REFINERIES OPPORTUNITIES BRIEF OVERVIEW: TANK DE-SLUDGING, PAINTING AND INSULATION

1. Introduction 2. Purpose 3. Vision 4. Business drivers 5. Roles and Responsibilities Matrix

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1. INTRODUCTION In 2007 South African Refineries came together at Engen in Durban to find solutions to critical issues affecting them; one of the issues being the skills shortage and the other being the overall poor performance of the oil industry in Enterprise Development Initiatives. The BEE Refinery Managers Forum was formed to address the needs in these two areas, where a mandate was given to the forum to identify sustainable projects that would result in the creation of 100% Black owned, competent suppliers, that would be able to supply goods and services in the refinery environment for all the South African refineries. The forum has developed this Business Model against which all the forums Enterprise Development initiatives will be modeled. The initial aim was to develop existing 100% BEE suppliers in the field of High Pressure Cleaning, with a view to creating 100% BEE companies that are able to compete equally with other existing suppliers in the area of High Pressure Cleaning and Facilities Management. While this remains an ultimate goal of the Refineries Forum, it was decided that the scope of work be scaled down to cover only Tank De-sludging, Painting and Insulation initially, because of the complexity of the scope of work involved in Vacuum, High Pressure and Chemical Cleaning, and thus the many possible barriers to entry to these areas for new companies. These 3 areas will be considered at later stage.

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The potential short list of suppliers will be selected by SASDA against a jointly agreed set of criteria to ensure fairness and transparency of the system. Taking into account competition law and the stringent restrictions it places on industry players, the Refineries Forum decided that it would be best to have SASDA conducting the selection process. We have identified 3 key role-players at the onset of this project: BEE Refineries Forum members Maintenance Managers from each refinery SASDA

2. PURPOSE The purpose of this document is to propose a solution that will further the aims of the Liquid Fuels Charter, the Charter, and the transformation objectives of the South African Refineries in the area of Enterprise Development. The South African Refineries Forum aims to facilitate the development of suppliers to ensure that they meet the petroleum industrys requirements and standards, in order to ensure that developed suppliers are given preferential access to procurement

opportunities.

3. REFINERIES FORUM VISION To select and develop successfully small to medium sized, 100% Black Owned Companies that will be able to operate independently and safely, whilst adding the required value to the industry.

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4. BUSINESS DRIVERS To develop successfully 100% black owned businesses in this field in terms of: Health Environment and Safety Quality and Reliability Business Management and Administration Sustainability

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RACI MATRIX OF ROLES AND RESPONSIBILITIES R = Responsible; A = Accountable; C = Consult; I = Inform BRF BEE Refinery Forum (BRF) General guidance to SASDA throughout feasibility, sourcing, development and management process Review and provide approval at hold points throughout process Facilitate the collective development of BEE suppliers Allocation (Set aside) of 30% of each refineries total spent Enterprise Development Task Team (EDTT) Monitoring progress and develop strategies for intervention where hurdles are encountered General Managers Refinery Forum (GMRF) R Ensure effective communication of Strategic objectives to all relevant stakeholders R Spread all strategic input and buy-in to all stakeholders R Create a supporting and enabling environment for program success SASDA Perform needs analysis for Industry and identify who are the current market players (including the total spend per category) Conduct a GAP analysis with black suppliers already in the high pressure cleaning industry Draw Project plan and budget I/C Implement, monitor and report on project(s) I/C I/C R/A I/C I/C I/C I/C I/C I/C I/C I/C I/C R/A R/A R/A I/C I/C I/C I/C I/C I/C I/C I/C I/C I/C I/C I/C I/C R R R I/C I/C I/C A I/C I/C I I/C R I/C I/C I/C EDTT GMRF SASDA

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6. REFINERIES FORUM ROLES AND RESPONSIBILITY General guidance to SASDA throughout feasibility, sourcing, development and management process; Review and provide approval at hold points throughout process; Facilitate the collective development of BEE suppliers; This to be reflected by allocation (Set aside) of 30% of each refineries total spent.

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