Leadership for Energy Automated Processing May 27 th

Leadership for Energy Automated Processing May 27 th, 2008 CAPP Presentation Crude Oil Committee – Calgary www. energyleap. org

Objective The objective of this presentation is to provide mutual awareness between LEAP and CAPP. 2

What is LEAP? • LEAP - Leadership in Energy Automation and Processing • • A non-profit organization Focus on Energy Trading Global scope Comprised of industry working groups to improve energy trading • Executive committee and by-laws 3

Members • Addax BV Curacao • Arcadia • Barclays Bank • BP • Camin Cargo • Cargill International SA • Chevron • Citibank N. A. • Deloitte • Depository Trust & Clearing Corporation • Deutsche Bank • ESS • Glencore Ltd. • Hess Corporation • Intercontinental Exchange • Intertek USA Inc. • Inspectorate • J. Aron & Company • JP Morgan Chase • Koch Supply & Trading LP • Mercuria Energy Holding BV • Morgan Stanley • Nexen Inc. • PMI Comercio Internacional S. A. de C. V. • Saracen Merchant Energy LP • Sempra Energy Trading • SGS Group Management SA • Shell Trading US • Statoil. Hydro ASA • Sungard Consulting • Totsa Total Oil Trading SA • Transport 4 4

Mission Statement: to promote efficient and reliable transaction processing within the energy trading industry by means of automation and standardization. 5

Energy Trading - Initiatives • Promote data automation and standards • Fill the gaps in automation and standardization which includes contracts • Develop contract standards to allow for electronic confirmation and electronic settlement of trades • Work with system vendors on a neutral basis to ensure they use the same data standards 6

Standard Contracts • Release V 2. 0 of the LEAP Master Agreement for Crude Oil and Refined Products (U. S. ) in Nov. , 2007 • International Swap and Derivatives Association (ISDA) is working with LEAP to publish an Oil Annex • Canadian sub-committee will be releasing the Canadian Addendum to V 2. 0 of the LEAP Master Agreement in June, 2008 7

Benefits of Standard Contracts • Independent and neutral contract • Industry standard reference point (95%) standard terms and conditions • Able to customize (5%) if required • Significantly reduces time required to negotiate contracts • Reduces legal costs associated • Allows electronic confirmation of energy trades and operational excellence 8

Benefits of Electronic Confirmation • Electronic matching of deals identifies trade capture error rates (10 – 20%*) • Firm acceptance of deal terms under agreed terms and conditions • Faster acceptance, facilitates audits • Eliminates manual processes • Reduces paper flow time and costs • 4 companies using e. Confirm in the U. S. for physical crude oil trades *Source: ISDA Benchmark Study 2007 9

Error Rates *Source: ISDA Benchmark Study 2007 10

Canadian Sub-Committee Members include: • Nexen, BP, Shell, Chevron, J Aron/GS, Morgan Stanley, Total, Barclays, Mercuria • The Canadian Addendum appends to the LEAP Master Agreement to include Canadian terms, i. e. Alberta law, credit provisions (CCAA, BIA), tax, currency, exchange rates 11

How it works • The Canadian Addendum appends to the LEAP Master Agreement if executed • One set of Special Provisions allows companies to customize these terms • The master contract terms then apply to applicable transactions with the parties • Without e. Confirm there are still benefits of shorter contracts that bind the parties under fully agreed terms • Schedule J of ICE e. Confirm allows parties to confirm electronically 12

More About LEAP Other Global LEAP Initiatives: • Contract Committee - Rotterdam Barge Agreement (North West Europe) • Electronic Bills of Lading (Marine) • Certificates Quantity & Quality (Marine) • Reference Data • Scheduling Initiatives (Transport 4) • Settlement Committee 13

Membership • Membership is not required to use the LEAP Master Agreement, but it is required to participate in committees Membership Types: • Full Membership (board members) • Regular Membership (committees) • Service Membership (vendors) • Associate Membership (UK - Energy Institute) 14

CONTACT INFORMATION • Cdn. Addendum: Karen Mikkelborg 403. 699. 4206 Karen_Mikkelborg@nexeninc. com • LEAP Master Kevin Jandora 914. 225. 4509 Kevin. Jandora@morganstanley. com Mary Dortenzio 203. 328. 3175 Mary. Dortenzio@glencore-us. com 15