Wintershall Focused growth. Reinier Zwitserloot Chairman of the Board of Wintershall

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1 Wintershall Focused growth Reinier Zwitserloot Chairman of the Board of Wintershall

2 Disclaimer This presentation contains forward-looking statements under the U.S. Private Securities Litigation Reform Act of These statements are based on current expectations, estimates and projections of BASF management and currently available information. They are not guarantees of future performance, involve certain risks and uncertainties that are difficult to predict and are based upon assumptions as to future events that may not prove to be accurate. Many factors could cause the actual results, performance or achievements of BASF to be materially different from those that may be expressed or implied by such statements. Such factors include those discussed in BASF s Form 20-F filed with the Securities and Exchange Commission. We do not assume any obligation to update the forward-looking statements contained in this presentation. 2

3 1 Wintershall 2 E&P Business 3 Gas Trading Business 3

4 Wintershall core activities Exploration and Production Gas Trading UK DK F B D CZ AU RO BUL Core region OPCO 4

5 Wintershall core team Division Head Reinier Zwitserloot Production Ties Tiessen Exploration Bernhard Schmidt Gas Trading Rainer Seele Finance Karsten Heuchert 5

6 Oil & Gas Production and gas trading Production in million boe Gas Oil 6% CAGR Gas share improved to ~40% International production at 84% 0 6 Gas trading in billion m³ E E WINGAS Wholesale WINGAS 13% CAGR Base load sales to BASF at 18% Sales outside Germany at 38%

7 Oil & Gas Sales and EBIT Sales in billion Euro Gas 14% CAGR Boost from higher gas production / sales YTD turnover up 48% vs. Q1-Q Q1-Q E&P 13% CAGR EBIT in billion Euro 2005 WINGAS EBIT impacted by pricing lag Q1-Q Gas E&P YTD EBIT up 49 % vs. Q1-Q3 2005

8 1 Wintershall 2 E&P Business 3 Gas Trading Business 8

9 General trends in the E&P industry Trends Continuous demand growth ( % p.a. through 2020) Limited opportunities outside OPEC / Russia Increased global competition for resources Reserve replacement the key challenge High exploration and development activity Equipment and manpower constraints Consequences Higher finding, development and production costs Prices will stay above historical levels Growing influence of OPEC / National Oil Companies Partial shift to enhanced recovery and nonconventional resources Growing opportunity for new technologies 9

10 All sizes fit in E&P Over 1,000 E&P companies worldwide, all sizes Very large number of projects, all sizes Large companies forced to focus on big projects Economies of scale not decisive in upstream High degree of outsourcing to service industry, available for all but with growing constraints High level of risk sharing through partnerships Focused approach key to success 10

11 Wintershall E&P Long experience unique partnerships - focus #1 German E&P company, #10 in Europe 75 years of E&P experience on- / offshore We practice Enhanced Oil Recovery (EOR) since the mid 60 s Unique partnership with Gazprom Up- / midstream integration basis for Gas for Europe strategy Selective technology development World class operational excellence Wintershall is the starting point of a world-class hydrocarbon value chain called BASF 11

12 Wintershall E&P competitive position Five year average Wintershall Peers Average* Range Peers Production growth [% p.a.] Production costs [USD/boe] Return on capital [% p.a.]** Finding & Development costs [USD/boe] F&D/Production [USD/boe] Finding rate [%] Reserve replacement [%] Reserve/Production ratio [yrs.] *Peer Group (upstream only): ExxonMobil, Shell, BP, Total, Hydro, BG, Amerada Hess, OMV, Apache, Marathon, Occidental, Talisman, Woodside **(Income before tax + interest on borrowed capital) / average total assets Source: CERA, Herolds, Woodmac, SEC

13 Resources and reserves Resources* (3P) ** (in million boe) SEC Reserves *** (in million boe) 3,000 3,000 YR/Libya Swap 2,000 Achimgaz 2,000 R/P ratio 10 from ,000 Base 1, ,000 0, * As of closing of Yuzhno Russkoye deal ** Sum of proven, probable and possible reserves *** Proven reserves according to SEC guidelines 13

14 Wintershall E&P way forward Continue production growth into next decade - Short term focus on Russian gas projects overall production target: 150+ million boe/a Ensure adequate reserve base in (re)balanced asset portfolio - Continue near field exploration, enhance greenfield activities - Acquire additional brownfield development opportunities (oil) Keep geographic focus, core region concept Evolve from smart follower to one of the leaders in selected technologies LNG optional if sufficiently big remote gasfield is identified 14

15 1 Wintershall 2 E&P Business 3 Gas Trading Business 15

16 General trends in the gas industry Trends Continuous demand growth (2% p.a. through 2020) Power generation demand major uncertainty EU / USA rely increasingly on imports Global LNG growth, limited by liquefaction capacity Increased global gas competition European market liberalization Consequences Cheap gas era is over / growing competition from coal and renewable resources Substantial new infrastructure needed Storage capability increasingly important Convergence of regional prices towards global pricing Long term access to gas: key for growth Local players go European 16

17 Wintershall gas trading Dynamic unique partnership expanding WINGAS # 3 in German market, expanding into Europe Gazprom s partner for Gas for Europe -strategy Large long term supply contracts (2030) Modern, expanding own infrastructure Direct connections to European gas hubs Largest gas storage facility in Europe (Rehden) Partner in Nord Stream* offshore, leader in Nord Stream onshore Born into competition, lean & mean WINGAS is a daughter of two formidable parents, the largest gas holder in the world and the largest gas consumer in Europe 17 * Former project name NEGP

18 WINGAS competitive position Five year average Gas sales growth [% p.a.] WINGAS Peers Average* Range Peers Sales per employee [million /employee] EBIT per employee [million /employee] Return on capital [% p.a.]** Return on sales [% p.a.] *Peer Group: E.ON Ruhrgas, Verbundnetz Gas AG, Gaz de France, Centrica **(Income before tax + interest on borrowed capital) / average total assets Source: Annual Reports, own calculation

19 WINGAS way forward Continue profitable growth above market average in Germany and Europe 2015 WINGAS gas sales target: 40+ billion m³ Reap benefits of market liberalization, minimize cost of regulation Capture logistical optimization through swap potential Complete ongoing East-West transit capacity de-bottlenecking Implement Haidach and Saltfleetby to become # 3 storage company in Europe Target earliest Nord Stream implementation LNG supply only as an option to additional deliveries 19

20 Wintershall Fit for the future in summary Wintershall contributes substantially to BASF Group results and will continue to do so in a challenging business environment through tailored organic growth strategies in both up- and midstream in growth markets focused on Europe s increasing gas import requirements. 20

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