Refining NZ Analyst Briefing 23 August 2018 1 DISCLAIMER This - PowerPoint PPT Presentation

Refining NZ Analyst Briefing 23 August 2018 1

DISCLAIMER • This presentation contains forward looking statements concerning the financial condition, results and operations of The New Zealand Refining Company Limited (hereafter referred to as “Refining NZ”). • Forward looking statements are subject to the risks and uncertainties associated with the refining environment, including price and foreign currency fluctuations, production results, demand for Refining NZ’s products or services and other conditions. Forward looking statements are based on management’s curr ent expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. • Forward looking statements include among other things, statements concerning the potential exposure of Refining NZ to market ris k and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. Forward looking statements are identified by the use o f terms and phrases such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “goals”, “intend”, “may”, “objectives”, “outlook”, “plan”, “probably”, “project”, “risks”, “seek”, “should”, “target”, “will” and similar terms and phrases. • Readers should not place undue reliance on forward looking statements. Forward looking statements should be read in conjunction with Refining NZ’s financial statements released with this presentation. This presentation is for information purposes only and does not constitute legal, financial, tax, financial product advice or investment advice or a recommendation to acquire Refining NZ’s securities, and has been prepared without taking into account the objectives, financi al situation or needs of individuals. Before making an investment decision, you should consider the appropriateness of the information having regard to their own objectives, financial situation and needs and consult an NZX Firm or solicitor, accountant or other professional adviser if necessary. • In light of these risks, results could differ materially from those stated, implied or inferred from the forward looking statements contained in this announcement. Refining NZ does not guarantee future performance and past performance information is for illustrative purposes only. To the maximum extent permitted by law, the directors of Refining NZ, Refining NZ and any of its related bodies corporate and affiliates, and their offices, partners, employees, agents, associates and advisers do not make any representation or warranty, express or implied, as to accuracy, reliability or completeness of the information in this presentation, or likelihood of fulfilment of any forward-looking statement or any event or results expressed or implied in any forward-looking statement, and disclaim all responsibility and liability for these forward-looking statements (including, without limitation, liability for negligence). • Except as required by law or regulation (including the NZX Main Board Listing Rules), Refining NZ undertakes no obligation to provide any additional or updated information whether as a result of new information, future events or results or otherwise. • Forward looking figures in this presentation are unaudited and may include non-GAAP financial measures and information. Not all of the financial information (including any non-GAAP information) will have been prepared in accordance with, nor is it intended to comply with: (i) the financial or other reporting requirements of any regulatory body; or (ii) the accounting principles generally accepted in New Zealand or any other jurisdiction with IFRS. Some figures may be rounded and so actual calculation of the figures may differ from the figures in this presentation. Non-GAAP financial information does not have a standardised meaning prescribed by GAAP and therefore may not be comparable to similar financial information presented by other entities. Non-GAAP financial information in this presentation is not audited or reviewed. • Each forward looking statement speaks only as of the date of this announcement, 23 August 2018. 2

AGENDA 2018 PERFORMANCE THE FUTURE 3

FIRST HALF NUMBERS DOMINATED BY THE SHUTDOWN 3 cps interim dividend HY 17 HY 18 Gross Refinery Margin (US$/barrel) 7.70 5.65 Free cash flow (NZ$m) [1] 39 (75) EBITDA 105 50 Net profit after tax – Group (NZ$m) 35.2 (2.8) TRCF [2] 0.94 0.75 Personal LTIF [2] 0.13 0.47 Tier 1 (>US$25k) [3] 0 2 Process Tier 2 (>US$2.5k) [3] 2 2 Releases outside consent 2 1 Throughput (million barrels) 20.1 17.9 Operational availability 96.2% 83.3% Brent price (US$/barrel) $52 $71 Exchange rate (US$) 0.71 0.73 [1] Free cash flow calculated as operating cash flow minus actual capital expenditures [2] Per 200,000 hours, rolling 12-month [3] For a full definition please refer to Glossary in Appendix I 4 See our Half Year Report for further detail, available at http://www.refiningnz.com/investor-centre.aspx

SHUTDOWN COMPLETED Major re-life • 1,700 work packs • 2,000 welds • 1,300 additional people on site (at peak) • 1,100 tonnes of scaffolding Complex brownfield retrofits • Hydrogen Manufacturing Unit • Mid-section replacement – High Vacuum Unit But… • Brownfield, emergent work and weather challenges (13 days delay, $22m capital spend) • Original Equipment Manufacturer valve failure (8+ days delay) 5

UNDERLYING MARKET FUNDAMENTALS STRONG Refining margin adjusted for shutdown at US$8.25 per barrel UPLIFT Δ HY17 HY18 US$/BARREL Freight 1.59 2.16 0.57 Product quality 1.04 0.94 (0.10) Plant availability (0.27) (2.60) (2.33) Crude cost and yield 2.23 1.91 (0.32) - TOTAL 4.59 2.42 (2.17) * The Singapore Complex Margin is calculated using Platts Dubai crude and Singapore product prices, VLCC freight to 6 Singapore , and the International Energy Agency’s Dubai complex refinery yields adjusted for fuel & loss.

IMPACT OF SHUTDOWN DOMINATES NZ$m 7 See our Half Year Report for further detail, available at http://www.refiningnz.com/investor-centre.aspx

2018 REVISED PROFIT MATRIX USD/NZD 0.60 0.65 0.70 0.75 CAPEX NZD M *) H2 FY 10 2 (4) (10) 2018 2019 5.00 5.28 Retain 139 50/55 270 281 290 298 30 21 13 6 Was 139-144 80 6.00 5.85 GRM (USD/bbl) 250 259 266 276 Grow 18 20/25 49 39 30 22 7.00 6.41 Was 20 5 230 240 250 257 69 57 47 38 8.00 6.97 210 222 233 242 89 75 63 53 9.00 7.54 190 204 216 226 41 Production, Mbbl NPAT 99 Non Processing Fee Revenue, $m Borrowings 97 Depreciation, $m 8 * Subject to final Board approval

AGENDA 2018 PERFORMANCE THE FUTURE 9

STRONG MACRO CONTINUES With IMO and Chinese export caveats kb/d 1,200 1,000 800 600 400 200 0 -200 -400 -600 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Incremental CDU Capacity * Incremental Refinery Product Demand 10 Source: FACTS Global Energy (July 2018)

SURPLUS CAPACITY TRENDING DOWN TO THE “GOLDEN AGE” With IMO and Chinese export caveats mmb/d 8.0 7.0 6.0 5.0 Golden Age 4.0 3.0 2.0 1.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 11 Source: FACTS Global Energy (July 2018)

IMO STEP CHANGE IN BUNKER FUEL DEMAND FROM 2020 • Sulphur decrease from 3.5% to 0.5% • Expected impact • Price volatility in 2020 - 2023 • Lift in diesel demand and price • Diesel Depressed HSFO demand and price • Scrubber sales increasing • Large refineries installing conversion capacity HSFO 12 Source: FACTS Global Energy (July 2018)

GROWTH AGENDA PIPELINE CAPACITY SULPHUR FORMING SHORT PAYBACK JET IMPORT FACILITY DREDGING CONSENT REPHASED ON SCHEDULE PROJECTS DELIVERED DELIVERED GRANTED • 2019 completion • Hydrogen optimisation • • Studying tankage • 2019 completion Resource consent (6 USc/bbl) challenged August 2018 conversion • • Additional nitrogen Dredging 2019/2021 storage (0.5 USc/bbl) onwards* • Variable speed drive on a key compressor (0.5 USc/bbl) 13 * Subject to final Board approval

CLIMATE CHANGE PRESENTS AN OPPORTUNITY CO 2 3 TE MAHI HOU 2 2 HYDROGEN BIO-FUELS 1 1 ENERGY SAVINGS BIO-FUELS 0 Near term Mid- to long-term 14

CLIMATE CHANGE PRESENTS AN OPPORTUNITY Te Mahi Hou TOYOTA COROLLA 2017 – 2018 TE MAHI HOU Small Car: Saloon 120,000 60,000 = tonnes/year Toyota Corollas CO 2 reduction TESLA MODEL 3 $4.6 billion = spent on $365 million Tesla Model 3s 15 Note: based on NZTA mileage and CO2 emission statistics and price of current Tesla model 3 model available in NZ

KEY TAKE-OUTS • Shutdown completed • Current margin and forex environment favourable • Next shutdown in 2020 • Short payback projects agenda continues • Climate change presents an opportunity • Assets integral to a brownfield biofuels and H2 future re-lifed 16

Refining NZ Analyst Briefing 23 August 2018 17