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2012 IHS No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.

Agenda

Intro to IHS

Economic Outlook

Energy Drivers &Backdrop

Chemicals Overview

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2012 IHS No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.

Agenda

Intro to IHS

Economic Outlook

Energy Drivers &Backdrop

Chemicals Overview

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2012 IHS No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.

IHS: A leading Information & Insight Provider

We are 6,500+people, in 30countries, speaking 50 languagesall working each day to:

Serve businesses and all levels ofgovernments worldwide

70% of the U.S. Fortune 1000

84% of the Global Fortune 500companies

Small businesses

Customers in 167 countries

Provide comprehensive content, softwareand expert analysis and forecasts

Help our customers drive criticalprocesses and make high-impactdecisions with speed and confidence

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Commercial + Strategic

Market, planning &consulting advisory

services Analytical & technical

expertise

Trusted authority onchlor-alkali, vinylchloride, andbleaching chemicals

Market and pricingdata

100-year informationsupplier

Authoritative chemicalbusiness news

Information resource forhigh-level industryexecutives andprofessionals

Technical + Specialties

Worlds leading businessresearch & forecastingservice

Provider of chemicalprocess economics for theglobal chemical industry

ChemicalWeek

CMAI

SRIConsulting

HarrimanChemsult

Bringing Together Best-in-Class Brands to DeliverWorld-Leading Chemical Insights & Expertise

IHSChemical

IHS has brought together the strengths of CMAI, SRI Consulting,

Chemical Week and Harriman to create the most comprehensiveset of chemical information and insights in the world

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2012 IHS No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.

Agenda

Intro to IHS

Economic Outlook

Energy Drivers &Backdrop

Chemicals Overview

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7/31 2012 IHS No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.

Peak

Q3

2008

Trough Q1 2009

Back to

Previou s Peak

Q2 2010

77

05 06 07 08 09 10 11 12

Quarterly Annualized ValueConstant 2005 U.S. DollarsTri l l ions

Source: IHS Global Insight

Global Economy

was off the growthcurve for sevenquarters

Pace of Expansionslowed to less than3 percent per year(`12-`13)due to EU& confidence loss

but is accelerating

Taking much longerto regain trend lineperformance

$44

$46$48

$50

$52

$54

$56

$58

$60

13 15

Slower Pace of Economic Recovery

China Grows at about 7.9% per year and

Global rates are close to 3.5%

14

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2012 IHS No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.

The sovereign debt crisis has abated somewhat, but most Eurozoneeconomies will struggle through 2013.

US growth will remain sluggish through 2013, then pick up in 2014-15.

Chinas growth pace is stabilizing near 7.5%, but a strong rebound is

unlikely, and government policies will remain cautious.

Emerging markets still offer the best growth prospects.

Risks to the outlook:

Eurozone debt crisis US sequestration Iran-related oil price shock China hard landing

The Global Economy: Policy Uncertainties in theU.S., Eurozone, and China Impede Growth

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2012 IHS No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.

The Eurozone will struggle with weak growth and sovereign debt problems;necessary reforms will take years to work. Signposts: sovereign bond yields, credit availability, ECB liquidity injections,

confidence indexes, PMIs, exchange rates, fiscal balances

The US expansion will continue at a modest pace, restrained by fiscal tightening

and supported by housing market recoveries. Signposts: job growth, housing permits, capital goods orders, solution tosequestration and budget

Chinas slowdown is both cyclical and structural. Signposts: exports, property transactions, home prices, electricity use,

industrial production, credit growth

Asia will lead global growth; Latin America and Africa will do well by historicalstandards. Signposts: world trade flows, commodity prices, PMIs, retail sales

Summary and Signposts

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2012 IHS No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.

Agenda

Intro to IHS

Economic Outlook

Energy Drivers &Backdrop

Chemicals Overview

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2012 IHS No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.

0%

10%

20%

30%

40%

50%

60%

0

2

4

6

8

10

12

14

16

18

07 08 09 10 11 12 13 14 15 16 17

Crude (WTI) Natural Gas Gas as % of Crude

Dollars Per MMBtu Gas as a % of Crude, BTU Basis

North America Energy Price Trends

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2012 IHS No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.

Snapshot of US Energy Landscape

12

Unconventional oil sources have

increased oil production by 25% from2008.

Twelve years ago, shale gas productionwas only 2% of total US natural gasproduction, today it represents 37%.

The increase in US natural gas productionfrom shale gas and tight gas plays ismaking it possible that the United Stateswill become a net exporter of gas by the

end of this decade

Employment in the unconventionalupstream sector will account for morethan 1.7 million jobs in 2012.

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2012 IHS No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.

From 2012 to 2035 the Employment Contribution of theUnconventional Oil and Gas Industry will Double

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2012 2015 2020 2025 2030 2035

Employment Contributions ofUnconventional Oil and Gas Activity

(thousands of workers)

Induced

Indirect

Direct

The greatest future job growth will occur between 2012 and 20203 million jobs by 2020.

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2012 IHS No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.

Agenda

Intro to IHS

Economic Outlook

Energy Drivers &Backdrop

Chemical Overview

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2012 IHS No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.

Chemical SectorDrivers and Trends?

International TradePattern Changing?

Investmentsubstantialplans change USlandscape

A Perspective on the Future

Gl b l M t d C t A d B d

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2012 IHS No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.

Global Megatrends Center Around BroadFundamental Value Creation Drivers

Demographic

Rapid population in thedeveloping world withincreased ageing in thedeveloped world shift

demand profile

EconomicStandard of Living rises

rapidly, merging developingcountry standards with that of

the developed world andleading to rapid technology

take-up

Sustainability

Growing populations andeconomies create needs forinnovative solutions; market

drivers will be likelysupplemented by policy

DemographicRapid population growth inthe developing world withincreased ageing in thedeveloped world shift

demand profile

EconomicStandard of Living risesrapidly, merging developingcountry standards with thatof the developed world andleading to rapid technology

take-up

SustainabilityGrowing populations and

economies create needs forinnovative solutions; marketdrivers will be supplemented

by policy initiatives

Create opportunities and threats for chemical producers

New geographic & end-use markets (products, logistics & channels)

Minimum operational footprint and maximum resource efficiency(energy value creation & environmental excellence)

Linkages to fast growth markets (BRICS), coupled with an expandedfocus on the frontiers (e.g. Africa)

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2012 IHS No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.

Changing Demographics Impact Chemical Demand.Advanced Economies Age-Emerging Markets Grow

Chemical Impact

Population driven demand will be centered in the emerging markets

Access to qualified technical, experienced human resources will be a challenge for thechemical industry, especially in the advanced economies Changing age profiles will likely change the end-use buying patterns (related to factors such

as household creation, technology adaptation etc.)

Associated impact on chemical business footprint (location, logistics, portfolio)

-1.0 0.0 1.0 2.0 3.0 4.0

Developing Countries

Emerging Markets

Advanced Economies

(Population by age segment, compoundannual growth rate, 2000-2020)

Age 65+ Age 15-64 Age 0-14

(200) - 200 400 600 800 1,000

Developing Countries

Emerging Markets

Advanced Economies

Age 65+ Age 15-65

Population Growth by Age Segment, 2000 - 2020

Millions of People

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2012 IHS No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.

More Disposable Income Impacts the Applicationand Type of Chemical Products Demanded

0

10

20

30

40

50

Brazil Russia India China U.S.

2000 2020

(Food consumption share of total consumption)

0

3000

6000

9000

12000

15000

18000

Brazil Russia India China U.S.

Cars, units sold (thousands)

2000 2020

Source: IHS Global Insight, IHS Automotive

Consumer market & income growthtrends

The U.S. will remain the largestconsumer market while the shareof European countries willstagnate or decline

Diversity of spending patternsexist as economies are at

different stages of growth. Food and other necessity

spend tends to be higher witheconomies in earlydevelopment.

Necessity goods/services still

dominate but gradual shifttowards discretionary items.

As incomes rise, spending shiftsto towards households goods,communication, leisure,education, and upgrade to higher-value goods.

20

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2012 IHS No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.

(35% of Globe)

19

$0

$200

$400

$600

$800

$1000

$1200

MDE Canada-------- Ethane ---------

U.S. U.S.Naphtha

MDELPG

MDENaphtha

Europe AsiaLPG

NEA SEANaphtha

Ethylene Cash Cost Comparison

U.S. Dollars Per Metric Ton2012

Feedstock Costs are Key to Earnings andIncreasing Supply/Demand Dislocation

Differences in

cost positionremain verysubstantial

Condensates

even favor U.S.vs. naphtha usedelsewhere

Margins remain

very wide forethane based orclose-to-zero foroil based

Price

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2012 IHS No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.

Cents Per Pound o f Polyethylene

U.S. Ethane to PolyethyleneChain Margin Distribution

-10

0

10

20

30

40

50

60

Ethylene

Ethane

Polyethylene

High Oil Prices Mean Profits for Ethane Chain

Incentives remainhigh regardinginvestment inIntegration

U.S. Ethane to PE

producers enjoythe benefits of avery advantagedgas-oil price ratio

Feedstock andethylene marginssupport increase innet export activity

1990 1995 2000 2005 2010 2015 2020

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2012 IHS No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.

North America Net ExportsMil l ion Metr ic Tons

Naphtha crackingeconomics remain inplace as the GlobalPrice Maker

Business Plans for

new capacity willinclude a significantexport presence

Exports could

represent 50% offuture productionmethane & ethanecost position critical

0.0

2.5

5.0

7.5

10.0

12.5

15.0

90 95 00 05 10 15 20 25

Polyethylene

Polypropylene

Vinyls

0%

5%

10%

15%

20%

25%

30%

35%

Percent of Production

Trade Connects Advantaged Hydrocarbons toHigh Demand Growth Markets

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Methanol Benefiting Strongly from Shale Gas

Low priced methane in the U.S. asa result of shale gas is providing alow cost feedstock for methanolproduction.

Methanol capacity in the U.S. willgrow ~5 fold from 2010 to 2017.

Capacity additions exceed USdemand for growth

US will switch from a net importerto an exporter

The U.S. will transition from beingthe highest priced country tosecond lowest globally.

New end uses for methanol in theregion such as methanol-to-chemicals, gasoline as well asdirect blending into gasoline couldhelp accelerate demand growth.

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2012 IHS No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.

$0

$2

$4

$6

$8

$10

$12

$14

13 15 17 19 21 23 25 27 29

Billions of Dollarsrequired to fundchemical plantcapital plansattributable to theshale gale

IHS estimates$95B to be spentover this timeframe

Generating jobgrowth & CAPEXrisk in constructionto operations

North American Capital Spend

Billions

Other Chemicals

Propylene Chain

Ethylene Chain

Methane Chain

Chlorine Chain

Capital Build will Challenge ResourceAvailability

C ti S d T d V l Ri i D i b

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Caustic Soda Trade Volumes Rising; Driven byExport Co-product PVC Demand

High Cash Costs in most ofthe world

Global price set by high costregions tied together viashipping costs

Low USA Cash costs Higher production in USA

Higher net exports of causticfrom USA

Lower imports of caustic soda

into USA

Global traded volume ofcaustic soda increases

0%

5%

10%

15%

20%

25%

0

1

2

3

4

5

00 02 04 06 08 10 12 14 16 18 20 22 24 26 28 30

Imports Exports Net Exports as % of Total Demand

Million Metric Tons Percentage

US Trade Outlook for Caustic Soda

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Shales Impact on Aromatics is More Indirect

Demand pulled by Asian appetite for

PS, nylon, PC, polyester fibers and PETwith solvents being relatively small

Benzene production diminished withshift of crackers to light feeds andlightening crude feed slate pushing upBZ prices.

Toluene and xylene blend values rise ashigh octane components are driven upby the same shift.

Despite expensive benzene, styreneexports up 10-15% driven by low

ethylene and competitive productioncosts pull benzene imports

2014 will provide some modest relief inBTX with improving capacity in Asia.

BENZENE

TOLUENE

CH3

para - XYLENE

CH3

CH3

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Visit www.ihsglobalevents.com/WPC2013for complete agenda and to register.

Nariman BehraveshChief EconomistIHS

Bill SandersonVice President,Downstream Researchand Consulting - EnergyInsightIHS

Gary AdamsChief Advisor, ChemicalIHS

Dave WitteSenior Vice President &General Manager,ChemicalsIHS

Stephen D. PryorPresidentExxonMobil Chemical

Company

Moayyed Al QurtasVice Chairman & CEOTasnee

Graeme BurnettSenior Vice PresidentRefining & Chemicals

Americas

Total SA

Jos Luis UriegasCEOGrupo IDESA

Susan EssermanChair of the InternationalDepartment; formerDeputy US TradeRepresentativeSteptoe & Johnson LLP

Zbyszko TabernackiVice President,Economics & Country RiskIHS

Richard MeseroleVice President ofOperations and GeneralManager

Fluor

Mark EramoChemical Industry InsightsIHS

Charles T. DrevnaPresidentAmerican Fuel &

Petrochemical

Manufacturers (AFPM)

Arnaud FrancoSenior AnalystGraphic PapersPulp and Paper

Products Council

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