1. Copyright of Shell SA Marketing Sep 2010 Copyright of Shell SA Marketing Click to edit Master subtitle style Sep 2010 Liquid Fuels Charter Submission Shell SA __________________________ Public Hearings 14 September 2010

2. Copyright of Shell SA Marketing Sep 2010 Content 1. Shell South Africa Business Strategy 2. Transformation initiatives 3. LFC recommendation 2

3. Copyright of Shell SA Marketing Sep 2010  1st oil company to achieve a level 3 B-BBEE status:  2002 – Thebe acquired a 25% share in SSAM  2008 – Thebe acquired a 25% share in SSAR  Employment equity  Overall 74% black staff - 42% female.  Senior management - 48% black, 22% women.  Middle management - 56% black, 35% women.  Procurement:  General Procurement – 62% of spend to B-BBEE compliant Shell’s SA Business Strategy -Transformation is key to sustainability Women and people with disabilities’ representation remains a challenge 3

4. Copyright of Shell SA Marketing Sep 2010  Crude procurement – evaluated 5 entities, have started purchasing from Thebe Energy  Retail – programmes to facilitate HDSA’s  Supply&Distribution – all transport contractors B-BBEE compliant Shell’s SA Business Strategy -Transformation is key to sustainability 4

5. Copyright of Shell SA Marketing Sep 2010 Transformation Initiatives 1995-2010 Livewire Shell’s Livewire programme has been developing aspirant entrepreneurs from disadvantaged communities for over 10 years (every year about 300 micro enterprises are given training on how to run a small enterprise) 1996 – 2010 Employment Equity Programme Shell's Employment Equity Programme has been designed to correct past discrimination against groups of people, including black people, women and the disabled. Shell actively and proactively recruits black staff to fill vacancies at all levels of the company. This enables Shell to enjoy the benefits of a workforce comprising groups from diverse backgrounds with diverse skills and cultures. 5

6. Copyright of Shell SA Marketing Sep 2010 Transformation Initiatives…. 1998 – Refinery processing deal with Tepco Tepco had a deal with Shell SA which provided Tepco with a share in Shell SA's processing activities at the SAPREF refinery in Durban. Tepco would purchase crude and process it through the refinery, and participate in the entire spectrum of products. The deal was positioning Tepco to ensure security of product supply for its wholesale and retail market requirements. 2000 – Petroleum and Liquid Fuels Industry BEE Charter Shell SA participated fully in developing the South African Petroleum and Liquid Fuels Charter. As a signatory, Shell SA has undertaken to implement the framework for sustainably progressing the empowerment of Historically Disadvantaged South Africans in the Liquid Fuels Industry. 6

7. Copyright of Shell SA Marketing Sep 2010 Transformation Initiatives….. 2002 – Equity partner in Shell’s South African Marketing Business In 2002 Thebe Petroleum Investments acquired 25% of Shell marketing business in SA and the joint venture company Shell South Africa Marketing (Pty) Ltd was formed. This transaction was the first step in implementing Shell’s policy for black equity participation in its South African business. 2008 – Equity partner in Shell’s South African Refining Business In 2008 Thebe Petroleum Investments acquired a 25% share in Shell South Africa Refining (Pty) Ltd. With effect from 30 September 2008 Shell South Africa Refining (Pty) Ltd own a 50% share in the 180 000 barrel-per-day SAPREF refinery in Durban, and operate Shell’s import, refining and export business in SA. 2010- Integrated Energy Centre Shell SA is partnering with DoE in establishment of Integrated Energy Centres 7

8. Copyright of Shell SA Marketing Sep 2010 Transformation Initiatives….. Aspire (Shell Foundation) For the past seven years the Shell Foundation has run the R20m Energy Fund through Empowerment Fund Project, Aspire, with its partners ABSA and IDC, and project managers, Grofin. This project resulted in the establishment of around 20 small businesses and more than 200 direct job opportunities. Socio-Economic Development Shell SA’s Socio-Economic Development programmes focus on education, environment, welfare improvement and energy poverty alleviation. 8

9. Copyright of Shell SA Marketing Sep 2010 Recommendation B-BBEE access to: Pipeline Storage More crude procurement Alignment of LFC with B-BBEE Codes of Good Practice The Charter lacks rigorous definitions of many of the terms used, and lacks definitions of how compliance with its aims is to be measured. In contrast the Dti’s Codes of Good Practice (CoGP) contain rigorous definitions of both the terminology and metrics used in its B-BBEE scorecard. 9

10. Copyright of Shell SA Marketing Sep 2010 Recommendation B-BBEE Codes of Good Practice (CoGP) are very effective in measuring BEE compliance in the “commercial” or B2B marketplace. CoGP are shaping the B2B behaviour in the South African economy as it influences both the preferential procurement and sales to customers. In this way it creates a self-sustaining chain reaction in the economy An opportunity to have one transformation measuring tool for licensing and “commercial” environment The process of assessment of compliance is credible as it is conducted by accredited verification agencies 10

11. Copyright of Shell SA Marketing Sep 2010