Refineria Colombiana.

Legal Framework.
We are advancing the pertinent studies, for approv-
al in the Congress of the Republic, in order to elimi-
nate subsidies on gasoline and achieve free access " Oil refining is free within the national territory by
to the oil market at an equal rate in the transporta- private companies. "
tion of fuels. Document Conpes 2393/1994, article 58 of Decree
1056 1953

Colombian legal stability provides a stable terrain

for foreign investment.

Law 963 (Jul/05) • Decret 2950 (Ag./2005) • Conpes 3363 (2005)

Objectives.
Complement the efficient production of heavy crudes.
Take advantage of the limited regional refining capacity, reaching regional markets.
Reduce the import of fuels and thinners in the country.
Having a portfolio of high-quality refined products aimed at strategic markets.
Use state-of-the-art technology, aligned with international environmental regulations.
Reduce transportation costs.
Obtain the declaration of a permanent Free Trade Zone.
Business units.
1.Refinery: as the main productive unit
2. 135MW Power Plant
3. Fluvial Port on the Magdalena River
4.Puerto Seco and civil infrastructure area for industries
complementary to the hydrocarbon sector.
5. Plant for Transfer of Finished Products.
Refinery.
The Refinery is projected to process 100,000 B / D of crude oil: Castilla Blend (19.9 ° API) and Vasconia (24 ° API).
Conceptual Engineering will consider refining scenarios based on mixing these crudes, and if necessary with heavier
crudes.
Refined Products to obtain: Diesel, Gasoline, Jet Fuel, Naphtha and Bottom Refined
Tentative Refining Processes to use:
• Normal Distillation: heating units, atmospheric distillation, and vacuum distillation.
• Deep Conversion: visco reducer, desulfurization, coke and other plants required according to the application of
technology for deep conversion indicated by Conceptual Engineering.
• Support infrastructure and effluent management.

Pre-feasibility, feasibility and pre-engineering studies: are available in a virtual file (“Data Room”) to be validated and
to initiate the Conceptual Engineering and necessary support studies, among others, type and requirements of the Free
Zone, study market, socio-environmental impact study.
135 MW Power Plant.

Give priority to the Industrial Petroleum Complex (RCS).

Initial analysis indicates that a medium-speed combined cycle with the ability to burn
light and heavy fuel in addition to natural gas and others would result in maximum
power generation and economic flexibility. Conceptual Engineering will define the
fuel and the number of plants under the most convenient technical-economic-safety
conditions for RCS. (Source: LS Energia)
In the event of not using the RCS Complex, all the electricity generated will be sold to
the national electricity grid.
Due to security measures and maintenance shutdowns, a permanent connection will
be designed to supply the electricity required by RCS from the national supply
network.
Port on the Magdalena River.

It is essential to make the logistics and transportation costs of all the key
elements for the Project feasible, as it is the most economical alternative
among the main means of transportation (river, rail and road).
• The connection by the river with the seaports of the Atlantic coast make it
the shortest and most direct route for the movement of equipment and
others that the project requires.
• It is essential to receive and dispatch goods and products to be made and
processed at the Sevastopol Complex.
Once the free zone permit is granted, it will be the entrance for all supplies,
equipment and machinery during the construction of the RCS.
The port will facilitate the transshipment of the cargo that comes in the maritime transport ships to the river transport
barges, logistically and cost benefit, to the development of the RCS, providing an invaluable service for the movement
of raw materials, products or derivatives that require or export the RCS Complex.
Due to its strategic location, the RCS Complex will have free zone advantages, due to its high connectivity with import
and export ports, it will become a regional development pole, also serving as a river port, thanks to intermodalism: as
a dry port and burden of the industries that are established in the free zone and of the other neighboring and regional
ones of its zone of influence.
The port is conceived as a self-sustainable unit, closely linked to the free zone, which can be a profitable business unit
not only as a consumer and cargo generator, but also as a port for transshipment of goods, products and merchandise
for import and export. national.

(Source: Duaga Consulting, SA)

Civil Infrastructure.

As a “dry port” it will be an extension of the port, it will have different transport, service and maintenance infrastructures, becoming an
intermodal terminal, with customs releases, which will speed up the arrival and departure of goods through the port. This multimodal
system speeds up the physical flow of loading and unloading, reduces costs and increases control over the security of goods. It will be
projected as a civil infrastructure area for complementary industries (mainly oriented to the maquila) and storage of the hydrocarbon sector,
based in a free zone operated under a customs regime and open with fiscal incentives. It will be a multifunctional Industrial Logistics
Complex, and therefore a key part of the overall development strategy of the RCS Complex..
Finished product transfer plant:
The Refinery will be located in an area with nearby consumption centers and access
through excellent communication channels; Hence, the Transfer Plant has been
considered as a business unit based on:
• High demand from a captive local consumer market.
• Have less inventory at the refinery.
• Availability and product dispatch infrastructure at the required time so as not to
miss out on local marketing opportunities.
The Transfer Plant will be a continuous tool to monitor fluctuations in demand for
different products in the domestic market (local sampling), and use its data as one
of the variables to make projections and adjust volumes of products to be produced
at the refinery.
Approximate Investment.

Total estimated US$ 6.000 MILLONES.

Refinery: 5.000 millones USD
Power Plant: 400 millones USD /
Othes Business Unities: 600 millones USD .
Project under PIN classification and promoted by Procolombia: The RCS Complex will be
incorporated into the National Interest Projects Program (PIN); therefore the permits
from government institutions required for its construction will be achieved in less time. It
is also being promoted to potential investors by ProColombia through its national and
international network of offices.

This approximate investment is based on "comparator" indices or "benchmarks" for

these types of projects, showing at this stage only the order of magnitude of the
investment (Class V Cost Estimate). A more exact investment will be obtained during
the development of the engineering stages.

ESTIMATED IPC TIME (Engineering, Procurement and Construction): 48 months (4

years).
Schematic example of RCS type
refinery installaton areas.

Río Magdalena

A Barrancabermeja
Geographical project location.
Boundaries and environment.
North:
UBERTO GUARDIA 1.497.93 Mts,
LAUREANO SANTA 705 Mts
Hda, "La Florida" 3.586.84 Mts
Zona rural de Murillo 670.39 Mts
South:
Hda. San Juan de Bedout 2.328.75 Mts
San Juan de Vásquez 2 4.114.29 Mts
East: Río Magdalena 1.350.97 Mts
West: Hda. La florida 2.308.56 Mts
Total. 16.562.73 Mts

Fuente: Fotos publicadas en Internet

Infraestructure related to the loca-
tion of the project area.
Red de oleoductos Red de oleoductos Red de oleoductos

Colombia has a network infrastructure of pipelines and gas pipelines that are near where the Oil Industrial
Complex Sebastopol (RCS) will develop, among others, the Ocensa and ODC pipelines and Transmetano gas
pipeline.
 Raw material Vs. Short term
supply (Immediately).
LEGAL SECURITY
Article 4th. 1964 Decree 2657: All petroleum operator is obliged to Likely location of the
allocate or preferably sell their production . port.
a)the official refinery, and
b)private operating in the national territory. The 2nd paragraph is in
these terms regulated the article 58 of the Code of Petroleum. Puerto Berrio
Article 58 Petroleum Code and Decree Law 2119 of 1992:
•Petroleum refining is free within the national territory.
•Exploitation dealers will attend the needs of the country, and offer for
sale, preferably where required by the consumption of oil derivatives,
the raw material required to meet such consumption, according to the
regulation that the Government in this regard.
OCENSA PIPELINE & COLOMBIA PIPELINE (ODC)
Both pipelines have subscribed rights-of-way for the lot selected for construction of Sebastopol Industrial
Complex (RCS).
To date the Ocensa pipeline carries 60% of the crude oil produced in the country. In 2010 it transported light
crude 40% and 60% heavy crudes.
Ocensa took the decision to increase the transport of crude oil (project P135) into operation in 2016 bringing
its current capacity of approximately 575,000 Bbls to 745,000 Bbls.
The project P135 (Ocensa) will have 3 new stations, a tank of 150,000 Bbls in Cusiana and two tanks in
Vasconia of 165,000 Bbls.
P135 project is fully funded.
Marketing of obtained products.

Plants Refinery distance

Km.
Puerto Berrio 1
Barranca 125
Mariquita 235
Bucaramanga 190
Ibagué 410
Medellín 195
Rionegro 210
Bogotá 338
Commercial strategy.
Close to the refinery consumption market:
Basket proposal for refinery.
Differentiating strategy for delivery by tank truck.
Lower logistics costs. Fuel Volumen - %
Direct delivery to stations through the storage plant.
Main production taken to major wholesalers (Terpel, Biomax). Diesel 40%
Replacement of imported products: Gasoline 35%
Deficit of Jet Fuel in the central area of the country.
Deficit of Diesel of low sulphur. Jet Fuel and Naftas 20%
Deficit of naphtha as crude oil diluent. R e fi n e d 5%
Products for other segments: Fund (*)
IFOS and Marine-Diesel. (*)Coke, lubricants, asphalts,
Asphalt. bases, etc.
Values added:
Little current refining capacity.
International sales of Jet Fuel and IFOS.
Higher standards for large consumers.
Domestic deliveries of inputs for IFOS
Economic evaluation.

Products basket.
CONSIDERATIONS
In short periods of time, world oil markets and product
markets operate independently of each other, reacting
to their respective signals of supply and demand.
In the log term they are related, but the transition from
crude oil prices to the prices of products - transmission
mechanism oil prices - is a very complex process, since in
the multivariate models to be used should be consid-
ered other parameters, among these, demand for mate-
rials and supply factors that affect the price of products.
Environmental plan.
Strategic lines use in the elaboration of the CRSP: the goal of the Plan for the Refinery is to establish guidelines of management in order
to ensure ethical principles and respect employed and external persons, society and the environment. Among these strategic lines, the
basic are listed below:
Minimize the environmental impact: a primary aspect included in the concept of social responsibility is the respect for the environment.
In fact, it is one of the main premises in sustainable development.
Ensure the motivation and the involvement of human resources in the continuous improvement of the company.
Maintain a close relationship with the customers and guarantee their satisfaction.
Extending the commitment to social responsibility to suppliers and subcontractors.
Environmental plan.
Engaging with the community and the social fabric: this line is known as "social action", which refers to a wide range
of actions, such as the dialogue with the community, the monetary or investment in species, donations, sponsorship,
among many others. Social action intensifies with concrete actions, well planned to achieve its objectives, the period
in which the Plan is carried out.
Promote and systematize the channels of dialogue: social responsibility carries inherent the concept of involvement
and dialogue with the parties concerned mainly the shareholders of the company. Dialogue with these partners is
very important to define a strategic line in the Plan.
Environmental plan.

The Refinery will prepare a Plan (CSRP) with their respective actions to take to engage with social and environmental de-
velopment, promoting policies of corporate social responsibility, characterized by the transparency of its management
systems and the implementation of social programs.
In this way the Refinery expects to respond to the growing social demands and shall act for the benefit of human rights,
the integration of its employees and respect for social and environmental reality where it will develop its activities. For this
the Refinery be certified under the ISO 9001 and 14001 standards, and SA 8000, all applied to management, quality and
environmental management systems.
 Dialogue

Society

Employees Environment

Customers Suppliers

Shareholders

Dialogue
RCS Free Zone (FZ).
As defined by the Ministry of Commerce, Industry and Tourism, the law 10042005, 3832007 and 40512007
Decrees, Free Zones are:
«Geographically delimited areas within the national territory, where develop industrial activities of goods and
services, or commercial activities, under a special commodity tax, customs and foreign trade regulations».

Types of Free zone in Colobia

Permanet Special Transitory

Benefits of Free Zone for RCS.

According to the legal framework and 1607 Tax Reform Act of 2012:
•Will cause no tax on added value (VAT) or tariff value for goods brought from abroad (construction process of all units of
Sebastopol).
•Exemption from VAT for raw materials, inputs and finished goods that from customs territory to be sold to industrial users
of FZ.
•VAT exemption for sales of goods to foreign markets.
•Goods exported from FZ to foreign countries can enjoy the benefits of international trade agreements.
•Single rate of income tax of 15% + 8% of tax equity (CREE added in the law 16072012).

Source: Duaga Consulting / Araújo Ibarra – Consultores en Negocios Internacionales

Conclusions.
According to the studies carried out to date, among others, the Colombian Legal framework and Legal Stability
Agreement, competitive advantages are granted to foreign investment in terms of a special tax regime, confidence
and respect to foreign direct investment.
RCS is located in area where infrastructure, surface and near transport facilities.
RCS will have a strong position in the large markets and growth in the hydrocarbon sector in the short term. It aims
initially serve a captive market in the regions of the eastern part of the country (Santander, Norte de Santander and
Eastern Plains).
Its corporate policies will be mainly oriented to satisfy the domestic market (quality and quantity of the products)
with excellent operating practices, strengthen the value chain and the sustainable development of its market
niches.
RCS will apply clean and environment friendly technologies, best management practices and corporate social
responsibility programs. It will generate new sources of employment, improving the quality of life for many
Colombians.
Conclusions.

The RCS project is viable, feasible and of great

interest for the development of the country's
oil industry.
Economic structure.

}
USD 500 millones
Total estimated investment (Budget Class V)
1. Refinery USD 5.000 millones Total USD 6000 USD 500Millones
2. Power Plant of135MW USD 400 millones Millones. 30% Equity 70% Credit Line.
3. Other business units USD 600 millones

Project Financing:
Total Investment FZ: 5 UNIDADES DE NEGOCIOS.

Month 01 al 20: Estudios Ingenieria Conceptual. FEDD, Ingenieria,
detalles
MOnt 20 al 48: : Procura, construcción, montaje, capacitación,
marcha y operacion complejo industrial.
USD 500 millones Se ha elaborado y se dispone
actualizado un cronograma de
USD 500Millones Desembolsos mensuales para la
etapa de Ingeniería: Conceptual y
detalles.
 Dr. Germán Casas - President: +57 1 213 4672 +57 311 812 0654 +57 310 277 1239 .

Ing. Yamile Wilches N. - Proyect Manager: +57 322 362 6232

casassebastopol@gmail.com germancasas@refineriacolombianasebastopol.com
yamilewilches@refineriacolombianasebastopol.com .

Carrera 7B No. 108 - 33

Bogotá, D.C. República de Colombia

Executive summary and technical study : Grupo EPAL.

Comunicación es: diseño.