Africa the potential for growth Ian Taylor President & CEO, Vitol March 2015
The oil price a long term view 2010 to date - $94 2000s - $49.6 1980s - $25.8 1990s - $18.3 1970s $10.5 1
Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Demand and supply likely to balance in H2/15 but overhang of H1 build of 300 mln bbls in stocks will continue to pressure prices Global Oil Supply / Demand Developments (Mln b/d) 96.0 95.0 Demand Supply 94.0 93.0 92.0 91.0 90.0 2
The Gambia Liberia Tog Benin Niger Chad South Africa Lesotho Malawi Djibouti 0 5 10 15 20 25 30 35 Low prices are a challenge for oil producing country revenues Algeria: -$8 bn Lost revenues at $60/bbl vs $100/bbl (USD Bn, 2014 volumes) Nigeria Angola Algeria Libya Nigeria: -$33 bn Angola: -$24 bn Congo Gabon S Sudan Cameroon Egpyt Ghana 3
Low oil prices offer the opportunity to invest for future development Subsidies prevalent across the continent until recently $50 bn pa of oil subsidies in Africa in 2013 Economic activity impacted as government budget constraints often hit supply availability Animal testing A chance to follow Asia: - Funds diverted to education and infrastructure - Driving economic development - Means testing to protect the poorest >4% GDP <1% GDP 1-4% GDP Taxes Neutral Emerging diseases (flu pandemic) 4
Range of patterns of consumption - opportunity for Africa to grow, efficiently Oil Use Per Capita (Litres) 800 700 600 Egypt South Africa Algeria 500 400 300 200 Congo (DRC) Morocco China (2000) Tunisia Angola China (2014) 100 0 Nigeria Other Sub-Sahara Africa GDP Per Capita (USD) 5
African demand growth will continue in the short term, driven by transport sector. Development will be impacted by a range of factors Africa Oil Demand (Mln b/d) 4.5 4.0 3.5 3.0 2.5 2.0 Economics Infrastructure investment Industrialisation Urbanisation Mechanisation Fuel availability Personal income growth End user prices 1.5 1.0 0.5 0.0 2010 2015 2020 Fuel Oil Gasoil Jet-Kero Gasoline LPG 6
Lack of immediate additional refinery capacity means 2.2 mln bbl/day increase in demand has to be met by imports Africa product balance (mln b/d) 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Import Requirement Refinery Output 2000 2005 2010 2015 2020 Opportunity to benefit from output of existing and new refineries in AG, India and USGC 7
West Africa will lead demand growth satisfying demand and sustaining growth will require investment in energy infrastructure Regional Gasoil & Gasoline Demand Growth (Mln b/d)2015-20 300 250 200 Gasoline Gasoil Import facilities Pipelines Storage Service stations 150 100 50 0 S Africa E Africa W Africa N Africa 8
The Gambia Guinea Bissau Sierra Leone Liberia Togo Benin Algeria Niger Equatorial Guinea Gabon Rep. of The Congo Libya Chad Democratic Of The Congo African Republic Republic Central (Zaire) Zambia Lesotho Zimbabwe Swaziland Rwanda Burundi Sudan Malawi Tanzania Eritrea Ethiopia Djibouti Somalia Vitol is investing in African growth through energy distribution Morocco Tunisia Mali Cape Verde Senegal Burkina Faso Guinea Nigeria Cote d Ivoire Ghana Cameroon Uganda Kenya Shell licensee in 16 countries 1431retail sites >2000 employees 100+ service stations opened in 2013 ~890,000 m 3 storage Present in Angola, Cameroon, Cape Verde, Ghana, Ivory Coast, Kenya, Mauritius, Morocco, Nigeria, Senegal and Uganda Angola Madagascar Vivo Energy Operating Unit Vitol Country Presence VTTI Terminals* Namibia Botswana South Africa Mozambique Mauritius Navgas, Lagos, Nigeria 16,000 m 3 of LPG storage the largest in Africa Mombasa, Kenya 111,000 m 3 of modern storage facilities in East Africa 9
Vitol is investing in African growth through the power sector Cenpower Plant, Tema, Ghana, 359MW Vitol is helping address Ghana s immediate electricity supply problems Long-term security of supply Commitment to deliver 4m bbls pa of liquid fuel to the plant, for at least 20 years Construction of required infrastructure Over 70,000m3 of storage capacity for the project being constructed Capital investment and corporate guarantees including a long-term performance bond, enabled project to proceed, within a tight timeframe. Generation to commence 2017 Other opportunities in Africa currently under consideration OCTP development, Ghana Working with GNPC and ENI to develop offshore oil and gas fields. The project will deliver: Secure gas supply to Ghana s thermal power sector until at least 2036 Enable the construction of 700MW of new generation capacity Project is largest single Foreign Direct Investment project in Ghana since Independence His Excellency President Mahama: We are harnessing Ghana s natural resources to power Ghana s future... The Sankofa development will provide the reliable energy source needed to accelerate the economic growth of our country. 10
This Presentation is confidential and has been prepared by Vitol SA solely for information purposes and is subject to amendment, revision and updating in any way without notice or liability to any party. This presentation does not qualify as investment research or advice and is not intended to be relied upon in any way. This presentation contains some forward-looking numbers and statements which involve uncertainties and assumptions and actual results and developments may differ materially from those expressed or implied by the numbers and statements. No representation or warranty, express or implied, is made as to the fairness, accuracy or completeness of the information or opinions contained herein, which has not been independently verified. Vitol S.A. is not responsible for the accuracy of data collected from external sources and will not be held liable for any errors or omissions whatsoever. This presentation does not constitute an offer or solicitation to buy or sell any investment and nothing in the presentation should be regarded as investment advice or as a recommendation to enter into any transaction. Any persons acting on or relying on information contained in this report do so solely at their own risk. To the fullest extent permitted by law, no Vitol group company accepts any liability whatsoever (including in negligence) for any direct or consequential loss arising from any use of or reliance on material contained in the presentation. 11