11 th Africa Oil & Gas and Trade & Finance Conference and Exhibition

1. NOT AN OFFICIAL UNCTAD RECORD 11th Africa Oil & Gas and Trade & Finance Conference and Exhibition 23rd – 25th May, 2007 Nairobi, Kenya

2. NOT AN OFFICIAL UNCTAD RECORD Financing Oil and Gas in Africa: Past Experience and Future Oppotunities Hartwig C. Schuen Executive Director Commodity Finance WestLB Capital Markets

3. Introduction

4. Introduction Agenda • Introduction • Oil and Gas in Africa • Financing • WestLB • Conclusion

5. Introduction Conclusion • Because… • Africa’s oil and gas sector and • national and international trade patterns of hydrocarbons • have changed significantly • …African oil and gas companies will • require different forms of financing then in the past

6. Oil and Gas in Africa

7. Oil and Gas in Africa World Crude Oil Reserves 1995: 1,027.0 bln bbl

8. Oil and Gas in Africa World Crude Oil Reserves 1995: 1,194.1 bln bbl

9. Oil and Gas in Africa World Crude Oil Reserves: + 16% bln bbl

10. Oil and Gas in Africa Africa’s Crude Oil Reserves 1995: 72.0 bln bbl

11. Oil and Gas in Africa Africa’s Crude Oil Reserves 2005: 113.8 bln bbl

12. Oil and Gas in Africa Africa’s Crude Oil Reserves: +58% bln bbl

13. Oil and Gas in Africa Africa’s Crude Oil Reserves: +58% • Africa is the world‘s second fastest growing region after Europe & Eurasia which is mainly driven by new discoveries in the Caspian area. • Africa‘s growth driven by • new discoveries in Angola, Libya, Nigeria and • newcomers: Chad, Equatorial Guinea and Sudan

14. Oil and Gas in Africa Africa’s Crude Oil Reserves: +58%

15. Oil and Gas in Africa World Oil Production 1995: 68.1 mln bopd

16. Oil and Gas in Africa World Oil Production 2005: 81.1 mln bopd

17. Oil and Gas in Africa World Oil Production: + 19% ´000 bopd

18. Oil and Gas in Africa African Oil Production 1995: 7.1 mln bopd

19. Oil and Gas in Africa African Oil Production 2005: 9.8 mln bopd

20. Oil and Gas in Africa African Oil Production: + 38% ´000 bopd

21. Oil and Gas in Africa African Oil Production: + 38% • African production growth unrivalled by any other region • Production grew twice as much as world average • Growth mainly driven by • Algeria, Angola, Nigeria and • Newcomers: Chad, Equatorial Guinea and Sudan • More oil producing countries • Production more evenly spread across countries

22. Oil and Gas in Africa African Oil Production: + 38%

23. Oil and Gas in Africa World Natural Gas Reserves 1995: 143.43 tln m³

24. Oil and Gas in Africa World Natural Gas Reserves 2005: 179.09 tln m³

25. Oil and Gas in Africa World Natural Gas Production: + 25% bln m³

26. Oil and Gas in Africa Africa’s Natural Gas Reserves 1995: 9.93 tln m³

27. Oil and Gas in Africa Africa’s Natural Gas Reserves 2005: 14.39 tln m³

28. Oil and Gas in Africa Africa’s Natural Gas Reserves: + 45% tln m³ tln m³

29. Oil and Gas in Africa Africa’s Natural Gas Reserves: + 45% • Africa is the region with the second highest growth rate in gas reserves after the Middle East • Growth mainly driven by Egypt and Nigeria • 94% of reserves still concentrated in Algeria, Egypt, Libya and Nigeria

30. Oil and Gas in Africa World Natural Gas Production 1995: 2,142 bln m³

31. Oil and Gas in Africa World Natural Gas Production 2005: 2,763 bln m³

32. Oil and Gas in Africa African Natural Gas Production: + 96% bln m³

33. Oil and Gas in Africa African Natural Gas Production: + 96% • African gas production grew at the same rate as the Middle East‘s • Growth mainly driven by Egypt, Libya and Nigeria • Less concentration in Algeria (1995: 70%; 2005: 54%) • Nigeria‘s and Egypt‘s shares increased • 96% of production concentrated on Algeria, Egypt, Libya and Nigeria

34. Oil and Gas in Africa Outlook: Crude Oil • Large producers will grow: e.g. Angola, Nigeria, Libya • More oil producers: e.g. Mauritania, East African countries • Continued change in trading patterns: more oil to Asia, in particular China • Relatively high crude oil prices • More intensive competition for resources

35. Oil and Gas in Africa Outlook: Natural Gas • Existing large producers will continue to dominate production on the African continent • Possibly new producers: e.g. Namibia • Relatively high natural gas prices • More intensive competition for resources

36. Financing

37. Financing Past Experience • Past experience for banks is overwhelmingly positive • Few material defaults • Good track record: e.g. Sonangol • Almost entire range of bank debt financing products already offered • Pre-export finance (e.g. Angola) • Reserve based lending (e.g. Nigeria) • Project finance (e.g. Nigeria, Egypt) • Asset backed securitisation (e.g. Egypt) • Local receivables finance (e.g. Ghana) • Bank activities focused on a small number of countries (i.e. Algeria, Egypt, Angola, Nigeria, Ghana, etc.)

38. Financing Recent Developments • Established borrowers benefit from • high level of liquidity in the banking markets and • their good track record • Higher loan amounts • Looser structure providing more commercial flexibility to borrowers • Longer tenors enabling borrowers to adequately finance longer term projects • Lower risk margins • More competition from non-traditional market participants

39. Financing Outlook • Established borrowers will continue to benefit from good market conditions, • Will improve or obtain credit ratings which will give them (better) access to capital markets (corporate loans, bond issues) • New borrowers will need to tap the banking markets to • finance their projects and • to establish positive track records • Pre-export financing for new borrowers • Domestic and local receivables financing • Continued competition from non-traditional market participants

40. Financing Challenges • Banks will put more focus on • good governance and transparency issues and • environmental and social sustainability issues • audited financials • For banks: compete against on-traditional lenders, ma • For borrowers: detach financial from commercial issues (pre-payments) • Maintain a prudent approach to lending (healthy competition)

41. WestLB

42. WestLB AG is a European commercial bank with firm roots in North Rhine-Westphalia,its home region, and Germany It has a close business partnership with the savings banks in North Rhine-Westphalia and Brandenburg, with more than 11.5 million customers WestLB is the financial partner for major corporations and medium-sized companies, institutional and public-sector clients WestLB is a leading provider of specialist services, including lending, structured finance,capital market and private equity products, private banking, asset management,transaction services and real estate finance WestLB AG Who is WestLB AG?

43. Positioning as a profitable European commercial bank with headquarters in North Rhine-Westphalia WestLB ensures capital market expertise and access to the international marketsfor savings banks and medium-sized companies It provides an efficient range of innovative financial products of international standingfor its domestic and international clients The focus of its international activities is on Europe WestLB is represented in all major financial centres worldwide,with branches in 26 countries and a dense sales network in Germany and Europe WestLB AG European Commercial Bank

44. As a member of the Sparkassen-Finanzgruppe, WestLB cooperates closely with its partner institutions WestLB is the central institution for the savings banks in North Rhine-Westphalia and Brandenburg WestLB is central service provider for the savings banks, specially as a strong partner of the savings banks for innovative investments- and financing products as “the window on the world” with international capital market expertise It ensures the timely development and provision of competitive products tailored to the needs of the savings banks and their clients WestLB AG Strong Financial Partner in the Savings Banks Alliance

45. WestLB AG Expansion in Selected Markets Worldwide • WestLB with its 28 branches has established the largest number of international locations among all former Landesbanken • WestLB generates more than 50% of its income in international business • In its core areas WestLB is among world leaders

46. April 2006 Vodafone Japan JPY 1,280,000,000,000 Senior Secured Bridge Facility Mandated Lead Arranger Australia Oct 2006 Rivercity Motorway A$1.839bn Senior Loan Note Facility Joint Lead Arrangers and Underwriters US April 2006 LS Power Equity Partners USD 1,240,000,000 Acquisition of Duke Energy North America Generation Portfolio M&A and Financial Advisor Arranger & Bookrunner WestLB AG Successful Re-Orientation as “Premier Structured Finance House“ • Focusing on high-growth sectors in which WestLB has acquired particular expertise • WestLB Core SectorsMetals & Mining, Media, Entertainment & Telecoms, Diversified Industries/Leveraged Finance, Transportation, Infrastructure, Hospitality, Energy • Demand for the product know-how of the Bank is particularly strong in the above sectors. • WestLB one of international Top Players • in the following sectors Energy Telecom Infrastructure

47. In 2006, WestLB financed a total of 34 deals Total volume amounted to USD 4 billion Hence, WestLB is the most importantGerman project finance bank Internationally, WestLB is one of Top 10 banks worldwide Objective for the next three years: Top 5 Source: Dealogic, Global Project Finance Review, January 24, 2007 WestLB AG Germany‘s Leading Bank for International Project Finance

48. WestLB AG WestLB One of TOP 5 Western Banks for Islamic Finance • Aston Martin: WestLB was Mandated Lead Arranger for aquasi-debt financing (volume: GBP 225 million) in connectionwith a Leveraged Buy-Out (LBO) for the acquisitionof the car maker • Financing in conformity with Sharia principles realizedfor the acquisition syndicate • This transaction is the first LBO in the UK to be exclusively realized in accordancewith Islamic legal provisions • WestLB is one of the Top 5 banks worldwide capable of providing such financingin the growth market of Islamic Finance within such a short period of time

49. WestLB AG Shareholder structure (Aa1/AA-/AAA) Düsseldorf State of NRW (Aa1/AA-/AAA) Sparkassenand Giro Association of Westphalia-Lippe(Aa3/NR/NR) Münster Sparkassen and Giro Association of theRhineland (NR) Düsseldorf 25.154% 31.175% 17.469% 25.154% Düsseldorf, Münster Moody´s A1 S&P A- DBRS A (high) Balance of 0.524% each is held by the Regional Associationof the Rhineland and by the Regional Association of Westphalia-Lippe (indirectly held by the Westfälisch-Lippische Vermögensverwaltungsgesellschaft mbH, Münster)As of March, 2007

50. Long-Term Ratings of Selected Credit Institutions WestLB AG Rating