Activity and Sustainable Development Report

Transcription

1 2012 Activity and Sustainable Development Report

2 We are a world leader in project management, engineering and construction for the energy industry. From the deepest subsea oil and gas developments to the largest and most complex offshore and onshore infrastructures, our 36,500 people work together to offer the best solutions and most innovative technologies to meet the world s energy challenges. Present in 48 countries, Technip has state of the art industrial assets on all continents and operates a fleet of specialized vessels for pipeline installation and subsea construction. What we accomplish, together with our partners, is nothing short of amazing. Because taking it further is what we do.

3 Take it Further Doing the right thing 04 Message from the Chairman 06 Technip worldwide 08 Message from the Head of Sustainable Development in pictures in figures 20 Ethics and compliance 24 Markets and strategy 26 Health and safety, security Trusting the team 32 Governance and organization 36 Human resources Encouraging a fair return for all 42 Local communities 46 Business stakeholders Building the future 52 Innovation and technologies 54 Operations Subsea Offshore Onshore 72 Environment 76 Indicators 86 Glossary

4 3 Activities one technip Subsea Offshore Onshore

5 technip In billion Backlog at the end of billion revenue million Operating income from recurring activities industrial assets on all continents Listed on the Euronext Paris exchange 36,500 people 32 vessels of which 4 under construction Presence in 48 countries

6 2012 technip activity and SuSTaInaBLE DEvELOpMEnT report Take it FurTher take it further is our approach to business, partnerships and aspirations. it embodies our spirit and our outlook. it is the message we want to convey through our words and above all our actions. it is the essence of technip, making us unique.

7 message From the chairman 04 technip WorldWide 06 message From the head of SuStainable development in pictures in FigureS 14

8 2012 Technip Activity and Sustainable Development Report 2012 has been a year of growth and profitability. Thierry Pilenko Chairman and Chief Executive Officer 04

9 take it Further DOInG THE right THInG TruSTInG THE TEaM EnCOuraGInG a fair return for all BuILDInG THE future How would you sum up the year 2012? as we look back to 2012, we see another year of good performance and great achievement and progress. we have improved certain safety indicators and for the first time since 2005 there were no fatalities on any of our projects. we won a broad range of projects across all our business, leveraging our technologies and teams, which translated into a record backlog. as a result of the growth this year, we now have 36,500 people working for Technip worldwide. This is 50% more than five years ago. we have also done a number of strategic moves over the course of I would like to highlight two of them. The first one is the acquisition of Stone & webster process technologies, which expands our downstream technology portfolio and gives us exposure to the us petrochemicals market, driven by the shale gas revolution in north america. The second one is our commercial alliance with Heerema for the ultra-deep subsea market. In parallel, we invested 519 million in CapEx to strengthen our asset base. In Brazil for instance, we are building a new flexible pipe plant, which will manufacture high-end products for the 3,000-meter water depth pre-salt market. Can you comment on Technip s financial results? 2012 has again been a year of growth and profitability, with Technip delivering a strong performance in line with our objectives. firstly, I would like to note that our full-year revenues have increased by 20%, to 8.2 billion. Secondly, our operating margin is at 10% for the fourth year in a row, with operating income growing by 16% to more than 800 million. and lastly, our backlog reached 14.3 billion at the end of 2012, with a strong order intake of 12 billion that represents an average of 1 billion per month. It is a well-diversified backlog, by geography, market segment and project type, which we hold to be a critical success factor in our industry. Our two segments of activities performed well. In Subsea, the operating margin in 2012 was in line with our objective, at 15% on revenues, which grew well ahead of plan at 36%. In Onshore/Offshore, the operating margin was at the top end of our expectations at 7%. These good results reflect the steady implementation of our strategy. Could you tell us about the Group s commitment to sustainable development? Sustainable development is an opportunity to do our business with more added value for all our stakeholders. Our initiatives in that field are related to social, societal and environmental aspects. when it comes to social actions, our priority is the safety and development of our people. regarding societal actions, particular emphasis is given to the national content of our projects and issues related to children, health, disability and humanitarian activities. for the environment, reduction of greenhouse gas emissions and prevention of accidental pollution are our main focus areas. we will be working even more on all these elements throughout the years to come. Technip is a global company, present in many countries, and we have a key role to play in corporate social responsibility. what is your outlook for 2013? Technip starts 2013 with a substantial, profitable backlog of business to execute. we believe our markets, while competitive and never immune to general economic conditions, remain robust and growing. Our clients continue to focus on replacing and raising production from increasingly challenging areas and reservoirs. They seek long-term relationships with contractors that are capable of developing and deploying the right technologies and who can embrace national content and local execution. upstream investments should grow at a double-digit rate and several very large oil and gas offshore developments should be sanctioned in the next couple of years. Downstream will be particularly active in petrochemicals, notably in north america. we will continue to be selective about the projects we take on, so as to ensure reliable execution and delivery to both clients and shareholders. we will pursue our CapEx program, with a focus on delivering our current commitments. On this basis, we aim to grow Group revenues by 11 to 16% to between 9.1 and 9.5 billion. we expect to raise revenue and profit at Technip again in 2013 in both our segments. we target full-year operating margins of around 15% in Subsea, and 6 to 7% in Onshore/Offshore, in line with our long-term expectations. accordingly, confident in our strategy, our backlog, and our potential for profitable growth, we will propose at the Technip s General Meeting of Shareholders an increase of 10 eurocents in the dividend, to 1.68 per share, in accordance with our practice of encouraging a fair return for all. 05

10 Ork 2012 Technip Activity and Sustainable Development Report TECHNIP WORLDWIDE A MULTI LOCAL COMPANY WHEREVER IN THE WORLD OUR CLIENTS OPERATE, WE HAVE THE RESOURCES TO MAKE THEIR PROJECTS A SUCCESS. Calgary Claremont Monterrey Houston Boston Carlyss Mobile Weymouth St. John s Stava Evanton Aberdeen Newcastle London Le Trait Paris Marseille Lisbon Barc REGIONAL HEADQUARTERS/ OPERATING CENTERS Mexico City Ciudad del Carmen Bogota Caracas Port-of-Spain (Trinidad) Accra CONSTRUCTION YARD LOGISTIC BASES Vitória Açu (under construction) Macaé Rio de Janeiro Angra Porto MANUFACTURING PLANTS (FLEXIBLE PIPELINES AND/OR UMBILICALS) SPOOLBASES 06

11 Take it Further Doing the right thing Trusting the team Encouraging a fair return for all Building the future A UNIQUE FLEET To undertake our offshore operations, we operate a specialized fleet comprised of 32 vessels (of which 4 are under construction)* which is unique in the industry. 4 Rigid Reel Lay and J Lay 11 Flexible Lay and Construction 4 Rigid S Lay and Heavy Lift 13 Diving and multi support * As of March 2013 ória Orkanger Oslo Pori Stavanger St. Petersburg Evanton Aberdeen Milton Keynes Newcastle The Hague London Warsaw Le Trait Düsseldorf Paris Lyon Marseille Rome Baku Ashgabat Lisbon Barcelona Athens Baghdad Cairo Doha Dubai New Delhi Al Khobar Mumbai er construction) aneiro Lagos Port Harcourt Accra Dande Luanda Lobito Abu Dhabi Chennai Bangkok Ho Chi Minh City Rayong Miri Kuala Lumpur Singapore Batam Seoul Tanjung Langsat Jakarta Perth Shanghai Balikpapan 07

12 2012 Technip Activity and Sustainable Development Report Our ambition is to be recognized as one of the bestin-class companies for sustainable development within our business sector. Colette Casimir Senior Vice President, Head of Sustainable Development 08

13 Take it Further Doing the right thing Trusting the team Encouraging a fair return for all Building the future What is Technip s sustainable development strategy and how do you evaluate its performance? Our sustainable development strategy relates to social, societal and environmental aspects. Our current level of maturity allows us to develop and widen our actions. To achieve our objectives and the expected level of excellence, sustainable development will be more deeply integrated into our business strategy. To do so, our action plan will focus primarily on integrating more sustainable development into project execution. Setting up innovative pilots in certain projects will then lead to a roll out for the most successful ones globally. Regarding climate change, we will focus on using eco-design and lifecycle analysis in the infrastructures we build to reduce the long-term impact on the environment. Our strategy also includes working more closely with stakeholders and notably the local communities in the countries where we operate, developing communication towards our clients, and reinforcing our relationships with socially responsible investors. We have taken tangible steps towards improving sustainable development and have been committed to a strong and widely recognized policy of corporate social responsibility (CSR) for many years. In 2003, we signed the United Nations Global Compact on human rights, working standards, environmental standards and anti-corruption. We apply its ten principles to every aspect of our business. Our CSR efforts have been acknowledged in many ways. We have been highly ranked in the Dow Jones Sustainability Indexes for more than 10 years. In 2011, the CSR rating agency Vigeo positioned Technip at number two in its industry. Moreover, we have received several distinctions for the quality of our sustainable development strategy, whether for our health, safety and environmental performance on projects, such as Jubail, Asab3 and PMP, or our human resources policies, with the Top Employers Europe label in Last year, the Group has been recognized for its excellence in financial, CSR and share performance, a prize only awarded to six companies amongst the top 100 market capitalization in France. Internally, additional key indicators for CSR will be defined in 2013 to improve the measurement of our performance. You were appointed as Group Head of Sustainable Development in July What is your vision of this function? Our approach to sustainable development permeates our four core values of Doing the right thing, Trusting the team, Encouraging a fair return for all and Building the future, and is therefore deeply embedded in our identity and strategy. Supporting our clients to meet the world's energy needs without compromising the ability of future generations to meet their own is our priority. I report directly to our Chairman and CEO, which demonstrates the importance of sustainable development at Technip. For us, sustainable development means reinforcing talent management to focus even more on developing the potential of each employee. Improving our financial and operational performance will happen by accurately anticipating the future needs of the industry and associating our business partners with our development. Regarding the environment, we need to further reduce the footprint of our activities and that of our clients and suppliers, by working together in a more collaborative way. Last but not least, sustainable development is about contributing to the economic and social balance of local communities, by raising the national content of our projects to create local employment. To support our vision, I have decided to reinforce our sustainable development network with more coordination at Group, regional and entity levels to improve the way we share best practices. The Group CSR team will be in charge of social, societal and environmental best practices as well as coordination of innovative pilot initiatives. Also, thanks to a new financing structure, we will take a smarter approach to funding sustainable development initiatives. In addition, and whenever appropriate, regional and country Sustainable Development Committees will be set up on the model of the Group Committee. Within operations, a Sustainable Development Coordinator will also be named for each Region and country. What are your priorities for 2013 and beyond? Poverty reduction through local initiatives, national content and climate change will be at the heart of our priorities. We will also continue to offer our teams better career opportunities and enhance internal mobility, a very important development tool when it comes to empowering employees. And, of course, we will promote even more sustainability and innovation in everything we do, especially in new technologies and solutions for our clients. Our continuing growth, while maintaining competitiveness, will help us provide value to all of our stakeholders. 09

14 2012 Technip Activity and Sustainable Development Report in pictures The year in review Major milestones for our projects The Koniambo nickel project, in New Caledonia, reached a turning point when the construction of the first production line of the smelter was completed. Technip completed the construction of the buoyancy cans of the Marine Well Containment System in its Pori yard, Finland, to help prevent oil spills. The Girassol Resources Initiatives development project (GirRI) represents a significant milestone for Technip as it demonstrates its capabilities to execute subsea projects from its Luanda center, Angola. In Brazil, the South-Nort Capixaba Profundo P62 Pipeline project exceeded expectations: Petrobras awarded the project the maximum performance evaluation score, ranking it as "excellent". We successfully completed the second phase of the Nord Stream Pipeline project, in the Baltic Sea, and performed tie-in of the largest offshore pipelines ever laid An array of new contract awards The Aasta Hansteen Spar will be the first one in Norwegian waters, the first Spar concept chosen by Statoil and the largest ever built. Technip also received instructions to start the construction of the Heidelberg Spar, in the US Gulf of Mexico. It will be the 17 th Spar delivered by Technip and demonstrates the Group s ability to tackle ultra-deepwater developments. Technip and Petrobras signed a major five-year frame agreement for the supply of around 1,400 kilometers of flexible pipe, reinforcing the Group s leadership in that sector. The award of Petronas Refinery and Petrochemical Integrated Development (RAPID) project, in Malaysia, confirmed our position in both the refining and petrochemicals sectors. Technip s expertise in the field of refining was reinforced by capturing the construction of phase 1 of a heavy residue hydrocracking complex to be built in Burgas, Bulgaria. Technip, in a JV with Odebrecht and ICA Fluor, was awarded a large EPC contract by Braskem Idesa for the Ethylene XXI petrochemical complex. The cracker will be the most modern and efficient in operation in the Americas. Technip was awarded its largest contract to date in the UK North Sea by BP and partners to develop the subsea infrastructure of the Quad 204 project. The TLP Malikai Deepwater Project is Technip s first TLP contract and a new step in its development into the burgeoning deepwater floating production facilities market in Asia Pacific. In 2012, Technip reinforced its leading position in the FLNG sector by securing contracts for Petronas FLNG in Malaysia and the signature of an agreement with Shell and Samsung to strengthen their FLNG collaboration. 05

15 take it Further DOInG THE right THInG TruSTInG THE TEaM EnCOuraGInG a fair return for all BuILDInG THE future

16 2012 Technip Activity and Sustainable Development Report in pictures The year in review Key acquisitions and alliances to reinforce our leadership Technip acquired Stone & Webster process technologies and associated oil and gas engineering capabilities from The Shaw Group and substantially enhanced its position as a technology provider to the refining and petrochemicals industries. Technip and Heerema Marine Contractors are in a five-year worldwide alliance where they combine their capabilities to address the fast growing subsea ultra-deepwater market. The agreement with CIMV will help Technip develop its renewable capabilities in green chemistry. Technip and Areva are going to actively collaborate on solar energy solutions for electricity generation or production of utilities for the oil and gas industry. Genesis Oil and Gas Consultants Ltd, Technip s subsidiary, acquired Suporte Consultoria e Projetos Ltda, a Brazilian pipeline and structural engineering company, to enhance its position in the fastest growing Brazilian market. Leading-edge assets The G1201, a vessel specialized in rigid pipe installation and heavy lift, joined the Technip fleet. Technip completed the construction of its new umbilical R&D facility in Newcastle, United Kingdom. Technip celebrated the inauguration of its operating center in Ghana, reinforcing its footprint in West Africa. Technip has entered a long-term charter agreement for a new build offshore construction vessel, designed to suit the Norwegian installation market. A strong commitment to sustainable development At the beginning of 2012, Technip won the Top Employers Europe label. Technip celebrated HSE through three main Group events: World Environment Day, Pulse Communication Week and Survey and Health Day. Many of our projects reached safety milestones, like the Jubail refinery in Saudi Arabia with 70 million man-hours without LTI. An example of our actions in favor of communities: 100 employees from our Houston (Texas) office raised more than $33,000 for the American Heart Association at the Annual Heart Walk. Technip has been a member of the Dow Jones Sustainability Indexes for 11 years. Technip created its Group Sustainable Development department, to strengthen its commitment. Technip launched its Facebook and Twitter accounts to improve dialogue with its stakeholders

17 take it Further DOInG THE right THInG TruSTInG THE TEaM EnCOuraGInG a fair return for all BuILDInG THE future

18 2012 Technip Activity and Sustainable Development Report 2012 in Figures KEY FIGURES Technip's performance was in line with our objectives throughout The revenue in 2012 grew by 20%, reaching 8.2 billion. For the fourth consecutive year, the operating margin from recurring activities was at 10%. Our substantial backlog, 14.3 billion at the end of the year, was diversified in terms of geography, segments and project type. We believe that we have built solid basis to sustain a profitable growth in 2013, with expanded capabilities, differentiating assets, and highly valuable teams worldwide. 8, ,082 6, REVENUE ( MILLION) Operating income from recurring activities* ( million) Subsea revenue in 2012 ( 4,048 million) reflected progress on various projects worldwide, notably in the North Sea as well as a mix of deepwater and shallow water projects in the Americas and Africa. Onshore/Offshore 2012 revenue ( 4,156 million) reflected progress on diversified projects around the world, including onshore downstream projects in the Middle East, Europe and the Americas, as well as offshore production platform projects in the North Sea, Asia Pacific and the Gulf of Mexico. * Includes the impact of assessment of purchase price allocation of Global Industries, which is reflected in the restated December 31, 2011 statement of financial position 14

19 Take it Further Doing the right thing Trusting the team Encouraging a fair return for all Building the future Net income ( million) Net income in 2012 was 540 million, up by 6.4% compared with NET CASH ( million) * ,332 Capital expenditures for full year 2012 were 519 million, compared with 357 million in Technip s investment in key differentiating assets during the year included the construction of vessels such as the Deep Orient, the Deep Energy and two 550-ton Flexible-Lay vessels for Brazil, or manufacturing plants such as the high-end flexible production unit in Açu, Brazil. Backlog ( million) , , ,251 In 2012, we maintained our portfolio diversification, invested in technology in order to increase our order intake, and made strategic acquisitions and alliances. 15

20 2012 Technip Activity and Sustainable Development Report 2012 in Figures Technip on the Stock Market Technip s shares are listed on the NYSE Euronext Paris exchange and the USA over-the-counter (OTC) market as an American Depositary Receipts (ADR), with one Technip share equal to four ADRs. Share Price Performance on Euronext Paris, Compartment A (from January 2, 2012 to December 31, 2012) Technip CAC 40 As of December 31, 2012, Technip s shares ranked 25 th on the CAC 40 by weighted capitalization (1.27%), compared to 36 th (0.64%), when Technip joined the index in September In 2012, despite uncertainty in relation to the worldwide economic recovery and European sovereign debt crisis, Technip s share price rose by 19.6% which outperformed the STOXX 600 Oil & Gas Index* by over 20% and the CAC 40 index by 4.4%. In 2012, Technip continued to implement its strategy focused on profitability based on successful project execution, technological excellence and profitable order intake. At the start of 2012, Technip s share price was and ended the year at * STOXX 600 Oil & Gas Index includes European companies that are involved in the energy sector 16

21 Take it Further Doing the right thing Trusting the team Encouraging a fair return for all Building the future Dividend for the fiscal year ( per share) Our 2012 performance enables the Board of Directors to recommend a dividend increase by 0.10 to 1.68 per share. Shareholding structure as of November 30, 2012 North America 31.7% UK and Ireland 11.7% Institutional Investors 83.1% Employees 2.6% Treasury 2.0% Others 4.7% Sustainable development indexes Sustainable development concerns are integrated into Technip s approach to project execution and in defining and applying its values. Thanks to our achievements in sustainable development, our stock has been reselected to be a part of both the European and World Dow Jones Sustainability Indexes, for the 11 th consecutive year. Technip is also part of SAM s list of best performing companies in sustainable development and ASPI Eurozone s index of socially responsible groups. Shareholders and investors contacts Technip s financial communications team is available to answer questions and provide information to individual shareholders, institutional investors and financial analysts in French and English: Individual shareholders relations Tel: +33 (0) actionnaires@technip.com Investors and analysts relations Tel: +33 (0) investor-relations@technip.com Rest of World 18.1% French Institutional Investors 16.4% February fourth quarter and full-year results MCE Deepwater Developments March 18-20, The Hague April first quarter results LNG 17 April 16-19, Houston Individual Shareholders 5.1% IFP Energies nouvelles 2.5% FSI 5.2% Technip s financial calendar April 25 General Meeting of Shareholders OTC 2013 May 6-9, Houston Main exhibitions in 2013 July second quarter results OTC Brazil October 29-31, Rio de Janeiro October third quarter results ADIPEC November 10-13, Abu Dhabi 17

22 2012 Technip Activity and Sustainable Development Report DOING the right thing Our conduct speaks louder than words. That is why we strive to always do the right thing wherever business takes us. That means not only acting transparently and keeping commitments, but also ensuring the safety of people and sustainable practices within the community and across the planet. Safety, ethics, security and respect always take us further.

23 Ethics and compliance 20 Markets and strategy 24 Health and Safety, Security 26

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25 Take it Further Doing the right thing Trusting the team Encouraging a fair return for all Building the future Ethics and Compliance Maintaining the highest ethical standards At Technip, Doing the right thing means doing business with the highest moral standards. Ethical behavior is expected of our employees, demanded by our clients and required by our shareholders. A clear strategy and a strong commitment We are dedicated to conducting business across the world according to the highest standards of honesty, fairness and integrity, and in compliance with the principles set out in the United Nations Global Compact. Everyone in the Group is expected to do the right thing and conduct our business in an ethical manner on a day to day basis. To make sure compliance is understood and applied by our employees, Regional Compliance Officers oversee daily operations and committees have been set up. We have also developed a compliance program that focuses on three main priorities: 1. Comply with the laws and regulations of the countries where Technip operates, 2. Conduct due diligence on business partners globally, to ensure that they operate in strict compliance with laws and regulations at both an international and national level, 3. Train our workforce to increase their awareness and knowledge of legal and company requirements, and to foster ethical behavior. Starting at the top Our compliance program is supported by a dedicated structure that stretches from the Board of Directors to every level of the Group. The first pillar of our compliance structure is the Ethics and Governance Committee. Created in December 2008 and composed of members of the Board of Directors, it assists the Board in promoting ethical and governance best practices. One of its main tasks is to guarantee the respect of ethical principles within the Group and debate any matter that the Board of Directors (or Chairman) submits for consideration. The Ethics and Governance Committee meets at least twice a year. It produces an annual report evaluating operating policies and proposing functional improvements. The second pillar is the Ethics and Compliance Committee. Composed of senior managers from across the Group, it reports directly to the Chairman and Chief Executing Officer (CEO). The Committee ensures that Technip s Ethics Charter and related policies and procedures are properly implemented. It submits an annual review of its actions to the Chairman and CEO recommending improvements in terms of ethics and compliance. Additionally, it gathers reports from regional managers detailing the implementation of our Ethics Charter. This Committee is very far reaching: any employee can submit a question concerning the principles set forth in the Ethics Charter. Moreover, a whistleblowing process enables Technip s employees to report if they feel that there has been a violation of its policies and procedures. The Chief Compliance Officer (CCO), who also supervises Technip s Ethics and Compliance program across the Group, chairs the Ethics and Compliance Committee. Reporting directly to the General Counsel and the Board of Directors via the Ethics and Governance Committee, the CCO is in charge of applying and enforcing the Ethics Charter and all applicable anti corruption policies and regulations. In the event of an issue involving the CEO or a top manager, the CCO would report it to the Chairman of the Ethics and Governance Committee. To ensure total independence, the CCO is not affiliated with any profit center and holds no other role within the Group. 21

26 2012 Technip Activity and Sustainable Development Report Training our workforce and leadership The Ethics and Compliance e-learning program helps raise ethical awareness. The Ethics and Compliance e learning program was launched in 2011 to raise awareness and understanding, while providing clear insight into ethical and responsible behaviors. In 2012, we expanded it to a broader population with a campaign highlighting our commitment to excellence in business practices. It was so successful that we decided to open our online training to business partners, because we believe that all third party stakeholders can benefit from the progress we are making towards maintaining the highest ethical standards. In 2013, we will continue to improve our ethics and compliance culture by enhancing our compliance program, expanding our e learning offering and adopting new policies and procedures. Regional Compliance Officers oversee everyday operations in the Regions and business units, supporting the implementation of Technip s anti corruption and compliance policies. Covering all business operations To govern our business activities, we have implemented several ethics related operational standards that translate our general principles into concrete operating procedures. The Doing Business Abroad Anti Corruption policy provides a clear and comprehensive Group wide framework to help employees operate with honesty and integrity. The policy sets out the rules governing sensitive relationships, such as negotiating with third parties and making decisions about contracts. Moral standards are expected of our employees. The Know Your Partner policy obliges potential business partners to complete a thorough questionnaire and sign a declaration of compliance with the main international laws and regulations against corruption. Internally, we perform due diligence on the information provided and we pay particular attention to any indicators that could cast doubt on the honesty and integrity of the potential partner. If any such issues cannot be suitably resolved, the commercial relationship is terminated. In 2012, we implemented several new policies. One of which governs the hiring of sub contractors. It is aligned with the Know Your Partner policy and aims to verify the reputation and integrity of our potential sub contractors. Another oversees joint ventures and consortium relationships. We also continued to enhance existing policies, revising them when necessary. For instance, we improved Technip s anti trust policy and launched a special training program for it. All the policies and procedures mentioned above apply to all operations worldwide. 22

27 Take it Further Doing the right thing Trusting the team Encouraging a fair return for all Building the future 3 QUESTIONS FOR David McGuire Vice President, Technip Marine Operations Services, T MOS (United Kingdom) Ethics governs the way we do business with our partners. In 2012, the Compliance department has launched a large scale initiative to create Technip s first Code of Conduct, which will be one of the most effective and impactful parts of its compliance program. Embracing all aspects of best practices, it will include, among others, topics related to human resources, sustainable development, safety, communication and finance. In 2013, a booklet will be produced and distributed worldwide to all employees. It will also be available on both our intranet and website, as a resource for our stakeholders to better understand the role and importance of compliance within Technip. Protecting human rights Fighting corruption is one part of our uncompromising commitment to ethics; protecting human rights is another. Technip is a signatory to the United Nations Global Compact, which covers human rights, working and environmental standards as well as fighting corruption. We respect the letter and spirit of all human rights legislation. That is why all of our entities adhere to the International Labour Organization s Fundamental Conventions regarding the elimination of discrimination, the freedom of association, the abolition of child labor, and the eradication of forced compulsory labor. Significant actions have been undertaken in favor of human rights. We added a clause to our general purchasing terms and conditions, informing suppliers that we uphold the Global Compact. Through regular inspection and audits, we verify that they comply with these values. We also encourage local initiatives. In Italy for example, we are proud to have received the Social Accountability 8000 certification for the ninth year in a row. SA 8000 is a code of conduct for improving working conditions around the world. Why is ethics important in your entity? As we have an international fleet of vessels, bringing together crew members from different cultures, and interface with many partners, our personnel are exposed to practices they may not be familiar with. We have the responsibility to ensure our employees fully understand our values and behave with sound moral judgment to avoid any customs fines, delays or even prosecution. Behaving ethically also helps us instill a sense of trust in both our partners and employees that benefits T MOS in terms of business, as well as motivation and retention of personnel. Can you give us an example of how you apply ethics principles in your scope of work? Within T MOS, we use crewing companies to help us man our vessels, as is the case with an agency based in the Philippines. We successfully completed the thorough Know Your Partner process, making sure that in spite of the distance, we retained a greater understanding of the structure and principles of this partner. It offers a level of comfort about our business relationships. In addition, we have completed a similar process for ships agents and freight forwarders, and have included a standard clause regarding company values in our contractual terms and conditions. How do you make the link between the Ethics and Compliance department and your teams? We have appointed a person who acts as the link between our teams, the Regional Compliance Officer and the department, to circulate information, monitor our performance for training and be the focal point for questions that our workforce onshore may have. We also organize regular seminars for our offshore personnel to make sure that the management on the vessels have the same briefings as our management onshore. Further to this, a key role in any marine organization is the Designated Person Ashore, ensuring feedback from the crew reaches the senior management onshore. 23

28 2012 Technip Activity and Sustainable Development Report Markets and Strategy Using our strengths to meet our clients needs and challenges Through the projects we undertake, we contribute to finding solutions to the world s energy challenges. We are known for the close attention we pay to the needs of our clients, which is made possible by our integrated management, our approach to projects, our technological expertise and local presence strategy. Markets: projecting solid fundamentals The improvement in market conditions seen in 2011 slowed slightly in 2012, after the sovereign debt crisis led the International Monetary Fund to lower forecasted gross domestic product (GDP) growth worldwide. However, growth for non OECD countries was projected at 3.6%, which was favorable for us as most of our business is generated in these countries. Oil demand in 2012 was 89.7 million barrels per day* (Mb/d), slightly down from 2011 demand (90.5 Mb/d), but still above 2010 (88.9 Mb/d). The solid level of oil demand together with a relative high priced barrel, highlights needs for more energy which would also trigger exploration, additional investments and production efficiency work increased by depletion issues in mature basins (United Arab Emirates, Indonesia, West Africa ). Hydrocarbons still supply more than 50% of the energy consumption of the Earth's 7 billion inhabitants. Exploration and production: spending set to reach a new high Despite a tougher macroeconomic environment, exploration and production investments are expected to grow by 7% in 2013 compared to 2012, which had already showed an 11% increase compared with the previous year**. International and offshore cycles momentums as well as attractive level in commodity prices are the main drivers of this contemplated trend. One notable outcome is that this growth shall be nearly entirely driven by international markets, North American evolution being seen as quite stable in A buoyant market for Technip We are confident in the growth drivers of our markets. Oil and gas account for more than half of the energy consumed by the world s population. Global primary energy demand could double in the first half of the 21 st century, and meeting this growth would require large scale and sustained investment in all sources of energy. * International Energy Agency figures ** Source Barclays, Global 2013 E&P Spending Outlook 24

29 Take it Further Doing the right thing Trusting the team Encouraging a fair return for all Building the future Second, we aim to set the industry benchmark for meeting the challenges of deep and ultra deepwater developments that require, among other things, heavy lift capabilities. Third, we are focused on subsea growth in regions that offer high development potential West Africa, the Gulf of Mexico, Brazil and Asia Pacific by not only managing a diversified portfolio of projects, but also by establishing a long term industrial footprint. Natural gas, the cleanest burning fossil fuel, has an important role to play. Our client Shell expects global natural gas demand to increase by 60% from 2010 to 2030, reaching 25% of the global primary energy mix, a vision shared by other major players***. With alternative energies growing only gradually, the share of oil and gas is likely to continue to dominate the energy market in the decades to come. Our clients must not only face an increase in demand, but also offset the decline in their reserves and undertake increasingly complex projects in challenging environments. A company like Technip, with a sound and reliable record in terms of safety and technology, is very well equipped to support these producers. Regionally, the most significant enhancements should come from Latin America, Asia and the Middle East. Our diversified portfolio strategy will help us meet the needs of these markets in Strategy: staying focused on our clients In this market context, we stayed focused on our oil and gas core business sector, where our technological expertise and solutions represent Developing assets is part of our vertical integration strategy in the subsea business. an indisputable competitive advantage that delivers real added value to our clients. We remained on course in 2012, implementing the strategy started in 2007, based on empowering our regional organization and increasing operational efficiency. Significant progress was made in 2012 in several areas by focusing on six strategic priorities: a well-diversified, profitable backlog; key differentiating assets; technology; execution capabilities; vertical integration and national content. We are also committed to a sustainable development policy that integrates environmental and social responsibility into everything we do and the way we grow our business. Subsea: increasing our global leadership Technip s comprehensive offer covers the entire value chain for subsea infrastructures, from pipeline and umbilical design to manufacturing and installation vessels (deep to shore projects). Our subsea strategy aims to extend our market leadership, as was illustrated by our acquisition of Global Industries in 2011 and our recent alliance with Heerema Marine Contractors. First, we intend to capitalize on vertical integration by increasing the production capacities of our flexible pipe and umbilical manufacturing plants and by modernizing and improving the capabilities of our fleet. Offshore: embracing frontier projects We operate in markets where technology delivers high added value, such as the ultra deepwater market (Spar technology), large units requiring sophisticated installation techniques, and the emerging market for floating liquefied natural gas units (FLNG), with construction of the units awarded by Shell and Petronas to Technip respectively in 2011 and In FLNG, we capitalize on our combined expertise in natural gas liquefaction, flexible pipelines and offshore platforms, and we intend to consolidate our leadership by working with the oil companies most committed to developing this market. Another aspect of our offshore strategy is the optimization of our ability to deliver projects in high potential regions, such as Asia Pacific and the Gulf of Mexico. Onshore: capitalizing on our expertise We are a world leader in the onshore market, and we reinforced our position in 2012 with the acquisition of Stone & Webster process technologies and associated oil and gas engineering capabilities from The Shaw Group. Widely known as a best in class player in downstream technologies, the acquired business provides us with recognized technologies and alliances in the ethylene, refining, petrochemicals and gas to liquids sectors. It also confirms our strategy of focusing on developing our main strengths: technological expertise (through proprietary technologies and partnerships with licensors), engineering and project management capabilities, and project delivery skills. *** ExxonMobil in its Outlook for Energy: a View to

30 2012 Technip Activity and Sustainable Development Report 26

31 Take it Further Doing the right thing Trusting the team Encouraging a fair return for all Building the future Health and Safety, Security Protecting people at all times From project sites to offices, from manufacturing facilities to vessels, we strive to protect our employees, clients and sub contractors. We do so by defining and strictly applying an ambitious health, safety and environment (HSE) policy, as well as an uncompromising security strategy. Our objectives for 2013 Safety Maintain a 0 fatalities rate Reduce the total recordable case frequency rate Elaborate a new three year Pulse plan Health Continue the implementation of health risk assessments on all sites and the follow up Start the health surveillance process, following health risk assessments Implement the health performance indicators described in our process Security Continue the implementation of the corporate security standards across Technip Consolidate the dedicated maritime security system across our fleet and offshore assets Implement Technip s new joint notification and incident management standard through the organization of regular crisis exercises Develop the prevention and detection of information security issues Safety: a culture of continuous improvement In 2012, a total of 172 million man hours were worked at our facilities and project sites worldwide. We are continually challenging and improving HSE management to increase performance and set the benchmark for our industry Technip safety performance Data driven prevention Our total recordable case frequency rate (TRCF), which measures the recordable incident per 200,000 hours worked, dropped to 0.24 in 2012 after rising slightly in The overall severity of incidents fell as well, and for the first time since 2005, there were no fatalities on any of our projects Total recordable case frequency (TRCF) Fatalities In 2012, we introduced the serious injury and fatality frequency rate (SIFF) in our reporting, including near misses, which are often precursors of more serious incidents. We will use this data to identify potential problem areas. We also track leading indicators to gauge the effectiveness of the proactive actions taken to improve safety performance. 27

32 2012 Technip Activity and Sustainable Development Report The Jacques Franquelin award fosters safety initiatives The Pulse leadership program Our Pulse program is one of the main ways we develop a positive HSE culture. It aims to create awareness of the challenges posed by safety, and of the human, material and financial costs of accidents. So far, more than 17,000 people have attended Pulse sessions, ranging from senior managers and managers/supervisors to the general workforce and engineers. In 2012, around 20,000 employees participated in a global HSE culture survey that focused on management commitment, risk taking and attitudes to stopping work when faced with a safety risk. The results will serve as the basis for a new three year Pulse plan. We continued our policy of making sub contractors part of implementing a robust HSE approach on worksite. To ensure everyone working on sites is fully engaged in HSE, we make our safety requirements and expectations clear to contractors at the contract stage, and provide training for all construction personnel. Leveraging leadership and communication, the Pulse program has massively contributed to improving the HSE culture and behaviors within Technip. Internally, we foster safety-related initiatives. In 2012, our annual internal Jacques Franquelin award was notably attributed to two teams, in the Doing the right thing category, for their high-safety aspect. The first team worked on risk management of soil contamination on a project site. The second one developed a method for installing offshore cables that reduced manual handling and working at height. This original concept is considered to be an industry first. Health: preventing risks and encouraging wellness Present in 48 countries, our employees travel and work in areas with different health profiles. A good knowledge of local health risks allows us to provide our personnel with the right information. Group wide health management process implemented Evaluating workplace risks, including social and psychological factors, has been at the center of our healthcare strategy since A health management process was implemented in 2011 to standardize practices throughout the Group. In 2012, a comprehensive guideline, regarding health risk assessments, was provided and a tool was also made available to the occupational health teams and HSE managers. New guidelines will be provided in To reinforce the services provided to the Regions, a new Medical Officer joined the medical team in Protecting travelers and expatriates Preventive healthcare starts with accurate information and regular training. Detailed leaflets about destination countries and specific diseases are available to travelers and expatriates on Technip s intranet. Special training for antimalarial treatments and other health risks is provided for projects in areas prone to epidemics. Medical risk alerts are issued when necessary: in 2012, 15 such alerts were issued, providing information and prevention advice. Improving medical care at sea and on land In 2012, we paid particular attention to our vessels. A new standard for the qualification and training of onboard medics was issued, and their job description was reviewed accordingly. In parallel, a new standard for vessel hospitals and medical equipment was published, bringing them in line with the standards used at construction sites. We continued to evaluate local medical resources and their ability to handle emergency situations. This review was conducted in Cameroon, Equatorial Guinea, South Korea, Ghana, Thailand, New Caledonia, Angola and Indonesia in Putting wellness in the spotlight For Technip s 2012 World Health Day, all of our entities organized a vaccination awareness campaign, complete with posters, information leaflets and workshops. Many entities invited healthcare experts to talk about the importance of vaccination and immunization. Other entities arranged for free flu shots. Across the Regions, employees also participated in awareness and fund raising healthcare activities for heart disease, smoking and diabetes. Several entities, including Technip s headquarters, started surveys and assessments of psychosocial risks at work. 28

33 Take it Further Doing the right thing Trusting the team Encouraging a fair return for all Building the future 3 QUESTIONS FOR Regular health checks are provided to our employees in our operating centers and project sites. Security: keeping our people out of harm's way Ensuring the security of our people and crews while operating in challenging environments is our security priority. An evolving international context 2012 was a challenging year, with more staff and operations around the globe, evolving maritime risks and an increased number of cyber attacks. Our robust security management system supported several vessel transits in high risk areas and the maintenance of operations in secure conditions in the Middle East and North Africa after the Arab Spring. All round protection Technip Security division monitors security issues affecting the working conditions and environments of our people and crew members, regardless of where they work or travel. Our strategy is to evaluate and prevent security risks while enhancing our ability to manage any kind of incident. Thanks to our fully independent assessments, we keep our teams permanently informed about security issues. Travelers Handbooks for all countries where we operate are given to staff prior to any mission. Real time security alerts are issued to inform travelers of changing security conditions worldwide. Through a system proprietary software, we are in permanent contact with all personnel in transit to inform and support them in case of an incident. In 2012, we distributed the Information Security and Privacy booklet to all our employees. Security starts with information In 2012, we consolidated our best practices and initiatives introduced in 2011 and kept innovating to enable our projects to be well integrated locally and continue to operate in volatile countries notably by forming close ties with local communities, clients and partners. Following the expansion of our fleet, maritime security processes were upgraded for the protection of vessels during operations and transits in sensitive areas. In 2012, an internally developed anti piracy DVD was given to all fleet staff. It contains information on threats and security recommendations. To answer a project s specificities, dedicated security inductions are conducted. Regular live exercises were carried out in Technip s main entities and projects to strengthen its response capacity. We continued to enhance our emergency communication capabilities, to keep in touch with our people and external stakeholders in the event of an incident. Regular security training and awareness raising sessions are held in entities for all staff. In order to reinforce the protection of our information and know how, a dedicated Information Security and Privacy booklet was distributed in 2012 to all employees. Also, a permanent independent audit process was implemented to regularly test the security of our IT systems, and therefore reduce risk exposure as well as anticipate new threats. In this context, the IT Security unit received additional resources to handle the ever changing IT protection landscape. Venus Maroun Group Security Manager (France) and Nigel Hope, Group Fleet Security and Emergency Response Director (United Kingdom) Why is maritime security so important at Technip? Following the development of our activities, our areas of operations have extended worldwide and some projects are located in regions with maritime and piracy threats. At all times, Technip Security ensures that dedicated processes are implemented throughout the Group for the protection of crews and the smooth execution of operations. What were the maritime security challenges in 2012? The capacity of our fleet to operate worldwide has led to a major increase of transits in piracy hotspots: for example, six transits happened in the Gulf of Aden and Arabian Sea in 2012, versus one transit in Several projects are also situated in the Gulf of Guinea where piracy incidents have significantly augmented. In addition, our projects are getting more complex as they involve staff and vessels from different Regions and marine centers across the Group. The maritime security organization, based on regional time zones and coordinated by our headquarters, has enabled us to tackle these challenges. Can you provide examples of measures in place for the protection of crews and vessels? To protect vessels transiting in piracy hotposts, we harden them by setting up barbed wire over the freeboard or on the main deck, welding steel plates at critical access points, adding lookouts during the transit, conduct lock down drills Depending on the threat assessment, an escort vessel or embarked armed security team can be provided. In liaison with our Legal department, we strictly control their skills, capacities and processes, notably the rules for the use of force. We also focus on security and awareness-raising briefings as the crew plays a key role in the prevention of threats. 29

34 2012 Technip Activity and Sustainable Development Report Trusting the team You already know the feeling that comes from joining together to successfully solve a major challenge. Our ability to combine talents and deliver success makes us unique. We value diversity, and have passion and true belief in each person s contribution. It is the trust and confidence between team members and between teams that take us further.

35 Governance and organization 32 Human resources 36

36 2012 Technip Activity and Sustainable Development Report 1 Julian Waldron Chief Financial Officer Thierry Pilenko Chairman and Chief Executive Officer 3 5 Nello Uccelletti Senior Vice President, Onshore 6 Thierry Parmentier Human Resources Director 4 2 Frédéric DELormel Executive Vice President and Chief Operating Officer Subsea Philippe Barril Executive Vice President and Chief Operating Officer Onshore/Offshore Last year, we started to see the impact of our strategy and acquisitions reflected in our backlog. In 2012, we signed a worldwide alliance agreement with Heerema. Together, we will provide our clients with unrivalled capabilities for execution in harsh, ultradeepwater environments, enabling them to bring these promising reservoirs into production. We will stay focused on the core processes of the company: safety, quality, compliance and more than ever people development. 32 In 2012, we expanded our services and technology offering and consolidated our project and regional portfolio. The acquisition of Stone & Webster process technologies has increased our portfolio of onshore technologies and reinforced our presence in some strategic countries. The joint effort of the Regions and the new dedicated business unit will allow us to gain a better and well diversified market share starting in 2013.

37 Take it Further Doing the right thing Trusting the team Encouraging a fair return for all Building the future Governance and Organization Keeping our standards high At Technip, we are committed to maintaining the highest standards of corporate governance, notably by complying with the French AFEP MEDEF code for corporate governance of listed companies. Representing operational and support functions The Chairman and Chief Executive Officer (CEO) is responsible for the general management of Technip and is assisted by the Executive Committee. Three other special committees report to the Chairman and CEO: the Sustainable Development Committee, the Ethics and Compliance Committee and the Disclosure Committee. The Executive Committee is comprised of the Chairman and CEO, two Chief Operating Officers from our business segments (Subsea and Onshore/Offshore) and the Senior Vice President, Onshore. Three key corporate functions are also represented by the Chief Financial Officer, the Human Resources Director and the General Counsel. 7 John Harrison General Counsel 6 7 At Technip, mobility is threefold: geographical, functional and between business segments. It is one of the tools which help our talents to develop their potential and get ready for the challenges of the future. We continued to share our values with all of our stakeholders, especially with the 3,000 new talents that have joined the Group through major acquisitions. The Executive Committee prepares decisions for approval by the Board of Directors, including those related to the approval of accounts, the setting of objectives, budgets, strategic orientation, as well as investments and divestments. It supervises the monitoring of major contracts and evaluates key investment decisions. It also examines the plans and recommendations put forward regarding internal audits, information systems and telecommunications, human resources and asset management. Enabling growth through empowerment Technip is organized into seven Regions, each responsible for its own client relations, operations and financial results: Asia Pacific, Brazil, Middle East, North America, North Sea Canada, Region A (Western Europe, Africa, India and Pakistan) and Region B (Italy, Greece, Eastern Europe/Russia/CIS and South America). The head office, comprised of our senior management and corporate teams, supports the Regions with advice and expertise in cross functional areas such as quality, health, safety, security, environment, finance, legal affairs, human resources, product lines, communications, sustainable development and information systems. 33

38 2012 Technip Activity and Sustainable Development Report Embodying our diversity and global reach 1 The Board of Directors determines the strategic business directions of Technip and supervises their implementation. It is made up of 11 members, including eight independent Directors, who bring an in depth understanding of our major clients and markets, such as North America, the North Sea, Asia Pacific and Brazil. With four women and seven nationalities, the Board reflects the diversity of the Group. It also complies with the AFEP MEDEF code, which calls for women to make up at least 20% of the board members of French listed companies in April 2013, and 40% by The Board is assisted in its duties by the recommendations made by four committees. The Audit Committee assists the Board in ensuring the quality of internal controls as well as the integrity of the information disclosed to shareholders and financial markets. The Nominations and Remunerations Committee makes recommendations to the Board on the appointment of Directors, examines the policy governing the compensation of Executive Committee members, and proposes the remuneration of the Chairman and CEO of the Group. 2 The Strategic Committee assesses Technip s overall strategy (strategic orientations, plans and budgets, investments, acquisition and disposal of assets) as proposed by the Chairman and CEO. Finally, the Ethics and Governance Committee promotes best practices regarding governance and ethics within the Group. The activities of the Board of Directors are governed by a set of internal regulations, and a Directors Charter defines the rules of conduct and duties of Board members. Composition of the Board of Directors at February 28, 2013: Thierry Pilenko - Technip s Chairman and CEO Olivier Appert - Chairman of IFP Énergies nouvelles Alexandra Bech Gjørv* - Partner in Advokatfirmaet Hjort Da Pascal Colombani* - Chairman of the Board of Directors of Valeo Leticia Costa* - Associate of Prada Assessoria Marie-Ange Debon - Corporate Secretary of Suez Environnement C. Maury Devine* - Member of the Boards of Directors of FMC Technologies and John Bean Technologies Gérard Hauser* - Member of the Boards of Directors of Alstom and Ipsen Marwan Lahoud* - Chief Strategy and Marketing Officer of EADS John O Leary* - Chairman and Chief Executive Officer of Strand Energy Joseph Rinaldi* - Partner in Davis Polk & Wardwell 3 *Independent Director 34

39 Take it Further Doing the right thing Trusting the team Encouraging a fair return for all Building the future The Board of Directors will submit the nomination of two additional Directors to the General Meeting of Shareholders scheduled for April 25, 2013: Manisha Girotra - Chief Executive Officer of Moelis & Company in India, Pierre-Jean Sivignon - Chief Financial Officer of Carrefour group. Marwan Lahoud has not solicited the renewal of his appointment as a member of the Board of Directors, which will expire on April 25,

40 2012 Technip Activity and Sustainable Development Report 36

41 Take it Further Doing the right thing Trusting the team Encouraging a fair return for all Building the future human resources in action In 2012, we began a new three-year action plan for Human Resources (HR), focused on improving the quality and impact of HR practices and also on strengthening business support. Our objectives for 2013 Recruit with impact Strengthen succession plans Develop core populations Promote positive diversity management Ensure reliability, consistency and completeness of HR data Supporting business development Our HR strategy aims to support the Group in its development, notably by providing experienced personnel, improving people management and developing tools to standardize practices across the organization. Accompanying the growth with recruitment Our business is developing strongly. Although our Job Portal remains the key tool for recruitment, we have had to identify other solutions to meet the increasing demand for new employees in We opened a new recruitment center in Malaysia, improved cooperation between centers, ran special recruitment campaigns and increased our social media presence. Those initiatives helped us continue to deliver projects under good conditions. During the same period, attrition decreased globally, thanks to improved people and career management. In action: A new recruitment center in Asia Pacific In 2012, we established the Asia Pacific Recruitment Center in Kuala Lumpur, Malaysia. It is a creative and innovative solution to sourcing and recruiting, as well as improving and promoting Technip s employer brand. We set out to recruit 2,000 people, and by the end of the year the Center had exceeded its objectives, and had already coordinated 2,119 recruitments. We plan to strengthen this process in 2013, and from 2014 onwards, our ambition is to support the Group HR and begin recruiting for other entities. Kasuma Satria Matjadi, Vice President, Human Resources and Corporate Development in Asia Pacific Integrating employees from recent acquisitions When we complete acquisitions, our goal is to make the transition as smooth as possible for the employees joining Technip. In 2012, we acquired Stone & Webster process technologies from The Shaw Group and successfully onboarded the employees. In action: Onboarding ex Shaw Group employees A 60 member team of representatives from both companies led the effort of this overwhelmingly successful integration into Technip. Key success factors included the high level of interaction, transparency, and consistent communication that began with Thierry Pilenko s warm greeting, and included town hall meetings and a comprehensive welcome booklet. The reception was friendly and genuine, and we look forward to continuing our integration into the Technip family. Paula King, Vice President, Human Resources, Technip Stone & Webster Process Technology Toward standardized HR systems Over the last four years, our Human Resources Without Borders program has been an important step towards standardization of HR systems. In 2012, we took a step forward, working on the harmonization of the way information is shared between the various HR systems used locally. We started the rollout of an employee and organization management tool that greatly facilitates day to day HR management. In parallel, we developed an ipad application for top managers and senior HR staff to have immediate access to employees information. 37

42 2012 technip activity and SuSTaInaBLE DEvELOpMEnT report in 2012, we faced large recruitment objectives. in action: an innovative application on ipad The ipad application we developed provides Group decision makers with secure, anytime access to key HR information like profiles, appraisals and career plans. Technip s HR executive Application System (HReIS) recently won the Digital Innovation Trophy in France, highlighting the great work that has been done by our team and encouraging a collaborative mindset. alain SOuny, vice president, human resources information SyStemS unlocking the potential of our people We continued to Strengthen our ability to identify and nurture talent. talent management In 2012, we conducted our biggest people review campaign ever: Technip management, supported by Hr, reviewed the careers of all middle and senior managers, as well as all high performers. This resulted in internal mobility opportunities, personal development plans and long-term career paths for each person. The review also enabled Hr to develop a strong succession plan for senior managers and identify pools of high-potential individuals. Moreover, thanks to the application for the second year of our revamped expatriation policy, we continued to promote international mobility, which is one of our key tools to help build tomorrow s leaders. Our four values: the Foundation of our culture An e learning course helps us translate our group values into actions. in action: reviewing 1,300 people in India In 2012, a special focus was given to the people review in India, to cover 100% of the eligible employees (more than 1,300 persons). We focused on high potential talents. Several employees were deemed ready for career development and they will be given new opportunities in the near future. The aim is to go beyond each operating center s needs and find greater opportunities for our people across our three centers in Delhi, Mumbai and Chennai as well as in the rest of the Group. SaMIk MukHErJEE, country manager and vice president For india learning and development Technip university is our cross-regional organization dedicated to growing knowledge. In 2012, two major project management initiatives were launched. Technip s Council for project Management and Technip university created the project Leader Development program (pldp). It empowers employees to assess their skills against a standard competency framework and compare their strengths and areas for development with current and future job requirements. as part of the program, Technip university is sponsoring a knowledge transfer project to accelerate the development of our next generation of project managers. Thirteen project management experts are helping 33 employees build their skills, with the goal of acquiring the expertise needed to take on assignments with larger scope and scale. additional employees and experts will be added to this project in When we undertook our brand revitalization program two years ago, we redefined our four corporate values to better reflect who we are and how we work: doing the right thing, Trusting the team, encouraging a fair return for all and building the future. To help all of us integrate our group values into everyday life, an interactive e learning course was launched in 2012 to improve our understanding of the behaviors, clarify how we evaluate ourselves and link them to the performance appraisal process. in this framework, 12 concrete behaviors were identified three per valueto express more tangibly how our values should be reflected in actions. in action: The project Leader Development program Participants remark on and appreciate the value of the skill development plans, as it is the first time they have seen development documented in such a manner. This approach also allows management to see who is ready for greater responsibility, as the University reports progress to the Council for Project Management. rebecca JOHanSSOn, vice president, technip university compensation and benefits Technip Capital 2012, the capital increase for the Group s employees, was held in July 2012 and created over 1.1 million new Technip shares, for an investment of about 66 million. More than 8,500 employees from 21 countries invested in the operation: with a 40.6% subscription rate, it was the highest ever for a Technip capital increase. in action: a first successful participation of Technip in Greece Taking part for the first time, Technip in Greece had the best participation rate in Technip Capital It was mainly due to the fact that it was a very good investment program. HR also created a climate of trust and dialogue between management and employees that reinforced our sense of belonging to an important and stable company. DIMITrIS SOTIrOpOuLOS, general manager of technipetrol hellas S.a. 38

43 Take it Further Doing the right thing Trusting the team Encouraging a fair return for all Building the future 3 QUESTIONS FOR We bring together employees from different cultures. Promoting social responsibility in the long term Technip is committed to a responsible HR approach. We encourage businesses to create both economic and social value by focusing on issues such as diversity. In 2012, we received several distinctions underlining the quality of our HR processes and working conditions, including the Top Employers Europe award (CFR Institute). Developing social dialogue Technip has built a culture based on trust, mutual respect and dialogue. To turn this culture into a competitive advantage, a Group HR policy will provide in 2013 a frame of reference for the collective relationships with trade unions and other employee representatives. It reinforces our commitment to long term business development through an open dialogue with personnel and external stakeholders. In 2012, more than 58 new collective bargaining agreements were signed, covering remuneration, working conditions, health and safety, equal opportunity and training. The 14 members from 10 European countries of the European Works Council met twice during the year. Strengthening diversity In 2012, Technip employed people from 109 nationalities, and women make up nearly a quarter of our workforce. Increasing diversity is embedded in all our talent management processes, from hiring to succession planning. Our approach is to improve our diversity mix with new joiners and to push the best to the top. In 2012, 24% of our people were female. In action: A diverse Board of Directors In 2012, we welcomed Alexandra Bech Gjørv as a new member of the Board. With four women and seven different nationalities out of 11 representatives, the Technip Board has clearly moved towards a greater diversity which is part of a drive for better governance. Technip is truly an international leader in the oil and gas service industry, and I am convinced that this increased diversity brings a strong added value to the Group in terms of culture, knowledge of the business environment and different perspectives on issues. Leticia Costa, member of the Board of Directors Providing employment to people with disabilities Again this year, we continued to support initiatives in favor of people with disabilities. From 2009 to 2012, the employment rate of people with disabilities has risen from 0.6% to 0.7%. For maximum efficiency, we target our efforts locally. In action: Technip in France working to improve inclusion Our Paris center actively supports public private initiatives for people with disabilities. Through Mission Handicap, which has been running since April 2010, we participated actively in the French Disability Week with several awareness activities. We also took a step forward by signing our first corporate agreement covering the hiring and career development of disabled employees. Patrick Dudouit, Mission Handicap Manager, Human Resources Thierry Parmentier, Group Human Resources Director (France) Technip expects to reach a headcount of 40,000 by How are HR preparing for this rapid growth? We have made sure we have robust and scalable processes in place that enable each entity to add staff effectively. During the period, we designed and developed these processes and in 2012, we began their implementation. We also cultivate a very open culture that sees the arrival of new people as enriching and highly complementary. We strengthen this culture through seminars, town-hall meetings and e-learning. What progress have you made on intergenerational HR management? Six percent of our workforce is over 60 years of age. Their experience and knowledge is a priceless asset, one that we cannot afford to lose. At the same time, our workforce is growing quickly, 22% of which being under 30. For several years now, our goal has been to create pathways of knowledge transfer. Our efforts will continue in this area. How do you identify and develop future leaders while ensuring an equal chance for all? It comes back to the processes I mentioned earlier. These include standardized performance appraisals and our Company wide people review. The goal is to find talents worldwide using objective measures and to give them the skills they need to advance. One way we do that is through our Technip University leadership training courses, but there are many others. To address gender diversity, in 2012 we focused on identifying a pool of talented women who are suitable for more senior positions. 39

44 2012 technip activity and SuSTaInaBLE DEvELOpMEnT report encouraging a Fair return For all We believe in profitable projects based on sustainable relationships. We seek to enhance our performance and share the benefits of every achievement with our stakeholders: clients, employees, shareholders, partners, suppliers and local communities. Fair returns take us all further.

45 Local communities 42 Business stakeholders 46

46 2012 Technip Activity and Sustainable Development Report 42

47 Take it Further Doing the right thing Trusting the team Encouraging a fair return for all Building the future Local communities Contributing to national economies and local development Technip is committed to encouraging a fair return for all. We strive to share the benefits of our successes with all our stakeholders, and notably local communities. Our objectives for 2013 Continue to increase the national content of our projects Select local initiatives more carefully to increase our positive impact on communities and national economies Promote and engage our workforce as volunteers and active players in sustainable development Create a position of Local Communities Manager to better coordinate the strategy and actions at Group level Stimulating national economies National content and multi local footprint of talents are one of our strategy s pillars. Our Regional presence puts us close to our clients, wherever they operate. It also helps us meet the growing demand for national content, in both developing and mature markets, and respond to local needs and sustainability issues. Establishing a deep rooted presence We are a truly multi local company with a strong regional focus. In the past 15 years, our workforce has been multiplied by 2.6 in Europe, by 44 in North America, by 15 in Asia Pacific, by 12 in South America and by 13 in the Middle East. During the same period, we launched activities in Africa and the North Sea, where we now employ 700 and 4,000 people respectively. Today, we are present in 48 countries, with production assets on every continent and an extensive network of suppliers, giving us the ability to undertake projects with a very high level of national content. For example, the supply contract for integrated production bundles delivered in 2012 to Papa Terra BV in Brazil, was executed with over 50% national content. Every time we open new offices, our objective is to stay for the long term. In 2009, we took our first steps in Ghana, an emerging oil and gas country, by opening a sales office. Three years later, we reinforced our presence there and inaugurated an engineering center, as part of a joint venture with Ghana National Petroleum Corporation, where 80% of the employees are Ghanaians. This center cooperated with our other centers to execute the Jubilee project, the first offshore field developed in Ghana, and is currently working on the second phase of the project. Promoting employment and skills transfer We play a key role in giving priority to on site hiring, while strengthening our multicultural identity: Group wide, 79% of our staff are local. For example, 100% of the workforce at our Dande spoolbase in Angola are Angolan, and 99% at our Tanjung Langsat factory in Malaysia are Malaysian. 43

48 2012 Technip Activity and Sustainable Development Report Our human resources strive to identify local talents and help them develop, notably through skill transfer and training. Our Technip Leading Edge Program, part of the career development process for managers, provides a common leadership culture for people from all nationalities, cultures and backgrounds. In , 102 people of 27 nationalities participated in the program. We play a key role of local employer. In our Asiaflex Products plant for example, 99% of our staff are Malaysian. Our activities generate indirect jobs. We work with clients to source materials and equipment locally whenever possible, and continue, according to our program launched in 2012, to qualify more and more suppliers from emerging countries. Our projects also help create employment in housing, healthcare, transportation and catering. Supporting local communities We are strongly committed to respecting local cultures. We work to improve the wellbeing of communities by encouraging solidarity at a local level, as well as through our newly created Technip Relief and Development Fund. Building trust and confidence through open dialogue Local communities are essential stakeholders and their support is an integral part of a project s success for us and our clients. In the United Kingdom, we have been involved in the Vattenfall led Aberdeen Bay offshore wind farm project since We have participated in various stakeholders events to explain the purpose and characteristics of the development, and address their potential concerns. A close and continuous relationship Our operating centers and project teams develop their own initiatives to support local communities, with an emphasis on issues related to children and education, health, people with disabilities and humanitarian projects. In 2012, charitable actions were carried out in 26 countries and donations reached more than 1 million. Some of our entities have comprehensive and sustained programs to take care of their local communities. For example, Technip in Brazil drafted two procedures in 2012 about corporate social responsibility (CSR) and inclusion of people with disabilities. Two social initiatives in Brazil were rewarded in The Technip Citizen Movement, a global day of action for community service, received our Jacques Franquelin internal award. The other program, consisting of initiatives towards our employees families and community, obtained the Social Service from Industries award in the sustainable development category. While our priority is long term engagement, we are also capable of collecting significant resources for disaster relief. Through a contract with Nagarjuna Oil Corporation, we work on a refinery complex at Cuddalore, in southern India. In 2012, when the area was hit by a devastating cyclone, the Technip project team helped assess the situation and provide assistance to the local population. Moreover, we work closely with clients and sub contractors to carry out initiatives in favor of local communities. The Macedon gas plant project team in Australia is collaborating with the client BHP Billiton, sub contractors and local communities to preserve the cultural heritage of Aboriginal people and protect indigenous flora and fauna. In Malaysia, we have teamed up with our client Statoil to visit and cheer up children at the Kuala Lumpur hospital. We regularly carry out initiatives in favour of local communities, such as schools sponsoring. 44

49 TakE IT further DOInG THE right THInG TruSTInG THE TEaM encouraging a Fair return For all BuILDInG THE future Another facet of our long term relationship is a fund raising widget on the Technip intranet that employees Technip supports the Red Cross preparation and response disaster ReAdy Fund. Technip supported the equipment of a computer room for the ghanaian kumasi university. technip relief and development Fund at Group level, we established the Technip relief and Development fund in 2011 to reinforce our CSr in the countries where we operate. The fund supports non-profit social and general interest projects, primarily focused on health, education and underprivileged communities. In the event of natural disasters, it also contributes to emergency missions. Since 2012, employees are able to directly submit project proposals to the fund via the company-dedicated intranet. During the year, the fund financed equipment for a computer room at the kumasi university in Ghana for use by students working on entrepreneurial projects. The fund also signed a long-term partnership with the red Cross non-governmental organization (see insert below). LOnG-TErM partnership with THE red CrOSS The Technip Relief and development Fund supports the Red Cross ReAdy Fund, a preparation and response disaster fund which finances actions worldwide in a sustainable approach. can use to donate money in the event of a disaster, with a 100% matching contribution from the group. Additionally, as part of an agreement established for the first time in 2012, our corporate doctor is made available for up to three weeks per year to provide medical assistance alongside the Red Cross teams in case of a natural disaster. 3 QueStionS For adriana rugeles, CSr Coordinator (Colombia) can you describe your relationship with the local communities and the way you are organized? we work with the local communities to shape business projects, conduct social investment, encourage volunteering and partner with local stakeholders. The goal is to encourage economic, social, educational and cultural development for the good of all. To do so, we have an annual CSr plan and budget and a dedicated team, comprised of two people in Bogotá and one in Barrancabermeja. Employees volunteer for many of the programs, such as our work with the homeless, distributing food and entertaining children. can you tell us what you did in 2012 that you are the most proud of? Our client Ecopetrol held a competition in 2012 for CSr excellence among suppliers and we won a prize recognizing our good practices in this domain. In addition, we donated machinery for cheese production and provided the technical assistance of an engineer to the asociación para Desarrollo Comunitario Merquemos Juntos, to help this association start a new food plant. What are your priorities for 2013? we will keep developing programs and projects in accordance with our plan. we are also looking at supporting a project that the Corporación Desarrollo y paz del Magdalena Medio association is developing. we will continue to structure our volunteering program in order to give employees more ways of giving back to the local communities. 45

50 2012 Technip Activity and Sustainable Development Report 46

51 Take it Further Doing the right thing Trusting the team Encouraging a fair return for all Building the future Business stakeholders Building value that benefits everyone Completing projects profitably and having a strong balance sheet are among our main responsibilities. By ensuring long term growth and employment, while creating a stable business environment for our economic partners, they contribute to sustainable development just as much as environmental protection and social initiatives. Our objectives for 2013 Pursue focus on client satisfaction and performance improvement Monitor sustainable development aspects of selected suppliers and sub-contractors in their supply chain methodologies Meet the needs of our individual shareholders and reinforce our relationships Maintain open, credible and consistent communications with all investors and provide Technip s management with relevant financial information Clients: national content and quality We are committed to creating value for our clients by providing quality services and delivering high performance installations that include significant levels of national content. Delivering client satisfaction and competitiveness Because it is the cornerstone of how we deliver client satisfaction, quality is at the heart of our priorities and the quality management systems of all our operating centers are ISO 9001 certified. To gauge client satisfaction, we measure nine indicators for all projects: health, safety and environment (HSE); project delivery; client relationships; documentation; scheduling; costs; resources; contract management and installation performance. We use questionnaires to evaluate performance over the duration of the project, understand clients expectations and identify potential improvements. Over 190 surveys were conducted in 2012 and the results showed a high level of satisfaction, on par with 2011, especially in HSE, project execution, installation performance and client relations. In 2013, we will again conduct 190 customer surveys to better analyze our clients perceived service level. To capitalize on the lessons learned, we have extended the new knowledge management system across all our Regions. We also continue to maintain our focus on costs and scheduling to further improve competitiveness. Following the introduction in 2010 of Lean principles for operations and Six Sigma quality improvement, more than 100 Lean Six Sigma leaders have been trained to spread the programs throughout the organization. Also, more than 80 quality initiatives have been launched across all our business areas and we aim to reach 100 across the Group in Increasing the national content of our clients projects With a presence in 48 countries, Technip is both international and very local. This allows us to deliver world class projects to our clients while meeting their objectives to increase national content (see Local communities chapter). 47

52 2012 Technip Activity and Sustainable Development Report Sub contractors: the power of collaboration The success of our projects depends in part on the quality of our sub contractors. No matter whether they are providing equipment or manpower, we always take an integrated approach to working with them. Our close relationships benefit all stakeholders. Sustainable procurement At Technip, sustainable procurement starts when selecting suppliers who share our values and standards. We also recognize the strategic importance of HSE in the quality of their operations and in our relationship with them. When choosing equipment suppliers, we focus on sustainable development criteria along with economic and technical performance data. For example, greenhouse gas emissions produced by equipment transportation are considered when making technical and commercial comparisons. Since 2006, our general purchasing terms and conditions have incorporated Technip s values, and a clause informing suppliers that we uphold the United Nations Global Compact principles. We verify that our suppliers comply with these values through inspections and audits. To sustain our long term, profitable performance, we use two regularly updated IT tools. One aims to promote a design to cost culture among our engineers, while the other provides our buyers with the most competitive best practices for procurement. Technip buyers are trained to uphold ethical standards and recognize the risks of corruption. They were among the first to be trained as part of the major ethics awareness campaign held in 2011 and 2012 (see Ethics and compliance chapter). Technip and its sub-contractors share the same values regarding sustainable development. In 2012, we continued to work with clients to develop procurement policies aimed at increasing the national content of projects, both in terms of industrial capacity and human resources, without compromising on quality and HSE practices. In 2013, we will organize an HSE awareness raising campaign in India, similar to the one we organized in 2012, in Shanghai. Ensuring accountability among construction sub contractors At project level, we use a process that integrates ethics and sustainable development in construction execution. It starts during the sub contractor selection phase. The call for bid documents, sub contracting procedure and final selection systematically include sustainability requirements. Project procedures and plans make sub contractors take greater responsibility for environmental protection and societal commitments. These documents serve as a framework and guidelines for sub contractors to help them draft their own procedures. They also describe how compliance to our principles will be ensured, through notably awareness raising meetings and training, and monitored. At corporate level, the Group Sustainable Development department has defined a strategy that aims to promote sustainable development practices among sub contractors and suppliers. The Group Construction Method Center in Abu Dhabi has turned this strategy into a tangible set of deliverables that can be used in projects and by sub contractors to promote a sustainable development culture, solutions and responsibilities on site. Fostering renewable energies on construction sites We focus on quality and HSE to meet our clients' requirements. At the end of 2012, a new initiative which will involve later on our sub contractors was launched to study the feasibility of implementing renewable energy on a pilot construction site. The Group Construction Method Center in Abu Dhabi had already performed a study to identify what activity and areas could benefit from green energy while minimizing the risk for production. In parallel, a study has started in other areas, such as water and waste, to learn from previous projects. 48

53 Take it Further Doing the right thing Trusting the team Encouraging a fair return for all Building the future 3 QUESTIONS FOR John Lindley, Vice President Procurement and Supply Chain Management, Global Projects Organization, BP (United States) In 2012, our individual shareholders visited our manufacturing pipe plant in Le Trait, France. Shareholders: benefiting from responsible growth Technip encourages a fair return for all of its stakeholders and therefore takes care to share the benefits of its growth with its shareholders. to that end, Technip s Board of Directors proposed that the General Meeting of shareholders of April 25, 2013 approves a dividend of 1.68 per share, a 6.3% increase over the previous year. Our individual shareholder relations are based on transparency and proximity and in 2012, we continued to promote an active and ongoing dialog with them. Two topic specific conferences were hosted at Technip s corporate headquarters, including one on our offshore wind activity, and we organized a visit of our manufacturing plant in Le Trait, France. We also met investors in Strasbourg and in Paris (France), during the Actionaria exhibition for individual shareholders of listed companies. We were awarded the Jury s Special Grand Prize for the organization of our General Meeting of Shareholders as well as a silver medal at the Shares Grand Prize for our share performance. During 2012, we continued to provide the institutional investment community with in depth information regarding our strategy, operations, technologies and financial results. This was done primarily through our investors dedicated website, where all press releases, presentations, audio webcasts and transcripts are freely available. Group and individual meetings were also held with investors, including roadshows and broker hosted conferences in 16 cities worldwide, visits to Technip s offices, and energy industry conferences. In October, we successfully hosted our second technical workshop, which focused on Technip s expertise in refining, via an audio webcast. What is BP s overall approach and strategy to quality? The quality of our supply chain is key. Our ultimate goal is to deliver projects that are defect free, start up, and stay up in production for many years. We want to further develop a quality culture that does not create, accept or pass on defects through the full project life cycle, starting from concept selection through to the first 24 months of operation. So, Technip has a large role to play in what we do: your performance is, in many respects, our performance. How does quality impact your partners, and especially Technip? Very significantly. We carefully choose the types of relationship we want to have and clarify how we will work with those sources of supply. Technip is seeing the benefits of working with us to improve its quality capability in a number of ways. These include among other things: visibility of performance including process safety, as we did recently with Genesis (Technip s subsidiary); and commitment to longer strategic relationships that reward great performance with future business. How do you evaluate Technip s specificities and culture regarding quality? In 2012, BP s GPO project conference was themed quality build, in line with our company commitment to quality. It is reassuring to hear that Technip is on a similar quality journey. We must continue to work together to improve quality across the industry. Our supplier quality management group provided positive feedback on Technip s capability and approach to quality earlier this year, following a collaborative engagement with its executive quality leadership team. It is also important that Technip feels empowered to propose quality improvements for BP to tackle, since we believe that quality is everyone s job. 49

54 2012 Technip Activity and Sustainable Development Report building the future At Technip, we are building the future through today s most ambitious energy infrastructure projects. We are also creating the conditions that will generate tomorrow s game changing innovations by developing our people. Entrepreneurial attitude, quality, investment and anticipation are at the very heart of how we are taking it further.

55 innovation and technologies 52 Ope rations 54 Subsea 54 Offshore 60 Onshore 66 Environment 72

56 2012 Technip Activity and Sustainable Development Report Innovation and technologies An expert in high added value technologies Innovation plays an essential role in all our activities. It helps us meet our clients needs effectively and provide tailored, high performance solutions. Our research and development (R&D) teams are the driving force behind our track record of successful innovation. At Technip, we foster innovation. We develop, design, integrate and market a wide range of technologies to complement and expand our offerings patent families registered, in force in more than 90 countries Nearly 70 million R&D investment per year Global network of more than 500 experts World class R&D centers Through our R&D centers, we optimize design and execution: Flexible pipe centers in Le Trait (France), Rio and Vitória (Brazil) Rigid pipe and fleet development centers in Aberdeen (UK) Umbilical center in Newcastle (UK) Hybrid riser center in Nîmes (France) Ethylene and hydrogen centers of expertise (US, Benelux and India) Onshore process development laboratory in Weymouth (US) AETech, part of our Asset Integrity Management (AIM) Services (France) Offshore and onshore product lines and technology (France) A leader in proprietary technologies for the onshore sector We cover a wide range of onshore technologies for the oil and gas chain as well as petrochemicals. At Technip, we foster innovation. Our newly created Technip Stone & Webster Process Technology business unit has a portfolio of proprietary technologies in ethylene, refining, hydrogen, petrochemicals, and gas to liquids including technologies offered through alliances or partnerships with other companies such as ExxonMobil Chemical Company. Our 50/50 joint venture, Badger Licensing LLC, offers technology in the area of phenolics and styrenics. Proprietary platform designs to answer the industry s needs In the offshore business, our R&D effort is focused on technology transfer for national content and new frontier areas such as ultra deepwater. As drilling activity and developments move into colder regions, Technip is developing designs and methods that will allow for the safe exploitation of resources in ice prone zones. Pipe technologies: primary focus of subsea R&D New initiatives are currently in the development phase for continuous rollout to projects following a rigorous gate review process. We own proprietary technologies for flexible pipe, integrated production bundle, pipe in pipe components, umbilicals, pipelay equipment and riser configurations. Our R&D activity is focused on four major technological trends: water depth, harsher environments with complex reservoirs (including high pressure and temperature), asset integrity to increase the life of field operation, and mastering the subsea value chain. Centers are equipped with a full range of test facilities, making it possible to simulate realistic service conditions on actual pipe samples. 52

57 Take it Further Doing the right thing Trusting the team Encouraging a fair return for all Building the future 2011 Signature of an engineering, procurement and construction contract for Prelude, the world s first floating LNG unit, which Shell will operate off the shores of North West Australia 2007 Installation of free standing hybrid risers on the PDET gas export system in Brazil (for Petrobras) Tomorrow recent technological firsts 2012 World s first large application of ethylene from fuel gas (for Reliance) 2010 Contract for the world s first subsea implementation of our reelable, electrically trace heated pipe in pipe (ETH PIP) technology (for Total) 2008 Certification of the Aerial LNG Loading system (ALLS) by Det Norske Veritas 2006 World s first semi deck floatover on the Petrobras P Certification of the Carbon Armor flexible pipe by Bureau Veritas 2009 World s first full-scale floating wind turbine (for Statoil) 2010 Qualification of one of the first 20,000 pound-force per square inch flexible jumpers at a water depth of 3,000 meters 2008 Technological world first with a riser and lifting system contract for a subsea mining project 2007 World s first open sea catamaran floatover topside installations on the deepwater Kikeh Spar (Murphy Sabah Oil Co. Ltd) 2006 World s first deployment of the integrated production bundle (IPB) on Dalia field; an innovative technology developed by Technip R&D teams, for high-level flow assurance (for Total) Our new client magazine, Tomorrow, was launched in 2012 and focuses on our differentiation in the energy industry through innovative technology in all of our business sectors. Every day, our teams play a part in meeting the world energy challenges and are involved in projects with a high level of technological input. This magazine shines a spotlight on our technologies of tomorrow, and how we use them today. Our magazine is a spotlight on our technologies of tomorrow. 53

58 2012 Technip Activity and Sustainable Development Report 4 billion subsea 2012 revenues 14.9% subsea 2012 operating margin 6.1 billion subsea Backlog at end billion subsea Order intake at end 2012

59 SUB operations SEA Underwater infrastructures, from deep to shore In the subsea business, we are a vertically integrated, technology leader committed to being at the forefront of frontier projects such as ultra deepwater, high pressure/temperature flexible pipe and asset integrity technologies. This dedication to excellence is driven by our strong internal research and development (R&D) programs, and is reflected in our acquisitions of state of the art technology companies. Our technologies and innovation combined with a leading edge fleet, international assets, talented people and the alliance with Heerema Marine Contractors make us a global leader from deep to shore.

60 2012 Technip Activity and Sustainable Development Report 56

61 Take it Further Doing the right thing Trusting the team Encouraging a fair return for all Building the future sub sea Constantly pushing the limits of frontier projects A strategy rooted in technology With greater depths come greater challenges for our clients. Through innovation and continuous improvement of existing technologies, we help them push back subsea frontiers. New technologies for new challenges At Technip, we are already working on tomorrow s ultra deepwater challenges. Our exclusive carbon fiber armor technology is a major advance for the industry. It weighs less than other solutions and offers excellent corrosion and fatigue resistance. A full scale dynamic fatigue test was successfully completed in Riser qualification and a potential field pilot application are currently under negotiation with a major operator. We have also launched a new initiative focusing on the qualification of flexible pipes for pre salt fields. The cold temperatures of deepwater operations can lead to wax or hydrate formation. Our electrically trace heated pipe in pipe is a cost effective and energy efficient way of reducing the risk of pipe blockage. In 2012, this technology successfully made its world debut on Total s Islay North Sea project, and operators are beginning to see the wider flow assurance potential of this solution. Corrosive fluids are a threat to pipe integrity and life expectancy. We have qualified mechanically lined pipes for dynamic applications, which were approved by Det Norske Veritas in For flexible pipes, our patented anti hydrogen sulfide layer is in the final stage of qualification. Capable of resisting corrosion and providing significant weight and cost reduction, it has already been made available for some specific projects. Improving life of field and safety of operations Following the acquisition of Cybernétix in 2011, we now provide a full portfolio of monitoring and robotic systems for use in hostile environments. In 2012, we went one step further, creating Asset Integrity Management (AIM) Services, a dedicated business unit. AIM Services focuses on life of field to reduce the risk of asset failure and accidents, increase asset availability, and help optimize in field maintenance strategies. Through proprietary technological solutions, AIM offers subsea assets surveillance, field surveys, information management and consulting services. It also performs inspection, maintenance and repairs using autonomous underwater vehicles and remotely operated vehicles. We signed our first contracts in 2012 for offshore flexible pipes inspection and integrity assessment in West Africa and Brazil. 57

62 2012 Technip Activity and Sustainable Development Report Technip reinforced its presence in West Africa with the award of the second phase of the Jubilee project offshore Ghana. Spanning the whole value chain of subsea The integration of Global Industries (see box p. 59) within Technip, our alliance with Heerema Marine Contractors, and our tier one assets strengthened our position as a leading subsea contractor in State of the art assets close to our clients Technip is committed to being close to its clients and field development areas. Our fleet of 32 vessels (of which four are under construction) is deployed in the main strategic oil and gas regions of the world. It covers the whole subsea installation chain from ultra deepwater to shore, with unique heavy lift and high tension pipe laying capabilities. The newest additions to the fleet include the Deep Orient, a Flexible-Lay construction vessel, and the Deep Energy, one of the largest pipelay vessels ever built and designed to operate in the Atlantic basin and on intercontinental projects. Both vessels will be delivered in We are also building two very high tension flexible pipelay vessels that will be dedicated to the Brazilian pre salt market. In 2012, we also ordered a new advanced construction vessel for the Norwegian installation market, which will be delivered in Our seventh manufacturing plant is being built in Açu, Brazil and will be completed at the end of This high end facility will deliver a full range of advanced flexible pipe products. Together with our Flexibras manufacturing plant in Vitória and our logistics bases in Macaé and Angra, our presence and activities in Brazil continue to grow to meet the robust market demand. Technip s umbilical R&D center opened in May 2012 in Newcastle, United Kingdom. Our dedicated steel tube umbilical manufacturing facility in Newcastle is also currently being expanded, and will notably feature the world s leading vertical helical assembly machine. The Deep Orient, our newbuild vessel, is dedicated to subsea construction and flexible pipelay projects. Operating at the highest standards of health, safety and environment Nowhere is safe and efficient operations more important than on our vessels, where we have deployed our WorkSafe program. It uses a system of management controls to ensure that all work is properly risk assessed, controlled and coordinated. For example, we implemented Behavior Based Safety (BBS) at our Flexi France (Normandy, France) and Asiaflex Products (Malaysia) plants in This peer to peer program uses incident analysis to identify critical action items and set up dedicated action plans. All our assets are concerned by safety, and a few other initiatives have been organized. The safe and efficiency control of work activities is paramount in our business. 58

63 Take it Further Doing the right thing Trusting the team Encouraging a fair return for all Building the future Global Industries: a positive first year 3 QUESTIONS FOR The flagship pipelay vessel G1201 was added to our fleet in During the year, we successfully integrated the employees from former Global Industries and they fully took their place within the Group. Above all, our teams and their expertise are paramount for the successfull execution of projects. Our organization is built around staffing flexibility and cross fertilization of talents, making us one of the few contractors worldwide capable of mobilizing hundreds skilled engineers on major projects, with a strong national content. A strategic alliance with Heerema Marine Contractors Projected to be the fastest growing part of the subsea market in the next few years, ultra deepwater projects, situated over a 1,500 meter water depth, are complex and require special technologies and pipe laying capabilities. To meet these challenges, we formed a five year worldwide alliance with Heerema Marine Contractors in October 2012 (see interview on the right). This agreement gives us unrivalled competences for work in harsh and ultra deepwater environments, requiring substantial tensioning capabilities. Safely expanding in new markets and bolstering our leadership In 2012, the North Sea continued to be a significant source of orders. We led the subsea parts Integration has already begun to deliver added value and we started using their assets in Not only does this acquisition offer greater flexibility to our clients, but it has also enhanced our backlog, with contracts in new markets such as conventional and trunklines. For example, in North America, the S Lay and heavy lift capability of the G1200 allowed us to secure a contract for the shallow water Starfish field. The G1201, a flagship pipelay vessel, was used for the first time in 2012 and carried out the offshore installation for the Liwan 3 1 shallow water project in China. In Australia, we were awarded our largest engineering, procurement, construction and installation contract to date in this region for the development of the Wheatstone field, which will use the G1201 for offshore installation. Worldwide, bid activity remains high and our S Lay vessels give us a competitive advantage. of important projects, including BP s Quad 204, our largest contract to date in the UK North Sea. The Gullfaks South field development will use our direct electrical heating and pipe in pipe flowline technology. We also won a major contract for the Bøyla field development in Norway and two subsea contracts under the diving frame agreement with Statoil. Ithaca Energy, one of our new clients, awarded us a significant contract to help them develop the Greater Stella area. In West Africa, we are working with Total on the second phase of the GirRI development in Angola, after we successfully completed the first phase in Similarly, Tullow selected us for the second phase of the Jubilee project offshore Ghana. In 2012, flexible pipes continued to contribute to the development of deeper and more complex offshore oil and gas fields. We signed a five year frame agreement with Petrobras for the supply of around 1,400 kilometers of flexible pipes. We also moved into promising new markets, winning the South West Fatah & Falah project in the Middle East, and being selected for the Panyu project in China. Leon Harland Senior Vice President Commercial, Heerema Marine Contractors (The Netherlands) Could you present us the Heerema/ Technip alliance in a few words? The essence of the alliance is to answer the significant technical and execution challenges of our clients ultra deepwater projects, by integrating all our capabilities such as project management skills, technology and specialized construction assets. Why did you choose Technip as your partner? Because there is a unique and complementary fit between our two companies. On one hand, Technip has an impressive track record in delivering integrated and complex deepwater projects thanks to its extensive engineering and project management capabilities and its versatile fleet. On the other hand, we have unmatched high tension J Lay vessels and an important technical expertise in ultra deepwater infield developments. Our companies are also quite alike: we both have a strong focus on health, safety and environment, project delivery as well as technology. Finally, the teams know each other well and have good relationships at all levels. What do you expect from this alliance? Heerema s approach towards ultra deepwater projects required project by project cooperation with other companies and was quite opportunistic. A long term alliance with a strong partner like Technip has therefore many advantages. We can see a range of exciting opportunities, and we are already pursuing several large ultra deepwater projects together, just a short time after the start of the alliance. 59

64 2012 Technip Activity and Sustainable Development Report 4.2 billion Onshore/Offshore 2012 revenues 7.0% Onshore/Offshore 2012 operating margin 8.2 billion Onshore/Offshore Backlog at end billion Onshore/Offshore Order intake at end 2012

65 off operations shore Fit for purpose platforms at sea Our Offshore activities include engineering, procurement, construction and installation of fixed and floating platforms for the energy industry. We use our world class standards and advanced technologies to deliver fit for purpose solutions. We have a long standing track record for fixed platforms in shallow water, with conventional sub structures and self installing platforms, and for deepwater facilities, including Spars, semi submersibles, tension leg platforms (TLP), floating production, storage and offloading (FPSO) and floating liquefied natural gas (FLNG) units. Thanks to our expertise, multi local footprint and ability to staff with national content, we are well positioned within this very promising market.

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67 Take it Further Doing the right thing Trusting the team Encouraging a fair return for all Building the future off shore Consolidating our expertise to prepare for the future North Sea activity and leadership in deepwater projects drive new business In 2012, our clear strategy and balanced approach to regions, and both shallow and great water depths enabled us to grow at a healthy rate, and prepare for the next growth phase. Still well positioned in the conventional sector 2012 marked our return to the North Sea offshore market, where we provide engineering, procurement and construction (EPC) on technically complex projects that are therefore very demanding in terms of safety and environment. In partnership with Daewoo Shipbuilding & Marine Engineering (DSME), we were awarded a strategic turnkey contract for the Hejre development project. Situated off the coast of Denmark, the platform will process high pressure and high temperature hydrocarbons fluids. At the end of the year, as leader of a consortium with Samsung Heavy Industries, we signed a large contract, with our share worth more than 580 million, for the topsides of a fixed production platform for the Martin Linge project offshore Norway. Multi local footprint continues to pay off Thanks to our multi local footprint, we are present in fast growing markets, such as the Middle East and Asia Pacific. In 2012, we reinforced our involvement in major offshore projects and our long standing relationship with National Petroleum Construction Company (NPCC) in the United Arab Emirates. In a consortium with NPCC, we were awarded a turnkey contract for the Upper Zakum 750K project, which is scheduled for completion in the second half of In Asia Pacific, Shell is one of our most important clients. After securing the Prelude FLNG facility contract, we signed a five year framework agreement, with an additional five year extension option, covering engineering and project management services for Shell s offshore facilities in Asia, Australia, and New Zealand. Leadership in deepwater floating installations We are a major player in Spars, having built 14 out of the 17 currently in operations worldwide. In 2012, we once again reinforced our position in this market. In a consortium with Hyundai Heavy Industries, we were awarded by Statoil the EPC and transportation of a Spar hull for their Aasta Hansteen field offshore Norway. Installed at a depth of about 1,300 meters, this Spar marks a number of firsts: the first Spar in Norwegian waters, and the first to be located in the Arctic Circle. It will also be the first to combine production facilities with product storage, and the largest Spar ever built. This contract followed the successful execution of the front end engineering and design (FEED) for this project. 63

68 2012 Technip Activity and Sustainable Development Report Positive long term outlook We signed another contract with Anadarko Petroleum Corporation to begin work on a 23,000 ton Truss Spar hull for their Heidelberg field development in the US Gulf of Mexico. The design and fabrication will be carried out by our Pori yard in Finland, where we are currently building the Truss Spar hull for Anadarko s Lucius field. Recognized as a leader in the field, our yard has been building offshore facilities for 40 years and supplies Spar systems worldwide. Our 40 year experienced yard in Pori is one of our assets in the offshore market. The offshore market continued to grow worldwide in With the signature of several major contracts, our Offshore activity reinforced its contribution to the Company s backlog. Although we expect 2013 to be a transition year in terms of order intake, we see an overall upward trend in the global offshore market in the next six years. In 2012, 100 floating platform projects were sanctioned worldwide and 175 are expected in This pattern is similar for fixed platform projects, from more than 60 this year to more than 100 in 2018 (source: Infield (08/12), Technip). There is sustained activity, especially in conventional platforms, in Asia Pacific, the Middle East, the North Sea and Europe. Future developments are being driven by new discoveries in Africa, by pre salt in Brazil, and new fields in Latin America. North America is seeing an increase in both conventional and non conventional platforms, such as Spars and TLPs, in the Gulf of Mexico. We have built 14 out of the 17 Spar platforms currently in operation worldwide. We continued the FEED of the Spar hull and moorings for BP s Big Dog Phase 2 development in the Gulf of Mexico. This is the first project to be executed under the 10 year Spar platform master services framework agreement signed with BP in In 2012, we strengthened our activities in pioneering deepwater field development projects in Malaysia and took a new step in the region s burgeoning market for deepwater floating production facilities. As part of a joint venture with Malaysia Marine and Heavy Engineering Sdn Bhd (MMHE), we signed our first TLP contract for the Malikai Deepwater project offshore Sabah. Technip has delivered some of the world s largest FPSO units. This track record was enhanced in 2012 by the award of two important contracts for the INPEX Ichthys project, situated in the Browse Basin, offshore Western Australia. We will execute the detailed engineering and procurement assistance for the FPSO topsides and the offshore commissioning of the FPSO and central processing facility. This project should be completed by the end of Moreover, in Brazil, we completed the detailed engineering work on Petrobras first two Brazilian FPSOs. Covering the entire spectrum of offshore challenges We are active in all types of offshore projects and are pushing the limits of frontier environments to meet the challenges of this evolving market. Ever more hostile, ever more complicated As with subsea, the offshore market is faced with the challenge of exploiting new hydrocarbon fields in increasingly extreme conditions, such as water depths approaching 3,000 meters and Arctic regions. In 2012, we continued to invest in new technologies and tools for production in these frontier environments. Work on our novel heave and vortex induced motion suppressed (HVS) semi submersible platform design moved forward, with 64

69 Take it Further Doing the right thing Trusting the team Encouraging a fair return for all Building the future 3 QUESTIONS FOR Roland Bianciotto Managing Director, Technip Offshore Finland Construction phase has begun for the Petronas Floating LNG 1 project. Many yards were hit hard by the economic crisis and the Macondo incident. How did you maintain, and even develop your activity in Pori? We increased our performance, by improving running costs, flexibility and adaptability. We also diversified our activities with the help of the other Technip entities. These efforts paid off. In 2011, as soon as the moratorium on drilling permits in the Gulf of Mexico was lifted, we signed two new major contracts. the evaluation of its suitability to support dry tree completions. This motion dampening platform reduces fatigue on risers connected to it, therefore supporting large diameter steel catenary risers in water depths that would not be possible with conventional semi submersibles. By year s end, the HVS was being evaluated for a potential Gulf of Mexico field development. Moving into Arctic and ice prone environments Drilling activity and oil and gas developments are moving into more northerly regions. We signed an agreement with Cervval (a specialist software company) and Bureau Veritas to develop a program capable of modeling the flow of ice around fixed and floating structures, and calculating ice loadings on the platforms. Since several projects are imminent in the North Caspian Sea, the program will be developed initially to predict ice behavior in shallow waters, but will be equally applicable in Arctic regions. The program will help optimize platform structures, and minimize ice loadings and ice rubble build up, prior to final design verification in an ice test basin. Maintaining a dominant position in FLNG FLNG represents a breakthrough in the oil and gas industry. By placing gas liquefaction facilities directly over offshore gas fields, FLNG units eliminate the need for long distance pipelines and extensive onshore infrastructure. By bringing together our expertise in subsea, offshore and onshore, we have played a leading role in the FLNG sector from the start. In 2012, we confirmed this position. We furthered our collaboration with Shell through the Technip Samsung consortium, signing a new agreement that reinforced our leadership in FLNG. The deal extends the collaboration between Shell, Technip and Samsung Heavy Industries on the design, engineering, procurement, construction and installation of future FLNG facilities. We also continued with the detailed engineering and procurement associated with Shell s Prelude FLNG unit. By the end of the year, construction of the hull had begun. After completing the FEED phase, Technip, in a consortium with DSME, won a contract for the engineering, procurement, construction, installation and commissioning of the Floating LNG 1 facility for Petronas, offshore Malaysia. Which projects are you currently working on? We just delivered the Marine Well Containment System (an emergency system to prevent oil spills) elements in the Gulf of Mexico, and are in the final phase of the Lucius Spar fabrication. Anadarko was so pleased with our work on Lucius that it gave us the go ahead for its sister platform. Fabrication started in November We are also engaged on the BP Big Dog project, one of the heaviest Spars ever built, and are supporting major projects in Malaysia and Houston, Texas. What are the priorities of the yard? Our goal is to deliver total client satisfaction. Quality is our motto, and safe operations and environmental protection guide our engineering and fabrication. Another priority is timely delivery. Pori holds a world record for delivering products on time. Finally, all our work is done in keeping with the Company s values: our people, safety, quality, and ethics always come first. 65

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71 on operations shore Land based oil, gas, petrochemical, renewable energies facilities and other industries Onshore covers the land based facilities required by a wide range of industries, including oil and gas, petrochemicals, renewable energies, mining and metals. In 2012, our Onshore business remained healthy. The acquisition of Stone & Webster process technologies, and associated oil and gas engineering capabilities from The Shaw Group strengthened our position in the downstream market. Throughout the year, we continued to balance the mix of contracts to reduce our overall risk profile.

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73 Take it Further Doing the right thing Trusting the team Encouraging a fair return for all Building the future on shore Broadening our reach and technologies A strategic acquisition yields significant opportunities The integration of Stone & Webster process technologies marked a turning point for our Onshore activity. In August 2012, we acquired Stone & Webster process technologies from The Shaw Group to strengthen our technology portfolio, high end proprietary solutions and skilled resources. It has made us a leader in downstream technologies by expanding our offering for the refining, ethylene, gas to liquids and petrochemical industries. It has also opened up growth opportunities in regions such as the US, where shale gas is revitalizing downstream activities. The acquisition led to the creation of our Technip Stone & Webster Process Technology business unit. This new global team provides three types of services: licensed proprietary technologies; process design and engineering; and design, supply and installation of critical proprietary equipment. Early involvement with projects increases our chances of being selected for following project phases. Construction sites achieved excellent safety results Our onshore projects reached several safety milestones this year, demonstrating our ongoing commitment to health, safety and environment (HSE). Our Jubail project in Saudi Arabia continued to deliver exceptional HSE performance, with a cumulative total of 70 million man hours without lost time injury (LTI) and a total recordable incident frequency rate (TRCF) below By the end of December 2012, the Plateau Maintenance Project (PMP) in Qatar had achieved more than 17 million man hours without LTI. With no lost time injuries and over 90,000 HSE training hours, this project is an example of how our dedication to safety is paying off. Robust activity in all sectors and a strong 2013 outlook Our Onshore business was solid across the board, with a noticeable shift towards North America. Moreover, our research and development (R&D) program continued to be a key differentiator for us. Natural gas: diversification across geographies Study contracts with the potential for future work were secured for major gas projects in North America, Russia/CIS, the Eastern Mediterranean, Africa and the Middle East. In Qatar, the Technip led joint venture with Chiyoda continued to execute the contract for gas treatment units and utilities at the Qatargas PMP site. In China, the small scale LNG unit for Ningxia Hanas has entered production. Work on a second unit has started, with a third expected to begin in the first semester of

74 2012 Technip Activity and Sustainable Development Report The acquisition of Stone & Webster process technologies allowed Technip to expand its offering to the refining industry. Our teams also contributed to floating liquefied natural gas (FLNG) projects, including the Shell Prelude and Petronas units. Our structured R&D program continued, with further development of enhanced heat exchangers in partnership with Wieland and others. Patent rights were acquired for the Air Tower LNG vaporizer, first used in Freeport LNG terminal, and new ones were filed for cryogenic gas processing. Refining: strong performance on grassroots projects In 2012, an outstanding track record of major projects positioned Technip as a refining leader. A major engineering project was the Petronas RAPID grassroots refinery and petrochemical complex in Malaysia that built on our long term presence in Asia Pacific, and confirmed our leadership in the refining and petrochemical sectors. We were also involved at the very early stages of projects in Eastern Europe, the Middle East and South America. Besides, we were also active on several engineering projects for grassroots refineries, including the Petrocarabobo Upgrader Complex in Venezuela, for the expansion of two refineries in Kazakhstan as well as the upgrading of a unit in Estonia. Some important projects, such as the SATORP Jubail refinery in Saudi Arabia, the Algiers refinery in Algeria and a residue hydrocracker in Bulgaria, moved closer to completion. Hydrogen: four new plants on stream Hydrogen is the most widely used industrial gas in the refining, chemical and petrochemical industries and we are recognized as the market leader in this sector. Four new Technip production units came on stream in 2012 in the US and Australia. The major expansion of Total s hydrogen plant in France also began operations. Work started on three new plants in the US for Air Products. Additionally, we were selected as the technology supplier of the hydrogen plants for the RAPID project. Our R&D teams worked on new advances and made incremental improvements to existing products, such as the process gas waste heat boiler. Our 20 year alliance with Air Products continued to generate significant development activities. Ethylene: upturn followed by a brighter horizon in 2013 Considering ethylene is the cornerstone of petrochemicals, the acquisition of Stone & Webster process technologies has reinforced renewable energies In 2012, we confirmed our commitment to offshore wind. As a member of the Ailes Marines Consortium with Iberdrola, Eole Res and Areva, we were awarded the Saint Brieuc offshore wind zone in France, our first major project win in this domain. We officially launched the European Union funded INFLOW project to industrialize the vertical axis floating wind turbine concept we are currently working on. Technip provided an important support to geothermal energy by being awarded a grant from the US Department of Energy for the implementation of an advanced ammonia water mixed fluid power cycle project, part of Entiv Organic Energy s development of a geothermal plant. We continued to reinforce our collaboration with well implanted companies and signed an agreement with the Compagnie Industrielle de la Matière Végétale to industrialize its process for converting solid biomass into hydrocarbons for use in petrochemicals. We also established a partnership with Areva Solar to combine solar energy with oil and gas assets. The Saint-Brieuc offshore wind zone award in France is an important achievement for Technip. 70

75 Take it Further Doing the right thing Trusting the team Encouraging a fair return for all Building the future our world leading position and expertise on those two markets. To further strengthen our leadership, we tied deeper relations with tier one partners, as was the case on Braskem Idesa s Ethylene XXI project in Mexico. We were awarded the engineering, procurement and construction (EPC) phase after successfully completing the front end engineering design (FEED) in Another example is Reliance s Jamnagar refinery complex in India for which we are working on the conceptual design and engineering of the cracker. The US market based on ethane from shale gas was buoyant in 2012 and additional ethylene production projects using the same feedstock are expected in In Texas, both The Dow Chemical Company and Chevron Phillips Chemicals selected us for FEED contracts for their respective world scale ethylene plants from ethane feedstock. The outlook for ethylene in 2013 remains positive. In addition, our new swirl flow tubes technology, tested in 2012, will be ready for market in Petrochemicals and fertilizers: partnerships and alliances drive business Economic growth in emerging countries led to new projects in Latin America, Eastern Europe and South East Asia. We maintained relations with best in class producers and technology owners such as INEOS, Asahi Kasei and BP. Thanks to these alliances, we are entering petrochemicals projects at the early stage, which positions us for the execution work that follows. We were selected for several process design packages and FEEDs in Russia, Malaysia and China. We were also awarded EPC contracts in Mexico, Germany, India and Saudi Arabia. Mining and metals: a mature diversification We have a major role to play in supporting key nuclear operators in their projects. The industrial design phase of the contract awarded to Technip and Ingérop, by the French National Radioactive Waste Management Agency (ANDRA), for the Cigeo geological storage center, started in TSU Projects, a jointly owned subsidiary of Technip and SGN (Areva Group), continued work on the Imouraren project in Niger. In the mining and metal sector, we carried on supporting Xstrata Nickel on the Koniambo nickel project. We are performing engineering studies for Eramet s Weda Bay nickel project in Indonesia, and have completed the feasibility study for the Zanaga iron ore project in Congo. We pursued pushing the limits in subsea mining. As a member of the French Maritime Cluster and premium sponsor of the International Marine Minerals Society, we are acting as an offshore architect engineer for the seafloor massive sulfides pilot mining project in the Pacific Ocean. 3 QUESTIONS FOR Stan Knetz Senior Vice President, Process Technology (United States) Could you describe Technip Stone & Webster Process Technology? It is a new global business unit with 1,200 engineers, researchers and project team members. Our wide and strong portfolio combines Technip s existing proprietary process technologies with the ones from Stone & Webster in ethylene, refining, hydrogen, petrochemicals and gas to liquids. What is process technology and why is it a good fit for Technip? In the onshore arena, process technology encompasses the methods of converting feedstocks into useable products. These technologies differentiate us in the downstream market and position us early in a project s development cycle. Royalties or license fees are paid when Technip supplies proprietary know how, expertise or catalysts. What projects are you currently working on? We have various projects underway, including a FEED for a major ethylene plant for Chevron Phillips Chemical, and a FEED and cracking furnaces engineering and procurement services for a new world scale ethylene plant for Dow in the US. In the Gulf, we are providing engineering services and licensing for our proprietary residue fluid catalytic cracking technology to Abu Dhabi Oil Refining Company (Takreer). The past few months have been an exciting time, and there are many opportunities ahead of us! The Ethylene XXI cracker will be the most modern and efficient in operation in the Americas, and will use our state of the art technology. 71

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77 Take it Further Doing the right thing Trusting the team Encouraging a fair return for all Building the future Environment Promoting sustainability across the board The energy industry has a vital role to play in meeting the planet s environmental challenges, especially those related to global warming and the prevention of accidental pollution. We assume these responsibilities everyday in all our activities, whether for ourselves or our clients. Our objectives for 2013 Limiting our environmental footprint The increased demand for energy in emerging countries has accelerated the need to tackle greenhouse gas emissions reduction. The main focus of our environmental policy is to reduce these emissions to fight against climate change and limit the impact of our activities, while continuing to develop more efficient processes. A strong and efficient commitment to improving performance As an integral part of our health, safety and environment (HSE) policy, our environmental strategy aims to improve environmental performance and compliance, increase energy efficiency, and lower consumption, emissions and waste. Establish carbon footprint minimization strategies Strive to reduce the environmental impact of our activities Develop, carry out and monitor a high-level environmental risk register in all Regions Conduct at least one environmental performance standard audit to identify steps for improvement in each Region Continue to implement the Green Office program at all major Technip offices Our process and requirements for environmental management are defined in Technip s global environmental management performance standard, which was implemented in In 2012, we audited both our environmental data and the data collection processes to identify areas of improvement, while reviewing our operating centers to assess their compliance with the standard. Also, to identify and manage local risks and challenges in accordance with regulatory and stakeholders expectations, an environmental risk register was established for each entity. One of Technip s major environmental achievements in 2012 was the implementation of its Green Office program, a standard developed since 2010 that describes how to conduct office operations in an environmentally-sound manner. Many green initiatives were organized around the Group: environmental walkthroughs and a waste management audit were held in Düsseldorf, Germany; a policy to reduce the volume of waste generated was implemented in Antwerp, The Netherlands; and a carbon footprint study was conducted in Paris, France. In 2013, all our head offices will be assessed against the Green Office standard. 73

78 2012 Technip Activity and Sustainable Development Report Reinforcing our environmental culture Improving our environmental performance begins with fostering responsible behavior. We continued to develop awareness, through participation in global events such as the World Environment Day. In 2012, activities were conducted throughout the Group, including local initiatives such as planting trees, nature walks, cycling events, recycling and energy saving. We completed buyoancy cans of the Marine Well Containment System to prevent oil spills in the Gulf of Mexico. With the same objective, Technip University launched four environmental e-learning modules. Specifically tailored for the oil and gas sector, they cover all aspects of our business. The purpose is to help raise an understanding of the Group s activities, potential impacts on the planet and area of opportunities for the future. Technip successfully continued to develop its expertise in the offshore wind sector. Helping clients meet their sustainability goals Our environmental initiatives are not limited to internal activities. We also support our clients in their efforts to tackle greenhouse gas emissions reduction and other environmental issues. Integrating the environment into every project Developing sustainable environmental solutions starts at the conceptual design phase of a project, where the greatest reduction in the impact of construction and operation can be achieved. For example, the Paris-based Environmental and Health team completed important design studies for Shell s FLNG projects, which will be deployed around the world. During the construction phase, we work closely with our clients on all aspects of HSE. Projects such as the Jubail refinery in Saudi Arabia have achieved a high level of HSE performance, including environmental management. During the construction, pre-commissioning and commissioning phases, we focused on air emission reduction, dust abatement, waste segregation and recycling. In addition, a great effort was made in environmental training and awareness campaigns, involving all personnel including site management and contracted workforce. The Jubail project s HSE Management System team received the Environmental Champion award from the client, in recognition of the excellent results in management and performance. Preventing accidental pollution Recent worldwide events, in the Gulf of Mexico or in the North Sea, and natural disasters have demonstrated how fragile the Earth is. They remind the industry of the importance of safety and pollution prevention. In 2012, Technip recorded an increase in environmental incidents on sites and vessels, as a direct result of stricter mandatory reporting requirements and additional reporting processes. These incidents had minimal impact and have helped us identify areas for improvement and prevention, including regular inspections, maintenance, training and processes, as well as ensuring the competency of the people and systems in place. Having equipment ready to mitigate the impact of any accidents is also paramount. In 2012, we completed the development and fabrication of the Marine Well Containment System for international operators led by ExxonMobil. This emergency response device can be available in 24 hours and fully deployed within a matter of weeks, in the event of an underwater well incident in the Gulf of Mexico. Staying strong in renewables After increasing over the last eight years and reaching a record level of $300 billion in 2011, global investment in renewable energy decreased for the first time in 2012 to $270 billion (source: Bloomberg New Energy Finance). In spite of this, we continued to meet the market s needs by reinforcing our expertise in that sector. During the year, several offshore wind initiatives were launched in France and in the rest of Europe, and we successfully continued our expansion in this market. Technip Offshore Wind Ltd, our UKbased business unit, earned the ISO 14001:2004 Environmental Management standard as well 74

79 TakE IT further DOInG THE right THInG TruSTInG THE TEaM EnCOuraGInG a fair return for all building the Future in brazil, we worked with schools to implement a vegetable garden and gardens built with reused material. 3 QueStionS For leonardo naves, HSE Manager, and mykaella Sbardelott, Environmental Engineer (Brazil) as the OHSaS 18001:2007 for Occupational Safety and Health standard, underpinning our commitment to becoming an industry leader in HSE performance. we also provided valuable support to geothermal activity in the us. Thanks to collaboration agreements in the renewables sector, we expanded our range of solutions in bio-refining and solar energy. investing in bio-based chemicals we accompanied the growth of the bio-based chemicals market, derived from biomass, and perspectives are promising, with several projects currently underway. In 2012, we continued work on our first bio-based chemical project in China, for Solvay, with a plant start-up scheduled for It will convert glycerin derived from vegetable oil into epichlorohydrin (a chemical used frequently in electronics, automotive and aeronautics). partnerships and technological alliances are being developed, both in the us and Europe. we recently joined the french bio-based Chemistry association, which seeks to promote the development of this new sector. we are also involved in a multi-client study regarding strategic and prospective issues for bio-based chemicals by a major step forward in this field as this project gathers together for the first time all the main actors of the value chain. HELpInG protect THE australian environment employees on site are trained to handle reptiles in case they need to be removed from excavations. in Western Australia, the bhp billiton Macedon gas project is located in a semi arid region of coastal plain and bushland. in 2012, we continued to implement various strategies to preserve the fragile local fauna, including native snakes and lizards. excavations are inspected twice daily and fitted with shelters to prevent animals from being trapped inside. employees were trained to handle reptiles, in case they need to be removed. This novel initiative has helped rescue and relocate a large number of animals and do a census count of the local fauna. can you present the actions you launched in brazil in 2012? we focused on three main initiatives in our manufacturing plant in vitória. first, the implementation of Technip s Environmental Education program, to raise awareness of natural resources among employees and communities, including three schools. various events, such as the arbor (Tree) Day Celebration, as well as lectures and visits were organized during the year. Second, we analyzed our 2011 CO 2 emissions to try and improve our performance and footprint. Third, the ISO certification of our environmental management system was renewed for the third time. how are you organized to carry out those actions? Mykaella and I work closely to set up awareness events and we can also count on our colleagues support and motivation. for the CO 2 diagnosis we conducted, we were helped by a consultancy and specialized contractor. In general, we try as much as possible to share best practices, providing food for thoughts to other regions across the Group! What are your priorities in terms of environment for 2013 and beyond? In 2013, in vitória, we will focus on pursuing the Environmental Education program, on implementing procedures to adjust the management system with the aim of achieving the nbr-iso Greenhouse Gases certificate, and on conducting an energy efficiency study to optimize the use of the site s resources. In the rest of Brazil, we will work on obtaining the ISO certification for Technip s new açu plant, vessels and supply boats. 75