May, 2019 www.oandoplc.com

Independent Players In Africa: Portfolio and Strategies

Africa E&P Summit and Exhibition

Presented by:

Ainojie ‘Alex’ IruneChief Operating Officer, OER, Nigeria

The Event

22 - 23 May 2019Date

The Africa E&P Summit and Exhibition

Event

Venue IET London: Savoy Place

Panel Discussion

2

Panelists

Ainojie ‘Alex’ IruneChief Operating Officer, Oando Energy Resources

Arkangelo OjokDirector General, Planning, Training and Research, Ministry of Petroleum (Sudan)

Dr Ibiwari Lorvde JackExecutive Director, Monitoring & Inspection - JDA

Celedónio Plácido VieiraDirector of Marketing & Business Dev. of Petroguin-EP National Oil Company

Menno de RuigActing VP Exploration for Africa and Middle East Shell

Austin AvuruChief Executive Officer Seplat

Jerreh BarrowCommissioner for Petroleum,Ministry of Petroleum and Energy (Gambia)

Patrick Allman-WardCEODana Gas

AND MORE

3

Production Oil: 20.1MMbpd Production Gas: 92.1Bcf% to world (Oil): 21.7

NORTH AMERICA &

MEXICO

AFRICA

Production Oil: 7.8MMbpd Production Gas: 58.8Bcf% to world (oil): 8.5

ASIA & PACIFIC

MIDDLE EAST

Production Oil: 17.8MMbpd Production Gas: 102.3Bcf% to world (oil): 19.2

EUROPE & EUROSIA

SOUTH & CENTRAL AMERICA

Production Oil: 7.1MMbpd Production Gas: 17.3Bcf% to World (Oil): 7.8

Production Oil: 8.0MMbpd Production Gas: 21.8Bcf% to world (oil): 8.7

Production Oil: 31.5MMbpd Production Gas: 63.8Bcf% to world (oil): 34.1

Source: BP Statistical Review 2018

OIL RESERVES

Bnboe

1,697

OIL PRODUCTION GAS RESERVES GAS PRODUCTION

MMbpd Tcm Bcf

92.6 193.5 356.1

Global Industry Overview

Average OilConsumption

>10YEARS AVERAGE FOR 3 CONSECUTIVE YEAR

Average Energy Consumption

LATEST SINCE 2013

Market Share of NOCs & Oil

Majors

2.2%

73%

1.8%

4

1.52MMBbls Oil Production

12.2BBls Proven Oil Reserve

153.1Tcf Gas Reserve

2.0MMBbls Oil Production

37.5BBls Proven Oil Reserve

183.7Tcf Gas Reserve

1.7MMBbls Oil Production

9.5BBls Proven Oil Reserve

14.9Tcf Gas Reserve

Nigeria

Algeria

Angola

*Source: BP Statistical Review 2018

Africa Context: Market Share

19.1%

Algeria

20.7%

Angola

Nigeria

24.6%

4%

World EnergyDemand

Market share ofNOCs & Oil Majors

90%

Oil MarketShare Growth in Energy Growth in Energy

Consumption ProductionGrowth in OilProduction

Growth in GasProduction

2.9% 5.7% 5.0% 9.0%

P R I C E C R A S H R E C OV E R Y F OR E C A S T

$

West TexasIntermediate (WTI) spot price

70.2

75.25

363.86

49.52 53.26

98.6893.80

87.84

63.00

43.47

38.23 33.94

2015 2016 2017 2018 2019 2020

5

Global population grows from 7.4 billion today to9.2 billion people in 2040

Africa’s population to hit~2bn by 2040 - the fastest rate across major regions

Africa will have the largest working-age population across regions by 2040

Strong global demand for cleaner energy source. Power accounts for ~50% of demand growth

INCREASING DEMAND

Business Model

Optimize Portfolio

Internal Efficiency

MANAGING & BENEFITING FROM SHIFT

Positioning for Increased Participation

62.80

95% NYMEX futures price

confidence upper bound

95% NYMEX futures price

confidence lower bound

NYMEX futures price

Source: Energy Information Agency

The Opportunities

6

Oil consumption as a % of global: 4.1%, although it grew regionally by 2.5%

Oil production as a % of global:8.6%, down 0.4% from 2015

By 2050, Africa’s oil & gas is set to increase by 74% and global consumption by 45%.Africa’s share of global consumption willincrease from 4.3% to 5.1%

Shale oil potential Libya 5th globally 26 Billion barrels

Gas Reserves503.3 Tcf7.6% of world’s proven reserves

Oil Reserves129.0 Billion barrels7.5% of the world’s proven reserves

Potential industry investment in Nigeria, Egypt, Libya, Angola & Mozambique estimated at US$40 billion per annum over the next 5 years

Natural gas pipeline exports were 45.6Bcm. 5.1% of the world’s exports in 2015

Source: PwC

Refinery capacity as % of global: 3.5%

Actual throughput 2016: 2.5% or 2.05 million bbl/day

Gas Flaring 32Bcf of gas flared 21% of global

Energy demand growing at 3.5% p.a.

Energy consumption per capita remains theworld’s lowest, as it increases modestly, by1.2% p.a.

AFRICA’S IMMENSE OPPORTUNITIES

Africa: Increasing Participation Through Partnerships

Billion

$38

$37

UpstreamM&A

Deals

Total Transaction Value

Total Reserve Value

>

Billion

Exit Entry

Source: IHS Herold, list not exhaustive* Excluding Nigeria 7

African Upstream M&A (2009 - 2014)

82

8

Exit

Other Assets

Oando Assets

NIGERIA

Nigeria: Increasing Participation Through Partnerships

M&A is a major value driver for indigenous E&P Companies in Nigeria

Source: IHS Herold; list not exhausitve

$1.5Bn

TransactionValueOMLs 60-63, OML 145, OML 131

OML 4

OML 38OML 41

OML 42

In Transactions Value

>1.1BnBoe

In Reserves

OML 26

OML 40

OML 30

OML 34

OML 130

Upcoming IOC Divestments

Company Assets Interests

Shell, Total & ENI OMLs 18, 24, 25 & 29 45%

Chevron OMLs 52, 53, 55, 83 & 85 40%

Exxon Mobil OML 138 45%

Possible Marginal Field Rounds Expected in2019

> $5.8Bn

Unlocking The Potentials

9

Strong Leadership & Good Governance 5

6

7

8

1

2

3

4Improve Business Environment to attract Investment

Economic Diversification & Regional Integration

Drive Financial Inclusion & Access to Capital

Effective Policies

Prioritize Infrastructure Access to Technology

Youth Empowerment & Job Creation

Solving Africa’s Oil And Gas Challenges

10

GOVERNMENTOIL & GAS COMPANIES

Investment in Infrastructure

Access to Sustainable Financing

Increased Domestic Resources Mobilization

Promote domestic oil & gas market

development projects to increase local demand

Investor friendly tax, trade and privatization

policies to attract investment

Predictable regulatory, commercial and legal framework across the continent to boost investor confidence

Government intervention in combating the security issues in the continent which threaten assets and reduce oil & gas supply

Innovation & Technology to drive efficiency

Creative Financing Solutions such as obtaining funds from international markets or forming partnerships based on technical expertise to share costs

Investment in infrastructure to increase production

Conglomerate approach to infrastructure development such that several companies create a framework to construct infrastructure for joint use

Engagement of the Government to increase the domestic market

Nigerian Content

Paved the way for the creation of Nigerian Content Management Board (NCDMB), and how the

business of Oil & Gas was done in Nigeria

NCMDB's Contributions So Far

April 22, 2010

The Nigerian Oil & Gas Industry Content Development

(NOGICD) Act was signed into law

Focused on achieving 70% in-country value retention within the next 10 years, and retain $14billion out of the$20billion yearly industry spend

NCDMB and the Bank of Industry (BOI) have relaxed conditions for accessing US$200m Nigerian Content Intervention Fund (NCI Fund) by qualified oil and gas service companies

Signed agre ment to reduce contracting cycle time and made it possible to review contracts within 100 days. Zabazaba Deepwater project reviewed in 14

months instead of the usual 24 to 36 months

Added 30,000 direct jobs, and has a strategic action plan to create 30 ,0 0 direct and indirect employments over the next 10-years

Local businesses retained about $5billion out of an estimated $20billion spent annually in the sector

11

A framework agreement that governs the conception, planning, funding and delivery of JV opportunities that can be done by Oando, and thus enhances the value to the JV.

Benefits include:• Implementation of lower ranking opportunities in the JV

portfolio• Inherent Local Content Benefits• Incremental Production• Provides a form of Risk Reduction for the JV• Knowledge Transfer from International Partner to

Indigenous Partner• Speed and Flexibility – fast-tracked contracting

Tactical Service Agreement

Overcoming Challenges: An Oando Case Study

12

Re-opening of shut-in Wells in Ebocha/Mbede

Improvement in LAR facility integrity and safety due to better crude stabilization

Improved LARexport pipelinehaulage capacity

Increase sale gas production

Improved Well performance in producing LAR

wells

IMPROVE RATES FROM LAR CHOKED-DOWN WELLS AND

WELLS PRESSURE INTERFERENCES

1 2 3 4 5

13

EXPECTED OUTCOME

Overcoming Challenges: An Oando Case Study

Independent Power Plant: Okpai

Both of them finalized to produce highefficiency, environmental friendly electricpower

Oando and its JV partner built 450 MW power plant valued at$320m, after entering a securitization agreement with the federal government in 2001.

The Okpai Combined Cycle PowerPlanthasa:

2 Gas Turbine GenerationSets (ALSTOM – GT13E2) of 165 MW each

A Condensate Type Steam Turbine of150MW; plus Balance of Plant (BOP) andPlantfacilities

Open Cycle, fueled by natural gas and air,with an efficiencyof 34.28%,

Water/Steam Cycle, fueled by the GasTurbines exhaust gases, raising theefficiencyup to 55.03%

14

Egina: A Colossal Project in Ultra Deep-water

Setting A Benchmark…

EGINA - How prepared are Regulators & Indigenous players

Industry Capability

Project Management

All the project management teams, for both Total and the main EPC Contractors were based in Lagos - a first for a Nigerian FPSO project

Right Partnership

The Detailed Engineering of the Egina FPSO was executed in-country by Samsung with a consortium of Nigerian engineering companies (NETCO, DeltaAfrik, IESL, Crestech), employing about 250 Nigerianengineers

Right Infrastructure

A new fabrication and Integration yard was built and it was Africa's first FPSO integration quay.

Several existing yards and manufacturing sites in other parts of Nigeria were upgraded for the fabrication of various components of the Egina project in Port-Harcourt, Onne and Lagos

~60,000 tons of equipment were fabricated in Nigeria, representing 35% of fabrication for the entire project

15

Dangote Refineries

An integrated refinery and petrochemical complex in the Lekki Free Zone near Lagos

The refinery will produce Euro-V quality gasoline and diesel, as well as jet fuel and polypropylene

Aimed to double Nigeria’s refining capacity and help in meeting the increasing demand for fuels, while providing cost savings by reducing crude importation

The Dangote oil refinery is being constructed through $3bn equity and $6bn loan capital

The project is expected to generate 9,500 direct and 25,000 indirect jobs with offered funding of N251.3bn ($0.997m) from the US Trade and development Agency

Land Size

2,635ha

Project Cost

$9.0billion

Production

650,000 barrelsper day

16

www.oandoplc.com