Exhibit S2B Post-Completion Risk Analysis

General Risks Risk Specific to Petrozuata and Venezuela Risk Mitigants

Market Risk: prices and quantities of
future output are uncertain.
• The price of oil available is volatile (case Exhibit
8).
• There is not an established market for
Petrozuata’s syncrude (case p.6).
• Conocoo 35-year off-take agreement (case p.6).
• The price of syncrude is tied to the price of Maya (case
p.6).
• Petrozuata’s break-even price is low -- $8.63/barrel (case
p.10).
Only once since 1982 has the price of Maya fallen below
this level (case Exhibit 8)
• Chem Systems found syncrude’s pricing reasonable and
consistent with expected market developments and found
that a third-party market would develop (case pp.5-6).

Supply/Input Risk: the raw materials • Labour, materials and parts suppliers, and • Utilities are owned by the Venezuelan government or
needed to generate the project output utilities are located in Venezuela (case p.5). PDVSA (case Exhibit p.6).
must be available at the anticipated terms • Post-completion, the project will supply its own electricity,
Post-completion Risk

for the life of the project.
Throughput Risk: the project must
perform as projected for the life of the
project. It includes:
• The amount of material put through a
process in a given period;
• The actual efficacy of the systems’
operations.
• The project has three components, all of which
must run simultaneously to produce the
syncrude.
• The delayed coking technology used for the
upgrader is complex (case p.5).
• The crude’s varying density could increase
throughput (case p.5).
gas, and water (case p.5).
• The participants have project experience (case pp.3-5).
• The technology is known (case p.5).
• The pipeline is buried and located in a sparsely
populated area (case p.5).
• Engineers did not expect the crude’s varying density to
be a major problem (case p.5).
• Stone & Webster independently evaluated the project’s
projected performance and found it to be reasonable (case
pp.5-6).

Force majeure events: events that are • Neither the completion agreement nor the • The pipeline is buried and is located in a sparsely
beyond the control of the project—except purchase agreement are valid in the case of populated area (case p.5).
for oil market developments. force majeure events (case p.6).
• Political events – war, labour strikes,
terrorism, or changes in laws;
• Non-political events – “acts of God” such
as hurricanes or earthquakes.

Operating cost changes: any changes in • Forecasted costs are uncertain and are on • Stone & Webster independently evaluated the project’s
costs will change the project’s economics. numerous factors. costs and found it to be reasonable (case pp.5-6).