1. SOCAR Trading All pages strictly confidential and not for public use Markets for Azeri Crude HEG Commodity Trading Major– Friday, 11 th November 2011 Ludwig Hachfeld – Project Director

2. All pages strictly confidential and not for public use 1 SOCAR IS THE STATE OIL COMPANY OF AZERBAIJAN Azerbaijan – location, history and economy 1 Source: SOCAR Azerbaijan Iran Turkey Russia Georgia Armenia Turkmenistan Kazakhstan Independent republic  Independence - 1991 from Soviet Union  Territory - 86.6 thousand km 2  Population - 8.7m  Capital - Baku Oil producing country  First industrial well - Bibiheybat 1846-1847  1890-1900 – 50% of world supply  1994 - Contract of the Century on ACG fields  Current production – over 1m barrels per day Stability and pro-business reform  Government – Presidential Republic (Ilham Aliyev)  UN Transparency – Public Service Award 2007  IFC Doing Business - top regulatory reformer 2009  WEF Competitiveness – largest improvement ever 2010 Fast economic development  Currency – Manat stable against USD  GDP – ca. US$55bn and US$10,000 PPP per capita  GDP growth – 20-30% pa 2005-2007 and 5% in 2010  Non-oil sector - 55% of GDP growing 7% pa

3. All pages strictly confidential and not for public use 2 READY FOR FURTHER DEVELOPMENT Azerbaijan economic and social indicators 2 Sources: Statistical Office Azerbaijan, SOFAZ GDP growth GDP diversification State Oil Fund Assets

4. All pages strictly confidential and not for public use 3 AZERBAIJAN UPSTREAM CONSORTIUM Azerbaijan and SOCAR legacy 3 Sources: SOCAR, BP *COP: Chirag Oil Project Since 1993, Azerbaijan and SOCAR have created a strong track record cooperating with international oil majors in upstream consortia.  Contract of the Century – signed on 20 September 1994 creating the AIOC consortium for the development and production sharing of ACG  AIOC – consortium investing >$15bn to develop ACG  ACG – oilfields located some 120km off the coast of Azerbaijan over 430 km 2 with >7bn bbl (1bn ton) in recoverable reserves and producing 850,000 bpd  BTC –1m bpd capacity crude export pipeline from Baku to Ceyhan via Tbilisi in Georgia (1,768 km), built over 2003-2005 after an investment of $4bn  SOFAZ – State Oil Fund of Azerbaijan established in 1999 to manage the Republic’s share of PSA receipts, amounting to $18bn in total assets by mid- 2010  SOCAR – State Oil Company of Azerbaijan Republic, incorporated in 1993 to manage all oil and gas assets and activities on the part of the Republic Novorossiysk Supsa Baku Ceyhan AIOC consortiumBTC and other pipelines BTC (2005) Baku Supsa (1999) Baku Novorossiysk (pre-1993) Azeri QualityACG production profile CeyhanSupsa API36.634.8 Sulphur, wt%0.15 TAN, mg KOH/g0.310.26 Vanadium, ppm< 1< 2.0 *

5. All pages strictly confidential and not for public use 4 SOCAR HANDLES 75-80% OF AZERBAIJAN’S PRODUCTION 4 Source: SOCAR *FOB Other: Supsa, Novorossiysk 2010 Crude Entitlement Million MT 44 5152

6. All pages strictly confidential and not for public use 5 AZERBAIJAN: EXPORTS STILL INCREASING Export routes and volumes 5 Source: SOCAR

7. All pages strictly confidential and not for public use 6 MEDITERRANEAN IS AZERI NATURAL MARKET Azerbaijan main oil export destinations from 2008 to 2011 6 Sources: SOCAR, BTC, press sources and SOCAR Trading estimates, BP

8. All pages strictly confidential and not for public use 7 System crude SYSTEM BARREL: NOW GROWING THROUGH CONSOLIDATION SOCAR Trading – system crude marketing 2008-2010 7 Source: SOCAR Trading Consolidation Customers Markets M MT

9. All pages strictly confidential and not for public use 8 RECENT INTERNATIONAL EVENTS BOOST AZERI PRICES Azeri premium VS Es Sider OSP 8 Sources: SOCAR, Reuter, press sources and SOCAR Trading estimates

10. All pages strictly confidential and not for public use 9 SOCAR CONTINUES TO DEVELOP AND EXPAND INTERNATIONALLY SOCAR – key assets 9 Source: SOCAR Turkey downstream  Petkim petrochemical factory – 2008  Refinery - under development Ukraine downstream Retail network - 2010 Azerbaijan upstream  Shah-Deniz gas – 2006  ACG Deepwater oil – 2008  Umit gas discovery – 2010 Azerbaijan downstream  Retail network development  Gas distribution – 2009  Refining and petrochemicals complex - under development Georgia mid- and downstream  Supsa crude pipeline – 1999  Kulevi product terminal - 2008  Retail station network -2008  Gas distribution - 2008 SOCAR HQ - Baku BTC and other pipelines Kulevi Terminal - Georgia Oil Refinery - Baku Petkim plant - TurkeySOCAR station - Georgia Romania downstream retail network - 2010 BTC pipeline - 2005

11. All pages strictly confidential and not for public use 10 SOCAR TRADING: ACHIEVEMENTS AND EXPANSION SOCAR Trading - commercial and corporate development 10 Source: SOCAR Trading SOCAR TRADING, established in 2008, is achieving its three corporate objectives:  Market SOCAR system barrel globally: since 2008 <50% volume is sold in Med basin  Develop third party trading: since 2009 >30% of volume and gross margin  Assist strategic development: achieved in 2010 with processing and investment in oil logistics Growth on all three fronts continues in 2011, with increased attention for Asia-Pacific, Africa and the Americas System crude production Key system crude customers Third-party crude Third-party crude under development Product trading Product trading to under development SOCAR Trading offices SOCAR Trading office to be opened Processing contracts Investments in oil logistics

12. All pages strictly confidential and not for public use 11 FUJAIRAH: FIRST TANKS OPERATIONAL THIS YEAR 11 1. First 3 fuel tanks operational – Q4 2011 2. All 6 fuel tanks complete– Mid 2012 3. First 6 distillates tanks – Mid 2012 4. Final 8 distillates tanks – Early 2013 PhaseConstructionTypeTanksTotal m 3 1 2010-2011 Main Infrastructure 3 x38,000 m 3 114,000 Fuel tanks 2 2011-2012 Fuel tanks3 x38,000 m 3 228,000 Distillates tanks 5 x22,000 m 3 340,000 1 x6,000 m 3 346,000 3 2012-2013Distillates tanks 7 x39,000 m 3 621,000 1 x20,000 m 3 641,000 All 2010-201320 Tanks641,000 m 3 Source: SOCAR Trading

13. All pages strictly confidential and not for public use 12 Sources: Korea National Oil Corporation  5 M bbl storage agreement in Yeosu  Vessels handling capacity  Panamax up to VLCC with min vessel PBL(parallel body length) of 105m  Qualities of crude that can be stored  API Gravity: more than or equal to 27  RVP (psi): less than 9.5 (0.67kg/cm2 at 37.8 deg C)  Wax Contents (wt%): less than 9  Viscosity (cst): less than 22 at 20 deg C  Sulfur (wt%): less than 3 Current Storage placesKNOC Facilities Opened in 1998: Underground and aboveground reserve Tank volume: 49.7 MMB YEOSU Partnership with the Korea National Oil Corporation KOREAN STORAGE

14. SOCAR Trading Rue de Villereuse 22 1207 Geneva, Switzerland Tel: +41 (0) 22 562 00 00 Fax: +41 (0) 22 562 00 99 All pages strictly confidential and not for public use Ludwig Hachfeld – Project Director