WHY AND HOW, SHOULD O&G COMPANIES ADAPT THEIR

PORTFOLIO FOR THE ENERGY TRANSITION

Environment Pledges GROW TH Energy Needs
F Change Primary Energy Mix Increase in From Piumeti & Fino 2014

UN Human Development Index

+ 2 Billion 1.0 mmb/
From Shell & BP 2019
People day
NET Oil
2020 100
A
40 Renewables
BioFuels Countries Income Rystad

+ 1.5 times
BP
Hydrogen
2020

80
ZER0 30 Coal 0.7 High
primary
Rystad Sygma
SDS IEA
CCUS
C
Mid
20 Gas energy 60
2050
Low
Geothermal 0.4 40
No new approvals

10 Hydro
Emissions 2.000 6.000 10.000

T 0
Nuclear

1975 2000 2025 2050

Anual per Capita Electricity Use (Kwh) 2020 2030 2040 2050

San Jacinto basin is closely related to its neighbor Magdale-

S San Jacinto basin is closely related to its neighbor Magdalena
basins, with evidences of a Cretaceous source rock, a major uncon-
Energy na basins, with evidences of a Cretaceous source rock, a
major unconformity separating two main sequences, inverted
formity separating two main sequences, inverted structures and res- Cost Security
ervoirs from Paleocene to Oligocene. structures and reservoirs from Paleocene to Oligocene.

Changes From Big Oil Capital Constrain

Incoming Capital scarcity
Talent Reputation
Lose Value Carbon
Budget
E $BN PE Funds capital for O&G Consumer
preferences Financial Carbon Tax
R Inbalance Stranded
F 40 Green
Energy
Revenue Supply Energy Assets
Access Low Prices
F 20
Conventional
Energy I Technological disruption
CO2 Price Forecast

E Business 0
From Bloomberg June 2021
S 200
2016 2018 2020

C
as Usual
K 150

Euro/Tonne
CO2
Market Novelties Portfolio Changes
T Carbon Intensity Disclosure Streamline portfolios S 100

S&P Platts daily Carbon Offset Premiums Low-carbon / Low-Cost assets 50

S Carbon-Neutral crude oil cargos ILX Exploration 0
From Shell 2020

Transparency and ESG commitments 2020 2030 2040 2050

CHANCHE OF NARRATIVE
Where do I want to be ESG Strategy
R Operations End-Use Products
Scope 1 Scope 2 Scope 3
O Oil portfolio Mixed portfolio New energy
GHG Emissions Energy Source 3rd party
Electricity Heating
A Gain market Low-carbon
porftolio
E
Measurement
Resource Type
Cooling
CO2 sinks projects
share in HC focused Fully transform Diesel / Gas
D business
Resource
business model Production
mechanism RE Technology
CCS
Carbon Offsets
Price resilient especialist Divestment from Transport Mode
M portfolio
Divestment from
all hydrocarbon
assets
Facilities
Connectivity
Efficiency
Hydrogen
Focus on high carbon inten-
A regions,
markets, costs
sity assets CCS,
Geothermal Safety UN Sustainable Development Goals
P Ligther and
Explore business
in new energies
Green Hydrogen
S Contribution to communities
Social purpose G TFCD
Equility, diversity, inclusion
sweeter Power from solar Human Rights
Gas, LNG, CCS and wind Reporting track record
Suppliers Audit

AVOID - REDUCE - MITIGATE

T What’s my message
R Capital
Access My position
A Risk/Return High Risk/ High Risk/ Low Risk/ High Risk/ N ESG Leadership?
Sustainable and Profitable
D Unkwn Return Low Return Low Return High Return ?
E Include CO2 price?
E Debt Cost Assets Carbon Intensity
X Credible Measurements
Benefitial Who will audit my emissions
O Regulations
T Regulatory Framework
F Business
Maturity
Technologies to produce cleaner
F Growth
Thinking Circular Economy
> Market > Share
S