ROMPETROL RAFINARE Corporate Presentation 2007-1-
Table of Contents Group Overview History Corporate Legal Structure Rafinare ( RRC ) Shareholders Operations * Refining * Petrochemicals * Marketing Strategy Stock Performance Financials -2-
Significant Corporate Events (I) 1974 - Established as the international operator of the Romanian oil industry 1993 - Privatized through a Management and Employee Buy Out ( MEBO ), turnover subsequently reduced to below $6 million by 1998 1998 - Control purchased by Dinu Patriciu and a group of local investors 1999 - Holding company established as The Group ( TRG ) in the Netherlands 1999 - The first major acquisition; the Vega refinery located in Ploiesti, is bought and doubles its revenues in the first nine months after the take-over 2000 - Private equity investment by US-managed Romania & Moldova Direct Fund L.P ( RMDF ). 2000 - takes over Petros at that time Romania s principal oilfield operator. The company has since been renamed Well Services 2001 - The Group s largest acquisition, Petromidia S.A. (later renamed Rafinare), Romania s largest and most sophisticated oil refinery. 2002 - OMV of Austria buys 25.1% of TRG NV, RMDF exits. OMV Chairman Dr. Wolfgang Ruttenstorfer joins TRG Board 2002 - opens subsidiaries in neighboring Republic of Moldova ( Moldova) and Bulgaria ( Bulgaria) 2003 - Rafinare reaches an agreement with the Ministry of Public Finance to restructure a historical tax liability 2004 - Rafinare (April) is listed on the Bucharest Stock Exchange & became 20% of the Index (November) 2004 - In June, both Standard & Poor s and Fitch rated The Group with B- Outlook Stable, upgraded to B+ at present 2004 - TRG establishes controlled subsidiary Vector Energy AG in Switzerland for oil and products trading -3-
Significant Corporate Events (II) 2005 - OMV sells its 25.1 percent stake in TRG back to the management of Holding 2005 - Record Financial results with net profit reaching $ 84 million on turnover of $2.35 billion. TRG starts operations in Albania and Georgia and opens a representative office in Moscow 2006 - TRG buys 100% equity stake in Dyneff Group, France s largest independent petroleum products distributor with operations in France and Spain 2006 - TRG becomes one of the first 25 companies from EU in in terms of turnover 2007 KazMunayGaz (KMG) acquired a 75% equity interest in The Group NV ( TRG ). TRG will be managed jointly by its two shareholders KMG and Holding -4-
Simplified group structure 100% The Group N.V. France 99,6% DYNEFF SA 82,36% S.A. 72,22% 27,78% 98.26% Financial Group SRL 99.95% 85 % Bulgaria JSC 99.50% 80 % Moldova S.A. 60% RP Albania Downstream Sh.A 60% RP Albania Wholesale Sh.A 50,59% 14,72% Rafinare S.A. 9,14% Well Services SA 2,62% 51% 0,1% 70% LLC Ukraine 60% Geopetsa 100 % Upstream International Ltd. 100% Vector Energy S.A. 100% Midia Marine Terminal SRL 100 % LLC 95% Georgia Ltd. 60% Distribution Albania Sh.A. 60% Albania Sh.A. IFN Fingroup Credit SA Rominserv SA 23.42% Ecomaster SA 23.42% 23.42% Industrial Parks SA 60.27% Logistics SRL 99,99% Petrochemicals SRL 99,99% Downstream SRL Rom Oil SA 99,99% 99,92% Quality Control SRL 23.42% Gas SRL 100% 99.4% Eurojet Romania SA 51% Global Security Sistem SA Listed Companies on Bucharest Stock Exchange ( BSE ) -5- Rompetrl Rafinare Group, traded on BSE as RRC
Rafinare - Flow of Operations Russia & Caspian Region Petromidia refinery Logistics Retail Crude Oil Refining Logistic Infrastructure Wholesale Domestic Downstream Rom Oil Export Bulgaria Moldova Ukraine Turkey Petrochemicals Petrochemicals -6-
Rafinare Petromidia Rafinare Petromidia"
Rafinare - Shareholders Name No. of shares (Billion) % The Group N.V. and affiliates Funds/Financial Institutions/Companies 16.04 76.0% 3.54 16.8% Individuals 0.86 4.1% TOP 200 20.44 96.9% Others 0.66 3.1% Total 21.10 100.0% Free float is concentrated to the first 200 shareholders -8-
Rafinare - Refinery Assets Built in 1976-79, was modernized in the early 1990s and can process a wide variety of crude oils, with different sulfur content and API Capacity: 100,000 bbl/day or 5 mio. to/year Has an unique location Shores of the Black Sea in Navodari, 20 km north of Constanta port Excellent logistics Railway, access to the Danube-Black Sea Channel, its own port The highest (83%) white products yield in the region Nelson Complexity Index of 10.7 (full restart of the steam cracker will change it to 11.2) Excellent location, complexity, highest product yield -9-
Rafinare - Crude Supply & Product Sales CRUDE SUPPLY Petromidia imports all its crude oil from Black Sea / Mediterranean Market Petromidia Refinery benefits from processing only Ural crude which is traded at a differential compared to Brent crude Brent Ural average differential increased significantly from 2001 to 2004, was steady between 2004-2006 at 3.8-4.0 USD/bbl, and decreased in 2007 to 2.86 USD/bbl PRODUCTS SALES s markets in the last 3 years were: Romania (50% from output); Near Abroad through group s subsidiaries (10-15%) Other regional markets through traders (35-40%) -10-
Rafinare Yields Kt; % 2007 2006 2005 Feedstock processed 3,827 3,695 3,259 Operational capacity utilisation rate 100% 92% 81% Gasoline 1,293 1,190 1,006 Diesel 1,410 1,374 1,201 Gasoline yield 33.8% 32.2% 30.9% Diesel yield 36.8% 37.2% 36.9% In 2007, we had the highest capacity utilisation rate increasing also the yields for motor fuels -11-
Rafinare - Refining Segment Margins USD/bbl or to; USD 2007 2006 2005 Gross cash refinery margin/t 56.7 59.7 75.8 Net cash refinery margin/t 19.5 22.5 41.9 Gross cash refinery margin/bbl 7.8 8.2 10.4 PVM Ural Cracking Margin/bbl (Benchmark for Med refineries processing URAL) 6.9 5.8 6.2 Difference +13% +41% +68% EBITDA 71 82 126 EBITDA margin 3.2% 4.2% 8.3% Better margins than the benchmark margin, but been affected by higher costs at EBITDA level -12-
Rafinare Petrochemicals Assets PP (Polypropylene) - 80,000 mt/year (operating at capacity) propylene is supplied by the refinery and by third parties LDPE (Low Density Polyethylene) - 60,000 to/year restarted in October 2006 after a 30 musd capital expenditure program; the main raw material ethylene is imported HDPE (High Density Polyethylene) - 60,000 to/year restarted in Q3 2007 Ethylene Cracker - 200,000 mt/year (currently in conservation) designed to use naphtha as raw material Small Petrochemicals Unit, Gradually increasing as result of restarting mothballed assets -13-
Rafinare Petrochemicals Operations Kt; %; musd 2007 2006 2005 Propylene processed 110 108 83 Ethylene processed 73 Production sales 170 96 84 Trading sales 15 30 44 Export 58% 51% 41% Domestic 42% 49% 59% EBITDA 4.6 6.3 8.7-14-
Rafinare Marketing Assets Six depots owned in Romania with a total Capacity of 60 kcbm Completely new network of COCO gas stations (115) built in the last 5 years and operating under Brand Network of DODO gas stations (189) developed in the last 2 years operating under Partener Brand Network of Expres movable stations (86) developed in the last 2 years A fleet of Railway and Road tanks used for primary and secondary transportation A very fast growing and modern retail network in Romania -15-
Marketing Segment Operational & Margins Kt; USD/t 2007 2006 2005 Quantities sold Retail 430 296 209 Quantities sold Wholesale & Partners 807 746 733 Gross Margin Retail 149 116 122 Gross Margin Wholesale & Partners 47 37 30 EBITDA (*) 60 36 23 In the last 3 years, we have continuously increased the quantities sold in our own retail network -16-
Rafinare Strategy Rafinare strives to become, through organic growth and sensible low-cost acquisition that integrate with its existing operations, the leading low-cost provider of petroleum products in the Balkans In Refining, we intend to:» Increase the operational capacity of the refinery with 28 % (from 3.9 mil to/y to 5 mil to/y)» Increase Diesel yields with 22 % (from 37% to 45%)» Operate the Refinery according to EU and Romanian environmental requirements» Total Capital Expenditure for these projects is estimated at USD 350 million over the next 3 years -17-
Rafinare Strategy In Retail & Marketing we intend to double our presence in Romania in the next 5 years by: Build or acquire additional retail sites up to a total of 149 COCO stations by the end of 2012. Franchise network of 109 DODO stations by the end of 2012. Innovate and capture the emerging market of large corporate fleets via Fill & Go system. Increase the non-petroleum sales contribution with the new concept of Hei shops. Total Capital expenditure for these projects ranges between USD 65-75 million -18-
Rafinare Stock Performance -19-
Consolidated Audited Financials RRC IFRS Million USD/% 2007 2006 2005 Net Revenues 2,610 2,106 1,683 Net Revenues increase 24% 25% 48% EBITDA 136 122 158 EBITDA Margin 5.21% 5.8% 9.4% Net result (116) (22) 74 Net result Margin -4.4% -1.0% 4.4% Basic EPS (US cents) (0.578) (0.132) 0.343-20-