PETROMOC,PROJECTS AND THE FUTURE

Johannesburg, November 2011

PETROMOC The NOC, with a 34 years history.

80% state owned. 20% employees.

Biggest refined products distributor

Distributes Mogas, Diesel, Jet A1, Kerosene, Fuel Oil, Lubricants

Mozambique´s 3rd largest company

Owns and operates the largest retail network and storage depots.

Appx 500.000m3 storage capacity.

Plus LPG storage capacity ≈ 850 MT2

PETROMOC

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Several core partnerships:•Storage•Transportation •Retail network•Biofuels and CNGAnd non-core partnerships:•Car distribution•Computers and consulting •Media•N4 Corridor etc

Details next page

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OBJ

ECTI

VES

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THE MOZAMBICAN MARKET

Market Share 2010 Sales (m3)(2007 to 2010)

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CHALLENGES

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STRATEGY – The way forward• Portfolio diversification

Development of logistics infrastructure

Production and distribution of alternative fuels

Development of regional and international markets

Push increased throughput refined products volumes

Direct involvement in the procurement of throughput products and its placement into the regional and international market

Diversification of currencies in which transactions are made

• Implementation of various projects, both in the core business and in related areas

• Partnerships have been key to access the required resources, and also contribute to skills, risks and market sharing, and critical networking.

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PROJECT: PETROLINE The project in an example of regional integration The benefits for Mozambique and the company are:

Increase of Maputo Port handling volumes and revenues Increase of Petromoc’s revenues the use of reception and storage tanks Transit of more than 5.000.000 m3 per annum of petroleum products SA imports Diesel. Additional volumes to Zimbabwe, Swaziland, Botswana and Zambia Maximum usage of Petromoc’s otherwise dormant storage tanks

Status of the project The construction and operation license has been granted in South Africa The feasibility study is being prepared in its various components Negotiations for the sale of pipeline capacity are under way with the

South African oil majors Negotiations with a number of prospective financiers are ongoing

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PETROLINE Latest developments:

The Government of South Africa has approved a levy, to be paid by fuel consumers to partly finance the construction of the Transnet pipeline (Durban)

Transnet has submitted a tariff mechanism for the new pipeline, based on a cross subsidy against the whole pipeline system

This is intervention by the Government in the pipeline market affects market competition

Factors that significantly affect the viability of the project Petroline

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PETROLINELatest developments:

The pipeline of Transnet has a huge budget and schedule slippage.

The partnership is engaging the Government of South Africa to accommodate the concerns of the Petroline pipeline promoters.

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Liquefied Petroleum Gas(LPG)

Target: Improve the acceptance, availability and the access of LPG

Development of infrastructure : reception (jetty,

pipeline) and storage

Sales of Storage services

Distribution and retail

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• Efficient logistics system that is consistent, reliable, versatile and competitive

• Supply LPG to domestic and regional markets

• Decentralized filling stations system and development of a distribution and retail business

• Broadening access to LPG covering all income levels

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LPG Strategy

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LPG STATUS

COMPRESSED NATURAL GAS

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• Petromoc majority owner of AUTOGAS, the authorized distributor;

• Ongoing construction of the first 3 gas stations to supply the compressed Natural Gas (CNG);

• Ongoing process of converting vehicles, especially public transport (150 buses), from the conventional fuel to CNG;

• Government pushing for development of this area

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BIOFUELS• Petromoc is the “the facto” Operational Government

“arm” for the promotion and development of the biofuels market, with several ongoing projects in different scales, approaches and with different locations and partnerships.

• Government enacted a mandatory blending of 10% ethanol and 3% biodiesel from 2012.

• Will result on the Maximization of company capacity as a logistics service provider and off -taker /distributor of final product.

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BIOFUELS Example of partnerships: ECOMOZ

• Biodiesel production facility in Matola• Partnership with Biomoz and Bioenergy• 80,000 ltrs / day ability • Produced about 2 million litres by 2010• Constraints of raw material• Strategy: have its own unit production of

vegetable oil to provide the feedstock in Matola thus removing raw material constraints

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BIOFUELS example of partnership: MOCAMGALP

• Production of vegetable oils from Jatropha Curcas, in Manica province with expansion planned for the Lugela district (Zambezia)

• In the first five years the project will have an investment estimated at USD 19 million

• 10.000 ha in phase I, total of 50,000 ha in the last phase..

Coal and Gas- To-Liquid• Projects to produce fuels from coal and gas• allows the production of 400,000 m3 of fuel per

year from coal.

• Possible production of fuels from natural gas, GTL) being evaluated, depending on availability of gas

• New discoveries in the north of the country and distance to potential markets in the south.

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FUTURE FUELDISTRIBUTION OPPORTUNITIES

IN MOZAMBIQUE

FUEL TRANSPORT AND DISTRIBUTION SYSTEM – CURRENT SITUATION -

• Up to now, the Petromoc Fuel Tranportat and Distribuition (FTD) System is mainly performed by road and railway - with a total of 27 Contractors (9 from South; 13 from Centre and 5 in North), covering Routes as follows:

– Distribution from Depots to the Filling Stations, using Contractors and Petromoc owned Trucks;

– Transfering from Main Depots to Depot;– Bunkerings (Fuel Supply to Ships); – Jet A1 (Air planes supplying), etc.

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PETROMOC DISTRIBUTION ROUTES

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REGIONROUTE

NUMBERFROM

(MAIN DEPOT)DESTINATION

(DEPOTS) DISTANCE

[km] REMARKS

SOUTH

1 Main DepotFilling Stations; Bunkering, Jet A1 30 up to 100 Road Tankers

2 Matola Lionde 300 Road Tankers

3 Matola Inhambane 500 Road Tankers

CENTER

4 Beira Chimoio Depot 200 Road Tankers

5 Beira Marromeu Depot 600Road Tankers, Shipping and Railway*

6 Beira Moatize 600Road Tankers in future, via Railway

7 BeiraLichinga, via Malawi 1200 Road Tankers

8 Beira Quelimane 600Road Tankers and Shipping.

9 Quelimane Mocuba 300 Road Tankers

NORTH

10 Nacala Nampula 200 Road Tankers

11 Nacala Pemba 450Road Tankers and Shipping.

12 Nacala Mocimboa da Praia 650 Road Tankers

13 Nacala Angoche 350 Road Tankers

14 Nacala Cuamba 550 Railway

FUEL TRANSPORT AND DISTRIBUTION SYSTEM – CURRENT SITUATION -

• One of the Contrators (Whana Auto) involved in the above operations is partly owned by Petromoc - operating in the South and Centre - including the two biggest Road Operations, namely:

– Fuel suply from Beira to the mining Project of Vale in Moatize, with current consumption of 3600 m3 per month and

– Natural Gas Condensate transportation from SPT (Sasol Petroleum Temane) to Beira Depot, with a current Rate of 2000 m3 per month.

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POLICY & THE FUTURE FUEL DISTIBUTION OPPORTUNITIES

• As we know, all vehicles carrying dangerous goods are required by law to comply with the National Road Traffic Acts & Regulations in addition to the regulations governing normal road vehicles.

• We at Petromoc are now busy developing the Fuel Transport and Distribution Policy - under the Integrated Management System (EMS) for Safety, Health, Environment and Quality (SHEQ) on ISO 9001; ISO 14001 and 0HSAS 18001.

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POLICY & THE FUTURE FUEL DISTIBUTION OPPORTUNITIES

To achieve the above referred target, the following will be focused:

• Fuel transportation Tender - to make sure all Contractors adhere and comply with the Petromoc Minimum Requirements which are listed in the Check List – under the Safe Loading Pass (SLP) System;

• Promotion of the Continuous Improvement principles to achieve the performance and management of the integrated system for SHEQ

• Identify, evaluate and control, continuously, all Safety and Occupational Health Risks, of all employees and related parties, giving primacy for reduction of chemical and organic risks.

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POLICY & THE FUTURE FUEL DISTIBUTION OPPORTUNITIES

In terms of opportunities in future, reference is made to the following Projects coming up:

• The above referred Tender will be an opportunity for Service Providers in this field adhering to the Petromoc FTD System – covering all or partially the above mentioned Routes;

• It is expected volume forecast to be increasing from new projects, such as:– Cabo Delgado, the construction of 8 (eight) LNG Plants;– Nampula, the extended capacity of Moma project;

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POLICY & THE FUTURE FUEL DISTIBUTION OPPORTUNITIES

– Nampula, the construction of new Harbour as well as the construction of the Railway from Tete up to Nacala;

– The expansion of Road Transportation System across the country, increasing the retail busisness.

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TRANSIT FUEL TO NEIGHBOUR COUNTRIES

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VOLUME @ 2010

[m3] MAPUTO BEIRA NACALA TOTAL

30,748.5 21,139.4 - 51,887.9

14,217.6 - - 14,217.6

20,984.4 11,692.1 12,377.3 45,053.8

4,887.7 - - 4,887.7

- 6,891.7 - 6,891.7

2,713.7 - - 2,713.7

4,963.2 - - 4,963.2

78,515.0 39,723.2 12,377.3 130,615.5

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THANK YOU.