Divesting in the downstream oil and gas industry

A current market view and a guide for sell-side activities

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is both a buffer to adversity and a means for seizing opportunity. managing the portfolio of assets 3. 400 350 300 250 200 150 100 50 0 1997 1998 1999 F&D reserves added per US$1000 (Three year averages) 2000 2001 2002 2003 2004 2005 2006 2007 2008 Global upstream spending (upstream costs incurred) 600 500 Proved acquisitions F&D spending 400 US$ billion 300 200 100 0 20 01 20 00 20 03 20 06 20 07 19 98 19 99 20 04 20 08 19 97 20 05 20 02 Source: IHS Herold Inc. Divesting in the downstream oil and gas industry A current market view and a guide for sell-side activities 20 09 1 . The chart on the next page compares the market capitalization-weighted returns on average capital employed (ROACE) that the major integrated oil companies have earned in their upstream and downstream businesses from 2000 to 2008. Proactive portfolio management in the downstream sector has been a feature of the large. Raising: assessing future funding requirements and evaluating sources 4. The upstream sector has historically achieved higher levels of return than the downstream. offer our explanation for the current high levels of divestment activity and explore some of the key issues associated with selling a downstream asset. vertically integrated oil companies for many years. oil and gas companies’ portfolio management decisions have had a number of key drivers. As strategic aims and market conditions change. Historically. we look at the oil industry trends. The capital agenda Leading businesses are adopting a range of disciplines in four key areas to build competitive advantage: 1. Preserving: reshaping the operational and capital base 2. These include: ► Potential market growth rates ► Current and predicted levels of ROACE compared to competition ► Supply chain synergy with other parts of the downstream business ► Market scale ► Brand synergy However. Given the dynamic economic environment. so do the requirements of the portfolio needed to achieve management and shareholder capital optimization objectives. with the recent downstream divestments announced by many of the super-majors. companies need to continually assess their capital needs as well as potential sources of capital. In this paper. With the super-majors focused on reserves replacement — consistently achieving less than 100% would put an oil and gas exploration and production organization in a longer-term closedown scenario — it is not surprising that a significant reduction in the value of each upstream dollar spent has correlated with a sharp increase in total upstream spending. the costs associated with finding and developing new oil and gas reserves have increased sharply.Introduction How companies manage their capital today will define their competitive position tomorrow. Investing: strengthening investment appraisal and transaction execution Current trends In recent years. Optimizing: driving cash and working capital. it is clear that there is a new factor playing a key role in the portfolio management decision-making process: the need to raise capital to fund increasing upstream investment requirements. The ability to raise capital. A strong capital agenda needs to be at the heart of all boardroom and management decisions. quickly and efficiently. The charts to the right detail the declining barrel of oil equivalent reserves that US$1000 bought you from 1997 to 2008. and the increase in total upstream expenditure from 1997 to 2009.

present an exciting opportunity. ExxonMobil. ► Private equity (PE) firms may consider these assets to determine if they can extract additional value through control over the real estate. although historically on average producing lower levels of ROACE than the upstream business. ConocoPhillips. supplemented by strong downstream margins. The increasing capital requirements needed for very large exploration and production (E&P) development projects. provides the opportunity for the majors to divest what they perceive as non-core assets to generate capital for reallocation to their upstream businesses. The upstream. appears to be the winner of that debate. ► National oil companies (NOCs) may look to secure markets for their upstream activities. ► Property developers may be interested in sites and land banks located on prime real estate for restoration and development of residential or commercial properties. The evidence of the past decade is that the upstream business has produced higher levels of return than the downstream business.Segment returns: major integrated oils Segment returns: major integrated oils 45% Upstream returns (left axis) 40% $100 35% Upstream range of returns US$ per bbl $120 Oil price (right axis) Downstream returns (left axis) 30% $80 ROACE 25% $60 20% Downstream range of returns 15% $40 10% $20 5% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 $0 Source: Ernst & Young calculations from data compiled by Deutsche Bank AG Note: The “major integrated oils” includes the “seven mega-majors” (BP. with historically higher levels of return. StatoilHydro. Royal Dutch Shell. OMV. reduce their exposure to oil price volatility and diversify their operations away from the upstream. Total SA. and Suncor. Potential purchasers of these assets are likely to include: ► International oil companies (IOCs) may look to create market leadership and economies of scale in their preferred markets. particularly in mature Organization for Economic Cooperation and Development (OECD) markets. 2 Divesting in the downstream oil and gas industry A current market view and a guide for sell-side activities . Repsol. strong cash flow and the relatively cheap and abundant levels of capital in the market. a significant new market dynamic has emerged over the past 18 months. Petrochina. the high levels of capital expenditure required in the upstream business could be maintained through record levels of earnings. Hess. While oil was heading towards its peak of nearly US$150 per barrel in the early part of 2008. Chevron. These assets. However. the ability to maintain capital expenditure at current high levels has been adversely affected for all the oil majors. ► Hypermarkets and independent retailers usually have a lower cost base and may find retail marketing more profitable than the IOCs and NOCs. a reduction in demand and a decline in upstream and downstream margins. The downstream. and Eni) along with: BG. In addition to the usual portfolio management issues that the oil majors consider. Sinopec. combined with the reduced availability of capital is forcing the majors to make tough decisions regarding how they allocate their capital. with the subsequent fall in the price of both oil and gas.

We recommend that organizations regularly appraise their portfolio to confirm that assets still fulfill all aspects of the evaluation criteria. and what ROACE is it likely to deliver in the future? How does this compare to the performance of similar competitor assets? ► What investment is required to maintain and develop the asset? ► What is the market valuation of the asset and “value to me” versus its “value to others”? Branding metrics: ► Does the asset play an important part in the marketing strategy? Are there critical brand interrelationships with other parts of the business? Supply chain metrics ► How critical is the asset to the performance and overall integrity of the upstream/downstream supply chain? Exit readiness Once assets have been earmarked for divestment it is worthwhile undertaking an initial readiness assessment to: ► Make sure that strategic expectations are realistic and achievable as well as identifying options and value opportunities. it is not unusual for sellers to consider core businesses for divestment if their requirements for additional capital cannot be economically sourced externally and the seller has a better use for that capital. Divesting in the downstream oil and gas industry A current market view and a guide for sell-side activities 3 . restructure. In today’s constrained capital conditions.The downstream divestment process Divestments require a number of phases from the initiation of the process with strategic analysis and review through until the transaction is finalized and any post transaction (‘go live’) support is provided. Over time. The process can be summarized as follows: Managing the sales process Transaction preparation Positive decision to divest Exit readniess assessment Sales execution Negotiation and completion Strategic analysis Managing the divested asset separation process Carve-out planning Carve-out implementation Post Go Live support In this next section we look at the key issues that oil companies face in each phase. the broader corporate strategy or the underlying performance of an asset when evaluated against these criteria may change. Indeed the criteria themselves may be periodically updated for example as changes in economic conditions result in more or less stringent financial hurdles. ► Consider the operational requirements for separating and divesting the business (including the impact on the parent). Strategic analysis The major oil companies will regularly review their downstream businesses and consider whether their asset portfolios are aligned with their overall strategy. grow or divest. Based on these criteria assets can then be classified as hold. Assets will be evaluated against a broad range of criteria that are likely to include: Financial metrics: ► What ROACE has the asset delivered.

organizational responsibilities. The following graphic illustrates some of the areas that might be considered during a readiness session: A readiness assessment is typically completed in 1-2 weeks and in our experience the outcome of that exercise adds value and enables the organization to prioritize key issues and shorten the transaction timeline. synergies with other parts of the business. risk. 4 Divesting in the downstream oil and gas industry A current market view and a guide for sell-side activities .► Consider the tax aspects of the divestment and whether cash received can be repatriated efficiently and at minimal cost. brand impact and a understanding as to how the proposed course of action aligns with the broader strategy of the overall business. Financial information ► Robustness of financial information? ► Transparency and separability ► Restructuring impacts explained? ► Historical pro forma’s? People ► Divisibility of teams and capabilities? ► Key personnel considered? ► Reward systems for transition? ► Pensions appropriately addressed? IS/IT ► IT strategy consistent with exit strategy? ► Robust IT capability and efficient cost base? ► Quality of management info. ► Confirm the logistical requirements for the divestment process (including the likely information requirements. timelines and key milestones. systems? Material contracts ► Strategy for joint customers/suppliers? ► Change of control impacts considered? ► Dissynergies? ► Stranded costs considered? For oil and gas companies. Exit perimeter and deal structure ► Perimeter clearly defined (boundary)? ► Transition issues defined (scope of services)? ► Alternatives which deliver more value? ► Potential bidders considered? Identify and extract hidden value ► Working capital savings predisposal? ► Operational Improvement/synergies? ► Capital expenditure opportunities? ► Outsourcing or offshoring of certain activities? Robustness of value story ► Projections consistent with market? ► Proven management track record? ► Operational/capex plan? ► Recession case tested? Tax ► Filings up to date? Transfer pricing? ► Tax structuring issues/opportunities? ► Value of tax losses carried forward? ► Any potential tax costs on exit? Ernst & Young’s exit readiness diagnostics Assessing and addressing these topics prior to exit can significantly ease the disposal process and enhance value. making a decision on retaining or selling downstream assets requires difficult trade-offs between expected financial returns.

those contracts may include beneficial terms which will be lost on transition to a new owner. in terms of both stranded costs but also potentially lost synergies. Equally important is the communication and incentivization strategy that is essential to both the retention of critical employees and ensuring that the business continues to perform throughout the divestment process.Transaction preparation Once the decision to divest has been made. For example a financial investor would likely require a fully stand alone business whereas a strategic buyer will likely already have its own back office functions.g. the detailed transaction preparation and carve out planning phases can be initiated. Prior to beginning the preparation phase in earnest some consideration should be given to: ► Defining the package of the business(es) to be sold and whether there are different packaging options available (e. It is also an unparalleled opportunity to examine the divestiture’s impact on the retained business. ► Separation of IT systems can be both time consuming and costly particularly in the modern business world where centralization of IT in shared service and support centers is commonplace. An early analysis of the functional and operational support to be provided to the divested entity by the parent is essential. This is the time to consider the potential risks and upsides from the buyer’s perspective and anticipate what data they will need to adequately assess the opportunity. and perhaps more importantly. whether the asset will be sold in whole or in parts or whether additional assets could be added to the package to enhance value). Paramount in deciding the separation strategy will be the ongoing needs for data security. In every carve out there are a number of critical aspects to address. the seller needs to think about: ► The extent to which they are prepared to support a potential. ► Considering who the potential buyers might be and tailoring accordingly. Service Level Agreements (SLAs) that detail timings. deliverables.. Detailed sell-side due diligence affords an in-depth view into the workings of the business. response times and all the key dimensions of the services to be provided will form part of any TSA. detailed planning is key. Can anything be done to enhance that value within the sellers desired timetable? When preparing for the sale of a business or business unit. Divesting in the downstream oil and gas industry A current market view and a guide for sell-side activities . the extent of customization in existing systems and the likely needs of potential buyers. consideration needs to be given to the impact on the pro forma financial performance of the divested entity (which in turn may have an impact on the valuation). providing the seller a unique advantage in negotiations. ► Finally the seller needs to think about the future relationships with the divested business (for example where there is ongoing trading) and particularly if the entity being divested has historically enjoyed beneficial (non-arms length) terms. In addition to operational and physical aspects of the separation. ► The impact of the divestment on the remaining business. buyer with transition service agreements (TSAs) and over what time period. notably: ► Identifying the employees who will transfer with the business is vital to ensuring that the business is fully operational post transfer. ► Migrating contracts to the new owner also needs careful consideration. A critical element of the work in this phase will be to assess the marketability of the asset. Existing third party contracts may include change of control clauses but also. 5 Carve out planning As well as considering specifically the needs of the expected buyer group. Thinking about the value story and whether the bridge between the current financial performance and the future financial performance reflects the value that the investor expects to receive for the business. Our experience shows that many sales processes with poor outcomes are the result of a lack of operational preparation of the assets for sale. It highlights undiscovered value and prepares management to respond to challenges that the buyer may discover.

1.A register of services that may need to be provided centrally by the current parent to the divested entity should be compiled. compliance and market reporting. 2. operational and separation considerations. both to weed out those questions which are immaterial and to understand what impact an answer might have on the investors interpretation of the business and their valuation. legal services. financial consolidation. The document is typically provided to a smaller group of qualified potential bidders inviting them to formally enter a non-binding indicative bid. ► Formalize the process for asking and answering questions. These items typically include. ► They enable the seller to address the diligence requirements of multiple investors thereby materially reducing the demands on management and enabling them to better focus on the ongoing business. IT infrastructure and applications management. the reports can add clarity. organizational and legal data that potential buyers will need to assist in formulating their decision. A SID tends to be more factual and more limited in scope and is typically provided when the potential investor group is limited to strategic investors (who already have a good understanding of the business). The room will contain all key performance. and in fact desirable. research and development. The advantages of both reports are: ► Particularly where the business is a complex carve out or has a complex trading history. That means: ► Ensuring that all the data placed in the room is relevant and consistent. Divesting in the downstream oil and gas industry A current market view and a guide for sell-side activities . In our experience investors will often ask many questions which seem to lack logic. 6 5. More importantly it is the opportunity for the management team to bond with the potential investors and to instill confidence in the achievability of its plans. ► Consider limiting the number of questions that may be asked in the first round bidding process to ensure potential investors remain focused on important issues. It is important to run the data room process with discipline. financial. This document which contains only high level (generally non confidential) financial information would be provided to a relatively broad group of potentially interested parties to couch interest. A VDD is a comprehensive report on which the reporting accountant will provide reliance (legal liability) to potential purchasers. The management presentation is generally not the forum for exchanging detailed information. For those reasons an independent report can reduce investors diligence requirements and significantly speed up the negotiation and completion phase. ► Respond quickly and decisively to questions to ensure bids arrive with minimal requirements for “confirmatory” diligence. Both reports can include not only the financial aspects of the transaction but also the commercial. 3. Management presentations and Q&A Irrespective of how comprehensive the preparation material has been for investor diligence there will always be questions that are unique to individual investors and therefore a Q&A process is inevitable. Data room The data room can be physical or virtual. Sales execution There are a number of key activities that will need to be completed in this phase: 4. therefore it is important that this is an interactive process. Teaser A high level concise summary of the asset for sale. internal audit. ► They enable the seller to be pre-warned (and therefore better prepared) of potential transaction issues. Information memorandum (IM) A more detailed selling document containing investment highlights as well as key financial and operational considerations. human resources management and real estate management. in order to close down any remaining objections. Ensure that important new information is disclosed to all potential investors. There is no reliance on a SID. Vendor Due Diligence (“VDD”) report or Seller Information Document (“SID”) As opposed to the IM (which is seen as an overtly selling document) the seller may also decide that he wants to provide potential investors with an independent report to assist them in their due diligence.

As the consideration is not paid to the vendor until the completion date (rather than the locked-box date). the vendor usually expects some compensation for the value that will accrue in the business between the locked-box date and the completion date (the “value accrual”). Under a completion accounts mechanism. This will include a detailed definition of the: ► Asset and legal entities that are being sold ► Financial details of the sale including both the purchase price and any adjustments ► Assets or liabilities that will remain with the current owners ► TSA’s and the accompanying SLA’s In recent years. the locked-box (or fixed) price mechanism increased in popularity (compared with the more traditional completion accounts mechanism).Negotiation and completion Evaluating and comparing bids will depend on a number of factors not only related to price. In other cases a more straightforward concern will be the ability of a potential buyer to fund the transaction. completion accounts are prepared and a purchase price adjustment is calculated based on net debt and working capital on the date of completion (as compared with that at the reference date). Following the completion of the bidding process and the identification of the preferred bidder. Divesting in the downstream oil and gas industry A current market view and a guide for sell-side activities 7 . a sales and purchase agreement can be negotiated and agreed. the economic risks and rewards transfer to the purchaser on the date of completion when the purchaser pays an initial equity purchase price (which will involve an enterprise value typically adjusted for working capital and net debt at a reference balance sheet date). Important considerations will also include the speed and ease with which a transaction can be completed. Subsequently. the economic risks and rewards transfer to the purchaser at a reference balance sheet date (known as the “locked-box” date). The vendor usually agrees not to extract value (no “leakage”) from the target business from the lockedbox date to the date of completion (when control passes to the purchaser) except for certain defined or “permitted leakages”. Under a locked-box mechanism. Some concerns may be whether certain combinations will come under scrutiny of the competition authorities.

. March 2011 ► Completion accounts prepared. Dec 2010 e. ► Establishing the new legal and operating structure.. ► Economic risks and rewards transfer to bidder (subject to any other protection in the SPA). Close coordination will be required to help ensure that the pre-completion activities and the sales process time lines are aligned and stay aligned until the sale is completed. Dec 2009/Mar 2010/Jun 2010 e. Dec 2009/Mar 2010/Jun 2010 e... Where a price adjustment mechanism on completion is included it is critical to ensure that it is appropriate and that any agreement addresses the key areas of risk.g. Reference date ► Reference balance sheet. Key areas of focus in this phase should be: ► Continuing communication and dialogue with management. SPA signed. ► Equity purchase price paid SPA signed. March 2011 ► Completion accounts prepared.g. to adjust to final equity. Completion ► Equity price paid reflecting locked-box equity price plus value accrual adjusted for permitted leakage.. Whether a transaction is suitable for a locked box style completion mechanism will depend on whether the transaction object can be audited which is often not the case in a complex carve out or an asset sale. protracted completion accounts disputes.The following diagram illustrates the two pricing/closing mechanisms: Post-deal true-up mechanism/completion accounts Vendor receives actual cash e. Expectations need to be managed around issues such as pensions. ► Purchase price adjustments. Locked box mechanism Vendor forecast cash profit e. (initial). Carve out implementation The carve out implementation plan will need to be refined during the negotiation phase as the identity of the likely buyer becomes clearer. definitions are agreed upon.g.e. ► Finalizing and implementing TSAs and the relevant service level agreements.g. significantly reduces the chances of disputes arising post closing.g.. ► Ensuring that redesigned processes have been adequately communicated and tested. ► Actual cash profits may be better than expected. including a clear and unambiguous definition and hierarchy of accounting policies to be applied in the completion accounts.. based on estimated or reference balance sheet. Dec 2010 e. In our experience identifying potentially contentious accounting issues up front.g. Although the benefits of a locked-box price mechanism include certainty over the price to be paid at completion and the potential avoidance of long. we have seen a return to the more traditional approach to completions. employee transfers and future opportunities. As a result. Locked box date ► Reference balance sheet. it has meant additional risk being taken by the buyer.. the employees and their representatives (unions etc.). 8 Divesting in the downstream oil and gas industry A current market view and a guide for sell-side activities . Signing Completion ► Headline enterprise value as well ► Economic risks and rewards as net debt and working capital transfer to bidder. As economic conditions have become more volatile so buyers have tended to become more cautious and risk-averse.e. i. ► Purchase price adjustments. to adjust to final equity. ► Novating third party contracts to the new legal entity/owners. Signing ► Final fixed equity price as well as basis for calculating “value accrual” and definitions of leakage and permitted leakage are agreed upon. i.

Divesting in the downstream oil and gas industry A current market view and a guide for sell-side activities 9 .

Avoiding common areas of value leakage Pre-sale Poorly defined scope of assets to be divested . A clearly defined “locked-box” mechanism can help prevent this. Ensuring that the time between the publication of recent audited accounts and the sales process is as short as possible ensures that up-to-date information is readily available.Post ”go live” support In a carve out situation ongoing support is commonly provided to the divested asset via TSAs. allowing time for the seller to mitigate the impact of stranded costs in an orderly manner. then ensure that “normal” working capital levels are identified and factored into the negotiations. Final thoughts There are a number of key areas to focus on that will help the vendor avoid value leakage through the sales process. accurate data gathering and process support. Ensure that you have a clear This can slow the sales process and discourage understanding of the assets: potential buyers. The seller bears the risk of continuing to provide the services (i. During the sales process Not providing the appropriate level and type of information for the data room.e. environmental and other ongoing liability issues. Understanding to whom the asset may be of most value to is critical to increasing the sales value. Completion Completion account disputes can be protracted and can result in value leakage. taxes. This can delay the sales process and result in last-minute surprises. Failure to provide the appropriate level and type Not understanding the true value of the of information for the information memorandum. Internal sensitivity regarding the sale of the asset needs to be balanced with the need for fast.. ► EBITDA (earnings before interest. The level of detail and accuracy of the accompanying SLAs will be important in ensuring that the expectations of both the buyer and the seller are met. the sellers employees providing the service may leave as they know they are delivering on a time limited agreement). This can create uncertainty and wasted effort in all of the subsequent phases. 10 Divesting in the downstream oil and gas industry A current market view and a guide for sell-side activities . or ► Ensures cost coverage for the seller. business. depreciation and amortization) ► Working capital ► Individual asset values Failure to engage with the appropriate expertise both internally and externally. Lack of clarity and resolution for pensions. Failure to assess and manage the consequences of the divestment on the cost and organizational structure of the retained business. Tactically the seller needs to decide whether he wants to price the TSAs at a level which either: ► Encourages the buyer to migrate off the agreement quickly. buyers will factor a worst-case scenario into their valuation of the business. If this approach is not acceptable to the buyer. Not having researched potential buyers. In the absence of information.

com +1 713 750 1395 Sanjeev Gupta Partner.gupta@sg. Transaction Advisory Services dfairhurst@uk.com +44 (0)20 7951 7009 David Fairhurst Partner.mccarter@ey.com +44 (0)20 7951 4516 Jon McCarter Partner.ey.Downstream divestment contacts Andy Brogan Global Oil & Gas Transaction Advisory Leader abrogan@uk.ey.ey.com +65 6309 8688 Divesting in the downstream oil and gas industry A current market view and a guide for sell-side activities 11 . Transaction Advisory Services jon. Transaction Advisory Services sanjeev-a.

Ernst & Young capabilities Ernst & Young has a long track record of assisting clients to achieve a smooth exit from non-core businesses within the oil and gas sector. pensions. downstream and oil field services sectors. IT. ► Our broad range of service offerings across the sales and asset separation processes. Ernst & Young supports clients through the divestment process with subject matter resource and experience across a broad range of issues: Divestment phase Strategic analysis Transaction structuring Sales execution Completion Ernst & Young services ► M&A strategy advisory ► Financial and business modeling ► Valuation ► International tax structuring ► Sell-side M&A lead advisory ► Commercial due diligence — sell-side ► Financial. ► The strength of our client relationships across the sector. IT. operational.500 oil and gas professionals dedicated to serving our clients in over 100 countries. pensions. These factors enable our oil and gas professionals to offer an integrated service for clients. due diligence ► Transaction carve out services ► Debt and capital advisory ► Organization and governance ► Financial. HR. midstream. real estate. operational. with the seamless coordination of both the sales and the asset separation processes. Clients benefit from: ► Our breadth of experience in the oil and gas sector — we have worked with many of the leading and emerging organizations — around the world and across the upstream. real estate. due diligence ► Financial and business modeling ► Finance transformation and consolidation ► Financial reporting and IT advisory ► Financial reporting valuations ► SOX/JSOX/internal controls advisory ► Supply chain optimization ► Statutory audit and reporting ► Tax structuring ► Tax compliance and advisory ► Transaction carve out and integration services ► Transaction effectiveness services ► Internal audit ► Risk advisory ► Supply chain and tax efficiency ► Shared services planning ► Performance management ► IT effectiveness ► Cost reduction ► Dispute advisory Carve out planning Carve out implementation Post ”go live” support 12 Divesting in the downstream oil and gas industry A current market view and a guide for sell-side activities . HR. ► Our geographic coverage — Ernst & Young has over 7.

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It’s how Ernst & Young makes a difference. Ernst & Young’s Global Oil & Gas Center brings together a worldwide team of professionals to help you achieve your potential — a team with deep technical experience in providing assurance. It is not intended to be a substitute for detailed research or the exercise of professional judgment. does not provide services to clients. . On any specific matter.ey. Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited.com Jeff Dowling Oceania +61 8 9429 2229 jeff. We make a difference by helping our people. please visit www. All Rights Reserved. India and Africa (EMEIA) +47 51 70 67 40 john.000 people are united by our shared values and an unwavering commitment to quality. tax.barringer@bh.dowling@au.com Raymond Ng Far East +86 10 5815 3332 raymond. a UK company limited by guarantee.ey.com John Avaldsnes Europe.Ernst & Young Assurance | Tax | Transactions | Advisory Our Global Oil & Gas contacts: Dale Nijoka Global Oil & Gas Leader +1 713 750 1551 dale.ey.nijoka@ey.com Sanjeev Gupta Far East +65 6309 8688 sanjeev-a.ey.com About Ernst & Young’s Global Oil & Gas Center The oil and gas industry is constantly changing. our 144.ng@cn. reference should be made to the appropriate advisor. Worldwide. each of which is a separate legal entity.com David Barringer Middle East +973 3961 7303 david. identify the implications and develop points of view on relevant industry issues.ey. price fluctuations and geopolitical complexities all present significant challenges. Ernst & Young Global Limited. transaction and advisory services. EYG no. This publication contains information in summary form and is therefore intended for general guidance only. The Center works to anticipate market trends. DW0070 In line with Ernst & Young’s commitment to minimize its impact on the environment. Middle East. 1011340. Creative Services Group. our clients and our wider communities achieve their potential.ey.gupta@sg.avaldsnes@no.donadio@ey. this document has been printed on paper with a high recycled content. tax. transaction and advisory services. Ultimately it enables us to help you meet your goals and compete more effectively.indd (UK) 08/2010. © 2010 EYGM Limited. For more information about our organization.com Marcela Donadio Americas +1 713 750 1276 marcela. Neither EYGM Limited nor any other member of the global Ernst & Young organization can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication. Increasing regulatory pressures.com About Ernst & Young Ernst & Young is a global leader in assurance.

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