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Investor Presentation <br />November2009<br />
Summary of Current Environment & Performance<br />
RefinerySector Outlook<br />
CrudePrices & Exchange Rate<br />
ProductRatios<br /> Margin weakness is fundamentally driven by middle distillates.<br />Gasoline ratios have been weak but...
Turkish Sector Outlook<br />
TurkishConsumption 000*M3  (January – September)<br />
Turkish Monthly Diesel Consumption<br />
Turkish Oil Products Demand Projection(Million Ton)<br />10<br />
Turkey’s Import / Export Balance (Net)<br />(Million Ton)<br />(Export)<br />(Import)<br />11<br />
Vehicle Parc Comparison (per 1000 People)<br />Passenger Cars, 2006<br />Turkey By Vehicle Type<br />
13<br />
TÜPRAŞ Assets<br />Black Sea<br />  Baku<br />İstanbul<br />İzmit<br />11.0 mt<br />NC: 7.78<br />Marmara<br />Ankara<br /...
Opet<br /> Results<br />EBITDA  $191 Million<br />Network<br />Opet: 795, Sunpet: 544, <br />Total 1,339<br />Terminal Cap...
Koç Energy Group Storage Capacities<br />(1000 M3) <br />784<br />36.5 <br />   43.7 <br />65.6<br />249.1 <br />100% Cove...
Crude Suppliers of TÜPRAŞ  (million ton)<br />UK<br />Kazakhstan<br />Italy<br />Russia<br />%30<br />Domestic<br />Azerba...
Net Refining Margins<br />18<br />
ProductionVolumes<br />
9M ProductsYields<br />2008<br />2009<br />Light<br />Distillate<br />Light<br />Distillate<br />Black<br />Products<br />...
DomesticSales, Ton*000<br />
ExportVolumes<br />FullYear (MillionTons)<br />9 Month (KTons)<br />
9M Trading Activities<br />Finished Products<br />Gasoil imports up 20%<br />LPG & Jet imported to make up shortfall<br />...
Total Sales ByCustomers- 9 Months 2009<br />Total Sales : 16,2  million ton<br />First 4 Distributors’ Share  79.2 %<br />
25<br />
Investments<br /><ul><li>GasolineImprovement
StorageCapacity +1.1mn ton
ResidiumUpgrading
  OEP & others</li></ul>50<br />26<br />
CompanyStrategy<br />
The Fundamentals<br />Changes<br />Scale<br />Capacity of project increased by 30%<br />Will utilise residuals from other ...
RUP ProductYields<br />
Financial Summary<br />
31<br />
FinancialHighlights (mn $)<br />
Profitability Indicators , January-September<br />*CCS – CurrentCost of Sales, ** 40% representingTüpraş’sshare<br />
IncomeStatement<br />
FX Risk Exposure (30 September 2009 ) <br />Million $<br />-128<br />SoleTüpraş -90 Million $<br />
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Tupras November 2009 3 Q

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  • Slide 2: Key MessagesDomestic demand is down in line with expectations, with Rural Diesel demand worst hit as it has the highest correlation with GDPthough it declined less than GDP and less than some other developed markets.The volume of Crude Processed was down, with the emphasis once again on profitability. Opportunity crudes and intermediary products were utilised. The result was once again a higher white product yield.Benchmark margins were down on oversupply and reduced demand and made worse by poor crude differentials.On the other hand, Tüpraş Margins showed a big premium primarilydue to better yieldsandourcompetitiveadvantages.Many investors have asked us if the Coker project is to be cancelled. Instead we haverevised the plan increasing the size of the units. Final negotiations are under way with the short listed constructors and financial packages under discussion.
  • Slide 10: 1st Half Products Yields The flip side of the coin can be seen on this slide. Black product yields shrunk to just 26 ½%, down from nearly 32% a year ago. Middle distillates yields were up 2% and light distillates 2%andasphaltyieldswereup 3.2%.Therewas a bigincrease in lowsulphurdieselyield
  • Slide 11: Domestic Sales, Ton*000Domestic sales decreased by 700 thousand tons for the period, almost entirely due to a decline in rural diesel sales.Jet fuel sales were up, thanks to an astoundingly good year for Turkish airlines in the face of a global meltdown in the sector.Sales of gasoline were up, as we took market share from imports.Since April, Tüpraş has been outperforming the market.
  • Slide 12: Export VolumesAs product surpluses have left export premiums at very low levels, Tüpraş has chosen not to produce for export.Total export volumes fell 63%, with middle distillates, which are being sold domestically and fuel oil where production has fallen, are showing the largest decreases. Whenever the profitability of exports improves, Tüpraş will respond with higher utilisation rates and greater volumes of exports. Inthecurrentweak market conditions, increasingexportscouldhavenegativeeffects on Medprices, therebyaffectingdomesticpricing of allproducts.
  • Slide 15: 1st Half Trading ActivitiesImports of diesel and LPG wereslightly up year on year.More than 300,000 tons of Jet fuel were imported, compared to zero in the same period last year.More than 600,000 tons of semi-finished products were imported.
  • 2007 yılında 177 milyon doları master plan yatırım programı kapsamında olmak üzere toplma 325 milyon dolar yatırım harcaması yapılacaktır. 2008 yılında master plan yatırımlarının tamamlanmasıyla Tüpraş’ın Nelson Kompleksitesi 6.43’ten 7.25’e yükselecektir.
  • Slide 16: Coker UpdateWe have been asked by many investors if we plan to cancel or postpone the resid project. However, the project is far to important for us to even consider such a move. Instead we are to increase the capacity of project by around 30% and will utilise residuals from other refineries.There has been a change in timetable, with completion expected end of 2013, as we are taking advantage of falling construction and financing costs.Licencing has beencompletedanddetailedengineering has beenmovedforwardtosave time. Commercialbidsarebeingreceivedfromourprojectmanagementshortlistandwill be evaluatedoverthecomingmonths.Financing will be mostly by Export Credit Agencies, which are very keen to fill the gap left in the market.The Budget has not beenfinalised but willprobably be between $1.5 to $2 Billion, and based on current market prices, costs may be up to 30% lessthanpreviouslyexpected. The fundamentals of the project are still good.$200 Fuel Oil / Diesel Spreads are temporary as fuel oil prices will decrease with more heavy crude and Diesel / Jet prices will improve with recovery. Add in future LSFO requirement for Bunkering and fuel oil’s future looks bleak. Thedomesticpriceadvantageshould not be forgotten. For the foreseeable future, Turkey will still be very short of diesel and long on fuel oil
  • Slide 17: RUP Product YieldsTotal black product feed will now be about 4.2 million tons per year, of which a million tons will be atmospheric dip transferred from other refineries.Diesel production is increased to more than 2½ million tons, with close to 1 million tons of other white products.
  • Slide 18: Financial SummaryWe have revised our assumptions, with Interest Rates of 6.0% and Crude Oil at $60 per barrel.Financing will be predominantly through loans.We expect Additional Revenue in excess of $1.0 Billion, and additional EBITDA of more than $500 Million.This Results in an NPV of over $1 Billion an IRR of 28%, and a Payback of about 4 Years
  • Transcript of "Tupras November 2009 3 Q"

    1. 1. Investor Presentation <br />November2009<br />
    2. 2. Summary of Current Environment & Performance<br />
    3. 3.
    4. 4. RefinerySector Outlook<br />
    5. 5. CrudePrices & Exchange Rate<br />
    6. 6. ProductRatios<br /> Margin weakness is fundamentally driven by middle distillates.<br />Gasoline ratios have been weak but above last year’s terrible lows.<br />Fuel oil prices have been strong.<br />Lack of heavy crudes means lower production.<br />Has led to higher utilisation of hydroskimming refineries.<br />
    7. 7. Turkish Sector Outlook<br />
    8. 8. TurkishConsumption 000*M3 (January – September)<br />
    9. 9. Turkish Monthly Diesel Consumption<br />
    10. 10. Turkish Oil Products Demand Projection(Million Ton)<br />10<br />
    11. 11. Turkey’s Import / Export Balance (Net)<br />(Million Ton)<br />(Export)<br />(Import)<br />11<br />
    12. 12. Vehicle Parc Comparison (per 1000 People)<br />Passenger Cars, 2006<br />Turkey By Vehicle Type<br />
    13. 13. 13<br />
    14. 14. TÜPRAŞ Assets<br />Black Sea<br /> Baku<br />İstanbul<br />İzmit<br />11.0 mt<br />NC: 7.78<br />Marmara<br />Ankara<br />Kırıkkale<br />5.0 mt<br />NC: 6.32<br />İzmir<br />11.0 mt<br /> NC: 7.66<br />Batman<br />1,1 mt<br />NC:1.83<br />Mersin<br />Ceyhan<br />Kirkuk<br />Total Refining Capacity: 28.1 Million Tons<br />Current Nelson Complexity(NC): 7.25<br />14<br />
    15. 15. Opet<br /> Results<br />EBITDA $191 Million<br />Network<br />Opet: 795, Sunpet: 544, <br />Total 1,339<br />Terminal Capacity<br />1,161,042m3.<br />* Tüpraş’s 40% share <br />
    16. 16. Koç Energy Group Storage Capacities<br />(1000 M3) <br />784<br />36.5 <br /> 43.7 <br />65.6<br />249.1 <br />100% Coverage<br /> of Turkey<br />1,161,000 M3<br />150,000 M3<br />5,100,000 M3<br />16<br />
    17. 17. Crude Suppliers of TÜPRAŞ (million ton)<br />UK<br />Kazakhstan<br />Italy<br />Russia<br />%30<br />Domestic<br />Azerbaijan<br />Iraq<br />Syria<br />%48<br />Iran<br />Libya<br />S. Arabia<br />17<br />
    18. 18. Net Refining Margins<br />18<br />
    19. 19. ProductionVolumes<br />
    20. 20. 9M ProductsYields<br />2008<br />2009<br />Light<br />Distillate<br />Light<br />Distillate<br />Black<br />Products<br />Middle<br />Distillate<br />Middle <br />Distillate<br />Other <br />White<br />WhiteProduct 73.2%<br />Production : 11.9 mn ton<br />WhiteProduct 68.2 %<br />Production : 17.9 mn ton<br />
    21. 21. DomesticSales, Ton*000<br />
    22. 22. ExportVolumes<br />FullYear (MillionTons)<br />9 Month (KTons)<br />
    23. 23. 9M Trading Activities<br />Finished Products<br />Gasoil imports up 20%<br />LPG & Jet imported to make up shortfall<br />Intermediates<br />HVGO & ASRFO were imported to keep the hydrocrackers running full capacity.<br />Naphthaimportedtoproducegasoline<br />
    24. 24. Total Sales ByCustomers- 9 Months 2009<br />Total Sales : 16,2 million ton<br />First 4 Distributors’ Share 79.2 %<br />
    25. 25. 25<br />
    26. 26. Investments<br /><ul><li>GasolineImprovement
    27. 27. StorageCapacity +1.1mn ton
    28. 28. ResidiumUpgrading
    29. 29. OEP & others</li></ul>50<br />26<br />
    30. 30. CompanyStrategy<br />
    31. 31. The Fundamentals<br />Changes<br />Scale<br />Capacity of project increased by 30%<br />Will utilise residuals from other refineries<br />Timing<br />Completion expected end of 2013<br />Financing more by ExportCreditAgency<br />Budget<br />$1.5-$2 Billion, <br />Costs may be 30% less<br />Fuel Oil / Diesel Spreads<br />$200 spreads are temporary<br />Fuel oil prices will decrease with more heavy crude<br />Diesel / Jet prices will improve with recovery<br />LSFO req. forBunkering<br />Product Mix<br />Turkey will still be very short of diesel and long on fuel oil<br />CokerUpdate<br />
    32. 32. RUP ProductYields<br />
    33. 33. Financial Summary<br />
    34. 34. 31<br />
    35. 35. FinancialHighlights (mn $)<br />
    36. 36. Profitability Indicators , January-September<br />*CCS – CurrentCost of Sales, ** 40% representingTüpraş’sshare<br />
    37. 37. IncomeStatement<br />
    38. 38. FX Risk Exposure (30 September 2009 ) <br />Million $<br />-128<br />SoleTüpraş -90 Million $<br />
    39. 39. Ratings & Corporate Governance<br />Fitch Rating Comparison<br />Corporate Governance Rating<br />Ratingby Saha Ratings<br />36<br />
    40. 40. Thank you…<br />TheInvestorRelationssection of ourcompanywebsite has a wealth of constantlyupdatedinformation of interesttoinvestors.<br />www.tupras.com.tr<br />37<br />
    41. 41. Disclaimer<br />This presentation contains forward-looking statements that reflect the Company management’s current views with respect to certain future events. Although it is believed that the expectations reflected in these statements are reasonable, they may be affected by a variety of variables and changes in underlying assumptions that could cause actual results to differ materially.<br />Neither Tüpraş nor any of its directors, managers or employees nor any other person shall have any liability whatsoever for any loss arising from use of this presentation. <br />38<br />
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