Reservoir Management at. Pluspetrol S.A. The Company, Expertise and History of its Evolution. Production Growth, a parallelism with Company Evolution

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1 REGIONAL ASSOCIATION OF OIL, GAS & BIOFUELS SECTOR COMPANIES IN LATIN AMERICA AND THE CARIBBEAN Reservoir Management at Pluspetrol S.A. Telmo Gerlero Pluspetrol S.A. 86 th ARPEL Experts Level Meeting (RANE) Management of Reservoirs October 6-7, 2014 Buenos Aires, Argentina Agenda The Company, Expertise and History of its Evolution Production Growth, a parallelism with Company Evolution Operational Excellence: The Foundation for Reserves Progression Redesigning the Processes Maturity and Operations Cycle Human Resources 2 1

2 Strong Presence in Latin America and Growing in Africa Colombia Exploration in Llanos, Sinu-San Jacinto and Putumayo basins Peru #1 oil and gas producer in the country Largest operator in the Amazon Responsible for the development of gas giant Camisea field 2 exploration licences Venezuela Operator of gas licenses: gas discovery in development phase (Tiznado block) Entering Faja through acquisition of Harvest NR Bolivia 4 producing fields Exporting gas to Argentina Large exploration portfolio Chile Non-operated interest in El Tranquilo block Angola Operator of Cabinda South block Partners: Sonangol, Force. Castanha oil discovery already producing Noz discovery under evaluation Argentina 3 rd oil producer in the country 5 th gas producer in the country Well-positioned in both, Neuquina and Northwestern basins Small interests in midstream and downstream 3 History of Company Evolution LatAm Cons. Africa Eval. Diversification in LatAm Today 10 years in Peru Mid 00 s Focus on Argentina International Expansion Mid 90 s 00 s Early 90 s Begining 2

3 Experience in Operating High Pressure Multi-TCF Gas Fields Camisea Project (Peru) Oil and Gas Production MMcf/d Mbbl/d 2, , , Oil Production Gas Production Gas Res.: 12 TCF* Oil Res: 650 MMbbl* Gas Production MMcf/d Ramos Field (Argentina) Cum. Gas Prod.: 2.3 TCF Gas Res.: 0,2 Tcf* Oil Res: 1.9 MMbbl* 0 * Provedreserves * Provedreserves * Operated Reserves. ** Oil production 86 th in Ramos is currently ~3500 bbl/d,and ARPEL Experts Level Meeting (RANE) Management of Reservoirs October6-7 Buenos Aires, Argentina 5 its highest production almost reached 7000 bbl/d in Source: Pluspetrol. Reactivation of Marginal Fields and Operation in Remote Areas Centenario (Argentina) Production Mboed 35 Pluspetrol Pre-Pluspetrol Block 8 (Peru) Reserves MMbbl % Reserves: 49 MMboe Production: 11.2 Mbbl/d Initial Reserves (1996) Added by Pluspetrol Cumulative Production Remaining Reserves (2013) 6 3

4 Expertise In Operations that Require Complex Logistics Argentina North District Peru Camisea Project Ramos Field Block 88 Block 56 Peru North Jungle Angola Onshore Cabinda Block 8 Block 1AB Cabinda South Block 7 Surfing the Knowledge Wave Chemical EOR Project Development 0 I II III IV V EOR in-house multidisciplinary team EOR Screening Fluid to Fluid Studies Fluid to Core Studies Field Scale Pilot Field Simulation Implementation Development Member of the CEOR JIP (University of Texas Austin) El Corcobo (P/ASP) Centenario (SP) Integration with external partners Challacó (SP) Aguada Baguales (SP) Technology implementation through field pilots 8 4

5 Interesting position for unconventional developments in the Neuquen Basin Vaca Muerta Pluspetrol s position in Neuquen Basin Unconventionals Overview Pluspetrol holds over 2.5 million acres in the Neuquen Basin Pluspetrol s net acreage with shale potential is 352,000 acres Our acreage position is diversified across different maturity windows We have recently acquired an important position through a deal with YPF regarding Apache s assets 9 Operated Production Growth, a parallelism with Company Evolution BOED Camisea 2 nd expansion PAR Acquisition Production has continually been increasing in parallel with Company Growth Started with Centenario Ramos Expansion in Argentina & Bolivia. Expansion in Peru B8. Camisea Contract Expansion in Peru B1AB. Camisea Start Up LIQUIDS Camisea 1 st expansion GAS Today's operated production is slightly over half a million BOED Around 65% is Gas, 35% is related to associated condensate & LPG, light crude and heavy oil 5

6 Operational Excellence. Foundation for Operation Growth Technology Process People Operational Excellence is the defined Strategy that will support Company Growth and Sustainability 11 A road for Operational Excellence Processes Operation s Integrity Organization Capability Integrated Planning Performance & Accountablity IMPACT ON: Integrity and Safety Production Efficiency Reserves Replacement Operation Costs Capital Productivity Operational License 12 6

7 Reservoir Management & Reserves Progression The Mission To assure company sustainability through constant reserve replacement and opportunities progression (3C) P3 P2 P1 13 Redesigning the Whole Process Core processes helped defining key roles and accountabilities Exploration Reserves Progression & Reservoir Management Capital Excellence Process (CEP) Unconventionals Development Safety & Integrity Risk Management Production Management Motivated multidisciplinary, multifunctional team working environment Established a common language Integrated all main areas involved in the value chain from Exploration through Production 14 7

8 Reservoir Management Processes Company Resources & Reserves Reserves Progression& Reservoir Management PROA Surveillance Strategy Depletion Planning Reservoir Modelling Reserves and Contingent Resources Management PROA: Progression of Opportunites Administration New Ideas Discovery Generate new development opportunities Perform feasibility studies Execute, monitor and evaluate URP Progress reserves and resources based on a deep understanding of reservoir models and their uncertainties Identify new opportunities and convert them into feasible projects (PROA) Design surveillance plans and pilots projects to reduce reservoir uncertainties Generate integrated long term depletion scenarios (DP) that include all ongoing and new development projects Consolidate processes outputs into a clear reserve & resource company position 15 Planning for Reservoir Depletion Not a Synonym of Declining PROA Surveillance Strategy Depletion Planning Reserves and Contingent Resources Management Represents an integrated platform that provides complete development scenarios and uncertainties to support decision making Reservoir Modelling Contains developed forecasts, current scenarios and new projects from PROA Basic Projects PROA Assures execution and consensus through a decision gate composed by first line managers 16 8

9 How Mature Our Operations are Sales ANGOLA CAMISEA BOLIVIA PPN RAMOS COLOMBIA UNCONV EOR HEAVY OIL RIO COLORADO NQN A diversified asset portfolio including different maturity stages TIGHT GAS Maturity Harvest Supports company s sustainability through resources and reserves progression Growth Decline Acquisitions in the first half of the maturity curve help balancing company portfolio Start-Up Shutdown Time 17 Human Resources the Capital for this Endeavor HR are one of the foundations for Operational Excellence External context is demanding internal one is challenging Hiring, developing and retaining HR are crucial for company sustainability Benchmarking of professional skills and retention policies Top-growth companies have higher technical headcount 18 9

10 Age Distribution for Company s Professionals 30% 25% 20% 15% 10% Argentina Perú Corp An important gap for middle-aged professionals Gap could impact on company s expertise and/or leadership Need to classify technical skills and identify gaps by seniority and areas of work 5% 0% Develop a program to strengthen technical careers 19 Conclusion It s important to have well-defined processes and its implementation can be challenging There s a need for interdisciplinary work Implementation of processes drive opportunities progression through discipline integration and systematic approach Knowledge spread to different geographies Importance of corporation quality standards The important role of HR strategy New technologies 20 10

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