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Analysts

Briefing24 August 2017

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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 current 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 risk and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions.

Forward looking statements are identified by the use of 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.

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.

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, 24 August 2017.

Disclaimer

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2017Future

Agenda

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1H 16 1H 17

Personal [2]TRCF 1.02 0.94

LTIF 0.34 0.13

ProcessTier 1 (>US$25k[3]) 1 0

Tier 2 (>US$2.5k[3]) 0 2

Releases outside consent 1 2

Throughput (million barrels) 21.1 20.1

Operational availability 94.6% 96.2%

Gross Refinery Margin (US$/barrel) 5.25 7.70

Free cash flow (NZ$m) [4] (24) 39

Net profit after tax – Group (NZ$m) 11.6 35.2

Crude price (US$/barrel) $37 $52

Exchange rate (US$) 0.67 0.71

Health

and safety

DELIVERING

WORLD CLASS

PERFORMANCE

Environmental

DELIVER A

WORLD CLASS

PERFORMANCE

Quality and

reliability

BUILD ON

ELEMENTS OF OUR

CUSTOMER

PROMISE

Competitiveness

IMPROVE OUR

RNZ has been foiling 100%[1]

[1] New America’s Cup vernacular for a strong performance[2] Per 200,000 hours, rolling 12-month[3] For a full definition please refer to Glossary.[4] Free cash flow calculated as operating cash flow minus capital expenditures.

See our 2017 Interim Report for further detail, available at http://www.refiningnz.com/investor-centre.aspx

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Margins continue at top of historical average…Growth strategy continues to pay off in a tough competitive environment

* The Singapore Complex Margin is calculated using Platts Dubai crude and Singapore product prices, VLCC freight to Singapore, and the International Energy Agency’s Dubai complex refinery yields adjusted for fuel & loss.

US$'

Uplift delta 2.76

Freight 0.57

Product quality (0.30)

Plant availability 1.17

Crude cost and yield 1.32

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Strong net income and cost deliveryResulting in an interim 6cps dividend

See our 2017 Interim Report for further detail, available at http://www.refiningnz.com/investor-centre.aspx

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2017 delivery as per promise

Pipeline Stage IINatural Gas

Jun Jul Aug Sep Oct Nov Dec

GRM-add (US cents per barrel) (NZ$m)

Post Te Mahi Hou Optimisation:

- Hydrogen recovery from BRU: compressor 0.8

- Hydrogen recovery from CCR: Advanced Process Control -

Other short payback projects 4.1

Natural Gas 0.2

Pipeline capacity increase: Stages I and II 5.1

Jet fuel tank farm re-configuration 6.2

Sulphur soldification 4.5

Cumulative 20.9

2017

TOTAL

CAPEX

15+ 23+ 34+

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2.5

1.5

15+

8.5 at full capacity

35+

1

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2017 revised profit and borrowings matrix

Capex (NZ$ mln) 2017 2018

Retain Was 78 112

Now 78 119

Grow Was 10 10-30Now 10 5

Sulphur & jet 11 9

USD Exch. Rate

Actual H1 0.71 0.71 0.71 0.71 0.71

Forecast H2 0.65 0.70 0.75 0.80 0.85

Margin

Actual Forecast Full

H1 H2 Year

USD USD USD

42 36 30 25 21

216 225 232 239 245

60 52 46 40 35

191 202 211 219 226

78 69 61 54 48

172 181 189 199 207

96 86 77 69 62

154 165 174 181 188

114 102 92 84 76

137 148 158 167 175

NPAT 43 Production, Mbbl

Borrowings 85 Non Processing Fee Revenue, $m

94 Depreciation, $m

7.70 8.00 7.86

7.70 9.00 8.39

7.70 6.00 6.80

7.70 7.00 7.33

7.70 5.00 6.26

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2018 shutdown deep dive

• Capital spend NZ$85m

• Hydrocracker shutdown 38 days – comparable

with 2014

• Financial impact NZ$30m – comparable with a

normal hydrocracker shutdown

• Intake 42.7mbbls

Total refinery shutdown

Crude distiller 2

Mechanical/consequential shutdownShutting down/startup

Hydrocracker,High vacuum unit 2

Butane de-asphalting unit

Sulphur recovery units

Crude distiller 1, High vacuum unit 1

May-18 Jun-18

6 days38 days14 days

Apr-1820-Apr-18

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2017Future

Agenda

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Key drivers and strategy unchanged

World class

Environmental

performance

High

Performance

culture

World class

Health &

Safety

Manufacturing and supply

partner of choice

CompetitiveQuality and

Reliability

Fuel emission standards/

petrol and diesel specification changes

(Euro 6+)

Offshore competition

Climate change

Advantaged crudes

Auckland growth,

EVs, hybrids

Fuel oil specification

changes(MARPOL VI)

Drivers Strategy

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We expect continued support for refining marginsCapacity additions and retirements “locked in” to early 2020s

But.. Caveat emptor

• Marine industry shifting in 2020 from 3.5% to 0.5% sulphur fuel (MARPOL)

• Downward price pressure on fuel oil

• Upward price pressure on gas oil

• Net effect difficult to predict

• Studying impact and post 2020 strategy

Asia Net Capacity Additions vs. Oil Product Demand Growth

Source: FACTS Global Energy (July 2017)

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The electric vehicle conundrumNews of the death of the internal combustion engine greatly exaggerated?

Source: FACTS Global Energy (August 2017)

• Global gasoline increase by 300kb/d in 1H 2017

• SUV sales growth higher than plug-ins sales growth….

• Long term twin track of plug-in sales growth AND gasoline demand growth?

Worldwide SUV and Plug-In (battery and hybrid) sales growth

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Jet tank farm

reconfiguration••••

Longer term growth opportunitiesIn addition to $5 million high return small capital growth projects

Dredging• Resource consent application Sep/Oct• Dredging 2019 onwards*• Capital spend NZ$60-70 million

Pipeline capacity• Phase 1 complete• Phase 2 end 2017• Phase 3 2019*

• Further expansion…

Completion 2018Capital spend NZ$9 million

2017 LE NZ$6 millionWACC+ return

Sulphur forming••••

Completion 2018Capital spend NZ$10 million

2017 LE NZ$5 millionWACC+ return

* Subject to final Board approval

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Glossary

LTIF - Lost time injury frequency (rolling 12 month per 200,000 hours)

TRCF - Total recordable case frequency (rolling 12 month per 200,000 hours)

Tier 1 Process Safety Event (API 754) - A tier 1 Process Safety Event (PSE) is an unplanned or uncontrolled release of any material, including non-toxic and non-flammable, from a process which results in one or more of the following: A LTI and/or fatality; A fire or explosion resulting in greater than or equal to $25,000 of direct cost to the company; A release of material greater than the threshold quantities given in Table 1 of API 754 in any one-hour period; A officially declared community evacuation or community shelter-in-place.

Tier 2 Process Safety Event (API 754) - A tier 2 Process Safety Event (PSE) is an unplanned or uncontrolled release of any material, including non-toxic and non-flammable, from a process which results in one or more of the following: A recordable injury; A fire or explosion resulting in greater than or equal to $2,500 of direct cost to the company; A release of material greater than the threshold quantities given in Table 2 of API 754 in any one-hour period.

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Analysts

Briefing24 August 2017