GE Oil & Gas Oil & Gas $3.0 ~60% Business Imperatives Lead in technology Revenue $1.9 $0.2 $0.3 ~80% Capture robust market upturn Integrate VetcoGray explore other adjacent opportunities Segment Profit 1H 06 1H 07 Grow installed base Continue Service expansion traditional / new Winning in a strong market 2
Getting closer to the source Oil & Gas VetcoGray Gas turbine drivers and generators Compression train packages Gas recovery systems Asset optimization Australia ~$0.2B project Surface & Subsea drilling packages Remote control systems Floating production modules Subsea equipment ~$1B project Providing 5X more value 3 Equipment portfolio transformation 04 sales 07E sales $4.9 $1.8 Sales Subsea & Drilling LNG Pipelines Downstream $1.7 $3.2 Sales Building platforms beyond strong LNG segment 4
Continuing market strength Increasing depletion rate Market implications in next 3Ys 250 200 150 100 (M boe/d) 50 Existing reserves Required new production 00 10 20 30 37% world oil production from offshore by 10... end of easy oil Non-conventional sources... Oil sands and sour/acid gas ME & Africa to provide 90% of gas trade by 12 Oil & gas prices remain high E/P CAPEX up 21% Sustained drilling activity 3,000 active rigs 1,000 Xmas Trees to be awarded 30% W. Africa LNG trade expansion 15 new trains 60,000 miles of new intercontinental pipelines 90 new greenfield/expansion refinery projects Market dynamics fueling growth 5 Visible opportunities 08-10 Opportunity geography Key opportunities Asia N. America 19% 10% Latin America ~$14B Middle East opportunities Saudi: $200B spend, up and downstream India: $60B plan in oil & gas projects 15% 34% 22% Europe ~$15B Americas opportunities NA: focus on drilling and downstream Brazil: Petrobras to spend $87B MEA India ~$11B European opportunities North sea: strong sub-sea activity Russia: Arctic LNG and new gas pipelines ~$50B visible opportunities 6
Drilling & Subsea $1.7B 200MM Over plan Highlights $800MM 3Q Orders Growth synergies Services, regional presence & customer relationships Technology Subsea processing GE Turbocompression excellence Supply Chain Rooftops, G&A, Other synergies: $100MM annualized target 07 Sales Est Exploring adjacencies deep water drilling, subsea processing Vetco outperforming all expectations 7 Lean in Vetco first results Risers Drilling & production GE Manufacturing Technology Infusion GE Process Rigor Orbital welding Induction heating AUT & digital x-ray Blast & paint Standard work Engineering controls Production scheduling Lean 74% cycle reduction -38 to 10 days 4x additional output Improved deliveries Increased quality & safety Transferable 8
Technology differentiation ($ in millions) Key technologies Subsea processing Ultra-high reliability solutions Electrification NPI spending 01-10 6X ~$200 High speed electric motors drivers Compressor technology Advanced stage aerodynamics & seals $80 ~$120 Global services Power up-rates & lower emissions Gas turbines Increased fuel flexibility higher efficiency $33 '01 '04 '07E '10F Plus access to world-class R&D technology programs 9 Service growth Services sales growth Non-traditional traditional ~$1.9 Traditional & non-traditional Traditional: Mining a large installed base 2,730 global units & 65% penetration 350 sites with remote monitoring and diagnostics $1.2 0.5 0.7 ~0.8 ~1.1 Regionalization closer to customers Expanding non-traditional service business Over $3B CSA backlog by YE Upgrade solutions orders $0.4B, up 46% 05 07E Investing in technology 4x 06 Growing non traditional service offering 10
Summary Strong market realities oil price, drilling activity, & CAPEX remain high Vetco complements the portfolio outperforming expectations Continuing portfolio transformation building new platforms Technology NPI spending 6X higher than 01 over $200MM in 10 Service expanding installed base and growing non-traditional offering Large emerging markets opportunities matched with best portfolio ever 11 GE Infrastructure