Framing & Alignment Meeting PROJECT NAME: Date: 28 October 2006

Pr 29:18 Where there is no vision (revelation), the people perish. Pr 19:2 It is no good to have zeal without knowledge, nor to be hasty and miss the way.

Why an alignment meeting? To achieve alignment between all the stakeholders on the business, project and project execution objectives. When? At the start – at kick off of the project At the start of each phase of the project Duration of about one day Who? The major project stakeholders : Business owner & sponsor Marketing Operations & maintenance Technical/engineering Environmental

Why Are We Here? As management members of relevant departments and/or of the project, you are here to provide expert input. A viable business opportunity has been identified and is being pursued further. To improve efficiency and coordination on the planning of this project. You are asked to set aside any issues, power plays, politics and to focus on the interests of the project. You are invited to co-operate as a part of a flexible and dynamic discussion group that will outline and define the ultimate success of this project. Sasol Executives have decided that this project opportunity must be pursued further, at least to the next decision gate in the BD&I model, whichever one that might be. You will together determine that today. Sasol Board Members like to know exactly to what they are committing themselves and the company to. The fact that this is not really achievable is simply not a consideration! You must find a way to maintain their confidence in your role in the project, while giving the decision-makers the information they need to be effective in their roles. You can not at this time say with certainty whether the project will be an overall business success or not. The only truly effective benchmark for project success is the long-term return gained on the investment in the project. The success of a project is linked to meeting Sasol Executives’ expectations, and failure is directly linked to communication breakdowns. As managers, your job is not just to help the project team bring this project in on time and within budget, maximum performance, quality, safety, and all the other traditional parameters of success. Your task is more than that. You must understand what Sasol’s business is all about and work to achieve its business goals. As this project progresses to the next decision gate, you must bear in mind what Sasol’s business objectives are for the project, and whether you as managers are steering this project towards achieving those objectives. While we are using words like “stakeholders”, “success”, “cooperate”, “communicate” and “Alignment”, lets take a moment to make sure that we all agree on the definitive meanings of these words.

Meeting Ground Rules One conversation at a time – speak clearly. All participate and contribute. Listen to the contribution of others. Getting ideas out, not judging them. No rank in the room (except for the Facilitator!). No political games. No “us” and “them” Cell phones off. Have Fun!

Participants & Roles List of participants and introduction Where are you from? What role do you play in the project? What are your expectations from the meeting? Project Role From Name

Framing Meeting Objective and Deliverables The objective: 1. Achieve alignment on project objectives, risk issues, scope of work, roles and responsibilities and next actions The deliverables : 1. A List of : Business Objectives Project Objectives Project Execution Objectives 2. A List of : Business Risks Project Risks Project Execution Risks 3. A Block Diagram showing the scope of the project 4. Roles and Responsibilities 5. Governance Structure and Communication 6. Safety Health and Environment 7. Contracting Strategy 8. Project Ground Rules 9. A Project Milestone Roadmap, with deliverables and dates 10. A List of Next Steps Some social fun (which you can read in your own time): Subject:  A LESSON OF BUSINESS Lesson One O’ One ************** A crow was sitting on a tree, doing nothing all day. A small rabbit saw the crow, and asked him, "Can I also sit like you and do nothing all day long?" The crow answered: "Sure, why not." So, the rabbit sat on the ground below the crow, and rested. All of a sudden, a fox appeared, jumped on the rabbit and ate it. Management Lesson Number One: To be sitting and doing nothing, you must be sitting very, very high up.

Project Framing Agenda Define business objectives Define project objectives Define project execution objectives Business risks Project risks Project execution risk A Block Diagram showing the scope of the project Roles and Responsibilities Governance Structure and Communication Safety Health and Environment Contracting Strategy Project Ground Rules A Project Milestone Roadmap, with deliverables and dates A List of Next Steps

Framing Meeting Block Diagram Project Execution Planning (Execution Objectives) Project Execution Plan (Scope of services internal & external) (HOW & WHO) Business Planning & Objectives (WHY) Project (Facility) Planning (Project Objectives) The Right Project (Scope of Facilities) (WHAT) Market needs & Requirements Metrics to measure success

Business Objectives Define the Business Objectives: Understand the business opportunity and why resources are committed to the project. What are the reasons for the project? How does it fit Corporate strategy? What is the economic justification? IRR % NPV What are the economic sensitivities ? Feed cost Sales volumes Capital cost Sale prices What are the business drivers? New markets & opportunities Expansion Environmental/regulatory requirements What other projects are impacted - or may be impacted?

Objective Matrix Results Business Objectives Results to Achieve: (Business Objectives) Results to Prevent Resources to be used Restrictions preventing achieving objectives

Framing Meeting Block Diagram Project Execution Planning (Execution Objectives) Project Execution Plan (Scope of services internal & external) (HOW & WHO) Business Planning & Objectives (WHY) Project (Facility) Planning (Project Objectives) The Right Project (Scope of Facilities) (WHAT) Market needs & Requirements Metrics to measure success

Project Objectives Define the Project Objectives: The project objectives support and underlay all the business objectives. Production facility performance objectives – volumes, purity, yields, etc? What are the project sensitivities – cost, schedule, (plant) performance (quality)? What are the milestone dates that must be met? (Window of opportunity – Schedule?) The technology to be used – new, proven? Environmental/effluent objectives? Site and location of the facility? Project specifications to be used?

Objective Matrix Results Project Objectives Results to Achieve: (Project Objectives) Results to Prevent Resources to be used Restrictions preventing achieving objectives

Framing Meeting Block Diagram Project Execution Planning (Execution Objectives) Project Execution Plan (Scope of services internal & external) (HOW & WHO) Business Planning & Objectives (WHY) Project (Facility) Planning (Project Objectives) The Right Project (Scope of Facilities) (WHAT) Market needs & Requirements Metrics to measure success

Project Execution Objectives Define the Project Execution Objectives: The project execution objectives must support and underlay business AND project objectives. Execution objectives with regards to: Local content, country, site specific issues Engineering / specifications Procurement Construction Safety, health and environmental objectives Strategic milestone dates that must be met Understand Project Objectives and impact on Cost Schedule, Performance/quality Financier requirements e.g. World Bank

Objective Matrix Results Project Execution Objectives Results to Achieve: (Project Execution Objectives) Results to Prevent Resources to be used Restrictions preventing achieving objectives Site location, remoteness Site conditions, green field, revamp. Logistic supplies Infrastructure available Local content

Business Risks Identify the business Risks Risks arising from the business venture itself, effecting viability (good or bad) of the business model, usually external, unpredictable and not insurable Market risk: Price changes, demand changes, substitute products, barriers to market entry, competition, etc. SHE risk: Changes in environmental requirements and legislation, green issues, CO2 emissions Financial risk: Currency fluctuations, inflation rates, interest rates Socio-political and economical risks: AIDS Geo-political risks: regional wars, social instability

Project Risks Identify Risk that will directly result from the project (facilities) itself: Technology risks Technical complexity First of a kind Scope risk – potential for significant scope changes Quality risk Cost risk SHE risks Any other risk inherent to the project

Project Execution Risks Risk that will impact implementation and delivery of the project (EPC): Availability of resources Skills availability Material and equipment supply & delivery. Site issues – congestion, remoteness, etc. Weather/climate Country, area, site specific issues Project Management risk Scope definition – scope creep Logistical, transport risks Infrastructure, equipment availability

Scope of Work Define Scope of Work (Develop WBS) Create a block diagram What is in the scope? What is outside the scope? Define the Battery Limits? Other opportunities?

Project Organigram (Governance structure) Develop project organigram Indicate: Organisational structure – function, matrix or project Indicate functions and reporting lines Steering Committee and key role players

Project Governance and Communication How will the project be governed? Meetings Technical Meetings – attendees, frequency Project Progress Meetings – attendees, frequency Steering Committee - members Communication Reports Format and Frequency Media, format, referencing, lines of communication Approvals What approval levels will be applicable

Roles and Responsibilities Develop RASCI chart for the project with all the project team members together R – for Responsible A – for Accountable S – for Support C – for Comment I – for Information

Contracting Strategy & Plan Types of Contracts proposed for: Feasibility Phase: Basic Engineering Phase: Execution Phase: Construction:

Project Road Map Agree the Current Starting Gate and Key Deliverables for Future Gates or Milestones Define starting gate or milestone: Define Next Gate or Milestone Deliverables and Dates for: Business deliverables Technical deliverables Projects deliverables

Project Ground Rules Technical Ground Rules Project specifications Life span of the project Cost, schedule or quality driven Plant safety Human Aspects How are we going to work together ? What are the “rules of engagement” for the team People health and safety issues Team member availability Decision making process

Next Steps Decide on and write down the next steps during and after the Framing and Alignment Meeting with completion dates and responsible persons

Conclusion The results from the Framing and Alignment session serves the following purposes: To achieve alignment on the WHY, the WHAT, and the HOW of a project Ensuring that project objectives are aligned with company objectives. Forms the basis of the Project Charter Forms the basis of the Project Execution Plan

Sasol Business Development & Implementation Model Project Execution Operational Business Front End Loading Implementation Business/ Operations Business Case Business Plan Final Business Plan The Business Running Entity Post Audit Report Engineering/ Technical Preliminary Eng. Proposals Conceptual Eng. Proposal Basic Eng. Package Technical Integrity Start-up Assistance Performance Certified Project Management Project Execution Assessment Project Execution Philosophy Project Execution Plan Project as per Execution Plan Project Close-out & Review Plan Project Close-out Report Sponsor Feasibility Charter Basic Development Charter Project Charter Governance Probability of Business Development proceeding Focus Idea Generation Idea Packaging 1 Pre- feasibility 2 3 Basic Development 4 5 6 Evaluation/ Operation Feasibility Execution Start-up 7 Opportunity scanning Brain storming R&D Stage Gate Model Business enquiries Business Planning Identify & assess opportunity Assess business alternatives, uncertainties & risks Company Strategy Alignment Accuracy + 50% Facility Planning Develop & select best alternatives Select Technology Execution & Design philosophies Develop Business opportunity Accuracy + 30% Project Planning Optimised & fully defined scope Authority Engineering Execution Plan Accuracy (+ 10% to + 20%) Depending on contracting strategy Provide assets according to Business Plan Implement with minimum changes Facility & business systems ready for start-up Owner quality assurance Safe start-up of the assets and business systems End-of job documentation Steady operation In specification product SBU acceptance Evaluation to ensure project met objectives Performance test Start business support Post project audit Phase objectives Track Deliverables 30% 50% 70% 95% 100% 100% 100% right opportunity? continue/abort/ rework accept next phase plan right business solution? continue/ rework/ abort principle approval accept next phase plan strategy fit continue / abort accept next phase plan project authorisation optimum project definition continue/ rework/ abort accept next phase plan ready for operation approve start-up beneficial operation stable operating plant quality product all objectives met acceptance of post audit & close-out reports Gate Criteria Copyright: © Sasol Technology (Pty) Ltd 2002, revision 4, 28 February 2003