NP - Strategic Focus Newsletter - December 2014

DECEMBER 2014

time in decades initiated many new business ventures that will make NP a competitive player in the petroleum sales and marketing sector in the region. More, we have improved our credibility as an employer practising good industrial relations and a socially responsible national corporation.

Domestic Market

Earlier this year we signed a Memorandum of Understanding (MOU) with the NGC/CNG Company of Trinidad and Tobago to have CNG available at most of our NP stations and at all our New to Industry (NTI) sites. We made considerable headway and received very positive feedback on our campaign to rebrand and upgrade our QuickShoppes. Our partners (the franchisee operators) worked with us to strengthen our new image, giving our stations a modern look and improved functionality. We made safety the top priority at all our service stations, ensuring the protection of our staff and valued customers. We have started to build NTI sites in many different parts of the country: Tumpuna Road, Arima; Trincity; Guayamere; and El Socorro. Work is in progress also at Starlite, Diego Martin and St. Christopher’s on Wrightson Road.

www.np.co.tt/Trinidad & Tobago National Petroleum @TrinidadNP TrinidadNP

NEWSLETTER

2014 has seen NP use the platform of profitability, performance, stability and security that we built during the three years 2010-2013 to carry its name regionally. Our aim was to achieve superior results in every aspect of the company’s management and operations. Many businesses know their own product and sometimes forget that other people need to be energised by the product as well. Our brand should make you feel something when you say the name NP. This is what management and the Board of Directors have done over the last three years.

2014 Achievements

This has been a year in which we have been able to fulfil our mandate to maintain a consistent supply of fuel and lubricants to all our customers. We have for the first

Corporate Social Responsibility

Our social responsibility programme has been extremely welcomed by those communities and groups that benefit from our activities. We have continued our Music Literacy Programme for another set of students (the fourth) from our fenceline community in the Beetham, Laventille and Morvant areas, and for the second straight year we sponsored defensive driving sessions for Form 6 students at secondary schools.

Regional and Hemispheric

Our plan to position NP as a regional player in the sales of lubricants and fuel was off to a highly successful start. In December 2014, the Company opted to blend, for the first time, a synthetic oil under the Ultra brand locally, rather than importing a finished synthetic product. By March 2015 we will have a CNG oil for CNG motor vehicles, the first of its type in Trinidad and Tobago. This opens up a brand new world of possibilities for us and can be our stepping stone to competitiveness in the hemispheric market and beyond.

Continued on next page

OUR BRAND

As NP continues to grow, we are making efforts to ensure that our brand is more visible to the travelling public. To this end, we have installed signage at one of the gates in the East Concourse at Piarco International Airport that includes NP-branded chairs, a column wrap and a power charging table. Passengers in the area can now relax and recharge with NP.

A MESSAGE FROM CHAIRMAN NEIL GOSINE

NEW SIGNAGE INSTALLED AT PIARCO AIRPORT CONCOURSE

ChairmanNeil Gosine


NP is in the process of reviewing and updating its Performance Management System. There are many components to performance management that contribute to creating a work environment that both enables and encourages employees to perform optimally. Under the system, jobs are monitored and evaluated from the moment they are defined to the moment an employee leaves the organisation.

The first phase of revising the Performance Management System is the review and development of Key Performance Indicators (KPIs). KPIs are used to:• Clearly communicate goals to employees so they understand what they

are contributing to• Create useful and meaningful measures of performance that people

actually use and value to improve performance• Make lasting improvements in performance rather than putting band-

aids on symptoms

PERFORMANCE MANAGEMENT —AT THE HEART OF AN ORGANISATION’STRANSFORMATION

Chairman’s Message continued

Industrial Relations

After years of work stoppages and low productivity, 2014 was the year of improved efficiency and no work stoppages. This has helped to bring back a calm through the organisation and has helped us to support the State during this period when we are experiencing a sharp and continuing fall in oil prices. The improved industrial relations climate, the tighter control on expenditure, as well as the procedures and protocols put in place to maintain accountability all helped us to build on the $22M we made in 2012 and $11.7M in 2013. Our expectation is that we will record a reasonable profit of $37M in 2014.

Issues in 2014

This is in no way intended to give the impression that 2014 did not have significant challenges that tested our resolve and capacity. The Industrial Court case emanating from workers who took part in an illegal strike continues in the Court of Appeals. Although this is hard for all of us, we continue to monitor and hope to resolve the issue soon. We have continued to work closely with Petrotrin to ensure a continuous supply of fuel from them. We are taking all necessary steps to deal with the disruption of our company’s fuel distribution process with an aim to provide the public with dependable, easily accessible, modern and clean stations that they can enjoy using.

The ongoing challenge of the illegal storage and sale of diesel fuel or the “diesel racket” continues to be a burden on us. No action has yet been taken by the police to deal with the evidence already in their hands. We will continue working with the Ministry of Energy and Energy Affairs to investigate and eradicate this scourge.

The Year Ahead — 2015

In 2015, we plan to partner with a lubricant plant in South America to distribute our lubricants and greases in this potentially lucrative market. Provided approval is given by the Corporation Sole for establishing a subsidiary company in Haiti, we intend to finalise supply agreements with nine Dealer-Owned Dealer-Operated stations and supply fuel for these stations in Haiti. Our long-term goal is the cargo sale of petroleum fuels and lubricants to regional and international markets. In our Lubricating Oil Blending Plant, we upgraded the 1AG and 5AG filling lines which are critical for the launch of our new bottle design. With the commissioning of these lines in 2015, we anticipate growth in areas of the retail sector that were previously untapped through a combination of marketing strategies, including more modern packaging.

We plan to get larger ships to use our bunkering services and so will be partnering with National Infrastructure Development Company Limited to dredge the Port of Spain harbour. This will ease the pressure at the port and bring in new clients. We have

signed an MOU with the National Energy Corporation to build an 8,000bbl tank at the Port of Galeota for marine bunkering and supply of fuel to Exploration and Production customers.

The plan of the Board and management is to concentrate on expanding our fuel storage capacity in 2015. We completed a diesel tank at the Tobago Terminal which increased the storage in the island to last almost two weeks. At the same time, work is in progress on the installation of mobile, above-ground fuel storage at fishing depots in La Ruffin, Moruga.

We will continue to improve the safety of our QuikShoppes and our partners by installing 20 bulletproof kiosks at all our 24/7 sites.

Stakeholder Relations

As the Chairman of NP, I want to see all of us — Board, management, employees, suppliers, distributors, partners and even customers — continue to hold NP as a cherished and preferred brand, distinguished by safety, efficiency and commitment to national development. People think having courage means you have no fear. I believe courage is taking action despite the fear, and I hope both the Board and management can overcome this fear and cement NP’s place through efficiency in service delivery, expanding the brand regionally, being the leader in the national retail fuel marketing business, and as the flagship of our country internationally.

Geeta Ragoonath, General Manager Human Resources (standing), conducts HR training with managers and supervisors.

CULTURE

After a one-year hiatus, Ultra Lubricants re-entered the rallying fraternity in 2014 as sponsors of a 2003 UK-built Group A Mitsubishi Evolution VIII rally car driven by Cristian Bourne and navigated by Jesu De Gannes.

Cristian has developed a solid track record over the years, winning the overall rally championship in 2012 when he was also named the FCB Sports Nominee for Rally. In addition to being a fierce competitor, Cristian is a crowd favourite whose fearless style of driving is always highly anticipated by spectators. His commitment to excellence and constant drive to be the best makes him an ideal partner for Ultra.

The Trinidad & Tobago Rally Club (TTRC) held its 10th Anniversary Rally Trinidad from March 27th-30th 2014 with 24 special stages held at various locations, including a night stage at the Hasely Crawford Stadium and several high-speed stages in south and central Trinidad. Facing over 30 competing teams including experienced regional and international drivers, Ultra-sponsored

Cristian Bourne placed 1st in Group A and 4th overall. In the ensuing local rally event held on May 4th 2014 at Preysal, he placed 2nd in Group A and 2nd overall, and ended the 2014 rally season as the Group A champion.

Cristian maintains his competitive edge under harsh and demanding rallying conditions using a special blend of NP’s fully synthetic engine oil, Ultra Tec.

Check out aerial footage of Cristian driving at Rally Trinidad at http://youtu.be/Tq5XFuCorvA or come out and see him and other Ultra-sponsored rally cars in action at Rally Trinidad 2015 (dates to be announced).

Cristian is also the owner of one of the leading service centres in West Trinidad, CRISM Limited, where Ultra Lubricants are also retailed.

ULTRA-SPONSORED RALLY CARRACES TO VICTORY

OUR BRAND

BUSINESS VENTURES

NP TO ENGAGE IN INTERNATIONAL FUEL TRADINGNP is currently positioning itself to commence the trading of fuel in the regional and international markets. On November 6th 2014, the Board of Directors granted approval to implement this new initiative beginning with an initial two trading transactions in these markets. Fuel will be sourced from Petrotrin and other international suppliers/traders of fuel, and NP will enter into respective sales agreements with regional and international buyers of fuel. The trading of fuel will present opportunities to contribute significantly to NP’s revenue and profitability.

• Get tight alignment of measures to strategy and not waste effort on irrelevant measures• Streamline the measurement and

reporting process to reduce cost, effort and cycle time

The second phase features the review of the performance appraisal at the department and individual levels. New tools and methodologies to improve the appraisal process were introduced during

training sessions with managers and supervisors in October and November, led by Geeta Ragoonath, General Manager Human Resources. The programme entitled “Performance Appraisals – How to Conduct Effectively” taught participants to identify the importance and benefits of performance appraisals, assess and prepare relevant documentation, set motivational goals, plan for effective appraisal interviews and conduct fair and beneficial appraisals. This new approach will be adopted throughout the

company including the Dominica and Tobago operations in 2015.

In addition to training managers and supervisors, the training will be offered to all employees to develop an understanding of how performance appraisals work and their role in preparing and participating. These initiatives will assist in NP’s drive towards the development of a performance-oriented culture.

CULTURENP HOSTS CHRISTMAS COCKTAILPARTY FOR DEALERS AT ARIA LOUNGE


DISTRIBUTION NETWORK

On December 4th 2014, NP simulated a hazard event at the Piarco facility in which two employees of a contractor firm conducted hot works on Bulk Storage Tank # (13), while Jet A 1 Fuel was being discharged from an RTW into Horizontal Jet A 1 Bulk Storage Tank # A (12), located approximately 18 feet east of Bulk Storage Tank # 13. Bulk Storage tank # A (12) malfunctioned and fuel from it came into contact with sparks and slags from the hot works, resulting in a fire. After an unsuccessful attempt to extinguish the flames with portable fire extinguishers, the two contractors were trapped by the heat and smoke, rendering them unable to evacuate the tank. Upon noticing the fire, the stock attendant activated the pull station located at the Bridging Hut and contacted the aviation supervisor via radio, informing him of the situation, which resulted in a general evacuation. The head count revealed that the two contractor employees were missing.

Simulations of this nature are critical to maintaining health and safety best practices in all our operations. Objectives of the drill included an evaluation of the company’s Policy and Emergency Response Plan, and informing the drafting and implementation of a site-specific Emergency Response Plan for the facility.

The exercise also aimed to ensure that the Company meets OSHA, ISO and legal requirements for obtaining a fire certificate. The simulation tested the adequacy of the fire alarm system in lieu of the installation of additional storage tanks and LFP equipment at the facility, as well as the response times of external agencies to incidents at the facility.

The drill was a collaborative exercise among the Airports Authority of Trinidad and Tobago, the Trinidad and Tobago Civil Aviation Authority, Piarco Fire Services and NP Security.

NP PIARCO EXECUTES FIRE DRILL


CULTURECULTURE

Children of NP employees enjoyed a wonderful yuletide treat at our annual Children’s Christmas Party which took place on Sunday 7th December in the eastern car park at NP House. About 200 children were entertained in a day of fun-filled activities which included face-painting, a mechanical bull and a large bouncy castle. They also got to interact with cartoon characters such as SpongeBob SquarePants, Dora the Explorer and Minnie Mouse who brought endless smiles to the children’s faces. Santa Claus was present, giving out gifts to the very grateful kids. Perhaps the most memorable aspect of the party was the magic show by Abracadabra the Magician, who wowed the children with amazing tricks and humorous jokes. All in all, a great time was had by the children and even the parents, who spent a fun day together enjoying NP’s Christmas cheer.

NP SPREADS JOY AT CHILDREN’S CHRISTMAS PARTY

• Get tight alignment of measures to strategy and not waste effort on irrelevant measures• Streamline the measurement and

reporting process to reduce cost, effort and cycle time

The second phase features the review of the performance appraisal at the department and individual levels. New tools and methodologies to improve the appraisal process were introduced during

training sessions with managers and supervisors in October and November, led by Geeta Ragoonath, General Manager Human Resources. The programme entitled “Performance Appraisals – How to Conduct Effectively” taught participants to identify the importance and benefits of performance appraisals, assess and prepare relevant documentation, set motivational goals, plan for effective appraisal interviews and conduct fair and beneficial appraisals. This new approach will be adopted throughout the

company including the Dominica and Tobago operations in 2015.

In addition to training managers and supervisors, the training will be offered to all employees to develop an understanding of how performance appraisals work and their role in preparing and participating. These initiatives will assist in NP’s drive towards the development of a performance-oriented culture.

CULTURENP HOSTS CHRISTMAS COCKTAILPARTY FOR DEALERS AT ARIA LOUNGE


DISTRIBUTION NETWORK

On December 4th 2014, NP simulated a hazard event at the Piarco facility in which two employees of a contractor firm conducted hot works on Bulk Storage Tank # (13), while Jet A 1 Fuel was being discharged from an RTW into Horizontal Jet A 1 Bulk Storage Tank # A (12), located approximately 18 feet east of Bulk Storage Tank # 13. Bulk Storage tank # A (12) malfunctioned and fuel from it came into contact with sparks and slags from the hot works, resulting in a fire. After an unsuccessful attempt to extinguish the flames with portable fire extinguishers, the two contractors were trapped by the heat and smoke, rendering them unable to evacuate the tank. Upon noticing the fire, the stock attendant activated the pull station located at the Bridging Hut and contacted the aviation supervisor via radio, informing him of the situation, which resulted in a general evacuation. The head count revealed that the two contractor employees were missing.

Simulations of this nature are critical to maintaining health and safety best practices in all our operations. Objectives of the drill included an evaluation of the company’s Policy and Emergency Response Plan, and informing the drafting and implementation of a site-specific Emergency Response Plan for the facility.

The exercise also aimed to ensure that the Company meets OSHA, ISO and legal requirements for obtaining a fire certificate. The simulation tested the adequacy of the fire alarm system in lieu of the installation of additional storage tanks and LFP equipment at the facility, as well as the response times of external agencies to incidents at the facility.

The drill was a collaborative exercise among the Airports Authority of Trinidad and Tobago, the Trinidad and Tobago Civil Aviation Authority, Piarco Fire Services and NP Security.

NP PIARCO EXECUTES FIRE DRILL


NP is in the process of reviewing and updating its Performance Management System. There are many components to performance management that contribute to creating a work environment that both enables and encourages employees to perform optimally. Under the system, jobs are monitored and evaluated from the moment they are defined to the moment an employee leaves the organisation.

The first phase of revising the Performance Management System is the review and development of Key Performance Indicators (KPIs). KPIs are used to:• Clearly communicate goals to employees so they understand what they

are contributing to• Create useful and meaningful measures of performance that people

actually use and value to improve performance• Make lasting improvements in performance rather than putting band-

aids on symptoms

PERFORMANCE MANAGEMENT —AT THE HEART OF AN ORGANISATION’STRANSFORMATION

Chairman’s Message continued

Industrial Relations

After years of work stoppages and low productivity, 2014 was the year of improved efficiency and no work stoppages. This has helped to bring back a calm through the organisation and has helped us to support the State during this period when we are experiencing a sharp and continuing fall in oil prices. The improved industrial relations climate, the tighter control on expenditure, as well as the procedures and protocols put in place to maintain accountability all helped us to build on the $22M we made in 2012 and $11.7M in 2013. Our expectation is that we will record a reasonable profit of $37M in 2014.

Issues in 2014

This is in no way intended to give the impression that 2014 did not have significant challenges that tested our resolve and capacity. The Industrial Court case emanating from workers who took part in an illegal strike continues in the Court of Appeals. Although this is hard for all of us, we continue to monitor and hope to resolve the issue soon. We have continued to work closely with Petrotrin to ensure a continuous supply of fuel from them. We are taking all necessary steps to deal with the disruption of our company’s fuel distribution process with an aim to provide the public with dependable, easily accessible, modern and clean stations that they can enjoy using.

The ongoing challenge of the illegal storage and sale of diesel fuel or the “diesel racket” continues to be a burden on us. No action has yet been taken by the police to deal with the evidence already in their hands. We will continue working with the Ministry of Energy and Energy Affairs to investigate and eradicate this scourge.

The Year Ahead — 2015

In 2015, we plan to partner with a lubricant plant in South America to distribute our lubricants and greases in this potentially lucrative market. Provided approval is given by the Corporation Sole for establishing a subsidiary company in Haiti, we intend to finalise supply agreements with nine Dealer-Owned Dealer-Operated stations and supply fuel for these stations in Haiti. Our long-term goal is the cargo sale of petroleum fuels and lubricants to regional and international markets. In our Lubricating Oil Blending Plant, we upgraded the 1AG and 5AG filling lines which are critical for the launch of our new bottle design. With the commissioning of these lines in 2015, we anticipate growth in areas of the retail sector that were previously untapped through a combination of marketing strategies, including more modern packaging.

We plan to get larger ships to use our bunkering services and so will be partnering with National Infrastructure Development Company Limited to dredge the Port of Spain harbour. This will ease the pressure at the port and bring in new clients. We have

signed an MOU with the National Energy Corporation to build an 8,000bbl tank at the Port of Galeota for marine bunkering and supply of fuel to Exploration and Production customers.

The plan of the Board and management is to concentrate on expanding our fuel storage capacity in 2015. We completed a diesel tank at the Tobago Terminal which increased the storage in the island to last almost two weeks. At the same time, work is in progress on the installation of mobile, above-ground fuel storage at fishing depots in La Ruffin, Moruga.

We will continue to improve the safety of our QuikShoppes and our partners by installing 20 bulletproof kiosks at all our 24/7 sites.

Stakeholder Relations

As the Chairman of NP, I want to see all of us — Board, management, employees, suppliers, distributors, partners and even customers — continue to hold NP as a cherished and preferred brand, distinguished by safety, efficiency and commitment to national development. People think having courage means you have no fear. I believe courage is taking action despite the fear, and I hope both the Board and management can overcome this fear and cement NP’s place through efficiency in service delivery, expanding the brand regionally, being the leader in the national retail fuel marketing business, and as the flagship of our country internationally.

Geeta Ragoonath, General Manager Human Resources (standing), conducts HR training with managers and supervisors.

CULTURE

After a one-year hiatus, Ultra Lubricants re-entered the rallying fraternity in 2014 as sponsors of a 2003 UK-built Group A Mitsubishi Evolution VIII rally car driven by Cristian Bourne and navigated by Jesu De Gannes.

Cristian has developed a solid track record over the years, winning the overall rally championship in 2012 when he was also named the FCB Sports Nominee for Rally. In addition to being a fierce competitor, Cristian is a crowd favourite whose fearless style of driving is always highly anticipated by spectators. His commitment to excellence and constant drive to be the best makes him an ideal partner for Ultra.

The Trinidad & Tobago Rally Club (TTRC) held its 10th Anniversary Rally Trinidad from March 27th-30th 2014 with 24 special stages held at various locations, including a night stage at the Hasely Crawford Stadium and several high-speed stages in south and central Trinidad. Facing over 30 competing teams including experienced regional and international drivers, Ultra-sponsored

Cristian Bourne placed 1st in Group A and 4th overall. In the ensuing local rally event held on May 4th 2014 at Preysal, he placed 2nd in Group A and 2nd overall, and ended the 2014 rally season as the Group A champion.

Cristian maintains his competitive edge under harsh and demanding rallying conditions using a special blend of NP’s fully synthetic engine oil, Ultra Tec.

Check out aerial footage of Cristian driving at Rally Trinidad at http://youtu.be/Tq5XFuCorvA or come out and see him and other Ultra-sponsored rally cars in action at Rally Trinidad 2015 (dates to be announced).

Cristian is also the owner of one of the leading service centres in West Trinidad, CRISM Limited, where Ultra Lubricants are also retailed.

ULTRA-SPONSORED RALLY CARRACES TO VICTORY

OUR BRAND

BUSINESS VENTURES

NP TO ENGAGE IN INTERNATIONAL FUEL TRADINGNP is currently positioning itself to commence the trading of fuel in the regional and international markets. On November 6th 2014, the Board of Directors granted approval to implement this new initiative beginning with an initial two trading transactions in these markets. Fuel will be sourced from Petrotrin and other international suppliers/traders of fuel, and NP will enter into respective sales agreements with regional and international buyers of fuel. The trading of fuel will present opportunities to contribute significantly to NP’s revenue and profitability.

DECEMBER 2014

time in decades initiated many new business ventures that will make NP a competitive player in the petroleum sales and marketing sector in the region. More, we have improved our credibility as an employer practising good industrial relations and a socially responsible national corporation.

Domestic Market

Earlier this year we signed a Memorandum of Understanding (MOU) with the NGC/CNG Company of Trinidad and Tobago to have CNG available at most of our NP stations and at all our New to Industry (NTI) sites. We made considerable headway and received very positive feedback on our campaign to rebrand and upgrade our QuickShoppes. Our partners (the franchisee operators) worked with us to strengthen our new image, giving our stations a modern look and improved functionality. We made safety the top priority at all our service stations, ensuring the protection of our staff and valued customers. We have started to build NTI sites in many different parts of the country: Tumpuna Road, Arima; Trincity; Guayamere; and El Socorro. Work is in progress also at Starlite, Diego Martin and St. Christopher’s on Wrightson Road.


NEWSLETTER

2014 has seen NP use the platform of profitability, performance, stability and security that we built during the three years 2010-2013 to carry its name regionally. Our aim was to achieve superior results in every aspect of the company’s management and operations. Many businesses know their own product and sometimes forget that other people need to be energised by the product as well. Our brand should make you feel something when you say the name NP. This is what management and the Board of Directors have done over the last three years.

2014 Achievements

This has been a year in which we have been able to fulfil our mandate to maintain a consistent supply of fuel and lubricants to all our customers. We have for the first

Corporate Social Responsibility

Our social responsibility programme has been extremely welcomed by those communities and groups that benefit from our activities. We have continued our Music Literacy Programme for another set of students (the fourth) from our fenceline community in the Beetham, Laventille and Morvant areas, and for the second straight year we sponsored defensive driving sessions for Form 6 students at secondary schools.

Regional and Hemispheric

Our plan to position NP as a regional player in the sales of lubricants and fuel was off to a highly successful start. In December 2014, the Company opted to blend, for the first time, a synthetic oil under the Ultra brand locally, rather than importing a finished synthetic product. By March 2015 we will have a CNG oil for CNG motor vehicles, the first of its type in Trinidad and Tobago. This opens up a brand new world of possibilities for us and can be our stepping stone to competitiveness in the hemispheric market and beyond.

Continued on next page

OUR BRAND

As NP continues to grow, we are making efforts to ensure that our brand is more visible to the travelling public. To this end, we have installed signage at one of the gates in the East Concourse at Piarco International Airport that includes NP-branded chairs, a column wrap and a power charging table. Passengers in the area can now relax and recharge with NP.

A MESSAGE FROM CHAIRMAN NEIL GOSINE

NEW SIGNAGE INSTALLED AT PIARCO AIRPORT CONCOURSE

ChairmanNeil Gosine

NP - Strategic Focus Newsletter - December 2014

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