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Discussion of Key Policy Initiatives in Nigerian Energy Sector

Discussion of Key Policy Initiatives in Nigerian Energy Sector. 2 nd India-Africa Hydrocarbons Conference New Delhi, India. December 7, 2009 “NSE Quoted Company of the Year” 2003, 2004, 2007 *Thisday Oil & Gas Company of the Year 2008. Private & Confidential.

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Discussion of Key Policy Initiatives in Nigerian Energy Sector

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  1. Discussion of Key Policy Initiatives in Nigerian Energy Sector 2nd India-Africa Hydrocarbons Conference New Delhi, India December 7, 2009 “NSE Quoted Company of the Year” 2003, 2004, 2007 *Thisday Oil & Gas Company of the Year 2008 Private & Confidential. No part of this presentation can be discussed or shared without the written permission of the management of Oando plc

  2. Contents • Company Overview • Key Energy Policy and Regulatory Initiatives in Nigeria • Petroleum Industry Bill • Local Content Policy • Nigerian Gas Master Plan • Deregulation of Downstream Sector

  3. COMPANY OVERVIEW

  4. Refining & Terminals Gas & Power Energy Services Exploration & Production Marketing Supply and Trading • Nigeria’s leading oil retailer with 18% market share • Operations in Nigeria, Togo, Ghana and Benin • Largest indigenous supply and trading player in the sub-Saharan region • Over 1 million MT of white products imported into Nigeria in 2008 • Taken key steps towards the development of a refinery in Lekki, Lagos • Consists of Gaslink Nigeria Limited, Akute Power and East Horizon Gas Company Limited • Rapidly expanding business • Primary assets are located in Nigeria • Leading indigenous drilling contractor in Nigeria with special interest in swamp and shallow offshore operations • Revenue 1,456.9 • EBITDA 62.3 • Net Profit 27.5 • Cash 62.2 • Debt 100.1 • 518 retail outlets • Six terminals (120,000 MT) • 3 Aviation fuel depots • Two lube blending plants (55m litres / annum) • Ten LPG filling plants • 1,066.3 • 13.3 • 7.6 • 39.9 • 219.5 • Trading desks in Nigeria, the UK and Singapore • 54.8 • 5.1 • 3.0 • 1.2 • 46.5 • 124 km gas pipeline in the East of Nigeria spanning Akwa Ibom and Cross River states • 100 km gas distribution pipeline in Lagos • Akute Power Plant • 34.5 • (6.9) • (7.1) • 1.2 • 64.7 • 5 rigs • Drill bits and engineering services. • Total fluids management. • 106.2 • 57.8 • 22.5 • 11.0 • - • OPL 236 204Bcf • OPL 278 11.0 mmbbls • OPL 282 6.5 mmbbls • OML 56 3.8 mmbbls • OML 125 5.7 mmblbs • OML 134 10.9 mmbbls • OML 90 4.2 mmbbls • n/a • n/a • n/a • n/a • n/a • Purchased 450 hectares of land • Completed pre-feasibility studies • FEED for refined products tank farm commenced in 1Q 09 Oando: Nigeria’s leading indigenous integrated energy solutions company Group Operations Downstream Division Midstream Division Upstream Division Description 2008 Financials (US$m) Key assets 2008 Avg NGN/USD exchange rate: N118.5/USD used for convenience of translation 2008 Y/E NGN/USD exchange rate: N132.6/USD used for convenience of translation Note: Individual division financials do not add up to Group figures due to intra-group transactions and other smaller companies included in consolidation

  5. Financial and Operational Overview Overview Select balance sheet items • Ideally positioned as one of Africa’s leading indigenous integrated oil and gas players • Oando Plc (Oando) turnover increased by 79% in 2008 • Due mainly to an increase in Marketing and Trading activity and upstream production • Oando was the best performing stock over the last two years in its peer group • Outperformed Nigerian Stock exchange by 97% • Continued focus on upstream division expected to increase profitability and returns considerably Positive momentum over last three months Share price: N93.99 ($0.63) Market Cap: US$562mm EV: US$1.5Bn Share price performance Select income statement items +18% - 26% - 26% - 56% - 68% Operating profit is defined as income before tax and interest expense

  6. KEY POLICY INITIATIVES

  7. Key Policy Initiatives • Petroleum Industry Bill • Harmonize Petroleum Industry laws and regulation • Create new National Oil Company • Reform Oil and Gas Sector • Formalize Local Content Policy • Nigerian Local Content Program • Improves participation of local companies in oil and gas services sector • 70% of work to be performed within Nigeria • Nigerian Gas Master Plan • Integrated development of natural gas infrastructure and markets • Focus on gas gathering, large scale processing facilities, transportation pipelines, gas distribution, markets and pricing • Nigerian Downstream Deregulation • Removal of price subsidies on key petroleum products • Promotion of market competition Impact is Significant Growth Opportunities for Private Sector

  8. Thank You

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