Refining NZ Analyst Briefing...• Readers should not place undue reliance on forward looking statements. Forward looking statements should be read in conjunction with Refining NZ’s

1

Refining NZ

Analyst Briefing23 August 2018

2

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 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. 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, financial 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.

3

AGENDA

2018 PERFORMANCE

THE FUTURE

4

FIRST HALF NUMBERS DOMINATED BY THE SHUTDOWN3 cps interim dividend

HY 17 HY 18

Gross Refinery Margin (US$/barrel) 7.70 5.65

Free cash flow (NZ$m) [1]

EBITDA39

105(75)

50

Net profit after tax – Group (NZ$m) 35.2 (2.8)

PersonalTRCF [2] 0.94 0.75

LTIF [2] 0.13 0.47

ProcessTier 1 (>US$25k) [3] 0 2

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

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

5

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)

6

UNDERLYING MARKET FUNDAMENTALS STRONGRefining margin adjusted for shutdown at US$8.25 per barrel

* 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.

UPLIFT

US$/BARREL HY17 HY18 Δ

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)

7

IMPACT OF SHUTDOWN DOMINATES

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

NZ$m

8

0.60 0.65 0.70 0.75H2 FY

10 2 (4) (10)

5.00 5.28

270 281 290 298

30 21 13 6

6.00 5.85

250 259 266 276

49 39 30 22

7.00 6.41

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

NPAT 41 Production, Mbbl

99 Non Processing Fee Revenue, $m

Borrowings 97 Depreciation, $m

USD/NZD

GR

M (

USD

/bb

l)

2018 REVISED PROFIT MATRIX

CAPEX NZD M *)

2018 2019

Retain 139 50/55

Was 139-144 80

Grow 18 20/25

Was 20 5

* Subject to final Board approval

9

AGENDA

2018 PERFORMANCE

THE FUTURE

10

STRONG MACRO CONTINUESWith IMO and Chinese export caveats

-600

-400

-200

0

200

400

600

800

1,000

1,200

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

kb/d

Incremental CDU Capacity * Incremental Refinery Product Demand

Source: FACTS Global Energy (July 2018)

11

SURPLUS CAPACITY TRENDING DOWN TO THE “GOLDEN AGE”With IMO and Chinese export caveats

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

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

mmb/d

Golden Age

Source: FACTS Global Energy (July 2018)

12

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

• Depressed HSFO demand and price

• Scrubber sales increasing

• Large refineries installing conversion capacity

Diesel

HSFO

Source: FACTS Global Energy (July 2018)

13

PIPELINE CAPACITY ON SCHEDULE

DREDGING CONSENT GRANTED

SULPHUR FORMING REPHASED

JET IMPORT FACILITY DELIVERED

SHORT PAYBACK PROJECTS DELIVERED

GROWTH AGENDA

• Hydrogen optimisation (6 USc/bbl)

• Additional nitrogen storage (0.5 USc/bbl)

• Variable speed drive on a key compressor(0.5 USc/bbl)

• Resource consent challenged August 2018

• Dredging 2019/2021 onwards*

• Studying tankage conversion

• 2019 completion • 2019 completion

* Subject to final Board approval

14

0

1

1

2

2

3CO2

Near term

BIO-FUELSENERGY SAVINGS

Mid- to long-term

CLIMATE CHANGE PRESENTS AN OPPORTUNITY

TE MAHI HOU

BIO-FUELSHYDROGEN

15

CLIMATE CHANGE PRESENTS AN OPPORTUNITYTe Mahi Hou

$4.6 billion spent on

Tesla Model 3s

60,000Toyota Corollas

TOYOTA COROLLA 2017 – 2018

Small Car: Saloon

TESLA MODEL 3

TE MAHI HOU

$365 million

120,000 tonnes/year

CO2 reduction=

=

Note: based on NZTA mileage and CO2 emission statistics and price of current Tesla model 3 model available in NZ

16

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

17

Refining NZ

Analyst Briefing23 August 2018

18

APPENDIX I

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.