Caltex Australia

Regulatory clearance

• The acquisition is subject to regulatory review and clearance by the Australian Competition and Consumer Commission (ACCC) and the Foreign Investment Review Board (FIRB).
• Caltex will continue to co-operate with the ACCC regarding its review.

The purchase

• The 302 service station sites included in the acquisition are geographically complementary to Caltex and are primarily located in metropolitan areas along the east coast of Australia.
• No Mobil sites are being acquired in Western Australia, Tasmania or the Northern Territory.
• The purchase is wholly retail. Caltex is not purchasing any refining or other infrastructure as part of this acquisition.

People

• Caltex is endeavouring to ensure continuous employment for as many people as possible.
• Following completion of the acquisition, there will be a period of transition to ensure we maintain organisational stability as we move toward the effective integration of people and business systems and processes. We expect this transition to take approximately 12 months to complete.
• Employment terms and conditions for the impacted employees for the transition period will be the same or no less favourable overall than their previous employment arrangements.
• The transition period provides the impacted employees with continuity of employment and an excellent opportunity to get to know our business and explore more about the Caltex organisation and Caltex career opportunities.

Market dynamics

• Australia has one of the most competitive fuel markets in the world with about 6000 service stations nationwide.
• The Caltex brand on a site does not necessarily mean Caltex sets the price at that site. It simply designates the fuel source and acceptance of Caltex cards, and also provides quality assurance of product. Caltex sets the price at sites that represent about 5% of the national retail petrol market. Caltex estimates that the addition of the Mobil sites would represent an increase of about 6% in Caltex's share of the national retail petrol market (that is, a total of 11% post acquisition).
• Based on the ACCC's 2007 petrol pricing report, the Australian market share by retail sales of petrol by brand (2006-07) is shown in the column on the left. Caltex has used these figures to calculate estimates of branded market share following the acquisition (shown in the column on the right) assuming the ACCC data is otherwise unchanged:

Retail branded market share

Pre-acquisition (ACCC)			Post-acquisition (Caltex Australia estimate based on ACCC report)
Coles Express	22%		Coles Express	22%
Woolworths	22%		Woolworths	22%
Other independents	7%		Other independents	7%
BP	19%		BP	19%
Caltex Australia1	16%		Caltex Australia2	22%
Mobil	11%		Mobil	5%
Shell	3%		Shell	3%

- Note 1 - This 16% includes the estimated 5% market share where Caltex sets the price plus sites where Caltex does not set the price, eg franchisee sites.

- Note 2 - This 22% includes the estimated 5% market share pre acquisition where Caltex sets the price and the estimated additional 6% market share due to the acquired Mobil sites, plus sites where Caltex does not set the price, eg franchisee sites.

• Caltex and Woolworths are two separate companies that compete with each other in the retail fuel market. Caltex is a wholesale supplier of fuel to Woolworths and has an arrangement whereby Woolworths uses the Caltex brand. All of the Caltex / Woolworths co-branded service stations are Woolworths controlled - Woolworths sets the prices and makes the redemption offer.

Supply arrangements

• In order to ensure secure and reliable supply to the sites being acquired, it is intended that fuel for these sites will continue to be sourced from current suppliers.

About Caltex Australia

• Caltex is an independent Australian company and is listed on the Australian Securities Exchange.
• Caltex only operates within Australia.