GE Infrastructure Analyst Meeting
November 2, 2005
GEOil & Gas
Claudi SantiagoPresident & CEO
2 / Santiago
GE Proprietary & Confidential
Oil & Gas demand and supply challenge
• Depletion rates accelerating to >6% creating new challenges
• New reservoirs in difficult areas … technology critical
• Significant new investments needed to meet world demand
Supply ChallengeOil & Gas Demand
0
50
100
150
200
250
2000 2010 2020 2030
Mboe / d
Oil
Gas
Mboe / d
100
150
250
2000 2010 2020 2030
50
0
Existing Reserves
RequiredNew Production
200
Oil & Gas regional supply & demand imbalance
139
N America
23
1-2%35
2-3%11
27
ME & Africa
37
12
2314
Eastern Europe
31
3-5%2-4%
1-2%
1-2%
3-4%
3-5%
3-4%1-3%
1-2%
4-5%
Asia Pacific
13
L America
(Mboe / d)
Total World Demand
(CAGR% ’04-’15)
‘04 ‘15
163163
128128
2%
81
91
47
553%
2%
Gas
Oil
’04 Supply – Demand by Regions(Mboe / d)
(CAGR% ’04-’15)
Required New Supply(’04 – ’15)
LNG
Pipelines
16%
55%
3% - GTL
26%Local
Consumption Supply
Demand
Western Europe
Supply > Demand
Source: CERA, EIA, IEA, BP
Oil & Gas industry challenges play to GE strengths
4 / Santiago
GE Proprietary & Confidential
‘05 – ‘15 Segment Indicators
Source: SSB, EIA, Lehman
Oil & Gas industry … very attractive for GE
• E&P capex +30% … offshore and deepwater• Floating production fleet 2X … + 275 vessels• Depletion Rates > 6%
• LNG demand 2X … ~50 new trains• LNG from 6% to 10% of world gas consumption• Gas pipelines +25% … ~0.4MM miles
• Refining production +20% … 82 to 100MMb/d• Ethylene capacity +45% … 30+ new plants • GTL to satisfy 1.2% of gas consumption
60
60
’15F
$355
235
Transportation
Processing
’05
45
$265
170
50
Exploration &Production
($B)
5 / Santiago
GE Proprietary & Confidential
Multiple ways to grow
• Monetize stranded gas
• Enhanced oil reservoir recovery
• Bring gas to China
• Increase refinery capacity
• Capture installed base opportunity
6 / Santiago
GE Proprietary & Confidential
Monetize stranded gas … Qatar LNGNatural Gas Monetization LNG Production … Unprecedented Scale
Australia
Malaysia2.3
7.8(MTPA)
Fr 51985
Fr 7E1991
Fr 9E2004
200$/toe
Production Cost
Qatar
2.7
100$/toe
50
400
Pow
er (M
W)
$600MM won year-to-date
• #1 for Gas Reserves/sqMile• North field = 60 miles• ~250 Years UK Demand
• 1 train … size of a football field• ~400MW … 8 MM tons / year LNG• GE … proven gas turbines & world
class compression
Ras Laffan
QATAR
DohaDoha
NorthField
7 / Santiago
GE Proprietary & Confidential
Enhanced oil reservoir recovery … Middle East
GE Technology Helping to Maximize Oil Production
Improve production by ~20%
Re-injection Recovery Technology Options
Recovering Only ~35% of Oil Fields Capacity
• Natural gas• Water • Acid Gas and CO2
• 250+ re-injection trains
• 40+ gas turbine driven water injection pumps in Saudi Arabia
Recent wins … >$100MM in Orders
• UAE … Turbo-compressor re-injection trains + plant upgrades
• Saudi Arabia … gas turbine driven multi-phase pumps
8 / Santiago
GE Proprietary & Confidential
TarimBasin
Bring gas to China … west to east pipeline
Aviation20 LM2500+
Oil & Gas24 CC
Service JV – GE / SBWMajor Chinese Compressor Manufacturer
+
Pipeline length 2,400 miles
+
• GE’s equipment technical advantages and system integration experience• Local commitment to a growing market … manufacturing & service shop facilities• “One-stop” solution: gas turbines, compressors, services and pipeline inspection
Why We Won … ~$200MM Project:
Building on one GE
Pipeline in operationWest-East PipelinePipeline under construction
9 / Santiago
GE Proprietary & Confidential
Increase refinery capacity … equipment upgrade
US Gulf Coast Refinery
• 50% capacity increase … +25,000 barrels/day
• Increased reliability by ~1 pt
• CapEx … ~30% savings vs new
Customer Value
Integrated Solution
• Turbines, compressors & expanders
• One-stop shop … turn-key, installation, commissioning & start-up
• Six-sigma re-engineered package
Increased capacity with optimized CapEx investment
• Need environmental upgrades
• Physical space restriction
• Compressed project cycle
10 / Santiago
GE Proprietary & Confidential
Capture installed base opportunity … services
• 30+ Countries
• 1,400 Units
• Injecting technology to drive productivity
Recip.Comp.
Cent.Pumps
Cent.Comp.Turbo-
expandersGas
TurbinesS & V
Comp.Steam
Turbines
9,400
8,000
3,000
2,000
1,700
1,600
700
$1.4
‘04
~$2.1
’05E
$0.2
‘00
$0.8
‘03
AAGR 60%($B)
• Unpiggable NPI increasing GE entitlement
• First generation launched summer ‘05
CSA’s Commitments
World Pipelines = 1.7MM Km Pipeline Inspection
# of Operating Units
42%
58%Piggable
Unpiggable
Installed Base
Service growth … 10x in past 10 years
11 / Santiago
GE Proprietary & Confidential
300
300
150
Oil & Gas 2006 Opportunities
1390 1095
180
450
200
450
North America$840 (9.5%)
Western Europe$1450 (16%)
Eastern Europe$930 (10%)
China $390 (4.4%)
Asia$900 (10%)
AIM$3585 (40%)Latin America
$915 (10%)
500
195
790
100
80
120
340
130
~3.3 B
Exploration & Production
~2.5B
Transportation
~1.7 B
Refinery & Petrochemical
~1.5B
Service + Pipeline Inspection
140
60
310
100
190
50
(%) - % Total Visible Opps
290
Going where the action is
Looking @ $9B+ of identified opportunities
Qatar
Nigeria Training Center& Service Shop
Kazakhstan
Brazil Packaging
490
170
340
JV in China
100Algeria Training Center
($MM)
12 / Santiago
GE Proprietary & Confidential
Financial overview … Oil & Gas
Revenue
OP
• ’06 revenues over 2.5x ’00 level
• CSA backlog $0.7B up in ’05 …3x in 3 years
• $9B+ identified opportunities …equipment & services
• Technology investment … over $225MM in last 3 years
• Robust market … multiple ways to grow
($MM)
'06E
+15-20%
$331
~$400
'05E'04
$3,129
~$3,800
+10-15%
GE Infrastructure Analyst Meeting
November 2, 2005