Petro Vista Energy's goal of building an oil and gas company focused on production is heightened with key resource rich assets in South America, a growing global appetite for oil, and decline in production.

OIL INDUSTRY HIGHLIGHTS:

• Oil prices declined in September and early October 2008; expected to increase in 2009. The current slowdown in economic growth is contributing to the recent decline in oil demand and sharp decline in prices since July. Oil markets are expected to remain relatively tight because of sluggish production growth.
• Oil demand forecasts to rise for 2008 and 2009. Oil consumption is expected to rise by 300,000 barrels per day (bbl/d) in 2008 and by almost 800,000 bbl/d in 2009 compared with year-earlier levels.
• Non-OPEC Supply expected to decline. A series of supply disruptions are expected to negatively affect non-OPEC supply resulting in minimal supply growth unseen since 2005.
• OPEC crude oil production declines to 32.4 million bbl/d in the fourth quarter of 2008 and falls through 2009 to an average of 31.6 million bbl/d for that year.

OIL CONSUMPTION:

Oil demand forecasts for 2008 and 2009 were trimmed by 240 kb/d and 440 kb/d, respectively, given weaker OECD deliveries and the IMF's downward revisions to 2009 global GDP assumptions. World oil demand is expected to average 86.5 mb/d in 2008 (+0.5% or +0.4 mb/d vs. 2007) and 87.2 mb/d in 2009 (+0.8% or +0.7 mb/d).

Solid growth in non-OECD countries, especially China, India, Latin America, and oil exporting countries in the Middle East, is partly offset by sharp declines in U.S. oil consumption as well as lower oil consumption in many other OECD countries.

In 2008, non-OECD consumption is expected to rise by 1.4 million bbl/d, while OECD consumption is expected to fall by 1.1 million bbl/d. China's oil consumption remained high in August 2008 as imports for crude and oil products climbed 12 percent and 32 percent, respectively, from year-earlier levels according to Chinese government data. These trends are similar for 2009, although the decline in OECD consumption in 2009 is expected to be about half of the amount seen in 2008. The level of Chinese demand growth following the Olympics will have an important impact on non-OECD consumption growth and will depend on the domestic economy as well as the level of exports to other countries.

OIL PRODUCTION:

OPEC crude oil production is expected to average 32.7 million bbl/d during the third quarter of 2008, up 1.7 million bbl/d from year-earlier levels. The forecast assumes production in Saudi Arabia of 9.6 million bbl/d in the third quarter, representing a 900,000-bbl/d rise from year-earlier levels. OPEC's call for greater compliance with quotas at its September meeting, suggests about a 500,000-bbl/d cut in output, but this outcome is uncertain. Given that the bulk of OPEC above-target output has been coming from Saudi Arabia, the group's decision to scale back production will depend on Saudi Arabia's willingness to cut. Taking into account uncertainties about Saudi actions, this Outlook assumes that OPEC crude oil production declines to 32.4 million bbl/d in the fourth quarter of 2008 and falls through 2009 to an average of 31.6 million bbl/d for that year. Lower crude oil production, combined with planned increases in OPEC total liquids production capacity, suggests OPEC surplus crude production capacity could increase from 1.5 million bbl/d in the second quarter of 2008 to compared with year-earlier levels.