Pareto s annual Oil & Offshore Conference: Presentation of Kværner ASA Jan Arve Haugan, President & CEO 1
HSE our licence to operate Our HSE mindset is a core value We: strive continuously for zero harm to people, the environment and property focus on employee health and on continuously improving the work environment require every employee to take personal responsibility for HSE by focusing on their own behaviour HSE is a not only our licence to operate, it is an efficient way to work Lost time incident frequency (LTIF) Per million work hours 1,5 1 0,5 0 Total recorded incident frequency (TRIF) Per million work hours 5,0 4,0 3,0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2,0 1,0 0,0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2
Kvaerner a dedicated EPC company UPSTREAM DOWNSTREAM & INDUSTRIALS CONCRETE JACKETS NORTH SEA INTERNATIONAL E&C AMERICAS Global leader in gravity based concrete structures European leader in steel jackets Leading EPC contractor to the North Sea market Spearhead for international expansion A leading EPC contractor for the American market Concrete substructures Large steel jackets for oil & gas installations Wind jackets Topsides Floaters Onshore upstream facilities Topsides Floaters Onshore upstream facilities Onshore facilities Power plants Steel mills More than 40 years experience 3 500 HSE focused employees Annual revenues of NOK 13.2 billion in 2010 Order backlog of NOK 13.3 billion at 30 June 2011 3
With full focus on EPC field developments More flexible Meeting low cost requirements through strategic partnerships Meeting local content requirements through local partnerships More focused Field development market poses unique challenges and opportunities Market requirements for dedicated EPC contractors Creating a focused global EPC company 4
World class references KRISTIN HPHT GAS PLATFORM The first HPHT (high pressure, high temperature) floating production gas platform. Delivered in 2005. SAKHALIN II GBS Two concrete gravity based platforms for the Sakhalin II project offshore the Sakhalin island, East Russia. Delivered in 2005. ADRIATIC LNG TERMINAL The world s first offshore GBS based LNG re-gasification terminal, a strategic component of the Italian gas system. Delivered in 2009. GRANE PLATFORM JACKET 17 500 tonnes fixed steel substructure for drilling, production, processing and accommodation facilities. Delivered in 2003. ORMEN LANGE The third largest gas field in Europe and one of Norway s largest onshore plants. Delivered in 2007. 15 POWER PLANTS SINCE 2002 New plants, as well as retrofits, environmental modifications, maintenance and upgrades to existing facilities 5
EPC contract formats Contractual structures and risk (Figures are illustrative) Field development contract format (Project example) 0 % Contractor risk 100 % Lump sum Measurement (rate based) Measurement (norms/rate based) Measurement Target Cost/target (reimbursable) Target (reimbursable) Lump sum 100 % Owner risk Cost reimbursement 0 % Procurement Engineering Construction Project management 6
A flexible delivery model CONCEPT FEED ENGINEERING (E) PROCUREMENT (P) CONSTRUCTION (C) COMMISSIONING ELDFISK (Topsides) Aker Solutions as subcontractor EKOFISK 2/4L (Jacket) SAKHALIN (GBS) HEBRON (GBS) + + BROWSE (TLP) 7 Aker Solutions as subcontractor/partner COOEC as partner Potential agreement; for illustrative purposes
Flexible cost base and ability to take on large projects in parallel Resource fluctuation at yard Number of FTE s Contract staff Own employees 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 EPC Deliveries Floating facility Snorre B Topside Valhall Drilling Floating facility Kristin Onshore Kårstø Ormen Lange Snøhvit Floating facility Gjøa Drilling rigs Aker Barents Aker Spitsbergen 8
Growing internationally on the back of solid home market Energy demand fuelling global EPC market Solid position in home market and concrete structures Recent exploration discoveries prove the continued attractiveness of the NCS Increasing production in frontier areas requires strong field development capabilities Leverage our technology and EPC experience to further grow internationally North Sea Offshore EPC USD million 12 000 10 000 8 000 6 000 4 000 2 000 Global Offshore Oil and Gas EPC USD million 60 000 50 000 40 000 30 000 20 000 10 000 CAGR 2010-15: 19% 2000 2005 2010 2015 2020 CAGR 2010-15: 17% 2000 2005 2010 2015 2020 Source: Rystad Dcube August 2011 9
Closing remarks HSE core value and licence to operate Maintain and develop home markets International expansion Hands-on management 10
We execute amazing projects We successfully realise the world s most demanding fields 11 11
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Copyright and disclaimer Copyright Copyright of all published material including photographs, drawings and images in this document remains vested in Kvaerner and third party contributors as appropriate. Accordingly, neither the whole nor any part of this document shall be reproduced in any form nor used in any manner without express prior permission and applicable acknowledgements. No trademark, copyright or other notice shall be altered or removed from any reproduction. Disclaimer This Presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this Presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for Kværner ASA and Kværner ASA s (including subsidiaries and affiliates) lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as expects, believes, estimates or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for Kvaerner s businesses, oil prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time in the Presentation. Although Kværner ASA believes that its expectations and the Presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the Presentation. Kværner ASA is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither Kværner ASA nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use. 13