HYUNDAI OILBANK

Hyundai Heavy Industries Group Company

At a Glance

Fast Facts Financial Highlights

Establishment November 1964 (USD Millions) 2012 2013 2014

CEO Mr. Moon, Jong-Bak

Refining Capacity 390 MBD Sales 19,100 18,534 17,335

Number of Employees 1,775

EBIT 274 368 183
Domestic Market shares 22.0% (No.3 in Korea)

Number of Service Stations 2,026

Total Asset 7,549 7,852 7,312
Petroleum and
Major Products
Petrochemical products
※ In 2014, in contrast with other refining companies in Korea,
only HDO reports a positive operating income
Energy is our VALUE

Refining Value Expanding Value Empowering Value Sharing Value

 The 20th largest refinery
in the world with 390 MBD
of refining capacity, soon to be
530 MBD (2016)
 No.1 HOU ratio in Korea
with 36.7%
 Over 2,000 gas station with
22.0% market share
 Founded a JV with Cosmo to
produce BTX
 Formed a JV with Shell
to produce Lubricant Base Oil
 Launched Hyundai Chemical,
a JV with Lotte, to pursue the
condensate refining and MX
manufacturing businesses
 Named One of the Best
Employers in Korea by Aon Hewitt
 Daesan Refinery acclaimed
three million man hours no
accident in 2014, 3rd times in total
 Declared a wage freeze for
all employees in 2014, based on
our will for co-prosperity
 96% of Hyundai’s 1,800-plus
employees have voluntarily
chosen to participate in donating
1% of their payroll
 Named a social responsible and
reliable leader by the 2015
Management Transparency
Awards by Korea Employers
Federation In February 2015

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Achievements and Global Presence

Brief History Global Footprint

2014 Established HyundaI Chemical, ★London

a JV with Lotte Chemical
○
2012 Established HyundaI Shell Base Oil, a JV with Shell Shanghai ★
2010
Completed construction of #2 BTX Plant, Dubai ★
Established HyundaI Oil Terminal
Hanoi ★
2011 Commenced #2 HOU plant

2010 Became an affiliate

Singapore ★
of the Hyundai Heavy Industries Group

2009 Established HCP Pertochem, JV with Cosmo Oil

2000
2002 Renamed to Hyundai Oilbank

1999 Invested from IPIC

Merged Hanwha Energy and Energy Plaza Seoul Office
★
1998 Constructed a 400 Ktpa BTX plant Daesan Head Office
1990 & Refinery ★
1996 Relocated and commenced a 200 KBD facility
at Daesan (Dow’s Texas facility)

1993 Became a Hyundai Affiliate company

1980 1989 Completed construction of Daesan Plant (60 MBD)

1960 1964 Established as Kukdong Oil Industrial Company Domestic Branch

2
Stable Governance with Pan-Hyundai Advantage

Shareholding Structure Hyundai Families

• World No. 1 shipbuilder and ship engine manufacturer

Hyundai
• 27affiliates
Development
Hyundai Steel 1.4%
2.2%
Hyundai Motor 4.4%
Company • World’s top five automobile company
• Produce 8 million automobiles in 10 factories across 9 countries
• 56 affiliates

• Korea’s No.1 manufacturer of paint and building materials

91.1% Hyundai Heavy Industries

• Hyundai Merchant Marine
• Hyundai Department Store
• Hyundai Development Company
• Hyundai Marine & Fire Insurance

Engineering and
Factory Fueling Lubricant Chemical Construction

3
Seasoned Management

Chief Executive Officer Executive Officers

Kim, Byung Sub

 Senior Executive Vice

President
 Head of Sales and
Marketing

Kang, Dal Ho
Moon, Jong Bak
Representative Director, President & CEO
 Senior Executive Vice
President
 Head of Safety & Production
Previous Positions and Awards

SEVP & CFO / CSO, Hyundai Oilbank Chang, Ji Hak

President & CEO, HCP Hyundai Cosmo Petrochemical

 Executive Vice President
 Head of Global Business
President & CEO, HSB Hyundai and Shell Base Oil Company
Kang, Myoung Sub

CEO, HHI Hyundai Heavy Industries Holdings Company in China(~2010)

 Executive Vice President

Awarded Best Management in Korea (Hankyung)  Head of Projects and
Constructions

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Geographic Advantage

Strategically Positioned

Korea, Daesan • A sole west-coast Korean refiner, close to East coast of China
China
(China is a net importer)
China • Closest to metropolitan Seoul
Net Importer
638,000 B/D • Historically, China policies have restricted exports to ensure
Seoul Japan domestic supply
Net Importer
South 560,000 B/D • Japan is a net importer, with oil product demand further
Malaysia Korea compounded by nuclear power shutdowns
Japan
Singapore • Australia has been shutting down inland refineries,
Net Importer increasing net imports while Korean refineries meet the
716,000 B/D strengthened regulations
Singapore
Source: BP Statistical Review., Bloomberg.

Synergy within the Daesan Complex with scalable site

 Samsung Total :
Purchase Hydrogen, C4, C5, C6
Sell Naphtha, Steam

 LG : Sells Naphtha and Steam,

Purchases Hydrogen

 LOTTE : Sells Steam,

“Secured future sites” Purchases Hydrogen

 KNOC : Contingent Storage

 KCC : Hyundai family.

Coating, Specialty chemicals.

5
Upgraded Refinery

Throughput & Utilization Rate Main Process Overview

(Unit: MBD) Process #1 #2 Total
94% Crude Distillation 110 280 390
88%
86% 87% Vacuum Distillation 78 - 78
83%
80% 79% Akylation - 18 18

366 LBO 20 20
334 345 339
313 309 322
Hydrocraking 40 - 40

HOU Delayed Coking 35 - 35

RFCC - 68 68

Benzene 120 115 235

Aromatics
Para-xylene 380 800 1,180

2008 2009 2010 2011 2012 2013 2014 (Unit : MBD, KTA)

Expansion History Sales Breakdown (2014)

(Unit: MBD) (Unit: Ktpa)
600 530 [ Sales by Volume] [ Export Destination ]
(2016)
1600 1415
(Present)
500
390 Others Naphtha China Japan
(1999) 1200 12% 8% 23% 13%
400 Gasoline
Bunker C 16%
USA
300 3%
200 800 Kerosene 6%
(1996) 1%
143 400
200 134 (2014) Oceania
(2013) (1998) 10%
400 Jet fuel Others
100 34 Diesel 21% 26%
(1989)
39% Singapore
0 0 22%
CDU HOU BTX

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Quality Brand and Marketing Capability

Domestic Market Share Lubricant Business

Unit: DM
497,700
500,000

22.2% 22.0% 400,000

300,000 258,000

18.4% 18.5% 200,000

100,000 65,531
1,756
0
2008 2010 2012 2014 2013 2014 2015(e) 2016(e)
July
launch Domestic Overseas

Major Sponsorship Consumer Loyalty Co-marketing Customer Satisfaction

K리그 스폰서 조인
식
 K-LEAGUE title sponsor  Membership reaches 12  Co-marketing with  Customer Call Center
since 2011 million and continues to Hyundai Motor Group ranked No.1 in KS-QI
grow 2014 (Korean Service
 5 consecutive years  Also implementing
Quality Index)
 Securing customers with co-marketing efforts with
information and feedback other Hyundai affiliates  Awarded
No.1 of KS-CQI

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Expanding Value - Petrochemical

HYUNDAI Chemical HYUNDAI COSMO Petrochemical

Condensate → Mixed Xylene Business Mixed Xylene → BTX

Condensate 140KBD BZ 250 Ktpa

Capacity
MX 1,000 Ktpa PX 1,180 Ktpa

USD 6,100 Mil Revenue USD 2,739 Mil

Share-holding
60% Ratio
50%

• Hyundai Chemical Co., Ltd, jointly owned by
Hyundai Oilbank and Lotte Chemical of the
Republic of Korea began to construct a new
Mixed Xylene production plant and supporting
facilities at the site of Hyundai Oilbank Daesan
refinery.
• The main objective of Condensate Crude
Refining and MX production Project is to
produce above 1,000 KMTA of Mixed Xylene
and other products.
• Hyundai Oilbank built and run at Daesan
refinery the #2 BTX plant in partnership with
Cosmo Oil of Japan.
• The #2 BTX plant increased our capacity by
800,000 tons of paraxylene and 130,000 tons of
benzene, actively targeting growing demand
from China, India, and other regional Asian
markets.

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Expanding Value - Lubricants

HYUNDAI and SHELL Base Oil Lubricants

Lube Base Oil Business Lubricant Products

GⅡ Base Oil 650Ktpa Capacity 258,000 DM annually*

USD 857 Mil Revenue USD 100 Mil

Share-holding
60% Ratio
100%

• Hyundai Oilbank announced in Feb 2012 that it
has entered into a contract with Shell to
establish a joint venture and construct a
lubricant base oil plant.
• Mechanical completion was finished at the end
of April 2014 and commercial operation started
from Aug 2014.
• The JV supplies its high-quality products
to major Asian countries including China and
other regions as to meet the rapidly growing
lube base oil demand.
• Hyundai Oilbank entered the automobile engine
oil market by launching XTeer, a new lubricant
product, in 2013.
• 180,000 barrels of finished products annually
are serving demand at home and abroad.
• This will consist of expanding our distribution
network to include over 2,000 gas stations and
automobile repair shops nationwide.
* Sales Volume

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Expanding Value - Associated businesses

HYUNDAI Oil Terminal Carbon Black

Oil Storage Business Carbon Black

280,000 KL Capacity 160,000 Ton annually(e)

USD 22 Mil Revenue USD 300 Mil(e)

Share-holding
70% 60%(e)
Ratio

• We established Hyundai Oil Terminal to pursue • We are to advance a higher value-added

the oil storage business more professionally.
The terminal has a storage capacity of 280,000
kiloliters and dock facilities capable of handling
tankers of up to 50,000 deadweight tons.
• The terminal securely stored the first arrival of
products in December 2013, attracting
customers for 100% of its total storage
capacity.
business taking advantage of slurry oil, which is
a by-product of our FCC process.
• To proceed energy sales business(i.e. selling
energy to Petchem plants within Daesan
complex) by utilizing surplus steam available
from carbon black.
• Aim to complete the plant in Sep, 2016 and to
operate commercially in Nov.

10
Awards and Recognitions

Operational Recognition

ISO-14001 Certification from KFQ (Korean Foundation for Quality)

ISO-9001 Certification from KFQ (Korean Foundation for Quality)

ISO-14001 EMS (Environmental Management System) Certification

ISO-9001 QMS (Quality Management System) Certification

OHSAS-18001 Certification from KFQ (Korean Foundation for Quality)

OHSAS-18001 SMS (Safety and Health Management System)

KOLAS International Laboratory Qualification is accredited

Awards Received

Received No.1 of 2015 Received the Presidential award Received No.1 of Knowledge Received the Minister of
Management Transparency in Korean Safety Management Management Awards 2014 Environment award in Global
Awards Awards 2014 Green Management Excellence
Awards 2014

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Empowering Value

Shutdown Days Successful Upgrading

(Unit: days per 100,000 equivalent Awarded one shot startup
5.68 distillation capacity) of RFCC by UOP
36.7%
34.6%

22.1% 20.8%

1.94

0.99 1.02
0.79
0.53
0.29 0.20 0.23

2006 2007 2008 2009 2010 2011 2012 2013 2014 Hyundai GS Caltex S-Oil SK Energy
* Solomon study (~2012), In-house Data (2013~14)

Cooperative Labor Relations The Best Place to Work in 2013

• No labor dispute since 1964
• No strike declaration by
labor union, with agreement
to delegate wage increase
decisions to the management
• Hyundai Oilbank was named as one of the
2013 Best Employers in Korea by Aon Hewitt
in Feb 2013. The results judged that we
enjoyed high employee engagement pride,
and excellent CEO leadership.

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Sharing Value
Hyundai Oilbank 1% Nanum Foundation
• Since September 2011, our employees have donated
1% of their monthly salaries to realize a warm and
sound society by reaching out to our neighbors in need.
We were the first large company in Korea whose
employees pledged to do so every month
Volunteer activities
• Support and encourage employee volunteer
service by making a financial contribution
(KRW 10,000 per volunteer hour) to the charities
they volunteer at. Our employees are providing over
5,000 hours of community service each year
Supporting Local Communities
• In September 2011, we completed Daejuk Park on a
17,400 square meter site, providing community
residents with access to cultural and sports activities
• In May 2014, we completed Hwagok Reservoir Park
in Seosan, providing local residents with a place
for rest and relaxation
Hiring the Disadvantaged
• Operate employment programs that offer jobs to
the physically disabled to assist with self-sufficiency.
Since 2003, we have hired disabled individuals as car
wash attendants at our directly run gas stations in
cooperation with Korea Employment Agency
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Disclaimer

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Disclaimer

Hyundai Oilbank Co., Ltd., a corporation organized and existing under the laws of the Republic of Korea (“Korea”), with
its registered head office located at 182, Pyeongsin 2-ro, Daesan-eup, Seosan-si, Chungcheongnam-do ,
Korea (“HDO”);

HDO (among various businesses) owns and operates an existing refinery plant, located at its Daesan industrial complex
(“Daesan Complex”) in the Republic of Korea;

These materials have been provided to You by HDO in connection with an actual or potential business discussion or
engagement and may not be disclosed or referred to (in whole or in part) or used or relied upon for any other purpose
other than as specifically agreed by HDO. The information used in preparing these materials was obtained from or
through HDO, its representatives or public sources. While HDO has taken reasonable care in preparing these materials,
HDO has not independently verified the information contained in these materials. HDO, its affiliates and their respective
directors, officers or employees (the “Hyundai Heavy Industries (“HHI”) Group”) assume no responsibility for and do not
represent or warrant the completeness or accuracy of the information (whether written or oral) including estimates,
projections or forecasts (of future financial performance or otherwise) referred to in these materials or that may be
supplied in connection with these materials (“Information”). HDO is under no obligation to inform You or anyone about
any change (whether or not known to HDO) to the Information. You must make Your own independent judgment with
respect to any matter contained in these materials. The HHI Group will not be responsible for any losses or damages
which any person suffers or incurs as a result of relying upon or using these materials or as a result of any information
being omitted from these materials. These materials do not constitute an offer or commitment to arrange any form of
business and do not create any legally binding obligations on the HHI Group. The HHI Group does not owe any fiduciary
or other duties to You or any other person and the HHI Group may be involved in other transactions and services with
those who may have conflicting interests with You or any other person. If You do not accept any of the conditions above,
you must immediately return these materials and any copies of it, otherwise, the retention of these materials by You
shall evidence Your acceptance of such conditions.

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