An African energy company

1. An African energy company PRESENTATION TO THE PORTFOLIO COMMITTEE ON MINERALS AND ENERGY Presented by Dr Popo Molefe and Mr Sipho Mkhize None - Executive Chairman and President & CEO, PetroSA The Petroleum Oil and Gas Corporation of South Africa (Pty) Ltd Reg. No. 1970/008130/07

2. Agenda • Introduction • Shareholder Objectives • Salient Predetermined Objectives • Major Challenges • Way Forward • Financial Performance

3. Introduction to PetroSA • National upstream and downstream petroleum corporation • International player with African focus • Established 2002 through merger of State oil E&P company (Soekor) 1969 and GTL company (Mossgas) 1987 • Current business • Exploration, oil and gas production • GTL manufacturing - SA • Oil and chemicals trading

4. Shareholder Objectives The business strategy for PetroSA is based on achieving and contributing to the following shareholder (Government) objectives: • PetroSA to achieve sustained commercial viability • PetroSA to achieve transformation on a continuous basis. • Operating PetroSA in line with best international practices with regard to Safety, Health, Environment, Quality. • To contribute to the macro-economic objectives of the country.

5. Salient Predetermined Objectives • Financial viability and sustainability • SHEQ • Employment Equity • Black Economic Empowerment • Corporate Social Investment

6. Salient Predetermined Objectives Operational Environment • Favourable operating environment • Steady plant performance • Sable field performing above expectations • Oribi / Oryx producing beyond original estimates • Macro economic environment • Higher international oil prices • Rand strengthening against the Dollar • Declining interest rates

7. Salient Predetermined Objectives Financial Viability • Financial results • Revenue growth – 19% increase • Operating Margin – 20% increase • Profit before tax – 80% increase • Cost containment • Lower Gearing • Strong liquidity

8. Salient Predetermined objectives • Financial viability • SHEQ • Employment Equity • Black Economic Empowerment • Corporate Social Investment

9. Salient Predetermined objectives SHEQ • Retained all ISO accreditations • Obtain a NOSCAR platinum award for the seventh time • Orca achieves 2 756 days without disabling injury • FA platform wins Excellence in Mining and Environmental Management award for the second year • ZERO fatalities and Environmental spills • HIV/Aids programme roll out

10. Salient Predetermined objectives • Financial viability • SHEQ • Employment Equity • Black Economic Empowerment • Corporate Social Investment

11. Salient Predetermined objectives Employment Equity • 1 263 employees • Achieved 69:31 employment equity against a target of 60:40 • 19 % comprise women and aggressive target of 35% set for 2005/6 • First female shift supervisor appointed at the refinery • Appointed female Process Controller at the offshore platform

12. Salient Predetermined objectives • Financial viability • SHEQ • Employment Equity • Black Economic Empowerment • Corporate Social Investment

13. Salient Predetermined objectives Black Economic Empowerment • R804 million comprising 34% (Target of 50% not achieved) • R14 million allocated for supplier development • Five companies included in the pilot phase creating 98 jobs • Centre of Excellence produced over 300 graduates in various trades such as electricians, welders, riggers, fitters etc.

14. Salient Predetermined objectives • Financial viability • SHEQ • Employment Equity • Black Economic Empowerment • Corporate Social Investment

15. Salient Predetermined objectives Corporate Social Investment • PetroSA Development Trust capitalised by R55 million to focus on:> Education and Training> Health > Empowerment of women • Flagship Projects assisted by the Trust are • Protec • Limpopo Online Project • Computer Laboratories in Limpopo and KwaNonqaba • Construction of schools in Mossel Bay and Limpopo

16. Major Challenges • Major cash flow stream of PetroSA under threat as FA/EM gas supply to Manufacturing plant depleted by 2007 • Secure long-term feedstock supply to Manufacturing plant on a commercial viable basis • Uncertainty exists as to total investment required to secure feedstock for Manufacturing plant • Expand E& P asset base aggressively

17. Major Challenges • Financing of projects by utilising strength of balance sheet limited due to short period of secured cash flow generation from current operations • Streamlining of internal business processes • Supply agreements and retail markets • Supply agreement/MOU with other petroleum companies is limited to 3 years. • PetroSA has no access to the retail market and is therefore always dependent on, and sometimes held to ransom by, the competition in terms of its supply agreements.

18. Way Forward • Finalise evaluations as to optimal feedstock solution for Manufacturing plant and associated investment required as matter of urgency • Pursue aggressive growth in E & P asset base, organically and non-organically

19. FINANCIAL PERFORMANCE 31 MARCH 2005

20. Economic Indicators

22. Abridged Income Statement Volume variance 1 614 Oil Price variance 1 648 Exchange rate var (650) Subsidiary sales 361 Total Sales Variance 2 973 Increased Revenue 2 973 Condensate (116) Provisions (514) Shutdown 270 Other Expenses (262) Subsidiary expenses (240) Operating Profit Change 2 111

23. Abridged Balance Sheet

24. Abridged Cash Flow

25. Discussion