INTERTANKOAthens Tanker Event

11 April 2005

Odd Anker Hassel

Director, CERA

CONFIDENTIAL©2005, Cambridge Energy Research Associates, Inc., 55 Cambridge Parkway, Cambridge, Massachusetts 02142No portion of this presentation may be reproduced in any form without prior written consent

The New Oil Market Paradigm—How High, How Long?

4

HIGH OIL PRICES:

Sustainable or a Speculative Bubble? The Answer Depends on the Lens Used to Evaluate Price

Source: Cambridge Energy Research Associates.50305-1

Four Lenses

Inventory Levels Value of the Dollarand Inflation

Spare ProductionCapacity

Refining Margins

5

Source: Cambridge Energy Research Associates.40920-11

The Global Oil MarketThe Six Key Driving Forces to Watch

Economic Growth China

Iraq

And a lensto watch

them through:

TheEnvironment

andSustainable

DevelopmentRussia OPEC and Saudi Arabia

Do they control production?

India

6

World Oil Demand Growth Driven Mainly by Economic Growth

Source: Cambridge Energy Research Associates.

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

2001 2002 2003 2004 2005 2006

AnnualAveragePercentChange

Real GDP Growth Oil

DemandGrowth

7

Source: Cambridge Energy Research Associates.Notes: Mexico is included in Latin America. South Korea is included in OECD Asia Pacific.40403-8_0314

Changes in Oil Demand by Region(volume change from previous year in million barrels per day)

.83

1.64

2.53

2.011.87

Total World

2002

2003

2004

2005

2006

Europe

.00

.20 .19 .17.13

OECDAsia Pacific

-.04

.15

-.16

.10 .05

Non-OECDAsia Pacific(excl. China)

.21 .27.35

.30 .31

Latin America

-.02-.11

.21 .11 .12

China

.28

.41

.92

.55 .55

Middle East

.17 .20.33 .29 .24

Eurasia

.10 .08 .07 .06 .06

Africa

.08 .04 .05 .06 .05

North America

.15

.39.58

.37 .34

8

China Oil Demand Growth

6.57%

7.86%

8.32%16.95%

9.62%

4,000

5,000

6,000

7,000

8,000

9,000

2002 2003 2004 2005 2006 2007

kbd

Growth

Source: Cambridge Energy Research Associates.

The Supply Response

10

Annual Change in World Oil Demand and Non-OPEC Production

Source: Cambridge Energy Research Associates.

CERA projectionHistorical

-0.2

0.2

0.6

1.0

1.4

1.8

2.2

2.6

1999 2000 2001 2002 2003 2004 2005 2006

World Oil Demand

Non-OPEC Production

Million

Barrels

per Day

11

Shifts in World Liquid Capacity(million barrels per day)

Canada

3.4 3.5 3.82.8

North Africa

4.7 5.0 5.5

4.0

West Africa

5.4 5.86.9

4.3

Western Europe

6.4 6.3 6.66.9

Russia and others

9.4 9.7 10.2

6.5

Caspian Area

1.9 2.12.9

1.3

Far East

7.9 8.1 8.17.8

Middle East

27.728.8

30.5

26.5

Sakhalin Area(included in Russia)

0.05 0.07 0.30.03

Latin America

10.5 10.9 11.610.4

United States

7.6 7.5 7.47.8

20002004200520072010

33.1

8.3

0.54.3

10.9

6.2

8.5

5.6

4.7

7.2

12.4

Source: Cambridge Energy Research AssociatesUpdated January 200540916-11

12

Composition of Total Liquids Capacity in 2004 and 2010: Increased Shares of Light and Heavy Liquids

Source: Cambridge Energy Research Associates.50115-1

Heavy7%

Medium59%

Light34%

In 2010:101.5 mbd Capacity

Heavy9%

Medium55%

Light36%

In 2004:85 mbd Capacity

Light > 34 API

Medium 27 to 33.9 API

Heavy < 26.9 API

13

Refining CapacityWhat has Changed?

14

• Asia Pacific—mainly China—needs significant additional capacity

• Western European refinery capacity generally adequate, but poorly-configured to meet demand

• US refinery capacity growth resumes in 2005 and 2006

Are We Running Out of Refinery Capacity? Capacity Challenges Differ in Each Region

Source: Cambridge Energy Research Associates.

15

Source: Cambridge Energy Research Associates.

Relative Change in Refining Margins and the Price of Crude OilMargins have exerted positive influence on the price of crude oil

100

120

140

160

180

200

220

2000 2001 2002 2003 2004

100 = 1990–1999

Average

Refining Margins(USGC 3-2-1crack spread)

Crude OilPrice (WTI)

In 2004 the crude price increased 34 percent.

Margins jumped 41 percent.

16

Significant Refinery Capacity Additions Needed to Meet Long-term Asia Pacific Demand Growth

Source: Cambridge Energy Research Associates.

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

1990 1995 2000 2005 2010 2015

MillionBarrels

perDay

Demand*

Refinery CDU

Capacity

5 mbd of new capacity needed by 2015

(equivalent to 15 large refineries)

17

Oil Supply and DemandThe Global Perspective

Source: Cambridge Energy Research Associates.20708-3

Russia

China

Caspian RegionWest Africa

Coastal States

India

Brazil

Venezuela

Supply Growth

Demand Growth

Supply and Demand growth

Canada

US

MiddleEast

If you have any questions about this presentation orCERA in general, please feel free to contact

Odd Anker HasselDirector

+47 67531034ohassel@cera.com

BeijingOakland, CAWashington, DC

Cambridge, MA

Calgary

Mexico City

São Paulo

Paris

OsloMoscow

55 Cambridge ParkwayCambridge, Massachusetts 02142, USA

www.cera.com