1. 8th Africa Oil and Gas, Trade and Finance Conference Marrakech, 26-30 April 2004 APICORP’s Experience & Outlook Nicolas Thévenot Manager – Project Finance North Africa and the Mediterranean Arab Petroleum Investments Corporation www.apicorp-arabia.com NOT AN OFFICIAL UNCTAD RECORD

2. 1 Outline of presentation  Part I: Experience  APICORP’s profile  What changes have affected our activity…  … and our performance?  Part II: Outlook  Capital investment requirements  Financing challenges  APICORP’s responses  Conclusions

3. 2 APICORP’s profile  Mandate  Status  Specialization  Competencies  Capital  Assets   Direct investment and financing of petroleum projects in the Arab world  Government-owned* but commercially oriented  oil, gas, petrochemicals and power  Project finance, trade finance, equity investments, advisory  US$550 million  US$2.1 billion 2/3 project-oriented APICORPs shareholders are Algeria, Bahrain, Egypt, Iraq, Kuwait, Libya, Qatar, Saudi Arabia, Syria and the UAE

4. 3 What changes have affected our activity…  Shifting role of governments and greater participation of private sector  Rise of new gas producers/exporters (Qatar, Egypt, etc.)  New structures and trends in the downstream industry RESULTING IN RESULTING IN  11-fold increase in our assets since inception  A boost in project finance  Expansion of trade finance  Participation in the financing of power generation  Development of financial advisory

5. 4 … and our performance?  increasing volatility of oil prices  Declining world interest rates Source: APICORP

6. 5 Looking Forward  Arab oil is expected to gain a bigger share of world output  Arab gas will continue to be supported by downstream industries and new export schemes Source: OAPEC, OPEC and IEA

7. 6 Future investment opportunities  The region will require more investments than in the past  US$24 bn/year for the hydrocarbon sector  US$6bn/year for power  Governments’ role will become less  More Concessions, PSAs and JVs upstream  Increasing JVs and direct investments downstream 5-year oil, gas petrochemicals and power investments: US$ 150 bn Source: APICORP

8. 7 Financing requirements  Provided oil prices are high enough, equity will continue to be self-financed  Traditional sources (local & regional banks; international banks, multilaterals & ECAs) may not be sufficient to meet debt requirements  Additional sources will involve  Islamic institutions financing  Further development of capital markets (stocks and bonds) 5-year Equity & Debt Requirements Source: APICORP

9. 8 APICORP’s responses To help meet increasing investment financing we have reformulated our strategy Expand the range of our financial services  Loans  Direct equity  Financial advisory Support financing of the private sector

10. 9 Adding to the momentum in North Africa  The oil and gas dimension of North Africa is being strengthened by  The i mplementation of new policy measures aimed at attracting investments and private capital in the energy sector  The revitalization of the Barcelona Process and the adoption of specific measures to fund key energy projects  An increasing role and involvement of the EIB (through FEMIP*) and European ECAs in the southern flank of the Mediterranean  In this context, we are increasing our commitment to the region and adding to the momentum * FEMIP: EIB ’ s Facility for Euro-Mediterranean Investment and Partnership

11. 10 Conclusions The key challenge facing us is heightened by larger hydrocarbon investment requirements than in the past The key challenge facing us is heightened by larger hydrocarbon investment requirements than in the past Financing will be more critical as the power sector is factored in and the burden shifted to the private sector Financing will be more critical as the power sector is factored in and the burden shifted to the private sector This challenge is more acute in North Africa where a boost in upstream activities will need more equity funding This challenge is more acute in North Africa where a boost in upstream activities will need more equity funding We believe our experience and expertise make us the partner of choice for the development of the Arab oil, gas and downstream industries We believe our experience and expertise make us the partner of choice for the development of the Arab oil, gas and downstream industries