Antonio Merino, Chief Economist, Repsol

“Oil Market: Recent Dynamics”

London, October 6-7, 2015

2

Disclaimer

The views and opinions expressed in this presentation are those of Antonio Merino and do not necessarily reflect the official policy or position of Repsol.

3 Source: IEA y Economic Research Department of Repsol

Petroleum Demand Dynamics: growth elasticity and.. price elasticity

Oil consumption levels and oil demand growth rates

1.86%

1.09%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

8%

45

50

55

60

65

70

75

80

85

90

95

19

71

19

72

19

73

19

74

19

75

19

76

19

77

19

78

19

79

19

80

19

81

19

82

19

83

19

84

19

85

19

86

19

87

19

88

19

89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

Mill

ion

Bb

l/d

World Oil Demand (LHS)

YoY Growth (RHS)

Avg. Growth 1986-2004

Avg. Growth 2005-2014

4 Source: IEA y Economic Research Department of Repsol

Petroleum Supply Dynamics → Conventional oil. Do we really see the fall?

Monthly Non-OPEC Production* (Jul 2014 → Aug 2015)

52.0

52.5

53.0

53.5

54.0

54.5 J

UL2

014

AU

G20

14

SEP

2014

OCT

2014

NO

V20

14

DEC

2014

JA

N20

15

FEB

2015

MA

R20

15

APR

2015

MA

Y201

5

JU

N20

15

JU

L201

5

AU

G20

15

Mill

ion

bbl/

d

TOTAL NON-OPEC SUPPLY*

*Excluding processing gains and biofuels

-1,313 Million bbl/d

5 Source: IEA and Repsol Economic Research Department

Petroleum Supply Dynamics → Non-OPEC Supply. A fast compared reaction

Non-OPEC Production (D Dec 2014 → Aug 2015)

-2000 -1000 0 1000

Global Biofuels

Indonesia

Turkmenistan

Others increasing

Oman

Australia

New Zealand

Niger

China

Colombia

UK

Brazil

Mexico

Norway

Yemen

Kazakhstan

USA

Canada

Others decreasing

Total Non-OPEC

Non-OPEC excl. Bios & PG

Thousand bbl/d

2009 vs. 2015. (D Dec → Aug)

-1500

-1000

-500

0

500

1000

Var. Dec-08 → Aug-09 Var. Dec-14→Aug-15T

ho

usa

nd

bb

l/d

Total Non-OPEC

Non-OPEC excl. Bios & PG

-1500

-1000

-500

0

500

1000

Var. Dec-08 → Aug-09 Var. Dec-14→Aug-15

Th

ou

san

d b

bl/

d

Total Non-OPEC

Non-OPEC excl. Bios & PG-1500

-1000

-500

0

500

1000

Var. Dec-08 → Aug-09 Var. Dec-14→Aug-15

Th

ou

san

d b

bl/

d

Total Non-OPEC

Non-OPEC excl. Bios & PG

6 Source: IEA and Repsol Economic Research Department

Organic Capex as % of Operating Cash Flow (4 quarters moving average)

0%

20%

40%

60%

80%

100%

120%

140%

160%2Q

2005

4Q

2005

2Q

2006

4Q

2006

2Q

2007

4Q

2007

2Q

2008

4Q

2008

2Q

2009

4Q

2009

2Q

2010

4Q

2010

2Q

2011

4Q

2011

2Q

2012

4Q

2012

2Q

2013

4Q

2013

2Q

2014

4Q

2014

2Q

2015

Org

anic

Capex a

s %

of

Opera

nting C

ash F

low

Petroleum Supply Dynamics → Non-OPEC Supply Companies included in “Top 42” show the unsustainability of the capex/ cash flows. Either prices up or capex further down

Antonio Merino, Chief Economist. Repsol

“Oil Market: Recent Dynamics”

London, October 6-7, 2015