Black Economic Empowerment A Presentation to the Portfolio Committee on Minerals and Energy

1. 020223JHBPT159ST_P1 Black Economic Empowerment A Presentation to the Portfolio Committee on Minerals and Energy 06 September 2002

2. 020223JHBPT159ST_P1 • BP globally • Present in 100 countries serving more than 10 million customers per day • 29,000 service stations and 23 refineries worldwide • 107,000 permanent employees • Established operations in Africa, Europe, North & South America and Australasia • Operated in Africa for more than 80 years • Present in 14 countries • Downstream investment of US$550m and annual operating budget of US$100m • 1,500 service stations, 52 depots and a 50% in the region’s largest refinery - SAPREF • BP in Africa • BP in South Africa BP in context • Downstream investment of US$370 million and an annual operating budget of US$70m • Powerhouse of African operation & performance • Africa operated from Cape Town – BP’s Africa Head Office • Directly employee 1,300 people • 790 service stations & 26 depots • 50% stake in Africa’s largest refinery – SAPREF in Durban • 2 lubes oil blending plants South Africa considered a core BP geography and a major investment opportunity into the future

3. 020223JHBPT159ST_P1 • To be competitively successful • Whilst being a force for good • To increase shareholder value year on year • To deliver a performance standard that challenges the world’s best companies • To attract and retain the best talent • To be number one or two where we choose to compete • To have an unshakeable commitment to human progress • To create energy that fuels growth and gives people freedom – freedom to move, to be warm, to enjoy better quality of life – this freedom should be inseparable from the responsibility to produce and consume our products in ways that respect both human rights and the natural environment • To share returns with the communities in which we operate to effect positive societal change BP values & black economic empowerment BP is at the forefront of South Africa’s change and transformation process

4. 020223JHBPT159ST_P1 How does BP define success on empowerment? • Success on empowerment – a BP definition • In order for empowerment to be successful it must satisfy the following objectives: • Job creation • Skills transfer • Create opportunities for HDIs to participate in the economy of South Africa in a meaningful and sustained way • Create opportunities for education • Provide HDIs with increased influence & control over the way BP operates in South Africa and beyond • How will it be achieved within BP: • Ownership & control • Empowering HDI employees • Affirmative procurement • Development of SMEs • Meaningful corporate social investment Must contribute significantly to poverty alleviation across South Africa Must broaden South Africa’s economic base and be value creating for BP and its empowerment partners to ensure sustainability

5. 020223JHBPT159ST_P1 Why MIC/WDB? • BEE partners – what were we looking for? • Reputation & strategic ability • Ethical conduct of company and individuals • Track record of delivery • Broad based shareholding • Active not passive shareholders • Focus and ability to grow the business • Capacity to invest own capital • Fit with existing business(es) • MIC & WDB satisfied these requirements and importantly had a history of joint investment together

6. 020223JHBPT159ST_P1 BPSA (Pty) Ltd BP 75% MIC 17.5% WDB 7.5% Manufacturing (Refining), Supply, Trading Retail Lubes Commercial & Industrial Commercial & Industrial Marketing Joint Venture Spin off 50% Future BEE 30% SAPREF & Blendcor BP 45% MIC 17.5% WDB 7.5% MIC/WDB/BP relationship structure • How is MIC/WDB’s equity investment and joint venture in BP structured?

7. 020223JHBPT159ST_P1 Why the deal is sustainable • What else is ground breaking about our black economic empowerment deal? • No incentive to exit • Participation is encouraged • No third party finance • We aim to develop our partners’ expertise • Commercial interests in common • Empowerment partners with a broad base of beneficiaries

8. 020223JHBPT159ST_P1 Introducing MIC/WDB

9. 020223JHBPT159ST_P1 MIC shareholding structure (where does the value go?) B ENEFICIARIE S M D A INEWORKERS EVELOPMENT GENC Y JB M B T ARKS URSARY RUS T (SECTION 21) COMPANY NATIONAL OFFICE BEARERS Trustees 100 % R40m distributed to date and R52m committed over the next 6 years. E LIJAH B ARAYI N UMPROPS M EMORIAL ( ) T PTY LT D RAINING C ENTR E (S 21) C ECTION OMPAN Y MIC Team: Clifford Elk ( MD ) Paul Nkuna Keshan Pillay Tshidi Madima Anton Hugo

10. 020223JHBPT159ST_P1 WDB MF Ms Mimie Sesoko (CEO) WDB Trust Trustees Mrs. Zanele Mbeki (Chair) Mr. Colin Hall Mr. Michael Katz Ms Futhi Mthoba Mrs. Gertrude Shope Ms Sally Motlana WDBIH Directors Mr. Colin Hall (Chair) Ms Faith Khanyile (Executive) Ms Mimie Sesoko Ms Thandi Ndlovu Ms Tania Slabbert (Executive) Ms Audrey Mokhobo WDB Group structure • What is the WDB Group’s structure? WDB Services to date 20 575 loans issued 16 000 women trained R20 million loaned R2 million saved WDB Micro-credit Finance 100% beneficiary WDB Trust Key Messages • Wholly owned by WDB Trust • WDB Trust supports rural women – it advances micro-credit and capital for enterprise development • Since 1991 WDB has advanced 20,000 business loads, supporting 10,000 jobs and trained over 1,000 women in basic business skills • Singlemindedly focused on empowering women in the poorest rural communities of South Africa • Repatriated R11m since inception in 1997 100% (equity) WDB Investment Holdings (Pty) Ltd

11. 020223JHBPT159ST_P1 • How we are achieving black economic empowerment at BP • Black economic empowerment will be achieved through a range of initiatives – not by one initiative in isolation Achieving black economic empowerment • Empowering HDI employees • Affirmative procurement • Development of SMEs • Meaningful corporate social investment At present BP is focused on these important areas

12. 020223JHBPT159ST_P1 Diversity profile – BP in South Africa • Racial profile • Gender • Diversity profile • (%) • (%) • (%) • White males • White • Black • Female Now • Asian & Coloured • Male • Diverse population • White males • Female • Black • White 2005 Target • Male • Asian & Coloured • Diverse population

13. 020223JHBPT159ST_P1 Racial and gender profile of the leadership • BP’s commitment to empowerment extends to all levels of the organisation • 89 most senior positions in BP South Africa – tiers 1, 2 & 3 • Female • Black • Asian/ coloured • Male • White • 2000 • 2002 • 2005 Target • 2000 • 2002 • 2005 Target

14. 020223JHBPT159ST_P1 Other ways we empower our people • Employee share scheme • 84% of BP staff in South Africa participate in the employee share scheme (of which 79% are HDIs) – giving our staff a stake in the future of BP globally • Under this scheme all employees are entitled to purchase the company’s shares on the London Stock Exchange at 50% of the list price • Soft loans from the company are also available to facilitate access to the scheme Current value of BP South Africa employee equity ownership approximately R68 million

15. 020223JHBPT159ST_P1 • Fast track development programmes • International exchange programme • Approximately 75 staff on fast track development programmes in South Africa of which 71% are HDIs • 73% of “Rising Stars” (3-grade potential) are HDIs • 70% of “Oil High Potentials” (assessment supports director level potential) are HDIs • 40 South African employees currently on international expatriate assignment of which 16 are HDI • All staff qualify for housing assistance, provident fund contributions, medical aid, thirteenth cheque & annual performance bonuses Other ways we empower our people

16. 020223JHBPT159ST_P1 • Dudula Shipping • Largest single BEE procurement deal in the oil industry to date • Southern Tankers – joint ownership between Dudula (100% black owned) and the Grinrod Group • Will provide coastal hydrocarbon shipping service to BP . • Value of deal = R300m • Training and development of 40 HDIs at sea Affirmative procurement – some BP examples

17. 020223JHBPT159ST_P1 • Retail dealer/franchisee empowerment • Retail dealer/franchisee profile at present: • To support progress in this area we have committed to focus on the recruitment of black, asian, coloured and female entrepreneurs for at least 70% of all new and “churned” Retail franchises • Additionally we have developed a finance offer with Citibank and the IDC for new and existing dealers • This makes finance far more accessible for HDI entrepreneurs wishing to take on a BP franchise SMME development – Retail dealers & franchisees Racial profile Gender profile Black/asian/coloured Female 33% of all dealers are HDIs at present, this includes white females White Male

18. 020223JHBPT159ST_P1 • Corporate social investment & empowerment “In the last decade BP has moved from seeing its social performance as an important, additional requirement to doing business, to regarding it as one of the three most important measures of performance that must be reported annually to its shareholders” • Financial performance • Environmental performance • Social performance • We have defined “social performance” as • Our behaviour, that is, whether we live up to the values expressed in our company’s business policies • Our impact on people • Our overall contribution to society Financial Responsible Social Environmental Corporate social investment

19. 020223JHBPT159ST_P1 • Objectives • Focus • To contribute to social and economic development wherever we operate • To earn and build our reputation as a responsible corporate citizen • To promote and help the company achieve its business objectives • To encourage and promote employee involvement in community upliftment • Job creation • HIV/AIDS • Road safety • Environment What are the objectives & focus of BP’s CSI programme? Areas that are key to South Africa’s social livelihood

20. 020223JHBPT159ST_P1 Q&A