Throughput and Margin Report for November/December 2014

Announcement to NZX

Refining NZ Throughput and Margin Report for November/December 2014

The Gross Refinery Margin1) (GRM) for the period was USD 9.98 per barrel with a throughput of 7.1 million barrels. This delivered a Processing Fee income of NZD 63.9 million, enabling the Fee Floor2) to be completely paid back to customers. The average exchange rate was USD/NZD 0.78.

For the full year we achieved a GRM of USD 4.96 per barrel with a throughput of 39.7 million barrels, ahead of the updated guidance of 39 million barrels given in the interim results announcement. Processing Fee income was NZD 168 million, 5% ahead of the 2013 Processing Fee.

Singapore complex margins were healthy and averaged USD 4.48 per barrel for November/December. Refining NZ’s margin uplift over Singapore complex margins of USD 5.50 per barrel for the period was again higher than the normal range of USD 3 - 4 per barrel, driven by the 2014 margin initiatives, excellent operational performance and favourable crude prices. The crude price movements included an ongoing narrow Brent-Dubai spread and reduced market premia for crude oil over the Brent and Dubai benchmark prices.

We saw crude prices decline further to end the year at around USD 50 per barrel. Lower crude prices improve our competitiveness against imported product due to lower inventory costs for our customers. At the current crude price of below USD 50 per barrel, Refining NZ is competitive at a GRM of USD 4.50 per barrel or better.

Appendix I shows further information on throughput, margin and refining income.

Historic Analysis

A five year history of Throughput, Margins and Processing Fees is attached as Appendix II and can also be found on the company’s website: www.refiningnz.com

Full announcement: RC044.pdf

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