Overview of Sasol Oil’s business and its Black Economic Empowerment (BEE) programme

Presentation to members of Minerals and Energy PPC: 1 September 2006

2

Overview of Sasol Oil’s business

Progress on ownership, board representation and management control

Progress on employment equity

Progress on BEE procurement and enterprise development

Corporate social investment and skills development

Presentation Themes

Overview of Sasol Oil’s business

4

How was Sasol Oil structured?

Rationale: Sasol Oil business was

restructured and designed to give effect to the Liquid Fuels Charter requirements

Compete on an equal footing with the foreign owned oil companies’ businesses in South Africa

Liquid Fuels activities of Sasol Group at the time the Charter was signed

Sasol Mining Sasol Synfuels Sasol Oil

Restructuring was required:

Natref shareholding

Refining crude oil

Manufacturing

Chemical and fuel components

Blending fuel components into final liquid fuel

products

Marketing

MSA and Blue Pump

Agreements

5

Essence of Component Supply Agreement (CSA)

Salient features of CSA:

An evergreen supply agreement dated July 2003

Sale of 100 000 barrels (bbls) per day of fuel components to produce final products

Exclusive for the first 10 years

Equivalent to a typical coastal crude oil refinery

Sasol Oil owns the blending plant and storage facilities (Replacement value of +/-

R1billion)

This margin is referred to as the “Virtual Refinery Margin”

Margin equivalent to that earned by a typical coastal refiner.

Price paid for components is BFP – Discount (Virtual Refinery Margin)

All components must be able to be blended to comply with product specifications

(current and future)

6

What benefits does this arrangement have for Tshwarisano and Sasol?

A majority share in an inland refinery as well as earning a refining

margin similar to that enjoyed by the businesses of the foreign owned

oil companies in South Africa from CTL

Significant blending and integration of feedstock synergies are

maintained between Sasol Synfuels and Sasol Oil’s share in Natref

Sasol can honour its commitments in terms of the charters for various

sections of its businesses e.g. mining, liquid fuels, etc. and for the

different empowerment partners for these businesses

The cost for a single empowerment grouping to acquire a meaningful

stake across all of the Sasol businesses would be challenging

7

Sasol OilPurchasing of synfuel fuel

components & crude oil

Synfuels fuel

components blending &

storage activities

Joint Ventures: Natref, TOSAS,

Exelem, NLF & PeSS

Fuel Oil

Direct marketing through Sasol/Exel

brands

Wholesale marketing to

foreign owned and emerging

companies and product trading

>8,5 million m³ white fuel production capacity

0,5 million m³ residual products production

Wholesale supply agreements

Sasol/Exel retail brands Commercial marketing Africa overland and

deep sea exports

Marketed throughMarketed through

Sasol Oil salient features

75% Sasol Ltd & 25% Tshwarisano

8

KNNC

WC

EC

FS

NW Mp

Lp

Gt

Natref (63.6%)

153

38

1333

24

33

22

41

19

How successful has Sasol Oil been in establishing a marketing footprint?

Average throughput per service station

Industry 230 kl p.m.

Sasol 360 kl p.m.

Exel Franchised 258 kl p.m.

Exel dealer owned 138 kl p.m.

Market share of 8% in the retail market

# Sites

Sasol branded @ 163

Exel branded @ 215

Small share of the Commercial Market in RSA @ 6%

Reasonable marketing success given market entry in January 2004

9

Sasol Group is a significant investor in SA

We invested 80% of our capital expenditure programme in SA during the last 2 years

We invested 80% of our capital expenditure programme in SA during the last 2 years

-

2.00

4.00

6.00

8.00

10.00

12.00

FY 96 FY 97 FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06

R B

illio

ns

Attributable Profit SA Capital Investment Foreign Capital Investment

As a South African company we: contribute 4,4% of SA’s GDP are the biggest industrial investor in SA create wealth of R27 billion pa create jobs for 140 000 South Africans are the biggest private R&D spender in SA have plans for further expansions in SA

10

How much tax do we pay?

We are South Africa’s biggest tax payer Our effective tax rate is above average at 32%

Company A

Company B

Company C

Company D

Company E

Company F

Company G

Company H

Company I

Company J

Company K

Company L

Company M

Sasol

We are a major contributor to the fiscus

11

Foreign exchange saving of synfuel vs. alternate supply sources in South Africa

Beneficiation of own resources saves more forex and diminishes supply risk much better than imports of either final product or crude oil

Beneficiation of own resources saves more forex and diminishes supply risk much better than imports of either final product or crude oil

0

10

20

30

40

50

60

70

80

90

Imported product Typical Crude OilRefinery

Synfuels

$/b

arr

el

Cost of import Forex Saving

ProducerPrice(BFP)

12

Energy security tops global agenda

shortfall requires

alternatives

Projected demand

SA imports a major portion of its crude, and an increasing portion of final product – we are exposed to supply vagaries caused by weather or war

Projected global oil supply

13

There are alternatives to conventional oil

proven reserves of fossil fuels will sustain the world only for a limited period at current production rates

Sasol’s CTL and GTL technologies play a leading role in the future supply of global energy needs

global distribution of coal reserves

proven reserves to

consumption ratio

6 nations in the world control 80% of the

global coal reserves

14

Reliance on fuel imports growing in SA

-6.0

-5.0

-4.0

-3.0

-2.0

-1.0

-

1.0

2.0

3.0

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Bill

ion

Lit

res

-12.0

-10.0

-8.0

-6.0

-4.0

-2.0

-

2.0

4.0

6.0

Petrol Diesel Kerosene White Product

Projected SA* fuel supply/demand balanceAt 6% GDP growth assumptions

At 6% GDP growth

a 150 000bbl refinery is required by 2011

fuel demand is projected to grow at more than 2,5%

first phase 10% expansion of synfuels included

SA importing fuel when the current account balance is already under pressure

Progress on ownership, board representation, management and control

16

Tshwarisano – Pulling together with our new empowerment partners

Tshwarisano BEE transaction effective from 1 July 2006

Value of the transaction is R1.45 billion

Largest BEE transaction in the liquid fuels industry in South Africa

Ownership - 25% BEE ownership across value chain

Broad-based - Direct beneficiaries include hundreds of thousands of historically disadvantaged South Africans

Black women - More than 50% of the beneficiaries are black women

25% Equity 25% Equity

17

Ngazana Liquid Fuels

Ngazana Liquid Fuels

Batho TrustBatho TrustPhakisang

InvestmentsPhakisang

InvestmentsNozweniNozweni Auto

workers Funds

Autoworkers Funds

17.9% 7.7% 5.6% 20.4%

PulaNalaPulaNala LelethuLelethu TswelopeleTswelopele

Ayabonga Oil Pty LtdAyabonga Oil Pty Ltd

5.1% 20.3% 6.5% 0.8%

5.1% 5.1% 5.1%

TSHWARISANO LFB

TSHWARISANO LFB

AKA Liquid Fuels

Pty Ltd

AKA Liquid Fuels

Pty Ltd

14.7%

FormerExel (Powerlib) Shareholders

FormerExel (Powerlib) Shareholders

Amandl’ EmbokodoAmandl’

Embokodo

5.1%

Warehouse Trust

Warehouse Trust

Tshwarisano shareholding structure

100%

SASOL LIMITED

SASOL LIMITED

SASOL OIL (PTY) LTD

SASOL OIL (PTY) LTD

CEPPWAU InvestmentCEPPWAU Investment

25% 75%

100%

1%

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It is a broad-based BEE group consisting of: +150 000 direct shareholders + 2 800 000 indirect beneficiaries

The demographics of the group are: 54% women substantial rural representation 3% youth 2% disabled

This confirms the broad-base structure of Tshwarisano which will benefit a large number of disadvantaged South Africans

“An enduring broad-based group with a significant proportion of women”

Tshwarisano Profile

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25% BEE ownership and control of all facets of Sasol’s liquid fuels

Exercise full voting rights immediately

Senior debt R1.14 billion to be guaranteed by Sasol

Sasol’s contribution to Tshwarisano R millionFinancing facilitation (interest rate benefit) 450

Cost of guarantee 170

Cash contributions (facilitation to buy shares on behalf of some broad-based groups)

31

TOTAL 651

Sasol’s facilitation of BEE transaction

Sasol participated fully in financing mechanismSasol participated fully in financing mechanism

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Scope of BEE transaction

Participation in all facets of Sasol’s liquid fuels businessParticipation in all facets of Sasol’s liquid fuels business

Sasol Oil

Sasol Oil

Depot network and other logistics

Depot network and other logistics

Synfuels fuel components sourcing

and blending

Synfuels fuel components sourcing

and blending

Crude Oil trading and shipping

Crude Oil trading and shipping

Storage and dispatch of fuel components Storage and dispatch of fuel components

Wholesale, commercial & retail

Wholesale, commercial & retail

Sasol’s 64% interest in Natref refinery

Sasol’s 64% interest in Natref refinery

Fuel oil and Lubricants businesses

Fuel oil and Lubricants businesses

Sasol’s shares in TOSAS, Exelem, NLF

& PeSS

Sasol’s shares in TOSAS, Exelem, NLF

& PeSS

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Tswarisano and board representation

TSHWARISANOTSHWARISANO

6 directors

SASOL OILSASOL OIL 3 executive directors

SASOL LIMITEDSASOL LIMITED

3 directors All HDSA of which one

woman

One HDSA

Three HDSA of

which two women

Full shareholder rights & 58% HDSA (25% women) on Board

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Sasol Oil executive team

GM, Natref:

Oscar Volkwyn

50% HDSA (20% women) who support and understand the spirit of the Charter

Managing Director, Sasol OilErnst Oberholster

GM, Manufacturing&Supply:

Henri Loubser

MD, Fuels Marketing:

Maurice Radebe

Manager, Finance:

Feroza Syed

Manager, HR:

Dawid Heymans

Manager, Strategic Planning:

Johan Thyse

Manager, Commercial

Support & Compliance:

Chris Venter

Manager, Legal Services:Kate Farina

Manager, Quality &

Technology:

Poovin Naidoo

Progress on employment equity

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Employment equity progress and targets

30 31 33

4246

50

0

10

20

30

40

50

60

2003 2004 2005 2006 2007 2008

*HDSA Target

68% of Sasol Oil’s TOTAL EMPLOYEES

80%(HDSA) / 60% (women) appointment policy

* Excluding white women

Supervisory level and above

Nu

mb

er

of

emp

loy

ees

25

BEE participation in Sasol/Exel retail network

46% HDSA (women = 12%) & 75% HDSA appointment policy

4%8%

14%19%

55%

0

10

20

30

40

50

60

White Men African Indian WhiteWomen

Coloured

%

Progress on preferential procurement and enterprise development

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Progress on preferential procurement (excl. crude)

0

5

10

15

20

25

30

35

40

2001 2002 2005 2006

%

Actual Target

Exceeds Charter compliance

7% 6%

23%

34%

28

Crude Oil BEE Procurement

Procures around 20 million bbls of

crude oil p.a

13 million bbls (65%) term crude from

Saudi Arabia (ARAMCO) & Iran

(NIOC)

7 mil bbls (35%) bought on spot basis

from countries like Nigeria, Angola,

UAE. Oman and Yemen

For various reasons the ongoing term

contracts with ARAMCO and NIOC

do not provide room for meaningful

BEE participation

Sasol Oil aims to achieve a target of

50% of its spot crude oil requirements

from approved BEE crude suppliers

FY04/05 FY05/06 to dateVolume barrels Volume barrels

Total purchases 13,691,132 12,250,000

BEE purchases - - % BEE 0.00% 0.00%

FY03/04 FY04/05 FY05/06 to dateVolume barrels Volume barrels Volume barrels

Total purchases 7529321 7,105,884 6,957,295

BEE purchases 1254347 1,738,231 3,342,979 % BEE 16.66% 24.46% 48.05%

FY04/05 FY05/06 to dateVolume barrels Volume barrels

Total purchases 20,797,016 19,207,295

BEE purchases 1,738,231 3,342,979 % BEE 8.36% 17.40%

Term Crude oil imports ( Saudi Arabia and Iran)

Spot Crude oil Imports.

Total Crude oil Imports.

48% of spot & 17% of total crude oil purchases

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Empowering emerging fuel and gas wholesalers

Lavela

GTL

Resources

Marketing

Sky Oil Heartening

Reatile

Royal

Vuyo

480 million

litres p.a

Fair opportunity created for HDSA companies

30

Sasol’s Integrated Energy Centres (IeCs)

Private public partnership flagship

Objective = make energy accessible to rural communities

Product bouquet and services: IP, candles, LPG, petrol and diesel & provide energy-

related training and advisory services

Staff trained at our Sasolburg Academy & supplied with Sasol forecourt uniforms

Total investment of R15 million in IeCs located within government identified poverty nodes.

Caba Mdeni in the Eastern Cape

Laxey in the Northern Cape

Mutale in Limpopo

A fourth IeC will be developed in Makgobistad in the North-West Province

Sasol Oil board approved a further R8 million to continue expanding this initiative

Qunu in the Eastern Cape

Another in KwaZulu Natal

Corporate Social Investment and skills development – Sasol group perspective

32

Corporate Social Investment allocation – 2005/6

Education35%

Job creation25%

Arts and culture and sport development

5%

Environment5%

Crime prevention5%

Health and Welfare25%

33

Skills development initiatives

Accelerated Leadership Development Programme Develop Sasol’s new leadership

Placement of unemployed HDSA graduates

To insert ALDP Picture

34

Investment in critical skills: science mathematics and technology

Aim : to improve the performance of school learners in Aim : to improve the performance of school learners in Mathematics, Science and TechnologyMathematics, Science and Technology

CSIR15 m

BursariesR30 m

SponsorshipR6 m

Sasol Research &Development

R23 m

R74 m

• educator development• competitions• direct interventions with learners• creating infrastructure• resource provision• research• resource centres such as Osizweni & Boijhorisong

• Techno X• Scifest

35

Demographic of Sasol Bursary Scheme

43

22

3

32

38

17

5

40

25

96

59

36

27

9

27

44

11

0

44

59

9

0

32

54

14

3

2933

17

0

50

38

1515

31

0

10

20

30

40

50

60

ChemicalEng

MechanicalEng

ElectricalEng

ControlEng

Mining Eng IndustrialEng

Chemistry Geology Other

White Indian Coloured African

%

%

Chemical Eng 57% Chemistry 46,2% Electrical Eng 75,1%

Electronic Eng 63,6% Geology 66,7% Industrial Eng 40,9%

Mechanical Eng 62,2% Mining Eng 55,6% Other 61.6%

Overall 57% Male 63,3% Women 36,7%

49,75% 14,25% 7,50% 5,25% 4,50% 5,50% 8,50% 1,50% 3,25%

HDSA %

Over 500 bursars 58% Black students

R 30 million to build the capacity

36

Jointly we will “pull together” to grow the South African economy

Pumping the economic transformation process

THANK YOU