The New Zealand Refining Company

Section 1: Our Company

Section 2: NZRC Results

Section 3: Global Refining Situation

People and Environment

Where We Are Today At NZRC our aim is to ensure that everyone on site goes Safely Home, Every Day. In 2010, we focused on embedding our vision of Safely Home, Every Day and on reinforcing the accountabilities that translate that vision into clear expectations. We continued to demonstrate our commitment to health and safety and to develop our safety leadership skills. Our emergency systems and people are good and we know what’s needed to become world-class.

Where We Want to Be • Visible management commitment to health and safety is demonstrated in everything we do. • Every individual understands how they contribute to a successful health and safety performance. • We are passionate about health and safety and intervene to protect others. • Every individual is trained to carry out their tasks safely or is adequately supervised. • Our health and safety management and emergency systems are robust and recognised as world-class. • We understand and manage our significant health and safety risks.

Where We Want to Be • Our environmental footprint is significantly reduced beyond that required by law. • The impact on our neighbours from visible process smoke, noise and offensive odours is rare and our air quality is well within strict international environmental guidelines. • Our greenhouse gas emissions intensity and energy efficiency are the best they can be. • All current and legacy waste is well managed and our harbour remains safe to enjoy and to take food from because we ensure anything that leaves our site/operation is under our control. • Our site is clean and tidy and we help our community achieve its environmental aspirations.

Environmental Affairs

Environmental performance:

very good and getting better

compliance and beyond

energy performance/ energy study

good neighbour/ good corporate citizen

Patuharakeke relationship

NZRC’s values are the source and guideposts for the way we work and they are the foundation on which all

our actions are based.

They express an aspiration of the type of organisation we intend to

become and the way we are going to behave as we bring our Business

Plan to life.

Company Overview

NZRC Overview

• Supplies 80% of NZ’s oil product requirements. Oil Companies import

the balance (mainly from Singapore region, Japan and Australia).

• Owns the only oil refinery in New Zealand.

• Toll refiner of crude oil – charges a processing fee based on gross

margin generated.

• Owns the multi-product pipeline to Auckland (Approx. 50% of

production), remainder of market dispersed (coastal 46%, road 5%).

• 75% ownership of Independent Petroleum Laboratories

• 320 employees, 150 – 300 contractors (can move to +500 SD etc).

• NZRC Governance is through the Board of Directors (shareholder

representation from both the oil companies and via independent

appointment), the chairman is independent.

NZRC Overview

We make approximately….

• 50% of NZ’s petrol

• 75% of NZ’s Diesel

• 80% of NZ’s Bitumen for roading

• Fuel Oil for shipping

• Sulphur for farm fertiliser

• Co2 for carbonation of drinks

NZRC Company Structure

Listed on New Zealand Stock Exchange.

280 million shares with current market capitalisation of ~$1.04b.

Shares held by four major oil companies in New Zealand, Garlow Management and ~3,750 other shareholders.

Directors:

BP 2

Mobil 2

Z Energy 2

Chevron 1

Independent 3

NZRC Customers/Shareholders

Refinery Capacity Allocation

Greenstone Energy, 30% BP, 28%

Chevron, 21%Mobil, 21%

The four customers have

access to 100% of the refining

capacity.

Shareholding

BP

24%

Chevron

13%

Mobil

19%

Greenstone

Energy

17%

Garlow

Management Inc

13%

Public

14%

NZRC Leadership Team

Ken Rivers

Chief Executive Officer

Jack Ariel

Project Director

Vaughan Wykes

Engineering

Denise Jensen

Corporate Services

(Company

Secretarial)

Dalila Zaghal

Strategy & Supply

Chain

Anna Meyer

People and

Environment

Peter Gubb

Refining

Sue Dyke

Corporate Services

Manager

NZRC – Brief History

1958 First approach to Government by Oil Companies

1959 NZRC registered on January 9th

1961-64 Site selected and construction for £10 Million (under Bechtel control)

1964 Start-up on April 30th

Late 70s Discussion and planning for expansion, Think Big and utilisation of Maui Gas

1980 US$500Million credit line for project

1982-86 Construction (under Badger Chiyoda control) also RAP construction

1985 Utilities start-up, A Block revamp, RAP commissioned

1988 B Block start-up, C Block initial start-up

1988 Oil Industry deregulation planned by Government from Jan 1 1989

- 88 for 89 campaign – competitiveness drive

1996 Full production consistently, Heads of Agreement (Processing) signed

1996 Processing Agreements signed with Customers

NZRC – Brief History

1999 RAP debottlenecked – IPS1 Start-up

1999 Processing Floor mechanism invoked (low Refining Margins)

2000 Alliance signed with Transfield Worley for Maint and Eng Services

2001 Government Product Specification review, Scouting Study for FF Options

2003 NGA signed with Government

2003 Board Sanction of FF Project, FW selected EPCM contractor

2003 Construction started on Future Fuels Project

2004 RAP debottlenecked – IPS2 Start-up and second pump at IPS1

2005 HSU, HDS3 and BRU started up - on time, on budget, on spec

2006 Board approves FEED for Point Forward Project, Worley Parsons

selected contractor

2007 Board Sanction of PFP Project - $180M Upgrade of CDU

2009 Point Forward Project completed

NZRC – Brief History

2010 Shell sells downstream assets in NZ (incl.. NZRC shares). New cornerstone

shareholder and customer welcomed – Greenstone Energy Ltd – Now Z Energy

2011 NZRC celebrates 50 years since incorporation

Section 3: Strategy

NZRC Strategic Plan

Strategic Corporate Advantages

NZRC has some strategic advantages:

•Ownership, listed company.

•Strong independent mindset.

•Access to best international knowledge.

•Commercial Technical Service Agreement with Shell.

•Only refinery in the country, logistical advantage.

•Reputation for reliable quality supply.

•Bottom line focus.

•Proactive maintenance programmes.

•Major project execution experience.

Strategic Refining Advantages

NZRC has some strategic advantages:

•Located close to the largest and fastest growing transport fuels

market NZ (Auckland).

•Owns and operates the product pipeline to the Auckland market.

•As the only oil refinery in NZ there is a niche position created by

the freight differential between crude and product.

•The NZRC configuration is well suited to the NZ and regional

markets, i.e. strongest in jet and diesel fuels, which will be the

products with the highest potential demand growth.

•Versatile regarding crude diet (designed to run high S crude).

•Deep conversion, high complexity refinery

Section 5: The Market

Demand Outlook – Distillate Products

With PFP commissioning NZRC’s share of total demand increased to ~75%. This

will erode again over time.

NZRC vs NZ - All Distillates (kt per year)

0

2,000

4,000

6,000

8,000

10,000

12,000

1995

2000

2005

2010

2015

2020

2025

30%

40%

50%

60%

70%

80%

90%

NZRC Production NZ Demand Range NZRC Supply vs NZ Demand (% of Ave)

PFP

PFP

Questions The New Zealand Refining Company

Overview

OIL REFINING SERVICE

NZRC is a toll processor

Operations governed by Processing Agreements

Processing Fee is related to regional refining margins (import and quality parity)

Ownership of hydrocarbon stays with the suppliers - Oil Companies

FEEDSTOCK RECEIPT

All feedstock supplied by processors across jetty

OIL PRODUCT DISTRIBUTION (No direct contact with retail market)

Pipeline fee (volume related) is applied for pipeline distribution Via NZRC owned

and operated multiproduct pipeline to Auckland

Via specific pipelines to adjacent truck loading facility owned by oil companies

Via jetty to shipping (Shipping control by others)

From storage tank to trucks (Bitumen & Sulphur)

How it all works

Lisa Parkes

CDU

1&2

Naphtha (Gasoline)

140/180 degC minus

Kerosene (Avtur)

140-250 degC

Gasoil (Diesel)

250-350 degC

HVU2

Vacuum Gasoil

350-370 degC

BDU

HCU

Waxy Distillate 370-540 degC

DAO 540-620 degC

Asphalt (Fuel Oil)

Naphtha

Kerosene

Gasoil

H2

350 degC +

620 degC +

Plus

CO

2 S

Distribution

Distribution

Auckland Mount Maunganui

Napier

Wellington

New Plymouth

Lyttelton

Timaru

Dunedin

Bluff

Nelson

Pipeline (40%)

Coastal

Distribution

(40%)

Imports

(20%)

NZRC c80% of total

market in 2011

RAP

NZRC

NZRC

WOSL

IPS -1

IPS - 2

Marsden Point

Wiri Terminal

Wellsford

Kumeu

250 mm Diameter 170 km Long

Back up slides

Safely Home Every Day

Safely Home, Every day

in late 2007, the NZRC safety data was clearly indicating that some immediate and positive actions were required

we were hurting too many people

we had historically been a safer place to work

some people thought that the site safety performance was acceptable, yet it was far from being world class

despite our interventions, incidents were still happening

NZRC in conjunction with its business partners are on a journey to develop and progress a plan designed to deliver success and to create a place at NZRC where everyone goes safely home, every day.

Safely Home, Every day

Work accidents are avoidable Safety culture key to success Safety record is an indicator of

management quality No differentiation between NZRC employees and

contractors Induction, Training, Safety first, Management focus,

Reporting, Follow-up, Take 5, RCA/Tripod tools, Rules of fair play, PTW system, Housekeeping

Key measure is TRCF=Total recordable case frequency per million hours worked

Significant progress achieved during last years Process Safety is a key overaching focus area and multiple

initiatives are applied across the board

There is no activity at NZRC

that is so urgent or important

that it can not be done safely

Visible Leadership Commitment

our senior managers are visibly committed and our supervisors demonstrate clear health

and safety leadership

how will we get there

increase

visible

presence of

senior

leaders

demonstrate

safety is

important

believable

vision

reinforce

safety

messages

by

engaging

with our

people

get to

know

our

people &

personalise

safety

build

our

safety

leadership

capability

Safely Home, Every day

Accountabilities Every individual is clear on how they contribute to a successful health and safety

performance and we are measuring that

how will we get there

key

accountabilities

for

all levels

build

into

PDPs

cardinal

rules

new

induction.

set clear

expectations

Safely Home, Every day

Behaviour

PATTERNS& TRENDSPATTERNS& TRENDS

What’s Been Happening?

What’s Been Happening?

PATTERNS& TRENDSPATTERNS& TRENDS

What’s Been Happening?

What’s Been Happening?

MENTALMODELSMENTALMODELS

What are the Prevalent Assumptions?

What are the Prevalent Assumptions?

MENTALMODELSMENTALMODELS

What are the Prevalent Assumptions?

What are the Prevalent Assumptions?

EVENTSEVENTSWhat Just Happened?What Just Happened? EVENTSEVENTSWhat Just Happened?What Just Happened?

SYSTEMIC

STRUCTURES

SYSTEMIC

STRUCTURESWhat are the

Forces at Play?

What are the Forces at Play?

SYSTEMIC

STRUCTURES

SYSTEMIC

STRUCTURESWhat are the

Forces at Play?

What are the Forces at Play?

REACT

ANTICIPATE

PREDICT

TRANSFORM

what is it we reward?

what are the questions we ask?

What language do we use? (solution messaging)

it is our leadership behaviour that is changing

We will go beneath our systemic

structures. We will challenge our

assumptions and we will gain insight

into what is driving behaviour

how will we get there

Safely Home, Every day

Safely Home, Every day

Process details

David Gray

CDU1

CDU2

HVU1

BBU

HVU2

BDU

HCU

HMU

HDS2

SplitHDT

PlatDePr

HDS1

Fuel

Gas

GasOil

Blend

Mogas

Blend

FuelOil

Blend

RG

RGH2RG

H2

RG

H2

RG

H2

RG

Natural Gas

Syngas and Reformates

Condensates and Low

Sulphur Crudes

High Sulphur Crudes

Imported Residues

High Sulphur Crudes

Low Sulphur Crudes

Imported Residues

Naphtha

Kero

LGO

HGO

Long Residue

Naphtha

Kero

LGO

HGO

Long Residue

Sulphur

Refinery Gas

Regular Mogas

Premium Mogas

Kero / Avtur

CO2

Automotive Gasoils

and Marine

Light Fuel Oil

Bunkers

Heavy Fuel Oil

Refinery Fuel

Bitumen 80/100

Bitumen 180/200

Bitumen 45/55

Refinery Gas

CDU1

CDU2

HVU1

BBU

HVU2

BDU

HCU

HMU

HDS2

Split HDT

Plat DePr

HDS1

Fuel

Gas

GasOil

Blend

Mogas

Blend

FuelOil

Blend

RG

RG H 2 RG

H 2

RG

H 2

RG

H 2

RG

Natural Gas

Components & Reformates

Condensates and Low Sulphur Crudes

High Sulphur Crudes

Imported Residues

High Sulphur Crudes

Low Sulphur Crudes

Imported Residues

Naphtha

Kero

LGO

HGO

Long Residue

Naphtha

Kero

LGO HGO

Long Residue

Sulphur

Regular Mogas

Premium Mogas

Kero / Avtur

CO 2

Automotive Gasoils and Marine

Light Fuel Oil

Bunkers

Heavy Fuel Oil

Refinery Fuel

Bitumen 80/100

Bitumen 180/200

Bitumen 45/55

HDS3

Ref-Split

BenSat

Section 6: Benchmarking

Section 10: Continuous Disclosure

Lisa Parkes