Refinery

Engen supplies the bulk fuel volume requirements of our South African market, our affiliates in Lesotho, Botswana and Swaziland, and half of our Namibian operation's needs. To keep our South and southern African markets 'wet' we rely chiefly on the Engen Refinery (Enref), our refinery in Durban on the east coast of South Africa. Where there is a market shortfall, we import or procure product from other oil companies.

Local regulations permitting, we also supply our affiliates in other African territories. In countries where we are not permitted to do so, we use authorised suppliers.

As South Africa's second-biggest refinery, Enref represents a large part of Engen's commitment to help keep our markets 'wet'. But operating a refinery comes with major challenges. As a functionally complex, highly capital-intensive operation, strictly ruled by extensive regulations and standards, it must be carefully managed.

Currently Enref is focused on three key success factors:

• Managing capex risks (business value-adding capex is preferred)
• Constantly improving performance (profitability and operational cost containment, HSEQ), and
• Fostering best-in-class human capital programmes and returns

Enref's current five-year capex programme, which runs until 2013, has a clear focus on the environment; maintenance and reliability; infrastructure, buildings and equipment; future fuels; and profit generating interventions. Specific investments include:

• A 'Global Reliability System'
• An Operational Improvement Programme
• A Profit Improvement Programme
• A Global Energy Management programme
• Continuous investment in equipment
• Human capital investments
• HSE, including a R60 million annual environmental improvement budget
• ISO 14001 accreditation, and
• Continuous business improvement