1. 1 Does Australian oil refining really matter? Des King CEO & Managing Director Caltex Australia Limited American Chamber of Commerce 8 November 2007

2. 2 Outline World –energy demand growth –oil demand and supply –refining capacity Australia –refining –demand growth for fuels –growing fuel imports

3. 3 World energy demand Source: IEA World Energy Outlook 2006 An exajoule is 10 18 joules 2004 470 exajoules 2030 715 exajoules

4. 4 World energy supply 2004 470 exajoules 2030 715 exajoules Source: IEA World Energy Outlook 2006 An exajoule is 10 18 joules

5. 5 Global oil supply forecasts Source: National Petroleum Council 2007 AVERAGE OF OIL COMPANY ESTIMATES

6. 6 Source: Chevron Unconventional supply 0 - 4 - 8 - 12 - 16 - 200520102015202020252030 Biofuels Gas to Liquids Other XHO Venezuelan XHO Canadian X-Heavy Oil (XHO) (MBD) NGLs, condensate, processing gains, etc. Gap 2005 2030 Total oil supply Unconventional supply North America, Latin America, Asia-Pacific, and Europe Middle East, West Africa, and FSU 0 - 140 - (MBD) Oil supply sources NGLs, condensate, processing gains, etc.

7. 7 World carbon dioxide emissions Source: IEA World Energy Outlook 2006 Reference Case

8. 8 Million barrels per day Global refining capacity 0 20 40 60 80 100 199019952000200520102015 Global refining capacity to remain tight Source: P&G, IEA & PFC Global refined product demand

9. 9 World overview Energy demand will increase 50% by 2030 Oil, coal and gas will remain dominant Alternatives to conventional crude oil required to meet demand growth Oil refinery capacity will remain tight medium term

10. 10 Australian refining industry Caltex delivers diesel to the Ashton Coal Project, Hunter Valley

11. 11 Altona CAPACITY REDUCED Western Australia Northern Territory Queensland South Australia New South Wales Source : Australian Institute of Petroleum, DITR Australia’s refineries Mobil Bulwer Is Lytton Clyde Kurnell Geelong Pt Stanvac CLOSED Kwinana Mobil Petroleum Products* Production: 34,000 ML Demand: 43,000 ML Product imports: 22% * Petrol, diesel and jet fuel

12. 12 Australian product demand and imports Demand for petroleum products is increasing Petrol Diesel Jet fuel 0 - 1%pa 4%pa 3 - 4%pa Percentage of petroleum products* imported 2006-7 2015 2030 22% 30 - 40% 50 - 70% Source : Caltex estimates * Petrol, diesel and jet fuel

13. 13 As at January 2007. Source: BP Statistical Review (1970–2006); East-West (2007); CAL Analysis Regional supply and demand remains tight in medium term Asian Product Supply and Demand Million barrels per day Asian Supply Asian Demand Forecast 10 15 20 25 30 1988199219962000200420082010

14. 14 Jamnagar refinery, India

15. 15 Crude imports US$2.35/barrel freight Product imports US$5.10/barrel freight Refining location advantage US$2.75/barrel Source : Freight rates are for Caltex refineries for 1H07 (Caltex data). Crude oil and petroleum product sources are for total Australian imports (DITR data).

16. 16 Australian greenhouse gas emissions Total Australian GHG emissions 559 Mt CO 2eq Contribution of petroleum products Source : Australia's National Greenhouse Accounts, National Greenhouse Gas Inventory 2005 Petrol (motorists)8% Diesel (transport/industry)8% Jet/other fuels4% Refinery emissions1%

17. 17 Other regulatory issues Biofuels Environmental requirements Fuel price regulation

18. 18 Does Australian refining really matter? Energy security is emerging strategic issue for all Australian industry Petroleum product imports are increasing – what level is the “tipping point” for insecurity? Liquid fuel security can be achieved – but we have to recognise the problem and take it into account now