Team “C”Team “C”Jacob MunozJacob MunozAaron HebertAaron Hebert

Joseph NasserJoseph Nasser

Motiva Enterprises LLCMotiva Enterprises LLCPort Arthur Expansion Port Arthur Expansion

ProjectProject

OutlineOutline

Motiva OverviewMotiva Overview

Expansion HighlightsExpansion Highlights

Insurance ProgramsInsurance Programs– Contractor Wrap-UpContractor Wrap-Up– Contractor’s Equipment FloaterContractor’s Equipment Floater– Builders RiskBuilders Risk– Marine CargoMarine Cargo

Motiva OverviewMotiva Overview

Formed in 1998Formed in 1998Dual ownership between Shell and Saudi AramcoDual ownership between Shell and Saudi AramcoNumber of Employees: Approximately 2,900Number of Employees: Approximately 2,900Revenues: $31.1 billion (YE 2006); (~85M a day)Revenues: $31.1 billion (YE 2006); (~85M a day)Terminals: 42Terminals: 42Motiva owned stations: 1,128Motiva owned stations: 1,128Wholesale owned stations: 7,011Wholesale owned stations: 7,011Crude Throughput Capacity (Daily): 745,000 BPDCrude Throughput Capacity (Daily): 745,000 BPDCrude Actual Avg. Daily Throughput: 704,000 BPD Crude Actual Avg. Daily Throughput: 704,000 BPD (Average ~95% of max capacity)(Average ~95% of max capacity)

Motiva OperationsMotiva Operations

Commercial FuelsCommercial Fuels

DistributionDistribution

RetailRetail

RefiningRefining– Convent Refinery- 235,000 BPDConvent Refinery- 235,000 BPD– Norco Refinery 220,000 BPDNorco Refinery 220,000 BPD– Port Arthur Refinery 285,000 BPDPort Arthur Refinery 285,000 BPD

Refinery Expansion HighlightsRefinery Expansion Highlights

325,000 barrels/day 325,000 barrels/day capacitycapacity

Lower emissionsLower emissions

Increase US SupplyIncrease US Supply

4,500 construction 4,500 construction jobs and at least 300 jobs and at least 300 new full-time jobsnew full-time jobs

CostCost– $7,000,000,000$7,000,000,000

Cautionary StatementCautionary StatementThe following presentation includes forward-looking and backward-looking statements within the meaning of Section 27A of the Securities Act of 1933, The following presentation includes forward-looking and backward-looking statements within the meaning of Section 27A of the Securities Act of 1933,

as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. You can identify our forward-looking statements by words such as “anticipates,” “expects,” “intends,” “plans,” “projects,” created thereby. You can identify our forward-looking statements by words such as “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” and similar expressions. Forward-looking statements relating to Team C observations on Motiva are based on our “believes,” “estimates,” and similar expressions. Forward-looking statements relating to Team C observations on Motiva are based on our research and knowledge from Dr. Dan Jones’ class. It includes generalized information about the petroleum industry in general on the date the research and knowledge from Dr. Dan Jones’ class. It includes generalized information about the petroleum industry in general on the date the presentations are given. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions presentations are given. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Further, certain forward-looking statements are based upon assumptions as to future events that may not prove to that are difficult to predict. Further, certain forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking be accurate. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements.statements.

Factors that could cause actual results or events to differ materially include, but are not limited to, crude oil and natural gas prices; refining and Factors that could cause actual results or events to differ materially include, but are not limited to, crude oil and natural gas prices; refining and marketing margins; potential failure to achieve, and potential delays in achieving expected reserves or production levels from existing and future marketing margins; potential failure to achieve, and potential delays in achieving expected reserves or production levels from existing and future oil and gas development projects due to operating hazards, drilling risks, and the inherent uncertainties in interpreting engineering data relating oil and gas development projects due to operating hazards, drilling risks, and the inherent uncertainties in interpreting engineering data relating to underground accumulations of oil and gas; unsuccessful exploratory drilling activities; lack of exploration success; potential disruption or to underground accumulations of oil and gas; unsuccessful exploratory drilling activities; lack of exploration success; potential disruption or unexpected technical difficulties in developing new products and manufacturing processes; potential failure of new products to achieve unexpected technical difficulties in developing new products and manufacturing processes; potential failure of new products to achieve acceptance in the market; unexpected cost increases or technical difficulties in constructing or modifying company manufacturing or refining acceptance in the market; unexpected cost increases or technical difficulties in constructing or modifying company manufacturing or refining facilities; unexpected difficulties in manufacturing, transporting or refining synthetic crude oil; international monetary conditions and exchange facilities; unexpected difficulties in manufacturing, transporting or refining synthetic crude oil; international monetary conditions and exchange controls; potential liability for remedial actions under existing or future environmental regulations; potential liability resulting from pending or controls; potential liability for remedial actions under existing or future environmental regulations; potential liability resulting from pending or future litigation; general domestic and international economic and political conditions, as well as changes in tax and other laws applicable to future litigation; general domestic and international economic and political conditions, as well as changes in tax and other laws applicable to Team C. Other factors that could cause actual results to differ materially from those described in the forward-looking statements include other Team C. Other factors that could cause actual results to differ materially from those described in the forward-looking statements include other economic, business, competitive and/or regulatory factors affecting Team C generally as set forth in the class syllabus. Team C is under no economic, business, competitive and/or regulatory factors affecting Team C generally as set forth in the class syllabus. Team C is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements, whether as a result of new obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.information, future events or otherwise.

Cautionary Note to U.S. Investors – The U.S. Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to Cautionary Note to U.S. Investors – The U.S. Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this presentation such as “oil/gas resources,” legally producible under existing economic and operating conditions. We use certain terms in this presentation such as “oil/gas resources,” “Syncrude,” and/or “Society of Petroleum Engineers (SPE) proved reserves” that the SEC’s guidelines strictly prohibit us from including in filings “Syncrude,” and/or “Society of Petroleum Engineers (SPE) proved reserves” that the SEC’s guidelines strictly prohibit us from including in filings with the SEC. U.S. investors are urged to consider closely the oil and gas disclosures in our Form 10-K for the year ended December 31, 2004.with the SEC. U.S. investors are urged to consider closely the oil and gas disclosures in our Form 10-K for the year ended December 31, 2004.

This presentation includes certain non-GAAP financial measures, as indicated. Such non-GAAP measures are intended to supplement, not substitute This presentation includes certain non-GAAP financial measures, as indicated. Such non-GAAP measures are intended to supplement, not substitute for, comparable GAAP measures. Investors are urged to consider closely the GAAP reconciliation tables provided in the presentation for, comparable GAAP measures. Investors are urged to consider closely the GAAP reconciliation tables provided in the presentation Appendix.Appendix.

Motiva – Port ArthurMotiva – Port Arthur

Port Arthur Refinery (PAR)Port Arthur Refinery (PAR)– Built in 1903 as Texaco’s first refineryBuilt in 1903 as Texaco’s first refinery– Capacity of 285k BBOPDCapacity of 285k BBOPD– 900 employees with payroll of $150,000,000900 employees with payroll of $150,000,000– Port Arthur and Port Neches terminals serve 700 Port Arthur and Port Neches terminals serve 700

vessels per annumvessels per annum

Historic asidesHistoric asides– Wood storage tanks and pipesWood storage tanks and pipes– WWII Fuel for Cash programWWII Fuel for Cash program– Donkey transportationDonkey transportation– Admin building shaped like a “T”Admin building shaped like a “T”

Contractor Wrap-Up ProgramContractor Wrap-Up Program

Traditional insurance – project owners, Traditional insurance – project owners, contractors and subs purchase insurance contractors and subs purchase insurance independently.independently.

Wrap-up insurance – project owner covers Wrap-up insurance – project owner covers all parties – owner, contruction manager, all parties – owner, contruction manager, general contractor, and subsgeneral contractor, and subs

Popular on large construction projectsPopular on large construction projects– Cost savingsCost savings

Contractor Wrap-Up ProgramContractor Wrap-Up Program

AdvantagesAdvantages– Savings from buying insurance “in bulk”Savings from buying insurance “in bulk”– Eliminating duplication in coverageEliminating duplication in coverage– Handling claims more efficientlyHandling claims more efficiently– Reducing potential litigationReducing potential litigation– Enhancing workplace safetyEnhancing workplace safety– Save up to 50% vs. traditional insuranceSave up to 50% vs. traditional insurance

Save up to 1 to 3% of project’s construction costSave up to 1 to 3% of project’s construction cost

– Cost savings realized from centralized safety Cost savings realized from centralized safety programs.programs.

Contractor Wrap-Up ProgramContractor Wrap-Up Program

DisadvantagesDisadvantages– Requires project owners to invest more time Requires project owners to invest more time

and resources in adminand resources in adminProject owners must hire additional personnel or Project owners must hire additional personnel or pay to contract out mgmt of wrap-up insurance.pay to contract out mgmt of wrap-up insurance.

– Large premiums at beginning of projectLarge premiums at beginning of project

Contractor Wrap-Up ProgramContractor Wrap-Up Program

BarriersBarriers– State systems for workers’ compensation can prevent State systems for workers’ compensation can prevent

wrap-up insurance in some states by reducing cost wrap-up insurance in some states by reducing cost savings.savings.

North Dakota, Ohio, Washington, West Virginia, WyomingNorth Dakota, Ohio, Washington, West Virginia, Wyoming

– Project must be large or have high labor costs to Project must be large or have high labor costs to make wrap-up insurance financially viable.make wrap-up insurance financially viable.

– Reduces contractor’s profits from insurance rebates.Reduces contractor’s profits from insurance rebates.– ¾ of Total Ins. Cost on construction is for workers’ ¾ of Total Ins. Cost on construction is for workers’

comp. Removing it from owner’s control eliminates comp. Removing it from owner’s control eliminates the cost savings of wrap-up insurance.the cost savings of wrap-up insurance.

Contractor Wrap-Up ProgramContractor Wrap-Up Program

Wrap-up insurance can provide:Wrap-up insurance can provide:– Workers’ compWorkers’ comp– General liabilityGeneral liability– Architects’ and engineers’ professional liabilityArchitects’ and engineers’ professional liability– Builders’ riskBuilders’ risk– Excess liabilityExcess liability– Pollution liabilityPollution liability– Specialized insuranceSpecialized insurance

Longshoremen’s and harborworkers’ insuranceLongshoremen’s and harborworkers’ insuranceRailroad protective liability insuranceRailroad protective liability insurance

Wrap-up insurance does not provide:Wrap-up insurance does not provide:– Automobile liabilityAutomobile liability– Insurance on contractors’ tools and equipmentInsurance on contractors’ tools and equipment

Contractor Wrap-Up ProgramContractor Wrap-Up Program

Two types of wrap-up insuranceTwo types of wrap-up insurance– Guaranteed Cost PlanGuaranteed Cost Plan

Simplest form of planSimplest form of plan

Premiums remain constant regardless of claims paid out.Premiums remain constant regardless of claims paid out.

Common for small to medium-sized businessesCommon for small to medium-sized businesses

– Loss-sensitive PlanLoss-sensitive PlanPremiums dependent on policyholder’s claims paid or Premiums dependent on policyholder’s claims paid or “losses”“losses”

Returns a refund for low lossesReturns a refund for low losses

Charges additional premium for high lossesCharges additional premium for high losses

Dollars in millionsDollars in millions

Project Name and Project Name and LocationLocation

Total Total project project

costcost

Insurance CostsInsurance Costs Insurance Insurance savingssavingsTraditionalTraditional Wrap-upWrap-up

Blue Water Blue Water

Bridge, MichiganBridge, Michigan

$97.2$97.2 $10$10 $7.1$7.1 $2.9$2.9

Boston Central Boston Central

Artery Tunnel, Artery Tunnel, MassachusettsMassachusetts

$10,800$10,800 $1,030$1,030 $765$765 $265$265

I-15, I-15,

Salt Lake City, UtahSalt Lake City, Utah

$1,600$1,600 $52.2$52.2 $22.3$22.3 $29.9$29.9

CTA Green Line CTA Green Line Rehabilitation Rehabilitation

Chicago, IllinoisChicago, Illinois

$408.7$408.7 $32.5$32.5 $21.0$21.0 $11.5$11.5

Hudson-Bergen Light Rail Hudson-Bergen Light Rail (Initial segment)(Initial segment)

$992$992 $20$20 $11$11 $9$9

Tri-Met, Westside Light Rail Tri-Met, Westside Light Rail

Portland, OregonPortland, Oregon

$952$952 $27.1$27.1 $17.2$17.2 $9.9$9.9

Transportation Infrastructure, Advantages and Disadvantages of Wrap-Up Insurance for Large Construction Projects, U.S. General Accounting Office, June 1999, Transportation Infrastructure, Advantages and Disadvantages of Wrap-Up Insurance for Large Construction Projects, U.S. General Accounting Office, June 1999, http://www.gao.gov/archive/1999/rc99155.pdfhttp://www.gao.gov/archive/1999/rc99155.pdf

Contractors’ Equipment FloaterContractors’ Equipment Floater

Common insurance on special equipment for construction projects Common insurance on special equipment for construction projects that is not permanently tied to one locationthat is not permanently tied to one locationTypes of equipment coveredTypes of equipment covered– LoadersLoaders– DozersDozers– CranesCranes– ExcavatorsExcavators– Concrete PumpersConcrete Pumpers– BackhoesBackhoes– Asphalt MachineryAsphalt Machinery– Drill RigsDrill Rigs– Well Servicing EquipmentWell Servicing Equipment– ForkliftsForklifts– Misc. Tools & EquipmentMisc. Tools & Equipment

Equipment has tendency to walk off during the nightEquipment has tendency to walk off during the night

Construction Builders/All RiskConstruction Builders/All RiskInsuranceInsurance

BUILDER'S RISK:BUILDER'S RISK:  Insurance against loss to   Insurance against loss to buildings or structures in the course of buildings or structures in the course of construction.construction.

ALL RISK: ALL RISK:  Insurance against loss or damage Insurance against loss or damage to property arising from any accidental cause, to property arising from any accidental cause, except such as may be specifically excludedexcept such as may be specifically excluded

OptionsOptions

Estimated Maximum Loss of $750MEstimated Maximum Loss of $750MLeverage Motiva’s existing property coverage Leverage Motiva’s existing property coverage with Oil Insurance Limitedwith Oil Insurance Limited– Disadvantages:Disadvantages:

Only 1 OIL limit of $250 million for combined operational and Only 1 OIL limit of $250 million for combined operational and CAR eventCAR eventRequires commitment to OIL for life of project – reduces Requires commitment to OIL for life of project – reduces flexibilityflexibility

Stand-alone CAR programStand-alone CAR program– AdvantagesAdvantages

More coverageMore coverageUse of captivesUse of captives

DecisionDecision

Standalone CoverageStandalone Coverage• Limits: Limits:

$750 million, except $250 million in respect of $750 million, except $250 million in respect of windstorm and flood; windstorm and flood;

$10 million for existing property.$10 million for existing property.• Deductible: Deductible:

$10 million any one occurrence;$10 million any one occurrence;

MarketMarket Line SizeLine Size• Swiss Re (Lead)Swiss Re (Lead) 20.00%20.00%• Noble (Shell Captive)Noble (Shell Captive) 20.00%20.00%• Stellar (Saudi Aramco Captive)Stellar (Saudi Aramco Captive) 20.00%20.00%• LibertyLiberty 10.00%10.00%• ZurichZurich 7.50%7.50%• AIGAIG 5.00%5.00%• Starr TechStarr Tech 4.00%4.00%• ArchArch 2.50%2.50%• NavigatorsNavigators 1.00%1.00%• SCORSCOR 4.00%4.00%• LancashireLancashire 2.00%2.00%• O'FarrellO'Farrell 2.00%2.00%• CatlinCatlin 2.00%2.00%

• TotalTotal 100.00%100.00%

Project Insurance ProgramsProject Insurance ProgramsConstruction All Risk - MarketsConstruction All Risk - Markets

Marine Cargo Insurance...Marine Cargo Insurance...Who needs that??Who needs that??

Marine Cargo Insurance Marine Cargo Insurance SummarySummary

The world’s integrated Global Economy demands movement of The world’s integrated Global Economy demands movement of goods across borders to fuel economic growth and stability. goods across borders to fuel economic growth and stability.

As Emerging Markets in Latin America, Europe, Asia, Africa, and As Emerging Markets in Latin America, Europe, Asia, Africa, and the rest of the world begin to demand more goods from across the rest of the world begin to demand more goods from across the globe the volume of international cargo shipments increase. the globe the volume of international cargo shipments increase.

Although physical damage on transit claims may not be a Although physical damage on transit claims may not be a common problem. Importers or exporters must keep in mind that common problem. Importers or exporters must keep in mind that over 50 voyages a year encounter heavy weather where over 50 voyages a year encounter heavy weather where shipping containers are lost overboard.shipping containers are lost overboard.

Most risks are difficult for the owner of the goods to manage Most risks are difficult for the owner of the goods to manage directly. This is because the shipment will be given into the care, directly. This is because the shipment will be given into the care, custody and control of third parties who will limit their liability for custody and control of third parties who will limit their liability for loss or damage to those goodsloss or damage to those goods

Marine Cargo Insurance Marine Cargo Insurance Cont.Cont.

Marine Cargo Insurance is different then other liability and property Marine Cargo Insurance is different then other liability and property coverage. The scope is international, and broad. Also, extension of coverage. The scope is international, and broad. Also, extension of coverage is industry specific and broader then other lines of insurance. coverage is industry specific and broader then other lines of insurance. – Marine insurance clauses are not filed, nor regulated by state laws. Marine insurance clauses are not filed, nor regulated by state laws.

Also insurance can be offered for one shipment or multiple Also insurance can be offered for one shipment or multiple shipments.shipments.

The premium cost of covering the cargo is based on individual The premium cost of covering the cargo is based on individual experience, shipment volume, mode of transit, and value shipped. The experience, shipment volume, mode of transit, and value shipped. The underwriter determines what premium will be required to meet the underwriter determines what premium will be required to meet the anticipated losses and expenses on account. anticipated losses and expenses on account. – The premium can also be impacted as the shipper includes The premium can also be impacted as the shipper includes

additional coverage; such as processing in a foreign country, how additional coverage; such as processing in a foreign country, how damage to cargo could affect future cash flows of a firm, exhibition damage to cargo could affect future cash flows of a firm, exhibition coverage at sales conventions in foreign countries overseas, and coverage at sales conventions in foreign countries overseas, and temporary storage overseas.temporary storage overseas.

RisksRisks

Theft, pillage or hijackTheft, pillage or hijackMistakes in Mistakes in transportation...transportation...– I.E. dropping, rough or I.E. dropping, rough or

inappropriate handlinginappropriate handling

Accident to the carrying Accident to the carrying conveyance...conveyance...– I.E. vessel sinking, I.E. vessel sinking,

aircraft crashing or aircraft crashing or vehicle fire, road traffic vehicle fire, road traffic accident or overturningaccident or overturning

Exposure to rain or salt Exposure to rain or salt waterwaterExposure to unusual Exposure to unusual variations in temperaturevariations in temperature

Example of a Motiva Insurance Example of a Motiva Insurance PackagePackage

• Coverage: Coverage: Physical Loss of or Damage occurring during transit from suppliers' Physical Loss of or Damage occurring during transit from suppliers' premises anywhere in the World until safe unloading at the Project premises anywhere in the World until safe unloading at the Project Site;Site;

Loss or impairment of Operating Margin triggered by a covered Loss or impairment of Operating Margin triggered by a covered property loss.property loss.

• Term: October 15 07 to June 01 10;Term: October 15 07 to June 01 10;• Limits: Limits:

$70 million any one vessel, conveyance and/or location; $70 million any one vessel, conveyance and/or location;

indemnification up to $480 million, capped at $50 million per month, indemnification up to $480 million, capped at $50 million per month, for a 24 month indemnity period.for a 24 month indemnity period.

• Deductible: Deductible: Property damage - $100,000 each and every loss;Property damage - $100,000 each and every loss;

DSU - 45 days in the aggregate.DSU - 45 days in the aggregate.

The Port of HoustonThe Port of Houston

Port of Houston SummaryPort of Houston Summary

Port of Houston is the port of the fourth-largest city in the United States.Port of Houston is the port of the fourth-largest city in the United States.

The port is a 25-mile-long complex of diversified public and private facilities The port is a 25-mile-long complex of diversified public and private facilities located a few hours’ sailing time from the Gulf of Mexico.located a few hours’ sailing time from the Gulf of Mexico.

It is the busiest port in the United States in terms of foreign tonnage, It is the busiest port in the United States in terms of foreign tonnage, second-busiest in the United States in terms of overall tonnage, and tenth second-busiest in the United States in terms of overall tonnage, and tenth busiest in the world. busiest in the world.

Made up of the Houston Ship Channel and Galveston Bay. It is made up of Made up of the Houston Ship Channel and Galveston Bay. It is made up of the port authority, and the 150-plus private industrial companies along the the port authority, and the 150-plus private industrial companies along the ship channel. Many oil companies have built refineries on the channel ship channel. Many oil companies have built refineries on the channel where they are protected from the Gulf of Mexico.where they are protected from the Gulf of Mexico.

Port of Houston Quick Facts Port of Houston Quick Facts (2006)(2006)

66thth largest in the world largest in the world

11stst in US in foreign tonnage in US in foreign tonnage

22ndnd in total tonnage in total tonnage

Home of the world’s 2Home of the world’s 2ndnd largest petrochemical largest petrochemical complexcomplex

More then 200 million tons of cargo moved through More then 200 million tons of cargo moved through the port.the port.

Leads the nation in environmental protection. It is Leads the nation in environmental protection. It is the first US port to be certified as ISO14001.the first US port to be certified as ISO14001.

Supports 785,000+ jobs in TexasSupports 785,000+ jobs in Texas