PETROPLUS Ingolstadt Analyst Day Presentation Final


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petroplus analyst day ingolstadt december 8 2011


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disclaimer while all reasonable care has been taken to ensure that the facts stated herein are accurate and that the opinions contained herein are fair and reasonable this presentation is selective in nature and is intended to provide an overview of the business of the company any opinions expressed in this document are subject to change without notice and neither the company nor any other person is under any obligation to update or keep current the information contained herein this presentation may contain forward-looking statements which include all matters that are not historical facts by their nature forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future we caution you that forward-looking statements are not guarantees of future performance and that the company s actual financial condition results of operations and cash flows and the development of the industry in which the company operates may differ materially from those made in or suggested by forward-looking statements contained in this presentation no obligation is assumed to update any forward-looking statements 2


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agenda 1 the refining market outlook 2 strategy 3yip 3 update on petit couronne 4 fourth quarter 2011 update 5 2012 outlook 6 liquidity 7 capital structure 8 the way forward 9 summary 3


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2011 ­ a very difficult year for european refining · crude oil differentials global oil demand driven by non-oecd countries supply concerns driven by the turmoil in the mena region macro uncertainty in europe resulting in volatile crude price supply disruptions e.g libya syria the north sea strong premiums for light sweet barrels narrow differentials for sour barrels · product cracks macro uncertainty in europe weighing on demand for and prices of petroleum products weakness in gasoline naphtha strength in middle distillates · refining capacity new refining capacity has come online predominantly in asia capacity rationalization mainly in europe and the u.s is accelerating due to weak margins · operating expenses increased headwinds from weaker u.s dollar and higher variable costs energy catalysts 4


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european refining margins remain depressed usd/bbl 7 6 5 4 3 2 1 0 jan 1 2 3 feb mar apr may jun jul aug sep oct nov dec petroplus market indicator $2.08 $1.81 $1.53 $1.66 2010 2011 2011 quarterly average the pmi is not the petroplus margin petroplus margin may be better or worse depending on location configuration crude diet specialties etc the pmi is a daily indicator to give a flavor of the market conditions/trends it consists of a basket of 4 crude oils 40 urals 35 forties 12 cpc 13 bonny light and is calculated and reported after variable costs source platts the data is through november 30 2011 5


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crude differentials everything more expensive significant increases in 2011 driven by the lost crude supply from libya usd/bbl 5 differentials to dated brent 4 3 2 1 0 urals 1 azeri light ekofisk cpc forties saharan blend 2 q1 2010 q1 2011 q2 2010 q2 2011 q3 2010 q3 2011 q4 2010 q4td 2011 3 4 source platts the q4td data is through november 30 2011 6


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lost libyan crude production has had a major impact on crude price and light sweet differentials in 2011 6 140 azeri light diff ekofisk diff 5 130 dated brent differentials to dated brent bbl libyan crisis starts 3 110 2 100 1 libyan crude starts to return to the market 90 0 jan feb mar apr may jun jul aug sep oct nov 80 dated brent bbl 4 120 source platts the data is through november 30 2011 7


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urals has strengthened significantly in h2 2011 usd/bbl 1 differential to dated brent 0 jan feb mar apr may jun jul aug sep oct nov 1 2 3 reasons for the narrow brent-urals differential · russian crude production reached post-soviet highs however high domestic refinery run rates limited exports 4 · linefill requirements for two new pipelines increased supply of saudi arabian sour barrels to replace lost libyan production · reduction of saudi arabian supply to europe · fuel oil cracks have been relatively strong improving urals economics 5 sources platts pira energy the data is through november 30 2011 8


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product cracks have recently shown strength in middle distillates fuel oil but weakness in naphtha and gasoline usd/bbl 25 differentials to dated brent 20 15 10 5 0 naphtha 5 gasoline ulsd heating oil 3.5 fuel oil 10 15 q1 2010 q1 2011 q2 2010 q2 2011 q3 2010 q3 2011 q4 2010 q4td 2011 20 source bloomberg the q4td data is through november 30 2011 9


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european market environment mmbbls 160 150 140 130 120 110 100 jan feb mar apr may jun jul aug sep oct nov dec 2009 2010 2011 german domestic heating oil stocks · middle distillate cracks are at their strongest level since 2008 and are expected to stay strong through the end of 2011 due to seasonal demand · middle distillate inventories in the ara have declined sharply and are at their lowest level since 2008 which should support refining margins · german domestic heating oil stocks are about 4 mmbbls lower than last year due to delays in restocking owing to the high price environment and unseasonably warm winter weather · strong inland premiums due to the low water levels on the rhine · naphtha is very weak but is expected to become seasonally stronger when colder weather arrives as rising lpg prices provide an incentive for steam crackers to shift to naphtha 2009 2010 2011 mmbbls 28 26 24 22 20 18 jan ara middle distillate inventory · gasoline is weaker than the seasonal norm due to weak demand and as refineries have been increasing runs due to the strength in middle distillates which has resulted in increased production of other products such as gasoline feb mar apr may jun jul aug sep oct nov dec source pira energy 10


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the rationalization of european refining capacity continues 15 european refineries closed up for sale or under strategic review refining capacity in europe mmbpd possible sales/closures confirmed closures capacity reduction/temp shutdown 0.7 0.9 0.2 several announcements have been made in recent months 0.7 mmbpd on the u.s east coast 0.2 mmbpd in europe and the low margin environment is expected to accelerate the pace of rationalization possible sales/closures confirmed closure capacity reduction/temporary shutdown sources press company reports 11


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global oil demand expected to outpace new capacity mmbpd 3 2.5 new refinery additions net refinery expansions global y-o-y oil demand growth 2 1.5 1 0.5 0 2010 2011 2012 2013 · · · · · · global oil demand bounced back strongly in 2010 and more than recovered the demand lost during the economic crisis macroeconomic uncertainty has weighed on demand for petroleum products in 2011 to date recent announcements are expected to reduce net refining capacity global gdp growth will set the pace for oil demand growth emerging markets are expected to drive both oil demand growth and the increase in refining capacity demand growth is estimated to outpace capacity additions which should benefit refiners around the world source wood mackenzie demand data from nov -11 supply data from dec -11 12


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agenda 1 the refining market outlook 2 strategy 3yip 3 update on petit couronne 4 fourth quarter 2011 update 5 2012 outlook 6 liquidity 7 capital structure 8 the way forward 9 summary 13


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strategic action plan 1 extract maximum value from existing portfolio of assets 3yip · · · 2 establish best practices in diverse portfolio improve competitiveness through targeted enhancement program ongoing focus on petit couronne fix low performers asset management · · · · converted teesside to a terminal sold antwerp processing facility reichstett being converted to a terminal with the intention to sell the site further actions 3 pursue opportunities to upgrade portfolio · · disciplined approach strict criteria 14


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3yip original goal for 2012 2012 goal bbl 2012 goal m gross margin energy efficiency opex g&a total improvement $0.40 $0.55 $0.10 $0.15 $0.35 $0.45 $0.05 $0.10 $0.90 $1.25 $100m $25m $80m $15m $220m goals set up in early 2010 with 2009 as the baseline 15



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