Powering Ahead with Singapore Petroleum January 2009 2H08 Overview Macro-economic factors Global economic slowdown severely weakened demand for oil and refined products. Oil prices fell by more than US$100 per barrel from record highs in July 08 to below US$40 per barrel in December 08. Geopolitical tensions and uncertain global economic outlook has resulted in increased volatilities in oil prices and weaker refining margins. WTI Crude Prices in 2008 Source: Bloomberg 2
FY08 Summary Financials Turnover of $11.1 billion, a y-o-y increase of 26.9% Cost of sales was $10.7 billion, a y-o-y increase of 32.5% Gross profit was $466.1 million, a y-o-y decrease of 35.6% Profit before tax at $300.4 million, a y-o-y decrease of 48.5% PATMI at $229.7 million, a y-o-y decrease of 55.4% EPS at 44.61 cents Gearing ratio of 0.15X Return on equity of 13.1% Others Average refining margin of about US$5.50 per barrel Total sales volume of 76.6 million barrels Average realisation of US$102.98 per barrel, compared to US$74.37 per barrel in 2007 The Group s prudent hedging activities yielded gains which partially offset the inventory write-down. 3 FY08 Continued Top-line Growth Annual Revenue 10,000 9,000 8,574.2 8,766.7 11,123.7 8,000 7,474.2 7,000 6,000 5,000 4,974.4 4,000 3,000 3,187.6 2,000 1,000 0 2003 2004 2005 2006 2007 2008 4
FY08 A Creditable Performance Annual PATMI 600.0 500.0 400.0 403.6 514.7 (Restated) 300.0 252.1 284.6 229.7 200.0 100.0 0.0 59.0 2003 2004 2005 2006 2007 2008 5 Increased Upstream Profitability Despite Oil Price Fall 2006 2007 2008 Kakap oil & gas production $ 180 160 140 120 100 Oyong oil production in 3Q Bohai oil production in 2H Operating Profit S WTI US$/bbl US$95.98 Portfolio of 10 E&P acreages Oyong oil production Bohai oil production Kakap production S$155.96 80 60 US$61.05 S$54.49 US$44.60 40 20 SS$14.59 0 2006 2007 2008 6
FY08 Stronger Contribution From E&P Segmental breakdown Revenue Operating Profit Exploration & Production 329.2 156.0 Downstream 10,794.5 157.6 E&P fuels growth - Operating profit margin of about 47.38% - Contributes 2.96% of 2008 revenue and 48.21% of OP Downstream provides sustainable income - Operating profit margin of about 1.46% - Contributes 97.04% of 2008 revenue and 48.71% of OP 7 Compelling Value Proposition E&P Growth + Downstream Support Operating Profit Margin ( %) 60 50 40 E&P 30 20 10 Downstream 0 2002 2003 2004 2005 2006 2007 2008 8
Exploration & Production In 2000, SPC repositioned its business to create sustainable long-term growth. SPC began investing in the upstream sector. Its activities include the exploration, development and production of crude oil and natural gas. Today, SPC has 9 Production Sharing Contracts (PSC), 1 exploration permit and 3 gas pipelines. Its E&P footprint extends across 5 countries Australia, Cambodia, China, Indonesia and Vietnam. 9 E&P Asset Summary Asset East Kalimantan, Mahakam Hilir PSC Bohai Bay, Block 04/36 Bohai Bay, Block 05/36 Pearl River Mouth Basin, Block 26/18 Bass Basin, Block T/47P Song Hong Basin, Block 101-100/04 Khmer Basin, Block B Offshore East Java, Sampang PSC Oyong oil field Oyong gas field Jeruk oil field Song Hong Basin, Blocks 102 and 106 West Natuna Sea, Kakap PSC Location Indonesia China China Australia Vietnam Cambodia Indonesia Vietnam Indonesia Acquired Nov-08 Oct-07 Aug-07 Mar-07 Oct-06 Aug-05 Jul-04 Apr-04 Jun-00 Area 344.14 km2 198 km2 4,961 km2 2,890 km2 6,174 km2 6,560 km2 535.5 km2 8,560 km2 2,006 km2 Working interest 100.0% 8.9% 7.8% 100.0% 35.0% 45.0% 33.3% 40.0% 40.0% 40.0% 21.8% 20.0% 15.0% Operator SPC Anadarko SPC Tap Oil Santos PTTEP Santos Petronas Star Energy 10
E&P Indonesia Mahakam Hilir (East Kalimantan) Location : East Kalimantan, Indonesia Area : approx 344.14 km 2 Type : exploration Operator: SPC Share : 100% 11 E&P Strong Contribution to Revenue and Profitability 350.0 Revenue 329.2 160.0 Operating Profit 155.96 300.0 140.0 250.0 120.0 200.0 150.0 100.0 50.0 28.8 36.0 36.1 39.1 49.2 145.1 100.0 80.0 60.0 40.0 20.0 11.9 15.4 18.5 22.1 14.6 54.5 0.0 2002 2003 2004 2005 2006 2007 2008 0.0 2002 2003 2004 2005 2006 2007 2008 SPC s Growth Catalyst now contributes close to 40% of bottom-line 12
Downstream Sustainable Cashflow Revenue Operating Profit 12000 10000 8000 7435.1 8525.0 8621.6 10794.5 600 500 400 424.8 338.2 522.6 6000 4938.3 300 268.7 4000 2000 2406.7 3151.5 200 100 38.8 58.2 157.6 0 0 2002 2003 2004 2005 2006 2007 2008 2002 2003 2004 2005 2006 2007 2008 Downstream provides sustainable earnings support 13 Positioned to Weather Challenges Ahead Financially robust to build growth platforms and seize opportunities during this economic downturn. Intact management team with more than 30 years at the helm. Good track record and developed know-how in both downstream and upstream businesses. Upstream growth has successfully diversified earnings stream Established first upstream branch office in Shekou, China (September 2008) Awarded operatorship of first onshore block, Mahakam Hilir PSC in East Kalimantan, Indonesia (November 2008) SPC s fundamentals remain sound. The Group has a robust corporate governance and risk management framework. Positioned to face the challenges ahead. 14
Growing SPC Amid Uncertainties The global economic uncertainties will take time to dissipate. Investments in the oil industry have been curtailed or cancelled due to the uncertain economic outlook. New refining capacity will affect margins. SPC will continue to review its capital investments and operating expenditure to ensure that these make economic sense amid the difficult operating environment. SPC will continue to invest prudently to benefit from opportunities that may arise from the current downturn. - E&P will grow organically and through acquisitions - Downstream will continue to support earnings with continued investments in selected projects SPC has low gearing and no long-term borrowings to be re-financed. The Group remains financially robust and resilient. SPC will continue to focus on corporate sustainability - Ensure robust risk management framework - Heighten corporate governance and internal controls 15 Consistent Returns to Shareholders S$ 1.00 0.90 0.85 0.99 EPS DPS 0.80 0.70 0.60 0.59 0.55 0.60 0.50 0.40 0.30 0.20 0.10 0.00 0.13 0.06 0.20 0.32 0.35 0.45 2003 2004 2005 2006 2007 2008 0.28 16
Disclaimer This release may contain forward-looking statements which are subject to risks and uncertainties that could cause actual results to differ materially from such statements. Such risks and uncertainties include industry and economic situations, competition, and legal, governmental and regulatory changes. The forward-looking statements reflect the current views of Management on future trends and developments. 17 Q & A 18
For further information, please contact the SPC Investor Relations & Communications Team Ms Elaine ANG Email: elaine.ang@spc.com.sg Tel: (65) 6477-1815 Ms Joey HO Email: joey.ho@spc.com.sg Tel: (65) 6477-1550 19 Thank You! Powering Ahead with Singapore Petroleum Singapore Petroleum Company Limited 1 Maritime Square #10-10 HarbourFront Centre Singapore 099253 Tel : (65) 6276 6006 Fax : (65) 6275 6006 Retail Hotline: 1800 477 1800 www.spc.com.sg 20