NZR
29/04/2004
ADDRESS

REL: 1400 HRS The New Zealand Refining Company Limited

ADDRESS: NZR: Chairman's address to the AGM 29 April 2004

The New Zealand Refining Company Limited

Chairman's Address

This year, I have departed from tradition and have asked the Company's
General Manager, Thomas Zengerly to provide you with an update on the
Company's performance and other items of significance that the Company has
been involved in. I will concentrate on the strategic and governance aspects

You will note that the agenda is longer than usual. Some of the items will
no doubt raise issues for some. I will not discuss these items now, but as
we cover off on the agenda items, we will discuss the items before voting on
them.

Firstly though, a comment on our annual accounts. For 2003, we have
commenced a transition from our traditional focus on financial reporting to
triple bottom reporting. We as a major industry in New Zealand, recognise
that stakeholders, want more information and Annual Reports are the
appropriate place to provide information about Social, Environmental and
Economic information.

In February we reported the results for the year. To recap, the company made
an Operating Surplus before tax of $59.6 million, 2.5% higher than 2002. The
final dividend was 60 cents, with full imputation credits.

When combined with the interim dividend of 60 cent we paid out 78% of net
profit after tax, this is less than what we have achieved in the past but
still an excellent outcome.

The directors were concerned that 2004 could be quite a demanding year from a
financial perspective. High exchanges rates and a major shut down being to
key factors to consider. We feel far more comfortable now that we have
completed the first quarter and are well into the second quarter. Refining
margins have been high and the New Zealand dollar is now weaker against the
USD. The shutdown is due to commence next week.

Corporate Governance has been a topic high on the agenda of many boardrooms
this year. We are in the process of making some changes to Board
composition, committees etc, in order to comply with NZX rules. This process
will be completed by the October deadline. I agree with recent comments made
by the recent comments by Sir Ron Brierley regarding directors reiterate that
rules and regulations don't make a person honest or make them more
trustworthy.

Good Directors and Managers know what is right or wrong and value personal
integrity very highly. On behalf of the Directors of your Company, I can
state that we will comply with the rules and appendices of the New Zealand
Exchange, but I will also add that our standards and requirements for good
governance have not changed because of these new rules.

In early 2003, we took steps to ensure the Independence of our Auditors was
not compromised and adopted many of the principles in Sarbanes Oxley. Our
Internal Audit programme is comprehensive, based on risk assessments covering
all aspects of our business. We have extensive quality assurance, safety and
environmental programmes in place. I am not saying we are perfect - many of
the aspects like safety is a never ending journey - what I am saying is that
as professionals tasked with creating long term benefits for stakeholders, we
are pro-active and we do not wait for rules

Last year, the Board approved the Future Fuels project which is one of the
largest industrial projects in New Zealand in the last decade - allocating a
total of $180 million to the project. Foster Wheeler were appointed the main
Engineering, Procurement and Construction contactor. Progress to date has
been good. We are still on target in terms of safety performance, schedule
and cost. Thomas will provide further details in his presentation.

Today the Minister of Energy will announce that the Company has been awarded
1.2 million carbon credits. This is subject to completing a co-generation
plant at Marsden Point. NZRC staff and HRL, an Australian organisation with
expertise an