Annual Report 2011 and General Update Presented to The Portfolio Committee on Energy Parliament of RSA 25 October 2011

2 Agenda PetroSA Annual Report 2010/11 1.Chairman’s Report Company Overview Annual Report 2.Annual Financial Statements

Company Overview * Following the merger of Soekor E & P and Mossgas Pty Ltd  PetroSA was established in 2002*  Employed 1836 total staff (March 2011)  Owns world’s 2nd largest, fully operational GTL refinery  Business spans petroleum value chain  Produces ~ 5% of RSA fuel needs  Produces diesel, gasoline, kerosene and specialty products  Produced ~70 MMbbl crude & 1 Tcf of natural gas to date  Has exploration acreage in Equatorial Guinea & Namibia  Has a trading office in Rotterdam  Net Asset Value ~ R16.57 billion

Our Core Business  Exploration and production of oil and natural gas  Participation in and acquisition of local as well as international upstream petroleum ventures  Production of synthetic fuels from offshore gas  Development of domestic refining and liquid fuels logistical infrastructure  And marketing and trading of oil and petrochemicals

5 Our Current Strategic focus is Sustain Mossel Bay, Use this as a platform for growth, Grow PetroSA to a significant industry player in RSA and regionally, Contribute to security of energy supply, And support economic growth, job creation and drive transformation. Meaningful growth as an NOC includes adding oil and gas reserves.

LNG or other feedstock MTHOMBO 3X3 2X2 2X1 25% 5% Vision 2020: Building Blocks CURRENT Field optimisatio n DOWNSTREAM SHALE GAS ? TRAINS LOCAL MARKET SHARE F-O © 2011 FOR INTERNAL USE ONLY Other Block 9 prospects

DoE CEF Divisions EDC NEEA (Reports through Saneri) Subsidiaries PetroSA SFF (s21) PASAiGas OPC (s21)SANERI ETA Energy CCE (Pty) Ltd 81.5% CEF Carbon CSA (60%) African Exploration PAMDC (33%) Associates Darling Wind Power 49% Johanna Solar 3% Biotherm 19% Cradock Sugar Beet 48% Philips Lighting Maseru 33% Energ G Joburg 29% Baniettor Mining 49% TFST 45% Funds managed Equalisation Fund Mine Health & Safety MEETI Administration Norad Project UNDP Solar Water Heater project SASDA Central Energy Fund

8 2010/11 Annual Report

Annual Performance: Salient Facts 2011/12 A Turn-Around For PetroSA  Records R831-million net profit, from R356-million loss the previous year  Commenced Development of Project Ikhwezi (previously known as F-O Project), set to sustain GTL Refinery operation to 2020  Continued efforts on Project Mthombo  Continues to support BBBEE, volumes increase by 14% from previous year  Maintains an excellent safety record  Averts a potential water crisis in Mossel Bay through the construction of the largest (15 million litres/day) desalination plant in South Africa

10 Performance Against Objectives Objective Key Performance Indicator Performance Result PeopleEmployment Equity Women representation remains a challenge, but there are interventions under way to rectify FinanceProfitability A turn-around to R831- million net profit vs R356 million loss the previous year BB-BEE/Stakeholder Preferential Procurement BEE Sales 53% of discretionary spend 14% increase in sales Internal Business Processes Feedstock Solution New Crude Refinery Project Ikhwezi approved Business case review

11 Staff Analysis

PetroSA WORKFORCE PROFILE – 31 MARCH 2011 (Total Women = 26% : Total Black = 75%) Occupational Level MaleFemale Foreign Nationals Total AfricanColouredIndianWhiteAfricanColouredIndianWhiteMaleFemale Top & senior management Senior management Professionally qualified and experienced specialists and mid-management Skilled technical and academically qualified workers, junior management, supervisors, foremen, and superintendents Semi-skilled and discretionary decision making Unskilled and defined decision making TOTAL PERMANENT Temporary employees TOTAL

13 Annual Financial Statements

14 PetroSA Group Results 2010/11 1.Consolidated Income Statement – Yr. on Yr. Revenue variance increased sales volumes, 14% increased crude price, 26% Cost of sales additional costs of R676m as result of updated abandonment study increased production,25% Other opex reduced because of delayed Mthombo FEED, reduced expenditure on Upstream activities compared to prior year as well as freezing of posts and cost saving initiatives Investment income reduced interest rates, even though higher cash reserves Tax Revised assessment 2008/9,prov.tax to be repaid

15 h PetroSA Group Results Consolidated Balance Sheet – budget vs. actual PPE increase as a result of deferred expense of R1,2b due to change in abandonment. Other financial assets under spend compared to budget due to delay in Castle and Mthombo. Increase in non-current liabilities due to updated abandonment study. Assets held for sale of disposal groups represents the PetroSA Nigeria and Brass Exploration Unlimited

16 PetroSA Group Results Cash Flow Statement Increased interest received increased cash balances Investments delay of Mthombo FEED and Castle Loan advances Mthombo FEED delayed Cash generated by operations increased by R2b

17 PetroSA Group Results 4. Historical Performance

18 PetroSA Group Results 5. Audit Opinion The PetroSA group was issued with an unqualified audit opinion. An emphasis of matter, which does not modify the audit opinion, was raised for the following items:  Significant Uncertainties Brass Exploration Unlimited, a subsidiary, was sold in February The sale was contested by the joint venture partner in July  Material Impairments Inter-company loan (R945-million) to subsidiary (PetroSA Egypt) impaired due to unsuccessful exploration activities. Inter-company loan (R270-million) to a subsidiary (PetroSA Gryphon Marin) written off

19 PetroSA Group Results 5. Audit Opinion Report on Other Legal and Regulatory Requirements Predetermined Objectives There were no material findings on predetermined objectives National Environmental Management Act Timely corrective action was not taken with regards to Voorbaai sub-surface contamination Corrections subsequent to 31 May PFMA deadline  Journal entries processed

20 PetroSA Group Results 5. Audit Opinion R13m of the 2010 fruitless and wasteful expenditure was recovered in R16m of the 2011 fruitless and wasteful expenditure is expected to be recovered in Fruitless and wasteful expenditure 2011 R’m 2010 R’m Incurred2215 Recovered(13)- Expensed915 Net fruitless and wasteful expenditure 2010 & 2011 = R 9million

Investments – NPV

22 Subsidiaries T H A N K Y O U