First safety, then production

Natref regrets the occurrence of recent accidents and the impact

on those affected

First safety, then production

• Recent incidents– Despatch Incident– HF Alkylation unit incident

Also available• Natref Background and Orientation

• SHERQ Management systems

• Business performance

BRIEFING AGENDA

First safety, then production

Accident description.

– On Saturday October 30th a fire occurred in the Natref despatch area when a road tanker, whilst loading, overfilled. The spill occurred when approximately half the tanker compartment volume was loaded.

– The fuel that spilled during the overfill ignited, fatally injuring the persons involved with the loading.

DESPATCH INCIDENT

First safety, then production

Island C

Island B Island A

North

FMDFMD

Drain system Grid

Fire Damage

Hen

ro B

ulk

Exp

ress Fu

el

Drawing not to scale

BRJ 838 NC

FFX 787 N

DGP 757 GP

Royale EnergyLoaded Prem 3459 ltLoaded Diesel 7027 lt

Express FuelLoaded Diesel 7641 lt

Henro BulkLoaded Prem 45000 lt

1

3

4

Person 1Mr Jan SmitRoyale Energy

Person 2Mr ChettyGazelle Testing Service

Person 3Mr Champion MoletsaneHenro Bulk

Person 4Alex MpondaExpress Fuel

West

2

Ro

yale En

ergy

Source of Spill

DESPATCH INCIDENTSchematic of scene of accident

First safety, then production

First safety, then production

DESPATCH INCIDENT

First safety, then production

Emergency handling

• The spray water system was opened at 01:12

• Natref emergency services arrived on the scene at 01:15

• The Natref emergency action plan was activated immediately

• “Mutual Aid” assistance was obtained from surrounding industries

• The fire was extinguished at 02:10

DESPATCH INCIDENT

First safety, then production

Injuries

• Four persons were injured and hospitalised at 01:18

– Two were transferred to Milpark hospital in Johannesburg

– Two persons were treated in Sasolburg and discharged the same day

• Mr R Chetty (surveyor) and Mr J Smit (the truck driver) passed away 12 hours and 10 days respectively after the accident in the Milpark hospital

DESPATCH INCIDENT

First safety, then production

Investigation status

• Incident was reported to SAPS and DOL - site visits on same day

• Internal investigation held on 30 October - possible causes identified and revised procedures proposed

• Results of further technical investigations by independent experts

• Investigation was conducted by DOL with all relevant parties present on 26 November.

• Dossier finalised on 18 February and to be handed to state prosecutor

• Most probable cause of accident - mechanical defect on tanker truck

• Mechanical defects on service provider road tanker caused by inadequate maintenance practices

DESPATCH INCIDENT

First safety, then production

Corrective actions (1)

• DOL Prohibition Notices were immediately implemented – Upgrade training by tanker service providers

– No flood loading allowed

– Vehicle not idling, lights switched off, battery isolated, earthed

– Compartment hatches closed

– Verify loading volume request versus compartment capacity

• Supervision increased

• Operating procedures were revised and implemented (including training)

• New documentation (inspection check lists & driver declarations)

DESPATCH INCIDENT

First safety, then production

Corrective actions (2)

• Prevention of product spillage is pro-actively managed by:– Pressure testing of vehicle prior to loading

– Stop loading in gantry if mechanical failure occurs

– Transporter demerit system resulting in vehicle, driver or fleet suspensions

– Root Cause Analysis of each spillage incident in co-operation with Transporter

• Hardware installation to link the overfill protection system on vehicles to loading de-activation in progress

DESPATCH INCIDENT

First safety, then production

Process description (more than 250 units worldwide)

• Production of high octane petrol from LPG (Butane, butylene)

• The catalyst used in the process is Hydrofluoric acid (HF)

• HF is a hazardous chemical which is a strong acid as well as toxic

• Precautionary measures to handle HF acid (standard procedure)– Acid resistant metallurgy used to ensure containment– People protection through acid resistant protective clothing (PPE)– People protection through restricted access– Early warning systems to indicate loss of containment (leak detectors)– Training and re-training of personnel working in the unit

HF ALKYLATION UNIT INCIDENT

First safety, then production

HF ALKYLATION UNIT INCIDENTIncident description

• Shut down procedure of the Alkylation plant was started on 23/1/05

• Shutdown procedure typically takes 7 days and entails the following:– Separation of acid and hydrocarbons– Safe storage of acid– Evacuation of hydrocarbons to safe storage– Neutralisation of process equipment to allow safe entry for repairs

• On 26/1/05, while the acid was being recovered:– A gas leak was noticed by plant personnel and the alarm was raised– The leaking gas ignited and resulted in a fire

• The site emergency plan was initiated– Site emergency personnel were deployed and combated the fire– Personnel not directly involved were evacuated to muster points

First safety, then production

HF ALKYLATION UNIT INCIDENT

Emergency handling

• Principles– Contain gas cloud with water– Identify source of gas leak– Evacuate personnel not involved (including other industries)

• Emergency statistics– Alarm raised 17:03– Natref emergency services on scene at 17:15– Own and contractor personnel evacuated at 17:15– Neighbouring industries were informed at 17:20

First safety, then production

HF ALKYLATION UNIT INCIDENT

First safety, then production

• Principles– Be pro-active– Don’t leave anything to chance– Rather over treat than under treat

• Statistics– 17 people were taken to the local hospital– 12 were released after observation– 5 were kept overnight for further observation

HF ALKYLATION UNIT INCIDENTHandling of those affected

First safety, then production

• The team was identified to include:

– 3 Trade Unions (Solidarity, SACWU, CEPPWAWU)

– Natref SHE representatives

– Natref experts

– External experts (including Sasol and Total)

– People involved in the incident

– DOL site inspection on 28 January

– All information required by DOL submitted

HF ALKY INCIDENTInvestigation Process

First safety, then production

• Technical experts did an initial evaluation of the information

• The investigation team started their process and has completed its work

• The pump will be investigated by the experts approved by DoL

• Final analysis of the incident and root cause identification will then take place

• Provisional conclusion has been made

HF ALKY INCIDENTInvestigation Process (continued)

First safety, then production

QUESTIONS ?

First safety, then production

Historical perspective of Natref

• In operation for the past 34 years– Commissioned in 1971 (most recent in RSA)

– Oldest operating Total refinery 50 years

– Oldest operating refinery in South Africa 45 years

• Ownership– Sasol 63,64%

– Total 36,36%

• Employment– Direct jobs; 560 persons (2x more than Europe/USA)

– Indirect jobs; 4000 jobs, services, contractors

First safety, then production

Strategic perspective

• Only inland crude oil refinery– Supplies 80% of JIA jet fuel requirement

– Important supplier of Gauteng area

– Cheaper to transport crude oil than refined products

• Most efficient crude oil refinery in South Africa– Converts 15% more crude oil to petrol, diesel and jet

– Removes twice as much sulphur from crude oil

– Recovers 15 t/h CO2 (greenhouse gas) for Rand Water

First safety, then production

Shipping

Depots60%

Crude oil typicalfrom Middle East& West African

NatcosTankfarmDurban

600 km Petronetpipeline

Natref oil refinerySasolburg• petrol• diesel• jet fuel• bitumen

Gauteng andsurrounding market

Road

Rail - export

JohannesburgInternational

PetronetPipelines

PETROL

30%

10%

BUSINESS ORIENTATION

First safety, then production

Business results• Safety

– Four fold reduction of own personnel injuries last 30 months– Four fold reduction of contractor injuries last 24 months– Fourth lowest injury rate amongst 28 Total refineries

• Reliability– Best reliability amongst 28 Total refineries for past 2 y– Lowest number of production interruptions in RSA

• Independent international benchmarking results– First in 8 performance parameters– Second in 7 performance parameters– Third in 2 performance parameters (Profitability related)– Fourth in one performance parameter (Energy consumption)

First safety, then production

Drivers of Natref’s business success

• Clear vision and strategy shared by all personnel

• Effective management systems

• Demonstrated manpower competence

• Demonstrated management commitment– Independently confirmed, DuPont, Total, Nosa

• Recognised interdependence and need for networking

First safety, then production

• Corporate SHERQ support– Involvement of both Sasol and Total

– Guidance via group policies, standards and guidelines

– Industry benchmarking via Total

– Lessons learnt and incident briefing from other sites

– Subject specific advice

– Sharing of best practices

– Incident investigations

– Corporate audits

– Networking

SHERQ Management

First safety, then production

• Legal framework– OSHAct– Environmental Management Act– Major Hazardous Installations Act

• Health and safety meeting structure– Representatives elected by employees– Divisional/Departmental committees– Central committee chaired by General Manager

SHERQ Management

First safety, then production

• Standards– OSH Act and regulations– SABS codes– Corporate standards (Total & Sasol)

• Management systems (Audited twice/year)– NOSA safety management system– Inspection management system– ISO 14001 (First integrated site system in 1996)– ISO 9000 (Since 1992)

SHERQ Management

First safety, then production

SAFETY PERFORMANCERecordable Case Rate (12 month rolling average)

0

0.5

1

1.5

2

J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J200420032002

First safety, then production

SAFETY PERFORMANCEContractor Recordable Case Rate

0

1

2

3

4

5

6

7

8

9

10

J F M A M J J A S O N D J F M A M J J A S O N D

20042003

First safety, then production

PERFORMANCEFires

0

5

10

15

20

25

30

35

40

2001 2002 2003 2004

First safety, then production

PERFORMANCEReliability - % on-line (12 month average)

96

97

98

99

100

2000/ 01 2001/ 02 2002/ 03 2003/ 04

First safety, then production

PERFORMANCE% Utilisation (12 month rolling average)

60

70

80

90

100

N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D

200420032002

First safety, then production

Current FCC/Alkylation shutdown results

• Planning– Budget; R15m– Duration; 30 days

• Manpower– Own personnel assigned;– Contractor personnel assigned– Total manhours worked

• Injury statistics– Lost work day cases; 4 of which 3 are contractors

– Recordable cases; 2 of which 0 are contractors

– First aid cases; 24 of which 16 are contractors

First safety, then production

Conclusion• Natref is a well managed National asset

• Recent incidents were caused by material failure due to:– Improper maintenance practices– Improper management of change

• Current management strategy in line with international practice– Benchmarking with Total– DuPont audit findings

• Identified areas of improvement– Process safety management which includes:

• Management of change• Contractor management