Global Refining: Fueling Profitability in the Turbulent Times Ahead. Sponsored by:

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1 Global Refining: Fueling Profitability in the Turbulent Times Ahead Sponsored by:

2 The Outlook for Energy: A View to 24 Roland L. Moreau ExxonMobil Upstream Research Company Hart Energy Breakfast Club February 7, 213 This presentation includes forward-looking statements. Actual future conditions (including economic conditions, energy demand, and energy supply) could differ materially due to changes in technology, the development of new supply sources, political events, demographic changes, and other factors discussed herein and under the heading "Factors Affecting Future Results" in the Investors section of our website at: The information provided includes ExxonMobil's internal estimates and forecasts based upon internal data and analyses as well as publically-available information from external sources including the International Energy Agency. This material is not to be used or reproduced without the permission of Exxon Mobil Corporation. All rights reserved.

3 Population Trends Impacts Energy Use Population Fertility Rate* Global Demographics* Billion Children per Woman Billion 9 8 OECD 9 6 Other Non OECD Africa China India Southeast Asia Latin America 6 Age 65+ Africa 4 Age India 3 3 China 2 OECD Age ExxonMobil 213 Outlook for Energy * Source: World Bank & United Nations

4 Economic Growth Drives Energy Demand GDP Trillion 25$ 125 Energy Demand Quadrillion BTUs AAGR % AAGR % 1 World 2.8% Other Non OECD 3.9% 1 World 1.% Energy Saved ~5 75 China 5.6% 75 5 Other OECD 1.8% United States 2.3% ExxonMobil 213 Outlook for Energy

5 Electricity Generation Leads Growth Energy Demand by Sector Quadrillion BTUs Electricity Generation Industrial Transportation Res/Comm ExxonMobil 213 Outlook for Energy

6 Residential/Commercial Outlook By Sector Quadrillion BTUs 15 Residential Energy Intensity Million BTUs per Person 35 Fuel Demand Quadrillion BTUs Commercial Residential North America Europe OECD Japan India China Other Coal Electricity Biomass Gas Oil ExxonMobil 213 Outlook for Energy

7 Industry Energy Demand Increases Quadrillion BTUs 25 Paint 2 Plastics Fertilizer Chemicals Manufacturing & Industry Liquid Fuels Energy Industry Other Steel Coal Automobiles Lubricants Textiles Natural Gas Asphalt Agriculture ExxonMobil 213 Outlook for Energy

8 Transportation Sectors Light Duty Vehicles Heavy Duty Vehicles Cars 18-wheelers SUVs Buses Pickup Trucks Delivery Trucks ExxonMobil 213 Outlook for Energy

9 Transportation Demand Sector Demand MBDOE 75 6 Rail Marine Demand by Region MBDOE Aviation Heavy Duty Light Duty AP NA Europe LA ME ROW ExxonMobil 213 Outlook for Energy

10 Light Duty Vehicle Sales & Efficiency Annual New Car Sales by Type Million Cars Elec/PHV Full Hybrid Natural Gas Conv. Diesel Conv. Gasoline Incremental Vehicle Efficiency Gains Miles per Gallon MPG Hybrid 75 1 Vehicle Size 5 Body & Accessories 25 5 Average 27 MPG Powertrain ExxonMobil 213 Outlook for Energy

11 Economic Choices for U.S. Electricity Baseload, Startup cents/kwh 16 $6/ton of CO 2 12 Reliability Cost 8 4 $/ton Coal Gas Nuclear Onshore Wind* Utility Solar PV* *Wind and solar exclude costs for integration, backup capacity and additional transmission ExxonMobil 213 Outlook for Energy

12 Energy Mix Continues to Evolve Quadrillion BTUs % % Average Growth / Yr % 1.% %.4% % 1.8% Oil Gas Coal Nuclear Biomass Solar / Wind / Biofuels Hydro / Geo ExxonMobil 213 Outlook for Energy

13 Liquids Supply Supply by Type MBDOE 12 Biofuels Other Liquids Resource* TBO 6 1 NGLs 5 8 Oil Sands Tight Oil Deepwater 4 Remaining Resource Conventional Crude & Condensate 2 1 Cumulative Production ExxonMobil 213 Outlook for Energy * Source: IEA

14 North America Energy Balance Quadrillion BTUs Net Imports Oil Net Exports 2 Regional Supply Gas 4 3 Net Exports Total Energy Balance Net Imports Net Exports Regional Supply 2 Regional Supply ExxonMobil 213 Outlook for Energy

15 Conclusions ExxonMobil 213 Outlook for Energy

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17 Global Crude, Refining and Clean Fuels Outlook to 235 Executive Energy Club Rodrigo Favela Executive Director Refining, Planning and Evaluation Hart Energy February 7, 213

18 Global Refined Product Demand Million barrels per day 1.2% 118 Increment = 29.2 LPG Naphta Gasoline Jet/Kero Diesel Fuel Oil Other 89 25% 29% 18 24% 31% 23% 34% Fuel Oil 2% Diesel 45% Other 16% LPG 12% Naphta 4% Gasoline 13% Jet/Kero 8% Global demand will continue to grow driven by developing countries 33% in next two decades (lower to primary energy growth) Transportation fuels like diesel and gasoline represent almost 6 % of total Diesel will experience strongest growth by % of increment All rights reserved 213

19 Regional Petroleum Product Demand Growth Asia Pacific 1.8% Middle East 2.6% Latin America 1.8% CIS Africa 1.9% 2.% Europe North America.2%.2% Million barrels per day Asia-Pacific highest volume Middle East highest growth North America will decrease by.2% All rights reserved 213 Source: Hart Energy analysis and forecast (213)

20 Atlantic Basin Declining Gasoline Market 15, Thousand barrels per day 13, 11, 9, 7, 5, Declining demand in U.S. and Europe: Transportation efficiency standards + ethanol growth + dieselization of car fleets Growth in Latin America Note: Includes Mexico With ethanol Without ethanol All rights reserved 213

21 Atlantic Basin Expanding Distillate Market Thousand barrels per day 8, 6, 4, 2, Small increase in US despite Transportation Efficiency Standards Growth in Europe imports will continue to grow despite tax changes Strong growth throughout Latin America- diesel shortfall will continue even with new refinery projects U.S. Europe Latam Note: Excludes biodiesel All rights reserved 213

22 Transportation Fuel Quality Million barrels per day 3 Gasoline <1 ppm 1-5 ppm 51-5 ppm >5 ppm Diesel <1 ppm 11-5 ppm 51-5 ppm 51-2 ppm >2 ppm Gasoline and on-road diesel markets to less than 1 ppm ULS fuels Lower sulfur in off-road diesel and marine fuels: 5 ppm for on-road diesel by 215 & below 1 ppm by ppm for marine fuels before middle next decade. All rights reserved 213 Source: Hart Energy analysis and forecast (213)

23 Capacity Expansion, Hydrocracking +74% Catalytic Cracking +19% Coking +66% Crude Distillation +28% Million barrels per day All rights reserved 213 Source: Hart Energy analysis and forecast (213)

24 Changes in Product Trade Patterns Escalating gasoline and distillate imbalance in Europe and North America European gasoline exports to North America will decline by 5% The distillate shortfall in Europe: CIS less volume Middle East and other regions incremental supply Asia-Pacific will increase gasoline and distillate exports but will fall short in long term due to increased internal demand Middle East is projected to become the world marginal refined product supply center. All rights reserved 213

25 Global Crude Oil Outlook Global Crude Oil Quality Trends API, %Sulfur API Sulfur Biofuels 8% Increased Crude/Liquids GTL/CTL 5% NGL 15% Heavy Oil 28% Light/Me dium 23% Unconven tional 15% SCO 6% Crude quality will remain similar in average but Heavy crude oil, condensate/ngl, Light/Medium and Unconventional Oil will have the largest contribution to liquid supply Impact on diesel yield All rights reserved 213 Source: Hart Energy analysis and forecast (213)

26 North America: Supply Landscape Million barrels per day Tight Oil Oil Sands % of Total 7% 6% 5% 4% 3% 2% 1% % Unconventional Tight Oil (Shale) will add 4 million b/d. (Sweet light) Logistic constraints emerging crude-by-rail infrastructure Canadian oil sand Turn up in production 2+ million b/d increase 212 to 22 Additional.8 million b/d Increasing supply of condensate and NGL All rights reserved 213

27 USGC Natural Gas Prices and Refining Differentials Light Heavy Differential (USD/Bbl) Natural gas prices ($/Mcf) Jun 8 Jun 9 Jun 1 Jun 11 Jun 12 Jun 13 Jun 14 Jun 15 Jun 16 Jun 17 Jun 18 Jun 19 Discounts will depend if USGC exports allowed: ($7 $8/barrel vs $2 $3) All rights reserved 213 Product (ULR+DSL)/2 HSF WTI MAY LLS MAY Source: Hart Energy analysis and forecast (213) Jul 8 Dec 9 Apr 11 Sep 12 Jan 14 Jun 15 Oct 16 Mar 18 Jul 19 Natural gas prices sustained at $4 $5/Mcf

28 U.S.: Favorable Refining Position Refinery Utilization (%) Gasoline Distillate US refining with $2 3 US/bbl advantage over other regions. US Midcontinent / USGC Capacity Additions surplus capacity with minimal rationalization. Exports to Latin American have helped to maintain process Capacity rationalization focused on Europe and to a lesser extent in US East Coast US Exports to Latin America (thousand barrels per day) All rights reserved 213 Source: Hart Energy analysis and forecast (213)

29 Diesel Gasoline Differential Outlook Diesel Gasoline Differential (USD/bbl) Condensate & NGL (1 b/d) 2,5 1, Condensate NGL Growth in condensate will depress light naphtha and eventually gasoline market Naphtha/Gasoline market vulnerable to ethanol requirements volatility initiatives. Gasoline prices will decline relative to crude and diesel. All rights reserved 213 Source: Hart Energy analysis and forecast (213)

30 Latin America: Refined Product Demand LPG Naphtha Gasoline Jet/Kero Diesel Fuel Oil Other Increment MILLION b/d 1.8% Other, 9% LPG, 7% Diesel, 41% Fuel Oil, % Jet/Kero, 5% Naphta, 2% Gasoline, 37% Demand will grow by 52% Diesel and gasoline represent 6% of total demand and contribute 8% of increment LPG and fuel oil participation higher than other regions Brazil and Mexico represent 6% of total demand Major countries will reach less than 3 ppm fuel specs before 216 All rights reserved 213 Source: Hart Energy analysis and forecast (213)

31 Latin America: Refining Capacity Expansion (million barrels per day) Conversion Hydroprocessing Light Oil Processing Crude Distillation Crude Quality heavier and sourer than other regions Capacity will increase 42% increment (Brazil, Mexico, Cuba, Argentina and Colombia) Investment in conversion, hydrocracking, and hydroprocessing will increase above 5% (7%,13%,91%) All rights reserved 213 Source: Hart Energy analysis and forecast (213)

32 Final Remarks Global refining markets have become more volatile, diesel will be the fuel with the strongest growth in all regions Gasoline will continue to grow in developing countries but will experience a decline in the US and Europe Strong growth in Latin America/Middle East/Asia Pacific. Larger countries will achieve nationwide ultra low sulfur fuels quality by 216. Aggressive capacity expansion will be required to keep pace with demand and lower quality indigenous crude. Middle East emerging as the marginal producer of diesel. Unconventional gas and crude will foster US refineries competitiveness in the Atlantic Basin affecting European refining industry and possibly some Latin American refining projects new opportunities will arise for petrochemicals based on condensates for the region All rights reserved 213

33 Global Crude, Refining and Clean Fuels Outlook to 235 Rodrigo Favela Executive Director Refining, Planning and Evaluation Hart Energy All rights reserved 213

34 All rights reserved 213