Luberef is a highly specialized, standalone base oil producer with global scale assets and a unique position in the Middle East:

‍

• Luberef is a pure play base oil producer, with facilities optimized for base oil production and is the only virgin base oil producer in the Kingdom.
• The Company’s base oil production capacity of 1.3 million MT per annum positions it as the second largest producer by capacity⁶ in the Middle East in 2021G, leveraging its long-term agreements with Saudi Aramco for the provision of its high-quality Arab-light feedstock.

• Luberef’s production assets have competitive scale globally⁷ with the Yanbu facility ranking among the largest ten refining facilities globally in terms of capacity when including the planned Yanbu Growth II expansion project.

• The Company is integrated within Saudi Aramco’s system and supplies critical products to the Kingdom.
• The Company has a network of global marketing and logistical hubs in strategic locations, including the Kingdom and the UAE, which Luberef utilizes to export its products regionally and globally.
• The Company’s participation in the Aramco Base Oil Alliance allows it to supply base oils to key markets in Asia and the Americas through its partners, S-Oil and Motiva, to benefit from additional demand in other markets.

‍

⁶ _{Market Consultant Report - IHS Markit and the Company for Company data}

⁷ _{Market Consultant Report - IHS Markit and the Company for Company data}

‍

Luberef has advantaged value chain positions due to long term access to high quality, low value reduced crude oil feedstock, operational cost leadership, strategically located production assets, and long-standing relationships with key customers:

‍

• Luberef has advantaged value chain positions in feedstock supply, assets and operations, and customer relationships.
• The Company enjoys long-term agreements with Saudi Aramco for the provision of its high-quality Arab-light feedstock.
• Luberef’s high quality, low value reduced crude oil feedstock, the main feedstock used by the Company, has an optimal composition for use in producing base oils, and its market price is typically lower per barrel than Brent due to its high sulfur content⁸.
• The Company’s advantaged feedstock position and reliability of supply enable high plant utilization (87% in 2021G ) and base oil production, resulting in high operational efficiency, supply and resilience.
• The Company’s base oil unit production cost, excluding feedstock, was approximately USD 119 per MT in 2021G, over 60% lower than the average for other base oil producers⁹ due to its asset quality and scale, energy efficiency, and high utilization from secured feedstock.
• The Company has deep, multi-decade relationships with globally and regionally renowned base oil customers, due to the reliability and quality of its base oil supply.

‍

⁸ _{Market Consultant Report - IHS Markit and the Company for Company data}

⁹ _{Market Consultant Report - IHS Markit and the Company for Company data}

‍

The Company has a track record of value-added growth with attractive opportunities to capture projected market growth in key end-markets:

‍

• Luberef has grown its base oil production capacity and sales volumes, with the most recent Yanbu Growth I expansion project, allowing the Company to introduce Group II base oil production capacity into Saudi Arabia to cater for domestic and regional demand.
• The expansion of the Yanbu facility following the implementation of the Yanbu Growth I expansion project increased production capacity of the facility by 710 thousand MT, and resulted in an approximately 50% increase in Group II base oil sales volumes in 2021G compared to 2020G.
• The demand outlook for base oils is further supported by strong macro fundamentals in Saudi Arabia and the broader Middle East region, which are key end-markets for Luberef, with real GDP expected to grow at a CAGR of approximately 2.5% in Saudi Arabia and approximately 3.3%, in the Middle East between 2021G and 2030G¹⁰.
• The Company intends to continue to benefit from the structural growth in global demand growth for Group II and Group III base oils which are expected to grow at a CAGR of 3.5% and 4.8% between 2022G and 2030G, respectively¹¹.
• The next phase of the Company’s growth story includes the Yanbu Growth II expansion project, which is planned to be completed in 2025G, and which will add additional Group II base oil production capacity and introduce Group III base oil production capacity to Luberef.
• The relationship with Saudi Aramco and its asset portfolio presents a unique platform for additional opportunities for further growth, with demand for base oils globally expected to increase by approximately 5 million MT between 2022G and 2030G¹².

‍

¹⁰ _{Market Consultant Report - IHS Markit}

¹¹ _{Market Consultant Report - IHS Markit}

¹² _{Market Consultant Report - IHS Markit}

‍

Luberef’s high margins, high cash conversion and high returns underpin a robust financial framework and allow for optimum shareholder value:

‍

• In FY 2021G, Luberef generated approximately SAR 8,847 million (USD 2,359 million) in revenues and SAR 2,096 million (USD 559 million) in EBITDA resulting in cash conversion of 83% and a ROACE of 31%. Furthermore, the Company distributed SAR 938 million (USD 250 million) of dividends to its shareholders during that period.
• The Company achieved a base oil crack margin of SAR 2,250 (USD 599) per MT in FY 2021G.
• The Company’s strong financial performance in FY 2021G is attributed to an increase in Group II base oils sales volumes following full ramp up of its Yanbu Growth I expansion project in 2021G, in addition to high demand that was met with tight supply in the base oil market due to lack of feedstock from refinery operations of some base oil producers.
• The Company operates within a robust financial framework that focuses on three key elements including capital structure, capital investments and shareholders returns.
• The Company targets a prudent capital structure and strong liquidity position, with a target gearing ratio of 25-35% through the cycle and gearing of 15% at December 2021G.
• The Company's operational setup requires low maintenance capex, given its well invested asset base, preventative maintenance programs, the recently completed and ramped up expansions, and a rigorous capital allocation process for growth projects, all of which underpin a robust financial profile which the Company believes is beneficial to ROACE.

‍

Luberef has a strong commitment to environmental and social performance and a robust governance framework:

‍

• Luberef has a goal to foster environmental excellence. The Company delivered a 40% flaring reduction in 2021G vs. 2020G, as well as an approximate 45% CO₂ emission reduction in 2021G vs. 2016G¹³  
• The Company is also exploring new opportunities and collaboration for low carbon hydrogen production and opportunities to reduce the sulfur content of its fuel oil and base oils.
• The Company collaborated with KAUST to target up to an 85% reduction in sulphur content of its fuel oil and base oils.
• The Company has a goal to contribute to the well-being and safety of its employees and the communities it operates in. In 2021G, the Company reported a total recordable incident rate of 0.0, which reflects its efforts for employee safety.
• From a governance perspective, the Company has an experienced Board of Directors, with defined corporate governance policies aligned with the applicable governance regulations.
• The Company maintains an arms-length relationship with Saudi Aramco, with key feedstock purchases and product sales conducted on an arm’s length basis.

‍

¹³_{Based on CO2 generated per valuable product produced i.e., base oils, naphtha, ULSD, and drilling fluid.}

‍

The Company’s experienced management team has decades of expertise across the value chain and is committed to foster operational excellence and innovation:

‍

• Luberef has a highly experienced leadership team, with strong sector knowledge, and a deep commitment to maintaining the highest standards of excellence at the Company.
• The senior management team has over 170 years of combined experience across various operational and financial areas.