Does Australian oil refining really matter? Des King CEO & Managing Director Caltex Australia Limited American Cham

1. Does Australian oil refining really matter?Des KingCEO & Managing DirectorCaltex Australia Limited American Chamber of Commerce 8 November 2007

2. Outline • World • energy demand growth • oil demand and supply • refining capacity • Australia • refining • demand growth for fuels • growing fuel imports

3. World energy demand 2030715 exajoules 2004470 exajoules Source: IEA World Energy Outlook 2006An exajoule is 1018 joules

4. World energy supply 2030715 exajoules 2004470 exajoules Source: IEA World Energy Outlook 2006An exajoule is 1018 joules

5. Global oil supply forecasts AVERAGE OF OIL COMPANY ESTIMATES Source: National Petroleum Council 2007

6. Oil supply sources Total oil supply Unconventional supply 140 - Gap (MBD) Unconventional supply (MBD) 16 - NGLs, condensate, processing gains, etc. NGLs, condensate, processing gains, etc. Biofuels 12 - Middle East, West Africa, and FSU Gas to Liquids 8 - Other XHO Venezuelan XHO 4 - North America, Latin America,Asia-Pacific, and Europe Canadian X-Heavy Oil (XHO) 0 - 0 - 2005 2030 2005 2010 2015 2020 2025 2030 Source: Chevron

7. World carbon dioxide emissions Source: IEA World Energy Outlook 2006 Reference Case

8. Global refining capacity to remain tight Million barrels per day 100 Global refining capacity 80 60 Global refined product demand 40 20 0 1990 1995 2000 2005 2010 2015 Source: P&G, IEA & PFC

9. World overview • Energy demand will increase 50% by 2030 • Oil, coal and gas will remain dominant • Alternatives to conventional crude oil required to meet demand growth • Oil refinery capacity will remain tight medium term

10. Australian refining industry Caltex delivers diesel to the Ashton Coal Project, Hunter Valley

11. Australia’s refineries Kwinana Bulwer Is Northern Territory Lytton Queensland Western Australia Petroleum Products* Production: 34,000 ML Demand: 43,000 ML Product imports: 22% South Australia New South Wales Clyde Kurnell Pt Stanvac CLOSED Geelong Altona CAPACITY REDUCED Mobil Mobil * Petrol, diesel and jet fuel Source : Australian Institute of Petroleum, DITR

12. Demand for petroleum products is increasing Petrol Diesel Jet fuel Australian product demand and imports 0 - 1%pa 4%pa 3 - 4%pa • Percentage of petroleum products* imported • 2006-7 • 2015 • 2030 22% 30 - 40% 50 - 70% * Petrol, diesel and jet fuel Source : Caltex estimates

13. Regional supply and demand remains tight in medium term Million barrels per day Asian Product Supply and Demand 30 Forecast Asian Demand 25 20 Asian Supply 15 10 1988 1992 1996 2000 2004 2008 2010 As at January 2007. Source: BP Statistical Review (1970–2006); East-West (2007); CAL Analysis

14. Jamnagar refinery, India

15. Refining location advantage US$2.75/barrel Product importsUS$5.10/barrel freight Crude importsUS$2.35/barrel freight Source : Freight rates are for Caltex refineries for 1H07 (Caltex data). Crude oil and petroleum product sources are for total Australian imports (DITR data).

16. Australian greenhouse gas emissions • Total Australian GHG emissions 559 Mt CO2eq • Contribution of petroleum products Source : Australia's National Greenhouse Accounts, National Greenhouse Gas Inventory 2005

17. Other regulatory issues • Biofuels • Environmental requirements • Fuel price regulation

18. Does Australian refining really matter? • Energy security is emerging strategic issue for all Australian industry • Petroleum product imports are increasing – what level is the “tipping point” for insecurity? • Liquid fuel security can be achieved – but we have to recognise the problem and take it into account now