Straight Ahead to ValueSegment presentation Oil & Gas, April 2008
22
1 | Oil & Gas in the BASF portfolio
2 | E & P
3 | Gas trading
4 | Strategic partnership with Gazprom
5 | Outlook
3
ChemicalActivities
Agricultural Solutions
Sales of 2007 have been restated according to new segment structure as of January 1, 2008
Oil & Gas
2007 total sales: €58 billionincluding other activities 2007: €6.6 billion (12%)
PerformanceProducts
15%
FunctionalSolutions
16%
Plastics17%
18%
6%
Chemicals16%
Oil & Gas – one of BASF’s core activities
4
Oil & Gas
Oil & Gas business provides significant advantages for BASF
Long term security of gas supply
Significant cash flow
and sustainable profitability
Hydrocarbonhedge
Joint R&D for EOR
(enhanced oil recovery)
5
Gas Transport and TradingExploration and Production
Oil & Gas businessCore activities
6
Gas Transport and TradingExploration and Production
• Successful exploration, acquisitions and farm-ins
• Profit sharing of E&P contracts withhost countries
• Selective technology development and deployment
• Integrated gas business
• Oil price
• Cost development
• Long term access to
– gas reserves
– transport capacity
– storage capacity
• Spotmarket opportunities
• Oil price volatility and time lag effects
• Weather conditions
Oil & Gas businessKey drivers of profitability
7
Exploration & Production• 3% CAGR 2001-2007• Gas share increased
to ~40%• Successful production
launch at YuzhnoRusskoye gas field
WINGAS• 13% CAGR 2001-2007• Gas sales to BASF
3.9 billion m³ (~16%)• Gas Trading business is
successfully maintaining its growth course
• Several contracts with new customers have been concluded
Oil & Gas – E&P and Gas Trading
0
10
20
30
40
2001 2002 2003 2004 2005 2006 2007
Gas Trading (including sales to BASF)in billion m³
21 2429 30 33 35
Wholesale(WIEH, WIEE)
WINGAS
Productionin million boe
0
40
80
120
2001 2002 2003 2004 2005 2006 2007
93 94 105 108 112 111
Oil
Gas
112
37
8
Sales• 15% CAGR 2001-2007• Boost in 2005-2007 from
- higher oil and gasprices
- increased sales ingas trading
EBIT• 15% CAGR 2001-2007• Oil price in Euro terms
remained flat in 2007 vs. 2006
• European gas pricesand margins sufferedfrom time lag effects in 2007
Oil & Gas – Sales and EBIT
E&P
Gas trading
E&P
Gas trading
Salesin billion €
EBITin billion €
0
3
6
9
12
2001 2002 2003 2004 2005 2006 2007
E&P4.5 4.2 4.8 5.3
7.7
10.7
0
1
2
3
4
2001 2002 2003 2004 2005 2006 2007
1.3 1.2 1.4 1.62.4
3.3
10.5
3.0
99
1 | Oil & Gas in the BASF portfolio
2 | E & P
3 | Gas trading
4 | Strategic partnership with Gazprom
5 | Outlook
10
Operating Company (OPCO)
Core region
Production and / or Exploration
Russia
Northern Africa Caspian Sea
Europe
South America
Middle East
Exploration and ProductionActivities in core regions
11
Exploration and ProductionSuccess through focus
Wintershall is the starting point of a world-class hydrocarbon value chain called BASF
• #1 German E&P company, #11 in Europe, #59 worldwide*
• 75 years of E&P experience on- / offshore
• Experience in Enhanced Oil Recovery (EOR)since the mid 60’s
• Unique partnership with Gazprom
• Up- / midstream integration basis for“Gas for Europe” strategy
• Selective technology development
• World class operational excellence
* Source: Energy Intelligence 2008
12
Production growth [% p.a.]
Production costs [USD/boe]Return on capital [% p.a.]**
Finding & Development costs [USD/boe]F&D/Production [USD/boe]
Reserve replacement [%]Reserve/Production ratio [yrs.]***
* Benchmark Group (upstream only): Amerada Hess, Apache, BP, ExxonMobil, Marathon, Occidental, Shell, Talisman, Woodside** EBIT / average total assets, WIHO adjusted by non compensable taxes*** as of December 31, 2007Source: Herold, SEC, own calculation
Five year average 2003 – 2007 Wintershall Group Average* Group Range
13 27 46
-4.0 1.0 7.7
4.3 11.59.0
7.5 22.314.5
21.313.7
130
12.210.3
4.7
65 236
9.5 18.1
1.9
4.3
28
8.6
4.7
153
Exploration and ProductionWintershall competitive position
13
• Maintain geographic focus, core region concept
• Ensure adequate reserve base– Increase greenfield exploration, continue near
field exploration – Acquisitions
• Innovation: Evolve from smart follower to one of the leaders in selected technologies exploiting BASF know-how
• Continue production growth into next decade– Short term focus on Russian gas projects– 2015 overall production target:
150+ million boe/a
Exploration and ProductionStrategy
14
Nearfield exploration
Southern North SeaGermany
Libya
Greenfieldexploration
NorwayArgentina
Qatar
Frontier exploration
MauretaniaLibya – Kufra
Exploration and ProductionExploration portfolio strategy
15
Reduce explorationrisk
Advanced 3D seismicinterpretations
Improve oil and gasrecovery
Chemical EORSteam flooding
Optimized development of
complex reservoirs
Tight gasMulti frac technology
Exploration and ProductionSelective technology development
16
Exploration and ProductionExploration & development update
Norway• Participation in
11 licenses
Russia• Yuzhno Russkoye• Achimgaz phase I• Achimgaz phase II
Southern North Sea• 30 new licenses• E18-A development• P9-A/B development
Germany• Mittelplate: Infill drilling• Leer: Tight gas
Qatar• Operator block 3• 2nd appraisal well block 11
Libya• Operator license 201 Kufra• C97 water injection• Al Jurf (phase II)
Argentina• Aguada Pichana
infill drilling• Aguada Pichana
north west • Rincon Chico north
Mauritania• Taoudeni basin: 2nd
exploration phase
Operating Company (OPCO)
Core region
black
red
Current Activities
Exploration
Development
Turkmenistan• 2nd appraisal well block 11/12
17
Execution of Russian projectsAchimgaz
• First production joint venture with Gazprom
• Wintershall provides technical expertise for development of complex reservoirs
• 6 wells of pilot phase drilled and completed
• Production tests confirm expectations
• Start of production in 1H/2008
• Start of full field development in 2010
• Plateau production of up to 8 billion m³/a in 2015
18
Execution of Russian projectsYuzhno Russkoye
Yuzhno Russkoye• Start of production
ahead of schedule in October 2007
• Accelerated ramp up and earlier plateau phase
• Current production rate 33 million m³ per day* out of 59 wells
• Estimated production for 2008: 13 billion m³* (100%)
* Russian Standard
Forecast 2006Current schedule
Productionin billion m³ (100%)
0
5
10
15
20
25
2007 2008 2009 2010 2011
Plateau production
19
Reserves distribution end 2007Reserves development
Exploration and ProductionReserves*
* According to SEC guideline without Achimgaz** Concessions C96 / C97 at 51%
14%48%
24%11% 3%
NetherlandsArgentina
Libya**
Russia
GermanySEC Reserves (million boe)No consideration of Achimgaz reserves
R/P
0
200
400
600
800
1000
1200
1400
2001 2002 2003 2004 2005 2006 2007-10 yrs
-5 yrs
0 yrs
5 yrs
10 yrs
Oil Gas
940 976 978 924 871814
1,132
1,400
1,200
1,000
Total proven reserves: 1,132 million boe
2020
1 | Oil & Gas in the BASF portfolio
2 | E & P
3 | Gas trading
4 | Strategic partnership with Gazprom
5 | Outlook
21
Sales developmentCore Regions
Gas Trading Activities in Europe
* WIEE
F
UKDK
RO*
BUL*
BCZ
WINGAS gas salesin billion m³ p.a.
0
10
20
30
40
2005 2007 2010E 2015E
30
40
21
Europe excl. GermanyGermany
33%
45%25
AU
D
22
Gas Trading Well positioned in a liberalizing market
• WINGAS # 3 in German market, expanding into Europe
• Excellence in gas distribution, trading, transport and storage
• Strategic partnership with Gazprom through successful joint ventures (WINGAS, WIEH, WIEE)*
• Large long term supply contracts (until 2030)• Access to modern and expanding infrastructure
– Well structured pipeline system in NW Europe
– Largest gas storage facility in West Europe(Rehden)
• Direct connections to European gas hubs
* WINGAS: 50+1% BASF / 50-1% Gazprom; WIEH and WIEE 50/50 each.
23
Gas TradingWINGAS competitive position
Gas sales growth [% p.a.]
Sales per employee [million €/employee]EBIT per employee [million €/employee]
Return on capital [% p.a.]**Return on sales [% p.a.]
Five year average 2002 – 2006
-5.2 14.9
10.6 13.5
7.5 8.5
1.6 14.9
3.3 14.70.4
0.19 1.21
14.7
0.05 1.21
7.0 13.5
5.0 11.2
WINGAS Peers average* Range peers
* Peer Group: E.on Ruhrgas, Verbundnetz Gas AG, Gaz de France, Centrica** (Income before tax + interest on borrowed capital) / average total assets Source: Annual Reports, own calculation
24
• WINGAS offers long-term security of supply
• Diversified portfolio: competitive advantage throughoptimisation of short and long term supply
• Innovative sales strategies:– Gas for Europe– Optimization of customer portfolio: move closer
to end user– Focus on storage related products: value before
volume• Value creation through access to storage and
pipeline infrastructure
• Industry leader in cost efficiency
• Strengthen partnership with Gazprom through thewhole value chain
Gas TradingWINGAS strategy
25
Gas TradingWINGAS turntable for Russian gas
• Decreasing indigenous production (e.g. North Sea)
• Increasing demand• Growing import and
storage needs• Increasing share of
Russian importsEurope needs gas and flexibility
25
14
2
3
5
INTERCONNECTORJAMALTRANSGASBBLNORD STREAMGas depositWINGAS TRANSPORT-pipeline systemWINGAS TRANSPORT-pipeline system (planned/ under construction)
1
2
3
4
5
Imports
Local production
EU 27in billion m³
2006 2020
620-680
550
~ 40% ~ 20%
~ 80%~ 60%
26
Offshore:• 55 bn m³/a capacity via two 1,200 km subsea
pipelines*• First gas to be delivered in 2011• Joint Venture between Gazprom 51%, BASF
and E.ON 24.5% each**
Onshore:• System expansion: OPAL (2011), NEL (2012)• Increased transportation capacity to NL, B, (UK)
through system upgrade incl. Storage• Germany as distribution hub for Europe
Total investment €3.1 billion (BASF-share)
Nord Stream Major project for European supply
* Nord Stream estimates project budget for the offshore part at €7.4 billion (March 31, 2008)** Joining of Gasunie with 9% will reduce BASF‘s and E.ON‘s share to 20% each, final agreement
to be signed in 1H/2008
27
Gas TradingDiversified supply portfolio
short-/mid-term (1-4y)
long-term West (>4y)long-term Russian supplies (2035)„Nord Stream“long-term Russian supplies (2030)
WINGAS sales
Supply
• Portfolio of long-term supply contracts from different sources
• Active at different spot markets in NW Europe
• Logistical integration of storages, spot markets and long term supplies
Diversification,optimized logistics,security of supply
Sales
• Until 2010 approx. 80% of sales volumes already contracted
WINGAS supply portfolioin billion m³ p.a.
0
40
1995 2000 2005 2010 2015
20
30
10
ZBHGerman border price
Long term vs. spot pricein ct/kWh
0
1
2
3
4
5
Jan03
Jan04
Jan05
Jan06
Jan07
Jan08
28
Competitive advantage through storage portfolio
• Different markets/regions
• Different storage characteristics
• Pipeline linkage
Arbitrage potential
Physical portfolio optimization
Security of supply
Integrated sales products for target customer
existingplanned/under construction
With planned expansion to 6.5 billion m³ storage volume WINGAS # 3 in NW Europe
Gas Trading Competitive storage portfolio
* Capacity 50% WINGAS, 50% Gazprom** Capacity 1/3 WINGAS, 1/3 RAG,
1/3 Gazprom28
Jemgum(2012: 1.2 bn m³)
Haidach (100%)**(2007: 1.2 bn m³)(2011: 2.4 bn m³)
Saltfleetby (100%)*(2011: 0.8 bn m³)
Rehden(1993: 4.2 bn m³)
2929
1 | Oil & Gas in the BASF portfolio
2 | E & P
3 | Gas trading
4 | Strategic partnership with Gazprom
5 | Outlook
30
BASF receives
Yuzhno Russkoye WINGAS Libya onshoreBASF receives 25% less one share with voting rights plus 10% partici-
pation without voting rights in Severneftegazprom (SNG)
BASF receives the profits from the sale of 35% of the gas produced
Gazprom receives in addition to the present
shareholding of 35%15% minus one share
of WINGAS GmbH
Gazprom receives a 49% stake of a German
Wintershall subsidiary which holds the Libyan onshore concessions (C96/C97)
€540 millionCash payment to Gazprom
Gazprom receives
Structure of the asset swap
31
• BASF share of 35% of gas production is sold by SNG to Gas Marketing Company at cost plus margin
• Remaining 65% of gas production is sold directly to Gazprom at cost plus margin
• Cost plus margin of SNG isdistributed via dividends to shareholders (double-digit million Euro amount p.a.)
• Gas Marketing Company isselling-on BASF‘s share of gas to Gazprom accordingto agreed price formula
• Price formula is a mix of netback export price and Russian domestic prices
SNGGas Production
Company
Gas MarketingCompany*
65% of gasproduction
at “cost plus“
100% Profits
Sale ofBASF‘s shareof gas to Gazprom according to price formula
35% of gas production
at “cost plus“(BASF-share)
Dividends
Asset swap: Yuzhno RusskoyeGas and profit flows
Dividends
* ZAO Gazprom YRGM Trading
32
Financial impact of asset swap
Million €Fair Value of given assets (15% WINGAS, 49% Libya)
Cash Payments• Compensation of value of received assets
• Earnings 2006 (15% WINGAS; 49% Libya)
850
598540
58
Fair Value of received assets (35% Yuzhno Russkoye) Million €
Deferred taxes -424Total 1,448
Investment in SNG (BASF‘s share in equity value of SNG) 110
Total 1,448
Intangible assets* (Value of gas marketing contract) 1,762
Cash payments include • Cash compensation to
Gazprom to balance thevalue of swapped assets
• Balancing of earnings of WINGAS and Libya in 2006 as of effective date of swap agreementJune 1st, 2006
• WINGAS and Libyaearnings in 2007 will bedistributed via dividendsin 2008
* including deferred taxes (IFRS regulation)
33
Net income in € million*
Asset swapEstimated net effect on BASF net income
• Asset swap has alreadya positive impact in 2008 due to higher than expected production at Yuzhno Russkoye gas field
• Strong contribution to netincome as of 2009
0 5
143137
0
25
50
75
100
125
150
2007 2008 2009 2010
* Assumptions: Brent range $75 – 60 per bbl, Exchange rate $/€ 1.45 – 1.40
34
-49% of after tax income
100% 100%
50%
24.5% (20% if Gasuniehas joined JV)
LibyaConcession
96 & 97Achimgaz WINGAS Nord Stream
offshore
100%
Dividends
New projects with GazpromImpact on BASF’s P&L structure
Oil & Gas EBIT
Financial results(equity method)
= Income before taxes and minority interests
./. Income taxes(incl. n.c. taxes in Libya)
= Income before minority interests
./. Minority interests
= Net income
Yuzhno RusskoyeSNG Gas Mktg C.
-15% additional after tax income
3535
1 | Oil & Gas in the BASF portfolio
2 | E & P
3 | Gas trading
4 | Strategic partnership with Gazprom
5 | Outlook
36
Oil & GasPursuing ambitious growth targets
***Brent range of $60 ($/€ 1.40) – $75 per barrel ($/€1.45) including Yuzhno Russkoye 35%, Libya onshore C96/C97 51%; WINGAS: 50% BASF plus one share; subject to contract prolongation, no major changes in market frame-work
* Excl. asset swap with Gazprom** Brent average 2007 of $/bbl 72.39, $/€ 1.37;
Libya C96/C97: BASF 51%, WINGAS: BASF 50%, effective December 2007
Investments 2008-2012:Gas trading capex: €3 – 4 billionE&P capex: ~ €2 billionE&P exploration expenses.: €1 bn
Investments 2001-2007:€3.5 billion*
Net income Oil & Gas: €780 – 910 million***
Net income Oil & Gas: €789 million**
Natural gas sales of 37 billion cubic meters
Crude oil and natural gas production of 112 million barrel oil equivalent
2007
Increasing natural gas sales to 40 billion cubic meters
Increasing crude oil and naturalgas production to 140 million barrel oil equivalent
2010
2001-2007 2008-2012
37
Disclaimer
This presentation may contain forward-looking statements. These statements are based on current expectations, estimates and projections of BASF management and currently available information. They are not guarantees of future performance, involve certain risks and uncertainties that are difficult to predict and are based upon assumptions as to future events that may not prove to be accurate.
Many factors could cause the actual results, performance or achievements of BASF to be materially different from those that may be expressed or implied by such statements. Such factors include those discussed in BASF’s Report 2007 on pages 106ff. We do not assume any obligation to update the forward-looking statements contained in this presentation.
38
39
Back-up
39
40
Exploration and ProductionProduction forecast
Russia2007: 4.2 million boe2010: min 60 million boe
Europe 2007: 30.2 million boe2010: min 26 million boe
North Africa2007: 51.5 million boe2010: min 22 million boe
South America2007: 26.4 million boe2010: min 27 million boe
Core regionCurrent Activities
Caspian Sea2007: --2010: tbd
Middle East2007: 0.4 million boe2010: tbd
41
0,000
1,000
2,000
3,000
Exploration and ProductionResource Overview
Achimgaz
Base
Net effectYR/Libya
Swap
Resources (3P) *(in million boe)
* Sum of proven, probable and possible reserves