1. 0 Global developments, European Challenges February 1, 2005 Huub Meessen SABIC EuroPetrochemicals B.V. Shaping Success

2. 1 There is no security on this earth, there is only opportunity Douglas MacArthur Chemical industry in Europe is yet again at a cross road

3. 2 1.Competitive pressures in Europe 2.SABIC strategy 1.Competitive pressures in Europe Contents

4. 3 Middle East and Asia determine the global game 2/3 of the global capacity expansions center around the Middle East and Asia Pacific Asian demand growth is approximately half of the global growth ME can supply to Asia and Europe (and lands at lowest cost) Americas and Europe increasingly local for local Europe Asia S. Am. N. Am. ME Global PE demand from 61 mln tons in 2004 to 76 mln tons in 2009

5. 4 Imports will claim market shares of more than 20% in PE by 2009 Share of ME in imports raises from 50% today to over 75% in 2009 Imports will take most of WE market growth Market Share of imports in WE 0% 5% 10% 15% 20% 25% 30% 35% 199819992000200120022003200420052006200720082009 LDPE LLDPE HDPE

6. 5 European Producers need to scrap and very selectively build (1)

7. 6 European Producers need to scrap and very selectively build (2) 50 % of capacity is older than LDPE: 27 yrs HDPE: 20 yrs LLDPE: 10 yrs Average line size development in Europe 0100200300400 LDPE HDPE LLDPE Average line size in kta 50% oldest capacity 50% newest capacity Typical line size for new plant

8. 7 Oil and Naphtha determine WE integrated cost position OPEC can no longer control price within preferred range A paradigm shift in pricing is logical consequence Historical range Medium range Peak values Oil ($/bll) 15 - 25 25 – 45 > 45 AVG PE/PP (EUR/t) 500 - 1000 800 – 13001000 - 1500 Price levels will fluctuate between 800 and 1300 Euro/t Value Chain needs to absorb structural increased price levels (1) 0 200 400 600 800 1000 1200 1400 1600 0204060 Oil price in $/bll Polyolefine price in EUR/ton Historical range Medium range Peak values

9. 8 Injection moulding Extrusion coatingExtrusion PE-film Blow moulding Extrusion Pipes Value Chain needs to absorb structural increased price levels (2) WE consumers will be faced with only 10 euro higher cost per year when PE prices become 300 euro/ton higher West-European consumers use approximately 35 kg of PE per capita per year PE is serving a wide variety of markets, adding a lot of value at low cost per consumer

10. 9 1.Competitive pressures in Europe 2.SABIC strategy 1.Competitive pressures in Europe Contents

11. 10 Become one of the top 5 global petrochemical companies in 2015 Increase sales to 30 billion USD by 2015 Polyolefins are major contributor to turn-over Grow faster in polyolefins than the market Leverage SABIC s unique cost position in KSA SABIC global ambition

12. 11 Within our global strategy of expansion and the European context, we will: Complete Best in Class manufacturing sites Build on formidable cost position in Middle East Use SABIC s unique complementary strengths SABIC strategy for Europe: think global, act local SABICs new European Head Office is under construction

13. 12 1. Expansion of cracker in Geleen 2. World-scale LDPE tubular line based on SABTEC technology 3. World-scale PP plant 4. State-of-the-art bimodal HDPE plant SABIC EPC already has excellent cost position. EurOPE1: European Olefins and Polyolefins Expansion

14. 13 SABIC EPC ranking after EurOPE1 the 2nd largest seller in Europe the largest average line size the largest capacity per site 0 500 1.000 1.500 2.000 after EurOPE1 SABIC EPC Borealis Repsol Dow BP Basell Total PC Exxon Mobil Polimeri Polyolefin capacities per site ktons per site 0 50 100 150 200 250 after EurOPE1 Exxon Mobil SABIC EPC Dow BP Basell Borealis Total PC Polimeri Repsol Average polyolefin line size ktons per line Mln tons per year 0 1 2 3 4 5 6 Basell after EurOPE1 Borealis SABIC EPC BP Total PC Dow Polimeri Exxon Mobil Repsol PEPP European polyolefin sales EurOPE1 will bring SABIC EPC to undisputed cost leadership

15. 14 SABICs coverage of Europe Manufacturing center Focal area European assets Vast Gas reserves

16. 15 Middle East and Asia determine the global game By 2009 imports will take more than 20% of the WE market; approx. 75% will come from the ME Producers need to scrap and very selectively build in Europe tremendous amount of scrap potential cost leaders annually beat inflation The Value Chain needs to adapt to structural increased price levels it s not expected that oil prices will fall back to historical range SABIC is ready for the future ! Conclusions

17. 16 Sharing our futures Thank you