OPERATION GOOD OIL

Post Refinery Report

Prepared by the Operation Good Oil Committee

For the People of New Zealand

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16-04-2024

From:
The Committee Members
And
Levi Wulf, Research and Editor.
Daniel Reurich, Research, finance and biofuels

Operation Good Oil is an information and awareness campaign which is made

up of a dedicated team of concerned individuals who seek to bring the truth of
New Zealand’s current looming energy crises into the light of day.
Neither Operation Good Oil nor any of its contributing members have been
recompensed in any way shape or form in the production of this report, it has
been produced solely through volunteering of time and resources.
This report does not constitute financial or legal advice nor is it intended to
substitute sound financial and or legal advice.

“Nothing is hidden that will not be made known’'

Jesus of Nazareth

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Executive Summary
It is our conclusion that the switch from a refining model to an import only model for the
supply of the New Zealand refined fuels market was a grave error precipitated by a board that
failed to present a balanced and rational case for shutdown of the refinery.

Instead they presented to the shareholders a business case that has proven to be based on
unfounded poor future profitability and an overwhelming fear of missing out on the transition
to carbon zero.

Not only has it deprived shareholders of both the capital value of a world class low emissions
refinery putting out high quality refined fuels, bitumen and other by-products, it has caused a
massive increase in the C02 and CO2e emissions of New Zealand’s transport fuels, bitumen
and other products the refinery once produced.

The company formerly known as Refining New Zealand Ltd now named Channel
infrastructure has been reduced from producing over 70% of the nation’s transport fuels to
tankage and delivery of 40% of imported refined oil.

It is our opinion that the business case that was presented for closure was overstated and that
claimed losses were created by impairments of refinery assets that were deemed no longer
useful simply because "fossil fuel is bad". There were no real world losses as the 2020 and
2021 reports declared that the refinery operated on a "cash neutral basis from the fee floor" as
per the customer processing agreements and returned to profitability in Q3 2021.

We also determined that had the refinery returned to full production in 2022, it would have
been earning maximum profits in 2022, 2023, 2024 and be projected to do so for some
years. The company instead was deprived of these profits, and shareholders have been left
without the dividends that would have more than made up for the lean years of 2019 through
2021.

We now believe that the company is being run in a haphazard financial manner paying out
appeasement dividends without the underpinning cash flow.

The costs of the planned small scale production of ‘sustainable fuels’ have not yet been
established and all indications are that such ventures require massive amounts of investment
that currently exceed oil refining in order to reach market share. There is no guarantee for
future sustainable production of these fuels.

As a consequence of the shutdown of the Oil Refinery, we believe that the shareholders along
with the nation are now exposed to global and geopolitical security risks that are worsening
by the day. Removing the means of production of refined transport fuels from our shores has
removed the ability to pivot in a low stock or high price environment causing the company to
essentially be nothing more than an expensive transport fuels tolling and storage facility that
could well be entirely bypassed in the near future using other ports and fuel transport options.

This indeed has already been demonstrated by the large loss of market share.

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To the people of New Zealand:

1.0 Shipping situation update

Since the closure of the refinery Operation Good Oil has been monitoring shipping tanker
movements through a number of different channels, we have managed to keep a fairly
loose but good handle on the data and can make the following estimations about the
progress in the import fuel supply lines.

Using data obtained from the AIS systemi, we were able to track the details and movements
of every chemical tanker that has entered New Zealand waters.

Through the ongoing efforts of members we were able to deduce through repetition which
tankers were most likely delivering fuels and compile a list of all the fuel tanker arrivals into
port.

We took a 9 month sample from April 2022 to December 2022 with the help of a research
team and we then created a detailed database for analysis.

By applying averages and known capacities/consumption figures from MBIE and industry
sources we were able to table and graph a range of probabilities to assess the current
performance of the import model.

Table 1.0

1.1 CONCLUSIONS ON SHIPPING

The overall supply volume of the shipments exceeded the national gross consumption in the
period observed when compared to MBIE figuresii.

We were unable to differentiate the specific fuels in each shipment but the overall number
of vessels x capacity x frequency was enough to build an outline.

The amount of shipments that entered in the first 9 months (165) that were tracked nearly
exceeded the entire projected annual amounts pre refinery closure, during the observation
period several shipments were either reported to be faulty or rumoured to be of unusable
quality.

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1.2 POLLUTION INCREASED AND 600,000 tons of CO2 EMISSIONS ADDED
NOTE: this section is by no means an exhaustive analysis of the shipping emissions created
by the supply chain, it has been prepared with the goal of demonstrating that pollution and
carbon creation has increased. It is intended to give people more than a “trust me bro” or
“some guy on the internet told me” source when discussing or making decisions based on
the following subject matter.

We welcome further investigation into this issue and feel more than quietly confident that
honest detailed results will yield even worse figures.

It is our conclusion that the switch to an import model has greatly increased the carbon
emissions created by the supply chain and has introduced a significant amount of a new and
far more concerning environmental pollution hazard, Nitrous oxide (N2O).

Nitrous oxide is an environmental poison which is created by heavy shipping exhaust and is
also classified as a greenhouse gas that is measured in ‘CO2E’

1kg of N2O = 278kg of CO2*iii

Because N2O is defined as being 278 x greater than CO2 as a GWG (global warming gas) and
is a toxic gas that has been artificially introduced into the ecosystem, this swapping of
emissions and pollution by New Zealand oil consumption is deeply concerning from an
environmental stand point.

We have literally done nothing to reduce emissions but instead increased the level of
environmental poison the country’s oil usage creates.

iv
Channel infrastructure sustainability report 2021

Prior to the closure of the refinery the CO2 emissions for 2021 of both direct and indirect
causes totalled up to 998,982 tons.
It is noteworthy that the calculations include scope 2 covering shipping of oil from source.

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1.3 WEIGHTS AND VOLUMES
Using the database we created we were able to conservatively estimate the CO2 and CO2E
emissions created by the Fuel delivery tankers.

We tracked 124 individual ships which separately entered New Zealand waters 165 times
combined.

These calculations do not include inshore legs of their journeys and do not include their
onward journeys out of New Zealand waters, they are meant to empirically demonstrate
that the closure of the refinery has been an environmental disaster and is now a blight on
the country in terms of New Zealand’s clean green image and also to show that we
have made a grave environmental error closing the refinery before viable replacement
technology exists.

Using the 9 months data we calculated the average monthly shipments as 18.33/month and
then multiplied by 12 to generate our annual figure of:

220 shipments per annum.

Using the loose but generally accepted percentage of 70% fuels produced by the refinery we
were then able to arrive at:

154 shipments replacing the refinery output in 2022/23

By multiplying the DWT of each ship by its number of entries into New Zealand waters we
were then able to arrive at a total weight of movement for calculation over the 9 months
and averaged it out for annual projection: 48,996,636 kg average per shipmen

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The estimated annual replacement weight of movement we arrived at is:

48,996,636 (kgs/ship) x 154 (ships) = 7,545,481,944 kilograms

7.5 million tons

1.4 Distance

The vast majority of the shipments originated in Singapore and South Korea with a minority
from China and Australia.

Using [Link] which calculates shipping to EN16268 and ISO 14083 and entering the
shortest route (Singapore) we arrived at the following figures:

384,715,943.92 kilograms of CO2E

210,466,925.90 kilograms of CO2

A total of: 595,182.87 tons added to the supply chain

1.5 Section Summary
Disclaimer: the preceding information was prepared by volunteers and there is no claim
whatsoever that it was an exhaustive investigation into shipping pollution nor that it was
100% correct, in that some best educated guesses were applied, it does however represent
many hours of combined work and research by a number of volunteers, we believe that it
tips the scales of probability to be able to make the claim that co2 and co2e gasses have
markedly increased.

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Given that;

 We now no longer have legislative or mechanical control on how our fuels are
refined other than international standards and toothless regulations imposed on
importers by parliament.
 We did not look at return journey emissions of ships caused to make the mammoth
10,000 kilometre journey down to New Zealand
 We did not look at shipping of the other products that the refinery used to supply
such as Sulphur for fertilizer, Carbon Dioxide for food and medical, the 190,000 tons
+ of bitumenv and the various other.
It would be quite reasonable assume that the refinery closure has nearly doubled the
global carbon emissions of the transport fuels being used in New Zealand. The fact that
this was not accounted for in the impacts assessmentvi is a clear obfuscation in order to
bolster the case for the shutdown
Marsden Point oil refinery operated as one of the most efficient and environmentally
sustainable in the world. New Zealand has swapped its environmental responsibility to
control the means of production with an archaic, haphazard, pollution intensive model of
refined oil supply.

2.0 CREATIVE ACCOUNTING SHIFTY DEALS AND WOOLY HAT PULLS FOR
SHAREHOLDERS

It is Operation Good Oil’s findings that the financial position and future projections for the
profitability of the Marsden Point Refinery were inaccurate prior to the shutdown.
As a result we believe that long term shareholders have been deprived of significant profits
and are left holding stocks in a glorified petrol station which appears to be currently run in a
manner where future profits are leveraged to pay out obscene dividends using borrowed
money.
Why high dividends in the absence of sufficient cash flows are being doled out is a matter of
speculation, but one thing is clear, the current fiscal management of the company does not
reflect the reality of the grandiose claims of future fuels projects which are not an economic
reality with existing technology and without investments to the magnitude of billions.

[Link]: Channel Infrastructure dividends to earnings

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We wonder if tax write offs of highly valuable operational plant and scrap sales will be
underpinning this marketing scheme, as opposed to future growth and expansion into
economically viable production of actually usable and therefore saleable fuels.

The fact that the business plan for what was previously New Zealand’s main redundancy for
fuel emergencies now relies on producing “future fuels” with technology that does not yet
exist at scale, to service a market which is only a theory on a climate scientists whiteboard,
is beyond terrifying to those who ponder such things, given the global security state of
affairs.

2.1 UNDUE PESSIMISM IN THE FACE OF EVIDENT REALITIES

In November of 2018 Refining New Zealand floated an offer of subordinate notes. vii On page
15 of this document the company states that in June of 2018 they had just completed a one
in 15 year shut down and invested 107 million dollars in a “major re-life” of the plant and
added significant upgrades.

This would give us the reasonable expectation that the refinery plant was good to go out
until 2033 and had been modernized to service the market for at least the next 5-10 years.

On page 17 of the subordinate notes offer it is stated that according to FACTS, by 2022
demand in Asia for refined products would outstrip capacity.

Page 17 RNZ Investor presentation 2018

Nostradamus in the stats department

Again in the RNZ 2019 Annual Results presentation for investorsviii dated Feb 27 2020, a
mere month after the first lockdown was enforced on the Chinese people, we see a chart
produced in line with the company forecast that 2020 is going to be a negative year with a
return to positive refining margins in 2021. It is acknowledged in all the metrics in the
report that CDU throughput capacity in Asia is going to be severely outpaced by demand
post 2020. High refining margins are forecasted. The chart appears to take into account the

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Covid-19 Govt responses along with the bottom of the dip in the cycle and is spookily
accurate in terms of demand vs capacity although a little optimistic in usage reductions.

Pg12 Refining New Zealand 2019-Investors-presentation

It is clear that pandemic aside, 2021 was known, forecasted and predicted to be a pivotal
year for refining and the turnaround in refining fortunes.

Nobody needs reminding of the events of 2020 and 2021 in which it was alleged that a new
and deadly virus was on the loose that would kill vast amounts of people if drastic measure
were not taken, but none the less the short of it is:
On the 25th of March 2020 the incumbent New Zealand government in conjunction with the
New Zealand Police decided to make it essentially illegal in New Zealand to use motorcars,
boats and other oil powered vehicles without severely restricted reasons.

This lasted for 1 month across the entire country and then went on in various sporadic
stages in various areas until June 8 2021 when all but border restrictions affecting aviation
fuel were lifted

Again on August 11th the government decided to lock down the refinery’s largest market for
its customers, Auckland with various forms of travel restrictions until October 8th.

These unprecedented actions by the government caused a predictable but massive drop in
domestic demand for refined fuel, coupled with the international flight restrictions which
caused a catastrophic drop in Aviation fuel demand, the resulting action by the refinery was
a logical drop in throughputix during the course of the government actions, this along with
some bizarrely timed accounting moves resulted in the company posting a net loss for 2020
of 198 million dollarsx.

We at Operation Good Oil feel it is important to note that these drops in demand were not
due to usual market forces or global supply and demand metrics, but were temporary local
phenomena that should have been easily recognized as such.

2.1 WHAT A TIME TO DO A REVIEW

Bizarrely the company chose to do a strategic review in the middle of an unprecedented

global disruption which affected all industries across the economy and in particular caused a

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significant but temporary drop in transport fuel consumption, the refinery’s main market.

Interestingly the “Strategic Review” seemed to include a revaluation of plant and assets
right before taking a case to the shareholders, it would seem that the revaluation resulted in
the company marking down the resale value of a large amount of capital asset and claiming
an impairment loss of 233 million dollars which had a negative effect on the profitability of
the business and the annual return (more on this further down).

xi
Refining New Zealand Financial Statements 2020

The justification in the notes for such a large impairment causing losses was based on some
key factors, some of the factors given assumed an average throughput at the refinery’s
retarded rate of 93,000 bpd and reliance on the fuel demand forecasts which were
produced using assumptions of compliance to legislation and emergence/uptake of electric
vehicle and green transport technologies. Basically a best case and ideal scenario outcome
for the unicorn fart industry.

Shareholders should rightly be more than a bit miffed that the profitability case presented
at the AGM and the basis on which the board issued dire warnings and recommendations
was more than a little scketchy.
We believe that the strategic review relied far too heavily on projections of a reduction in
crude oil based transport fuel demand.

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Needless to say the board made a decision to present a business case to the shareholders
that the most viable future for the company was to close the refinery down and convert the
site to an import terminal and indicated it had plans to utilize the existing infrastructure for
R&D of future carbon neutral fuels, specifically SAF (‘allegedly’ Sustainable Aviation Fuel)
and Hydrogen.

Currently signatory states to the Paris accord have been mandating SAF percentages in
aviation fuel incrementally toward the reduction targets with a view to having all aviation
fuel comprised of 50% SAF by 2050.

The legislation is bad in that it was not written by industry experts nor did it take into
account the markets resistance to bad legislation which is economically unviable; SAF
manufacturers and users around the world are stating that the targets are unachievable.

Google search: SAF targets unachievable

The scale of technology did not exist in 2021 and it does not exist now to bring the product
to market at targets without investments that will essentially collapse the entire industry.
The market will resist and even kick back at such a prospect, and it is in fact beginning to do
so.

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It is noteworthy that much of the projections and metrics for future usage in channel and
MBIE reports were provided by Hale and Toomey.

In July of 2021 National attacked the government over two conflicting reports on the same
issue of fuel resilience without a refinery, both created by Hale and Twomey. They appear
to arrive at opposite conclusions, the “pro” shut down report interestingly cost the
government 10x as much to procure as the one ‘opposing’ or cautioning against, the
refinery shut down.
“National's energy and resources spokesperson Barbara Kuriger said: "I just can't believe
how the two reports have ended up so differently."xii

Peak oil

xiii xiv
Newshub article investor’s presentation

Hale and Twomey have projected oil peaking somewhere around 2025 and plateauing for a
few years, their projections are based on two assumptions that have a massive range of
variables which are subject to market forces and global security conditions.

1: EV production, delivery and uptake.

2: The markets ability to deliver according to legislative requirements.
In our opinion this is a very foolish way to do business and an even more foolish
methodology to rely upon when removing the means of production in favour of an ideal
outcome with unknown factors.

Basically they have taken a gamble based on the odds.

2.2 SLOW IT DOWN AND YOU WILL SHUT IT DOWN

In a publication by refining New Zealand titled “response by refining NZ to the New Zealand
Commerce commissions retail fuel market study draft report” dated September 2019, the

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author prophetically makes the following statements:

Response by refining NZ to the New Zealand Commerce commissions retail fuel market study draft report

SUB POINT A

In late 2020 RNZ decided that it would remove the production of bitumen form the refinery
and reduce the throughput to 90,000 bpd beginning early 2021xv.

The official reasoning was the saving of 20 million dollars in labour and production costs.

We find this move bizarre as the market is worth 100 million per annum and during the
course of the government imposed lockdowns while there were fewer cars on the road,
roading was considered an essential service, so bitumen and roading would logically be
viewed as bread and butter income.

Slowing down the refinery makes business sense in a severely deflated time of demand, but
removing a profitable guaranteed income makes no sense at all unless the customer base
has indicated that it will no longer buy the product.

Many have tried through the OIA request process to find evidence of political collusion
influencing this inexplicable business decision but have mostly been unsuccessful.

One thing is for sure, the business process appears to have a very tangible flavour of a
foregone conclusion.

2.3 OH NO WE’RE MAKING MONEY

Disclaimer: This section of the report contains information that is of a complex taxation nature, and we
make no claims whatsoever as to legalities, practices or procedures and in no way shape nor form do we make
any allegations against any individuals whatsoever. This information is supplied for the purposes of raising
legitimate questions that we believe need to be answered and for making historic observations about what
has transpired.

Despite the retardation of the refinery output in early to mid-2021 and the removal of the
lucrative bitumen contract along with the magic act of disappearing impaired capital in
2020, the refining margins returned in Q3 2021 and the refinery started to make profit.

Enter yet more suppression power from the wonderful world of accounting, the company

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posted the annual financial statements of December 2021xvi and claimed a total net loss of
552 million dollars and some change after the accounting magic.

Refining New Zealand annual return December 2021

It seems legit on the surface and is exactly what was predicted by the proponents of transfer
to an import model, times were dire, demand was down, production was dismal they went
on to take the predicted hammering that import only was going to save them from.

All they had to do now was get rid of that massive liability the refinery and they would get
back into the green again, this is where we make a tyres screeching or a record scratching
noise and say “hold the phone”.
It would seem that in December 2021 a full 3 months before the refinery stopped operating
(in the green) they got rid of it, yes that’s right they disposed of it for tax purposes at a
staggering loss of 587 million and change.

Refining New Zealand annual statement December 2021

Once again the instrument they chose to use was impairment, presumably that’s why they
continued operating until April 2022 in order to justify the usage of impairment to claim
such a huge loss.

We do find the reasoning for such large losses given in the notes to be questionable, so we
are asking some questions and will report back when we get some answers.

Note 11 sub note (a) in the report gives the following justification for the massive half billion
dollar write off:

“The residual value of refining assets was assessed at $34 million, based on an independent
assessment of the scrap value of refining plant (post demolition) and the fair value of
refining units that could be sold or used in the production of renewable fuels.”

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Does this mean they wrote off anything useable in the production of standard fuels still very
much in use around the world for the foreseeable future, as merely scrap metal destined for
the smelter?

We also find their justification of financial forecasts tied to bad legislation more political
than a working sense of responsibility to shareholders and the company.
Over the space of 2 years during an unprecedented time of low demand the company
managed to write down 825 million dollars of well-maintained equipment to a poultry $35
million dollars and present that to the shareholders and to the nation as a massive loss due
to circumstances outside of their control! Tui add anyone?

2.4 IS THAT EVEN LEGAL BOSS?

We are not tax experts and the people we have approached about it do seem to think that
this is all a little odd but it still doesn’t change the fact that there would have actually been a
modest profit hidden in there somewhere had the write off not been done while the plant
was still in use and a better job was done to source buyers and sell equipment at a
responsible price. At the very least a break even considering the 35 million dollar difference
between the write off and the total net loss (a repetitive figure as it turns out).

Killing the goose that lays the golden eggs

Could this bizarre move to make the refinery look as if it was a total lemon be an attempt to
save egg on the face that would result from having to face the shareholders at the next
AGM whilst holding a green balance sheet?

Once again we are sure that Channel Infrastructure has some of the best accountants and
lawyers on the books but we feel more than a little aggrieved at the treatment of plant and
equipment that was gifted to them by the people of New Zealand for the nations fuel
security, so in the spirit of the historical record we will just leave this here:

“Notwithstanding any other enactment or rule of law, The New Zealand Refining Company Limited is
denied a deduction under the Income Tax Act 2007 for an amount of depreciation loss for the
expansion assets.” Petroleum Sector Reform Act 1988 section 3 (3)

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We will also just leave this here as well:

2.5 PROPHECY COMPLETE

SUB POINT B

This section does not need much explanation; the authors sub point b highlights the
damaging effect of the refinery’s closure on the nation’s prosperity and security.

New Zealand annually uses somewhere between 8 – 9 billion litres of refined oil product,
with the means of production removed from the economy the value added from oil refining
is now exported directly off shore in the form of your money.

Stats New Zealand reported in 2022xvii that:

“Diesel imports rose $589 million in June 2022 to reach $658 million, while petrol imports
rose $312 million to reach $335 million. These increases in values were mainly quantity
driven, however unit prices are also at a high level.”

and credited the currency export from transport fuels as “fuelling a record deficit”

The 2023 reportxviii didn’t fare any better and credited refined fuel products for an annual
increase in imported goods vs exported products quoting institutional sectors senior
manager Paul Pascoeas saying:

“Fuel, including diesel, petrol, and jet fuel, was the main contributor to the increase in goods
imports, driven by increases in both the price and volume of fuel,”

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We believe that these truths are self-evident and don’t need much more time spent on
them but they are important to highlight as more nails in the coffin of sensibility that lead to
the refinery’s closure.

3.0 INCREDIBLE CLAIMS BY THE PROPHETS OF DOOMED PROFITS

A special meeting was called on the 6th of August 2021 to vote on the shutdown. Concerns
were raised by minor shareholders about the dangers and folly of shutting down refining.
Political interference and loss of profits were raised.
In response Chair Simon Allen rejected accusations the decision was political.
“The refinery’s revenues had been declining and would continue to do so, he warned, unless
they agreed to transition to an import terminalxix. “

We find this statement incredulous in light of all the positive projections for future refining
margins and upward CDU throughput curve in all the company’s aforementioned metrics
(excluding those revisionary metrics previously mentioned in 2020).

Sadly Simon Allen and the boards assertions were not only against all previous forecasts and
promises to investors, they were completely wrong!

In the NZX announcement of the special meeting the board released the following:

“An Independent Appraisal Report has been prepared by Grant Samuel. In Grant Samuel’s opinion
maintaining the simplified refinery would be a sub-optimal outcome for Refining NZ and its
shareholders. Grant Samuel believes the transition to an import terminal on the basis of the non-
binding in-principle terms which have been agreed is fair to the non-customer shareholders of
Refining NZ. The basis for the Independent Appraiser’s opinion, and the assumptions on which it is
based, are set out in the Independent Appraisal Report included in the Explanatory Booklet, which
accompanies the Notice of Meeting.”

Although technically correct in that a simplified refinery would be sub optimal, we believe
this to be disingenuous wool pull over on the shareholders given that a fully functioning
refinery would have been optimal and also extremely profitable moving forward.
It is interesting to note Grant Samuel has been criticized as of late for “fundamental errors”
in its reporting, by people with the actual clout to make their criticism stickxx.
Refining margins returned in Q3 2021 and record profits are being made by refineries
around the world until this day.

This bad advice has cost the shareholders and the company 100’s of millions
of dollars in profits.

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 Bar graph of data from:
[Link]

4.0 SECURITY

Whilst Meagan Woods’ MBIE cabinet paper “Fuel supply resilience without a domestic oil
refinery”xxi addresses the different scenarios of fuel disruption and foolishly implies that
moving to an import only model is NOT a “single point of failure” (this kind of backward
logic is hard to digest) whilst advocating the removal of our secondary redundancy of
supply, it does not address the financial or economic destruction that will be caused by a
fuel disruption.

Operation Good Oil and a number of others including the refinery operators themselves
warned loudly against this folly and the decision to close was clearly and evidently not based
around traditional logic and sound reason which is what caused the refinery to be
constructed in the first place.

At the time of writing this report the price of crude oil has been increasing daily due to
proxy conflicts between Russia and Nato and conflicts in the middle east, specifically
between Israel and Iran.

Russian refineries have been attacked as their enemies seek to deprive their military of
energy, Iran has also engaged in a direct attack on Israel.

Russia is the world’s second largest oil producing nation but it is also the world’s 5th largest
user of oil so any diminishment in its ability to refine oil will put a squeeze on refined oil
products not to mention the oil shock that caused the New Zealand Government to reduce

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fuel tax and dump our strategic oil holdings onto the market when NATO and OPEC put
sanctions on Russian oil.

Russian oil supply or the lack of it clearly has an ability to negatively affect price and supply.

4.1 THE WORLDS MOST IMPORTANT CHOKE POINT

Iran owns part of the shipping channel in the strait of Hormuzxxii, which is made up of two
lanes each only two miles wide, effectively a perfect target for a marine ambush or
blockade.
20% of the planet’s oil supply pass through these channels daily, 76% of that supply goes to
Asia where some of the world’s largest economies rely heavily on deliveries, notably China
which is resource poor and Japan with around 50% of its energy requirements and South
Korea with around 70% come directly from the channel, the supply line has been well
documented and identified as the world’s most important energy corridor.

40% of the worlds natural gas supply is located in the Persian Gulf and the strait is the main
corridor for shipping.

The US Energy Information Administration calls the strait “the world’s most important oil
transit chokepoint”xxiii

Strait of Hormuz volume by destination

2013 graphic indicating volume paths

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A disruption in the strait will have an immediate effect on prices in New Zealand, any
extended disruption would likely lead to fuel delivery shortages and rationing.

New Zealand will not compete with any of the larger closer economy’s if a disruption occurs,
we wonder if the Minister Woods and her security advisors were actually paying attention
when they assessed the security to supply concerns whilst deciding that New Zealand
should rescind self-sufficiency and downgrade to rely on a single source of refined oil,
shipping.

Iran has already stated that it believes it has the right and the ability to close the strait, at
the time of writing this Iran had already intercepted and hijacked a cargo vessel that it
claims was carrying Israeli productxxiv.

Europe experienced a massive energy crisis due to unrealistic climate agenda legislation and
the global insecurity issuesxxv, it has subsided for now but the outlook moving forward is still
unclear as winter in Europe demands high usage of oil products and global security is an
ongoing issue that appears to be worsening by the day.

It is our view and has always been our view that just thinking about supply in terms of
quantity and logistical services by third parties as opposed to the means of production and
ability to controllably secure supply, is beyond foolishness and it is our enduring view that
the refinery formed apparatus which was vital for securing supply for the health and safety
of all new Zealander’s, no matter how big or small the threats are.

WE WILL JUST LEAVE THIS HERE:

Sabotage

(1)

Every one is liable to imprisonment for a term not exceeding 10 years who, with intent to prejudice
the safety, security, or defence of New Zealand or the safety or security of the armed forces of any
other country, lawfully present in New Zealand,—

(a) impairs the efficiency or impedes the working of any ship, vehicle, aircraft, arms, munitions,
equipment, machinery, apparatus, or atomic or nuclear plant; or

(b) damages or destroys any property which it is necessary to keep intact for the safety or health of the
public.

(2)

No person shall be convicted of an offence against this section by reason only of the fact that he or
she takes part in any strike or lockout.

Crimes Act 1961

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5.0 THE ELECTRIC VEHICLE MARKET
Unicorn farts and fairy dust are becoming about as likely as the New Zealand fleet (or world
fleet for that matter) switching to electric vehicles within the timeframe to justify all the
grandiose claims of both politicians and executives in the destruction of the refinery.
Electric vehicles asides from being heavier, more expensive to make and environmentally
irresponsible to create, are now more expensive to run than ever (clean car discounts
removed and RUCS’ added, charging is no longer free at some places) and have very little
infrastructure in terms of service, repair, charging or resale value.
They are great as a rich man’s gimmick for around town if you don’t mind throwing it away
after a few years, but as a realistic alternative to oil, they have predictably failed and no
amount of bad legislation is going to force people to voluntarily give up the convenience,
price and environmentally responsible longevity of a well-honed petrol or diesel vehicle.

Manufactures around the world have since 2023 not been able to mark down ev’s low
enough and in some instances they are now sitting rusting in yards in their tens of
thousands.

Major manufacturers have opted instead to act responsibly and save their companies,
deciding to pay carbon emissions tax as opposed to making EV’s that don’t [Link]

EV imports into New Zealand as of March 2024 [Link]

This was entirely predictable simply based on the science, we mentioned in our last report
that the evidence was self-explanatory and we were not going to go into it, we’ve left a
couple of links in the citations to look at but we still don’t think this needs much explanation
from us.
It was a stupid idea then and it is still a stupid idea now purely from a logical and scientific
stand point to try and electrify entire national fleets in a couple of decades, given where we
are on the technology curve.

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[Link]

The transition has happened, it was a fizzer as predicted and now all the legislation is going
to lead to is wealthy people buying throw away vehicles while the average man on the
street has to keep an ever aging second hand vehicle running until the Govt. makes it illegal
to use.

[Link]

We now wonder that since it is all now being fully exposed, if something else may shortly be
exposed, such as those who are enforcing these rules are and were actually fully aware of
what they are doing

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5.1 HYDROGEN FROM HERO TO ZERO

“H2, Hydrogen will never become a useful transport fuel because of basic physics. The
volumetric energy density of compressed h2 is about 20% of that of petrol, and compressed
liquid h2 about 30% with an added energy cost of the cooling and pressure to get liquid
nitrogen being approx 25% of the energy being stored as h2 fuel. And that's not even
considering the energy used to generate the hydrogen in the first place which is generally in
excess of 100% the energy capacity of the created fuel.. It just doesn't make economic sense
outside of very niche applications given that the net energy input from extracting crude oil to
it being pumped into your vehicle is less than 20% in total not including all the other
byproducts produced along the way.” Daniel Reurich Operation Good Oil – Future Fuels Report, yet to
be released

6.0 ROUGE SHAREHOLDERS AND REBEL DIRECTORS NOMINATED

We would like to bring to the reader’s attention a move within the shareholders of Channel
Infrastructure to conduct feasibility and cost study for a return to refining.

Two shareholders, Karl Barkley and Daniel Reurich have been nominated for directorships at
this coming AGM on April 30 2024.

Mr Barkely has prepared and sent a proposal for resolution by the shareholders; it has been
received by the board and added to the agenda for the meeting.

In a rather lengthy response, the board has recommended against the proposal because
they believe it is no longer Channels responsibility and have fobbed off all responsibility and
liability onto the government despite their rather murky behaviour and control over the
plant which does actually exist despite their accountants saying it doesn’t.

We would highly recommend if you are a shareholder voting for the proposal and for the
nominees if for nothing less than to throw a cat among the pigeons and to get some of our
burning questions answered.
If you are not a shareholder, it is not too late. You can buy as little as $5 worth of shares on
Sharsies and get voting rights to have a say. The more people who start to get involved and
buy shares to make noises the more a company culture can start to shift at the top.

It is not a foregone conclusion yet that we can’t refine our own oil, the people who have
made these bad decisions on behalf of all of New Zealand, be they government or
executives are biting their nails right now because they get up every morning and flip coins
to decide what they do next. Sometimes it comes up tails, sometimes it comes up heads.
The real question here is:

WHO IS THE HEAD AND WHO IS THE TAIL?

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Also a special thanks goes to: Ashlee Basham, Genevieve VE,
Juanita Penny for their help in collecting shipping data.

Citations
i
[Link]
ii
[Link]
iii
* US and European standards slightly differ [Link]
warming-potentials
[Link]
iv
[Link]
Report_Web_Spreads.pdf
v
[Link]
vi
[Link]
proactiverelease-pdf
vii
[Link]
viii
[Link]
ix
[Link]
cutting-production
x
[Link]
xi
[Link]
xii
[Link]
[Link]

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xiii
[Link]

xiv
[Link]
xv
[Link]
xvi
[Link]
xvii
[Link]
xviii
[Link]
xix
[Link]
xx
[Link]
valuation-wrong-20240404-p5fh9q
xxi
[Link]
proactiverelease-pdf
xxii
[Link]
xxiii
[Link]
xxiv
[Link]
[Link]
[Link]
xxv
[Link]
xxvi
[Link]
ev-growth-predictions/?sh=4a85c7b14621
[Link]
2030/?lang=en

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