Offshore Christian Tribout Senior Vice President, Offshore Investor Presentation Paris, October 17, 2007 - New York, October 19, 2007 Good morning ladies and gentlemen, my name is Christian TRIBOUT. I am responsible for the offshore facilities Product Line within Technip. I would like to share with you what we do in this market and, more specifically, the innovative platform concepts and floatover technologies that drive our development. So let me start with a slide about what we do. 1 of 13
Technip Offshore Segment SPAR FPSO SEMI-SUB FLOATERS Picture TOPSIDE FLOATOVER SOLUTIONS FIXED PLATFORM FLOATERS TPG 500 JACKET TPG 500 DERIVATIVES FIXED FACILITIES TPG500-MFC 2 These pictures illustrate what Technip does in the offshore facilities market: floaters, fixed platforms and topside floatover solutions. I will start with floaters that are shown on the top of the slide. Technip is the world leader and record setter for Spar. Neptune, the first Spar, was delivered in 1995. Since then, we delivered 13 other Spar with improved performances. Technip is also present in the FPSO and semi-sub markets. Technip has worked on the Girassol and Dalia mega-fpsos with oil storage capacities of 2 millions barrels and throughput of 200,000 barrels per day. We are currently working on the P-52 semi-sub for Petrobras in Brazil. Technip is also active in fixed platforms as shown at the bottom of the slide. The TPG 500 is a self-installable and removable drilling and production jack up. It is designed for 30 years in place in the North Sea environment, in water depth of up to 500 feet. No other jack up design can match these specifications. The so-called TPG 500 MFC is a TPG-500 derivative for marginal fields application. This drilling and production platform can be moved easily from one field to another when oil in place has been extracted. 2 of 13
Besides floating and fixed platforms, Technip masters floatover solutions to install offshore large topsides that have been fully commissioned onshore. Floatover enables to minimize offshore activities which are intrinsically more costly and risky than onshore activities. Floatover is also of a particular interest in areas where availability of heavy lift barges is limited. As shown on the slide, our floatover solutions apply to both fixed and floating platforms. Backlog: 602 M (June 30, 2007) Key facts Largest share of dry tree floaters installed: 35% of market share Completion of 18 floatovers so far in open sea 16 jackets-unideck 1 Spar and 1 Semi-Sub TPG 500 3 references with topside weight up to 30,000 tons Mega FPSO 4 references with topside weight up to 40,000 tons 3 Some facts about Technip positions in the offshore market. With the Spar, Technip has captured about one third of the dry tree floater market. Technip has completed 18 floatover decks in open seas: 16 on fixed jackets; our Unideck design has become a part of the toolbox of major Oil Companies that are increasingly specifying floatover solutions in their inquiries. One floatover on a Spar for Kikeh and one large 22,000 tons deck floatover on the P-52 semi-sub. 3 of 13
Technip has delivered TPG 500 production jack ups with topsides up to 30,000 tons: Harding and Shah Deniz for BP, which combine production, drilling and living quarter facilities. Elgin, operated by TOTAL, which is a living quarter and a production platform. With respect to mega-fpso, Technip has got four references with topside weight up to 40,000 tons. It started in the mid-nineties with the N KOSSA Floating Production Unit, using a large concrete barge to support the 30,000 tons topsides. More recently, Technip delivered the Girasol and Dalia FPSO, both in Angola. And we are currently working on the AKPO FPSO that is due to sail away from Korea mid 2008. Technological achievements Nigeria, East Area 1A (ExxonMobil), 2005 Heaviest deck installed by float-over: 18,000 tons Flare, wellhead platform jacket and bridges fabricated in Nigeria US Gulf of Mexico, Perdido (Shell), 2009 Deepest dry tree floater: 2,345 m (Neptune, first production spar 1995: 590 m) Brazil, P-52 (Petrobras), 2007 Installation of a 22,000 tons deck by float-over Local fabrication Malaysia, Kikeh (Murphy), 2006 Local fabrication Deck installed by float-over Azerbaijan, Shah Deniz (BP), 2006 Modularisation for transportation through Volga Don canal to Caspian Sea Local assembly Angola, Dalia (Total), 2006 World largest FPSO 4 Technology is at the core of Technip offshore business. Let me go quickly through six examples that illustrate our technological achievements: For ExxonMobil in Nigeria, the 18,000 tons deck of East Area 1 was installed in a single piece with our Unideck technology. Without Unideck, the deck would have 4 of 13
been installed in two large modules, involving scarcely available heavy lift cranes and months of activities offshore for hook up and commissioning. The Perdido Spar for Shell in the US Gulf of Mexico is the world deepest dry tree floater. Over the past 10 years, Spar water depth has been steadily increasing from about 600 meters in 1995 to 2,500 meters for Perdido And we are currently working on the next Spar generation to reach 3,000 meters. The P-52 semi-sub features an integrated deck of 22,000 tons. As previously mentioned, it has been successfully installed by floatover mid 2006. The successful installation of the Kikeh Spar for Murphy came a few months later. This is the first Spar ever installed outside of the Gulf of Mexico. And this is also the first time a deck has been installed on a Spar by floatover. This achievement will create new business opportunities for Technip in the US Gulf of Mexico where we are trying to deploy this technology. In Azerbaijan, Technip won the Shah Deniz development thanks to its modular TPG 500 design. It enabled modules to be built in floating strips in South East Asia, transported on the Volga / Don canals, they were then reassembled in the Caspian Sea. This reference is considered by the industry as a major technological and logistic achievement. Finally, the mega-fpso Dalia was installed on schedule with start of oil production in December 2006; it is a real success for Technip and Total, our client. 5 of 13
Floater market growth IDENTIFIED DEEPWATER FIELDS TO BE PUT ON STREAM (>2007) NEW FLOATERS BY REGION (ESTIMATES 2008 2012) Cumulative Field Size (Bn boe) 25 20 Tie-backs Floaters Asia-Pacific 27% West Africa 36% 15 10 5 0 < 50 50-100 100-200 200-500 500-1000 > 1000 Individual Field Size (Mboe) Brazil 24% Gulf of Mexico 13% ~ 15 floaters per year 2008 2012 (~ 10 floaters per year 2003 2007) Sources : Technip, Infield 5 This slide provides some information about the floater market dynamics. The chart on the left side shows the distribution of oil and gas reserves based on field size. The largest deepwater fields with reserve above 200 Mboe are likely to be developed with production floaters: FPSO in remote areas and deep draft floaters in areas where fluids can be exported through existing networks. At the other extreme, smaller fields are likely to be developed with subsea tie-backs. In between, there is a grey area where tie-backs compete with mini, low cost deep draft floaters such as cell Spar. Our market analyses suggest there are about 85 fields with reserves of 200 Mboe or more that could be put on stream over the next five years. About 50 with FPSO, including about 5 mega FPSO. The remaining 35 fields with deep draft floaters. All together, we estimate the floater market to average 15 units per year between 2008 and 2012, compared to an estimated 10 units for the last five years. From a more qualitative standpoint, the global floater market is shifting from the Gulf of Mexico and Brazil to West Africa and Asia Pacific. More specifically, there 6 of 13
were two to three deep draft floater projects in GoM in the recent past compared to one to two developments anticipated in the near future. Market-driven innovation Proprietary Technologies Non Prop. Tech. Non Prop. Tech. under development All Onshore FPSO Conventional Semi Conventional TLP EDP TPG 500 Lower Cost & Risk Topside Facility Integration All Offshore New Deep Draft Semi Mini TLP Floatover Spar Single Lift Spar Multi Lift Spar Unideck Single Lift Jacket Multi Lift Jacket High Motion Floater Improved Motion Performance Low Motion Floater No Motion Fixed Platform motion response to environment 6 This chart provides another illustration of the market dynamics. Over time, offshore production has been moving to harsher, deeper and more remote environments. Conventional FPSO, shown in the top left corner, were introduced in deepwater with no accessible export system. Deep draft platforms with superior performance in terms of motion behaviour have been developed with conventional semis, TLPs and Spars; In addition, customers expect the risks and costs associated to offshore works to be reduced. This requirement is captured by the vertical axis on this chart and explains the development of floatover and self-installation solutions. As you can see on the chart, innovative concepts are gradually adapted by the industry to improve platform motion response to the environment while reducing the costs and risks associated to offshore works. The floaters in blue involve Technip s proprietary technologies; the ones in orange are accessible to a larger number of contractors, the one in grey are 7 of 13
currently under development and involved non-proprietary technology. This is a deep draft semi with superior motion behaviours than conventional semi; however, it cannot be assembled at quayside and the topside has to be installed offshore. Technip positioning based on technological differentiation Leading-edge floatover installation technology Reversible technology Quick load transfer to jacket High air gap Heavy deck Innovative platform concepts (eg: Spar, EDP, TPG-500) High performance motion (drilling unit, dry tree, SCR friendly) Optimized execution plan (onshore commissioning, self-installed, standardisation) Multi-field applications Group-wide project management and top-side engineering expertise 7 Let me summarize what is Technip strategic positioning in the offshore facility market. In essence, our offshore facility business rests on three main foundations. First, Technip is a world leader in floatover installation technology. Our Unideck system is uniquely capable for very large decks, long sea wells, reversible operations in case of a rapid weather change as well as quick and smooth load transfer from the vessel to the jacket. Second, Technip has demonstrated its ability to introduce in the marketplace innovative deepwater platform concepts. This is the case for the Spar that is particularly well suited for drilling units, dry tree production and steel catenary risers. Our platform concepts are also designed to optimise execution plans and maximise onhore activities up to onshore commissioning. Third, we are leveraging the Group-wide project management and topside engineering skills as well as its marine expertise. These resources are key for a 8 of 13
successful delivery of our innovative platforms and floatover solutions. They are available all over the world, working with the same tools and sharing expertise. The following pages present a number of technological developments that Technip is currently pursuing. Development of Spar technology for arctic applications Winterized topsides ARCTIC SPAR Mooring line enclosed in hull through ice zone Chukchi Sea Coned neck to break ice down and minimize ice resistance Mooring lines to resist sheet ice and release to avoid extreme icebergs Orphan Basin Barents Sea Detachable keel buoy to release risers 8 In the Arctic region, such a the Chuckchi Sea, the Orphan Basin and the Barents sea, platforms will have to sustain extreme conditions with sheet ice (the surface ice) and icebergs. Should a very large iceberg approach, the platform has to be disconnected and moved away without damaging the risers and flow lines. Technip is currently developing an Arctic SPAR. This is a derivative from the classic SPAR, a proven and well-known technology. As you can see on the slide, a number of developments are being made: The coned neck - to break sheet ice down and minimize ice resistance thanks to cone effect. A smaller diameter at neck also reduces ice loads on hull. The mooring lines - to resist to sheet ice and releasable to avoid extreme icebergs. The detachable keel buoy - to be able to effectively release and reconnect the risers 9 of 13
Development of Spar technology for future deepwater projects INTEGRATION OF DRILLING SYSTEM IN HULL RISER WEIGHT REQUIREMENT FOR ULTRA-DEEP Adapting upper hull for supporting 6 th generation drilling systems on the Spar Enclosing centerwell of Spar for added buoyancy to support ultra deep hydropneumatic tensioned risers 9 We are working on another major adaptation of the Spar technology but targeted for the US Gulf of Mexico where the Spar is already well accepted. Future deepwater projects in the Gulf of Mexico will reach water depth over 3,000 metres. They will require 6 th generation drilling systems and much greater loads due to heavy risers systems. This slide illustrates on-going developments to adapt the basic Spar technologies to these new frontier projects: On the left side, you can see the upper hull section of a Spar. It is being redesigned to support a 6 th generation drilling system. Contrary to existing Spar, the drilling system will be incorporated in the hull, instead of being installed on the deck. One of the benefits is to reduce the topside weight. On the right side, you can see the centerwell of a Spar. It is being closed in order to provide extra buoyancy for the floater. This extra buoyancy is needed to support the riser weight requirements for ultra deepwater. 10 of 13
Development of floatover technology in open sea TODAY TOMORROW Installation of heavier deck (up to 30,000 tons) High Air Gap 10 This slide illustrates two important floatover technology developments. Technip is continuously improving its floatover deck design and installation systems to increasingly demanding open sea environments and larger decks, up to 22,000 tons. As mentioned, we successfully installed the deck on the Kikeh Spar with an innovative Catamaran floatover. Our goal is to develop a Catamaran floatover solution for heavy decks up to 30,000 tons in the Gulf of Mexico, using US registered barges in compliance with Jones Act. We are also working on higher air gap floatover systems. They are designed for the installation of heavy decks in remote areas, such as Asia Pacific, where the sea conditions require higher air gap, 20 meters or more compared to the 10-12 meters required in West Africa and Brazil. 11 of 13
Development of Extended Draft Platform (EDP) Applications Dry Tree Unit for production Mobil Offshore Drilling Unit (MODU) Main characteristics Very deep draft for low motions Capable of quayside hull and topside integration (up to 25,000 tons) At quay In operation 85m 100m 11 Let me share with you another innovative platform concept that is currently undergoing certifications at key customers. The Extended Draft Platform, so-called EDP, has an excellent dynamic behaviour thanks to its deep draft pontoon located 85 metres below sea level and serving as a baffle opposing to the movement of the hull. Some of the proven TPG 500 jacks up technology have been used. The EDP can support heavy pay loads, 30,000 tons and more. EDP fabrication and installation are carried out at quayside; when the platform leaves the yard, it is ready to operate with its utility systems in operation. It is self installable. With its very deep draft for low motions, the EDP is well suited for Dry Tree Production Unit and can be moved from field to field for production purpose. It is also well adapted to Mobil Offshore Drilling Units (MODU), especially for the 6 th generation heavier drilling packages. 12 of 13
Key goals Maintain Spar leadership in mature Dry Tree Unit market Adaptation of Spar for 6 th generation drilling system Adaptation of Spar for ultra-deep risers Extend technology into new markets Arctic Spar EDP as 6 th generation drilling, wellhead platform Adaptation of TPG 500 design for marginal field development Commercial innovations Buildable designs in local yards - EDP Standardization / modularization - FPSO Avoid expensive heavy lift vessels - Floatover Assess strategic options to further reinforce our control over fabrication activities 12 Let me conclude this presentation with the main goals set for the Offshore Facilities product line. Our first priority is to expand our leadership in the mature dry tee unit market with the adaptation of our Spar technology to 6 th generation drilling systems and ultradeep risers. Another top priority is to leverage our core technologies to enter new markets. It comprises the Arctic Spar for projects in the Barents Sea such as Shtockman, the EDP as a 6 th generation drilling and well-head platform, and the TPG 500 derivative for marginal fields. Our third priority is to adapt our solutions to local market requirements. It means to make our platforms build-able in local yards in order to cope with increasing local content requirements, to promote standardization and modularization in order to shorten engineering lead time and to broaden our panel of potential builders, as well as to continuously improve floatover solutions as an alternative to heavy lift barges. Finally, we are exploring strategic options to further reinforce our control over fabrication activities. Thank you for your attention, I leave the floor to Alain Marion who will present you our Subsea activities. 13 of 13