international law firm

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INTERNATIONAL LAW FIRM

LONDON GUILDFORD CARDIFF PARIS BELGRADE PIRAEUS ST.PETERSBURG DUBAI SINGAPORE HONG KONG CARACAS

Aurelio Fernández-ConchesoCaracas

Stirling LeechLondon

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April 11, 2002: Protesters marching in Caracas

INTERNATIONAL LAW FIRM

LONDON GUILDFORD CARDIFF PARIS BELGRADE PIRAEUS ST.PETERSBURG DUBAI SINGAPORE HONG KONG CARACAS

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April 11, 2002: Shootings around Presidential Palace

INTERNATIONAL LAW FIRM

LONDON GUILDFORD CARDIFF PARIS BELGRADE PIRAEUS ST.PETERSBURG DUBAI SINGAPORE HONG KONG CARACAS

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April 11, 2002: Government supporters shooting from Llaguno’s bridge against protesters and police officers

INTERNATIONAL LAW FIRM

LONDON GUILDFORD CARDIFF PARIS BELGRADE PIRAEUS ST.PETERSBURG DUBAI SINGAPORE HONG KONG CARACAS

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April 12, 2002: General Lucas Rincon and High CommanderOfficers announce Chavez’s resignation to the Presidency

INTERNATIONAL LAW FIRM

LONDON GUILDFORD CARDIFF PARIS BELGRADE PIRAEUS ST.PETERSBURG DUBAI SINGAPORE HONG KONG CARACAS

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INTERNATIONAL LAW FIRM

LONDON GUILDFORD CARDIFF PARIS BELGRADE PIRAEUS ST.PETERSBURG DUBAI SINGAPORE HONG KONG CARACAS

Interim Government led by Pedro Carmona

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April 14, 2002: Chavez returns to power after failure of the Interim Government lead by Pedro Carmona

INTERNATIONAL LAW FIRM

LONDON GUILDFORD CARDIFF PARIS BELGRADE PIRAEUS ST.PETERSBURG DUBAI SINGAPORE HONG KONG CARACAS

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INTERNATIONAL LAW FIRM

LONDON GUILDFORD CARDIFF PARIS BELGRADE PIRAEUS ST.PETERSBURG DUBAI SINGAPORE HONG KONG CARACAS

October 22, 2002: Legitimate Disobedience

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INTERNATIONAL LAW FIRM

LONDON GUILDFORD CARDIFF PARIS BELGRADE PIRAEUS ST.PETERSBURG DUBAI SINGAPORE HONG KONG CARACAS

December 02, 2002: National General Strike

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INTERNATIONAL LAW FIRM

LONDON GUILDFORD CARDIFF PARIS BELGRADE PIRAEUS ST.PETERSBURG DUBAI SINGAPORE HONG KONG CARACAS

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INTERNATIONAL LAW FIRM

LONDON GUILDFORD CARDIFF PARIS BELGRADE PIRAEUS ST.PETERSBURG DUBAI SINGAPORE HONG KONG CARACAS

December 04, 2002: PDV Marina joins the General Strike

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INTERNATIONAL LAW FIRM

LONDON GUILDFORD CARDIFF PARIS BELGRADE PIRAEUS ST.PETERSBURG DUBAI SINGAPORE HONG KONG CARACAS

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PDVSA’s Operational Report on 14th January:

Oil Production (Thousands of Barrels/day)

Normal Value

Current Value

3280

413

87 % closed down

Gas Compretion (Millions of cubic feet/day)Normal Value

Current Value

9400

2819

70 % closed down

Gas Production-Anaco (Millions of cubic feet/day)

Normal Value

Current Value

1800

850

53% closed down

INTERNATIONAL LAW FIRM

LONDON GUILDFORD CARDIFF PARIS BELGRADE PIRAEUS ST.PETERSBURG DUBAI SINGAPORE HONG KONG CARACAS

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PDVSA’s Operational Report on 14th January:

Oil Refining (Thousands of Barrels/day)

0

200

400

600

800

1000

1200

1400

Normal Value Current Value

Isla

Paraguana

El Palito

PLC PLC

1264

75*

94% Closed Down

* PLC is currently operating at 38% of its total capacity of 120 thousands barrels/day

INTERNATIONAL LAW FIRM

LONDON GUILDFORD CARDIFF PARIS BELGRADE PIRAEUS ST.PETERSBURG DUBAI SINGAPORE HONG KONG CARACAS

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Oil spill in Lake Maracaibo (Jan.2003)

INTERNATIONAL LAW FIRM

LONDON GUILDFORD CARDIFF PARIS BELGRADE PIRAEUS ST.PETERSBURG DUBAI SINGAPORE HONG KONG CARACAS

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INTERNATIONAL LAW FIRM

LONDON GUILDFORD CARDIFF PARIS BELGRADE PIRAEUS ST.PETERSBURG DUBAI SINGAPORE HONG KONG CARACAS

Explosion at El Palito Refinery

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INTERNATIONAL LAW FIRM

LONDON GUILDFORD CARDIFF PARIS BELGRADE PIRAEUS ST.PETERSBURG DUBAI SINGAPORE HONG KONG CARACAS

PDVSA’s Risk Profile

Property Insurance: 5 MM $ (deductible)

20 MM $ (PDV Insurance Bermuda)

Values at Risk: 25,000 MM $

Estimate Maximum Loss: 800 MM $

Loss of Income: No Cover

Renewal:

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INTERNATIONAL LAW FIRM

LONDON GUILDFORD CARDIFF PARIS BELGRADE PIRAEUS ST.PETERSBURG DUBAI SINGAPORE HONG KONG CARACAS

Potential Insurance issues regarding PDVSA

Cover: Might be challenged (No renewal ?)

Due Diligence: In General terms, the Company is not being operated by dully qualified personnel

Mitigation of damages: There is no SHA team available to face a

potential loss at the Refineries and Production facilities

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INTERNATIONAL LAW FIRM

LONDON GUILDFORD CARDIFF PARIS BELGRADE PIRAEUS ST.PETERSBURG DUBAI SINGAPORE HONG KONG CARACAS

Potential Insurance issues regarding Private Operators

Cover: Loss of income is normally included in their policies

Proximate Cause: Migh be challenged: Strike, Stoppage, Civil Disobedience or Sabotage ???

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INTERNATIONAL LAW FIRM

LONDON GUILDFORD CARDIFF PARIS BELGRADE PIRAEUS ST.PETERSBURG DUBAI SINGAPORE HONG KONG CARACAS

Other potential claims in the Energy Sector:

- Consequential damages in relation to supply agreements.

- Breach of Contracts (Supply agreements of Oil and derivatives).

- Loss of opportunity by PDVSA’s customers abroad.

- Financial liabilities for those companies involved in production activities in the Orinoco Belt (Apertura Petrolera).

- Financial liabilities that may be incurred by PDVSA’s subsidiaries and PDVSA’s joint ventures in Venezuela and abroad.

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INTERNATIONAL LAW FIRM

LONDON GUILDFORD CARDIFF PARIS BELGRADE PIRAEUS ST.PETERSBURG DUBAI SINGAPORE HONG KONG CARACAS

- Property damages (Plants, Refineries, Production facilities and other equipment).

- Strike or Sabotage ???

- Environmental damages for oil spillage in Maracaibo Lake.

- Execution of Letter of Credits.

Other potential claims in the Energy Sector (cont...):