1. M46; GROUND FLOOR; MARKS BUILDING
Presentation to THE SELECT COMMITTEE ON ECONOMIC AND BUSINESS DEVELOPMENT
12 june 2018
M46; GROUND FLOOR; MARKS BUILDING

2. CEF Strategy Review – Why now?
In past, CEF has successfully implemented South Africa's energy strategies
But now, PetroSA is in challenging financial position
CEF has low relevance, unbalanced portfolio, and complex governance
CEF is at a challenging point
New strategy makes CEF sustainable and relevant
Short-term focus on PetroSA turnaround
Long-term focus on economic transformation, having significant impact on South Africa's energy sector, financial sustainability, and social impact

3. Today, CEF is at a challenging point
Portfolio consists mainly of PetroSA
Limited relevance in market
No significant group profitability
<6%
Market share in refining 5
90%
Revenue from PetroSA
-481M ZAR
2017 -5
-10
-15
EBITDA
ZAR B

4. PetroSA is in a difficult financial situation
PetroSA cash reserves are shrinking fast
Depletion of gas feedstock
PetroSA will run out of cash and gas reserves in early 2022
R9.6B decommissioning liabilty
FY12
FY14
FY16
FY18
FY20
FY22

5. To address this, the Group Strategy Review was undertaken
Completed
Market trends and CEF starting point
Completed
3 weeks
Strategic options
Assess external environment
Benchmark best practices
Assess starting point
Ongoing
8 weeks
Implementation and Operating Model
Define CEF's role
Assess option space
Prioritise strategic path
5 weeks
Implementation roadmap
Governance recommendations
Capabilities plan

6. Group Strategy Review
Government
stakeholders
Interactions
9 workshops
>1000 hours of
exchanges
CEF Group
>55 interviews
External expert
opinions
>15
interviews
Group Strategy Review involved key stakeholders and all subsidiaries to design new strategy

7. Our ambition and priorities CEF has redefined how it fulfils its mandate
Create significant impact on South Africa's energy landscape…
…in a financially sustainable way…
...and in a socially responsible manner
..while transforming the local energy sector...

8. CEF should aspire to be the Catalyst for South Africa's energy transition ('vision 2030+') But must act now to build the country's future
Today
Mid-term
Long
term
???
Electric
Vehicles
Energy
diversification
(Upstream, NG)
CEF as
leader in sustainable energy solutions
CNG
Cleaner
Fuels
CEF + PetroSA Turnaround
2018
2023
2028
2040
Years

9. Turnaround PetroSA to a viable company
Accelerate transition from oil to EV
Build a Retail position to support EV play
Based on this, CEF will prioritise 6 strategic core areas And a potential additional area
Develop meaningful position in Renewables (under discussion)
Catalyse local E&P, facilitate transition to natural gas
Lead with DoE interim transition to clean fuels
Manage strategic stock

10. Communicate the Change
Support the Strategy
We need your support to make a major impact on South Africa's energy industry We in turn will continue to update you on a regular basis
Communicate the Change
with other stakeholders
Provide feedback

11. Thank you Mr. Godfrey Moagi Acting CEF Group CEO
Direct:
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