Operational Update for November/December 2020 – corrected v

This is a corrected version of the announcement released at 8.37am today. Refining NZ anticipates providing an update to the market regarding potential import terminal conversion prior to its full year results announcement in February 2021 (not its half year results as incorrectly stated in the earlier announcement). HIGHLIGHTS o Excellent health and safety performance continued during the period, with no Tier I or Tier II process safety events or recordable injuries. o Processing Fee revenue remained at the Fee Floor due to continuing negative international refining margins. o Refinery and Refinery to Auckland pipeline throughput continue to be impacted by low jet fuel demand due to COVID-19 travel restrictions. o The year end net debt position closed at $231 million, $10 million lower than FY19. o Preparations for simplified operations were completed, ready for transition from January 2021. o Import terminal negotiations are continuing with all customers. COMMENTARY Refining NZ's excellent health and safety performance continued with no Tier I or Tier II process safety events, and no recordable cases in 2020. Refining NZ acted promptly to address causes of two minor releases outside consent during the period. New Zealand gasoline and diesel demand was at normal seasonal levels for the November/December period, while jet fuel demand continued to be significantly impacted by COVID-19 travel restrictions. Refining NZ continued to adopt strategies that minimised jet fuel production while meeting gasoline and diesel requirements. Refining throughput was 6.5 Mbbls, slightly less than the 6.8 Mbbls in the same period last year. RAP throughputs were c70% compared to the same period last year due to the depressed jet fuel demand at Auckland International Airport. The Gross Refining Margin (GRM) remained below Fee Floor levels during November/December due to weak global refining margins which continue to be impacted by reduced demand due to COVID-19. The Singapore Dubai complex margin for the period was weak at US$ -1.54 per barrel reflecting a surplus of refining capacity globally and an operating environment of low utilisation and low margins. Refining NZ's November/December uplift over the Singapore Dubai complex margin was strong at US$ 4.78 per barrel due to the Middle Eastern crudes processed by the refinery trading at a discount to Dubai crude. GRM for the two months was US$ 3.24 per barrel. Processing Fee revenue for the two months was NZ$ 24.6 million, including NZ$ 3.6 million of Fee Floor payments by our customers. The year end net debt position closed at $231 million, $10 million below 31 December 2019. This reflects the impact of resetting the 2020 cost base, the proceeds of asset sales and simplification restructuring costs. Preparation is complete for the planned four week maintenance turnaround, commencing in late February 2021. The turnaround includes the first statutory inspection for the CCR Platformer (Te Mahi Hou Project commissioned in 2015) and routine inspection and maintenance for the crude distillation unit and associated plant. During the turnaround, all other processing units not undergoing maintenance will be temporarily shut down, with customers importing refined products during this time. Preparations for simplified refining operations, which will enable Refining NZ to continue to safely operate the refinery in 2021 in a low margin environment, were completed ready for transition from January 2021 with workforce reductions occuring through Q4 2020 and Q1 2021. Refining NZ has worked positively and collaboratively with Government and Northland regional agencies on a planned transition to help manage the impact of changes on the refinery's workforce. Import terminal discussions are continuing with all customers. Refining NZ anticipates providing an update to the market regarding potential import terminal conversion prior to full year results. Authorised by: Chris Bougen General Counsel and Company Secretary Refining NZ For further information: Ellie Martel Government and External Affairs Manager Ellie.Martel@refiningnz.com +64 (0)20 4174 7226 End CA:00366585 For:NZR Type:MKTUPDTE Time:2021-01-22 10:56:39