BROCHURE GENERAL-JUNIO-ING by YPFB Ronda Internacional

General Outline

Opportunities for Oil & Gas Exploration in Bolivia

First International Round of Blocks Promotion Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) invites to all interested companies to invest in Bolivia’s hydrocarbon exploratory and production activities, under modalities of Exploration & Production Contracts and Research Agreements. YPFB estimates that Bolivia has a prospective gas resource potential of over 60 TCF and more than 2.500 MMbbls of prospective oil resources. These amount of resource is distributed in 53,5 MM hectares of our National territory.

Bolivian Hydrocarbons Potential

Natural Gas (TCF)

Oil (MMBbl)(*)

Proved Reserves

9,94

209,81

Probable Reserves

3,71

98,22

Possible Reserves

6,27

4.34

Prospective Resources

2500

(*) Millions of Barrels

SCHEDULE Activity

Study Agreement

Oil Service Contract (E&P Contract)

International Calling Publication

March 04th, 2012.

Sale of the Bidding Conditions Document (DBL)

From June 11th 2012 to August 10th 2012.

and Data Package. Sale of Study Agreements Condition Document (DBCE)

From June 11th 2012 to

the Data Package.

July 06th 2012.

Written Inquiries.

Until July 11th, 2012.

Until August 17th, 2012.

Clarification Meetings.

July 16th 2012 / 15:30.

August 24th 2012 / 15:30.

Publication of DBL amendments or DBCE (if any).

Until July 20th, 2012.

Until August 31st, 2012.

Presentation of “Envelope A” and “Envelope B” for qualification.

September 14th, 2012 / 15:00.

Presentation of the documents for qualification.

July 27th, 2012 / 15:00.

Envelope opening ceremony.

July 27th, 2012 / 15:30.

September 14th, 2012 / 15:30.

Evaluation and selection of Oil Companies.

From July 30th 2012 to

From September 14th 2012

August 03th, 2012.

to September 21th, 2012.

Notification to the Companies about the selection process result.

August 07th, 2012.

September 24th, 2012.

Signing of Contracts

From August 08th, 2012

From October 01 st, 2012

to October 05th, 2012.

to November 30th, 2012.

Submission of proposals conditions

• Independent offer submission for each block. • All companies wishing to participate must include proof of interest purchase of the Condition Documents (E&P Contract and/or Research Agreements), according to the types of agreements to sign. In case offers are presented through a consortium, each member of it must buy the mentioned documents.

Consultations and Clariﬁcation of Terms

Oil Companies Qualiﬁcation

• Any company may access to consultations and clariﬁcations of the conditions Documents through letters addressed to YPFB. All the consultations and clariﬁcations will be answered by YPFB.

All interested companies in participating of the selection process, must submit the following:

• YPFB will notify the companies who have purchased the Condition Documents and sent the intention letters. • Likewise, YPFB will publish on its web page: www.boliviapromocionareas.com the answers to the consultations and clariﬁcations requested by all interested Oil Companies.

Intention Letter Also must comply with: Technical Aspects • All companies must have service and operations experience in oil and gas exploration activities of at least 3 years. In the case of a Consortium, the added years of experience among members should not be less than 6 years. • Companies must prove their professional staff to develop and execute exploratory activities must have at least 10 years of experience, whether they are executive, managerial or technical personnel. Financial Aspects • Equity average of the last three years must be over US$ 20 MM, in order to become a bidder in any block. • Additional Equity average of US$ 10 MM per each additional block of interest.

All companies must render services and operations and they must submit all legal documentation to validate all technical and ﬁnancial requirements.

Type of Contract • Exploration and Exploitation, also known as Risk Service Contract, allows the systematic Exploration of blocks and development and Exploitation of Hydrocarbons. In this case, a Mixed Economy Society (SAM) between YPFB (>= 51% share) and the investing company (=<49% participation) is constituted.

• Research Agreement, it has the purpose to evaluate the Hydrocarbon potential of an block and to identify the corresponding exploitation opportunities which could enable an E&P Contract.

Note: It is not a condition to make a Research Agreement for signing an E&P Contract.

Contents, Data Package, Condition Documents and Assurances E&P Contract

Research Agreement Content

Geological report of the exploratory leads. Determination of the lead Hydrocarbon potential. exploratory activities and investments program Preliminary Plan of the future Exploitation Project and investment. Evaluation of the Project and risk analysis. Production Forecast with expected cash flows. Geological Maps, structural, stratigraphic analysis, production capacity of the potential reservoirs and characteristics. Delimitation proposal of the selected block for the exploration.

Exploration Plan Committed UTEs Estimated Investments Exploratory Activities Schedule

Data Package

Data package price is subject to each available reserved block. Seismic Information Geological Information Well Information Electric Log Seismic Kingdom Project Presentations Brochures Model of the Study Agreement and/or E&P Contract Model of Statute for a Mixed Economy Society

Condition Documents

(US$ 1,000.00) Research Agreement Document (DBCE), contains the following conditions: administrative, technical and economical, evaluation methodology and procedures.

(US$ 2,000.00) Bidding Base Document (DBL), to subscribe E&P Contracts under the provision of services type contains the following conditions: administrative, technical and economical, evaluation methodology and procedures.

Assurances

(US$ 250,000.00) Fulfillment Assurance

(US$ 50,000.00) Assurance of a serious proposal

Research agreement Signing sequence of E&P Contracts

Financial Beneﬁts for the Investment Company

• Signing of the Research Agreement of the block. • Final report of the Research Agreement (No more than a year) • Signing of the E&P Contract (In case of interest of the Oil Company)

From the perspective of incurred costs: Devolution of the investments of the exploration activities, in case of exploratory success, with the same field production. The exploration cost will be passed to the company, applying a discount rate according to the current USA inflation. From the perspective of income: • Incomes according to the percentage share of the Exploitation block < 51%. (E&P Contract).

Blocks Technical Data Geological Provinces - Exploration Acreage

Geological Provinces - Exploration Acreage

Pando 57 1

Geological Provinces Altiplano

Beni Plain Chaco Plain Madre de Dios Basin

Beni

Pantanal Foothill North Subandean South Subandean

La Paz

References Explorations Acreage

Cities

Santa Cruz

Cochabamba 48

Oruro 17

Chuquisaca Potosi 18

79 27 12

Tarija

Total Seismic Line

Seismic Line Length (Km)

99 775 100 000 90 625 73 750 76 500

53 57 20 35 30

735,12 2020,93 334,90 394,12 557,16

Yes Yes Yes

Yes Yes -

Pelicano Huacareta

46 250 453 750

6 11

177,54 219,63

Yes

Yes -

Altiplano

Coipasa Corregidores

515 000 655 000

51 79

1740,46 1917,69

Yes Yes

Madre de Dios Basin

Cobija Manuripi Nueva Esperanza Madre de Dios

333 750 189 375 372 500 500 000

27 8 27 4

962,12 364,03 724,14 178,82

Yes

Yes Yes Yes

Beni Plain

Litoral El Chore

212 500 262 500

31 48

767,82 1016,57

Yes Yes

Geological Provinces

Available Blocks

Area (Has)

Foothills

Cedro Carandaiti La Guardia Ivirza Alegria

Southern Subandean

E&P Contract

Research Agreement

Blocks Technical Data

Oil Seeps Map

Seismic Coverage and Exploratory Wells

as huar Paca Río Río

Neg

Río Man urim i Río Man u pa re

Río Beni cito

Río Heath

Yata Río

idi ad

blo

BENI

Río ic Tu

Río Negro

an iq ui M Río

pa re Río Cha

o ro

Río

co z

Su d n Di Río Sa

M erc

ed es

ablo

ORURO

ya Saba

Río

Ñanc ahua zu

Río

M to

Río

u la

Uyuni

Río Jilc he

ocha

PELICANO

Río Lime ta

Río

Cam

CARANDAITI blay

CHUQUISACA POTOSI

Río At

AGU RIO PAR

pe Para Río

CHUQUISACA

HUACARETA ALEGRIA

TARIJA

Río m Pilco Río

Río

a piz Tu

rija Ta

TARIJA

References

ayo

Río Colo ra do

190

380

Kilometers

Geological Provinces

Producer

Cedro

Carandaiti

Foothills

La Guardia

Ivirza

Alegria

Southern Subandean

Pelicano

Huacareta

Coipasa

Altiplano Corregidores

Cobija

Madre de Dios Basin

Explorations Acreage Seismic Lines Wells 0

190

380

Kilometros

Current State Well Blocks

Manuripi

Nueva Esperanza

Madre de Dios

Litoral

Beni Plain El Chore

Dry Well

Abandoned

Closed Well

Nº Wells

In The Block

Near

In The Block

Near

In The Block

Near

In The Block

2 -

Near

In The Block

Near

In The Block

Near

In The Block

Near

In The Block

Near

In The Block

Near

In The Block

Near

In The Block

Near

In The Block

Near

In The Block

Near

In The Block

Near

In The Block

Near Total Wells

References Cities

Cities Explorations Acreage Seep Lake River

me Río Ber

SANTA CRUZ

COCHABAMBA

c Tu

Río Cienaga

rte

roc Río Mo

Río Barr as

Za po Río

Río

CEDRO LA GUARDIA

Salar de

POTOSI

CORREGIDORES

c po Za

SANTA CRUZ

as Río Vilc

ra nd e

Coipasa COIPASA

Río

Río Quimome

Pa jta

y Pira Río

izq

la s

Río

Ic h ilo

a Río Pesc pani Río Piray

jta Sa

Río

Río Chayanta

Río

pay a

Río Ca in e

Pa ila s

Pai

Río Ayo

COCHABAMBA

Salar de

ORURO

Río

IVIRZA

Río

LITORAL EL CHORE

LA PAZ

Río Paragua

uchi ja m Río Ti Is ib

Río

Río San Mateo

Cu be re Río

Río Ca bito

o Río Zo ng

RIO BE

oa Río Ich

ac hi

rde Ve

blo

Alt

i pacan Río Ya

Río

ore Río Ch

tacaje Río Co

i Río Boop

ic o

Río Ibare

Río Secure

z Pa

ri Mau Río Desaguadero

Río Saj am

Pa San Río

Río Kaka

q ui

Río

rv Ta

Qui ro Co

Undu avi

Río

AL TO

Gu a ra yo s

Río

RIO

BENI Río

Río

LA PAZ

RIO ITENEZ O GUAPORE

Río San Luis

Río

e atr Yu Río Sa n Pa

artin

Río

lo pu Ra

M San

Río

ma Yacu

Río

PANDO

aya eshu

NUEVA ESPERANZA

Río

RIO BENI

Gen Río

MADRE DE DIOS

MANURIPI Río Manuripi

Gran de

COBIJA

Río Cu riche

RIO

PANDO

Río Tahuamanu

ORE

M AM RIO

RIO ACR

Río Blanc o

RIO MAD ERA

RIO

Río Chip ama nu

Evaluation of Proposals The submitted proposals will be evaluated by YPFB based on the following considerations:

Qualiﬁcation criteria

E&P Contract

Commited Exploration Program, equal or higher to the one deﬁned by YPFB in UTEs

50%

Increase of the participation of YPFB > to 51% of a Mixed Economy Society (SAM)

25%

Number of requested Exploratory blocks in this choice, under Reserch Agreement type

10%

Direct Participation of YPFB

10%

Technical and Financial company’s Capacity.

Working Unit Exploration (UTE), is the Bolivian nomenclature that systematizes the duties of the Exploration Activities (geophysics, magnetometry, gravimetry, drilling of exploratory Wells and other exploratory activities) and which must be performed by the investing company in the different Exploration phases. Parameters of UTEs Exploratory Activities

UTE Equivalent

Seismic: Each kilometer of the 2-D seismic line registered, processed, interpreted, mapped and also in the case of not being technically interpretable or mapped.

2.50

Each kilometer of 2-D seismic line Pre - existing before the effective date of the contract which is reprocessed, interpreted and mapped.

0.15

Each square kilometer of 3-D seismic which is registered, processed, interpreted, mapped and also in the case of not being technically interpretable or mapped.

6.50

Magnetometry: Each lineal kilometer registered, interpreted and mapped with minimum spacing of 400 Meters of grids.

0.01

Gravimetry Each lineal kilometer recorded, interpreted and mapped with minimum spacing of 1000 Meters of grids.

Exploratory Wells (Depth) (*):

Size by Parcel block (**) > > > > > > > > >

1 5 10 20 40 80 120 160 200 300

5 Parcels 10 Parcels 20 Parcels 40 Parcels 80 Parcels 120 Parcels 160 Parcels 200 Parcels 300 Parcels 400 Parcels

0.02

1.000 meters 2.000 meters 3.000 meters 4.000 meters 5.000 meters 6.000 meters 7.000 meters

Traditional Zone UTE

250.00 440.00 740.00 1.300.00 1.980.00 3.250.00 5.400.00

Nontraditional zone UTE

500 700 900 1200 -

(*) For intermediate depths, equivalences in UTE will be determined by interpolating the two approximate values of depth. (**) 1 Parcel = 25 km2

300 400 500 600 700 800 900 1050 1200 1300

Hydrocarbons Sale The natural markets of the hydrocarbons produced in Bolivia are Brazil and Argentina, currently guaranteed by long term contracts to buy/sell (Brazil 1999-2019, Argentina 20062026). In 2011, gross production of natural gas, reached an average of 45.07 MMm3/day and crude oil production and condensated reached 44.60 MBbl/day. In February 2012, the highest production of natural gas was attained with 48 MMm3/day. Approximately 80% of the natural gas production is intended for exporting markets.

2011 - 2012

Selling price to Argentina (US$/MMBtu)

Selling price to Brazil (US$/MMBtu)

July

10.20

8.30

August

10.20

8.31

September

10.20

8.30

October

10.73

8.74

November

10.73

8.74

December

10.73

8.57

January

10.62

8.60

February

10.62

8.93

March

10.62

8.98

Taxes

Environmental Protection

• Companies Utility Tax (IUE), 25% over the annual net utility. In Upstream activities, tax regulation determines a straight-line depreciation of few years, encouraging oil operations in their ﬁrst years. • Royalties (18%) • Direct tax on Hydrocarbons (IDH), 32% on the measured production in the tax point. • All other taxes are deductibles except Royalties. IUE and IDH.

The company which decides operating in Bolivia should develop environmental prevention and mitigation activities, ensuring conservation and protection of the enviroment, using the most advanced techniques, in accordance with the Bolivian regulations. Acting responsibly is a fundamental requirement for companies operating exploratory activities, specially in the development of environmental impact controls. Legal Security Each E&P Contract is approved by the Congress of the Plurinational State of Bolivia.