Exhibit S2A Pre-Completion Risk Analysis

General Risks Risk Specific to Petrozuata and Venezuela Risk Mitigants

Resource Risk: both available • The quantity of crude oil must be able to support the
quantity and expected quality of planned life of the project.
the resource are important. • The crude oil must be of the fight grade in order to
ensure the upgrade will operate correctly (case p.5)
• DeGolyer & MacNaughton, the reserve engineer,
found that Petrozuata’s oil field contains 21.5 billion
barrels of oil, of which only 7% is required to sustain
production for 35 years (case p.5).
• Conoco agreed to purchase all of the project’s
syncrude, an agreement guaranteed by Dupont (AA-)
(case p.6).

Technology Risk: a project's
use of complex or untested
technology may lead to cost
overruns or construction
delays.
Pre-completion Risk
• The well technology has been used previously in
the Orinoco belt (case p.5)
• The pipelines run 125 miles between the oil fields
and Jose (case p.5.)
• The delayed coking technology used for the
upgrader is complex (case p.5.)
• The pipeline, lifting, and Canaco upgrader
technologies are known (case p.5).
• The participants and contractors have recent oil project
experience (case pp.5-6).
• Stone & Webster independently evaluated the project’s
design and found it to be achievable (case pp.5-6).

• The sponsors severally provided completion

guarantees; backed by their parents (Dupont (AA-) and
PDVSA (B)—case pp.6 and 9).

Timing Risk: failure to meet
intermediate milestones in a
complex project may jeopardize
the overall completion shadule.
• The project has three segments and is complex
(case pp.4-5, case Exhibits 5 and 6).
• The oil field and the pipeline must be finished on the
schedule in order for the project to realize early
operating cash flow (case p.7).
• Stone & Webster independently evaluated the project’s
execution and found it to be achievable (case pp.5-6).
• The participants and contractors have recent oil project
experience (case pp.5-6).
• Technologies are known (case p.5).
Pre-c
Completion Risk: completion
risk is a combination of timing
snd technological risks.
• Some of the project’s contractors and suppliers are
Venezuelan firms (case p.5).
• Reliance on early operating cash flow (case p.7)
22% of the funds for construction of the Petrozuata
project are projected to come from early operating
cash flows. 22% = $530 million/$2.424 billion (case
Exhibit 7).
• The participants and contractors have recent oil project
experience (case pp.5-6).
• Stone & Webster independently evaluated the project’s
execution and found it to be achievable (case pp.5-6).
• The sponsors severally provided completion
guarantees; backed by their parents (Dupont (AA-) and
PDVSA (B)—case pp.6 and 9).