EFTA01367366.pdf

31 May 2015 Integrated Oil US Integrated Oils Pr Eillaf y GrOWth Driver:: Near-term oil production growth will be challenged as most mega project starts and expansions (Kashagan restart expected mid 2017 with Tengiz and Pearl contributions anticipated post 2020) are anticipated later this decade. We model a 2.5% decline rate for the base assets; as recent investment in recovery methods in ACG (Chirag Oil Project) and in Tengiz (Capacity and Reliability project) are expected to partially offset declines. Primary Risks In our view, the primary risks to the 2015-2020 production outlook for the Caspian Sea include delays to unsanctioned projects amid lower crude prices as well as increased operational delays associated with the restart of the Kashagan oil field. I. Delays to Unsanctioned Projects: The region's most capital-intensive project is Tengiz (Wood Mackenzie estimated peak production of --240 mbpd aggregate for the WPMP and FGP projects) at --$37 Billion. Local content requirements and high export taxes delayed the scheduled FID from 2014 to 1H2015 yet with only 10% of the project's required capital invested as of YE 14. there is significant risk to further project slippage. Woodmac anticipates a further delay in FID to 4O15 with first oil production at FGP not expected until 2021 vs. the initial 2017 target date. FID decisions surrounding Kashagan Phase II (est peak production of 630 mbpd in 2030) and Pearls (est peak production of 50 mbpd in 2024) do not impact our forecast window but will have an impact on production sustainability in the country. 2. Operational Delays to the Restart of Kashagan: Operational-related delays to the restart of the Kashagan oil field) would represent another material risk in the outlook (with -$50Bn in sunk costs, the project is not materially levered to lower crude prices). Following the start of Phase One in September of 2013. the field was soon shut-in following leaks in the gas pipelines that carried sour gas onshore. Following a full replacement of the oil and gas pipelines production is expected to ramp to -400 mboe/d. Completion of pipeline replacement work is targeted for 2H2016 with Wood Mackenzie anticipated first oil production by mid-2017, reaching - 300 mboe/d by 2019. Figure a% Key growthProject;. 2014-2020 Valed urea., C..etro 1•04( Pans *Via*. ***ea Al, hoe 1*Vip* Ih. r«... =4 4:1** ma*VV. IPalasiv(VVV*O I* Vi*Mrs Cillit.. 1**COVVCVniviVe *Vv. **am V. =I NV II VP Oa *RIMY 1W 4.1.4*, *******, !eV fonri(VvOrtC4*** Yu*, *NW*. * I*, AO II anal IVO , gavv , .a.. I.,...., a *2 /712 *Attu*. IlW VI**. AniteptICITagn If ts.* *Mon. V AY an VII ..• *Sun Iry ov e *iv Own,. clue, av v I* Fat 44 401••••• .(1011,1400101 OW IS Wigs Fina•••••••••• OrinaMItiV al IPASMILn C••••••• MPS* II Nil all 0 it Sane Oatsets Sn lited Afecianoi Page 48 Deutsche Bank Securities Inc. CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0058899 CONFIDENTIAL SDNY_GM_00205083 EFTA01367366