Common use of CRUDE OIL ASSESSMENT PROCESS Clause in Contracts

CRUDE OIL ASSESSMENT PROCESS. This process is made on a monthly basis, between the 10th and the 15th day of each month, immediately after the month to be reported. It is made based on: ▪ The price of the crude oil components in the distillation Cuts’ model will be the one established with the arithmetic average of the international prices of the two (2) previous Calendar months and the same Calendar month for which the balance is being made. ▪ Prices of the International market for petroleum by – products published by Xxxxx’x and consolidated by the company called Xxxxxx & Xxxxx. ▪ Assay – Type characterization of the pure Crudes and simulation of the mixes that occur through the transportation service. ▪ Real API of each pure crude and mixes, certified by independent inspectors in each transfer point in custody and / or production. The sequence for the management of information in this process is represented in figure 1 below: DC – Contrato de Transporte de Crude Oil – 008 – 2013 78 Input of Basic Data Product Prices ===> Update of data Assay samples or pure crude oils ===> Calculation of Prices $ US / Bl ===> Update of prices and constants Summary Illustration 1 – Sequence of activities in the process of assessment Theoretical reasons of the assessment process: The current compensation utilizes two methods to assess the crude oil: ▪ Distillation Cuts ▪ Linear regression of the API Y % S (Bulk Properties) Distillation Cuts: This method utilizes distillation in the lab that models the behavior of each one of the refining processes (the “Distillation Cut”). Combining the results of the fractioning of the Crude Oil with the prices in the U. S. Market (USGC) of some refined products, the value of the barrel of said crude oil in the same market is determined. Illustration 2 shows the simple refining scheme utilized to characterize the currents that take part in the transportation:

CRUDE OIL ASSESSMENT PROCESS. This process is made on a monthly basis, between the 10th and the 15th day of each month, immediately after the month to be reported. It is made based on: ▪ The price of the crude oil components in the distillation Cuts’ model will be the one established with the arithmetic average of the international prices of the two (2) previous Calendar months and the same Calendar month for which the balance is being made. ▪ Prices of the International market for petroleum by – products published by Xxxxx’x and consolidated by the company called Xxxxxx & Xxxxx. ▪ Assay – Type characterization of the pure Crudes and simulation of the mixes that occur through the transportation service. ▪ Real API of each pure crude and mixes, certified by independent inspectors in each transfer point in custody and / or production. The sequence for the management of information in this process is represented in figure 1 below: DC – Contrato de Transporte de Crude Oil – 008 – 2013 78 Input of Basic Data Product Prices ===> Update of data Assay samples or pure crude oils ===> Calculation of Prices $ US / Bl ===> Update of prices and constants Summary Illustration 1 – Sequence of activities in the process of assessment Theoretical reasons of the assessment process: The current compensation utilizes two methods to assess the crude oil: ▪ Distillation Cuts ▪ Linear regression of the API Y % S (Bulk Properties) DC- Crude Oil Transportation Agreement - 009 - 2013 90 Distillation Cuts: This method utilizes distillation in the lab that models the behavior of each one of the refining processes (the “Distillation Cut”). Combining the results of the fractioning of the Crude Oil with the prices in the U. S. Market (USGC) of some refined products, the value of the barrel of said crude oil in the same market is determined. Illustration 2 shows the simple refining scheme utilized to characterize the currents that take part in the transportation:

CRUDE OIL ASSESSMENT PROCESS. This process is made on a monthly basis, between the 10th and the 15th day of each month, immediately after the month to be reported. It is made based on: ▪ The price of the crude oil components in the distillation Cuts’ model will be the one established with the arithmetic average of the international prices of the two (2) previous Calendar months and the same Calendar month for which the balance is being made. ▪ Prices of the International market for petroleum by – products published by Xxxxx’x and consolidated by the company called Xxxxxx & Xxxxx. DC – Crude Oil Transportation Agreement – 018 – 2013 88 ▪ Assay – Type characterization of the pure Crudes and simulation of the mixes that occur through the transportation service. ▪ Real API of each pure crude and mixes, certified by independent inspectors in each transfer point in custody and / or production. The sequence for the management of information in this process is represented in figure 1 below: DC – Contrato de Transporte de Crude Oil – 008 – 2013 78 Input of Basic Data Product Prices ===> Update of data Assay samples or pure crude oils ===> Calculation of Prices $ US / Bl ===> Update of prices and constants Summary Illustration 1 – Sequence of activities in the process of assessment Theoretical reasons of the assessment process: The current compensation utilizes two methods to assess the crude oil: ▪ Distillation Cuts ▪ Linear regression of the API Y % S (Bulk Properties) Distillation Cuts: This method utilizes distillation in the lab that models the behavior of each one of the refining processes (the “Distillation Cut”). Combining the results of the fractioning of the Crude Oil with the prices in the U. S. Market (USGC) of some refined products, the value of the barrel of said crude oil in the same market is determined. Illustration 2 shows the simple refining scheme utilized to characterize the currents that take part in the transportation:

CRUDE OIL ASSESSMENT PROCESS. This process is made on a monthly basis, between the 10th and the 15th day of each month, immediately after the month to be reported. It is made based on: ▪ The price of the crude oil components in the distillation Cuts’ model will be the one established with the arithmetic average of the international prices of the DC – Contrato de Transporte de Crude Oil – 017 – 2013 89 two (2) previous Calendar months and the same Calendar month for which the balance is being made. ▪ Prices of the International market for petroleum by – products published by Xxxxx’x and consolidated by the company called Xxxxxx & Xxxxx. ▪ Assay – Type characterization of the pure Crudes and simulation of the mixes that occur through the transportation service. ▪ Real API of each pure crude and mixes, certified by independent inspectors in each transfer point in custody and / or production. The sequence for the management of information in this process is represented in figure 1 below: DC – Contrato de Transporte de Crude Oil – 008 – 2013 78 Input of Basic Data Product Prices ===> Update of data Assay samples or pure crude oils ===> Calculation of Prices $ US / Bl ===> Update of prices and constants Summary Illustration 1 – Sequence of activities in the process of assessment Theoretical reasons of the assessment process: The current compensation utilizes two methods to assess the crude oil: ▪ Distillation Cuts ▪ Linear regression of the API Y % S (Bulk Properties) Distillation Cuts: This method utilizes distillation in the lab that models the behavior of each one of the refining processes (the “Distillation Cut”). Combining the results of the fractioning of the Crude Oil with the prices in the U. S. Market (USGC) of some refined products, the value of the barrel of said crude oil in the same market is determined. Illustration 2 shows the simple refining scheme utilized to characterize the currents that take part in the transportation:: DC – Contrato de Transporte de Crude Oil – 017 – 2013 90 Illustration 2 – Distillation Scheme used by the Transporter The cuts made during the distillation in the lab and the analyses made to each one of them are specified in Table 1. FRACTION DISTILLATION RANGE GASES FOE LIGHT GASES: METHANE + PROPANE NORMAL PROPANE ISO - BUTANE NORMAL – BUTANE NAPHTHA LIGHT PENTANE AT 160 ºF HEAVY 160 ºF TO 350 ºF DIESEL 350 ºF TO 650 ºF VACUUM GAS OIL (VGO) 650 ºF – 1000 ºF VACUUM BOTTOMS (VB) 1000 ºF + Table 1 – Distillation Ranges in each cut From the foregoing cuts, characteristics are determined, such as: volumetric yield of each one of the fractions, API, sulfur and the viscosity of the bottoms. This set of characteristics is internationally known as ASSAY. Additionally, general characteristics of the crude oil are determined, such as the API, sulphur and Factor K.