AGM 2021

Jun 29, 2021

Slides

Right. It's 2 o'clock. So welcome, ladies and gentlemen, to the 60th Annual Meeting of the Shareholders of the New Zealand Refining Company Limited. My name is Simon Allen. I'm the Chairman of the Board of Directors of Refining New Zealand. I'm pleased to confirm that we have a quorum of shareholders, and therefore, I declare the 2021 Annual Shareholders Meeting officially open. With me today are my fellow Refining New Zealand directors, Vanessa Stoddart, Paul Zealand, James Miller. And joining us virtually from Australia is Lucy Nation and Ricardo Carvello. And from Wellington, Lindus Jones, all of whom are also directors of Refining New Zealand. Joining me on the stage here is Refining New Zealand Chief Executive Officer, Naomi James. Also in attendance today are members of our corporate leadership team and representatives of our external auditors, Ernst and Young legal advisers, mentor Alison Rudd Watts and chair registrar, Computer Investor Services Limited. Today's meeting is a hybrid meeting as it is also being held online via the Lumi platform. As you may remember from last year, Lumi allows shareholders, proxies and guests to attend the meeting virtually. All attendees can hear and watch a live webcast of the meeting. In addition, shareholders and proxies have the ability to ask questions and vote on resolutions. I will provide more details on these matters shortly. Some housekeeping matters for those of you who have joined us in person today at Eden Park. 1, as a matter of courtesy, please turn your mobile phones off or to silent now. 2, in the event of a fire or a fire alarm being activated, please leave by the nearest safe exit as directed by Eden Park staff and security. Your nearest safe exit is back down the entry stairs for Gate G that you would have entered from, exit out of Gate G and continue across the car park to the assembly point on Rymer's Avenue. Please assemble safely on the footpath and staff the road. You will be asked to remain there until the all clear is given to return. 3, the toilets are located along the corridor. And 4, and finally, Eden Park is a nonsmoking venue. Please exit the building should you wish to smoke. Before we begin, shareholders may wish to note that this meeting will be available for viewing on the company's website after this meeting is concluded. Ahead of the formal business of the meeting, I'll explain the process for asking questions and voting on resolutions. Then Naomi and I will say a few words about the 2020 financial year and provide an update on the company's plans going forward. We'll then move to the resolutions set out in the notice of meeting, where we will cover each resolution in turn and invite questions specific to those items. Following that, we'll take general questions from shareholders. Once the meeting is complete, we hope that those of you present will join us for refreshments and the opportunity to talk further to the directors and the team that assemble care from the company. For those shareholders attending the meeting virtually, questions can be submitted at any time. To ask a question, press on the speech bubble icon. This will open a new screen. At the bottom of that screen, there is a section for you to type your question. Once you've finished typing, please hit the arrow symbol to send. Please note that while you can submit questions from now on, unless your question relates to a resolution to be voted on during the meeting, we will not address general questions until after we have completed the formal part of the meeting and voted on the resolutions listed in the notice of meeting. Please also note that your questions may be moderated. Multiple questions on one topic will be amalgamated. And if you don't feel that your question has been addressed, please just resubmit it. Due to time constraints and to ensure all shareholders have a chance to ask a question, I'd ask you to limit yourself to asking 2 questions. At maximum, we may run out of time to answer all your questions. And if this happens, we will endeavor to answer them in due course via email or by posting responses on our website. Voting on resolutions today will be conducted by poll and will ask shareholders to complete their voting papers or vote online after each resolution has been discussed. Ernst and Young, Refining New Zealand's auditor, will act as scrutineer. If you are a shareholder or a proxy joining us in person at Eden Park today, you should have received a blue colored ballot paper when you registered upon arrival at the meeting. If you do not have one, can you please raise your hand so that a member of the Computershare team can assist you? To cast your vote here in person, please complete your voting paper by ticking for or against or abstain in the appropriate place for your resolution. Voting cards will then be collected by Computershare at the end of the formal resolutions section of the meeting. If you have any difficulty, please raise your hand and Computershare will assist you. For those shareholders and proxies attending the meeting online, if you are eligible to vote, a new polling icon will appear. Selecting this icon will bring up a list of resolutions and present you with voting options. To cast your vote, simply select one of the options. There is no need to hit a submit or enter button as the vote is automatically recorded. You can, however, change or cancel your vote by simply selecting another option or clicking cancel up until the time I declare voting closed. I now declare voting open on all items of business. For those of you attending online via Lumi, the polling icon will soon appear. Please submit your votes at any time. I'll give you a warning before I move to close voting later in the meeting. Before we move to the resolution set out in the notice of meeting, Naomi and I will say a few words about the 2020 financial year and provide an update on the company's plans going forward. 2020 was unique in the company in this company's and this country's history, with the COVID-nineteen pandemic requiring an immediate response to maintain the company's near term resilience. In the immediate onset of the COVID-nineteen pandemic, we acted quickly and decisively, working with our customers to manage stocks and supply across the country. We agreed to change the way in which the refinery operated to enable the refinery to produce at substantially lower rates to help balance fuel supply across the country. The complex operational changes made during this period were completed while maintaining an exemplary safety performance on-site. In an environment that requires constant vigilance in regard to hazards, even during normal times, this is a very significant achievement by both our employees and our contractors working on-site. I want to put on record here today the Board's unprecedented circumstances. Turning to the company's financial results, which reflect the challenging year that we have all had. Not only has the company been dealing with the impacts of COVID-nineteen pandemic, but a structural change in the refining sector meant that we also faced historically low levels of refining margins. As a result, we acted quickly to reset the cost base with a reduction of approximately $80,000,000 in 20.20 planned expenditure to keep costs within the fee floor and thus enable the company to operate at a cash neutral basis. We took a range of measures to strengthen the balance sheet, including increasing and extending our bank facilities. The net loss after tax of $198,300,000 reflected the impact of lower volumes and refinery margins, together with a non cash impairment charge of $158,000,000 after tax, against the value of the company's refining assets, again reflecting a decline in the outlook for refining margins. At the same time as addressing the immediate requirements, the board commenced a strategic review process to develop a clear plan for sustainable shareholder returns in the future. In April 2020, following the commencement of Naomi as our new Chief Executive Officer, the Board initiated a strategic review to determine the optimal business model and capital structure for the company. The context included a significant fall in gross refining margin, or GRM, at the end of 2019. This was further exacerbated by the impacts of COVID-nineteen from early 2020 and returns from refinery below the cost of capital over the previous 10 years. Forecasts prepared by independent expert market commentators suggested that it could be several years before a rebalancing of regional transport fuels supply and demand results in a meaningful recovery in GRM. And there are structural challenges to the competitiveness of the refinery compared to newer Asian refineries due to the relatively small scale and higher cost of operating in New Zealand, which includes significant increases in electricity and gas costs in New Zealand. We were also necessarily conscious of the global movement towards and New Zealand's focus on reducing carbon emissions, with the emergence of new challenges and opportunities expected in the transition to low carbon transport fuels over time. With our very substantial investment in critical infrastructure, which supports New Zealand's fuel supply and with the need to realize full value and deliver sustainable returns for shareholders, we considered the strategic review necessary to determine the best future use of those assets. The initial outcome of the strategic review announced in June 2020 was to develop plans to simplify the refinery operations in the short term, to maintain cash neutral operations at the fee floor and, in parallel, explore with customers the commercial case for converting to an input terminal. Given the range of stakeholders involved and the long term horizon for decision making and implementation that future changes would involve, the strategic review process has been highly consultative. The board recognises that financial returns to shareholders have not been satisfactory for some years. We are committed to delivering on the outcomes of the review to realize full value for the company's assets and deliver more sustainable returns through the cycle while continuing to support secure, competitive fuel supply for the country and a fair and well managed transition for employees and other stakeholders. Our combined efforts have brought the company to a position in which short term viability has been maintained despite a major shock to both volumes and margins and therefore revenues, and at which the options for strategic change have been clearly identified and advanced. Now to the outcomes and the import terminal. Throughout this process, we've always maintained that our priorities were to realize full value for the company's assets and deliver more sustainable returns through the cycle and to support our workforce and the wider community through what, if approved, will be a significant change to Refining New Zealand's operations. Our customers have all expressed a desire for the company to convert to an import terminal model. For our customers, an import terminal would offer certainty and stability on the cost of accessing the infrastructure and mitigating the need for fee floor payments. For Refining New Zealand shareholders, new long term agreements with each of the existing refinery customers, BP, Mobile and Z Energy, would generate significantly more stable earnings compared with the inherent volatility of oil refining to deliver superior through the cycle returns to shareholders. The company is in regular dialogue with the New Zealand government on the potential conversion to an import terminal to ensure that Refining New Zealand is well positioned to continue its role in operating infrastructure that is critical to New Zealand. An import terminal would offer safe, reliable and efficient fuel supply, primarily to the Auckland and Northland markets. This proposal would also offer New Zealand's largest transport fuel storage capacity, and through the refinery to Auckland Pipeline, or RAP, continue to supply nearly all of the jet fuel directly to Auckland International Airport. The import terminal would therefore be critically linked to New Zealand's largest expected export earner, tourism, underpinning long term asset utilization. As you may have seen in recent weeks, with the Climate Change Commission's final advice to government on carbon budgets and decarbonization of the New Zealand economy as a key priority for New Zealand, As it currently operates, the Marston Point oil refinery is one of New Zealand's largest carbon emitters. A conversion to an import terminal would result in a significant reduction in refining New Zealand's emissions by almost 1,000,000 tonnes of carbon dioxide per annum. Naomi will expand on this shortly, but I did also want to point out that a transition to an import terminal will offer the company potential opportunities to support the wider de carbonization of the New Zealand energy market through repurposing of the existing infrastructure. And we expect the one off costs of conversion to an import terminal to be self funded. In terms of where we are in the process, you will have seen notification recently that the company has concluded a non binding, in principle agreement on key commercial terms with the second of our 3 customers, Z Energy. Negotiations remain ongoing with Mobil. Ultimately, any decision to proceed with conversion to an import terminal will be subject to a vote by the non customer shareholders. The Board expects to issue the notice of meeting an explanatory booklet, including an independent appraisal report, shortly for a shareholder vote in August. This will set out the board's assessment and recommendations on the import terminal proposal and provide you with the information to make this important decision on our company's future. I look forward to sharing with you soon our plans for the company's future, which would generate significantly more stable earnings, deliver superior through the cycle returns to shareholders and strongly position the company to participate in a decarbonizing of the New Zealand energy markets. I would like to now hand over to our Chief Executive Officer, Naomi James. Thanks, Naomi. Thank you, Simon. It's great to be able to meet with those of you in the room today in person this year. This year is our 60th anniversary as a company. In normal times, we would be celebrating those 60 years. Instead, our focus today is on acknowledging the company's resilience in surviving the last year, which has been the most challenging in our company's history and on planning carefully for the company's future. We met the challenges of 2020 by focusing on the three things we had to get right: operate safely, meet our commitments to customers and reset our cost base to operate cash neutral. Your company achieved excellent performance in each of these areas. We had our best safety performance on record with no Tier 1 or 2 process safety incidents and no recordable personal safety incidents. We met our commitments to customers. This safety and operational performance was particularly exceptional in a year that required us to do things that we had not done before. Operating the refinery units on a rotating basis and temporarily shutting down the refinery to rebalance fuel supply with the COVID-nineteen impacts on fuel demand. Finally, we acted swiftly to reset our cost base to fee floor levels, reducing planned expenditure in 2020 by $80,000,000 Our strong financial management resulted in the company's net debt closing some $10,000,000 lower at the end of the 2020 financial year, despite margins remaining below the fee floor through the year. We wouldn't have achieved any of this without the incredibly capable and committed workforce we have at Marsden Point. I want to acknowledge both the results our people have delivered and the fact that they have achieved this in the face of an uncertain future. The challenging market faced in 2020 came through both margin and fuel demand. Refining margins were weak at the start of the year due to growth in the supply of refined product from larger low cost refineries in the Asia Pacific region, which exceeded the growth in demand for transport fuels. The global drop in demand triggered by COVID-nineteen, particularly for jet fuel, weighed heavily on the already oversupplied market and placed yet more pressure on margins. The result was a negative average Singapore complex margin across the year of minus US1.65 dollars per barrel. The gross refining margin earned was US1.63 dollars per barrel, the 2nd lowest since the 1995 processing agreements came into effect. Demand in fuel dropped by 50% during the period New Zealand was in level 4 lockdown. Petrol and diesel recovered to more normal levels later in the year. However, jet demand remained impacted by the ongoing border travel restrictions, resulting in refinery throughput at 70% of 2019 levels. Having reset our cost base, the fee floor in the processing agreements protected us to a significant extent from these lower margins and demand levels, with our customers contributing around $90,000,000 in fee floor payments. The fee floor is the minimum level of processing fees our customers pay for operation of the refinery, irrespective of actual refining margins or throughput. And this was in operation for the whole of 2020 and continues through the 2021 year to date. At the beginning of this year, the company moved to a simplified refinery model in order to maintain cash neutral operations at the fee floor in 2021. The simplified refinery model has seen primary crude intake reduced by around 18% with total refined fuel production levels similar to levels at the time of commencement of the processing agreements in 1995. It has also seen the cessation of bitumen production at Marsden Point. An organizational restructure reduced the workforce by 25%. We set ourselves the target of supporting all of our employees impacted by these changes to find new work or training opportunities, which we've largely achieved with support ongoing today for only a couple of employees. Simplification of refinery operations has provided our company the time to fully assess and plan for a transition from refinery to import terminal operations, which I'll turn to now. Simon has already covered our strategic review process to determine the optimal future operating model for our business. I will cover in some more detail what an import terminal operation would involve. Utilizing our deepwater harbor and jiti infrastructure, our customers would import refined fuel into Marston Point instead of the crude oil they import today for refining. Fuel would be stored at Marston Point in existing tanks at what would be the largest fuel terminal in New Zealand with 180,000,000 liters of shared capacity and capacity to provide additional storage. We would continue quality fuel testing services both at the Marsden Point site and around New Zealand through our IPL business. Fuel from Marsden Point would be distributed primarily to the Auckland and Northland markets, which make up around 40% of New Zealand fuel demand through the 170 kilometer refinery to Auckland pipeline and the truck loading facility adjacent to the Marsden Point site. Our existing customers would continue to be our foundation customers with long term contracts and take or pay commitments supporting the investments made through a conversion from refinery to import terminal. And if in the future, unutilized capacity existed, we would have the ability to bring in new customers. The import terminal operation would primarily use existing finished product storage tanks with upgrades required to piping, compound bunds and fire protection systems for site safety and to ensure operational efficiency. As you can see from the image of the site on the slide, the import terminal will only require a small portion of our current facilities and site footprint. This presents the company with an opportunity for a number of different site repurposing options, some of which I will outline in more detail shortly. The proposed import terminal and the opportunities for using the site are underpinned by our long term commitment to Marsden Point, reflected in the granting this year of a 35 year resource consent to operate as a heavy industrial site. This consent, our deep harbor and jetty access, industrial electricity and gas connections and proximity to the largest population base in New Zealand all support our commitment to ongoing operations at Marston Point over the long term. As part of our strategic review, we have looked closely at future fuel demand in New Zealand and the Climate Change Commission's important work to develop advice for government on New Zealand's first carbon budgets and plans to achieve these. As you can see from the forecasts, our product mix is expected to be weighted towards jet and diesel in the future. The Climate Change Commission's report this year has highlighted a near term focus on decarbonization of transport through electric light vehicles with decarbonization of heavy transport and aviation fuels occurring over a longer period of time. The Commission's report identified that aviation fuels are particularly challenging to decarbonize and there is currently no commercially viable sustainable aviation fuel supply in New Zealand. As an import terminal, Refining NZ's existing infrastructure and repurposing of the Marsden Point site has the potential to support a transition to biofuels and sustainable aviation fuels. There is a strong link between the energy challenges facing New Zealand today and the opportunities that exist for the Marsden Point site in the future. Through a transition from local refining to imports, we need to ensure we hold sufficient fuel stock in country, a role that has been performed up to now by our refinery with its crude and intermediate product stocks. We face significant challenges in reliable and affordable gas and electricity supply today. A shift to imports will both reduce our exposure to and demand for gas and electricity and make a significant contribution to New Zealand's near term emissions reduction. Finding solutions which deliver affordable and reliable supply of electricity and transport fuels as well as reduced emissions is the key problem to solve in achieving a decarbonization of New Zealand's energy sector. We are open to all options for the Marsden Point site, whether that's strategic fuel storage, the import, blending or production of biofuels or electricity supply and storage. Our focus will be on identifying opportunities where our infrastructure can both support the decarbonization of New Zealand's economy and provide a return on investment for our shareholders. The company continues to work with customers to negotiate long term arrangements for the import terminal model. Importantly, we have reached in principle agreement with BP and Z Energy on key commercial terms including price. Negotiations with mobile are ongoing. The in principle agreements we have reached include long term commitments of at least 10 years, a combination of fixed and volume based fees as well as take or pay commitments to deliver minimum revenues and support the debt funding of conversion costs. Fees averaging an estimated $95,000,000 across the initial 10 year term on a real basis and the ability for new customers to access underutilized infrastructure such as the wrap or storage tanks. Current front end engineering and design and detailed planning work is ongoing and work to date has not resulted in any material change to our previous guidance on costs. Finally, we expect to generate significant tax losses from decommissioning of refinery assets, which will be available to offset future earnings subject to the loss carry forward rules. I look forward to sharing more detail on these commercial arrangements and the financial implications for the company, including for you as shareholders when we issue the notice of meeting and explanatory booklet ahead of a shareholder vote in the coming weeks. As you can see from the timeline behind me, we are currently targeting a final investment decision by the end of Q3 this year. In the meantime, we are progressing our customer negotiations and working on obtaining lender approvals and expect to shortly issue the notice of meeting and explanatory booklet for a shareholder vote in August. On these estimated time frames, the likely time for the conversion to be completed would be in the first half of twenty twenty two. Before concluding, I wanted to take a moment to reflect on our journey to reach this point And to put on record my gratitude for the enormous work that has been put in by a huge number of people across the company and the support we have had from a range of stakeholders. I liken this process to a jigsaw puzzle in that we've been working hard over the last year to find a long term sustainable future for our business and bring together the range of sometimes competing priorities. I want to acknowledge firstly the support of our customers as we worked through options for our business, responded to the near term challenges presented by COVID-nineteen and worked together on new long term arrangements. These are always robust commercial discussions as they should be. But throughout, we have all remained focused on the need to keep the market supplied and safely operate what is a major hazardous facility. I want to acknowledge our lenders who have supported us with additional lines through COVID-nineteen and continue to support us with the import terminal proposal, including funding for the transition. I want to acknowledge the engagement we have had with government working together to ensure the key issues to manage through a transition are considered and addressed. I also want to thank the members of the refinery transition working group formed last year, which provided support for our employees impacted by the simplification changes. This group is now focused on ensuring a planned transition for future changes at Marston Point, which mitigates the impact of changes on refinery workers and the regional economy. Finally, and of critical importance is our workforce and contractors who continue each and every day to focus on what's needed to operate our refinery safely and reliably, while planning for a very different future, which will involve significant change for everyone at Marston Point. A just transition means a well planned and managed transition. And my management team and I are focused on each piece of the puzzle as we go forward. We believe this is both the right thing to do and critical to setting up our company for a long term sustainable future, which delivers value for our shareholders. The pieces of this complex puzzle are now coming together, and I'm looking forward to sharing more details with you of what's involved in the coming month. Back to you, Simon. Thank you, Naomi. We'll now move to formally consider the resolutions set out in the notice of meeting. Today, as set out in the notice of meeting, we've 4 ordinary resolutions, which are required to be passed by a simple majority of votes, being more than 50% of the votes of shareholders who are entitled to vote on the resolutions and to exercise their right to vote. The first three resolutions deal with the election and reelection of your directors. Board supports all of the directors standing for election or reelection today. In accordance with clause 8.9.1 of Refining New Zealand's constitution and rule 2.7.1 of the NZX Listing rules, a director must not hold office without reelection past the 3rd annual meeting following the date that the director was appointed or 3 years, whichever is longer. Linda Jones and Vanessa Stoddart are both required to retire by rotation, and both being eligible to do so offer themselves for reelection. Brief biographies for both Linda and Vanessa were included in your notice of meeting. Clause 8.13.3 of Refining New Zealand's Constitution and Rule 2.3 of the NZX Listing Rules requires directors to be reelected individually. As such, we will consider the reelection of Lindus Jones and Medusa Stoddard separately. Resolution 1 relates to the reelection of Lindus Jones. I propose that Lindus Jones, who retires by rotation in accordance with clause 8.9 of the constitution, be reelected as a director of the company. I'll now ask Lindus to make a brief statement. Thank you, Mr. Chairman, and good afternoon, ladies and gentlemen. Firstly, apologies for not attending in person. Based upon current alert levels in Wellington and taking an abundance of caution, I agreed with the Chair that I would not travel to this meeting. Thank you for taking the time to consider my re election to the Board of Refining New Zealand at such an important time. I would like to take this opportunity to provide some background on myself as you consider this choice. The last 18 months have been particularly challenging for the downstream fuel industry, and this has been felt most acutely within the refining sector. I believe my experience within this industry, both internationally and in New Zealand, means I'm well placed to contribute to the development of a business that is resilient, that serves New Zealand well and generates sustainable returns to you as shareholders. Having graduated from Otago University in 1993, I started my career with Shell in Wellington and had several roles over the following 13 years in New Zealand, Europe, as well as sometime in Asia. And during my time in London, I also completed a Master's in Finance at the London Business School. After leaving Shell, I spent 4 years at the ANZ Bank before joining Greenstone Energy in 2010, which was to become shortly thereafter, Z Energy. In the 11 years at Z Energy, I've had various executive roles, and for the last two and a half years, I've been Z's Chief Financial Officer. During this career, I've had a broad exposure to the downstream fuels industry, led or participated in significant strategic projects in different countries, gained an understanding of energy systems and markets and how they evolve over time. However, the key thread in my career has been a focus on maximizing sustainable returns to shareholders, while doing the right thing by all stakeholders. As a non independent director, I acknowledge the potential for conflicts of interest to arise, and this is something I take extremely seriously. I believe that as a director, I have a duty to make the fullest possible contribution to Refining New Zealand, and I can assure you that the policies and procedures in place at Refining New Zealand and my employing organization, Z Energy, make this possible. As the Director of Refining New Zealand, my priorities have been and remain that we do everything possible to support the continued safe and reliable operations that prioritizes the health and well-being of our staff. Secondly, that we ensure that RNZ pursues strategies and choices that are most likely to maximize shareholder return over the long term. And then thirdly, does the right thing by New Zealanders as we transition to low carbon forms of energy. Lastly, and perhaps unrelated to my election as a Director of Refining New Zealand, I would like to recognize the diligence and effort of the independent directors who have navigated the recent history of this organization and have shaped a path back to sustainable returns to shareholders. I also want to recognize Naomi and her team that have had to contend with absolutely extraordinary difficult circumstances and done this in a way that has prioritized the health and well-being of their people and the safe and reliable operations of one of New Zealand's most important pieces of energy infrastructure. Thank you for considering my reelection as the Director of Refining New Zealand. I'm happy to take any questions. Thank you, Lindus. Are there any questions of Lindus or any discussions about this resolution from the meeting? It's getting the technology. Testing. Well, that sounds a bit better. Look, thank you for your time. There's a mantra I've heard chanted almost word for word by our 3 speakers, sustainable returns to shareholders. And you actually used that term 4 times in your presentation. Can you give us any idea when that mantra will be honored as far as what are your plans as to actually providing sustainable returns to shareholders? You're all singing from the same songbook, but the song is starting to sound quite sour. Could you give me an idea when you propose what time are we looking ahead to dividends appearing on the table again, please? Thank you. I'll take that as a question in relation to this resolution, although it's more akin to the general questions that we referred to after these resolutions. But Let's try to answer the question, please. Okay. Yes. Understood. Thank you. Okay. Thank you. I will let Linda refer to an answer to that question. Thank you. All right. What I observed and participated in the last year is that the company, I think, has done everything possible, given the circumstances, to make the choices to put in front of shareholders in the coming weeks, such that you have the full knowledge of the best choices to make. So I think the in terms of answering when, that information will be laid out clearly in the upcoming weeks. And I think that's it's more than just the choice that will be laid out, but the background to those choices so that you're fully informed on those choices. So specifically, I think a matter of weeks before that information is in front of you. We will address that question further in general questions after these resolutions. We'll address that further. Thank you. When does he expect that Z Energy will be returned to? When will Mr. Lindas Jones, Z Energy think that his company, 15% shareholder, NZR will receive a dividend from NZR. He's a big boss for their he's the one buying, bringing in the crude oil, etcetera. The tank is a petrol later on if it goes ahead. When do you think you're going to be giving a dividend by the company? Thank you for that. Yes, no. 2 years' time? Naomi and I will address that in general questions. We will address timing because it relates Yes, but you're asking a question that replies to the whole board. And so the whole board will Naomi and I, on behalf of the whole board, will answer that question in general questions. Are there any further questions? Thank you. Yes. Hello, Mr. Jones. You made reference to potential conflicts of interest. And I'm very well aware that the Institute of Chartered Accountants Australia and New Zealand has very strong ethical principles, which the members have to sign up to. And my question for you is, are you a member of the Institute of Chartered Accountants Australia in New Zealand? No, I'm not a member of that institute, not being formally trained as an accountant. So the answer is no, I'm not a member of either institute. Thank you. Are there any other questions? I don't believe we have any questions online. So I will now put the motion that Lindus Jones, who retires by rotation in accordance with clause 8.9 of the constitution, be reelected as a director of the company. I now ask shareholders to complete their voting papers in respect of this resolution. Please vote next to item 1 on your voting papers if you're not attending in person. Or for those of you attending online, if you have not already done so, please vote on Item 1 using Lumi. Yes. Thank you. I'll wait while you fill those out. Resolution 2 relates to the reelection of Vanessa Stoddart. I also propose that Vanessa Stoddart, who retires by rotation in accordance with clause 8.9 of the constitution, be re elected as a director of the company. I'll now ask Vanessa to make a brief statement. Thank you, Mr. Chairman, and good afternoon, ladies and gentlemen. I feel privileged to be here today to outline a little more about my background and the value I believe I can add to the refinery at this critical time in its history. Born and bred in the South Island and a proud New Zealander, I attended Otago University, gaining qualifications in Commerce, Finance and Law, and later, a post grad diploma in Professional Ethics from the University of Auckland. After graduating, I joined a large law firm in Auckland and for many years, practiced commercial competition law. But wanting to get closer to business, I joined Carter Harvey and moved into management. Initially, in change management roles for large IT implementations before heading up performance improvement programs. This led to a move to Australia and I headed up the packaging operations as Chief Executive. After 10 years, I was approached to come back to New Zealand to assist with the transformation of Air New Zealand post inset. Initially responsible for the cultural transformation through the various people portfolios, including human resources and health and safety, I also assumed responsibility for the engineering group of the airline, responsible for the operations, strategic initiatives and cultural transformation of engineering for the airline. But at the end of 2012 10 years at the airline, I decided after almost 25 years in executive roles to move into governance for the next stage of my career. The experience is gained from working in tough competitive industries here and offshore, including transforming cultures, installing risk management processes, including transforming health and safety, appreciating the importance of reputation management, especially through experiencing crisis management with significant safety incidents, and the role of alliances and collaboration, I believe, are of enormous value to boards and, in particular, add a dimension of operational and cultural experience to the Refining New Zealand Board. I am a graduate of the Australian Institute of Directors and a member of the New Zealand Institute of Directors. I'm currently a member of the Financial Markets Authority, Chair of MB's Audit and Risk Committee, and I'm a Director for 141's Trans Tasman Forestry and Wood Products Business. As a member and former Chair of Global Woman, I have a particular interest in promoting diversity in business and diverse thinking in the boardroom. I entered governance, some would say, early in my career because I had a passion to contribute to the strategic direction of businesses and share my experience and skills in the boardroom in tough industries facing tough strategic challenges. Governance is my full time career. I take it incredibly seriously and ensure I also have time to commit to ongoing development, which I personally invest in heavily, attending directors conferences and development sessions for governors offered by the institutes, consulting and law firms, as well as ensuring I'm constantly reading the relevant material available to directors. To my mind, your directors not only need to be experienced and skilled, but also committed to their responsibilities. They must be current and fully able to contribute. I believe my background and my portfolio of positions enables me to perform well for you. As you've heard today, Refining New Zealand is at a critical point in its history. And I am committed to seeing through this strategic review and its implementation and recommending what is in the best interest of shareholders and other stakeholders. I am able to fully commit to those needs. I think if you ask any member of the board or the executive team, they will tell you I'm available, responsive and contribute 20 fourseven. I would welcome the opportunity to contribute to this unique New Zealand company at such a critical time in its history and I would appreciate your support. Thank you. Thank you, Vanessa. Are there any questions of Vanessa or any discussion about this resolution from the meeting? Carly? Carly VanCamp, shareholder. Look, it's an obvious question. But have you toured up there and seen the size and magnitude of the whole shebang that might be put into mothballs? Is the microphone on? That's number 5. We're all good. So the short answer is yes. We're at the refinery frequently. So we have formal board meetings up there 4 or 5 times a year. But to be honest, if you've read the annual report this year, you'll know I think this year we've had over 40 or 50 meetings in the last year and a good proportion of those are held at the refinery. And it's not just for the meeting, actually to meet our health and safety commitments, but also to genuinely understand the business. We actually, meeting the safety requirements, walk the refinery frequently. Thank you. There's a microphone. Here we go. Vanessa, I'm appealing to your integrity, I suppose. Have any of the board stood against the proposal to shut down this refinery to stop crude oil coming to New Zealand? Dollars 1,000,000,000 worth of assets just wiped off the books. Have you thought like that for New Zealanders? So, Chair, I'm not sure that's a question in terms of this resolution. But I can answer the question more generally, which is more about discharging my responsibilities as a fully independent director in the interest of shareholders. And in that regard, I can assure you that I discharge that responsibility always. Thanks, Vanessa. And we'll make some comment to that question in general for you as well. Thanks. Any other questions? No questions online. I'll put the motion that Vanessa Stoddart, who retires by rotation in accordance with clause 8.9 of the constitution, be reelected as a director of the company. I now ask shareholders to complete their voting papers in respect of this resolution. Please vote next to item 2 on your voting papers. If you're attending or in person or for those attending online, vote item 2 using Lumi. Thank you. I'll go on to Resolution 3. Resolution 3 relates to the election of Lucy Nation. In accordance with clause 8.8 of Refining New Zealand's constitution, any director appointed to fill a casual vacancy or as an addition to the board must retire at their next annual meeting of the company, but shall be eligible for election at that meeting. Lucy Nation was appointed by the directors and being eligible offers herself for election. A brief biography of Lucy Nation was included in the notice of meeting. I propose that Lucy Nation be elected as a director of the company. And I'll now ask Lucy to make a brief statement. Thank you, Mr. Chairman. And I'm very pleased to be able to join my first Refining New Zealand special meeting, but also disappointed that I can't be with you in person. Given New Zealand's very sensible decision to halt travel from Australia, I was not able to fly as planned on Sunday, for which I apologize. But as someone who's relatively new to the Board, please allow me to just outline my background and why I was put forward in February to replace Debbie Boffa as a Director for Refining New Zealand. I'm a graduate of the University of Adelaide and hold a Bachelor's degree of Chemical Engineering. I also hold a Graduate Diploma in Applied Finance. I joined BP 23 years ago as a chemical engineer and worked for 13 years at BP Refineries in Brisbane, Chicago and Los Angeles in engineering, production planning, finance, process safety and operational roles. For 3 years, I was the plant manager for a manufacturing facility in Long Beach in California. In 2011, I moved to London and I worked in a variety of roles in Europe. This included having responsibility for a period of time for the terminal strategy for BP in Europe and I had management oversight for a terminal in Amsterdam that was a converted former refinery. I was then asked to move to Singapore, where I worked for 3 years in product trading and product supply before moving back to Australia. I came back to Australia to a role that included accountability for terminals and pipelines and product supply for BP's businesses in Australia and New Zealand before moving into the role of CFO for our Asia Pacific business. My current role has a very strange title, but effectively what I am now doing is running BP's green energy business for Asia Pacific. My team and I have responsibility for both decarbonizing BP's existing businesses in the region and building BP's green energy business to help corporations, supply chains and regions decarbonise as efficiently as possible. Throughout all of these roles, I have had a keen interest in organizational culture and performance. In terms of directorships, from 2017 until June of this year, I was a Director of BP Maritime Services Singapore. I am currently a Managing Director of BP Australia, and I'm a non executive director of Ocwen Energy, which is an Australian fuels distributor and fuels transport company. I'm a member of the Australian Institute of Company Directors and will be completing their training course in August. The energy industry globally is going through a period of unprecedented change, and it's also a very important period for Refining New Zealand as we are all acutely aware. Through my experience, I hope to be of service to the Refining New Zealand Board and to its shareholders over this very key time in the company's history. As a non independent director, I am very mindful of the potential conflicts of interests that exist. I can give assurance that both BP and Refining New Zealand have strict protocols in place to manage this conflict and to maintain the primacy of the interests of the shareholders. My objective is to give the Board the benefit of my experience and expertise to the best of my abilities. Clear priorities are obviously the safe and compliant operations of the facility, the well-being of staff, the facility, the well-being of staff, improving the value proposition of the company for its shareholders and determining the role that Refining New Zealand can play in energy transition. I firmly believe that Refining New Zealand's assets have key strategic value for New Zealand for many years to come, and the Board and management are working tirelessly to better reflect this value in the share price. I would like to acknowledge the enormous amount of work that all of the staff of Refining New Zealand, the management team and the Board have been doing to maintain focus both on safe operations while also conducting the strategic review and putting together a clear plan to give shareholders a choice in the coming weeks of how best to give the company a strong future. I thank you for your support, and I'm happy to take any questions. Thank you, Lucy. Are there any questions on Lucy's statement or any discussion about this resolution from the meeting? Thank you. Lucy, you said in Holland that you decommissioned a oil refinery and turned it into a storage facility. Was that the only refinery in Holland? So at the time that I was in that role, the refinery had already been decommissioned, but I was responsible for its operation or oversight of the management of it as a terminal. It was not the only refinery in Holland, No, I am also involved in my capacity as a Managing Director of Australia of the decommissioning overseeing the decommissioning of the Kwinana Refinery and have had responsibility for Uwa Refinery in Australia, which is also a terminal. Thank you. Are there any more questions? Thank you. Thank you. Just a question relating to your specialty. I'm interested in your response to this. I'm from Canada, and I was horrified to see the vulnerability of New Zealand supply chain for aero fuel from found array down to the international airports. You only needed a digger looking for carry gun to put a hole through it, and the whole country was in absolute bedlam. Literally hundreds and hundreds of trucks holding air fuel over the Brenderwinds. Is this possibly a time to look at putting air fuel storage facilities much nearer to their literal market, which is only the Mangere International Airport by the sound of it? Right now, we have one massive singular pipe going from Fungare to Auckland for aero fuel. Be interested to know if that is a sensible way or should something be learned from the disaster that happened in the past? I'll intervene, Lucy. We will answer that in general questions because it's a good question, and it's very much part of the work that we have been doing. So speciality, I was interested in doing. Yes, okay. And the actual issues there, we've spent a lot of time on as a board, and we will thank you. Any other questions? Okay. I put the motion that Lucy Nation be elected as a director of the company. I'll ask shareholders to complete their voting papers in respect of the resolution. Please vote next to Item 3 in both cases here or on Lumi. Thank you. Okay. I'll move on to Resolution 4, which relates to the authorization of auditors' fees and expenses. I propose that the directors be authorized to fix the fees and expenses of Ernst and Young as auditors to the company for the financial year ended 31 December 2021. Is there any discussion or online questions on this motion? Yes, 225, I think. Page 93. So if there are no further questions, I put the motion that the directors be authorized to fix the fees and expenses of Ernst and Young as auditors to the company for the financial year ended 31 December 2021. I'll ask shareholders to complete their voting papers in respect of this. It is item 4, whether you're here or online. So I ask you to fix your decision on that. Okay, now that does conclude our discussion on the items of formal business. In a couple of minutes, I'll close the voting system. Please ensure that you've cast your vote on all resolutions either online via Loomi or on your voting paper. I'll now pause to allow you time to finalize these votes. I think I see everyone has finished. Thank you, ladies and gentlemen. The voting is now closed. If you're attending in person, please remember to sign and date your voting paper before placing your completed form in one of the ballot boxes, which will be brought around by the Computershare team. Our auditors Ernst and Young are in attendance and will act as scrutineers. Once they've completed their review, the final results of the poll will be released to the NZX and posted on our website. We expect this announcement to be made tomorrow morning. Okay. We'll move into general business. And if there are any items of general business that shareholders wish to raise, including any in relation to my address on Amy's presentation, and we will cover, I think it was 3 questions that we referred to out of the previous section as well. Please do so if you're online through Q and A or if you're here raising your hand. And a brief word on housekeeping. Only shareholders or their proxy holders are entitled to ask questions. And in the room here at Eden Park, we've got roving microphones, as you know. We have started to get some questions coming in online, so we'll take them in a reasonable order. So I'll ask I'll first ask for first of all, I'll ask Naomi to answer 2 of the questions that came up in the previous set of questions, and then I'll come back to the one about dividends. Thank you, Simon. So there was a question around what options we looked at and how we've got to a view around the import terminal being the option that we are taking forward, and also what that means from a security of supply perspective for New Zealand. In terms of the strategic review process, that's a process we kicked off over a year ago now. And at the start of that process, we looked at every option around continuing to operate a refinery in New Zealand, as well as what the alternative would look like as an import terminal. And so there'll be more information when we put out the shareholder materials around the assessment that came out of looking at those options. But where we have got to in the process is that the sustainable option for the future is that shift to import terminal operations. In terms of supply to New Zealand, we today rely on the import of oil to supply fuel requirements, and that oil is refined at the refinery, together with the import of already refined fuel around the country. And so the shift to an import terminal really means that instead of importing oil, we are importing refined fuel. There is a change in how much product we hold in country because today we hold inventory in crude and intermediate product stocks, and that's a question that is being looked at by government in their assessment of these matters to make sure the right government policy settings are in place to ensure security of supply moving forward under an import terminal supply model. There was also a question about the disruptions that occurred in 2017 when our pipeline was impacted by it was found through the inquiry, the actions of an individual with a digger on some land that our pipeline runs through. And there was an in-depth government inquiry into that incident with a number of recommendations that came out of that inquiry. The inquiry found that our maintenance of the pipeline was good. There were opportunities for us to improve our ongoing surveillance and monitoring, which we have done, and also our communication to all of the landowners that exist along that pipeline, which we have also done and continue to do. There were also a range of recommendations around how to improve security of supply at the Auckland end, which sits outside of the refinery's operations with the terminal operations that are here in Auckland, and particularly for the jet fuel supply chain. And they are recommendations that are still being worked through by the industry and by government in terms of who those recommendations sit with to address. So that's where we stand today with what came out of the inquiry into the 2017 incident. A lot of improvements already been made and also some things that are still continuing to be worked through by the relevant people in the supply chain. Thanks, Naomi. Now on dividends, you won't get a guarantee from anybody here about when dividends are going to be paid, but I will give you some steerage about the way we're thinking. And you can rest assured that, that is one of our fundamental drivers for shareholder returns, out of which come dividends. So we've reduced the refinery operation to a simplified refinery operation. At that level, we're receiving a significant subsidy from under the processing agreement from our 3 customers and they're paying that in. But all that is doing is keeping us cash neutral. There's no prospect of a dividend being paid while we're sitting in this environment at simplified refinery. On balance, we find it very difficult to forecast that we would reverse back out of simplified refinery because there are too many forces at play that make that a very potentially very expensive exercise, which further reduces the ability to pay dividends. The transition work that we've done, the work for the alternative, we believe, does give us an opportunity to have a sustainable, reliable set of earnings that don't carry the volatility that we're exposed to today. It's not very volatile at the moment. It's just sitting at the bottom, you're down low. But removing that volatility gives a pathway for the company, a, to self fund a transition and b, to be able to, over time, pay dividends. Now how that's achieved and the timing of it, our work says it's a lot quicker than any other alternative, and we'll release that as part of our papers to be quite thorough work in that. Are there any other questions? I want to ask about horizon 2. How far over the horizon is it when we look at biofuels? I'll give that to Naomi. Thank you for the question. You may be aware the government currently has under consultation new policy to introduce a biofuels sales mandate in New Zealand and that is proposed to commence from 2023. So that is on the horizon And so what we're looking at is what is the range of things we could be doing at Marston Point to utilise the infrastructure we have, whether that's supporting the import of biofuels, the blending of biofuels, the local production, then that's likely to occur over a number of years as that policy becomes clearer and that transition path becomes clearer. There was another question. Thank you, Mr. Chairman. Clive Milne, long time or family long time shareholders of New Zealand Refining since day 1. Mr. Chairman, a couple of things. The current assets we have there for refining refined product are mainly Timahio. What would actually happen to all that? Because there was quite a bit of money spent on that. And I would have to be concerned that it's not going to be tipped down the Girdler. So that's number 1 is what would happen to the Timahiko project and the current assets for refining within the milestone point site up there. 2nd question is, at one stage I thought that we were looking at a hydrogen plant there. Now I saw some quite good photos of it some time ago. Is there any stage or any thought being put into developing that place as a hydrogen plant? Because I think it would be quite a good strategic asset for that place. And I think our share price was just about I won't say go through the roof, but it would certainly improve the whole thing a long way anyhow. Thanks, Clive. I'm actually going to ask Naomi to address both those questions. They are good questions. Thank you for the questions. On the first one, of what would happen with the facilities? On the first question of what would happen with the facilities at Marsden Point on a conversion to import terminal operations, the initial step would just be to make those facilities safe. We wouldn't intend to remove them because we do want to look at what are all the options for that site. And so we exactly as you say, we don't want to remove something that could potentially be put to an alternate use in the future. And we'll be going through a progressive process to look at what are all the options for that site in the future. We think there will be a range of options available. The specific question around hydrogen, there are 2 key ingredients you need to make hydrogen, and they are electricity and water. And in the case of electricity, you need a lot of it at very low cost. That is not something we have today in New Zealand. So while hydrogen is being looked at in the south, potentially to deal with an excess of electricity were TY to exit. In the north, we don't today have access to renewable electricity at the price you would need to make competitive hydrogen manufacture. That's obviously something we continue to look at going forward and assess as those markets for those sorts of future sources of energy continue to evolve. Thanks, Naomi. I've got a question online from Donald Stephenson. Will there be room or an ability to handle general cargo at the New Zealand Refining Wharves? I think I'll answer that. The answer is no. They're quite specialized, wharves relating to fluid transfer. And so the answer to that is not. There is also a question, would New Zealand Refining have the option to develop its own retail brand and outlets? We've got enough on our plate to consider. No, that is not an option for us. Now just remember, we don't own the product. We toll operate at the moment as a refinery, and we distribute product on behalf of our clients who distribute and sell with retail brands through New Zealand. I will ask Naomi to answer a question from Joel Minhond. What is the government's subsidy policy? That's a little bit of a broad question. We'll assume it is, I guess, specific to our current operations. So we haven't had any support from the government through the COVID-nineteen impacts other than those measures that have been generally available in New Zealand. And so I think the answer is there is not a government subsidy policy of the government for the refinery. Yes, I'll go to you now. I've got some more online. Sorry. This is a bit of an interruption, but the government gets mentioned a few times. The government set this all up in the beginning with a $500,000,000 bond issue. You pay interest on it. What is the bond situation at present? Is that the majority of your $441,000,000 worth of debt, if I have the figures correct? No. All financial exposure to the government has been extinguished from the company. So all of our debt, it relates to private sector debt. Why did I see that there was or maybe we'll just see initiation? In the a long time ago, there was some financial exposures, but they're well past now. As shareholder, can you expand on the plans for waste to energy? I saw on your board, right in the bottom corner, waste to energy. And with the problems that we have for dealing with waste and how other countries deal with waste, we put in they don't put it in landfills, they convert it to energy. Can you please talk about that? I'll get Naomi to talk about it. And it's under the heading, which quite a few of these questions coming in, are what are alternative uses of the site, what is the repurposing that is possible and what is the changes under decarbonization. I'll ask Naomi to answer the question. Thank you for the question. So that waste to energy opportunity sits in that 3rd horizon. So probably the furthest away from where we are today. But really, as we step out and look at all of the sources of energy that could be available to us in the future as we, over time, move away from fossil fuels, that's those continual steps across the page. So very much still early stage in New Zealand, starting with looking at waste sources here. But we're certainly keen to look at where the Marsden Point site could play a role as those supply chains start to develop in the future. So it's all in the never ever. And I can't see that you can ever pay dividends in the next 10 years the way you present your problems. Look, the question is about new usage. The reason they are on horizons is that they some of them have got are very early on in their development of technology. All of them cost significant amounts of money. And the process of working out the alternatives as part of a government strategy, a New Zealand strategy on decarbonization and alternative use is a complex and longer horizon job. Yes, I'm just going to take a couple off here because the screen is filled up a little bit. How much land does the company own at Marston Point and at Wherry? We don't own the land at Wherry. The Wherry is a lease, and it is just over 100 hectares, I think. 177 hectares. Yes, 177 hectares at Marston Point. That was from Joshua Hankins. Is there any option of small modular reactors instead of solar energy? Again, another question in the area of repurposing. It's not one that we've looked at carefully because we did look at solar quite carefully. But financially, it doesn't it didn't have the reward that was required for shareholders, particularly in the situation the company was in. I think I've just answered another question that just came in. What is the position of the planned solar farm? We are exploring opportunities with other parties still in all of those areas that where our land can be used. Yes? The gentleman behind me sounded Dutch, I'm likewise. And I asked NZR to look at Golden Bay Cement. They're using all the tires from Auckland. They're getting them for mix. Why don't you start offering a bit of money just so you get cheap energy rather than I was going to use the B word, but moaning fishing game, the term people know the farmers, no bitching complain. Why worry, why moan about the energy cost when you've got literally energy at your doorstep like Golden Bay are using all those tires, they've reduced their energy bill by huge amounts. Why didn't you have your thinking caps on 5 years ago? Yes, I'll get Naomi to answer that, but I think you'll find out our energy requirements are so much larger than that supplies that it's not a viable. So they have it's worth noting there have been significant efforts made to reduce energy intensity at the refinery over a number of years, and that has been a strong focus and a lot of improvements occurred in the energy requirements. And as Simon was mentioning, the solar project is an example of something we can do, to look to reduce our energy costs in the future, including as a terminal from what we're currently exposed to in the general market today. So that option remains one that's under consideration. What about tyres? We could probably get them from overseas from China. Yes. Yes. I've got more questions. Yes, over here. This is John Walker, long term shareholder. I'm very concerned about your plan going forward when you've got high liabilities. Now when you did the big projects many years ago, there was $800,000,000 of debt. The treasury took that $800,000,000 of liabilities and took it out of the country and the company prospered. Now you've got high levels of liabilities here. Have you planned ahead or are you going to suggest the Treasury to take those liabilities out seeing that they want to have decarbonization in New Zealand? I'll get Naomi to comment on it, but I would start by saying it would be great if we could get them to take our liabilities off us. But as I said before, we are disconnected in a commercial sense with the government in that we are a stand alone company with stand alone assets and stand alone liabilities. And the liabilities you might be referring to are just our debt. It is unlikely that the government would like to take our debt off us. Do you want to make any further comment? I think you'll see in our booklet a plan around our debt, our plan around our earnings and our plan around what we do with those liabilities over time. That drives a lot of what one has to do. While we're still burning imported coal at Huntley, I'm really not too fussed about driving my petrol car. Refining New Zealand won't be refining anymore, will it? So that will be a name change. But having 2 at your site up there, I am not at all optimistic that that huge amount of specialized equipment can be repurposed. I think you're looking at a huge write off. We got inkling of that at the Z Energy AGM recently where shareholders were really felt as welcome as the plague. I just feel that we are taking a huge risk importing all our product from Asia. We're already facing very inferior steel coming in from China from our building industry. What guarantees have you got on quality control? And where is it going to come from? I'll give that to Naomi. So the first part of your question, I think, related to how do we compare these options. And so that will be what we set out in the explanatory booklet and why the view is that an import terminal business model is the beta value proposition for shareholders. So that information is all to come in that next stage of the process. From a quality perspective, as a refinery today, we undertake quality control testing. We have our own laboratory business where we both provide services to our own refinery as well as services to our customers and to other people around the country in terms of government, and that's going to continue. Our role is as the provider of the infrastructure, and obviously there are the people bringing the fuel into the country, as they do today when they import product. There's a range of testing and quality measures in place to make sure our fuel is safe and meets the required specifications. Do they issue a laboratory? Yes. Yes. Is that the only laboratory in New Zealand? There are other laboratories, but we are regarded as a specialist group. Yes, possibly. It depends, I think. I've got a question online. It's quite a long one. Will the proposed change booklet information cover the current obligations of the oil companies and why we, shareholders will be better off and gives some examples, for example, the fee floor and how long do they have the commitment. Look, the short answer to that is yes. Absolutely, all of that type of stuff is going to be covered in our proposal that will be coming back to shareholders for consideration and a vote in August. And a second question, I'll paraphrase. Have you considered the merger with Northport to become the country's northernmost multipurpose port and the closest to most of New Zealand's international markets? The answer is yes, but I'll get Naomi to expand a little bit on that. So we're certainly in regular dialogue with North Port around their expansion. Plans is our closest neighbor. We are in different markets and businesses. They're obviously in today operating a wood based export operation, but with a proposal to expand it. Our focus is on transport fuels. But we continue to talk to them about what their future ambitions are and where there is synergy and opportunities between the sites between the two operations, we'll obviously continue to look at those things going forward. Over there. Thank you. I don't like the sound of my own voice, but last time, I promise you. First point, I'd like to make you long term. Your long term plan will mean we'll be doing no more refining in New Zealand. You'll definitely need to change your name. Accepted. Okay. The second one is, just clarify for me, are you aware of any other economy of similar size in the world that has closed down its only oil refinery successfully, please? I'll take the second question on notice if we have studied that. Yes. I mean, there are countries around the world that are going through the same challenges as us. So certainly, there are countries that do rely on the import of refined fuel. And an important one for New Zealand is we're needing to import our fuel either way. So because we don't have domestic production of oil of any significant volume, we are needing to rely on imports for our fuel sources. I have a question online, a long one. I understand the challenges of the company. It is known that the conditions in New Zealand are poor compared to oil refineries in Asia. For the same reason, Australia has also closed several refineries so far and changed its direction to import instead. I think this question is actually suggesting that we do something with Northport and that we do work with the refinery to Auckland pipeline. So that question is really a question about what are we doing in that area. And I think probably we have answered that question with what we're doing with the refinery pipeline. And anything that's not answered there will be in the documentation relating to that we'll be bringing to shareholders forthwith. Thank you. Has the refinery considered Sorry, I'm not seeing the other questioners, sorry. Sorry, you can ask it. Okay. We'll pass it over to here. Thank you. I'm Haley Chang. I'm a shareholder of this company. Just to let lady have a nice day tonight. That lady just mentioned about all the imports for refineries. Actually, New Zealand refinery imported it from South Korea and Singapore. They are of high quality. Don't worry about the China one because Chinese, the company's Chinese don't have enough oil to use and import it from Russia. Have a nice sleep tonight. Thank you. Did you have a question at the back there? No? Yes, thank you. Yes, it's Colin Abchin, shareholder. White's a very popular color. We've got an elephant in the room. I just wanted to try and get a little understanding about impairment of assets. Now obviously, this year, for very obvious reasons, impairment is the biggest single financial figure in there apart from revenue, which only pips it by a whisker. Now the balance sheet is at December. We're now at the end of June. Some things have moved on and no doubt there's been lots of more information available now. And I'm not asking for predictions and vision, but can you please have a bit of a discussion or a bit of information about what's the impairment charge potentially going to be for the current year because that will give me an indication as to whether or not going forward the assets are going to be with more, perhaps less than they are after the impairment charges being charged to the accounts in the year to December 'twenty. So where are we going with impairment? What are the factors that influence it? And I appreciate can't be specific in terms of numbers, but I'd just like to know if we got a serious exposure to this number being $100,000,000 more or $100,000,000 less. Thanks for the question. As you noted, we took a significant impairment charge at the end of last year. And that was primarily driven by a change in the external expert commentator that we use, the external forecast that we use for the outlook for refining margins. That was the key driver of that impairment. We will continue to test carrying value each time we're preparing accounts as we move forward. And when we do that, we again look at those key drivers of carrying value. Refining margins is often the most significant and also the most volatile. But FX, our cost base and our throughput outlooks also contribute to those calculations. So it's not possible to sort of predict other than to say that continues to be assessed each time we're at those period ends with preparation of our accounts. And our half year accounts will be finalized and released in August in our usual process. Thank you. Clive? Thank you, Mr. Chairman. I think Coralie VanCamp's call really has taken some of it. But besides importing the oil, I mean, I've heard Singapore and one other area I wasn't sure. But are we looking at importing refined product from other sources besides Singapore and the other place we have just mentioned, Fristau? So that's a customer question actually, and it's the customers that will source their product as they do now. We don't produce all of New Zealand's fuel, and fuel is imported from around from different locations already into several other terminals in New Zealand, Tauranga and in the South Island as well. So just a reminder, we tend to be supplying by coastal tanker around New Zealand at the moment, but also the Auckland and Northern markets. So there's already quite a strong importing market from a variety of supply. It's up to individual customers. Any more questions? The news is that the rail track from Auckland to Monterey is being upgraded, a side rail to Marsden Point. Have you considered that alternative for transport of fuels as cost effective? I'm going to ask Naomi. Yes, we have, but ask Naomi to comment. So the pipeline today is the lowest cost, lowest carbon transport route for fuel into Auckland. It has more than enough capacity to meet Auckland's forecast supply requirements. So we are not actively considering an alternate route in terms of rail for fuel transport. I'm going to offer to have a chat later on any other questions that you have. And are there any other questions from the floor? I have no more questions online. So I would declare the meeting closed and offer refreshments at the back for everybody. Thank you.