman and/or CEO is a direct appointee of the government entity KMG EP annual and financial reports for the relevant year Scoring: No governmental approval of NOC budget required (100); No governmental approval of NOC budget required but certain capital expenditures require state approval (75);NOC budget is proposed to and approved by one central government entity Independence of NOC 50 50 50 50 50 (50); NOC budget is proposed to and approved by capital and budget processes multiple central government entities (25); NOC budget is part of the national budget (0). KMG EP annual and financial reports for the relevant year NOC net cash flow after KMG EP annual and financial reports for the 71,645 106,298 150,387 138,406 taxes and dividends (local relevant year 38 currency MM) NOC capital expenditures KMG EP annual and financial reports for the 63,726 49,286 177,252 43,708 (local currency MM) relevant year Measured by net cash flow after taxes and dividends NOC financial sustainability as percentage of capital expenditures % 112 216 85 317 (%) CEE Calculation Scoring: NOC financial statement auditing performed by independent international auditor and files reports with international exchange (100); FS auditing performed and publicly disclosed by independent international auditor (75); FS auditing performed and publicly disclosed by independent NOC financial transparency 25 25 100 100 100 domestic or government auditor (50) ; FS auditing performed internally by N OC and publicly disclosed (25); No publicly available auditing (0) KMG EP annual and financial reports for the relevant year Scoring: NOC oil & gas reserves auditing performed by independent international firm and files reports with international exchange (100); reserves auditing performed and publicly disclosed by independent international firm (75); reserves NOC upstream reserves auditing performed and publicly disclosed by 0 0 0 0 100 transparency independent domestic firm (50); reserves auditing performed internally and publicly disclosed (25); No publicly available reserves auditing (0). KMG EP annual and financial reports for the relevant year Note: Non-shaded areas indicate data used in the exploratory statistical analysis presented in National Oil Companies and Value Creation, volume I, chapter 4. 39 7. Oil and Gas Development Corporation Ltd (Pakistan) (a) Value creation index components Operational Performance unit 2004 2005 2006 2007 2008 Company gas production BCF 297.22 345.95 344.16 344.03 358.87 Company oil production MM Bbls 9.94 13.05 12.96 13.93 15.04 E&P production (BOE) MM BOE 58.00 70.00 75.59 76.54 80.35 E&P production growth % 8.99 20.69 7.99 1.26 4.97 Total net additions proved oil reserves MM Bbls Total net additions proved gas reserves BCF Total net additions proved gas reserves MM BOE Reserve additions (BOE) MM BOE Reserves replacement rate % Primary distillation capacity MBPD Total refining throughput MBPD Refinery utilization rate % Assets $ MM 1,822.17 2,076.35 2,157.88 2,255.06 2,261.11 Output / total assets BOE/000$ 31.83 33.70 35.03 33.94 35.54 Employees # of people 11,872.00 11,708.00 11,000.00 11,335.00 10,961.00 Output / total employees BOE/000$ 4.89 5.98 6.87 6.75 7.33 Financial Performance Unit 2004 2005 2006 2007 2008 Earnings before interest & taxes (national currency) Bn 37.18 57.10 76.76 71.75 95.31 Direct expenditures on social/economic development Bn programs (national currency) Total revenue (national currency) Bn 52.62 74.85 97.31 100.73 125.91 EBRTN Bn 31.45 48.85 65.82 60.81 77.99 EBRTN / revenues % 59.77 65.26 67.63 60.37 61.94 EBRTN / total assets % 29.97 39.62 50.94 44.47 51.20 Total capital expenditures (national currency) Bn 4.40 8.17 10.16 16.48 18.35 net cash flow after taxes and dividends Bn 7.90 11.81 11.74 4.31 16.87 NCF/CAPEX % 179.38 144.59 115.55 26.15 91.94 National Mission Performance Unit 2004 2005 2006 2007 2008 Total number of NOC local employees # of people Total number of NOC non-local employees # of people Share of nationals in NOC workforce % 99.00 99.00 99.00 99.00 99.00 NOC employment in native country (# people) # of people 11,753.28 11,590.92 10,890.00 11,221.65 10,851.39 Country annual employment growth % 4.18 5.29 5.07 2.29 2.60 NOC - Country employment growth % points -5.18 -6.67 -11.12 0.76 -5.90 NOC annual employment growth % -1.00 -1.38 -6.05 3.05 -3.30 # of people Country Labor Force 48,095.08 50,637.12 53,205.85 54,421.95 55,836.77 (000,000) NOC employment share of country workforce % 0.02 0.02 0.02 0.02 0.02 NOC local purchases goods and services $ MM NOC total purchases goods and services $ MM Share of local content % NOC noncommercial expenditure (national currency) MM NOC noncommercial expenditure $ MM Noncommercial expenditure/Total expenditure % Net income from non-core commercial business % activities Net income from total commercial activities $ MM Net income noncore commercial activities/Net % income Price subsidies provided by NOC $ Bn Total NOC Revenues $ Bn 0.91 1.26 1.63 1.66 1.87 Price Subsidies/Revenues % NOC domestic petroleum products production MMBOE Country oil consumption MMBOE 118.63 113.88 129.94 141.62 141.99 Domestic output use % 40 (b) Value creation index 2004 2005 2006 2007 2008 Operational Performance E&P production growth (%) 8.99 20.69 7.99 1.26 4.97 Reserves replacement rate (BOE, %) Refinery utilization rate (%) Output / total assets (BOE/'000$) 31.83 33.71 35.03 33.94 35.54 Output / total employees ('000 BOE) 4.89 5.98 6.87 6.75 7.33 Financial Performance EBRTN / revenues (%) 59.77 65.26 67.63 60.37 61.94 EBRTN / total assets (%) 29.97 39.62 50.94 44.47 51.20 NCF / CAPEX (%) 179.38 144.59 115.55 26.15 91.94 National Mission Performance Share of nationals in NOC workforce (%) 99.00 99.00 99.00 99.00 99.00 NOC – Country employment growth (% points) -5.18 -6.67 -11.12 0.76 -5.90 NOC employment share of country workforce (%) 0.02 0.02 0.02 0.02 0.02 Share of local content (%) Noncommercial expenditures/total expenditures (%) Noncore commercial activities net income/Total net income (%) Price Subsidies/Revenues (%) Domestic output use (%) (c) Normalized value creation index 2004 2005 2006 2007 2008 Operational Performance 0.41 0.35 0.51 0.55 0.54 E&P production growth 0.50 0.10 0.39 0.51 0.48 Reserves replacement rate Refinery utilization rate Output / total assets 0.66 0.85 1.06 1.06 1.06 Output / total employees 0.07 0.09 0.09 0.08 0.09 Financial Performance 0.70 0.55 0.57 0.44 0.55 EBRTN / revenues 0.72 0.72 0.72 0.63 0.67 EBRTN / total assets 0.47 0.42 0.59 0.62 0.77 NCF / CAPEX 0.91 0.51 0.39 0.07 0.23 National Mission Performance 0.45 0.40 0.45 0.41 0.37 Share of nationals in NOC workforce 0.99 0.99 0.99 0.99 0.99 NOC - Country employment growth 0.35 0.21 0.34 0.22 0.12 NOC employment share of country workforce 0.01 0.01 0.01 0.02 0.02 Share of local content Noncommercial expenditures/total expenditures Noncore commercial activities net income/Total net income Price Subsidies/Revenues Domestic output use VCI 0.52 0.43 0.51 0.47 0.49 41 (d) Value drivers 2004 2005 2006 2007 2008 Source GEOLOGY Country specific resource BP Statistical Review of World Energy June 2009 297 326 342 359 289 endowment oil MMBBL available at http://www.bp.com/statisticalreview Country specific resource BP Statistical Review of World Energy June 2009 798 852 847 850 843 endowment gas BCM available at http://www.bp.com/statisticalreview Country specific resource 5,317 5,685 5,669 5,705 5,952 CEE calculation endowment MMBOE STATE CONTEXT WGI: Voice and -1.2 -1.05 -0.98 -1.06 -1.01 http://info.worldbank.org/governance/wgi/index.asp Accountability WGI: Political Stability -1.68 -1.7 -1.94 -2.39 -2.61 http://info.worldbank.org/governance/wgi/index.asp WGI: Government -0.58 -0.55 -0.53 -0.6 -0.73 http://info.worldbank.org/governance/wgi/index.asp Effectiveness WGI: Regulatory Quality -0.89 -0.59 -0.44 -0.56 -0.47 http://info.worldbank.org/governance/wgi/index.asp WGI: Rule of Law -0.88 -0.89 -0.95 -0.95 -0.92 http://info.worldbank.org/governance/wgi/index.asp WGI: Corruption Control -1.05 -0.99 -0.76 -0.82 -0.77 http://info.worldbank.org/governance/wgi/index.asp Hydrocarbon Revenues as % "Management of Oil and Gas in Pakistan," by Dr. of Total Government 3.0 3.0 3.0 3.0 3.0 Gulfaraz Ahmed, World Bank Conference on Oil Revenues and Gas in Federal Systems, March 2010. "Management of Oil and Gas in Pakistan," by Dr. Hydrocarbon Revenues as % 0.3 0.3 0.3 0.3 0.3 Gulfaraz Ahmed, World Bank Conference on Oil of GDP and Gas in Federal Systems, March 2010. WTO membership (yes- 1 1 1 1 1 www.wto.org 1/no-0) over five years OPEC membership (yes- 0 0 0 0 0 www.opec.org 1/no-0) over five years Country Crude Oil Exports - 2008 OPEC Annual Statistical Bulletin at 000 BPD www.opec.org "Management of Oil and Gas in Pakistan," by Dr. Country Crude Oil Imports- 26 28 30 32 32 Gulfaraz Ahmed, World Bank Conference on Oil 000 BPD and Gas in Federal Systems, March 2010. (Country Revenues Oil Imports valued at nominal oil price as reported in Exports)-(Costs Oil Imports) 0 -1 -1 -1 -1 2008 OPEC Annual Statistical Bulletin at US $ Billion www.opec.org Country Gross Domestic World Bank Development Indicators: 98 110 128 143 165 Product US $ Billion http://data.worldbank.org/indicator Country Net Revenues (Costs) of Oil Exports -0.3 -0.5 -0.5 -0.6 -0.7 CEE calculation (Imports) as % of GDP Government Budget http://www.tradingeconomics.com/Economics/Gove Surplus/Deficit as % of 3.7 2.3 3.3 4.3 4.3 rnment-Budget.aspx?Symbol=PKR Gross Domestic Product Stabilization Mechanisms such as petroleum funds 0 0 0 0 0 http://www.swfinstitute.org/ (yes-1/no-0) PETROLEUM SECTOR ORGANIZATION AND GOVERANANCE Publicly disclosed national Federal Legislative List Part I and Part II. policy addressing "Management of Oil and Gas in Pakistan," by Dr. 1 1 1 1 1 hydrocarbon sector issues Gulfaraz Ahmed, World Bank Conference on Oil (yes-1/no-0) and Gas in Federal Scoring: Independent NOC, Ministry and regulatory function (100); Regulatory function is performed by ministry (66); Regulatory function is performed by NOC (33); All three functions combined in one Institutional structure 66 66 66 66 66 entity (0). "Management of Oil and Gas in Pakistan," by Dr. Gulfaraz Ahmed, World Bank Conference on Oil and Gas in Federal 42 Country oil production MM BP Statistical Review of World Energy June 2009 23.8 22.8 26 24.2 28.4 Barrels available at http://www.bp.com/statisticalreview BP Statistical Review of World Energy June 2009 Country gas production BCF 1,214 1,254 1,276 1,288 1,321 available at http://www.bp.com/statisticalreview Country MMBOE 233 239 246 246 256 CEE calculation production NOC MMBOE Domestic OGDCL annual reports for relevant year available at 58 70 71 72 76 Production www.ogdcl.com Non-NOC percentage of oil 75.1 70.7 71.1 70.8 70.3 CEE calculation and gas production (%) Country Refinery Capacity - http://www.pump-zone.com/global-news/pakistan- 276 276 276 276 276 000 BPD revives-250000-barrel-per-day-khalifa-refinery.html Net NOC Refinery Capacity OGDCL annual reports for relevant year available at 0 0 0 0 0 - 000 BPD (country level) www.ogdcl.com Non-NOC percentage of refinery capacity (%, country 100.0 100.0 100.0 100.0 100.0 CEE calculation. level) Total Revenues (local 51,330 73,710 96,760 100,260 125,450 OGDCL annual reports for relevant year currency MM) Royalties and production 5,570 8,110 10,872 10,936 17,320 OGDCL annual reports for relevant year taxes (local currency MM) Income taxes (local Based on E&P income taxes paid in Pakistan. 8,101 16,052 19,944 15,500 33,969 currency MM) OGDCL annual reports for relevant year Dividends paid to government (local currency 16,340 27,421 32,904 32,904 34,731 OGDCL annual reports for relevant year MM) Royalties, production taxes, income taxes and dividends paid to government by NOC 58.5 70.0 65.9 59.2 68.6 CEE Calculation as percentage of total revenues (%) Effect of contract terms on No No No Sources: Fraser Institute Global Petroleum Survey 3.33 1.98 investment decisions survey survey survey 2007 and 2008 Effect of taxation regime on No No No Sources: Fraser Institute Global Petroleum Survey 3.20 2.20 decision to invest survey survey survey 2007 and 2008 Effect of cost of regulatory No No No Sources: Fraser Institute Global Petroleum Survey compliance on decision to 2.60 2.00 survey survey survey 2007 and 2008 invest Effect of regulatory No No No Sources: Fraser Institute Global Petroleum Survey uncertainty on decision to 2.34 2.40 survey survey survey 2007 and 2008 invest Effect of environmental No No No Sources: Fraser Institute Global Petroleum Survey regulations on decision to 3.00 2.00 survey survey survey 2007 and 2008 invest Scoring: Priority ranked publicly disclosed objectives exist and are publicly measured (100); Objectives publicly disclosed but not ranked and are publicly measured (75); Objectives publicly NOC objectives 75 75 75 75 75 disclosed and ranked but not publicly measured (50); Objectives publicly disclosed but not ranked and not publicly measured (25); No public documentation of NOC objectives (0). OGDCL annual reports for relevant year NOC STRATEGY AND BEHAVIOR Percentage of NOC domestic 75.0 75.0 78.0 82.0 86.0 OGDCL annual reports for relevant year upstream production 43 operated by specific NOC. If no data yes-1/no-0. Percentage of NOC domestic refining production operated OGDCL has no refining operations by specific NOC. If no data yes-1/no-0. NOC upstream capital expenditures as percentage 100.0 100.0 100.0 100.0 100.0 OGDCL annual reports for relevant year of total capital expenditures (%) NOC refining capital expenditures as percentage OGDCL has no refining operations of total capital expenditures (%) NOC upstream oil equity production as percentage of total NOC refining OGDCL has no refining operations throughput (%). If no data, yes/no. NOC international revenues as percentage of total NOC 0 0 0 0 0 OGDCL annual reports for relevant year revenues (%). If no data yes- 1/no-0. Scoring: NOC partnerships/JVs exist domestically and internationally (100); NOC partnerships exist domestically but not internationally (66); NOC Joint ventures between the partnerships exist internationally but not 66 66 66 66 66 NOC and third parties domestically (33); NOC partnerships, JVs, alliances do not exist (0). OGDCL annual reports for relevant year NOC CORPORATE GOVERNANCE Percentage of non- government ownership of 7.98 7.98 7.98 14.8 14.8 OGDCL annual reports for relevant year specific NOC (%) Percentage of independent 70.0 70.0 72.7 OGDCL annual reports for relevant year BOD members (%) Scoring: (100)-The government has no participation in deciding who will fill the positions of Chairman/CEO; (50)-The government through its Appointment authority for control of required voting shares can influence, NOC chairman and chief 0 0 0 0 0 directly or indirectly, the appointments of executive officer Chairman/CEO and (0) The Chairman and/or CEO is a direct appointee of the government entity OGDCL annual reports for relevant year Scoring: No governmental approval of NOC budget required (100); No governmental approval of NOC budget required but certain capital expenditures require state approval (75);NOC budget is proposed Independence of NOC to and approved by one central government entity 75 75 75 75 75 capital and budget processes (50); NOC budget is proposed to and approved by multiple central government entities (25); NOC budget is part of the national budget (0). OGDCL annual reports for relevant year NOC net cash flow after taxes and dividends (local 7,900 11,809 11,737 4,310 16,868 OGDCL annual reports for relevant year currency MM) NOC capital expenditures 4,404 8,167 10,157 16,477 18,347 OGDCL annual reports for relevant year (local currency MM) Measured by net cash flow after taxes and dividends NOC financial sustainability as percentage of capital expenditures % 179.4 144.6 115.6 26.2 91.9 (%) CEE Calculation 44 Scoring: NOC financial statement auditing performed by independent international auditor and files reports with international exchange (100); FS auditing performed and publicly disclosed by independent international auditor (75); FS auditing NOC financial transparency 75 75 75 100 100 performed and publicly disclosed by independent domestic or government auditor (50) ; FS auditing performed internally by N OC and publicly disclosed (25); No publicly available auditing (0) OGDCL annual reports for relevant year Scoring: NOC oil & gas reserves auditing performed by independent international firm and files reports with international exchange (100); reserves auditing performed and publicly disclosed by independent international firm (75); reserves NOC upstream reserves 0 0 0 0 0 auditing performed and publicly disclosed by transparency independent domestic firm (50); reserves auditing performed internally and publicly disclosed (25); No publicly available reserves auditing (0). OGDCL annual reports for relevant year Note: Non-shaded areas indicate data used in the exploratory statistical analysis presented in National Oil Companies and Value Creation, volume I, chapter 4. 45 8. Oil and Natural Gas Corporation Ltd (India) (a) Value creation index components Operational Performance unit 2004 2005 2006 2007 2008 Company gas production BCF 728.73 723.65 716.80 956.74 986.60 Company oil production MM Bbls 213.00 201.00 214.00 212.00 202.00 E&P production (BOE) MM BOE 392.00 375.00 387.00 388.00 377.00 E&P production growth % 0.20 -4.34 3.20 0.26 -2.84 Total net additions proved oil reserves MM Bbls 277.14 166.33 174.56 181.51 136.97 Total net additions proved gas reserves BCF 210.88 172.97 1,143.93 970.01 1,131.75 Total net additions proved gas reserves MM BOE 38.38 31.48 208.20 176.54 205.98 Reserve additions (BOE) MM BOE 286.00 102.00 585.00 533.00 343.00 Reserves replacement rate % 72.96 27.20 151.16 137.37 90.98 Primary distillation capacity MBPD 194.00 194.00 194.00 194.00 194.00 Total refining throughput MBPD 240.00 242.34 250.64 250.94 251.72 Refinery utilization rate % 123.71 124.92 129.20 129.35 129.75 Assets $ MM 15,893.30 17,844.82 20,548.91 27,506.04 27,257.77 Output / total assets BOE/000$ 30.18 25.97 23.29 17.44 17.20 Employees # of people 36,185.00 34,722.00 33,810.00 32,996.00 33,035.00 Output / total employees BOE/000$ 13.25 13.35 14.15 14.53 14.19 Financial Performance Unit 2004 2005 2006 2007 2008 Earnings before interest & taxes (national currency) Bn 288.03 382.55 416.90 492.87 551.57 Direct expenditures on social/economic development MM 973.73 1,080.29 1,173.22 1,252.62 1,209.47 programs (national currency) Total revenue (national currency) Bn 472.45 622.39 742.34 862.76 1,018.35 EBRTN Bn 289.00 383.63 418.08 494.12 552.78 EBRTN / revenues % 61.17 61.64 56.32 57.27 54.28 EBRTN / total assets % 40.47 48.56 44.96 44.62 44.10 Total capital expenditures (national currency) Bn 81.01 104.03 113.83 135.66 168.14 net cash flow after taxes and dividends Bn 118.52 139.89 154.20 213.26 224.59 NCF/CAPEX % 146.30 134.47 135.46 157.20 133.57 National Mission Performance Unit 2004 2005 2006 2007 2008 Total number of NOC local employees # of people 36,185.00 34,722.00 33,810.00 32,996.00 33,035.00 Total number of NOC non-local employees # of people Share of nationals in NOC workforce % 99.00 99.00 99.00 99.00 99.00 NOC employment in native country (# people) # of people 35,823.15 34,374.78 33,471.90 32,666.04 32,704.65 NOC annual employment growth % -4.04 -2.63 -2.41 0.12 # of people Country Labor Force 414,900.00 423,300.00 432,000.00 440,900.00 449,900.00 (000,000) Country annual employment growth % 1.69 2.02 2.06 2.06 2.04 NOC - Country employment growth % points -6.07 -4.68 -4.47 -1.92 NOC employment share of country workforce % 0.01 0.01 0.01 0.01 0.01 NOC local purchases goods and services $ MM NOC total purchases goods and services $ MM 152,408.00 273,405.00 347,078.00 400,235.00 514,241.00 Share of local content % NOC noncommercial expenditure (national currency) MM 973.73 1,080.29 1,173.22 1,252.62 1,209.47 NOC noncommercial expenditure $ MM 21.67 24.40 25.93 31.11 26.30 Noncommercial expenditure/Total expenditure % 0.64 0.40 0.34 0.31 0.24 Net income from non-core commercial business % activities Net income from total commercial activities $ MM 2,889.61 3,253.63 3,456.99 4,148.44 3,506.48 Net income noncore commercial activities/Net % income Price subsidies provided by NOC $ MM 501.00 2,337.00 3,302.00 7,899.00 6,184.00 Total NOC Revenues $ MM 10,515.33 14,058.91 16,405.30 21,429.76 22,142.84 Price Subsidies/Revenues % 4.76 16.62 20.13 36.86 27.93 NOC domestic petroleum products production MMBOE 202.00 212.00 214.00 201.00 213.00 Country oil consumption MMBOE 880.85 896.85 965.13 1,031.31 1,065.14 Domestic output use % 22.93 23.64 22.17 19.49 20.00 46 (b) Value creation index 2004 2005 2006 2007 2008 Operational Performance E&P production growth (%) 0.20 -4.34 3.20 0.26 -2.84 Reserves replacement rate (BOE, %) 72.96 27.20 151.16 137.37 90.98 Refinery utilization rate (%) 123.71 124.92 129.20 129.35 129.75 Output / total assets (BOE/'000$) 30.18 25.97 23.29 17.44 17.20 Output / total employees ('000 BOE) 13.25 13.35 14.15 14.53 14.19 Financial Performance EBRTN / revenues (%) 61.17 61.64 56.32 57.27 54.28 EBRTN / total assets (%) 40.47 48.56 44.96 44.62 44.10 NCF / CAPEX (%) 146.30 134.47 135.46 157.20 133.57 National Mission Performance Share of nationals in NOC workforce (%) 99.00 99.00 99.00 99.00 99.00 NOC - Country employment growth (% points) -6.07 -4.68 -4.47 -1.92 NOC employment share of country workforce (%) 0.01 0.01 0.01 0.01 0.01 Share of local content (%) Noncommercial expenditures/total expenditures (%) 0.64 0.40 0.34 0.31 0.24 Noncore commercial activities net income/Total net income (%) Price Subsidies/Revenues (%) 4.76 16.62 20.13 36.86 27.93 Domestic output use (%) 22.93 23.64 22.17 19.49 20.00 (c) Normalized value creation index 2004 2005 2006 2007 2008 Operational Performance 0.51 0.43 0.49 0.60 0.51 E&P production growth 0.25 0.03 0.31 0.49 0.24 Reserves replacement rate 0.44 0.26 0.25 0.81 0.63 Refinery utilization rate 1.00 1.00 1.00 1.00 1.00 Output / total assets 0.63 0.65 0.70 0.54 0.51 Output / total employees 0.22 0.22 0.21 0.18 0.18 Financial Performance 0.71 0.56 0.52 0.62 0.53 EBRTN / revenues 0.73 0.67 0.58 0.59 0.58 EBRTN / total assets 0.65 0.55 0.49 0.63 0.65 NCF / CAPEX 0.75 0.45 0.49 0.63 0.37 National Mission Performance 0.29 0.31 0.43 0.37 0.38 Share of nationals in NOC workforce 0.99 0.99 0.99 0.99 0.99 NOC – Country employment growth 0.22 0.47 0.14 0.18 NOC employment share of country workforce 0.00 0.00 0.01 0.01 0.01 Share of local content Noncommercial expenditures/total expenditures 0.22 0.03 0.01 0.01 0.01 Noncore commercial activities net income/Total net income Price Subsidies/Revenues 0.16 0.53 1.00 1.00 1.00 Domestic output use 0.08 0.08 0.10 0.07 0.13 VCI 0.50 0.43 0.48 0.53 0.48 47 (d) Value drivers 2004 2005 2006 2007 2008 Source GEOLOGY BP Statistical Review of World Energy June Country specific resource 5,565 5,919 5,693 5,459 5,798 2009 available at endowment oil MMBBL http://www.bp.com/statisticalreview BP Statistical Review of World Energy June Country specific resource 923 1,101 1,075 1,055 1,090 2009 available at endowment gas BCM http://www.bp.com/statisticalreview Country specific resource 12,84 11,371 12,454 12,095 12,654 CEE calculation endowment MMBOE 4 STATE CONTEXT WGI: Voice and http://info.worldbank.org/governance/wgi/index. 0.42 0.42 0.47 0.41 0.45 Accountability asp http://info.worldbank.org/governance/wgi/index. WGI: Political Stability -0.90 -0.74 -0.90 -0.98 -0.99 asp WGI: Government http://info.worldbank.org/governance/wgi/index. -0.08 -0.12 -0.04 0.05 -0.03 Effectiveness asp http://info.worldbank.org/governance/wgi/index. WGI: Regulatory Quality -0.35 -0.21 -0.19 -0.22 -0.21 asp http://info.worldbank.org/governance/wgi/index. WGI: Rule of Law 0.08 0.18 0.21 0.13 0.12 asp http://info.worldbank.org/governance/wgi/index. WGI: Corruption Control -0.34 -0.34 -0.23 -0.39 -0.37 asp Hydrocarbon Revenues as % of Total Government Revenues Hydrocarbon Revenues as % of GDP WTO membership (yes- 1 1 1 1 1 www.wto.org 1/no-0) over five years OPEC membership (yes- 0 0 0 0 0 www.opec.org 1/no-0) over five years Country Crude Oil Exports 2008 OPEC Annual Statistical Bulletin at -000 BPD www.opec.org Country Crude Oil 2009 OPEC Annual Statistical Bulletin at 1,936 2,053 2,207 2,412 2,553 Imports-000 BPD www.opec.org (Country Revenues Oil Imports valued at nominal oil price as reported Exports)-(Costs Oil -25 -38 -49 -61 -88 in 2008 OPEC Annual Statistical Bulletin at Imports) US $ Billion www.opec.org Country Gross Domestic World Bank Development Indicators: 701 810 915 1,180 1,160 Product US $ Billion http://data.worldbank.org/indicator Country Net Revenues (Costs) of Oil Exports -3.63 -4.68 -5.38 -5.15 -7.59 CEE calculation (Imports) as % of GDP Government Budget http://www.tradingeconomics.com/Economics/G Surplus/Deficit as % of -3.69 -3.29 -3.27 -2.67 -1.00 overnment-Budget.aspx?Symbol=INR Gross Domestic Product Stabilization Mechanisms such as petroleum funds 0 0 0 0 0 http://www.swfinstitute.org/ (yes-1/no-0) PETROLEUM SECTOR ORGANIZATION AND GOVERANANCE Publicly disclosed national policy addressing Ministry of Petroleum and Natural Gas website 1 1 1 1 1 hydrocarbon sector issues at http://petroleum.nic.in (yes-1/no-0) Scoring: Independent NOC, Ministry and regulatory function (100); Regulatory function is performed by ministry (66); Regulatory function Institutional structure 66 66 66 66 66 is performed by NOC (33); All three functions combined in one entity (0). Ministry of Petroleum and Natural Gas website at http://petroleum.nic.in BP Statistical Review of World Energy June Country oil production 282 269 278 281 279 2009 available at MM Barrels http://www.bp.com/statisticalreview 48 BP Statistical Review of World Energy June Country gas production 1,030 1,046 1,034 1,062 1,077 2009 available at BCF http://www.bp.com/statisticalreview Country MMBOE 460 449 456 464 465 CEE calculation production NOC MMBOE Domestic ONGC annual reports for relevant year available 392 375 387 388 377 Production at www.ongcindia.com Non-NOC percentage of 14.7 16.5 15.2 16.4 18.9 CEE calculation oil and gas production (%) http://www.pump-zone.com/global- Country Refinery Capacity news/pakistan-revives-250000-barrel-per-day- - 000 BPD 2,558 2,558 2,872 2,983 2,992 khalifa-refinery.html Net NOC Refinery Capacity - 000 BPD ONGC annual reports for relevant year 250 250 250 250 250 (country level) Non-NOC percentage of refinery capacity (%, 90.2 90.2 91.3 91.6 91.6 CEE calculation. country level) Total Revenues (local 472,454 494,397 590,575 615,426 650,494 ONGC annual reports for relevant year currency MM) Royalties and production 96,836 93,739 115,191 120,809 93,445 ONGC annual reports for relevant year taxes (local currency MM) Income taxes (local Based on E&P income taxes paid in India. 66,825 74,063 80,273 85,330 78,544 currency MM) ONGC annual reports for relevant year Dividends paid to government (local 47,952 54,144 56,558 59,256 59,256 ONGC annual reports for relevant year currency MM) Royalties, production taxes, income taxes and dividends paid to 44.8 44.9 42.7 43.1 35.5 CEE Calculation government by NOC as percentage of total revenues (%) Effect of contract terms on No No No Sources: Fraser Institute Global Petroleum 1.84 investment decisions survey survey survey Survey 2007 and 2008 Effect of taxation regime No No No Sources: Fraser Institute Global Petroleum 2.14 on decision to invest survey survey survey Survey 2007 and 2008 Effect of cost of regulatory No No No Sources: Fraser Institute Global Petroleum compliance on decision to 2.75 survey survey survey Survey 2007 and 2008 invest Effect of regulatory No No No Sources: Fraser Institute Global Petroleum uncertainty on decision to 2.72 survey survey survey Survey 2007 and 2008 invest Effect of environmental No No No Sources: Fraser Institute Global Petroleum regulations on decision to 2.4 survey survey survey Survey 2007 and 2008 invest Scoring: Priority ranked publicly disclosed objectives exist and are publicly measured (100); Objectives publicly disclosed but not ranked and are publicly measured (75); Objectives publicly NOC objectives 75 75 75 75 75 disclosed and ranked but not publicly measured (50); Objectives publicly disclosed but not ranked and not publicly measured (25); No public documentation of NOC objectives (0). ONGC annual reports for relevant year NOC STRATEGY AND BEHAVIOR Percentage of NOC domestic upstream % operated not disclosed in annual reports but production operated by 1 1 1 1 1 company appears to be a substantial operating specific NOC. If no data entity yes-1/no-0. Percentage of NOC 100.0 100.0 100.0 100.0 100.0 ONGC annual reports for relevant year domestic refining 49 production operated by specific NOC. If no data yes-1/no-0. NOC upstream capital expenditures as percentage Not reported of total capital expenditures (%) NOC refining capital expenditures as percentage Not reported of total capital expenditures (%) NOC upstream oil equity production as percentage of total NOC refining 208.0 211.0 194.0 208.0 208.0 ONGC annual reports for relevant year throughput (%). If no data, yes/no. NOC international revenues as percentage of 1 1 1 1 1 ONGC annual reports for relevant year total NOC revenues (%). If no data yes-1/no-0. Scoring: NOC partnerships/JVs exist domestically and internationally (100); NOC partnerships exist domestically but not Joint ventures between the internationally (66); NOC partnerships exist 100 100 100 100 100 NOC and third parties internationally but not domestically (33); NOC partnerships, JVs, alliances do not exist (0). ONGC annual reports for relevant year NOC CORPORATE GOVERNANCE Percentage of non- government ownership of 25.86 16.90 15.77 15.77 15.77 ONGC annual reports for relevant year specific NOC (%) Percentage of independent 36.36 41.67 46.15 30.77 47.05 ONGC annual reports for relevant year BOD members (%) Scoring: (100)-The government has no participation in deciding who will fill the positions of Chairman/CEO; (50)-The Appointment authority for government through its control of required NOC chairman and chief 0 0 0 0 0 voting shares can influence, directly or executive officer indirectly, the appointments of Chairman/CEO and (0) The Chairman and/or CEO is a direct appointee of the government entity. ONGC annual reports for relevant year Scoring: No governmental approval of NOC budget required (100); No governmental approval of NOC budget required but certain capital expenditures require state approval Independence of NOC (75);NOC budget is proposed to and approved capital and budget 25 25 25 25 25 by one central government entity (50); NOC processes budget is proposed to and approved by multiple central government entities (25); NOC budget is part of the national budget (0). ONGC annual reports for relevant year NOC net cash flow after taxes and dividends (local 118,517 101,966 147,113 169,844 156,020 ONGC annual reports for relevant year currency MM) NOC capital expenditures 81,011 93,524 96,950 141,578 152,749 ONGC annual reports for relevant year (local currency MM) Measured by net cash flow after taxes and NOC financial dividends as percentage of capital expenditures 146.3 109.0 151.7 120.0 102.1 % sustainability (%) CEE Calculation Scoring: NOC financial statement auditing performed by independent international auditor and files reports with international exchange (100); FS auditing performed and publicly NOC financial disclosed by independent international auditor 50 50 50 50 50 transparency (75); FS auditing performed and publicly disclosed by independent domestic or government auditor (50) ; FS auditing performed internally by N OC and publicly disclosed (25); No publicly available auditing (0) 50 ONGC annual reports for relevant year Scoring: NOC oil & gas reserves auditing performed by independent international firm and files reports with international exchange (100); reserves auditing performed and publicly disclosed by independent international firm (75); NOC upstream reserves reserves auditing performed and publicly 0 0 0 0 0 transparency disclosed by independent domestic firm (50); reserves auditing performed internally and publicly disclosed (25); No publicly available reserves auditing (0). ONGC annual reports for relevant year Note: Non-shaded areas indicate data used in the exploratory statistical analysis presented in National Oil Companies and Value Creation, volume I, chapter 4. 51 9. Petróleos de Venezuela, S.A. (Venezuela) (a) Value creation index components Operational Performance unit 2004 2005 2006 2007 2008 Company gas production BCF 2,396.59 2,557.92 1,391.00 1,405.00 1,297.00 Company oil production MM Bbls 1,034.05 1,060.69 1,192.00 1,075.00 1,197.00 E&P production (BOE) MM BOE 1,470.22 1,526.23 1,445.16 1,330.71 1,433.05 E&P production growth % 26.39 3.81 -5.31 -7.92 7.69 Total net additions proved oil reserves MM Bbls 723.69 688.00 748.00 405.00 Total net additions proved gas reserves BCF 3,248.92 12,748.00 3,624.00 1,252.00 Total net additions proved gas reserves MM BOE 591.30 2,320.14 659.57 227.86 Reserve additions (BOE) MM BOE 1,314.99 3,008.14 1,407.57 632.86 Reserves replacement rate % 86.16 208.15 105.78 44.16 Primary distillation capacity MBPD 3,102.00 3,102.00 3,102.00 3,098.00 3,035.00 Total refining throughput MBPD 2,854.00 2,854.00 2,854.00 2,521.00 2,441.00 Refinery utilization rate % 92.01 92.01 92.01 81.38 80.43 Assets $ MM 61,847.00 70,365.00 80,529.00 106,894.00 131,832.00 Output / total assets BOE/000$ 40.62 36.49 30.88 21.06 17.63 Employees # of people 64,449.00 59,678.00 68,106.00 77,292.00 80,000.00 Output / total employees BOE/000$ 38.98 43.03 36.51 29.12 29.05 Financial Performance Unit 2004 2005 2006 2007 2008 Earnings before interest & taxes $ MM 21,462.00 32,532.00 41,949.00 47,857.00 52,032.00 Direct expenditures on social/economic development $ MM 1,242.00 6,909.00 13,784.00 14,102.00 14,733.00 programs Total revenue $ MM 62,242.00 82,915.00 99,252.00 96,242.00 126,364.00 EBRTN $ MM 22,704.00 39,441.00 55,733.00 61,959.00 66,765.00 EBRTN / revenues % 36.48 47.57 56.15 64.38 52.84 EBRTN / total assets % 36.71 56.05 69.21 57.96 50.64 Total capital expenditures $ MM 5,385.00 3,939.00 1,748.00 11,066.00 18,413.00 net cash flow after taxes and dividends $ MM 7,490.00 4,278.00 2,328.00 1,151.00 14,452.00 NCF/CAPEX % 139.09 108.61 133.18 10.40 78.49 National Mission Performance Unit 2004 2005 2006 2007 2008 Total number of NOC local employees # of people 59,211.00 54,305.00 62,723.00 72,152.00 74,900.00 Total number of NOC non-local employees # of people 5,238.00 5,373.00 5,383.00 5,140.00 5,100.00 Share of nationals in NOC workforce % 91.87 91.00 92.10 93.35 93.63 NOC employment in native country (# people) # of people 59,211.00 54,305.00 62,723.00 72,152.00 74,900.00 NOC annual employment growth % -12.72 -8.29 15.50 15.03 3.81 # of people Country Labor Force 11,552.00 11,900.73 12,251.75 12,411.74 12,720.89 (000,000) Country annual employment growth % 3.11 3.02 2.95 1.31 2.49 NOC - Country employment growth pp -15.83 -11.30 12.55 13.73 1.32 NOC employment share of country workforce % points 0.51 0.46 0.51 0.58 0.59 NOC local purchases goods and services $ MM NOC total purchases goods and services $ MM 42,996.00 50,518.00 55,779.00 54,105.00 81,116.00 Share of local content % NOC noncommercial expenditure (national currency) $ MM NOC noncommercial expenditure $ MM 1,242.00 6,909.00 13,784.00 14,102.00 14,733.00 Noncommercial expenditure/Total expenditure % 2.89 13.68 24.71 26.06 18.16 Net income from non-core commercial business $ MM activities Net income from total commercial activities $ MM 5,406.00 6,483.00 5,452.00 6,273.00 9,413.00 Net income noncore commercial activities/Net % income Price subsidies provided by NOC $ MM 9,784.38 15,075.58 18,924.07 22,568.16 Total NOC Revenues $ MM 62,242.00 82,915.00 99,252.00 96,242.00 126,364.00 Price Subsidies/Revenues % 15.72 18.18 19.07 23.45 NOC domestic petroleum products production MMBOE 415.00 433.00 423.00 486.18 Country oil consumption MMBOE 190.84 210.30 221.73 242.79 262.47 Domestic output use % 217.46 205.89 190.78 200.25 52 (b) Value creation index 2004 2005 2006 2007 2008 Operational Performance E&P production growth (%) 26.39 3.81 -5.31 -7.92 7.69 Reserves replacement rate (BOE, %) 86.16 208.15 105.78 44.16 Refinery utilization rate (%) 92.01 92.01 92.01 81.38 80.43 Output / total assets (BOE/'000$) 40.62 36.49 30.88 21.06 17.63 Output / total employees ('000 BOE) 38.98 43.03 36.51 29.12 29.05 Financial Performance EBRTN / revenues (%) 36.48 47.57 56.15 64.38 52.84 EBRTN / total assets (%) 36.71 56.05 69.21 57.96 50.64 NCF / CAPEX (%) 139.09 108.61 133.18 10.40 78.49 National Mission Performance Share of nationals in NOC workforce (%) 91.87 91.00 92.10 93.35 93.63 NOC – Country employment growth (% points) -15.83 -11.30 12.55 13.73 1.32 NOC employment share of country workforce (%) 0.51 0.46 0.51 0.58 0.59 Share of local content (%) Noncommercial expenditures/total expenditures (%) 2.89 13.68 24.71 26.06 18.16 Noncore commercial activities net income/Total net income (%) Price Subsidies/Revenues (%) 15.72 18.18 19.07 23.45 Domestic output use (%) 217.46 205.89 190.78 200.25 (c) Normalized value creation index 2004 2005 2006 2007 2008 Operational Performance 0.78 0.53 0.48 0.44 0.37 E&P production growth 1.00 0.05 0.18 0.28 0.56 Reserves replacement rate 0.46 0.39 0.73 0.18 Refinery utilization rate 0.55 0.49 0.34 0.18 0.18 Output / total assets 0.85 0.92 0.93 0.65 0.52 Output / total employees 0.70 0.75 0.55 0.38 0.37 Financial Performance 0.56 0.49 0.65 0.52 0.50 EBRTN / revenues 0.40 0.49 0.57 0.68 0.56 EBRTN / total assets 0.59 0.65 0.91 0.87 0.76 NCF / CAPEX 0.71 0.32 0.48 0.00 0.19 National Mission Performance 0.61 0.64 0.84 0.74 0.66 Share of nationals in NOC workforce 0.90 0.89 0.90 0.92 0.92 NOC - Country employment growth 0.00 0.12 0.81 0.39 0.22 NOC employment share of country workforce 0.23 0.24 0.36 0.47 0.50 Share of local content Noncommercial expenditures/total expenditures 1.00 1.00 1.00 1.00 1.00 Noncore commercial activities net income/Total net income Price Subsidies/Revenues 0.53 0.58 0.95 0.64 Domestic output use 0.97 1.00 1.00 1.00 VCI 0.65 0.55 0.66 0.57 0.51 53 (d) Value drivers 2004 2005 2006 2007 2008 Source GEOLOGY BP Statistical Review of World Energy June Country specific resource 79,729 80,012 87,324 99,377 172,323 2009 available at endowment oil MMBBL http://www.bp.com/statisticalreview BP Statistical Review of World Energy June Country specific resource 4,287 4,315 4,708 4,838 4,983 2009 available at endowment gas BCM http://www.bp.com/statisticalreview Country specific resource 106,694 107,153 116,937 129,808 203,666 CEE calculation endowment MMBOE STATE CONTEXT WGI: Voice and http://info.worldbank.org/governance/wgi/index. -0.59 -0.61 -0.45 -0.60 -0.62 Accountability asp http://info.worldbank.org/governance/wgi/index. WGI: Political Stability -1.20 -1.18 -1.16 -1.20 -1.23 asp WGI: Government http://info.worldbank.org/governance/wgi/index. -0.90 -0.82 -0.79 -0.87 -0.85 Effectiveness asp http://info.worldbank.org/governance/wgi/index. WGI: Regulatory Quality -1.12 -1.20 -1.25 -1.56 -1.44 asp http://info.worldbank.org/governance/wgi/index. WGI: Rule of Law -1.21 -1.27 -1.38 -1.50 -1.59 asp http://info.worldbank.org/governance/wgi/index. WGI: Corruption Control -1.02 -1.06 -1.01 -1.07 -1.13 asp "Natural Resource Endowments, Governance Hydrocarbon Revenues as and the Domestic Revenue Effort," by Fabian % of Total Government 53.0 53.0 53.0 53.0 53.0 Bornhorst, Sanjeev Gupta, and John Thornton, Revenues IMF Working Paper, WP/08/170, July 2008; www.eia.doe.gov/cabs/Venezuela/pdf.pdf "Natural Resource Endowments, Governance and the Domestic Revenue Effort," by Fabian Hydrocarbon Revenues as 15.0 15.0 25.0 28.0 33.0 Bornhorst, Sanjeev Gupta, and John Thornton, % of GDP IMF Working Paper, WP/08/170, July 2008; www.eia.doe.gov/cabs/Venezuela/pdf.pdf WTO membership (yes- 1 1 1 1 1 www.wto.org 1/no-0) over five years OPEC membership (yes- www.opec.org 1/no-0) over five years 1 1 1 1 1 Country Crude Oil Exports 2008 OPEC Annual Statistical Bulletin at 1,566 1,788 1,919 2,116 1,770 -000 BPD www.opec.org Country Crude Oil 2009 OPEC Annual Statistical Bulletin at Imports-000 BPD www.opec.org (Country Revenues Oil Exports valued at Venezuela TJL oil price as Exports)-(Costs Oil 19 30 39 51 60 reported in 2008 OPEC Annual Statistical Imports) US $ Billion Bulletin at www.opec.org Country Gross Domestic World Bank Development Indicators: 112 146 185 228 314 Product US $ Billion http://data.worldbank.org/indicator Country Net Revenues (Costs) of Oil Exports 17.2 20.7 20.9 22.2 19.0 CEE calculation (Imports) as % of GDP Government Budget http://www.tradingeconomics.com/Economics/G Surplus/Deficit as % of -4.1 -1.3 2.3 overnment-Budget.aspx?Symbol=VEB Gross Domestic Product Stabilization Mechanisms such as petroleum funds 1 1 1 1 1 http://www.swfinstitute.org/ (yes-1/no-0) PETROLEUM SECTOR ORGANIZATION AND GOVERANANCE Publicly disclosed national policy addressing 1 1 1 1 1 PdVSA annual reports and website information hydrocarbon sector issues (yes-1/no-0) Scoring: Independent NOC, Ministry and Institutional structure 50 50 50 50 50 regulatory function (100); Regulatory function is performed by ministry (66); Regulatory function 54 is performed by NOC (33); All three functions combined in one entity (0). PdVSA annual reports and website information BP Statistical Review of World Energy June Country oil production 1,149 1,195 1,186 1,150 1,150 2009 available at MM Barrels http://www.bp.com/statisticalreview BP Statistical Review of World Energy June Country gas production 1,000 968 1,112 1,133 1,109 2009 available at BCF http://www.bp.com/statisticalreview Country MMBOE 1,321 1,362 1,378 1,345 1,341 CEE calculation production NOC MMBOE Domestic 1,147 1,182 1,182 1,127 1,121 PdVSA annual reports and website information Production Non-NOC percentage of 13.2% 13.2% 14.2% 16.2% 16.4% CEE calculation oil and gas production (%) BP Statistical Review of World Energy June Country Refinery Capacity 1,306 1,311 1,311 1,311 1,311 2009 available at - 000 BPD http://www.bp.com/statisticalreview Net NOC Refinery Capacity - 000 BPD 1,303 1,303 1,303 1,303 1,303 PdVSA annual reports and website information (country level) Non-NOC percentage of refinery capacity (%, 0.2 0.6 0.6 0.6 0.6 CEE calculation. country level) Total Revenues (local 62,242 82,915 99,252 96,242 126,364 PdVSA annual reports and website information currency MM) Royalties and production 9,247 13,318 18,435 21,981 23,462 PdVSA annual reports and website information taxes (local currency MM) Income taxes (local Based on E&P income taxes paid in Venezuela. 6,662 12,702 17,815 14,102 14,733 currency MM) PdVSA annual reports and website information Dividends paid to government (local 1,302 1,317 1,716 2,658 2,000 PdVSA annual reports and website information currency MM) Royalties, production taxes, income taxes and dividends paid to 27.7 33.0 38.3 40.3 31.8 CEE Calculation government by NOC as percentage of total revenues (%) Effect of contract terms on No No No Sources: Fraser Institute Global Petroleum 3.45 4.12 investment decisions survey survey survey Survey 2007 and 2008 Effect of taxation regime No No No Sources: Fraser Institute Global Petroleum 3.62 4.01 on decision to invest survey survey survey Survey 2007 and 2008 Effect of cost of regulatory No No No Sources: Fraser Institute Global Petroleum compliance on decision to 3.30 3.87 survey survey survey Survey 2007 and 2008 invest Effect of regulatory No No No Sources: Fraser Institute Global Petroleum uncertainty on decision to 4.10 4.61 survey survey survey Survey 2007 and 2008 invest Effect of environmental No No No Sources: Fraser Institute Global Petroleum regulations on decision to 2.92 2.43 survey survey survey Survey 2007 and 2008 invest Scoring: Priority ranked publicly disclosed objectives exist and are publicly measured (100); Objectives publicly disclosed but not ranked and are publicly measured (75); Objectives publicly NOC objectives 25 25 25 25 25 disclosed and ranked but not publicly measured (50); Objectives publicly disclosed but not ranked and not publicly measured (25); No public documentation of NOC objectives (0). PdVSA annual reports and website information NOC STRATEGY AND BEHAVIOR Percentage of NOC 1 1 1 1 1 % operated not disclosed in annual reports but 55 domestic upstream company appears to be a substantial operating production operated by entity specific NOC. If no data yes-1/no-0. Percentage of NOC domestic refining production operated by 100 100 100 100 100 PdVSA annual reports and website information specific NOC. If no data yes-1/no-0. NOC upstream capital expenditures as percentage 60.0 60.0 58.0 62.0 70.0 PdVSA annual reports and website information of total capital expenditures (%) NOC refining capital expenditures as percentage 20.0 20.0 23.4 16.0 9.0 PdVSA annual reports and website information of total capital expenditures (%) NOC upstream oil equity production as percentage of total NOC refining 70.0 70.0 69.0 70.0 70.0 PdVSA annual reports and website information throughput (%). If no data, yes/no. NOC international revenues as percentage of 10.0 10.0 15.0 11.0 13.0 PdVSA annual reports and website information total NOC revenues (%). If no data yes-1/no-0. Scoring: NOC partnerships/JVs exist domestically and internationally (100); NOC partnerships exist domestically but not Joint ventures between the internationally (66); NOC partnerships exist 100 100 100 100 100 NOC and third parties internationally but not domestically (33); NOC partnerships, JVs, alliances do not exist (0). PdVSA annual reports and website information NOC CORPORATE GOVERNANCE Percentage of non- government ownership of 0.0 0.0 0.0 0.0 0.0 PdVSA annual reports and website information specific NOC (%) Percentage of independent 0.0 0.0 0.0 0.0 20.0 PdVSA annual reports and website information BOD members (%) Scoring: (100)-The government has no participation in deciding who will fill the positions of Chairman/CEO; (50)-The Appointment authority for government through its control of required NOC chairman and chief 0 0 0 0 0 voting shares can influence, directly or executive officer indirectly, the appointments of Chairman/CEO and (0) The Chairman and/or CEO is a direct appointee of the government entity PdVSA annual reports and website information Scoring: No governmental approval of NOC budget required (100); No governmental approval of NOC budget required but certain capital expenditures require state approval Independence of NOC (75);NOC budget is proposed to and approved capital and budget 50 50 50 50 50 by one central government entity (50); NOC processes budget is proposed to and approved by multiple central government entities (25); NOC budget is part of the national budget (0). PdVSA annual reports and website information NOC net cash flow after taxes and dividends (local 7,490 4,278 2,328 1,151 14,452 PdVSA annual reports and website information currency MM) NOC capital expenditures 5,385 3,939 1,748 11,066 18,413 PdVSA annual reports and website information (local currency MM) Measured by net cash flow after taxes and NOC financial dividends as percentage of capital expenditures 139.1 108.6 133.2 10.4 78.5 % sustainability (%) CEE Calculation 56 Scoring: NOC financial statement auditing performed by independent international auditor and files reports with international exchange (100); FS auditing performed and publicly disclosed by independent international auditor NOC financial (75); FS auditing performed and publicly 0 0 75 75 75 transparency disclosed by independent domestic or government auditor (50) ; FS auditing performed internally by N OC and publicly disclosed (25); No publicly available auditing (0) PdVSA annual reports and website information Scoring: NOC oil & gas reserves auditing performed by independent international firm and files reports with international exchange (100); reserves auditing performed and publicly disclosed by independent international firm (75); NOC upstream reserves reserves auditing performed and publicly 0 0 0 0 0 transparency disclosed by independent domestic firm (50); reserves auditing performed internally and publicly disclosed (25); No publicly available reserves auditing (0). PdVSA annual reports and website information Note: Non-shaded areas indicate data used in the exploratory statistical analysis presented in National Oil Companies and Value Creation, volume I, chapter 4. 57 10. Petróleos Mexicanos S.A. (Mexico) (a) Value creation index components Operational Performance unit 2004 2005 2006 2007 2008 Company gas production BCF 1,231.00 1,305.00 1,487.00 1,744.00 1,643.00 Company oil production MM Bbls 1,374.00 1,354.00 1,332.00 1,268.00 1,135.00 E&P production (BOE) MM BOE 1,598.04 1,591.51 1,602.63 1,585.41 1,434.03 E&P production growth % -1.43 -0.41 0.70 -1.07 -9.55 Total net additions proved oil reserves MM Bbls 136.00 222.00 512.00 605.00 814.00 Total net additions proved gas reserves BCF 1,188.00 1,055.00 785.00 1,050.00 1,184.00 Total net additions proved gas reserves MM BOE 216.22 192.01 142.87 191.10 215.49 Reserve additions (BOE) MM BOE 352.22 414.01 654.87 796.10 1,029.49 Reserves replacement rate % 22.04 26.01 40.86 50.21 71.79 Primary distillation capacity MBPD 1,540.00 1,540.00 1,540.00 1,540.00 1,540.00 Total refining throughput MBPD 1,303.00 1,284.00 1,284.00 1,270.00 1,261.00 Refinery utilization rate % 84.61 83.38 83.38 82.47 81.88 Assets $ MM 86,646.55 99,524.00 110,719.00 122,423.75 89,412.06 Output / total assets BOE/000$ 23.93 20.70 18.71 16.74 21.19 Employees # of people 138,042.00 139,483.00 141,582.00 141,146.00 143,421.00 Output / total employees BOE/000$ 15.02 14.77 14.63 14.52 13.21 Financial Performance Unit 2004 2005 2006 2007 2008 Earnings before interest & taxes (national currency) Bn 481.90 510.60 675.56 678,99 767.14 Direct expenditures on social/economic development Bn 0.80 1.18 1.81 1.70 2.67 programs (national currency) Total revenue (national currency) Bn 810.89 940.48 1,106.10 1,139.26 1,328.95 EBRTN Bn 482.70 511.77 677.37 680.70 769.81 EBRTN / revenues % 59.53 54.42 61.24 59.75 57.93 EBRTN / total assets % 49.30 49.09 56.13 51.17 62.24 Total capital expenditures (national currency) Bn 100.32 104.57 122.68 136.91 159.74 net cash flow after taxes and dividends Bn -0.71 48.32 146.69 216.70 69.12 NCF/CAPEX % -0.70 46.20 119.58 158.28 43.27 National Mission Performance Unit 2004 2005 2006 2007 2008 Total number of NOC local employees # of people Total number of NOC non-local employees # of people Share of nationals in NOC workforce % 99.00 99.00 99.00 99.00 99.00 NOC employment in native country (# people) # of people 136,661.58 138,088.17 140,166.18 139,734.54 141,986.79 NOC annual employment growth % -1.12 1.04 1.50 -0.31 1.61 # of people Country Labor Force 42,614.10 43,294.33 44,761.01 45,647.42 46,706.07 (000,000) Country annual employment growth % 3.96 1.60 3.39 1.98 2.32 NOC - Country employment growth % points -5.09 -0.55 -1.88 -2.29 -0.71 NOC employment share of country workforce % 0.32 0.32 0.31 0.31 0.30 NOC local purchases goods and services $ MM NOC total purchases goods and services $ MM 391,391.00 487,660.00 565,856.00 622,377.00 847,732.00 Share of local content % NOC Noncommercial expenditures (local currency) MM 802.00 1,177.00 1,809.00 1,702.00 2,670.00 NOC Noncommercial expenditures $ MM Noncommercial expenditure/Total expenditure % 0.20 0.24 0.32 0.27 0.31 Net income from non-core commercial business % activities Net income from total commercial activities $ MM -2,426.00 -7,282.00 4,159.00 -3,002.00 -1,309.99 Net income noncore commercial activities/Net % income Price subsidies provided by NOC (local currency) MM 1,595.00 4,743.00 2,325.00 1,242.01 3,877.39 Total NOC Revenues (local currency) Bn 810,89 940.48 1,106.10 1,139.26 1,328.95 Price Subsidies/Revenues % 0.20 0.50 0.21 0.11 0.3 NOC domestic petroleum products production MMBOE 653.55 549.82 549.39 582.39 697.98 Country oil consumption MMBOE 700.23 720.49 719.03 739.72 744.39 Domestic output use % 93.33 76.31 76.41 78.73 93.77 58 (b) Value creation index 2004 2005 2006 2007 2008 Operational Performance E&P production growth (%) -1.43 -0.41 0.70 -1.07 -9.55 Reserves replacement rate (BOE, %) 22.04 26.01 40.86 50.21 71.79 Refinery utilization rate (%) 84.61 83.38 83.38 82.47 81.88 Output / total assets (BOE/'000$) 23.93 20.70 18.71 16.74 21.19 Output / total employees ('000 BOE) 15.02 14.77 14.63 14.52 13.21 Financial Performance EBRTN / revenues (%) 59.53 54.42 61.24 59.75 57.93 EBRTN / total assets (%) 49.30 49.09 56.13 51.17 62.24 NCF / CAPEX (%) -0.70 46.20 119.58 158.28 43.27 National Mission Performance Share of nationals in NOC workforce (%) 99.00 99.00 99.00 99.00 99.00 NOC – Country employment growth (% points) -5.09 -0.55 -1.88 -2.29 -0.71 NOC employment share of country workforce (%) 0.32 0.32 0.31 0.31 0.30 Share of local content (%) Noncommercial expenditures/total expenditures (%) 0.20 0.24 0.32 0.27 0.31 Noncore commercial activities net income/Total net income (%) Price Subsidies/Revenues (%) 0.20 0.50 0.21 0.11 0.29 Domestic output use (%) 93.33 76.31 76.41 78.73 93.766 (c) Normalized value creation index 2004 2005 2006 2007 2008 Operational Performance 0.34 0.28 0.25 0.39 0.30 E&P production growth 0.20 0.04 0.27 0.45 0.04 Reserves replacement rate 0.29 0.25 0.00 0.57 0.44 Refinery utilization rate 0.45 0.36 0.19 0.20 0.21 Output / total assets 0.49 0.51 0.55 0.52 0.63 Output / total employees 0.26 0.25 0.21 0.18 0.17 Financial Performance 0.50 0.38 0.58 0.67 0.54 EBRTN / revenues 0.71 0.58 0.64 0.63 0.62 EBRTN / total assets 0.80 0.56 0.68 0.75 0.95 NCF / CAPEX 0.00 0.00 0.41 0.63 0.06 National Mission Performance 0.33 0.31 0.36 0.30 0.36 Share of nationals in NOC workforce 0.99 0.99 0.99 0.99 0.99 NOC – Country employment growth 0.35 0.33 0.52 0.17 0.19 NOC employment share of country workforce 0.15 0.17 0.22 0.25 0.26 Share of local content Noncommercial expenditures/total expenditures 0.07 0.02 0.01 0.01 0.02 Noncore commercial activities net income/Total net income Price Subsidies/Revenues 0.01 0.02 0.01 0.00 0.01 Domestic output use 0.41 0.35 0.39 0.38 0.71 VCI 0.39 0.32 0.39 0.45 0.40 59 (d) Value drivers 2004 2005 2006 2007 2008 Source GEOLOGY BP Statistical Review of World Energy June Country specific resource 14,803 13,670 12,850 12,187 11,866 2009 available at endowment oil MMBBL http://www.bp.com/statisticalreview BP Statistical Review of World Energy June Country specific resource 419 408 388 512 500 2009 available at endowment gas BCM http://www.bp.com/statisticalreview Country specific resource 17,438 16,236 15,290 15,406 15,058 CEE calculation endowment MMBOE STATE CONTEXT WGI: Voice and http://info.worldbank.org/governance/wgi/index. 0.31 0.17 0.09 0.05 0.08 Accountability asp http://info.worldbank.org/governance/wgi/index. WGI: Political Stability -0.04 -0.23 -0.48 -0.5 -0.62 asp WGI: Government http://info.worldbank.org/governance/wgi/index. 0.10 -0.01 0.1 0.12 0.18 Effectiveness asp http://info.worldbank.org/governance/wgi/index. WGI: Regulatory Quality 0.44 0.32 0.38 0.39 0.45 asp http://info.worldbank.org/governance/wgi/index. WGI: Rule of Law -0.37 -0.48 -0.51 -0.56 -0.64 asp http://info.worldbank.org/governance/wgi/index. WGI: Corruption Control -0.33 -0.38 -0.32 -0.34 -0.26 asp "Natural Resource Endowments, Governance and the Domestic Revenue Effort," IMF Working Paper prepared by Fabian Bornhurst, Sanjeev Gupta and John Thornton, July 2008, Hydrocarbon Revenues as WP/08/170; "Extractive Industries Revenues % of Total Government 32.0 33.0 33.0 34.0 35.0 Distribution at the Sub-National Level,: Matteo Revenues Morgandi, Prepared for Revenue Watch Institute, New York, June 2008; "Oil and Gas Fiscal System in Mexico," Pedro Luna, Ministry of Finance, Mexico, World Bank Conference on Oil and Gas in Federal Systems, March 2010. Hydrocarbon Revenues as 7.2 7.2 8.3 9.0 10.5 http://devdata.worldbank.org/AAG/mex_aag.pdf % of GDP WTO membership (yes- 1 1 1 1 1 www.wto.org 1/no-0) over five years OPEC membership (yes- 0 0 0 0 0 www.opec.org 1/no-0) over five years Country Crude Oil Exports 2008 OPEC Annual Statistical Bulletin at 2,124 2,021 2,048 1,738 1,446 -000 BPD www.opec.org Country Crude Oil 2009 OPEC Annual Statistical Bulletin at Imports-000 BPD www.opec.org (Country Revenues Oil Exports valued at Mexico Maya oil price as Exports)-(Costs Oil 23 30 38 44 45 reported in 2008 OPEC Annual Statistical Imports) US $ Billion Bulletin at www.opec.org Country Gross Domestic World Bank Development Indicators: 759 847 949 1020 1090 Product US $ Billion http://data.worldbank.org/indicator Country Net Revenues (Costs) of Oil Exports 3.1 3.6 4.0 4.3 4.1 CEE calculation (Imports) as % of GDP Government Budget Surplus/Deficit as % of 2.5 2.5 2.3 2.2 1.8 Pemex Form 20Fs for relevant year Gross Domestic Product Stabilization Mechanisms such as petroleum funds 1 1 1 1 1 Pemex Form 20Fs for relevant year (yes-1/no-0) PETROLEUM SECTOR ORGANIZATION AND GOVERANANCE Publicly disclosed national policy addressing 1 1 1 1 1 Pemex Form 20Fs for relevant year hydrocarbon sector issues (yes-1/no-0) Scoring: Independent NOC, Ministry and regulatory function (100); Regulatory function is Institutional structure 83 83 83 83 83 performed by ministry (66); Regulatory function is performed by NOC (33); All three functions combined in one entity (0). 60 Pemex Form 20Fs for relevant year BP Statistical Review of World Energy June Country oil production 1,396 1,372 1,344 1,267 1,152 2009 available at MM Barrels http://www.bp.com/statisticalreview BP Statistical Review of World Energy June Country gas production 1,504 1,590 1,822 1,908 1,934 2009 available at BCF http://www.bp.com/statisticalreview Lesser of BP Statistical Review of World Energy June 2009 available at http://www.bp.com/statisticalreview or Pemex Country MMBOE 1,586 1,579 1,588 1,568 1,418 Form 20Fs for relevant years. There may be a production small amount of natural gas production operated on behalf of Pemex by third party service contractors but this data is not available. NOC MMBOE Domestic 1,586 1,579 1,588 1,568 1,418 Pemex Form 20Fs for relevant year Production Non-NOC percentage of 0.0 0.0 0.0 0.0 0.0 CEE calculation oil and gas production (%) Greater of Pemex Form 20Fs or BP Statistical Country Refinery Capacity 1,540 1,540 1,540 1,540 1,540 Review of World Energy June 2009 available at - 000 BPD http://www.bp.com/statisticalreview Net NOC Refinery Capacity - 000 BPD 1,540 1,540 1,540 1,540 1,540 Pemex Form 20Fs for relevant year (country level) Non-NOC percentage of refinery capacity (%, 0.0 0.0 0.0 0.0 0.0 CEE calculation. country level) Total Revenues (local 810,894 940,480 1,106,100 1,139,257 1,328,950 Pemex Form 20Fs for relevant year currency MM) Royalties and production 490,142 578,651 595,245 667,999 767,522 Pemex Form 20Fs for relevant year taxes (local currency MM) Income taxes (local Based on E&P income taxes paid in Mexico. 0 0 9,520 9,256 4,179 currency MM) Pemex Form 20Fs for relevant year Dividends paid to government (local 10,734 10,636 16,393 263 -35,457 Pemex Form 20Fs for relevant year currency MM) Royalties, production taxes, income taxes and dividends paid to 61.8 62.7 56.2 59.5 55.4 CEE Calculation government by NOC as percentage of total revenues (%) Effect of contract terms on No No No No No Sources: Fraser Institute Global Petroleum investment decisions survey survey survey survey survey Survey 2007 and 2008 Effect of taxation regime No No No No No Sources: Fraser Institute Global Petroleum on decision to invest survey survey survey survey survey Survey 2007 and 2008 Effect of cost of regulatory No No No No No Sources: Fraser Institute Global Petroleum compliance on decision to survey survey survey survey survey Survey 2007 and 2008 invest Effect of regulatory No No No No No Sources: Fraser Institute Global Petroleum uncertainty on decision to survey survey survey survey survey Survey 2007 and 2008 invest Effect of environmental No No No No No Sources: Fraser Institute Global Petroleum regulations on decision to survey survey survey survey survey Survey 2007 and 2008 invest Scoring: Priority ranked publicly disclosed objectives exist and are publicly measured (100); Objectives publicly disclosed but not ranked and are publicly measured (75); Objectives publicly NOC objectives 25 25 25 25 25 disclosed and ranked but not publicly measured (50); Objectives publicly disclosed but not ranked and not publicly measured (25); No public documentation of NOC objectives (0). 61 Pemex Form 20Fs for relevant year NOC STRATEGY AND BEHAVIOR Percentage of NOC Pemex Form 20Fs for relevant year. There may domestic upstream be a small portion of natural gas production that production operated by 100.0 100.0 100.0 100.0 100.0 is operated by third party service contractors on specific NOC. If no data behalf of Pemex but this data is not available. yes-1/no-0. Percentage of NOC domestic refining production operated by 100.0 100.0 100.0 100.0 100.0 Pemex Form 20Fs for relevant year specific NOC. If no data yes-1/no-0. NOC upstream capital expenditures as percentage 90.5 86.5 83.4 84.4 85.2 Pemex Form 20Fs for relevant year of total capital expenditures (%) NOC refining capital expenditures as percentage 5.1 8.6 12.4 11.7 10.9 Pemex Form 20Fs for relevant year of total capital expenditures (%) NOC upstream oil equity production as percentage of total NOC refining 268.9 261.4 262.2 249.9 229.6 Pemex Form 20Fs for relevant year throughput (%). If no data, yes/no. NOC international revenues as percentage of 0.0 0.0 0.0 0.0 0.0 Pemex Form 20Fs for relevant year total NOC revenues (%). If no data yes-1/no-0. Scoring: NOC partnerships/JVs exist domestically and internationally (100); NOC partnerships exist domestically but not Joint ventures between the internationally (66); NOC partnerships exist 33 33 33 33 33 NOC and third parties internationally but not domestically (33); NOC partnerships, JVs, alliances do not exist (0). Pemex Form 20Fs for relevant year NOC CORPORATE GOVERNANCE Percentage of non- government ownership of 0.0 0.0 0.0 0.0 0.0 Pemex Form 20Fs for relevant year specific NOC (%) Percentage of independent 0.0 0.0 0.0 0.0 0.0 Pemex Form 20Fs for relevant year BOD members (%) Scoring: (100)-The government has no participation in deciding who will fill the positions of Chairman/CEO; (50)-The Appointment authority for government through its control of required NOC chairman and chief 0 0 0 0 0 voting shares can influence, directly or executive officer indirectly, the appointments of Chairman/CEO and (0) The Chairman and/or CEO is a direct appointee of the government entity Pemex Form 20Fs for relevant year Scoring: No governmental approval of NOC budget required (100); No governmental approval of NOC budget required but certain capital expenditures require state approval Independence of NOC (75);NOC budget is proposed to and approved capital and budget 0 0 0 0 0 by one central government entity (50); NOC processes budget is proposed to and approved by multiple central government entities (25); NOC budget is part of the national budget (0). Pemex Form 20Fs for relevant year NOC net cash flow after taxes and dividends (local -705 48,315 146,694 216,703 69,119 Pemex Form 20Fs for relevant year currency MM) NOC capital expenditures 100,324 104,572 122,677 136,913 159,738 Pemex Form 20Fs for relevant year (local currency MM) Measured by net cash flow after taxes and NOC financial -0.7 46.2 119.6 158.3 43.3 dividends as percentage of capital expenditures sustainability (%) % 62 CEE Calculation Scoring: NOC financial statement auditing performed by independent international auditor and files reports with international exchange (100); FS auditing performed and publicly disclosed by independent international auditor NOC financial (75); FS auditing performed and publicly 100 100 100 100 100 transparency disclosed by independent domestic or government auditor (50) ; FS auditing performed internally by N OC and publicly disclosed (25); No publicly available auditing (0) Pemex Form 20Fs for relevant year Scoring: NOC oil & gas reserves auditing performed by independent international firm and files reports with international exchange (100); reserves auditing performed and publicly disclosed by independent international firm (75); NOC upstream reserves reserves auditing performed and publicly 100 100 100 100 100 transparency disclosed by independent domestic firm (50); reserves auditing performed internally and publicly disclosed (25); No publicly available reserves auditing (0). Pemex Form 20Fs for relevant year Note: Non-shaded areas indicate data used in the exploratory statistical analysis presented in National Oil Companies and Value Creation, volume I, chapter 4. 63 11. The Petroleum Oil and Gas Corporation of South Africa (Pty) Limited (South Africa) (a) Value creation index components Operational Performance unit 2004 2005 2006 2007 2008 Company gas production BCF 49.90 70.30 64.20 58.00 53.00 Company oil production MM Bbls 7.1 10.7 8.0 5.4 4.6 E&P production (BOE) MM BOE 16.18 23.49 19.68 15.96 14.25 E&P production growth % 45.19 -16.22 -18.94 -10.72 Total net additions proved oil reserves MM Bbls -11.70 23.80 1.20 -1.80 0.00 Total net additions proved gas reserves BCF 1.60 84.30 83.20 -133.00 20.00 Total net additions proved gas reserves MM BOE 0.29 15.34 15.14 -24.21 3.64 Reserve additions (BOE) MM BOE -11.41 39.14 16.34 -26.01 3.64 Reserves replacement rate % -70.50 166.60 83.02 -162.99 25.55 Primary distillation capacity MBPD Total refining throughput MBPD Refinery utilization rate % Assets $ MM 1,843.19 2,075.00 2,306.07 2,622.53 2,851.31 Output / total assets BOE/000$ 8.78 11.32 8.54 6.08 5.00 Employees # of people 1,263.00 1,587.00 1,399.00 Output / total employees BOE/000$ 18.60 12.40 11.41 Financial Performance Unit 2004 2005 2006 2007 2008 Earnings before interest & taxes (national currency) MM 240.00 2,125.00 2,911.00 2,694.00 2,666.00 Direct expenditures on social/economic development MM 26.10 19.00 5.00 44.80 85.10 programs (national currency) Total revenue (national currency) MM 3,471.00 6,446.00 7,509.00 8,952.00 11,018.77 EBRTN MM 266.10 2,144.00 2,916.00 2,738.80 2,751.10 EBRTN / revenues % 7.67 33.26 38.83 30.59 24.97 EBRTN / total assets % 2.23 16.25 18.71 14.35 11.90 Total capital expenditures (national currency) MM 288.00 288.00 461.00 1,646.00 1,722.00 Net cash flow after taxes and dividends MM 301.80 4,061.00 3,401.00 3,199.00 3,793.00 NCF/CAPEX % 104.79 1,410.07 737.74 194.35 220.27 National Mission Performance Unit 2004 2005 2006 2007 2008 Total number of NOC local employees # of people 1,237.74 1,539.39 1,343.04 Total number of NOC non-local employees # of people 25.26 47.61 55.96 Share of nationals in NOC workforce % 98.04 97.09 96.00 NOC employment in native country (# people) # of people 1,237.74 1,539.39 1,343.04 NOC annual employment growth % 24.37 -12.76 # of people Country Labor Force 16,793.63 17,141.12 17,503.48 17,884.21 18,641.83 (000,000) Country annual employment growth % 1.74 2.07 2.11 2.18 4.24 NOC - Country employment growth % points 22.26 -14.93 NOC employment share of country workforce % 0.01 0.01 0.01 NOC local purchases goods and services $ MM 126.42 264.13 441.22 465.72 NOC total purchases goods and services $ MM 471.36 416.19 660.32 1,076.15 667.22 Share of local content % 30.37 40.00 41.00 69.80 NOC noncommercial expenditure (national currency) MM 26.10 19.00 5.00 44.80 85.10 NOC noncommercial expenditure $ MM 4.04 2.99 0.74 6.15 10.49 Noncommercial expenditure/Total expenditure % 0.86 0.72 0.11 0.57 1.57 Net income from non-core commercial business activities $ MM Net income from total commercial activities $ MM 239.50 1,736.71 2,765.35 2,714.31 1,830.37 Net income noncore commercial activities/Net income % Price subsidies provided by NOC $ MM Total NOC Revenues $ MM 537.31 1,013.52 1,110.80 1,229.67 1,358.61 Price Subsidies/Revenues % NOC domestic petroleum products production MMBOE 8.80 15.00 11.38 10.17 7.92 Country oil consumption MMBOE 190.90 191.99 196.01 200.39 203.67 Domestic output use % 4.61 7.81 5.81 5.08 3.89 64 (b) Value creation index 2004 2005 2006 2007 2008 Operational Performance E&P production growth (%) 45.19 -16.22 -18.94 -10.72 Reserves replacement rate (BOE, %) -70.50 166.60 83.02 -162.99 25.55 Refinery utilization rate (%) Output / total assets (BOE/'000$) 8.78 11.32 8.54 6.08 5.00 Output / total employees ('000 BOE) 18.60 12.40 11.41 Financial Performance EBRTN / revenues (%) 7.67 33.26 38.83 30.59 24.97 EBRTN / total assets (%) 2.23 16.25 18.71 14.35 11.90 NCF / CAPEX (%) 104.7 1,410.07 737.74 194.35 220.27 National Mission Performance Share of nationals in NOC workforce (%) 0.00 98.04 97.09 96.00 NOC – Country employment growth (% points) 22.26 -14.93 NOC employment share of country workforce (%) 0.01 0.01 0.01 Share of local content (%) 30.37 40.00 41.00 69.80 Noncommercial expenditures/total expenditures (%) 0.86 0.72 0.11 0.57 1.57 Noncore commercial activities net income/Total net income (%) Price Subsidies/Revenues (%) Domestic output use (%) 4.61 7.81 5.81 5.08 3.89 (c) Normalized value creation index 2004 2005 2006 2007 2008 Operational Performance 0.09 0.37 0.13 0.08 0.05 E&P production growth 0.18 0.00 0.01 0.00 Reserves replacement rate 0.01 0.72 0.10 -0.01 0.01 Refinery utilization rate Output / total assets 0.16 0.27 0.24 0.18 0.14 Output / total employees 0.32 0.18 0.14 Financial Performance 0.18 0.20 0.20 0.37 0.34 EBRTN / revenues 0.00 0.30 0.36 0.26 0.23 EBRTN / total assets 0.00 0.10 0.04 0.07 0.11 NCF / CAPEX 0.53 0.79 0.67 National Mission Performance 0.22 0.33 0.22 0.27 Share of nationals in NOC workforce 0.98 0.96 0.95 NOC – Country employment growth 1.00 0.00 NOC employment share of country workforce 0.00 0.01 0.01 Share of local content 0.00 0.00 0.35 0.72 Noncommercial expenditures/total expenditures 0.30 0.05 0.00 0.02 0.09 Noncore commercial activities net income/Total net income Price Subsidies/Revenues Domestic output use 0.00 0.00 0.01 0.00 0.00 VCI 0.09 0.26 0.22 0.23 0.22 65 (d) Value drivers 2004 2005 2006 2007 2008 Source GEOLOGY BP Statistical Review of World Energy June Country specific resource 16 16 16 15 15 2009 available at endowment oil MMBBL http://www.bp.com/statisticalreview BP Statistical Review of World Energy June Country specific resource 0 0 0 0 0 2009 available at endowment gas BCM http://www.bp.com/statisticalreview Country specific resource 16 16 16 15 15 CEE calculation endowment MMBOE STATE CONTEXT WGI: Voice and http://info.worldbank.org/governance/wgi/index. 0.75 0.75 0.83 0.71 0.68 Accountability asp http://info.worldbank.org/governance/wgi/index. WGI: Political Stability -0.17 -0.03 0.00 0.04 -0.04 asp WGI: Government http://info.worldbank.org/governance/wgi/index. 0.78 0.83 0.71 0.72 0.75 Effectiveness asp http://info.worldbank.org/governance/wgi/index. WGI: Regulatory Quality 0.55 0.48 0.55 0.42 0.63 asp http://info.worldbank.org/governance/wgi/index. WGI: Rule of Law 0.15 0.16 0.24 0.13 0.12 asp http://info.worldbank.org/governance/wgi/index. WGI: Corruption Control 0.44 0.55 0.45 0.33 0.30 asp Hydrocarbon Revenues as % of Total Government Revenues Hydrocarbon Revenues as % of GDP WTO membership (yes- 1 1 1 1 1 www.wto.org 1/no-0) over five years OPEC membership (yes- 0 0 0 0 0 www.opec.org 1/no-0) over five years Country Crude Oil Exports 2008 OPEC Annual Statistical Bulletin at 0 4 5 4 6 -000 BPD www.opec.org Country Crude Oil 2009 OPEC Annual Statistical Bulletin at 471 538 443 451 470 Imports-000 BPD www.opec.org (Country Revenues Oil Imports valued at nominal oil price as reported Exports)-(Costs Oil -6 -10 -10 -11 -16 in 2008 OPEC Annual Statistical Bulletin at Imports) US $ Billion www.opec.org Country Gross Domestic World Bank Development Indicators: 216 243 258 284 276 Product US $ Billion http://data.worldbank.org/indicator Country Net Revenues (Costs) of Oil Exports -2.9 -4.1 -3.8 -4.0 -5.8 CEE calculation (Imports) as % of GDP Government Budget http://www.tradingeconomics.com/Economics/G Surplus/Deficit as % of -2.6 -2.1 18.0 overnment-Budget.aspx?Symbol=ZAR Gross Domestic Product Stabilization Mechanisms such as petroleum funds 0 0 0 0 0 http://www.swfinstitute.org/ (yes-1/no-0) PETROLEUM SECTOR ORGANIZATION AND GOVERANANCE Publicly disclosed national policy addressing Mineral and Petroleum Resources Development 1 1 1 1 1 hydrocarbon sector issues Act 2002 (yes-1/no-0) Scoring: Independent NOC, Ministry and regulatory function (100); Regulatory function is performed by ministry (66); Regulatory function Institutional structure 50 50 50 50 50 is performed by NOC (33); All three functions combined in one entity (0). http://www.cef.org.za/index.php?option=com_c ontent&view=article&id=1&Itemid=2 66 Country oil production US Energy Information Administration at 85 79 74 72 71 MM Barrels http://tonto.eia.doe.gov. Country gas production US Energy Information Administration at 79 78 102 106 115 BCF http://tonto.eia.doe.gov. Country MMBOE 99 92 92 90 91 CEE calculation production NOC MMBOE Domestic Petro SA annual reports for the relevant year 16 23 19 15 14 Production available at www.petrosa.co.za Non-NOC percentage of 84.0 75.0 79.0 83.0 85.0 CEE calculation oil and gas production (%) Country Refinery Capacity US Energy Information Administration at 692 692 692 692 692 - 000 BPD http://www.eia.doe.gov Net NOC Refinery Capacity - 000 BPD 0 0 0 0 0 Petro SA annual reports for the relevant year (country level) Non-NOC percentage of refinery capacity (%, 100.0 100.0 100.0 100.0 100.0 CEE calculation. country level) Total Revenues (local 3,473.3 6,446.4 7,508.6 8,951.8 11,018.8 Petro SA annual reports for the relevant year currency Bn) Royalties and production 15,530 14,236 Petro SA annual reports for the relevant year taxes (local currency MM) Income taxes (local 436 114,868 88,966 664,310 Petro SA annual reports for the relevant year currency MM) Dividends paid to government (local 500,000 Petro SA annual reports for the relevant year currency MM) Royalties, production taxes, income taxes and dividends paid to 0.0 2.0 8.0 0.0 6.0 CEE Calculation government by NOC as percentage of total revenues (%) Effect of contract terms on No No No No No Sources: Fraser Institute Global Petroleum investment decisions survey survey survey survey survey Survey 2007 and 2008 Effect of taxation regime No No No No No Sources: Fraser Institute Global Petroleum on decision to invest survey survey survey survey survey Survey 2007 and 2008 Effect of cost of regulatory No No No No No Sources: Fraser Institute Global Petroleum compliance on decision to survey survey survey survey survey Survey 2007 and 2008 invest Effect of regulatory No No No No No Sources: Fraser Institute Global Petroleum uncertainty on decision to survey survey survey survey survey Survey 2007 and 2008 invest Effect of environmental No No No No No Sources: Fraser Institute Global Petroleum regulations on decision to survey survey survey survey survey Survey 2007 and 2008 invest Scoring: Priority ranked publicly disclosed objectives exist and are publicly measured (100); Objectives publicly disclosed but not ranked and are publicly measured (75); Objectives publicly NOC objectives 75 75 75 75 75 disclosed and ranked but not publicly measured (50); Objectives publicly disclosed but not ranked and not publicly measured (25); No public documentation of NOC objectives (0). Petro SA annual reports for the relevant year NOC STRATEGY AND BEHAVIOR Percentage of NOC domestic upstream 1 1 1 1 1 Petro SA annual reports for the relevant year production operated by specific NOC. If no data 67 yes-1/no-0. Percentage of NOC domestic refining production operated by 0.0 0.0 0.0 0.0 0.0 Petro SA annual reports for the relevant year specific NOC. If no data yes-1/no-0. NOC upstream capital expenditures as percentage Not reported of total capital expenditures (%) NOC refining capital expenditures as percentage 0.0 0.0 0.0 0.0 0.0 Not reported of total capital expenditures (%) NOC upstream oil equity production as percentage of total NOC refining Not applicable throughput (%). If no data, yes/no. NOC international revenues as percentage of 1 1 1 1 1 Petro SA annual reports for the relevant year total NOC revenues (%). If no data yes-1/no-0. Scoring: NOC partnerships/JVs exist domestically and internationally (100); NOC partnerships exist domestically but not Joint ventures between the internationally (66); NOC partnerships exist 100 100 100 100 100 NOC and third parties internationally but not domestically (33); NOC partnerships, JVs, alliances do not exist (0). Petro SA annual reports for the relevant year NOC CORPORATE GOVERNANCE Percentage of non- government ownership of 0.0 0.0 0.0 0.0 0.0 Petro SA annual reports for the relevant year specific NOC (%) Percentage of independent 40.0 40.0 40.0 40.0 40.0 Petro SA annual reports for the relevant year BOD members (%) Scoring: (100)-The government has no participation in deciding who will fill the positions of Chairman/CEO; (50)-The Appointment authority for government through its control of required NOC chairman and chief 50 50 50 50 50 voting shares can influence, directly or executive officer indirectly, the appointments of Chairman/CEO and (0) The Chairman and/or CEO is a direct appointee of the government entity Petro SA annual reports for the relevant year Scoring: No governmental approval of NOC budget required (100); No governmental approval of NOC budget required but certain capital expenditures require state approval Independence of NOC (75);NOC budget is proposed to and approved capital and budget 50 50 50 50 50 by one central government entity (50); NOC processes budget is proposed to and approved by multiple central government entities (25); NOC budget is part of the national budget (0). Petro SA annual reports for the relevant year NOC net cash flow after taxes and dividends (local 301.8 4,061.0 2,889.2 4,242.4 3,793.0 Petro SA annual reports for the relevant year currency Bn) NOC capital expenditures 287.5 287.5 466.6 2,325.8 1,722.1 Petro SA annual reports for the relevant year (local currency MM) Measured by net cash flow after taxes and NOC financial dividends as percentage of capital expenditures 105.0 1412.3 619.2 182.4 220.3 % sustainability (%) CEE Calculation Scoring: NOC financial statement auditing performed by independent international auditor and files reports with international exchange NOC financial 50 50 50 50 50 (100); FS auditing performed and publicly transparency disclosed by independent international auditor (75); FS auditing performed and publicly disclosed by independent domestic or 68 government auditor (50) ; FS auditing performed internally by N OC and publicly disclosed (25); No publicly available auditing (0) Petro SA annual reports for the relevant year Scoring: NOC oil & gas reserves auditing performed by independent international firm and files reports with international exchange (100); reserves auditing performed and publicly disclosed by independent international firm (75); NOC upstream reserves reserves auditing performed and publicly 0 0 0 0 0 transparency disclosed by independent domestic firm (50); reserves auditing performed internally and publicly disclosed (25); No publicly available reserves auditing (0). Petro SA annual reports for the relevant year Note: Non-shaded areas indicate data used in the exploratory statistical analysis presented in National Oil Companies and Value Creation, volume I, chapter 4. 69 12. Petróleos Brasileiro S.A. (Brazil) (a) Value creation index components Operational Performance unit 2004 2005 2006 2007 2008 Company gas production BCF Company oil production MM Bbls E&P production (BOE) MM BOE 687.00 741.00 782.00 783.00 822.00 E&P production growth % 16.24 7.86 5.53 0.13 4.98 Total net additions proved oil reserves MM Bbls Total net additions proved gas reserves BCF Total net additions proved gas reserves MM BOE Reserve additions (BOE) MM BOE 713.00 1,846.00 371.00 1,036.00 296.0 Reserves replacement rate % 103.78 249.12 47.44 132.31 36.01 Primary distillation capacity MBPD 1,985.00 2,027.00 1,986.00 2,167.00 19.00 Total refining throughput MBPD 1,704.00 1,726.00 1,746.00 1,950.30 17.27 Refinery utilization rate % 85.84 85.15 87.92 90.00 90.90 Assets $ MM 63,082.00 78,638.00 98,680.00 129,715.00 125,695.00 Output / total assets BOE/000$ 20.75 17.43 14.38 11.52 6.59 Employees # of people 52,037.00 53,904.00 62,266.00 68,931.00 74,240.00 Output / total employees BOE/000$ 25.15 25.43 22.79 21.69 11.16 Financial Performance Unit 2004 2005 2006 2007 2008 Earnings before interest & taxes $ MM 27,117.00 37,053.00 47,385.00 44,738.00 66,178.00 Direct expenditures on social/economic development $ MM 212.00 113.00 119.00 123.54 312.83 programs Total revenue $ MM 51,954.00 74,065.00 93,893.00 112,425.00 146,529.00 EBRTN $ MM 27,329.00 37,166.00 47,504.00 44,861.54 66,490.83 EBRTN / revenues % 52.60 50.18 50.59 39.90 45.38 EBRTN / total assets % 43.32 47.26 48.14 34.58 52.90 Total capital expenditures $ MM 8,371.00 10,436.00 15,246.00 22,529.00 29,874.00 net cash flow after taxes and dividends $ MM 6,370.00 13,051.00 17,933.00 18,631.00 23,453.00 NCF/CAPEX % 76.10 125.06 117.62 82.70 78.51 National Mission Performance Unit 2004 2005 2006 2007 2008 Total number of NOC local employees # of people 46,098.00 47,709.00 55,409.00 62,148.00 67,465.00 Total number of NOC non-local employees # of people 5,935.00 6,195.00 6,857.00 6,783.00 6,775.00 Share of nationals in NOC workforce % 88.59 88.51 88.99 90.16 90.87 NOC employment in native country (# people) # of people 46,098.00 47,738.00 55,409.00 62,148.00 67,465.00 NOC annual employment growth % 3.56 16.07 12.16 8.56 # of people Country Labor Force 91,961.40 94,507.38 97,036.61 97,879.08 99,945.05 (000,000) Country annual employment growth % 2.86 2.77 2.68 0.87 2.11 NOC - Country employment growth % points 0.79 13.39 11.29 6.44 NOC employment share of country workforce % 0.05 0.05 0.06 0.06 0.07 NOC local purchases goods and services $ MM NOC total purchases goods and services $ MM 30,835.00 43,125.00 58,214.00 76,758.00 108,120.00 Share of local content % 80.00 70.00 NOC noncommercial expenditure (national currency) MM NOC noncommercial expenditure $ MM 212.00 113.00 119.00 123.54 312.83 Noncommercial expenditure/Total expenditure % 0.69 0.26 0.20 0.16 0.29 Net income from non-core commercial business $ MM activities Net income from total commercial activities $ MM 6,190.00 23.73 25.92 21.51 32.99 Net income noncore commercial activities/Net % income Price subsidies provided by NOC $ MM 1,440.00 1,440.00 1,440.00 1,440.00 Total NOC Revenues $ MM 51,954.00 74,065.00 93,893.00 112,425.00 146,529.00 Price Subsidies/Revenues % 1.94 1.53 1.28 0.98 NOC domestic petroleum products production MMBOE 623.00 633.00 619.41 655.18 652.26 Country oil consumption MMBOE 729.49 747.35 767.09 829.95 874.83 Domestic output use % 85.40 84.70 80.75 78.94 74.56 70 (b) Value creation index 2004 2005 2006 2007 2008 Operational Performance E&P production growth (%) 16.24 7.86 5.53 0.13 4.98 Reserves replacement rate (BOE, %) 103.78 249.12 47.44 132.31 36.01 Refinery utilization rate (%) 85.84 85.15 87.92 90.00 90.90 Output / total assets (BOE/'000$) 20.75 17.43 14.38 11.52 6.59 Output / total employees ('000 BOE) 25.15 25.43 22.79 21.69 11.16 Financial Performance EBRTN / revenues (%) 52.60 50.18 50.59 39.90 45.38 EBRTN / total assets (%) 43.32 47.26 48.14 34.58 52.90 NCF / CAPEX (%) 76.10 125.06 117.62 82.70 78.51 National Mission Performance Share of nationals in NOC workforce (%) 88.59 88.51 88.99 90.16 90.87 NOC – Country employment growth (% points) 0.79 13.39 11.29 6.44 NOC employment share of country workforce (%) 0.06 0.06 0.07 Share of local content (%) 80.00 70.00 Noncommercial expenditures/total expenditures (%) 0.69 0.26 0.20 0.16 0.29 Noncore commercial activities net income/Total net income (%) Price Subsidies/Revenues (%) 1.94 1.53 1.28 0.98 Domestic output use (%) 85.40 84.70 80.75 78.94 74.56 (c) Normalized value creation index 2004 2005 2006 2007 2008 Operational Performance 0.51 0.46 0.28 0.45 0.26 E&P production growth 0.71 0.06 0.35 0.48 0.48 Reserves replacement rate 0.53 1.00 0.02 0.80 0.11 Refinery utilization rate 0.47 0.39 0.27 0.33 0.36 Output / total assets 0.42 0.43 0.42 0.35 0.19 Output / total employees 0.44 0.44 0.34 0.28 0.14 Financial Performance 0.57 0.49 0.48 0.38 0.48 EBRTN / revenues 0.62 0.52 0.50 0.37 0.47 EBRTN / total assets 0.70 0.53 0.55 0.44 0.79 NCF / CAPEX 0.39 0.41 0.40 0.31 0.19 National Mission Performance 0.37 0.28 0.43 0.35 0.31 Share of nationals in NOC workforce 0.86 0.86 0.86 0.88 0.89 NOC – Country employment growth 0.35 0.83 0.36 0.30 NOC employment share of country workforce 0.00 0.00 0.04 0.05 0.06 Share of local content 0.78 0.75 Noncommercial expenditures/total expenditures 0.24 0.02 0.01 0.01 0.01 Noncore commercial activities net income/Total net income Price Subsidies/Revenues 0.06 0.08 0.03 0.04 Domestic output use 0.37 0.39 0.41 0.38 0.56 VCI 0.49 0.41 0.40 0.39 0.35 71 (d) Value drivers 2004 2005 2006 2007 2008 Source GEOLOGY BP Statistical Review of World Energy June Country specific resource 11,243 11,772 12,182 12,624 12,801 2009 available at endowment oil MMBBL http://www.bp.com/statisticalreview BP Statistical Review of World Energy June Country specific resource 321 302 343 360 359 2009 available at endowment gas BCM http://www.bp.com/statisticalreview Country specific resource 13,263 13,671 14,337 14,890 15,058 CEE calculation endowment MMBOE STATE CONTEXT WGI: Voice and http://info.worldbank.org/governance/wgi/index. 0.35 0.43 0.51 0.48 0.51 Accountability asp http://info.worldbank.org/governance/wgi/index. WGI: Political Stability -0.08 -0.08 -0.13 -0.17 -0.12 asp WGI: Government http://info.worldbank.org/governance/wgi/index. 0.01 -0.09 -0.14 -0.13 -0.01 Effectiveness asp http://info.worldbank.org/governance/wgi/index. WGI: Regulatory Quality 0.07 0.05 -0.04 -0.04 0.19 asp http://info.worldbank.org/governance/wgi/index. WGI: Rule of Law -0.32 -0.44 -0.43 -0.43 -0.3 asp http://info.worldbank.org/governance/wgi/index. WGI: Corruption Control 0.06 -0.19 -0.17 -0.21 -0.03 asp CEE calculation based on following relationships: Oil revenues averaging 1.4% of GDP and government revenues averaging 23% Hydrocarbon Revenues as of GDP. Sources:"Raising and Sharing % of Total Government 6.0 6.0 6.0 6.0 6.0 Revenue" by Sergio Wulff Gobetti, Conference Revenues on Oil and Gas in Federal Systems, World Bank, March 2010; World Bank Development Indicators: http://data.worldbank.org/indicator "Raising and Sharing Revenue" by Sergio Wulff Hydrocarbon Revenues as 1.4 1.4 1.4 1.4 1.4 Gobetti, Conference on Oil and Gas in Federal % of GDP Systems, World Bank, March 2010. WTO membership (yes- 1 1 1 1 1 www.wto.org 1/no-0) over five years OPEC membership (yes- 0 0 0 0 0 www.opec.org 1/no-0) over five years Country Crude Oil Exports 2008 OPEC Annual Statistical Bulletin at -000 BPD www.opec.org Country Crude Oil 2009 OPEC Annual Statistical Bulletin at 413 420 427 392 372 Imports-000 BPD www.opec.org (Country Revenues Oil Imports valued at nominal world oil price as Exports)-(Costs Oil reported in 2008 OPEC Annual Statistical 5 8 10 10 13 Imports) US $ Billion Bulletin at www.opec.org Country Gross Domestic World Bank Development Indicators: 664 882 1,090 1,330 1,610 Product US $ Billion http://data.worldbank.org/indicator Country Net Revenues (Costs) of Oil Exports 0.8 0.9 0.9 0.7 0.8 CEE calculation (Imports) as % of GDP Government Budget http://www.tradingeconomics.com/Economics/G Surplus/Deficit as % of 5.7 2.3 3.1 2.3 1.7 overnment-Budget.aspx?Symbol=BRL Gross Domestic Product Stabilization Mechanisms such as petroleum funds 0 0 0 0 0 http://www.anp.gov.br/ (yes-1/no-0) PETROLEUM SECTOR ORGANIZATION AND GOVERANANCE Publicly disclosed national policy addressing 1 1 1 1 1 Petrobras Form 20Fs for relevant year hydrocarbon sector issues (yes-1/no-0) 72 Scoring: Independent NOC, Ministry and regulatory function (100); Regulatory function is performed by ministry (66); Regulatory function Institutional structure 83 83 83 83 83 is performed by NOC (33); All three functions combined in one entity (0). Petrobras Form 20Fs for relevant year BP Statistical Review of World Energy June Country oil production 562 626 660 668 693 2009 available at MM Barrels http://www.bp.com/statisticalreview Petrobras Form 20Fs for relevant years. Both BP Country gas production and OPEC appear to report marketed gas 478 530 533 510 605 BCF production which is significantly lower than Petrobras gas production. Country MMBOE 644 717 752 756 797 CEE calculation production NOC MMBOE Domestic 602 673 708 708 750 Petrobras Form 20Fs for relevant year Production Non-NOC percentage of 6.6 6.2 5.8 6.3 5.9 CEE calculation oil and gas production (%) Greater of Petrobras Form 20Fs for relevant Country Refinery Capacity years or BP Statistical Review of World Energy 1,915 1,928 1,929 1,935 1942 - 000 BPD June 2009 available at http://www.bp.com/statisticalreview Net NOC Refinery Capacity - 000 BPD 1,915 1,928 1,929 1,935 1942 Petrobras Form 20Fs for relevant year (country level) Non-NOC percentage of refinery capacity (%, 0.0 0.0 0.0 0.0 0.0 CEE calculation. country level) Total Revenues (local 51,954 74,065 93,893 112,425 146,529 Petrobras Form 20Fs for relevant year currency MM) Royalties and production 4,052 5,831 7,477 8,381 9,255 Petrobras Form 20Fs for relevant year taxes (local currency MM) Income taxes (local Based on E&P income taxes paid in Brazil. 2,231 4,441 5,691 5,888 9,259 currency MM) Petrobras Form 20Fs for relevant year Dividends paid to government (local 1,000 1,178 1,761 2,242 2,658 ONGC annual reports for relevant year currency MM) Royalties, production taxes, income taxes and dividends paid to 14.0 15.5 15.9 14.7 14.4 CEE Calculation government by NOC as percentage of total revenues (%) Effect of contract terms on No No No Sources: Fraser Institute Global Petroleum 2.00 2.29 investment decisions survey survey survey Survey 2007 and 2008 Effect of taxation regime No No No Sources: Fraser Institute Global Petroleum 2.87 2.67 on decision to invest survey survey survey Survey 2007 and 2008 Effect of cost of regulatory No No No Sources: Fraser Institute Global Petroleum compliance on decision to 2.57 2.72 survey survey survey Survey 2007 and 2008 invest Effect of regulatory No No No Sources: Fraser Institute Global Petroleum uncertainty on decision to 2.54 2.29 survey survey survey Survey 2007 and 2008 invest Effect of environmental No No No Sources: Fraser Institute Global Petroleum regulations on decision to 2.50 2.38 survey survey survey Survey 2007 and 2008 invest Scoring: Priority ranked publicly disclosed objectives exist and are publicly measured (100); Objectives publicly disclosed but not ranked and NOC objectives 25 25 25 25 25 are publicly measured (75); Objectives publicly disclosed and ranked but not publicly measured (50); Objectives publicly disclosed but not 73 ranked and not publicly measured (25); No public documentation of NOC objectives (0). Petrobras Form 20Fs for relevant year NOC STRATEGY AND BEHAVIOR Percentage of NOC domestic upstream CEE estimate based on Petrobras Form 20Fs for production operated by 95.0 95.0 95.0 95.0 95.0 relevant year specific NOC. If no data yes-1/no-0. Percentage of NOC domestic refining CEE estimate based on Petrobras Form 20Fs for production operated by 100. 100.0 100.0 100.0 100.0 relevant year specific NOC. If no data yes-1/no-0. NOC upstream capital expenditures as percentage CEE estimate based on Petrobras Form 20Fs for 57.0 64.0 51.0 53.0 57.0 of total capital relevant year expenditures (%) CEE estimate based on Petrobras Form 20Fs for NOC refining capital relevant year. Note: Refining capital expenditures as percentage expenditures are not separated but included in 16.0 17.0 13.0 21.0 25.0 of total capital the Supply Segment which also includes oil expenditures (%) logistics, petrochemicals, fertilizers, ethanol distribution. NOC upstream oil equity production as percentage CEE estimate based on Petrobras Form 20Fs for of total NOC refining 94.0 102.0 103.0 90.0 94.0 relevant year throughput (%). If no data, yes/no. NOC international revenues as percentage of CEE estimate based on Petrobras Form 20Fs for 8.0 6.0 7.0 9.0 8.0 total NOC revenues (%). If relevant year no data yes-1/no-0. Scoring: NOC partnerships/JVs exist domestically and internationally (100); NOC partnerships exist domestically but not Joint ventures between the internationally (66); NOC partnerships exist 100 100 100 100 100 NOC and third parties internationally but not domestically (33); NOC partnerships, JVs, alliances do not exist (0). Petrobras Form 20Fs for relevant year NOC CORPORATE GOVERNANCE Percentage of non- government ownership of 44.3 44.3 44.3 44.3 44.3 Petrobras Form 20Fs for relevant year specific NOC (%) Percentage of independent 22.2 22.2 22.2 22.2 22.2 Petrobras Form 20Fs for relevant year BOD members (%) Scoring: (100)-The government has no participation in deciding who will fill the positions of Chairman/CEO; (50)-The Appointment authority for government through its control of required NOC chairman and chief 50 50 50 50 50 voting shares can influence, directly or executive officer indirectly, the appointments of Chairman/CEO and (0) The Chairman and/or CEO is a direct appointee of the government entity Petrobras Form 20Fs for relevant year Scoring: No governmental approval of NOC budget required (100); No governmental approval of NOC budget required but certain capital expenditures require state approval Independence of NOC (75);NOC budget is proposed to and approved capital and budget 50 50 50 50 50 by one central government entity (50); NOC processes budget is proposed to and approved by multiple central government entities (25); NOC budget is part of the national budget (0). Petrobras Form 20Fs for relevant year NOC net cash flow after taxes and dividends (local 6,370 13,051 17,933 18,631 23,453 Petrobras Form 20Fs for relevant year currency MM) NOC capital expenditures 8,371 10,436 15,246 22,529 29,874 Petrobras Form 20Fs for relevant year (local currency MM) 74 Measured by net cash flow after taxes and NOC financial dividends as percentage of capital expenditures 76.1 125.1 117.6 82.7 78.5 % sustainability (%) CEE Calculation Scoring: NOC financial statement auditing performed by independent international auditor and files reports with international exchange (100); FS auditing performed and publicly disclosed by independent international auditor NOC financial (75); FS auditing performed and publicly 100 100 100 100 100 transparency disclosed by independent domestic or government auditor (50) ; FS auditing performed internally by N OC and publicly disclosed (25); No publicly available auditing (0) Petrobras Form 20Fs for relevant year Scoring: NOC oil & gas reserves auditing performed by independent international firm and files reports with international exchange (100); reserves auditing performed and publicly disclosed by independent international firm (75); NOC upstream reserves reserves auditing performed and publicly 100 100 100 100 100 transparency disclosed by independent domestic firm (50); reserves auditing performed internally and publicly disclosed (25); No publicly available reserves auditing (0). Petrobras Form 20Fs for relevant year Note: Non-shaded areas indicate data used in the exploratory statistical analysis presented in National Oil Companies and Value Creation, volume I, chapter 4. 75 13. Petro China Company Limited (China) (a) Value creation index components Operational Performance unit 2004 2005 2006 2007 2008 Company gas production BCF 1,068.24 1,339.55 1,588.00 1,627.00 1,864.00 Company oil production MM Bbls 819.98 825.41 831.14 839.00 871.00 E&P production (BOE) MM BOE 1,014.40 1,069.20 1,120.16 1,135.11 1,210.25 E&P production growth % 10.38 5.40 4.77 1.34 6.62 Total net additions proved oil reserves MM Bbls 823.00 864.00 913.00 927.00 386.00 Total net additions proved gas reserves BCF 4,531.00 4,218.00 6,934.00 5,269.00 5,942.00 Total net additions proved gas reserves MM BOE 824.64 767.68 1,261.99 958.96 1,081.44 Reserve additions (BOE) MM BOE 1,647.64 1,631.68 2,174.99 1,885.96 1,467.44 Reserves replacement rate % 162.43 152.61 194.17 166.15 121.25 Primary distillation capacity MBPD 2,183.00 2,337.00 2,564.00 2,580.10 2,580.10 Total refining throughput MBPD 1,939.00 2,061.00 2,151.00 2,256.50 2,300.00 Refinery utilization rate % 88.82 88.19 83.89 87.46 89.14 Assets $ MM 77,110.75 95,118.22 109,597.13 141,035.67 172,691.02 Output / total assets BOE/000$ 22.33 19.15 17.38 13.89 11.87 Employees # of people 424,175.00 439,290.00 446,290.00 466,502.00 477,780.00 Output / total employees BOE/000$ 4.06 4.15 4.27 4.20 4.29 Financial Performance Unit 2004 2005 2006 2007 2008 Earnings before interest & taxes (national currency) MM 172,321.00 217,762.00 257,105.00 274,563.00 283,415.00 Direct expenditures on social/economic development MM 96.56 219.89 351.25 programs (national currency) Total revenue (national currency) Bn 397.35 553.35 690.51 836.35 1,071.10 EBRTN MM 172,321.00 217,762.00 257,201.56 274,782.89 283,766.25 EBRTN / revenues % 43.37 39.35 37.25 32.85 26.49 EBRTN / total assets % 26.99 27.99 29.49 25.70 23.75 Total capital expenditures (national currency) MM 95,045.00 121,561.00 158,578.00 194,182.00 243,752.00 net cash flow after taxes and dividends MM 88,024.0 169,557.0 196,765.7 205,586.0 179,526.2 NCF/CAPEX % 92.61 139.48 124.08 105.87 73.65 National Mission Performance Unit 2004 2005 2006 2007 2008 Total number of NOC local employees # of people Total number of NOC non-local employees # of people Share of nationals in NOC workforce % 99.00 99.00 99.00 99.00 99.00 NOC employment in native country (# people) # of people 419,933.25 434,897.10 441,827.10 461,836.98 473,002.20 NOC annual employment growth % 3.76 3.56 1.59 4.53 2.42 # of people Country Labor Force 754,509.41 760,627.03 766,465.19 771,078.94 776,880.99 (000,000) Country annual employment growth % 1.03 0.81 0.77 0.60 0.75 NOC - Country employment growth % points 2.73 2.75 0.83 3.93 1.67 NOC employment share of country workforce % 0.06 0.06 0.06 0.06 0.06 NOC local purchases goods and services $ MM 111,948.00 164,489.00 188,352.00 231,820.00 265,377.00 NOC total purchases goods and services $ MM 114,249.00 200,321.00 269,301.00 369,219.00 562,122.00 Share of local content % 97.99 82.11 69.94 62.79 47.21 NOC noncommercial expenditure (national currency) MM 96.56 219.89 351.25 NOC noncommercial expenditure $ MM 12.13 29.01 50.76 Noncommercial expenditure/Total expenditure % 0.04 0.06 0.06 Net income from non-core commercial business $ MM activities Net income from total commercial activities $ MM 108,108.00 140,105.00 150,148.00 155,176.00 126,651.00 Net income noncore commercial activities/Net % income Price subsidies provided by NOC $ MM 2,392.51 2,421.76 3,659.22 2,728.02 11,991.10 Total NOC Revenues $ MM 47,989.61 67,646.70 86,770.63 110,328.07 154,798.90 Price Subsidies/Revenues % 4.99 3.58 4.22 2.47 7.75 NOC domestic petroleum products production MMBOE 551.93 580.73 617.04 655.22 675.60 Country oil consumption MMBOE 2,471.87 2,549.20 2,694.35 2,825.90 2,919.58 Domestic output use % 22.33 22.78 22.90 23.19 23.14 76 (b) Value creation index 2004 2005 2006 2007 2008 Operational Performance E&P production growth (%) 10.38 5.40 4.77 1.34 6.62 Reserves replacement rate (BOE, %) 162.43 152.61 194.17 166.15 121.25 Refinery utilization rate (%) 88.82 88.19 83.89 87.46 89.14 Output / total assets (BOE/'000$) 22.33 19.15 17.38 13.89 11.87 Output / total employees ('000 BOE) 4.06 4.15 4.27 4.20 4.29 Financial Performance EBRTN / revenues (%) 43.37 39.35 37.25 32.85 26.49 EBRTN / total assets (%) 26.99 27.99 29.49 25.70 23.75 NCF / CAPEX (%) 92.61 139.48 124.08 105.87 73.65 National Mission Performance Share of nationals in NOC workforce (%) 99.00 99.00 99.00 99.00 99.00 NOC – Country employment growth (% points) 2.73 2.75 0.83 3.93 1.67 NOC employment share of country workforce (%) 0.06 0.06 0.06 0.06 0.06 Share of local content (%) 97.99 82.11 69.94 62.79 47.21 Noncommercial expenditures/total expenditures (%) 0.04 0.06 0.06 Noncore commercial activities net income/Total net income (%) Price Subsidies/Revenues (%) 4.99 3.58 4.22 2.47 7.75 Domestic output use (%) 22.33 22.78 22.90 23.19 23.14 (c) Normalized value creation index 2004 2005 2006 2007 2008 Operational Performance 0.45 0.34 0.29 0.43 0.43 E&P production growth 0.54 0.06 0.34 0.51 0.53 Reserves replacement rate 0.71 0.68 0.35 0.89 0.91 Refinery utilization rate 0.51 0.43 0.20 0.28 0.33 Output / total assets 0.46 0.47 0.51 0.43 0.35 Output / total employees 0.05 0.06 0.05 0.04 0.05 Financial Performance 0.46 0.37 0.33 0.33 0.24 EBRTN / revenues 0.49 0.38 0.34 0.29 0.24 EBRTN / total assets 0.42 0.26 0.22 0.28 0.31 NCF / CAPEX 0.47 0.48 0.43 0.41 0.17 National Mission Performance 0.48 0.43 0.36 0.30 0.31 Share of nationals in NOC workforce 0.99 0.99 0.99 0.99 0.99 NOC – Country employment growth 0.61 0.39 0.58 0.26 0.23 NOC employment share of country workforce 0.03 0.03 0.04 0.05 0.05 Share of local content 1.00 1.00 0.59 0.65 0.44 Noncommercial expenditures/total expenditures 0.00 0.00 0.00 Noncore commercial activities net income/Total net income Price Subsidies/Revenues 0.17 0.11 0.21 0.07 0.28 Domestic output use 0.08 0.08 0.11 0.09 0.15 VCI 0.46 0.38 0.33 0.35 0.33 77 (d) Value drivers 2004 2005 2006 2007 2008 Source GEOLOGY BP Statistical Review of World Energy June Country specific resource 15,531 15,587 15,615 15,493 14,817 2009 available at endowment oil MMBBL http://www.bp.com/statisticalreview BP Statistical Review of World Energy June Country specific resource 1,448 1,535 1,684 2,255 2,455 2009 available at endowment gas BCM http://www.bp.com/statisticalreview Country specific resource 24,640 25,240 26,204 29,678 30,261 CEE calculation endowment MMBOE STATE CONTEXT WGI: Voice and http://info.worldbank.org/governance/wgi/index. -1.45 -1.52 -1.68 -1.72 -1.72 Accountability asp http://info.worldbank.org/governance/wgi/index. WGI: Political Stability -0.14 -0.25 -0.31 -0.28 -0.32 asp WGI: Government http://info.worldbank.org/governance/wgi/index. -0.05 -0.12 0.06 0.19 0.24 Effectiveness asp http://info.worldbank.org/governance/wgi/index. WGI: Regulatory Quality -0.29 -0.25 -0.33 -0.24 -0.22 asp http://info.worldbank.org/governance/wgi/index. WGI: Rule of Law -0.36 -0.41 -0.48 -0.45 -0.33 asp http://info.worldbank.org/governance/wgi/index. WGI: Corruption Control -0.58 -0.67 -0.53 -0.61 -0.44 asp Hydrocarbon Revenues as % of Total Government Revenues Hydrocarbon Revenues as % of GDP WTO membership (yes- 1 1 1 1 1 www.wto.org 1/no-0) over five years OPEC membership (yes- 0 0 0 0 0 www.opec.org 1/no-0) over five years Country Crude Oil Exports 2008 OPEC Annual Statistical Bulletin at 109 161 126 76 77 -000 BPD www.opec.org Country Crude Oil US Energy Information Administration t 2,780 2,904 3,379 3,670 3,857 Imports-000 BPD http://www.eia.gov/countries/?fips=CH Exports valued at China Daiqing oil price and (Country Revenues Oil imports valued at nominal oil price as reported Exports)-(Costs Oil -35 -51 -72 -91 -130 in 2008 OPEC Annual Statistical Bulletin at Imports) US $ Billion www.opec.org Country Gross Domestic World Bank Development Indicators: 1,930 2,240 2,660 3,380 4,333 Product US $ Billion http://data.worldbank.org/indicator Country Net Revenues (Costs) of Oil Exports -1.8 -2.3 -2.7 -2.7 -3.0 CEE calculation (Imports) as % of GDP Government Budget http://www.tradingeconomics.com/Economics/G Surplus/Deficit as % of -2.4 -2.1 -1.6 -1.4 overnment-Budget.aspx?Symbol=CNY Gross Domestic Product Stabilization Mechanisms such as petroleum funds 0 0 0 0 0 CEE assessment (yes-1/no-0) PETROLEUM SECTOR ORGANIZATION AND GOVERANANCE China has been drafting an Energy Law since Publicly disclosed national 2006. In Feb. 2010 it was submitted to the policy addressing Legislative Affairs Office of the State Council 0 0 0 0 0 hydrocarbon sector issues and is expected to take effect in 2011. (yes-1/no-0) http://www.bjreview.com.cn/Energy/txt/2010- 02/25/content_248380.htm Scoring: Independent NOC, Ministry and regulatory function (100); Regulatory function is Institutional structure 66 66 66 66 66 performed by ministry (66); Regulatory function is performed by NOC (33); All three functions 78 combined in one entity (0). "China's Energy Market," by Nicholas V. Chen, Pamir Law Group, 9/19/08, nchen@pamirlaw.com; "Energy on the Agenda," BP Statistical Review of World Energy June Country oil production 2009 available at MM Barrels 1,271 1,324 1,345 1,366 1,385 http://www.bp.com/statisticalreview BP Statistical Review of World Energy June Country gas production 2009 available at BCF 1,460 1,742 2,068 2,445 2,679 http://www.bp.com/statisticalreview Country MMBOE CEE calculation production 1,523 1,624 1,702 1,788 1,847 NOC MMBOE Domestic Petrochina, CNOOC and Sinopec Form 20Fs for Production 1,374 1,465 1,525 1,550 1,621 relevant year Non-NOC percentage of 9.8 9.8 10.4 13.3 12.2 CEE calculation oil and gas production (%) BP Statistical Review of World Energy June Country Refinery Capacity 2009 available at - 000 BPD 6,289 6,587 7,029 7,511 7,732 http://www.bp.com/statisticalreview Net NOC Refinery Petrochina and Sinopec Form 20Fs for relevant Capacity - 000 BPD 5,300 5,552 5,847 6,042 6,193 year (country level) Non-NOC percentage of refinery capacity (%, 15.7 15.7 16.8 19.6 19.9 CEE calculation. country level) Total Revenues (local 397.4 552.2 690.5 836.4 1,071.1 Petrochina Form 20Fs for relevant year currency BM) Royalties and production 7,712 10,239 41,896 56,554 105,813 Petrochina Form 20Fs for relevant year taxes (local currency MM) Income taxes (local 43,598 54,180 50,602 49,781 35,178 Petrochina Form 20Fs for relevant year currency MM) Dividends paid to government (local 53,667 34,328 60,358 56,775 46,495 Petrochina Form 20Fs for relevant year currency MM) Royalties, production taxes, income taxes and dividends paid to 26.4 17.9 22.1 19.5 17.5 CEE Calculation government by NOC as percentage of total revenues (%) Effect of contract terms on No No No Sources: Fraser Institute Global Petroleum 2.42 2.16 investment decisions survey survey survey Survey 2007 and 2008 Effect of taxation regime No No No Sources: Fraser Institute Global Petroleum 2.97 2.64 on decision to invest survey survey survey Survey 2007 and 2008 Effect of cost of regulatory No No No Sources: Fraser Institute Global Petroleum compliance on decision to 2.84 2.11 survey survey survey Survey 2007 and 2008 invest Effect of regulatory No No No Sources: Fraser Institute Global Petroleum uncertainty on decision to 3.03 2.6 survey survey survey Survey 2007 and 2008 invest Effect of environmental No No No Sources: Fraser Institute Global Petroleum regulations on decision to 2.16 1.78 survey survey survey Survey 2007 and 2008 invest Scoring: Priority ranked publicly disclosed objectives exist and are publicly measured (100); Objectives publicly disclosed but not ranked and are publicly measured (75); Objectives publicly NOC objectives 25 25 25 25 25 disclosed and ranked but not publicly measured (50); Objectives publicly disclosed but not ranked and not publicly measured (25); No public documentation of NOC objectives (0). Petrochina Form 20Fs for relevant year NOC STRATEGY AND BEHAVIOR 79 Percentage of NOC domestic upstream % operated not disclosed in Form 20Fs but production operated by 1 1 1 1 1 company appears to be a substantial operating specific NOC. If no data entity yes-1/no-0. Percentage of NOC domestic refining production operated by 100.0 100.0 100.0 100.0 100.0 Petrochina Form 20Fs for relevant year specific NOC. If no data yes-1/no-0. NOC upstream capital expenditures as percentage 74.0 76.0 73.0 76.0 69.0 Petrochina Form 20Fs for relevant year of total capital expenditures (%) NOC refining capital expenditures as percentage 19.0 14.0 12.0 14.0 8.0 Petrochina Form 20Fs for relevant year of total capital expenditures (%) NOC upstream oil equity production as percentage of total NOC refining 115.8 109.7 105.9 102.0 102.7 Petrochina Form 20Fs for relevant year throughput (%). If no data, yes/no. NOC international revenues as percentage of 4.0 3.0 4.0 3.0 5.0 Petrochina Form 20Fs for relevant year total NOC revenues (%). If no data yes-1/no-0. Scoring: NOC partnerships/JVs exist domestically and internationally (100); NOC partnerships exist domestically but not Joint ventures between the internationally (66); NOC partnerships exist 100 100 100 100 100 NOC and third parties internationally but not domestically (33); NOC partnerships, JVs, alliances do not exist (0). Petrochina Form 20Fs for relevant year NOC CORPORATE GOVERNANCE Percentage of non- government ownership of 10.00 11.79 11.79 13.71 13.29 Petrochina Form 20Fs for relevant year specific NOC (%) Percentage of independent 23.08 23.08 25.00 27.27 35.71 Petrochina Form 20Fs for relevant year BOD members (%) Scoring: (100)-The government has no participation in deciding who will fill the positions of Chairman/CEO; (50)-The Appointment authority for government through its control of required NOC chairman and chief 50 50 50 50 50 voting shares can influence, directly or executive officer indirectly, the appointments of Chairman/CEO and (0) The Chairman and/or CEO is a direct appointee of the government entity Petrochina Form 20Fs for relevant year Scoring: No governmental approval of NOC budget required (100); No governmental approval of NOC budget required but certain capital expenditures require state approval Independence of NOC (75);NOC budget is proposed to and approved capital and budget 75 75 75 75 75 by one central government entity (50); NOC processes budget is proposed to and approved by multiple central government entities (25); NOC budget is part of the national budget (0). Petrochina Form 20Fs for relevant year NOC net cash flow after taxes and dividends (local 88,024 169,557 196,766 205,586 179,526 Petrochina Form 20Fs for relevant year currency MM) NOC capital expenditures 95,045 121,561 158,578 194,182 243,752 Petrochina Form 20Fs for relevant year (local currency MM) Measured by net cash flow after taxes and NOC financial dividends as percentage of capital expenditures sustainability (%) % CEE Calculation 80 Scoring: NOC financial statement auditing performed by independent international auditor and files reports with international exchange (100); FS auditing performed and publicly disclosed by independent international auditor NOC financial 100 100 100 100 100 (75); FS auditing performed and publicly transparency disclosed by independent domestic or government auditor (50) ; FS auditing performed internally by N OC and publicly disclosed (25); No publicly available auditing (0) Petrochina Form 20Fs for relevant year Scoring: NOC oil & gas reserves auditing performed by independent international firm and files reports with international exchange (100); reserves auditing performed and publicly disclosed by independent international firm (75); NOC upstream reserves 100 100 100 100 100 reserves auditing performed and publicly transparency disclosed by independent domestic firm (50); reserves auditing performed internally and publicly disclosed (25); No publicly available reserves auditing (0). Petrochina Form 20Fs for relevant year Note: Non-shaded areas indicate data used in the exploratory statistical analysis presented in National Oil Companies and Value Creation, volume I, chapter 4. 81 14. Petroliam Nasional Berhad (Malaysia) (a) Value creation index components Operational Performance unit 2004 2005 2006 2007 2008 Company gas production BCF Company oil production MM Bbls E&P production (BOE) MM BOE 551.37 583.27 582.72 624.11 647.04 E&P production growth % -0.20 5.79 -0.09 7.10 3.67 Total net additions proved oil reserves MM Bbls Total net additions proved gas reserves BCF Total net additions proved gas reserves MM BOE Reserve additions (BOE) MM BOE Reserves replacement rate % 260.00 70.00 170.00 180.00 90.00 Primary distillation capacity MBPD 356.50 356.50 367.30 367.30 376.30 Total refining throughput MBPD 320.85 310.16 334.24 337.92 323.62 Refinery utilization rate % 90.00 87.00 91.00 92.00 86.00 Assets $ MM 53,421.05 62,894.74 73,783.78 89,204.72 97,976.88 Output / total assets BOE/000$ 12.51 11.07 9.55 8.38 7.81 Employees # of people 30,634.00 33,944.00 34,985.00 36,027.00 39,236.00 Output / total employees BOE/000$ 21.82 20.52 20.14 20.75 19.50 Financial Performance Unit 2004 2005 2006 2007 2008 Earnings before interest & taxes $ MM 68.20 82.20 89.60 106.00 101.00 Direct expenditures on social/economic development $ MM programs Total revenue $ MM 137.00 167.00 184.00 223.00 264.00 EBRTN $ MM 68.20 82.20 89.60 106.00 101.00 EBRTN / revenues % 49.78 49.22 48.70 47.53 38.26 EBRTN / total assets % 33.60 34.39 32.82 35.93 29.79 Total capital expenditures (national currency) MM 17,400.00 18,700.00 21,600.00 37,600.00 44,000.00 Net cash flow after taxes and dividends MM 34,200.00 38,500.00 40,000.00 48,100.00 35,400.00 NCF/CAPEX % 196.55 205.88 185.19 127.93 80.45 National Mission Performance Unit 2004 2005 2006 2007 2008 Total number of NOC local employees # of people Total number of NOC non-local employees # of people Share of nationals in NOC workforce % 82.00 80.00 NOC employment in native country (# people) # of people 29,542.14 31,388.80 NOC annual employment growth % 6.25 # of people Country Labor Force 10,735.29 10,982.45 11,217.77 11,474.57 11,732.50 (000,000) Country annual employment growth % 2.31 2.30 2.14 2.29 2.25 NOC - Country employment growth % points 4.00 NOC employment share of country workforce % 0.26 0.27 NOC local purchases goods and services $ MM NOC total purchases goods and services $ MM 46,200.00 60,830.00 74,690.00 83,006.00 97,790.00 Share of local content % NOC noncommercial expenditure (national currency) MM NOC noncommercial expenditure $ MM Noncommercial expenditure/Total expenditure % Net income from non-core commercial business $ MM activities Net income from total commercial activities $ MM 6,923.00 10,672.00 12,719.00 137.41 188.49 Net income noncore commercial activities/Net % income Price subsidies provided by NOC $ MM 7.40 14.00 15.60 19.70 19.50 Total NOC Revenues $ MM 137.00 167.00 184.00 223.00 264.00 Price Subsidies/Revenues % 5.40 8.38 8.48 8.83 7.39 NOC domestic petroleum products production MMBOE 207.00 204.00 193.00 185.00 182.00 Country oil consumption MMBOE 185.00 191.00 195.00 197.00 196.00 Domestic output use % 111.89 106.81 98.97 93.91 92.86 82 (b) Value creation index 2004 2005 2006 2007 2008 Operational Performance E&P production growth (%) -0.20 5.79 -0.09 7.10 3.67 Reserves replacement rate (BOE, %) 260.00 70.00 170.00 180.00 90.00 Refinery utilization rate (%) 90.00 87.00 91.00 92.00 86.00 Output / total assets (BOE/'000$) 12.51 11.07 9.55 8.38 7.81 Output / total employees ('000 BOE) 21.82 20.52 20.14 20.75 19.50 Financial Performance EBRTN / revenues (%) 49.78 49.22 48.70 47.53 38.26 EBRTN / total assets (%) 33.60 34.39 32.82 35.93 29.79 NCF / CAPEX (%) 196.55 205.88 185.19 127.93 80.45 National Mission Performance Share of nationals in NOC workforce (%) 82.00 80.00 NOC – Country employment growth (% points) 4.00 NOC employment share of country workforce (%) 0.26 0.27 Share of local content (%) Noncommercial expenditures/total expenditures (%) Noncore commercial activities net income/Total net income (%) Price Subsidies/Revenues (%) 5.40 8.38 8.48 8.83 7.39 Domestic output use (%) 111.89 106.81 98.97 93.91 92.86 (c) Normalized value creation index 2004 2005 2006 2007 2008 Operational Performance 0.48 0.30 0.29 0.49 0.36 E&P production growth 0.24 0.06 0.26 0.66 0.44 Reserves replacement rate 1.00 0.40 0.30 0.93 0.62 Refinery utilization rate 0.52 0.41 0.32 0.36 0.28 Output / total assets 0.24 0.26 0.27 0.25 0.23 Output / total employees 0.38 0.35 0.30 0.27 0.25 Financial Performance 0.70 0.56 0.50 0.48 0.33 EBRTN / revenues 0.58 0.51 0.48 0.47 0.38 EBRTN / total assets 0.53 0.35 0.28 0.47 0.41 NCF / CAPEX 1.00 0.82 0.75 0.50 0.19 National Mission Performance 0.34 0.38 0.47 0.42 0.44 Share of nationals in NOC workforce 0.78 0.75 NOC employment growth 0.26 NOC employment share of country workforce 0.21 0.23 Share of local content Noncommercial expenditures/total expenditures Noncore commercial activities net income/Total net income Price Subsidies/Revenues 0.18 0.27 0.42 0.24 0.26 Domestic output use 0.49 0.50 0.51 0.46 0.70 VCI 0.51 0.41 0.42 0.46 0.38 83 (d) Value drivers 2004 2005 2006 2007 2008 Source GEOLOGY BP Statistical Review of World Energy June Country specific resource 5,160 5,252 5,357 5,460 5,520 2009 available at endowment oil MMBBL http://www.bp.com/statisticalreview BP Statistical Review of World Energy June Country specific resource 2,464 2,480 2,480 2,382 2,381 2009 available at endowment gas BCM http://www.bp.com/statisticalreview Country specific resource 20,659 20,851 20,956 20,445 20,495 CEE calculation endowment MMBOE STATE CONTEXT WGI: Voice and http://info.worldbank.org/governance/wgi/index. -0.25 -0.17 -0.55 -0.57 -0.58 Accountability asp http://info.worldbank.org/governance/wgi/index. WGI: Political Stability 0.29 0.47 0.34 0.23 0.13 asp WGI: Government http://info.worldbank.org/governance/wgi/index. 0.99 0.99 1.06 1.11 1.13 Effectiveness asp http://info.worldbank.org/governance/wgi/index. WGI: Regulatory Quality 0.48 0.52 0.51 0.53 0.27 asp http://info.worldbank.org/governance/wgi/index. WGI: Rule of Law 0.55 0.58 0.56 0.52 0.49 asp http://info.worldbank.org/governance/wgi/index. WGI: Corruption Control 0.42 0.32 0.36 0.23 0.14 asp Petronas website Hydrocarbon Revenues as http://www.petronas.com.my/downloads/financi % of Total Government 20 29 34 35 44 alOperationalReview/financialOperationalRevie Revenues w2007-08.pdf Hydrocarbon Revenues as World Bank Development Indicators: 4.0 5.5 7.6 7.4 10.1 % of GDP http://data.worldbank.org/indicator WTO membership (yes- 1 1 1 1 1 www.wto.org 1/no-0) over five years OPEC membership (yes- 0 0 0 0 0 www.opec.org 1/no-0) over five years Country Crude Oil Exports 2008 OPEC Annual Statistical Bulletin at 376 383 391 401 402 -000 BPD www.opec.org Country Crude Oil Imports-000 BPD (Country Revenues Oil Exports valued at Malaysia Miri oil price as Exports)-(Costs Oil 6 8 10 11 15 reported in 2008 OPEC Annual Statistical Imports) US $ Billion Bulletin at www.opec.org Country Gross Domestic World Bank Development Indicators: 125 138 156 187 195 Product US $ Billion http://data.worldbank.org/indicator Country Net Revenues (Costs) of Oil Exports 4.5 5.9 6.4 6.1 7.9 CEE calculation (Imports) as % of GDP Government Budget http://www.tradingeconomics.com/Economics/G Surplus/Deficit as % of -4.1 overnment-Budget.aspx?Symbol=MYR Gross Domestic Product Stabilization Mechanisms "Is Petronas on the right track?," by Datuk Seri such as petroleum funds 0 0 0 0 0 Dr. Fong Chan Onn, the star online, 3/21/10. (yes-1/no-0) PETROLEUM SECTOR ORGANIZATION AND GOVERANANCE Publicly disclosed national US Energy Information Administration at policy addressing 1 1 1 1 1 http://www.kettha.gov.my/template01.asp?conte hydrocarbon sector issues ntid=155 (yes-1/no-0) Scoring: Independent NOC, Ministry and regulatory function (100); Regulatory function is performed by ministry (66); Regulatory function Institutional structure 45 45 45 45 45 is performed by NOC (33); All three functions combined in one entity (0). CEE assessment 84 BP Statistical Review of World Energy June Country oil production 289 271 262 271 275 2009 available at MM Barrels http://www.bp.com/statisticalreview BP Statistical Review of World Energy June Country gas production 1,897 2,117 2,108 2,147 2,202 2009 available at BCF http://www.bp.com/statisticalreview Country MMBOE 616 636 625 641 655 CEE calculation production Includes Petronas entitlement volumes from NOC MMBOE Domestic PSCs as well as Petronas' own production. See 426 443 425 412 423 Production relevant year financial and operational reviews at www.petronas.com.my/investor_relations Non-NOC percentage of 30.9 30.3 32.0 35.7 35.4 CEE calculation oil and gas production (%) http://www.pump-zone.com/global- Country Refinery Capacity 545 545 555 556 565 news/pakistan-revives-250000-barrel-per-day- - 000 BPD khalifa-refinery.html Net NOC Refinery Capacity - 000 BPD 357 357 367 367 367 Petronas annual reports for relevant year (country level) Non-NOC percentage of refinery capacity (%, 34.6 34.6 33.8 33.9 35.0 CEE calculation. country level) Total Revenues (local 97,512 137,000 166,900 184,100 223,100 Petronas annual reports for relevant year currency MM) Royalties and production 7,800 9,700 6,300 6,800 Petronas annual reports for relevant year taxes (local currency MM) Income taxes (local 14,300 19,000 26,000 30,800 Petronas annual reports for relevant year currency MM) Dividends paid to government (local 9,100 13,000 20,000 30,000 Petronas annual reports for relevant year currency MM) Royalties, production taxes, income taxes and dividends paid to 21.8 22.8 25.0 28.4 30.3 CEE Calculation government by NOC as percentage of total revenues (%) Effect of contract terms on No No No Sources: Fraser Institute Global Petroleum 2.0 2.5 investment decisions survey survey survey Survey 2007 and 2008 Effect of taxation regime No No No Sources: Fraser Institute Global Petroleum 2.0 2.6 on decision to invest survey survey survey Survey 2007 and 2008 Effect of cost of regulatory No No No Sources: Fraser Institute Global Petroleum compliance on decision to 2.7 2.8 survey survey survey Survey 2007 and 2008 invest Effect of regulatory No No No Sources: Fraser Institute Global Petroleum uncertainty on decision to 3.0 2.3 survey survey survey Survey 2007 and 2008 invest Effect of environmental No No No Sources: Fraser Institute Global Petroleum regulations on decision to 2.4 2.0 survey survey survey Survey 2007 and 2008 invest Scoring: Priority ranked publicly disclosed objectives exist and are publicly measured (100); Objectives publicly disclosed but not ranked and are publicly measured (75); Objectives publicly NOC objectives 75 75 75 75 75 disclosed and ranked but not publicly measured (50); Objectives publicly disclosed but not ranked and not publicly measured (25); No public documentation of NOC objectives (0). Petronas annual reports for relevant year NOC STRATEGY AND BEHAVIOR Percentage of NOC CEE estimate based on disclosure in 2008/2007 domestic upstream 36.0 36.0 36.0 36.0 36.0 operational and financial review available at production operated by www.petronas.com.my/investor_relations 85 specific NOC. If no data yes-1/no-0. Percentage of NOC domestic refining production operated by 100.0 100.0 100.0 100.0 100.0 Petronas annual reports for relevant year specific NOC. If no data yes-1/no-0. NOC upstream capital expenditures as percentage 56.6 60.8 54.5 67.7 55.1 Petronas annual reports for relevant year of total capital expenditures (%) NOC refining capital expenditures as percentage 6.0 6.0 7.1 10.6 20.5 Petronas annual reports for relevant year of total capital expenditures (%) NOC upstream oil equity production as percentage of total NOC refining 201.5 189.0 194.8 184.6 190.1 Petronas annual reports for relevant year throughput (%). If no data, yes/no. NOC international revenues as percentage of 35.0 35.0 34.0 37.0 40.0 Petronas annual reports for relevant year total NOC revenues (%). If no data yes-1/no-0. Scoring: NOC partnerships/JVs exist domestically and internationally (100); NOC partnerships exist domestically but not Joint ventures between the internationally (66); NOC partnerships exist 100 100 100 100 100 NOC and third parties internationally but not domestically (33); NOC partnerships, JVs, alliances do not exist (0). Petronas annual reports for relevant year NOC CORPORATE GOVERNANCE Percentage of non- government ownership of 0.0 0.0 0.0 0.0 0.0 Petronas annual reports for relevant year specific NOC (%) "Petronas: A National Oil Company with an International Vision," by Dr. Fred R. von der Percentage of independent 0.0 0.0 0.0 0.0 11.11 Mehden with Al Troner, Presented at James A. BOD members (%) Baker III Institute for Public Policy, Rice University, March 2007. Scoring: (100)-The government has no participation in deciding who will fill the positions of Chairman/CEO; (50)-The government through its control of required voting shares can influence, directly or Appointment authority for indirectly, the appointments of Chairman/CEO NOC chairman and chief 0 0 0 0 0 and (0) The Chairman and/or CEO is a direct executive officer appointee of the government entity "Petronas: A National Oil Company with an International Vision," by Dr. Fred R. von der Mehden with Al Troner, Presented at James A. Baker III Institute for Public Policy, Rice University, March 2007. Scoring: No governmental approval of NOC budget required (100); No governmental approval of NOC budget required but certain capital expenditures require state approval Independence of NOC (75);NOC budget is proposed to and approved capital and budget 50 50 50 50 50 by one central government entity (50); NOC processes budget is proposed to and approved by multiple central government entities (25); NOC budget is part of the national budget (0). Petronas annual reports for relevant year NOC net cash flow after taxes and dividends (local currency MM) NOC capital expenditures 24,200 17,600 21,100 28,200 37,600 Petronas annual reports for relevant year (local currency MM) Measured by net cash flow after taxes and NOC financial dividends as percentage of capital expenditures sustainability (%) % 86 Scoring: NOC financial statement auditing performed by independent international auditor and files reports with international exchange (100); FS auditing performed and publicly disclosed by independent international auditor NOC financial (75); FS auditing performed and publicly 0 0 0 0 0 transparency disclosed by independent domestic or government auditor (50) ; FS auditing performed internally by N OC and publicly disclosed (25); No publicly available auditing (0) Petronas annual reports for relevant year Scoring: NOC oil & gas reserves auditing performed by independent international firm and files reports with international exchange (100); reserves auditing performed and publicly disclosed by independent international firm (75); NOC upstream reserves reserves auditing performed and publicly 0 0 0 0 0 transparency disclosed by independent domestic firm (50); reserves auditing performed internally and publicly disclosed (25); No publicly available reserves auditing (0). Petronas annual reports for relevant year Note: Non-shaded areas indicate data used in the exploratory statistical analysis presented in National Oil Companies and Value Creation, volume I, chapter 4. 87 15. PTT Public Company Limited (Thailand) (a) Value creation index components Operational Performance unit 2004 2005 2006 2007 2008 Company gas production BCF Company oil production MM Bbls E&P production (BOE) MM BOE 49.17 56.04 61.81 65.63 80.04 E&P production growth % 25.54 13.98 10.30 6.17 21.97 Total net additions proved oil reserves MM Bbls Total net additions proved gas reserves BCF Total net additions proved gas reserves MM BOE Reserve additions (BOE) MM BOE Reserves replacement rate % 98.00 Primary distillation capacity MBPD 382.00 383.00 393.00 400.00 427.00 Total refining throughput MBPD Refinery utilization rate % 91.00 90.20 91.00 92.00 86.00 Assets $ MM 12,492.46 16,191.52 19,882.58 26,534.24 25,291.57 Output / total assets BOE/000$ 3.94 3.46 3.11 2.47 3.16 Employees # of people 4,807.00 4,779.00 5,019.00 7,942.00 7,989.00 Output / total employees BOE/000$ 10.23 11.73 12.32 8.26 10.02 Financial Performance Unit 2004 2005 2006 2007 2008 Earnings before interest & taxes (national currency) Bn 101.42 132.06 173.65 178.77 137.74 Direct expenditures on social/economic Bn development programs (national currency) Total revenue (national currency) Bn 644.67 926.27 1,226.83 1,508.13 2,000.82 EBRTN Bn 101.42 132.06 173.65 178.77 137.74 EBRTN / revenues % 15.73 14.26 14.15 11.85 6.88 EBRTN / total assets % 20.82 20.28 23.06 20.05 15.56 Total capital expenditures (national currency) Bn 55.78 100.89 94.02 99.09 109.61 net cash flow after taxes and dividends Bn 25.25 80.04 83.73 105.91 107.73 NCF/CAPEX % 45.27 79.33 89.05 106.88 98.29 National Mission Performance Unit 2004 2005 2006 2007 2008 Total number of NOC local employees # of people 4,703.00 4,611.00 4,796.00 Total number of NOC non-local employees # of people 104.00 168.00 223.00 Share of nationals in NOC workforce % 97.84 96.48 95.56 NOC employment in native country (# people) # of people 4,703.00 4,611.00 4,796.00 NOC annual employment growth % 16.61 -1.96 4.01 # of people Country Labor Force 36,734.08 37,300.55 37,483.94 38,118.05 38,494.89 (000,000) Country annual employment growth % 1.88 1.54 0.49 1.69 0.99 NOC - Country employment growth % points 14.73 -3.50 3.52 NOC employment share of country workforce % 0.01 0.01 0.01 NOC local purchases goods and services $ MM NOC total purchases goods and services $ MM Share of local content % NOC Noncommercial expenditures (national MM currency) NOC Noncommercial expenditures $ MM Noncommercial expenditure/Total expenditure % Net income from noncore commercial business MM 10,385.00 11,549.00 25,360.00 24,669.00 30,268.00 activities (national currency) Net income from total commercial activities Bn 644.67 926.27 1,226.83 1,508.13 2,000.82 (national currency) Net income noncore commercial activities/Net % 1.61 1.25 2.07 1.64 1.51 income Price subsidies provided by NOC $ MM 0.24 0.09 Total NOC Revenues $ MM 16,529.40 23,030.06 32,385.67 44,886.13 57,166.17 Price Subsidies/Revenues % 0.00 0.00 NOC domestic petroleum products production MMBOE 104.53 111.02 257.62 267.91 255.28 Country oil consumption MMBOE 300.69 311.16 304.43 300.29 291.09 Domestic output use % 34.76 35.68 84.62 89.22 87.70 88 (b) Value creation index 2004 2005 2006 2007 2008 Operational Performance E&P production growth (%) 25.54 13.98 10.30 6.17 21.97 Reserves replacement rate (BOE, %) 98.00 Refinery utilization rate (%) 91.00 90.20 91.00 92.00 86.00 Output / total assets (BOE/'000$) 3.94 3.46 3.11 2.47 3.16 Output / total employees ('000 BOE) 10.23 11.73 12.32 8.26 10.02 Financial Performance EBRTN / revenues (%) 15.73 14.26 14.15 11.85 6.88 EBRTN / total assets (%) 20.82 20.28 23.06 20.05 15.56 NCF / CAPEX (%) 45.27 79.33 89.05 106.88 98.29 National Mission Performance Share of nationals in NOC workforce (%) 97.84 96.48 95.56 NOC – Country employment growth (% points) 14.73 -3.50 3.52 NOC employment share of country workforce (%) 0.01 0.01 0.01 Share of local content (%) Noncommercial expenditures/total expenditures (%) Noncore commercial activities net income/Total net income (%) 1.61 1.25 2.07 1.64 1.51 Price Subsidies/Revenues (%) 0.00 0.00 Domestic output use (%) 34.76 35.68 84.62 89.22 87.70 (c) Normalized value creation index 2004 2005 2006 2007 2008 Operational Performance 0.43 0.20 0.25 0.29 0.44 E&P production growth 0.98 0.08 0.43 0.63 1.00 Reserves replacement rate 0.69 Refinery utilization rate 0.54 0.46 0.32 0.36 0.28 Output / total assets 0.06 0.07 0.07 0.07 0.09 Output / total employees 0.17 0.19 0.18 0.10 0.13 Financial Performance 0.22 0.12 0.14 0.20 0.14 EBRTN / revenues 0.11 0.05 0.04 0.02 0.01 EBRTN / total assets 0.32 0.15 0.11 0.18 0.17 NCF / CAPEX 0.23 0.17 0.25 0.41 0.25 National Mission Performance 0.50 0.41 0.50 0.38 0.65 Share of nationals in NOC workforce 0.97 0.96 0.94 NOC – Country employment growth 1.00 0.27 0.63 NOC employment share of country workforce 0.01 0.01 0.01 Share of local content Noncommercial expenditures/total expenditures Noncore commercial activities net income/Total net income 0.37 0.66 1.00 0.69 0.64 Price Subsidies/Revenues 0.00 0.00 Domestic output use 0.14 0.14 0.43 0.43 0.66 VCI 0.38 0.24 0.30 0.29 0.41 89 (d) Value drivers 2004 2005 2006 2007 2008 Source GEOLOGY BP Statistical Review of World Energy June Country specific resource 527 453 461 461 454 2009 available at endowment oil MMBBL http://www.bp.com/statisticalreview BP Statistical Review of World Energy June Country specific resource 354 304 331 317 340 2009 available at endowment gas BCM http://www.bp.com/statisticalreview Country specific resource 2,754 2,365 2,543 2,455 2,593 CEE calculation endowment MMBOE STATE CONTEXT WGI: Voice and http://info.worldbank.org/governance/wgi/index. 0.12 0.03 -0.55 -0.61 -0.56 Accountability asp http://info.worldbank.org/governance/wgi/index. WGI: Political Stability -0.40 -0.6 -0.89 -1.01 -1.19 asp WGI: Government http://info.worldbank.org/governance/wgi/index. 0.22 0.36 0.25 0.17 0.11 Effectiveness asp http://info.worldbank.org/governance/wgi/index. WGI: Regulatory Quality 0.24 0.41 0.23 0.11 0.26 asp http://info.worldbank.org/governance/wgi/index. WGI: Rule of Law 0.05 0.11 0 -0.07 -0.03 asp http://info.worldbank.org/governance/wgi/index. WGI: Corruption Control -0.21 -0.13 -0.24 -0.41 -0.38 asp Hydrocarbon Revenues as % of Total Government Revenues Hydrocarbon Revenues as % of GDP WTO membership (yes- 1 1 1 1 1 www.wto.org 1/no-0) over five years OPEC membership (yes- 0 0 0 0 0 www.opec.org 1/no-0) over five years Country Crude Oil Exports 2008 OPEC Annual Statistical Bulletin at -000 BPD www.opec.org Country Crude Oil 2009 OPEC Annual Statistical Bulletin at 861 827 828 801 811 Imports-000 BPD www.opec.org (Country Revenues Oil Thailand's oil imports valued at nominal annual Exports)-(Costs Oil -11 -15 -18 -20 -28 oil price as reported in the 2008 OPEC Annual Imports) US $ Billion Statistical Bulletin at www.opec.org World Bank Development Indicators: Country Gross Domestic 161 176 207 247 272 http://data.worldbank.org/indicator Product US $ Billion Country Net Revenues (Costs) of Oil Exports -7.0 -8.7 -8.9 -8.2 -10.3 CEE calculation (Imports) as % of GDP Government Budget http://www.tradingeconomics.com/Economics/G Surplus/Deficit as % of 1.5 1.1 2.6 2.0 14.0 overnment-Budget.aspx?Symbol=THB Gross Domestic Product Stabilization Mechanisms such as petroleum funds 0 0 0 0 0 http://www.swfinstitute.org/ (yes-1/no-0) PETROLEUM SECTOR ORGANIZATION AND GOVERANANCE Publicly disclosed national policy addressing 1 1 1 1 1 CEE assessment hydrocarbon sector issues (yes-1/no-0) Scoring: Independent NOC, Ministry and regulatory function (100); Regulatory function is performed by ministry (66); Regulatory function Institutional structure 100 100 100 100 100 is performed by NOC (33); All three functions combined in one entity (0). PTT annual reports and presentations for relevant years at http://www.pttplc.com/en/ BP Statistical Review of World Energy June Country oil production 82 97 104 113 119 2009 available at MM Barrels http://www.bp.com/statisticalreview 90 BP Statistical Review of World Energy June Country gas production 788 834 859 915 1016 2009 available at BCF http://www.bp.com/statisticalreview Country MMBOE 218 241 252 271 294 CEE calculation production NOC MMBOE Domestic PTT annual reports and presentations for the 49 56 62 66 80 Production relevant year Non-NOC percentage of 77.5 76.7 75.4 75.6 72.8 CEE calculation oil and gas production (%) BP Statistical Review of World Energy June Country Refinery Capacity 1,062 1,065 1,092 1,112 1,187 2009 available at - 000 BPD http://www.bp.com/statisticalreview Net NOC Refinery PTT annual reports and presentations for the Capacity - 000 BPD 382 383 393 400 427 relevant year (country level) Non-NOC percentage of refinery capacity (%, 64.0 64.0 64.0 64.0 64.0 CEE calculation. country level) Total Revenues (local PTT annual reports and presentations for the 644.7 926.3 1,226.8 1,508.1 2,000.8 currency Bn) relevant year Royalties and production PTT annual reports and presentations for the 5,668 8,982 12,849 12,529 17,328 taxes (local currency MM) relevant year Income taxes (local PTT annual reports and presentations for the 18,677 23,628 33,227 42,224 43,347 currency MM) relevant year Dividends paid to PTT annual reports and presentations for the government (local 32,586 9,818 20,746 15,337 18,330 relevant year currency MM) Royalties, production taxes, income taxes and dividends paid to 8.8 4.6 5.4 4.6 3.9 CEE Calculation government by NOC as percentage of total revenues (%) Effect of contract terms on No No No Sources: Fraser Institute Global Petroleum 1.71 2.00 investment decisions survey survey survey Survey 2007 and 2008 Effect of taxation regime No No No Sources: Fraser Institute Global Petroleum 2.57 2.25 on decision to invest survey survey survey Survey 2007 and 2008 Effect of cost of regulatory No No No Sources: Fraser Institute Global Petroleum compliance on decision to 2.60 1.75 survey survey survey Survey 2007 and 2008 invest Effect of regulatory No No No Sources: Fraser Institute Global Petroleum uncertainty on decision to 2.75 2.6 survey survey survey Survey 2007 and 2008 invest Effect of environmental No No No Sources: Fraser Institute Global Petroleum regulations on decision to 2.80 2.25 survey survey survey Survey 2007 and 2008 invest Scoring: Priority ranked publicly disclosed objectives exist and are publicly measured (100); Objectives publicly disclosed but not ranked and are publicly measured (75); Objectives publicly disclosed and ranked but not publicly measured NOC objectives 75 75 75 75 75 (50); Objectives publicly disclosed but not ranked and not publicly measured (25); No public documentation of NOC objectives (0). PTT annual reports and presentations for the relevant year NOC STRATEGY AND BEHAVIOR Percentage of NOC domestic upstream % operated not disclosed in annual reports but production operated by 1 1 1 1 1 company appears to be a substantial operating specific NOC. If no data entity. yes-1/no-0. 91 Percentage of NOC domestic refining PTT annual reports and presentations for the production operated by 1 1 1 1 1 relevant year specific NOC. If no data yes-1/no-0. NOC upstream capital expenditures as percentage PTT annual reports and presentations for the 59.0 55.0 42.0 42.0 59.0 of total capital relevant year expenditures (%) NOC refining capital expenditures as percentage PTT annual reports and presentations for the 1.0 0.0 0.0 0.0 0.0 of total capital relevant year expenditures (%) NOC upstream oil equity production as percentage PTT annual reports and presentations for the of total NOC refining 1 1 1 1 1 relevant year throughput (%). If no data, yes/no. NOC international revenues as percentage of PTT annual reports and presentations for the 30.0 36.0 76.0 75.0 69.0 total NOC revenues (%). If relevant year no data yes-1/no-0. Scoring: NOC partnerships/JVs exist domestically and internationally (100); NOC partnerships exist domestically but not Joint ventures between the internationally (66); NOC partnerships exist 100 100 100 100 100 internationally but not domestically (33); NOC NOC and third parties partnerships, JVs, alliances do not exist (0). PTT annual reports and presentations for the relevant year NOC CORPORATE GOVERNANCE Percentage of non- PTT annual reports and presentations for the government ownership of 31.94 31.94 32.13 32.13 32.87 relevant year specific NOC (%) Percentage of independent PTT annual reports and presentations for the 13.33 7.14 6.67 6.67 6.67 BOD members (%) relevant year Scoring: (100)-The government has no participation in deciding who will fill the positions of Chairman/CEO; (50)-The government through its control of required Appointment authority for voting shares can influence, directly or NOC chairman and chief 50 50 50 50 50 indirectly, the appointments of Chairman/CEO executive officer and (0) The Chairman and/or CEO is a direct appointee of the government entity PTT annual reports and presentations for the relevant year Scoring: No governmental approval of NOC budget required (100); No governmental approval of NOC budget required but certain capital expenditures require state approval Independence of NOC (75);NOC budget is proposed to and approved capital and budget 50 50 50 50 50 by one central government entity (50); NOC processes budget is proposed to and approved by multiple central government entities (25); NOC budget is part of the national budget (0). PTT annual reports and presentations for the relevant year NOC net cash flow after PTT annual reports and presentations for the taxes and dividends (local 25,249 80,036 83,725 105,911 107,730 relevant year currency MM) NOC capital expenditures PTT annual reports and presentations for the 55,780 100,885 94,023 99,095 109,605 (local currency MM) relevant year Measured by net cash flow after taxes and NOC financial dividends as percentage of capital expenditures 45.3 79.3 89.0 106.9 98.3 % sustainability (%) CEE Calculation 92 Scoring: NOC financial statement auditing performed by independent international auditor and files reports with international exchange (100); FS auditing performed and publicly disclosed by independent international auditor NOC financial (75); FS auditing performed and publicly 50 50 50 50 50 disclosed by independent domestic or transparency government auditor (50) ; FS auditing performed internally by N OC and publicly disclosed (25); No publicly available auditing (0) PTT annual reports and presentations for the relevant year Scoring: NOC oil & gas reserves auditing performed by independent international firm and files reports with international exchange (100); reserves auditing performed and publicly disclosed by independent international firm (75); NOC upstream reserves reserves auditing performed and publicly 0 0 0 0 0 disclosed by independent domestic firm (50); transparency reserves auditing performed internally and publicly disclosed (25); No publicly available reserves auditing (0). PTT annual reports and presentations for the relevant year Note: Non-shaded areas indicate data used in the exploratory statistical analysis presented in National Oil Companies and Value Creation, volume I, chapter 4. 93 16. Qatar Petroleum (Qatar) (a) Value creation index components Operational Performance unit 2004 2005 2006 2007 2008 Company gas production BCF 1,382.31 1,616.28 1,789.20 2,230.33 2,716.66 Company oil production MM Bbls 275.68 279.55 293.06 308.53 307.62 E&P production (BOE) MM BOE 522.1 567.6 612.0 706.1 791.8 E&P production growth % 19.12 8.73 7.81 15.38 12.15 Total net additions proved oil reserves MM Bbls Total net additions proved gas reserves BCF Total net additions proved gas reserves MM BOE Reserve additions (BOE) MM BOE Reserves replacement rate % Primary distillation capacity MBPD 150.00 150.00 150.00 150.00 150.00 Total refining throughput MBPD 136.50 136.50 136.50 137.00 137.00 Refinery utilization rate % 91.00 91.00 91.00 91.33 91.33 Assets $ MM 20,637.09 28,995.88 37,869.78 51,740.66 67,591.76 Output / total assets BOE/000$ 27.71 21.29 17.48 14.61 12.45 Employees # of people 11,516.03 11,466.67 9,942.11 9,947.37 10,708.33 Output / total employees BOE/000$ 49.66 53.85 66.56 76.01 78.62 Financial Performance Unit 2004 2005 2006 2007 2008 Earnings before interest & taxes (national currency) MM 43,061.00 65,526.00 90,446.00 104,962.91 151,643.00 Direct expenditures on social/economic development MM programs (national currency) Total revenue (national currency) MM 53,506.00 75,826.00 100,684.00 117,430.00 168,488.00 EBRTN MM 43,061.00 65,526.00 90,446.00 104,962.91 151,643.00 EBRTN / revenues % 80.48 86.42 89.83 89.38 90.00 EBRTN / total assets % 57.32 62.08 65.61 55.73 61.63 Total capital expenditures (national currency) MM 13,714.00 20,008.00 32,990.00 47,037.00 36,791.00 net cash flow after taxes and dividends MM 12,520.00 18,515.00 13,610.00 41,063.00 36,863.00 NCF/CAPEX % 91.29 92.54 41.25 87.30 100.20 National Mission Performance Unit 2004 2005 2006 2007 2008 Total number of NOC local employees # of people 1,975.00 1,892.00 1,889.00 1,890.00 1,972.00 Total number of NOC non-local employees # of people 9,541.03 9,574.67 8,053.11 8,057.37 8,736.33 Share of nationals in NOC workforce % 17.2 16.5 21.0 19.0 19.0 NOC employment in native country (# people) # of people 11,400.87 11,352.00 9,842.68 9,847.89 10,601.25 NOC annual employment growth % 4.12 -0.43 -13.30 0.05 7.65 # of people Country Labor Force 521,151.68 597,420.54 687,986.97 792,937.57 899,391.21 (000) Country annual employment growth % 12.74 14.6 15.2 15.3 13.4 NOC - Country employment growth % points -8.63 -15.06 -28.46 -15.20 -5.78 NOC employment share of country workforce % 2.19 1.90 1.43 1.24 1.18 NOC local purchases goods and services $ MM NOC total purchases goods and services $ MM Share of local content % NOC noncommercial expenditure (national currency) MM NOC noncommercial expenditure $ MM Noncommercial expenditure/Total expenditure % Net income from non-core commercial business $ MM 135.77 74.42 102.69 165.00 196.15 activities Net income from total commercial activities $ MM 4,281.32 6,005.49 8,581.04 9,628.85 15,329.67 Net income noncore commercial activities/Net % 3.17 1.24 1.20 1.71 1.28 income Price subsidies provided by NOC $ MM Total NOC Revenues $ MM 14,699.45 20,831.32 27,660.44 32,260.99 46,287.91 Price Subsidies/Revenues % NOC domestic petroleum products production MMBOE 43.29 43.47 48.11 48.11 46.06 Country oil consumption MMBOE 19.41 22.71 27.35 32.77 37.97 Domestic output use % 223.00 191.38 175.92 146.79 121.31 94 (b) Value creation index 2004 2005 2006 2007 2008 Operational Performance E&P production growth (%) 19.12 8.73 7.81 15.38 12.15 Reserves replacement rate (BOE, %) Refinery utilization rate (%) 91.00 91.00 91.00 91.33 91.33 Output / total assets (BOE/'000$) 27.71 21.29 17.48 14.61 12.45 Output / total employees ('000 BOE) 49.66 53.85 66.56 76.01 78.62 Financial Performance EBRTN / revenues (%) 80.48 86.42 89.83 89.38 90.00 EBRTN / total assets (%) 57.32 62.08 65.61 55.73 61.63 NCF / CAPEX (%) 91.29 92.54 41.25 87.30 100.20 National Mission Performance Share of nationals in NOC workforce (%) 17.15 16.50 21.00 19.00 19.00 NOC – Country employment growth (% points) -8.63 -15.06 -28.46 -15.20 -5.78 NOC employment share of country workforce (%) 2.19 1.90 1.43 1.24 1.18 Share of local content (%) Noncommercial expenditures/total expenditures (%) Noncore commercial activities net income/Total net income (%) 3.17 1.24 1.20 1.71 1.28 Price Subsidies/Revenues (%) Domestic output use (%) 223.00 191.38 175.92 146.79 121.31 (c) Normalized value creation index 2004 2005 2006 2007 2008 Operational Performance 0.70 0.50 0.56 0.67 0.61 E&P production growth 0.79 0.07 0.39 0.86 0.70 Reserves replacement rate Refinery utilization rate 0.54 0.48 0.32 0.35 0.36 Output / total assets 0.57 0.53 0.52 0.45 0.37 Output / total employees 0.90 0.94 1.01 1.02 1.02 Financial Performance 0.80 0.66 0.62 0.72 0.73 EBRTN / revenues 1.00 1.00 1.00 1.00 1.00 EBRTN / total assets 0.94 0.74 0.85 0.83 0.94 NCF / CAPEX 0.47 0.24 0.00 0.33 0.26 National Mission Performance 0.59 0.53 0.50 0.49 0.52 Share of nationals in NOC workforce 0.00 0.00 0.00 0.00 0.00 NOC – Country employment growth 0.24 0.05 0.00 0.00 0.12 NOC employment share of country workforce 1.00 1.00 1.00 1.00 1.00 Share of local content Noncommercial expenditures/total expenditures Noncore commercial activities net income/Total net income 0.73 0.66 0.58 0.73 0.54 Price Subsidies/Revenues Domestic output use 1.00 0.93 0.92 0.73 0.92 VCI 0.70 0.56 0.56 0.63 0.62 95 (d) Value drivers 2004 2005 2006 2007 2008 Source GEOLOGY BP Statistical Review of World Energy June Country specific resource 26,865 27,910 27,436 27,323 28,833 2009 available at endowment oil MMBBL http://www.bp.com/statisticalreview BP Statistical Review of World Energy June Country specific resource 25,361 25,636 25,543 25,465 25,365 2009 available at endowment gas BCM http://www.bp.com/statisticalreview Country specific resource 186,386 189,161 188,100 187,497 186,379 CEE calculation endowment MMBOE STATE CONTEXT WGI: Voice and http://info.worldbank.org/governance/wgi/index. -0.47 -0.4 -0.59 -0.73 -0.77 Accountability asp http://info.worldbank.org/governance/wgi/index. WGI: Political Stability 0.94 0.78 0.87 0.8 1.01 asp WGI: Government http://info.worldbank.org/governance/wgi/index. 0.50 0.36 0.38 0.05 0.68 Effectiveness asp http://info.worldbank.org/governance/wgi/index. WGI: Regulatory Quality 0.31 0.33 0.38 0.55 0.66 asp http://info.worldbank.org/governance/wgi/index. WGI: Rule of Law 0.66 0.81 0.85 0.86 0.86 asp http://info.worldbank.org/governance/wgi/index. WGI: Corruption Control 0.82 0.93 0.94 1.07 1.24 asp "Natural Resource Endowments, Governance Hydrocarbon Revenues as and the Domestic Revenue Effort," by F. % of Total Government 66.0 66.0 66.0 66.0 66.0 Bornhorst, S. Gupta, J. Thornton, IMF Working Revenues Paper, WP/08/170, July 2008; http://www.edc.ca/english/docs/gqatar_e.pdf "Natural Resource Endowments, Governance and the Domestic Revenue Effort," by F. Hydrocarbon Revenues as 26.0 26.0 30.0 33.0 40.0 Bornhorst, S. Gupta, J. Thornton, IMF Working % of GDP Paper, WP/08/170, July 2008; http://www.edc.ca/english/docs/gqatar_e.pdf WTO membership (yes- 1 1 1 1 1 www.wto.org 1/no-0) over five years OPEC membership (yes- 1 1 1 1 1 www.opec.org 1/no-0) over five years Country Crude Oil Exports 2008 OPEC Annual Statistical Bulletin at 543 677 620 615 703 -000 BPD www.opec.org Country Crude Oil 2009 OPEC Annual Statistical Bulletin at Imports-000 BPD www.opec.org (Country Revenues Oil Qatar's values of exports as reported in the 2008 Exports)-(Costs Oil 18 25 34 42 56 OPEC Annual Statistical Bulletin at Imports) US $ Billion www.opec.org Country Gross Domestic World Bank Development Indicators: 32 43 57 71 92 Product US $ Billion http://data.worldbank.org/indicator Country Net Revenues (Costs) of Oil Exports 56.3 58.1 59.6 59.2 60.9 CEE calculation (Imports) as % of GDP Government Budget Surplus/Deficit as % of 9.8 9.8 9.8 9.8 10.0 http://www.edc.ca/english/docs/gqatar_e.pdf Gross Domestic Product Stabilization Mechanisms such as petroleum funds 0 1 1 1 1 http://www.swfinstitute.org/ (yes-1/no-0) PETROLEUM SECTOR ORGANIZATION AND GOVERANANCE Publicly disclosed national The Industrial Strategy as articulated by the policy addressing 1 1 1 1 1 Ministry of Energy and Industry and related hydrocarbon sector issues laws available at www.mei.gov.qa (yes-1/no-0) Scoring: Independent NOC, Ministry and regulatory function (100); Regulatory function is performed by ministry (66); Regulatory function Institutional structure 66 66 66 66 66 is performed by NOC (33); All three functions combined in one entity (0). Ministry of Energy and Industry, 96 www.mei.gov.qa BP Statistical Review of World Energy June Country oil production 362 375 405 437 503 2009 available at MM Barrels http://www.bp.com/statisticalreview BP Statistical Review of World Energy June Country gas production 2009 available at BCF 1,380 1,617 1,791 2,232 2,698 http://www.bp.com/statisticalreview Country MMBOE 600 654 714 822 968 CEE calculation production NOC MMBOE Domestic US Energy Information Administration at 348 383 419 488 577 Production www.eia.doe.gov/emeu/cabs/Qatar/pdf.pdf Non-NOC percentage of 42.1 41.5 41.3 40.6 40.4 CEE calculation oil and gas production (%) Country Refinery Capacity US Energy Information Administration at 200 200 200 200 200 - 000 BPD www.eia.doe.gov/emeu/cabs/Qatar/pdf.pdf Net NOC Refinery Qatar Petroleum annual reports for relevant Capacity - 000 BPD 150 150 150 150 150 years available at www.qp.com.qa (country level) Non-NOC percentage of refinery capacity (%, 25.0 25.0 25.0 25.0 25.0 CEE calculation. country level) Total Revenues (local Qatar Petroleum annual reports for relevant 53,506 75,826 100,684 117,430 168,488 currency MM) years Royalties and production Qatar Petroleum annual reports for relevant 7,538 11,924 16,691 20,589 28,801 taxes (local currency MM) years Income taxes (local Based on E&P income taxes paid in India. 19,168 30,773 41,434 47,077 63,571 currency MM) ONGC annual reports for relevant year Qatar Petroleum annual reports for relevant Dividends paid to years available at www.qp.com.qa. Instead of government (local 7,272 9,781 19,806 5,265 21,697 dividends the company reports "Net change in currency MM) account with Ministry of Finance" in cash flows from financing activities. Royalties, production taxes, income taxes and dividends paid to 63.5 69.2 77.4 62.1 67.7 CEE Calculation government by NOC as percentage of total revenues (%) Effect of contract terms on No No No Sources: Fraser Institute Global Petroleum 1.8 1.77 investment decisions survey survey survey Survey 2007 and 2008 Effect of taxation regime No No No Sources: Fraser Institute Global Petroleum 2.00 1.75 on decision to invest survey survey survey Survey 2007 and 2008 Effect of cost of regulatory No No No Sources: Fraser Institute Global Petroleum compliance on decision to 1.90 1.85 survey survey survey Survey 2007 and 2008 invest Effect of regulatory No No No Sources: Fraser Institute Global Petroleum uncertainty on decision to 2.11 1.65 survey survey survey Survey 2007 and 2008 invest Effect of environmental No No No Sources: Fraser Institute Global Petroleum regulations on decision to 2.00 1.86 survey survey survey Survey 2007 and 2008 invest Scoring: Priority ranked publicly disclosed objectives exist and are publicly measured (100); Objectives publicly disclosed but not ranked and are publicly measured (75); Objectives publicly disclosed and ranked but not publicly measured NOC objectives 75 75 75 75 75 (50); Objectives publicly disclosed but not ranked and not publicly measured (25); No public documentation of NOC objectives (0). Qatar Petroleum annual reports for relevant years 97 NOC STRATEGY AND BEHAVIOR Percentage of NOC domestic upstream % operated not disclosed in annual reports but production operated by 1 1 1 1 1 company appears to be a substantial operating specific NOC. If no data entity yes-1/no-0. Percentage of NOC domestic refining Qatar Petroleum annual reports for relevant production operated by 100.0 100.0 100.0 100.0 100.0 years specific NOC. If no data yes-1/no-0. NOC upstream capital expenditures as percentage Not reported of total capital expenditures (%) NOC refining capital expenditures as percentage Not reported of total capital expenditures (%) NOC upstream oil equity production as percentage Qatar Petroleum annual reports for relevant of total NOC refining 280.0 284.0 356.0 413.0 503.0 years throughput (%). If no data, yes/no. NOC international revenues as percentage of Qatar Petroleum annual reports for relevant 1 1 1 1 1 total NOC revenues (%). If years no data yes-1/no-0. Scoring: NOC partnerships/JVs exist domestically and internationally (100); NOC partnerships exist domestically but not Joint ventures between the internationally (66); NOC partnerships exist 100 100 100 100 100 internationally but not domestically (33); NOC NOC and third parties partnerships, JVs, alliances do not exist (0). Qatar Petroleum annual reports for relevant years NOC CORPORATE GOVERNANCE Percentage of non- Qatar Petroleum annual reports for relevant government ownership of 0.0 0.0 0.0 0.0 0.0 years specific NOC (%) Percentage of independent Qatar Petroleum annual reports for relevant 0.0 0.0 0.0 0.0 0.0 BOD members (%) years Scoring: (100)-The government has no participation in deciding who will fill the positions of Chairman/CEO; (50)-The government through its control of required Appointment authority for voting shares can influence, directly or NOC chairman and chief 0 0 0 0 0 indirectly, the appointments of Chairman/CEO executive officer and (0) The Chairman and/or CEO is a direct appointee of the government entity Qatar Petroleum annual reports for relevant years Scoring: No governmental approval of NOC budget required (100); No governmental approval of NOC budget required but certain capital expenditures require state approval Independence of NOC (75);NOC budget is proposed to and approved capital and budget 50 50 50 50 50 by one central government entity (50); NOC processes budget is proposed to and approved by multiple central government entities (25); NOC budget is part of the national budget (0). Qatar Petroleum annual reports for relevant years NOC net cash flow after Qatar Petroleum annual reports for relevant taxes and dividends (local 12,520 18,515 13,610 41,063 36,863 years currency MM) NOC capital expenditures Qatar Petroleum annual reports for relevant 13,714 20,008 32,990 47,037 36,791 (local currency MM) years Measured by net cash flow after taxes and NOC financial dividends as percentage of capital expenditures 91.3 92.5 41.3 87.3 100.2 sustainability (%) % 98 CEE Calculation Scoring: NOC financial statement auditing performed by independent international auditor and files reports with international exchange (100); FS auditing performed and publicly disclosed by independent international auditor NOC financial (75); FS auditing performed and publicly 75 75 75 75 75 disclosed by independent domestic or transparency government auditor (50) ; FS auditing performed internally by N OC and publicly disclosed (25); No publicly available auditing (0) Qatar Petroleum annual reports for relevant years Scoring: NOC oil & gas reserves auditing performed by independent international firm and files reports with international exchange (100); reserves auditing performed and publicly disclosed by independent international firm (75); NOC upstream reserves reserves auditing performed and publicly 0 0 0 0 0 disclosed by independent domestic firm (50); transparency reserves auditing performed internally and publicly disclosed (25); No publicly available reserves auditing (0). Qatar Petroleum annual reports for relevant years Note: Non-shaded areas indicate data used in the exploratory statistical analysis presented in National Oil Companies and Value Creation, volume I, chapter 4. 99 17. Oil Company Rosneft (Russia) (a) Value creation index components Operational Performance unit 2004 2005 2006 2007 2008 Company gas production BCF Company oil production MM Bbls E&P production MM BOE 148.00 621.00 655.00 792.00 771.00 E&P production growth % 11.28 319.59 5.48 20.92 -2.65 Total net additions proved oil reserves MM Bbls Total net additions proved gas reserves BCF Total net additions proved gas reserves MM BOE Reserve additions MM BOE 330.00 -310.00 1,439.00 620.00 593.00 Reserves replacement rate % 222.97 -49.92 219.69 78.28 76.91 Primary distillation capacity MBPD 256.85 493.15 493.15 1,136.99 1,107.53 Total refining throughput MBPD 135.82 454.32 481.10 805.75 987.67 Refinery utilization rate % 52.88 92.13 97.56 70.87 89.18 Assets $ MM 26,012.00 30,016.00 46,790.00 74,805.00 77,513.00 Output / total assets BOE/000$ 7.60 26.21 17.75 14.52 14.60 Employees # of people 76,380.00 63,550.00 74,200.00 105,903.00 161,912.00 Output / total employees BOE/000$ 2.59 12.38 11.19 10.26 6.99 Financial Performance Unit 2004 2005 2006 2007 2008 Earnings before interest & taxes $ MM 2,923.00 17,068.00 23,734.00 34,643.00 49,821.00 Direct expenditures on social/economic development $ MM 125.00 91.00 279.00 557.00 689.00 programs Total revenue $ MM 5,262.00 23,863.00 33,099.00 49,216.00 68,991.00 EBRTN $ MM 3,048.00 17,159.00 24,013.00 35,200.00 50,510.00 EBRTN / revenues % 57.92 71.91 72.55 71.52 73.21 EBRTN / total assets % 11.72 57.17 51.32 47.06 65.16 Total capital expenditures $ MM 4,378.00 2,090.00 4,378.00 6,870.00 8,779.00 net cash flow after taxes and dividends $ MM 655.12 2,887.32 2,217.00 16,736.00 13,905.00 NCF/CAPEX % 14.96 138.15 50.64 243.61 158.39 National Mission Performance Unit 2004 2005 2006 2007 2008 Total number of NOC local employees # of people Total number of NOC non-local employees # of people Share of nationals in NOC workforce % 99.00 99.00 99.00 99.00 99.00 NOC employment in native country (# people) # of people 75,616.20 62,914.50 73,458.00 104,843.97 160,292.88 NOC annual employment growth % 8.21 -16.80 16.76 42.73 52.89 # of people Country Labor Force 73,887.91 74,389.25 75,135.02 76,116.87 76,025.81 (000,000) Country annual employment growth % 0.16 0.68 1.00 1.31 -0.12 NOC - Country employment growth % points 8.05 -17.48 15.76 41.42 53.01 NOC employment share of country workforce % 0.10 0.08 0.10 0.14 0.21 NOC local purchases goods and services $ MM 5,661.60 NOC total purchases goods and services $ MM 5,571.00 6,938.00 8,088.00 12,512.00 16,541.00 Share of local content % 70.00 NOC noncommercial expenditure (national currency) MM NOC noncommercial expenditure $ MM 125.00 91.00 279.00 557.00 689.00 Noncommercial expenditure/Total expenditure % 2.24 1.31 3.45 4.45 4.17 Net income from non-core commercial business $ MM 228.11 334.00 197.00 440.00 1,568.00 activities Net income $ MM 5,262.00 23,863.00 33,099.00 49,216.00 68,991.00 Net income noncore commercial activities/Net % 4.34 1.40 0.60 0.89 2.27 income Price subsidies provided by NOC $ MM Total NOC Revenues $ MM 189.62 829.15 1,257.08 2,004.73 2,348.23 Price Subsidies/Revenues % NOC domestic petroleum products production MMBOE 49.58 162.75 169.80 287.10 348.30 Country oil consumption MMBOE 955.78 949.52 988.79 987.67 1,020.77 Domestic output use % 5.19 17.14 17.17 29.07 34.12 100 (b) Value creation index 2004 2005 2006 2007 2008 Operational Performance E&P production growth (%) 11.28 319.59 5.48 20.92 -2.65 Reserves replacement rate (BOE, %) 222.97 -49.92 219.69 78.28 76.91 Refinery utilization rate (%) 52.88 92.13 97.56 70.87 89.18 Output / total assets (BOE/'000$) 7.60 26.21 17.75 14.52 14.60 Output / total employees ('000 BOE) 2.59 12.38 11.19 10.26 6.99 Financial Performance EBRTN / revenues (%) 57.92 71.91 72.55 71.52 73.21 EBRTN / total assets (%) 11.72 57.17 51.32 47.06 65.16 NCF / CAPEX (%) 14.96 138.15 50.64 243.61 158.39 National Mission Performance Share of nationals in NOC workforce (%) 99.00 99.00 99.00 99.00 99.00 NOC- Country employment growth (% points) 8.05 -17.48 15.76 41.42 53.01 NOC employment share of country workforce (%) 0.10 0.08 0.10 0.14 0.21 Share of local content (%) 70.00 Noncommercial expenditures/total expenditures (%) 2.24 1.31 3.45 4.45 4.17 Noncore commercial activities net income/Total net income (%) 4.34 1.40 0.60 0.89 2.27 Price Subsidies/Revenues (%) Domestic output use (%) 5.19 17.14 17.17 29.07 34.12 (c) Normalized value creation index 2004 2005 2006 2007 2008 Operational Performance 0.32 0.47 0.38 0.44 0.32 E&P production growth 0.57 1.00 0.35 1.00 0.25 Reserves replacement rate 0.89 0.00 0.41 0.65 0.49 Refinery utilization rate 0.00 0.49 0.44 0.00 0.33 Output / total assets 0.14 0.66 0.52 0.45 0.43 Output / total employees 0.02 0.21 0.16 0.13 0.09 Financial Performance 0.31 0.65 0.48 0.82 0.75 EBRTN / revenues 0.69 0.81 0.78 0.77 0.80 EBRTN / total assets 0.16 0.67 0.60 0.67 1.00 NCF / CAPEX 0.08 0.47 0.05 1.00 0.46 National Mission Performance 0.60 0.32 0.43 0.42 0.60 Share of nationals in NOC workforce 0.99 0.99 0.99 0.99 0.99 NOC – Country employment growth 0.78 0.00 0.87 0.76 1.00 NOC employment share of country workforce 0.05 0.04 0.07 0.11 0.18 Share of local content 0.59 Noncommercial expenditures/total expenditures 0.78 0.10 0.14 0.17 0.23 Noncore commercial activities net income/Total net income 1.00 0.74 0.29 0.38 0.96 Price Subsidies/Revenues Domestic output use 0.00 0.05 0.07 0.12 0.24 VCI 0.41 0.48 0.43 0.56 0.56 101 (d) Value drivers 2004 2005 2006 2007 2008 Source GEOLOGY BP Statistical Review of World Energy June Country specific resource 75,791 76,561 73,482 74,067 74,277 2009 available at endowment oil MMBBL http://www.bp.com/statisticalreview BP Statistical Review of World Energy June Country specific resource 43,258 43,276 43,271 43,315 43,302 2009 available at endowment gas BCM http://www.bp.com/statisticalreview Country specific resource 347,884 348,768 345,654 346,520 346,645 CEE calculation endowment MMBOE STATE CONTEXT WGI: Voice and http://info.worldbank.org/governance/wgi/index. -0.58 -0.65 -0.92 -0.98 -0.97 Accountability asp http://info.worldbank.org/governance/wgi/index. WGI: Political Stability -1.00 -0.94 -0.77 -0.72 -0.62 asp WGI: Government http://info.worldbank.org/governance/wgi/index. -0.28 -0.36 -0.45 -0.41 -0.32 Effectiveness asp http://info.worldbank.org/governance/wgi/index. WGI: Regulatory Quality -0.24 -0.33 -0.57 -0.44 -0.56 asp http://info.worldbank.org/governance/wgi/index. WGI: Rule of Law -0.82 -0.87 -0.95 -0.95 -0.91 asp http://info.worldbank.org/governance/wgi/index. WGI: Corruption Control -0.75 -0.74 -0.77 -0.91 -0.98 asp "Oil and Gas in the Russian Federation," by G. Kurlyandskaya, G. Pokatovich, M. Subbotin, Center for Fiscal Policy, Moscow, World Bank Hydrocarbon Revenues as Conference on Oil and Gas in Federal Systems, % of Total Government 17.0 25.0 33.0 44.0 50.0 March, 2010; "Natural Resource Endowments, Revenues Governance, and the Domestic Revenue Effort," F. Bornhorst, S. Gupta, J. Thornton, IMF Working Paper wp/08/170, July 2008. "Oil and Gas in the Russian Federation," by G. Kurlyandskaya, G. Pokatovich, M. Subbotin, Center for Fiscal Policy, Moscow, World Bank Hydrocarbon Revenues as Conference on Oil and Gas in Federal Systems, 7.0 13.0 18.0 21.0 25.0 % of GDP March, 2010; "Natural Resource Endowments, Governance, and the Domestic Revenue Effort," F. Bornhorst, S. Gupta, J. Thornton, IMF Working Paper wp/08/170, July 2008. WTO membership (yes- 1 1 1 1 1 www.wto.org 1/no-0) over five years OPEC membership (yes- 0 0 0 0 0 www.opec.org 1/no-0) over five years Country Crude Oil Exports 2008 OPEC Annual Statistical Bulletin at 4,822 5,335 5,524 5,864 5,646 -000 BPD www.opec.org Country Crude Oil 2009 OPEC Annual Statistical Bulletin at 40 40 44 62 48 Imports-000 BPD www.opec.org Exports valued at Russia Urals oil price and (Country Revenues Oil imports valued at nominal oil price as reported Exports)-(Costs Oil 60 98 123 147 194 in 2008 OPEC Annual Statistical Bulletin at Imports) US $ Billion www.opec.org Country Gross Domestic World Bank Development Indicators: 592 765 991 1,290 1,680 Product US $ Billion http://data.worldbank.org/indicator Country Net Revenues (Costs) of Oil Exports 10.2 12.8 12.4 11.4 11.5 CEE calculation (Imports) as % of GDP Government Budget http://www.tradingeconomics.com/Economics/G Surplus/Deficit as % of 9.9 8.0 6.2 overnment-Budget.aspx?Symbol=RUB Gross Domestic Product Oil and Gas in the Russian Federation, by G. Stabilization Mechanisms Kurlyandskaya, G. Pokatovich, M. Subbotin, such as petroleum funds 1 1 1 1 1 Center for Fiscal Policy, Moscow, World Bank (yes-1/no-0) Conference on Oil and Gas in Federal Systems, March, 2010 PETROLEUM SECTOR ORGANIZATION AND GOVERANANCE Publicly disclosed national Oil and Gas in the Russian Federation, by G. policy addressing 0 0 0 0 0 Kurlyandskaya, G. Pokatovich, M. Subbotin, hydrocarbon sector issues Center for Fiscal Policy, Moscow, World Bank 102 (yes-1/no-0) Conference on Oil and Gas in Federal Systems, March, 2010 Scoring: Independent NOC, Ministry and regulatory function (100); Regulatory function is performed by ministry (66); Regulatory function Institutional structure 66 66 66 66 66 is performed by NOC (33); All three functions combined in one entity (0). CEE assessment BP Statistical Review of World Energy June Country oil production 3,565 3,486 3,565 3,641 3,609 2009 available at MM Barrels http://www.bp.com/statisticalreview BP Statistical Review of World Energy June Country gas production 20,191 20,486 20,971 20,906 21,190 2009 available at BCF http://www.bp.com/statisticalreview Country MMBOE 7,046 7,018 7,181 7,245 7,262 CEE calculation production NOC MMBOE Domestic Rosneft financial statements for relevant years 3,595 4,153 4,372 4,465 4,433 Production available at www.rosneft.com Non-NOC percentage of 49.0 40.8 39.1 38.4 39.0 CEE calculation oil and gas production (%) BP Statistical Review of World Energy June Country Refinery Capacity 2009 available at - 000 BPD 5,371 5,421 5,473 5,522 5,547 http://www.bp.com/statisticalreview Net NOC Refinery Capacity - 000 BPD Rosneft financial statements for relevant years 367 781 1,179 1,577 1,796 (country level) Non-NOC percentage of CEE calculation. CEE calculation. NOC refinery capacity (%, 93.2 85.6 78.5 71.4 67.6 volumes include Rosneft and Gazprom refinery country level) volumes. Total Revenues (local Rosneft financial statements for relevant years currency MM) 5,262 23,863 33,099 49,216 68,991 Royalties and production 1,717 11,545 18,130 23,922 36,816 Rosneft financial statements for relevant years taxes (local currency MM) Income taxes (local Rosneft financial statements for relevant years currency MM) 298 1,609 540 4,906 1,904 Dividends paid to government (local Rosneft financial statements for relevant years 45 54 373 374 488 currency MM) Royalties, production taxes, income taxes and dividends paid to 39.1 55.3 57.5 59.3 56.8 CEE Calculation government by NOC as percentage of total revenues (%) Effect of contract terms on No No No Sources: Fraser Institute Global Petroleum 3.15 3.06 investment decisions survey survey survey Survey 2007 and 2008 Effect of taxation regime No No No Sources: Fraser Institute Global Petroleum 3.13 2.71 on decision to invest survey survey survey Survey 2007 and 2008 Effect of cost of regulatory No No No Sources: Fraser Institute Global Petroleum compliance on decision to 3.54 3.07 survey survey survey Survey 2007 and 2008 invest Effect of regulatory No No No Sources: Fraser Institute Global Petroleum uncertainty on decision to 3.76 3.41 survey survey survey Survey 2007 and 2008 invest Effect of environmental No No No Sources: Fraser Institute Global Petroleum regulations on decision to 2.64 2.73 survey survey survey Survey 2007 and 2008 invest Scoring: Priority ranked publicly disclosed objectives exist and are publicly measured (100); NOC objectives 75 75 75 75 75 Objectives publicly disclosed but not ranked and are publicly measured (75); Objectives publicly disclosed and ranked but not publicly measured 103 (50); Objectives publicly disclosed but not ranked and not publicly measured (25); No public documentation of NOC objectives (0). Rosneft financial statements for relevant years NOC STRATEGY AND BEHAVIOR Percentage of NOC domestic upstream % operated not disclosed in annual reports but production operated by 1 1 1 1 1 company appears to be a substantial operating specific NOC. If no data entity yes-1/no-0. Percentage of NOC domestic refining % operated not disclosed in annual reports but production operated by 1 1 1 1 1 company appears to be a substantial operating specific NOC. If no data entity yes-1/no-0. NOC upstream capital expenditures as percentage 68.5 76.8 60.2 67.1 73.8 Rosneft financial statements for relevant years of total capital expenditures (%) NOC refining capital expenditures as percentage 29.8 14.5 10.8 14.5 12.9 Rosneft financial statements for relevant years of total capital expenditures (%) NOC upstream oil equity production as percentage of total NOC refining 259.3 301.7 306.8 229.1 198.5 Rosneft financial statements for relevant years throughput (%). If no data, yes/no. NOC international revenues as percentage of 0 0 0 0 0 Rosneft financial statements for relevant years total NOC revenues (%). If no data yes-1/no-0. Scoring: NOC partnerships/JVs exist domestically and internationally (100); NOC partnerships exist domestically but not Joint ventures between the internationally (66); NOC partnerships exist 66 66 66 66 66 NOC and third parties internationally but not domestically (33); NOC partnerships, JVs, alliances do not exist (0). Rosneft financial statements for relevant years NOC CORPORATE GOVERNANCE Percentage of non- government ownership of 0.0 0.0 17.0 17.0 17.0 Rosneft website www.rosneft.com specific NOC (%) Percentage of independent 0.0 0.0 33.0 33.0 33.0 Rosneft website www.rosneft.com BOD members (%) Scoring: (100)-The government has no participation in deciding who will fill the positions of Chairman/CEO; (50)-The Appointment authority for government through its control of required NOC chairman and chief 0 0 0 0 0 voting shares can influence, directly or executive officer indirectly, the appointments of Chairman/CEO and (0) The Chairman and/or CEO is a direct appointee of the government entity Rosneft website www.rosneft.com Scoring: No governmental approval of NOC budget required (100); No governmental approval of NOC budget required but certain capital expenditures require state approval Independence of NOC (75);NOC budget is proposed to and approved capital and budget 75 75 75 75 75 by one central government entity (50); NOC processes budget is proposed to and approved by multiple central government entities (25); NOC budget is part of the national budget (0). Rosneft website www.rosneft.com NOC net cash flow after taxes and dividends (local 655 2,887 2,217 16,736 13,905 Rosneft financial statements for relevant years currency MM) NOC capital expenditures 4,378 2,090 4,378 6,870 8,779 Rosneft financial statements for relevant years (local currency MM) 104 Measured by net cash flow after taxes and NOC financial dividends as percentage of capital expenditures 15.0 138.1 50.6 243.6 158.4 % sustainability (%) CEE Calculation Scoring: NOC financial statement auditing performed by independent international auditor and files reports with international exchange (100); FS auditing performed and publicly disclosed by independent international auditor NOC financial (75); FS auditing performed and publicly 100 100 100 100 100 transparency disclosed by independent domestic or government auditor (50) ; FS auditing performed internally by N OC and publicly disclosed (25); No publicly available auditing (0) Rosneft financial statements for relevant years Scoring: NOC oil & gas reserves auditing performed by independent international firm and files reports with international exchange (100); reserves auditing performed and publicly disclosed by independent international firm (75); NOC upstream reserves reserves auditing performed and publicly 100 100 100 100 100 transparency disclosed by independent domestic firm (50); reserves auditing performed internally and publicly disclosed (25); No publicly available reserves auditing (0). Rosneft financial statements for relevant years Note: Non-shaded areas indicate data used in the exploratory statistical analysis presented in National Oil Companies and Value Creation, volume I, chapter 4. 105 18. China Petroleum & Chemical Corporation (China) (a) Value creation index components Operational Performance unit 2004 2005 2006 2007 2008 Company gas production BCF 207.00 222.00 257.00 283.00 293.00 Company oil production MM Bbls 274.00 279.00 285.00 292.00 297.00 E&P production MM BOE 311.67 319.40 331.77 343.51 350.33 E&P production growth % 2.88 2.48 3.87 3.54 1.99 Total net additions proved oil reserves MM Bbls 284.00 306.00 284.00 23.00 114.00 Total net additions proved gas reserves BCF 352.00 141.00 161.00 3,758.00 921.00 Total net additions proved gas reserves MM BOE 64.06 25.66 29.30 683.96 167.62 Reserve additions MM BOE 348.06 331.66 313.30 706.96 281.62 Reserves replacement rate % 111.68 103.84 94.43 205.81 80.39 Primary distillation capacity MBPD 3,189.04 3,289.73 3,676.03 3,799.32 4,222.60 Total refining throughput MBPD 2,730.82 2,874.66 3,131.51 3,318.49 3,468.49 Refinery utilization rate % 85.63 87.38 85.19 87.34 82.14 Assets $ MM 54,465.00 67,120.00 76,762.00 96,045.96 110,559.84 Output / total assets BOE/000$ 24.02 20.39 19.21 16.19 14.62 Employees # of people 389,451.00 364,528.00 340,886.00 334,377.00 358,304.00 Output / total employees BOE/000$ 3.36 3.75 4.33 4.65 4.51 Financial Performance Unit 2004 2005 2006 2007 2008 Earnings before interest & taxes (national currency) Bn 80.035 86.29 113.41 124.17 85.50 Direct expenditures on social/economic development MM programs (national currency) 291.00 203.00 98.00 158.00 396.00 Total revenue (national currency) Bn 619.92 823.27 1,071.40 1,204.84 1,452.10 EBRTN Bn 80.33 86.49 113.50 124.33 85.89 EBRTN / revenues % 12.96 10.51 10.59 10.32 5.92 EBRTN / total assets % 16.68 15.87 18.58 16.97 11.19 Total capital expenditures (national currency) Bn 76.62 75.93 82.55 99.95 99.64 net cash flow after taxes and dividends Bn 45.98 42.33 50.00 103.37 55.98 NCF/CAPEX % 60.02 55.75 60.57 103.42 56.18 National Mission Performance Unit 2004 2005 2006 2007 2008 Total number of NOC local employees # of people 389,451.00 364,528.00 340,886.00 334,377.00 358,304.00 Total number of NOC non-local employees # of people Share of nationals in NOC workforce % 99.00 99.00 99.00 99.00 99.00 NOC employment in native country (# people) # of people 385,556.49 360,882.72 337,477.14 331,033.23 354,720.96 NOC annual employment growth % -3.73 -6.40 -6.49 -1.91 7.16 # of people Country Labor Force 754,509.41 760,627.03 766,465.19 771,078.94 776,880.99 (000,000) Country annual employment growth % 1.03 0.8 0.76 0.77 0.64 NOC - Country employment growth % points -4.77 -7.23 -7.24 -2.68 6.52 NOC employment share of country workforce % 0.05 0.05 0.04 0.04 0.05 NOC local purchases goods and services $ MM NOC total purchases goods and services $ MM 53,573.67 79,835.70 107,176.91 127,266.05 185,056.66 Share of local content % NOC noncommercial expenditure (national currency) MM NOC noncommercial expenditure $ MM 35.14 24.82 12.30 20.71 57.02 Noncommercial expenditure/Total expenditure % 0.07 0.03 0.01 0.02 0.03 Net income from non-core commercial business $ MM activities Net income from total commercial activities $ MM 4,994.00 5,474.00 6,952.00 7,373.41 5,892.38 Net income noncore commercial activities/Net % income Price subsidies provided by NOC $ MM 2,422.00 3,659.00 7,793.00 14,687.04 Total NOC Revenues $ MM 19,915.00 823,272.00 1,071,402.0 1,204,843.0 1,452,101.0 Price Subsidies/Revenues % 0.29 0.34 0.65 1.01 NOC domestic petroleum products production MMBOE 1,048.11 1,118.51 1,307.63 1,366.80 1,417.50 Country oil consumption MMBOE 2,471.87 2,549.20 2,694.35 2,825.90 2,919.58 Domestic output use % 42.40 43.88 48.53 48.37 48.55 106 (b) Value creation index 2004 2005 2006 2007 2008 Operational Performance E&P production growth (%) 2.88 2.48 3.87 3.54 1.99% Reserves replacement rate (BOE, %) 111.68 103.84 94.43 205.81 80.39 Refinery utilization rate (%) 85.63 87.38 85.19 87.34 82.14 Output / total assets (BOE/'000$) 24.02 20.39 19.21 16.19 14.62 Output / total employees ('000 BOE) 3.36 3.75 4.33 4.65 4.51 Financial Performance EBRTN / revenues (%) 12.96 10.51 10.59 10.32 5.92 EBRTN / total assets (%) 16.68 15.87 18.58 16.97 11.19% NCF / CAPEX (%) 60.02 55.75 60.57 103.42 56.18 National Mission Performance Share of nationals in NOC workforce (%) 99.00 99.00 99.00 99.00 99.00 NOC – Country employment growth (% points) -4.77 -7.23 -7.24 -2.68 6.52 NOC employment share of country workforce (%) 0.05 0.05 0.04 0.04 0.05 Share of local content (%) Noncommercial expenditures/total expenditures (%) 0.07 0.03 0.01 0.02 0.03 Noncore commercial activities net income/Total net income (%) Price Subsidies/Revenues (%) 0.29 0.34 0.65 1.01 Domestic output use (%) 42.40 43.88 48.53 48.37 48.55 (c) Normalized value creation index 2004 2005 2006 2007 2008 Operational Performance 0.38 0.31 0.26 0.48 0.32 E&P production growth 0.33 0.05 0.33 0.57 0.39 Reserves replacement rate 0.56 0.51 0.12 1.00 0.53 Refinery utilization rate 0.46 0.42 0.22 0.28 0.21 Output / total assets 0.49 0.51 0.57 0.50 0.43 Output / total employees 0.04 0.05 0.05 0.05 0.06 Financial Performance 0.21 0.05 0.05 0.17 0.07 EBRTN / revenues 0.07 0.00 0.00 0.00 0.00 EBRTN / total assets 0.25 0.09 0.03 0.12 0.10 NCF / CAPEX 0.31 0.05 0.10 0.40 0.11 National Mission Performance 0.31 0.23 0.28 0.24 0.29 Share of nationals in NOC workforce 0.99 0.99 0.99 0.99 0.99 NOC – Country employment growth 0.36 0.20 0.42 0.17 0.30 NOC employment share of country workforce 0.02 0.02 0.03 0.03 0.04 Share of local content Noncommercial expenditures/total expenditures 0.02 0.00 0.00 0.00 0.00 Noncore commercial activities net income/Total net income Price Subsidies/Revenues 0.01 0.02 0.02 0.04 Domestic output use 0.17 0.18 0.24 0.22 0.35 VCI 0.30 0.20 0.20 0.30 0.23 107 (d) Value drivers 2004 2005 2006 2007 2008 Source GEOLOGY BP Statistical Review of World Energy June Country specific resource 15,531 15,587 15,615 15,493 14,817 2009 available at endowment oil MMBBL http://www.bp.com/statisticalreview BP Statistical Review of World Energy June Country specific resource 1,448 1,535 1,684 2,255 2,455 2009 available at endowment gas BCM http://www.bp.com/statisticalreview Country specific resource 24,640 25,240 26,204 29,678 30,261 CEE calculation endowment MMBOE STATE CONTEXT WGI: Voice and http://info.worldbank.org/governance/wgi/index. -1.45 -1.52 -1.68 -1.72 -1.72 Accountability asp http://info.worldbank.org/governance/wgi/index. WGI: Political Stability -0.14 -0.25 -0.31 -0.28 -0.32 asp WGI: Government http://info.worldbank.org/governance/wgi/index. -0.05 -0.12 0.06 0.19 0.24 Effectiveness asp http://info.worldbank.org/governance/wgi/index. WGI: Regulatory Quality -0.29 -0.25 -0.33 -0.24 -0.22 asp http://info.worldbank.org/governance/wgi/index. WGI: Rule of Law -0.36 -0.41 -0.48 -0.45 -0.33 asp http://info.worldbank.org/governance/wgi/index. WGI: Corruption Control -0.58 -0.67 -0.53 -0.61 -0.44 asp Hydrocarbon Revenues as % of Total Government Revenues Hydrocarbon Revenues as % of GDP WTO membership (yes- 1 1 1 1 1 www.wto.org 1/no-0) over five years OPEC membership (yes- 0 0 0 0 0 www.opec.org 1/no-0) over five years Country Crude Oil Exports 2008 OPEC Annual Statistical Bulletin at 109 161 126 76 77 -000 BPD www.opec.org Country Crude Oil US Energy Information Administration at 2,780 2,904 3,379 3,670 3,857 Imports-000 BPD http://www.eia.gov/countries/?fips=CH Exports valued at China Daiqing oil price and (Country Revenues Oil imports valued at nominal oil price as reported Exports)-(Costs Oil -35 -51 -72 -91 -130 in 2008 OPEC Annual Statistical Bulletin at Imports) US $ Billion www.opec.org Country Gross Domestic World Bank Development Indicators: 1,930 2,240 2,660 3,380 4,333 Product US $ Billion http://data.worldbank.org/indicator Country Net Revenues (Costs) of Oil Exports -1.8 -2.3 -2.7 -2.7 -3.0 CEE calculation (Imports) as % of GDP Government Budget http://www.tradingeconomics.com/Economics/G Surplus/Deficit as % of -2.4 -2.1 -1.6 -1.4 overnment-Budget.aspx?Symbol=CNY Gross Domestic Product Stabilization Mechanisms such as petroleum funds 0 0 0 0 0 http://www.swfinstitute.org/ (yes-1/no-0) PETROLEUM SECTOR ORGANIZATION AND GOVERANANCE China has been drafting an Energy Law since Publicly disclosed national 2006. In Feb. 2010 it was submitted to the policy addressing Legislative Affairs Office of the State Council 0 0 0 0 0 hydrocarbon sector issues and is expected to take effect in 2011. (yes-1/no-0) http://www.bjreview.com.cn/Energy/txt/2010- 02/25/content_248380.htm Scoring: Independent NOC, Ministry and regulatory function (100); Regulatory function is performed by ministry (66); Regulatory function Institutional structure 66 66 66 66 66 is performed by NOC (33); All three functions combined in one entity (0). CEE assessment BP Statistical Review of World Energy June Country oil production 1,271 1,324 1,345 1,366 1,385 2009 available at MM Barrels http://www.bp.com/statisticalreview 108 BP Statistical Review of World Energy June Country gas production 1,460 1,742 2,068 2,445 2,679 2009 available at BCF http://www.bp.com/statisticalreview Country MMBOE 1,523 1,624 1,702 1,788 1,847 CEE calculation production NOC MMBOE Domestic Production from Sinopec, Petrochina and 1,374 1,465 1,525 1,550 1,621 Production CNOOC Form 20Fs for relevant years Non-NOC percentage of 9.8 9.8 10.4 13.3 12.2 CEE calculation oil and gas production (%) BP Statistical Review of World Energy June Country Refinery Capacity 6,289 6,587 7,029 7,511 7,732 2009 available at - 000 BPD http://www.bp.com/statisticalreview Net NOC Refinery Sinopec and Petrochina Form 20Fs for relevant Capacity - 000 BPD 5,300 5,552 5,847 6,042 6,193 year (country level) Non-NOC percentage of refinery capacity (%, 15.7 15.7 16.8 19.6 19.9 CEE calculation. country level) Total Revenues (local 619.9 823.3 1,071.4 1,204.8 1,452.1 Sinopec Form 20Fs for relevant year currency Bn) Royalties and production 16,345 17,186 28,636 34,304 56,799 Sinopec Form 20Fs for relevant year taxes (local currency MM) Income taxes (local 18,092 19,877 23,512 -24,721 1,883 Sinopec Form 20Fs for relevant year currency MM) Dividends paid to government (local 22,956 35,890 45,871 16,225 11,734 Sinopec Form 20Fs for relevant year currency MM) Royalties, production taxes, income taxes and dividends paid to 9.3 8.9 9.1 2.1 4.8 CEE Calculation government by NOC as percentage of total revenues (%) Effect of contract terms on No No No Sources: Fraser Institute Global Petroleum 2.42 2.16 investment decisions survey survey survey Survey 2007 and 2008 Effect of taxation regime No No No Sources: Fraser Institute Global Petroleum 2.97 2.64 on decision to invest survey survey survey Survey 2007 and 2008 Effect of cost of regulatory No No No Sources: Fraser Institute Global Petroleum compliance on decision to 2.84 2.11 survey survey survey Survey 2007 and 2008 invest Effect of regulatory No No No Sources: Fraser Institute Global Petroleum uncertainty on decision to 3.03 2.6 survey survey survey Survey 2007 and 2008 invest Effect of environmental No No No Sources: Fraser Institute Global Petroleum regulations on decision to 2.16 1.78 survey survey survey Survey 2007 and 2008 invest Scoring: Priority ranked publicly disclosed objectives exist and are publicly measured (100); Objectives publicly disclosed but not ranked and are publicly measured (75); Objectives publicly NOC objectives 25 25 25 25 25 disclosed and ranked but not publicly measured (50); Objectives publicly disclosed but not ranked and not publicly measured (25); No public documentation of NOC objectives (0). Sinopec Form 20Fs for relevant year NOC STRATEGY AND BEHAVIOR Percentage of NOC domestic upstream % operated not disclosed in annual reports but production operated by 1 1 1 1 1 company appears to be a substantial operating specific NOC. If no data entity yes-1/no-0. Percentage of NOC % operated not disclosed in annual reports but 1 1 1 1 1 domestic refining company appears to be a substantial operating 109 production operated by entity specific NOC. If no data yes-1/no-0. NOC upstream capital expenditures as percentage 39.0 42.0 52.0 50.0 54.0 Sinopec Form 20Fs for relevant year of total capital expenditures (%) NOC refining capital expenditures as percentage 20.0 25.0 27.0 21.0 12.0 Sinopec Form 20Fs for relevant year of total capital expenditures (%) NOC upstream oil equity production as percentage of total NOC refining 22.0 23.0 20.0 19.0 18.0 Sinopec Form 20Fs for relevant year throughput (%). If no data, yes/no. Sinopec Form 20Fs for relevant year. NOC international International upstream assets appear to reside in revenues as percentage of 0.0 0.0 0.0 0.0 0.0 parent company SGC as Sinopec does not report total NOC revenues (%). If international assets in its Forms 20Fs. SGC no data yes-1/no-0. upstream assets are in Russia, Iran and Canada. Scoring: NOC partnerships/JVs exist domestically and internationally (100); NOC partnerships exist domestically but not Joint ventures between the internationally (66); NOC partnerships exist 66 66 66 66 66 NOC and third parties internationally but not domestically (33); NOC partnerships, JVs, alliances do not exist (0). Sinopec Form 20Fs for relevant year NOC CORPORATE GOVERNANCE Percentage of non- government ownership of 23.0 23.9 23.5 23.5 24.2 Sinopec Form 20Fs for relevant year specific NOC (%) Percentage of independent 28.57 23.08 27.27 27.73 27.73 Sinopec Form 20Fs for relevant year BOD members (%) Scoring: (100)-The government has no participation in deciding who will fill the positions of Chairman/CEO; (50)-The Appointment authority for government through its control of required NOC chairman and chief 50 50 50 50 50 voting shares can influence, directly or executive officer indirectly, the appointments of Chairman/CEO and (0) The Chairman and/or CEO is a direct appointee of the government entity Sinopec Form 20Fs for relevant year Scoring: No governmental approval of NOC budget required (100); No governmental approval of NOC budget required but certain capital expenditures require state approval Independence of NOC (75);NOC budget is proposed to and approved capital and budget 75 75 75 75 75 by one central government entity (50); NOC processes budget is proposed to and approved by multiple central government entities (25); NOC budget is part of the national budget (0). Sinopec Form 20Fs for relevant year NOC net cash flow after taxes and dividends (local 45,983 42,327 50,000 103,369 55,978 Sinopec Form 20Fs for relevant year currency MM) NOC capital expenditures 76,615 75,927 82,545 99,946 99,636 Sinopec Form 20Fs for relevant year (local currency MM) Measured by net cash flow after taxes and NOC financial dividends as percentage of capital expenditures 60.02 55.75 60.57 103.42 56.18 % sustainability (%) CEE Calculation Scoring: NOC financial statement auditing performed by independent international auditor and files reports with international exchange (100); FS auditing performed and publicly NOC financial 100 100 100 100 100 disclosed by independent international auditor transparency (75); FS auditing performed and publicly disclosed by independent domestic or government auditor (50) ; FS auditing performed internally by N OC and publicly disclosed (25); 110 No publicly available auditing (0) Sinopec Form 20Fs for relevant year Scoring: NOC oil & gas reserves auditing performed by independent international firm and files reports with international exchange (100); reserves auditing performed and publicly disclosed by independent international firm (75); NOC upstream reserves reserves auditing performed and publicly 0 0 0 0 0 transparency disclosed by independent domestic firm (50); reserves auditing performed internally and publicly disclosed (25); No publicly available reserves auditing (0). Sinopec Form 20Fs for relevant year Note: Non-shaded areas indicate data used in the exploratory statistical analysis presented in National Oil Companies and Value Creation, volume I, chapter 4. 111 19. Sonatrach S.A. (Algeria) (a) Value creation index components Operational Performance unit 2004 2005 2006 2007 2008 Company gas production BCF 5,081.76 5,364.08 5,293.50 5,399.37 5,434.66 Company oil production MM Bbls 623.05 630.38 623.05 630.38 615.72 E&P production (BOE) MM BOE 1,627.00 1,568.00 1,554.00 1,574.00 1,566.00 E&P production growth % 15.04 -3.63 -0.89 1.29 -0.51 Total net additions proved oil reserves MM Bbls 469.12 Total net additions proved gas reserves BCF 1,762.04 Total net additions proved gas reserves MM BOE 320.69 Reserve additions (BOE) MM BOE 789.81 Reserves replacement rate % 50.82 Primary distillation capacity MBPD 450.00 450.00 450.00 450.00 450.00 Total refining throughput MBPD 366.12 366.66 380.12 392.27 419.72 Refinery utilization rate % 81.36 81.48 84.47 87.17 93.27 Assets $ MM 37,087.50 43,105.30 52,217.23 66,648.47 81,010.42 Output / total assets BOE/000$ 47.47 39.48 32.42 25.76 21.22 Employees # of people 36,626.00 37,205.00 38,012.00 39,733.00 41,204.00 Output / total employees BOE/000$ 48.07 45.74 44.53 43.22 41.72 Financial Performance Unit 2004 2005 2006 2007 2008 Earnings before interest & taxes (national currency) Bn 1,629.28 2,548.30 2,824.38 3,028.56 3,656.42 Direct expenditures on social/economic development Bn programs (national currency) Total revenue (national currency) Bn 2,450.77 3,535.76 4,222.75 4,346.63 5,218.45 EBRTN Bn 1,629.28 2,548.30 2,824.38 3,028.56 3,656.42 EBRTN / revenues % 66.48 72.07 66.88 69.68 70.07 EBRTN / total assets % 60.96 80.68 74.45 65.01 71.36 Total capital expenditures (national currency) Bn 263.81 297.35 349.91 450.77 597.68 net cash flow after taxes and dividends Bn 513.95 714.93 736.96 877.50 878.79 NCF/CAPEX % 194.82 240.43 210.62 194.67 147.04 National Mission Performance Unit 2004 2005 2006 2007 2008 Total number of NOC local employees # of people 36,626.00 37,205.00 38,012.00 39,733.00 41,204.00 Total number of NOC non-local employees # of people 3.00 1.00 0 1.00 1.00 Share of nationals in NOC workforce % 99.99 100.00 100.00 100.00 100.00 NOC employment in native country (# people) # of people 35,527.22 36,088.85 36,871.64 38,541.01 39,967.88 NOC annual employment growth % 1.59 1.58 2.17 4.53 3.70 # of people Country Labor Force 10,529.48 11,178.72 11,971.25 12,136.54 12,307.00 (000,000) Country annual employment growth % 11.58 6.17 7.09 1.38 1.40 NOC - Country employment growth % points -9.99 -4.59 -4.92 3.15 2.30 NOC employment share of country workforce % 0.34 0.32 0.31 0.32 0.32 NOC local purchases goods and services $ MM NOC total purchases goods and services $ MM Share of local content % NOC noncommercial expenditure (national currency) MM NOC noncommercial expenditures $ MM Noncommercial expenditure/Total expenditure % Net income from non-core commercial business activities Bn 40.25 66.69 85.20 102.39 123.11 (national currency) Net income from total commercial activities (national Bn 2,450.77 3,535.76 4,222.75 4,346.63 5,218.45 currency) Net income noncore commercial activities/Net income % 1.64 1.89 2.02 2.36 2.36 Price subsidies provided by NOC (national currency) Bn 369.49 585.72 767.15 806.78 1,087.46 Total NOC revenues (national currency) Bn 2,450.77 3,535.76 4,222.75 4,346.63 5,218.45 Price Subsidies/Revenues % 15.1 16.6 18.2 18.6 20.8 NOC domestic petroleum products production MMBOE 133.63 133.77 135.37 139.17 148.91 Country oil consumption MMBOE 87.75 91.74 94.82 105.29 113.50 Domestic output use % 152.28 145.81 142.76 132.18 131.19 112 (b) Value creation index 2004 2005 2006 2007 2008 Operational Performance E&P production growth (%) 15.04 -3.63 -0.89 1.29 -0.51 Reserves replacement rate (BOE, %) 50.82 Refinery utilization rate (%) 81.36 81.48 84.47 87.17 93.27 Output / total assets (BOE/'000$) 47.47 39.48 32.42 25.76 21.22 Output / total employees ('000 BOE) 48.07 45.74 44.53 43.22 41.72 Financial Performance EBRTN / revenues (%) 66.48 72.07 66.88 69.68 70.07 EBRTN / total assets (%) 60.96 80.68 74.45 65.01 71.36 NCF / CAPEX (%) 194.82 240.43 210.62 194.67 147.04 National Mission Performance Share of nationals in NOC workforce (%) 99.99 100.00 100.00 100.00 100.00 NOC – Country employment growth (% points) -9.99 -4.59 -4.92 3.15 2.30 NOC employment share of country workforce (%) 0.34 0.32 0.31 0.32 0.32 Share of local content (%) Noncommercial expenditures/total expenditures (%) Noncore commercial activities net income/Total net income (%) 1.64 1.89 2.02 2.36 2.36 Price Subsidies/Revenues (%) 15.08 16.57 18.17 18.56 20.84 Domestic output use (%) 152.28 145.81 142.76 132.18 131.19 (c) Normalized value creation index 2004 2005 2006 2007 2008 Operational Performance 0.74 0.54 0.43 0.54 0.47 E&P production growth 0.67 0.03 0.25 0.51 0.31 Reserves replacement rate 0.02 Refinery utilization rate 0.40 0.33 0.21 0.28 0.40 Output / total assets 1.00 1.00 0.98 0.80 0.63 Output / total employees 0.87 0.80 0.67 0.57 0.54 Financial Performance 0.93 0.94 0.86 0.85 0.76 EBRTN / revenues 0.81 0.81 0.71 0.75 0.76 EBRTN / total assets 1.00 1.00 1.00 1.00 1.10 NCF / CAPEX 0.99 1.00 0.88 0.79 0.42 National Mission Performance 0.49 0.61 0.72 0.61 0.71 Share of nationals in NOC workforce 1.00 1.00 1.00 1.00 1.00 NOC – Country employment growth 0.19 0.25 0.46 0.25 0.24 NOC employment share of country workforce 0.15 0.17 0.22 0.26 0.28 Share of local content Noncommercial expenditures/total expenditures Noncore commercial activities net income/Total net income 0.38 1.00 0.98 1.00 1.00 Price Subsidies/Revenues 0.51 0.53 0.90 0.50 0.75 Domestic output use 0.68 0.70 0.74 0.65 1.00 VCI 0.72 0.69 0.67 0.67 0.65 113 (d) Value drivers 2004 2005 2006 2007 2008 Source GEOLOGY Country specific resource BP Statistical Review of World Energy June 2009 11,800 12,270 12,270 12,200 12,200 endowment oil MMBBL available at http://www.bp.com/statisticalreview Country specific resource BP Statistical Review of World Energy June 2009 4,545 4,504 4,504 4,504 4,504 endowment gas BCM available at http://www.bp.com/statisticalreview Country specific resource 40,388 40,601 40,601 40,530 40,530 CEE calculation endowment MMBOE STATE CONTEXT WGI: Voice and -0.79 -0.74 -0.96 -1.00 -1.05 http://info.worldbank.org/governance/wgi/index.asp Accountability WGI: Political Stability -1.43 -1.13 -1.02 -1.12 -1.15 http://info.worldbank.org/governance/wgi/index.asp WGI: Government -0.45 -0.35 -0.45 -0.53 -0.5 http://info.worldbank.org/governance/wgi/index.asp Effectiveness WGI: Regulatory Quality -0.59 -0.56 -0.66 -0.66 -0.79 http://info.worldbank.org/governance/wgi/index.asp WGI: Rule of Law -0.66 -0.7 -0.61 -0.68 -0.7 http://info.worldbank.org/governance/wgi/index.asp WGI: Corruption Control -0.60 -0.44 -0.43 -0.43 -0.44 http://info.worldbank.org/governance/wgi/index.asp "Natural Resource Endowments, Governance and the Hydrocarbon Revenues as % Domestic Revenue Effort," by F. Bornhorst, S. of Total Government 65.0 65.0 66.0 66.0 66.0 Gupta, J. Thornton, IMF Working Paper, Revenues WP/08/170, July 2008; http://www.swfinstitute.org/fund/algeria.php "Natural Resource Endowments, Governance and the Domestic Revenue Effort," by F. Bornhorst, S. Hydrocarbon Revenues as % 22.0 22.0 30.0 33.0 33.0 Gupta, J. Thornton, IMF Working Paper, of GDP WP/08/170, July 2008; http://www.swfinstitute.org/fund/algeria.php WTO membership (yes-1/no- 0 0 0 0 0 www.wto.org 0) over five years OPEC membership (yes- 1 1 1 1 1 www.opec.org 1/no-0) over five years Country Crude Oil Exports - 2008 OPEC Annual Statistical Bulletin at 893 970 947 1,254 841 000 BPD www.opec.org Country Crude Oil Imports- 2009 OPEC Annual Statistical Bulletin at 000 BPD www.opec.org (Country Revenues Oil Algeria's values of exports as reported in the 2008 Exports)-(Costs Oil Imports) 32 46 53 59 77 OPEC Annual Statistical Bulletin at www.opec.org US $ Billion Country Gross Domestic World Bank Development Indicators: 85 102 116 136 167 Product US $ Billion http://data.worldbank.org/indicator Country Net Revenues (Costs) of Oil Exports 37.6 45.1 45.7 43.4 46.1 CEE calculation (Imports) as % of GDP Government Budget Surplus/Deficit as % of Gross 5.3 13.6 13.8 http://earthtrends.wri.org/searchable_db/index Domestic Product Stabilization Mechanisms such as petroleum funds (yes- 1 1 1 1 1 http://www.swfinstitute.org/ 1/no-0) PETROLEUM SECTOR ORGANIZATION AND GOVERANANCE Publicly disclosed national policy addressing 1 1 1 1 1 Sonatrach website at www.sonatrach-dz.com hydrocarbon sector issues (yes-1/no-0) Scoring: Independent NOC, Ministry and regulatory function (100); Regulatory function is performed by ministry (66); Regulatory function is performed by Institutional structure 33 66 66 66 66 NOC (33); All three functions combined in one entity (0). "Algeria: The Algerian Hydrocarbons Regulations," by R. Palmer, C. Bensoussan, F. Elbar, S. Sayah, 114 10/5/2009 available at http://www.mondaq.com/article.asp?articleid=86988 Country oil production MM BP Statistical Review of World Energy June 2009 710 735 731 736 727 Barrels available at http://www.bp.com/statisticalreview Gross country gas production as reported in the Country gas production BCF 6,495 6,813 6,884 6,989 7,095 2008 OPEC Annual Statistical Bulletin at www.opec.org Country MMBOE production 1,830 1,910 1,918 1,941 1,950 CEE calculation NOC MMBOE Domestic Sonatrach annual reports for relevant years available 1,627 1,568 1,554 1,574 1,566 Production at www.sonatrach-dz.com Non-NOC percentage of oil 11.1 17.9 19.0 18.9 19.7 CEE calculation and gas production (%) Country Refinery Capacity - US Energy Information Administration at 450 450 450 450 450 000 BPD www.eia.doe.gov/emeu/cabs/Algeria/pdf.pdf Net NOC Refinery Capacity - 450 450 450 450 450 Sonatrach annual reports for the relevant year 000 BPD (country level) Non-NOC percentage of refinery capacity (%, country 0.0 0.0 0.0 0.0 0.0 CEE calculation. level) Total Revenues (local 2,450.8 3,535.8 4,222.7 4,346.5 5,218.5 Sonatrach annual reports for the relevant year currency Bn) Royalties and production 431,040 608,640 6,065 10,545 2,251,161 Sonatrach annual reports for the relevant year taxes (local currency MM) Income taxes (local currency 1,048.1 1,584.0 1,825.0 1,847.3 260.9 Sonatrach annual reports for the relevant year Bn) Dividends paid to government (local currency MM) Royalties, production taxes, income taxes and dividends paid to government by NOC 60.4 62.0 43.4 42.7 48.1 CEE Calculation as percentage of total revenues (%) Effect of contract terms on No No No Sources: Fraser Institute Global Petroleum Survey 2.97 3.03 investment decisions survey survey survey 2007 and 2008 Effect of taxation regime on No No No Sources: Fraser Institute Global Petroleum Survey 2.67 2.50 decision to invest survey survey survey 2007 and 2008 Effect of cost of regulatory No No No Sources: Fraser Institute Global Petroleum Survey compliance on decision to 2.83 2.50 survey survey survey 2007 and 2008 invest Effect of regulatory No No No Sources: Fraser Institute Global Petroleum Survey uncertainty on decision to 3.03 3.03 survey survey survey 2007 and 2008 invest Effect of environmental No No No Sources: Fraser Institute Global Petroleum Survey regulations on decision to 1.50 2.00 survey survey survey 2007 and 2008 invest Scoring: Priority ranked publicly disclosed objectives exist and are publicly measured (100); Objectives publicly disclosed but not ranked and are publicly measured (75); Objectives publicly NOC objectives 75 75 75 75 75 disclosed and ranked but not publicly measured (50); Objectives publicly disclosed but not ranked and not publicly measured (25); No public documentation of NOC objectives (0). Sonatrach annual reports for the relevant year NOC STRATEGY AND BEHAVIOR Percentage of NOC domestic upstream production operated 75.0 72.0 71.0 1 1 Sonatrach annual reports for the relevant year by specific NOC. If no data yes-1/no-0. 115 Percentage of NOC domestic refining production operated 100.0 100.0 100.0 100.0 100.0 Sonatrach annual reports for the relevant year by specific NOC. If no data yes-1/no-0. NOC upstream capital expenditures as percentage of 75.0 75.4 74.6 70.1 66.9 Sonatrach annual reports for the relevant year total capital expenditures (%) NOC refining capital expenditures as percentage of 6.0 6.1 4.2 14.2 18.9 Sonatrach annual reports for the relevant year total capital expenditures (%) NOC upstream oil equity production as percentage of total NOC refining 262.0 281.0 286.0 286.0 277.0 Sonatrach annual reports for the relevant year throughput (%). If no data, yes/no. NOC international revenues as percentage of total NOC 1 1 1 1 1 Sonatrach annual reports for the relevant year revenues (%). If no data yes- 1/no-0. Scoring: NOC partnerships/JVs exist domestically and internationally (100); NOC partnerships exist domestically but not internationally (66); NOC Joint ventures between the partnerships exist internationally but not 100 100 100 100 100 NOC and third parties domestically (33); NOC partnerships, JVs, alliances do not exist (0). Sonatrach annual reports for the relevant year NOC CORPORATE GOVERNANCE Percentage of non- government ownership of 0.0 0.0 0.0 0.0 0.0 Sonatrach annual reports for the relevant year specific NOC (%) Percentage of independent 0.0 0.0 0.0 0.0 0.0 Sonatrach annual reports for the relevant year BOD members (%) Scoring: (100)-The government has no participation in deciding who will fill the positions of Chairman/CEO; (50)-The government through its Appointment authority for control of required voting shares can influence, NOC chairman and chief 0 0 0 0 0 directly or indirectly, the appointments of executive officer Chairman/CEO and (0) The Chairman and/or CEO is a direct appointee of the government entity Sonatrach annual reports for the relevant year Scoring: No governmental approval of NOC budget required (100); No governmental approval of NOC budget required but certain capital expenditures require state approval (75);NOC budget is proposed Independence of NOC capital to and approved by one central government entity 25 25 25 25 25 and budget processes (50); NOC budget is proposed to and approved by multiple central government entities (25); NOC budget is part of the national budget (0). Sonatrach annual reports for the relevant year NOC net cash flow after taxes and dividends (local 513,947 714,931 736,961 877,503 878,792 Sonatrach annual reports for the relevant year currency MM) NOC capital expenditures 263,811 297,354 349,906 450,768 597,675 Sonatrach annual reports for the relevant year (local currency MM) Measured by net cash flow after taxes and dividends NOC financial sustainability as percentage of capital expenditures % 194.8 240.4 210.6 194.7 147.0 (%) CEE Calculation Scoring: NOC financial statement auditing performed by independent international auditor and files reports with international exchange (100); FS auditing performed and publicly disclosed by independent international auditor (75); FS auditing NOC financial transparency 50 50 50 50 50 performed and publicly disclosed by independent domestic or government auditor (50) ; FS auditing performed internally by N OC and publicly disclosed (25); No publicly available auditing (0) Sonatrach annual reports for the relevant year 116 Scoring: NOC oil & gas reserves auditing performed by independent international firm and files reports with international exchange (100); reserves auditing performed and publicly disclosed by independent NOC upstream reserves international firm (75); reserves auditing performed 0 0 0 0 0 and publicly disclosed by independent domestic firm transparency (50); reserves auditing performed internally and publicly disclosed (25); No publicly available reserves auditing (0). Sonatrach annual reports for the relevant year Note: Non-shaded areas indicate data used in the exploratory statistical analysis presented in National Oil Companies and Value Creation, volume I, chapter 4. 117 20. StatoilHydro ASA. (Norway) (a) Value creation index components Operational Performance unit 2004 2005 2006 2007 2008 Company gas production BCF 781.00 953.00 1,335.00 1,352.00 1,468.60 Company oil production MM Bbls 265.00 257.00 385.00 391.00 386.48 E&P production (BOE) MM BOE 402.00 427.00 624.00 632.00 642.00 E&P production growth % 1.02 6.22 46.14 1.28 1.58 Total net additions proved oil reserves MM Bbls 151.00 286.00 197.00 357.00 189.00 Total net additions proved gas reserves BCF 338.00 827.00 1,045.00 976.00 177.00 Total net additions proved gas reserves MM BOE 61.52 150.51 190.19 177.63 32.21 Reserve additions (BOE) MM BOE 211.00 427.00 386.00 540.00 220.00 Reserves replacement rate % 52.49 100.00 61.86 85.44 34.27 Primary distillation capacity MBPD 337.00 337.00 337.00 337.00 337.00 Total refining throughput MBPD 317.00 320.00 320.00 313.00 302.00 Refinery utilization rate % 94.07 94.96 94.96 92.88 89.61 Assets $ MM 41,057.83 42,875.22 73,294.41 89,319.41 82,631.86 Output / total assets BOE/000$ 12.61 12.68 10.11 8.35 9.10 Employees # of people 23,899.00 25,644.00 25,408.00 29,500.00 29,496.00 Output / total employees BOE/000$ 21.66 21.21 29.16 25.30 25.50 Financial Performance Unit 2004 2005 2006 2007 2008 Earnings before interest & taxes (national currency) Bn 65.11 95.10 166.16 137.20 198.83 Direct expenditures on social/economic development MM 43.79 54.00 67.50 241.00 233.00 programs (national currency) Total revenue (national currency) Bn 306.22 393.30 521.48 522.80 656.02 EBRTN Bn 65.15 95.15 166.23 137.45 199.07 EBRTN / revenues % 21.28 24.19 31.88 26.29 30.34 EBRTN / total assets % 26.14 32.93 36.23 28.44 34.42 Total capital expenditures (national currency) Bn 32.55 45.79 49.37 68.35 78.47 net cash flow after taxes and dividends Bn 32.42 44.77 70.84 68.23 75.45 NCF/CAPEX % 99.60 97.78 143.50 99.82 96.15 National Mission Performance Unit 2004 2005 2006 2007 2008 Total number of NOC local employees # of people 12,710.00 12,214.00 13,987.00 18,102.00 18,001.00 Total number of NOC non-local employees # of people 11,189.00 13,430.00 11,421.00 11,398.00 11,495.00 Share of nationals in NOC workforce % 53.18 47.63 55.05 61.36 61.03 NOC employment in native country (# people) # of people 12,710.00 12,214.00 13,987.00 18,102.00 18,001.00 NOC annual employment growth % 7.39 -3.90 14.52 29.42 -0.56 # of people Country Labor Force 2,446.25 2,455.90 2,491.62 2,556.88 2,636.96 (000,000) Country annual employment growth % 0.43 0.39 1.45 2.62 3.13 NOC - Country employment growth % points 6.96 -4.30 13.06 26.80 -3.69 NOC employment share of country workforce % 0.98 1.04 1.02 1.15 1.12 NOC local purchases goods and services $ MM 7,397.03 6,824.93 8,450.48 17,285.40 NOC total purchases goods and services $ MM 10,345.96 9,317.51 10,814.70 20,020.89 Share of local content % 71.50 73.25 78.14 86.34 NOC noncommercial expenditure (national currency) MM 43.79 54.00 67.50 241.00 233.00 NOC noncommercial expenditure $ MM 7.21 8.01 10.78 44.55 33.29 Noncommercial expenditure/Total expenditure % 0.07 0.09 0.10 0.22 Net income from non-core commercial business $ MM activities Net income from total commercial activities $ MM 4,104.78 4,559.35 8,282.27 8,251.57 6,181.43 Net income noncore commercial activities/Net % income Price subsidies provided by NOC $ MM Total NOC Revenues $ MM 50,447.78 58,352.82 83,303.83 96,635.30 93,717.14 Price Subsidies/Revenues % NOC domestic petroleum products production MMBOE 60.31 71.28 71.61 69.10 64.61 Country oil consumption MMBOE 76.66 77.32 79.26 81.17 76.78 Domestic output use % 78.68 92.19 90.34 85.13 84.15 118 (b) Value creation index 2004 2005 2006 2007 2008 Operational Performance E&P production growth (%) 1.02 6.22 46.14 1.28 1.58 Reserves replacement rate (BOE, %) 52.49 100.00 61.86 85.44 34.27 Refinery utilization rate (%) 94.07 94.96 94.96 92.88 89.61 Output / total assets (BOE/'000$) 12.61 12.68 10.11 8.35 9.10 Output / total employees ('000 BOE) 21.66 21.21 29.16 25.30 25.50 Financial Performance EBRTN / revenues (%) 21.28 24.19 31.88 26.29 30.34 EBRTN / total assets (%) 26.14 32.93 36.23 28.44 34.42 NCF / CAPEX (%) 99.60 97.78 143.50 99.82 96.15 National Mission Performance Share of nationals in NOC workforce (%) 53.18 47.63 55.05 61.36 61.03 NOC - Country employment growth (% points) 6.96 -4.30 13.06 26.80 -3.69 NOC employment share of country workforce (%) 0.98 1.04 1.02 1.15 1.12 Share of local content (%) 71.50 73.25 78.14 86.34 Noncommercial expenditures/total expenditures (%) 0.07 0.09 0.10 0.22 Noncore commercial activities net income/Total net income (%) Price Subsidies/Revenues (%) Domestic output use (%) 78.68 92.19 90.34 85.13 84.15 (c) Normalized value creation index 2004 2005 2006 2007 2008 Operational Performance 0.37 0.35 0.43 0.43 0.28 E&P production growth 0.27 0.06 1.00 0.51 0.38 Reserves replacement rate 0.38 0.50 0.05 0.67 0.09 Refinery utilization rate 0.58 0.54 0.39 0.38 0.34 Output / total assets 0.25 0.31 0.29 0.25 0.27 Output / total employees 0.38 0.36 0.44 0.33 0.33 Financial Performance 0.37 0.26 0.38 0.31 0.34 EBRTN / revenues 0.19 0.18 0.27 0.20 0.29 EBRTN / total assets 0.41 0.33 0.34 0.33 0.49 NCF / CAPEX 0.51 0.27 0.53 0.38 0.25 National Mission Performance 0.36 0.41 0.53 0.57 0.56 Share of nationals in NOC workforce 0.43 0.37 0.43 0.52 0.52 NOC – Country employment growth 0.75 0.26 0.82 0.57 0.15 NOC employment share of country workforce 0.45 0.55 0.71 0.93 0.95 Share of local content 0.17 0.83 0.75 0.98 Noncommercial expenditures/total expenditures 0.02 0.01 0.00 0.01 Noncore commercial activities net income/Total net income Price Subsidies/Revenues Domestic output use 0.34 0.43 0.46 0.41 0.63 VCI 0.37 0.34 0.45 0.43 0.39 119 (d) Value drivers 2004 2005 2006 2007 2008 Source GEOLOGY Country specific resource BP Statistical Review of World Energy June 2009 9,722 9,688 8,546 8,168 7,491 endowment oil MMBBL available at http://www.bp.com/statisticalreview Country specific resource BP Statistical Review of World Energy June 2009 2,386 2,358 2,302 2,313 2,215 endowment gas BCM available at http://www.bp.com/statisticalreview Country specific resource 24,730 24,520 23,025 22,717 21,423 CEE calculation endowment MMBOE STATE CONTEXT WGI: Voice and 1.73 1.65 1.49 1.53 1.53 http://info.worldbank.org/governance/wgi/index.asp Accountability WGI: Political Stability 1.36 1.29 1.18 1.25 1.33 http://info.worldbank.org/governance/wgi/index.asp WGI: Government 2.16 1.99 2.13 2.14 1.95 http://info.worldbank.org/governance/wgi/index.asp Effectiveness WGI: Regulatory Quality 1.54 1.47 1.35 1.44 1.34 http://info.worldbank.org/governance/wgi/index.asp WGI: Rule of Law 1.98 1.92 2.00 1.98 1.96 http://info.worldbank.org/governance/wgi/index.asp WGI: Corruption Control 1.95 1.96 2.07 2.05 1.88 http://info.worldbank.org/governance/wgi/index.asp Facts 2009, 2008, 2007, 2006 and 2005 published by Hydrocarbon Revenues as % the Norwegian Ministry of Petroleum and Energy of Total Government 28.0 33.0 36.0 31.0 34.0 and the Norwegian Petroleum Directorate available Revenues at www.npd.no/en/Publications/Facts Facts 2009, 2008, 2007, 2006 and 2005 published by Hydrocarbon Revenues as % the Norwegian Ministry of Petroleum and Energy 21.0 25.0 25.0 24.0 25.0 of GDP and the Norwegian Petroleum Directorate available at www.npd.no/en/Publications/Facts WTO membership (yes-1/no- 1 1 1 1 1 www.wto.org 0) over five years OPEC membership (yes- 0 0 0 0 0 www.opec.org 1/no-0) over five years Country Crude Oil Exports - 2008 OPEC Annual Statistical Bulletin at 000 BPD 2,731 2,377 2,210 2,012 1,702 www.opec.org Country Crude Oil Imports- 2009 OPEC Annual Statistical Bulletin at 000 BPD www.opec.org (Country Revenues Oil Exports valued at Ekofisk oil price as reported in Exports)-(Costs Oil Imports) 38 47 53 54 62 2008 OPEC Annual Statistical Bulletin at US $ Billion www.opec.org Country Gross Domestic World Bank Development Indicators: 259 302 337 388 450 Product US $ Billion http://data.worldbank.org/indicator Country Net Revenues (Costs) of Oil Exports 14.7 15.7 15.6 13.9 13.7 CEE calculation (Imports) as % of GDP Government Budget http://www.tradingeconomics.com/Economics/Gover Surplus/Deficit as % of Gross 8.3 11.7 15.2 18.5 18.0 nment-Budget.aspx?Symbol=NOK Domestic Product Facts 2009, 2008, 2007, 2006 and 2005 published by Stabilization Mechanisms the Norwegian Ministry of Petroleum and Energy such as petroleum funds (yes- 1 1 1 1 1 and the Norwegian Petroleum Directorate available 1/no-0) at www.npd.no/en/Publications/Facts PETROLEUM SECTOR ORGANIZATION AND GOVERANANCE Publicly disclosed national policy addressing 1 1 1 1 1 StatoilHydro Form 20Fs for the relevant year hydrocarbon sector issues (yes-1/no-0) Scoring: Independent NOC, Ministry and regulatory function (100); Regulatory function is performed by Institutional structure 66 66 66 66 66 ministry (66); Regulatory function is performed by NOC (33); All three functions combined in one entity (0). 120 StatoilHydro Form 20Fs for the relevant year Country oil production MM BP Statistical Review of World Energy June 2009 Barrels 1,164 1,084 1,014 933 896 available at http://www.bp.com/statisticalreview BP Statistical Review of World Energy June 2009 Country gas production BCF 2,763 3,000 3,094 3,166 3,495 available at http://www.bp.com/statisticalreview Country MMBOE production CEE calculation 1,640 1,601 1,547 1,479 1,499 NOC MMBOE Domestic 363 359 539 519 542 StatoilHydro Form 20Fs for the relevant year Production Non-NOC percentage of oil 77.9 77.6 65.2 64.9 63.8 CEE calculation and gas production (%) Country Refinery Capacity - BP Statistical Review of World Energy June 2009 310 310 310 310 310 000 BPD available at http://www.bp.com/statisticalreview Net NOC Refinery Capacity - 141 141 141 141 141 StatoilHydro Form 20Fs for the relevant year 000 BPD (country level) Non-NOC percentage of refinery capacity (%, country 54.5 54.5 54.5 54.5 54.5 CEE calculation. level) Total Revenues (local 306,218 393,298 521,482 522,797 656,020 StatoilHydro Form 20Fs for the relevant year currency MM) Insignificant in Norway per disclosures in the annual Royalties and production "Facts" publications of the Norwegian Petroleum taxes (local currency MM) Directorate available at www.npd.no/en/Publications/Facts Income taxes (local currency 45,425 60,039 119,389 102,170 137,197 StatoilHydro Form 20Fs for the relevant year MM) Dividends paid to government (local currency 4,793 8,152 36,811 31,695 30,722 StatoilHydro Form 20Fs for the relevant year MM) Royalties, production taxes, income taxes and dividends paid to government by NOC 16.4 17.3 30.0 25.6 25.6 CEE Calculation as percentage of total revenues (%) Effect of contract terms on No No No Sources: Fraser Institute Global Petroleum Survey 2.5 2.17 investment decisions survey survey survey 2007 and 2008 Effect of taxation regime on No No No Sources: Fraser Institute Global Petroleum Survey 2.43 2.23 decision to invest survey survey survey 2007 and 2008 Effect of cost of regulatory No No No Sources: Fraser Institute Global Petroleum Survey compliance on decision to 2.47 2.81 survey survey survey 2007 and 2008 invest Effect of regulatory No No No Sources: Fraser Institute Global Petroleum Survey uncertainty on decision to 1.80 1.66 survey survey survey 2007 and 2008 invest Effect of environmental No No No Sources: Fraser Institute Global Petroleum Survey regulations on decision to 2.63 2.95 survey survey survey 2007 and 2008 invest Scoring: Priority ranked publicly disclosed objectives exist and are publicly measured (100); Objectives publicly disclosed but not ranked and are publicly measured (75); Objectives publicly NOC objectives 75 75 75 75 75 disclosed and ranked but not publicly measured (50); Objectives publicly disclosed but not ranked and not publicly measured (25); No public documentation of NOC objectives (0). StatoilHydro Form 20Fs for the relevant year NOC STRATEGY AND BEHAVIOR Percentage of NOC domestic % operated not disclosed in annual reports but 98.0 98.0 96.0 96.0 92.0 upstream production operated company appears to be a substantial operating entity 121 by specific NOC. If no data yes-1/no-0. Percentage of NOC domestic refining production operated 100.0 100.0 100.0 100.0 100.0 StatoilHydro Form 20Fs for the relevant year by specific NOC. If no data yes-1/no-0. NOC upstream capital expenditures as percentage of 83.7 89.1 90.4 89.7 87.6 StatoilHydro Form 20Fs for the relevant year total capital expenditures (%) NOC refining capital expenditures as percentage of 9.3 4.3 3.9 6.4 8.9 StatoilHydro Form 20Fs for the relevant year total capital expenditures (%) NOC upstream oil equity production as percentage of total NOC refining 310.3 307.7 329.1 343.0 350.9 StatoilHydro Form 20Fs for the relevant year throughput (%). If no data, yes/no. NOC international revenues as percentage of total NOC 3.3 5.1 6.3 8.0 7.0 StatoilHydro Form 20Fs for the relevant year revenues (%). If no data yes- 1/no-0. Scoring: NOC partnerships/JVs exist domestically and internationally (100); NOC partnerships exist domestically but not internationally (66); NOC Joint ventures between the partnerships exist internationally but not 100 100 100 100 100 NOC and third parties domestically (33); NOC partnerships, JVs, alliances do not exist (0). StatoilHydro Form 20Fs for the relevant year NOC CORPORATE GOVERNANCE Percentage of non- government ownership of 29.90 29.90 29.04 37.50 29.17 StatoilHydro Form 20Fs for the relevant year specific NOC (%) Percentage of independent 66.0 66.0 70.0 70.0 70.0 StatoilHydro Form 20Fs for the relevant year BOD members (%) Scoring: (100)-The government has no participation in deciding who will fill the positions of Chairman/CEO; (50)-The government through its Appointment authority for control of required voting shares can influence, NOC chairman and chief 50 50 50 50 50 directly or indirectly, the appointments of executive officer Chairman/CEO and (0) The Chairman and/or CEO is a direct appointee of the government entity StatoilHydro Form 20Fs for the relevant year Scoring: No governmental approval of NOC budget required (100); No governmental approval of NOC budget required but certain capital expenditures require state approval (75);NOC budget is proposed Independence of NOC capital to and approved by one central government entity 75 75 75 75 75 and budget processes (50); NOC budget is proposed to and approved by multiple central government entities (25); NOC budget is part of the national budget (0). StatoilHydro Form 20Fs for the relevant year NOC net cash flow after taxes and dividends (local 32,417 44,769 70,837 68,231 75,451 StatoilHydro Form 20Fs for the relevant year currency MM) NOC capital expenditures 32,548 45,785 49,365 68,354 78,470 StatoilHydro Form 20Fs for the relevant year (local currency MM) Measured by net cash flow after taxes and dividends NOC financial sustainability as percentage of capital expenditures % 99.6 97.8 143.5 99.8 96.2 (%) CEE Calculation Scoring: NOC financial statement auditing performed by independent international auditor and files reports with international exchange (100); FS auditing performed and publicly disclosed by independent international auditor (75); FS auditing NOC financial transparency 100 100 100 100 100 performed and publicly disclosed by independent domestic or government auditor (50) ; FS auditing performed internally by N OC and publicly disclosed (25); No publicly available auditing (0) StatoilHydro Form 20Fs for the relevant year 122 Scoring: NOC oil & gas reserves auditing performed by independent international firm and files reports with international exchange (100); reserves auditing performed and publicly disclosed by independent NOC upstream reserves international firm (75); reserves auditing performed 100 100 100 100 100 and publicly disclosed by independent domestic firm transparency (50); reserves auditing performed internally and publicly disclosed (25); No publicly available reserves auditing (0). StatoilHydro Form 20Fs for the relevant year Note: Non-shaded areas indicate data used in the exploratory statistical analysis presented in National Oil Companies and Value Creation, volume I, chapter 4. 123 The World Bank 1818 H Street, N.W. Washington, D.C. 20433 USA www.worldbank.org/ogmc (or /oil or /gas or /mining)