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Our critical Strategies

US-Saudi Business Opportunities Forum Keys to building a long term, successful partnership in the Saudi market

Amy Chua, VP Marketing & Product DevelopmentSeptember 18th 2013

SURFACE SYSTEMS

Cameron Al Rushaid (CAL)Surface Drilling

Primary Facility Type Manufacture Assembly Plant ■

Secondary Facility Type Aftermarket Service Centre ■ ■

Facility Size

Workshop 5,993 sq. m

Office 1,096 sq. m

Storage 1,610 sq. m

No. of Employees 197

Initial Capabilities/Services

Manufacture Surface wellheads

Repair and recertification

Spare Parts Inventory

Indoor & Outdoor Storage

Cameron start business in Saudi

1970s

2001

2000 to 2006

From 2006

Aftermarket facility for repairs and recertifications

Cameron Al-Rushaid JV was initiated

New manufacture of Surface wellheads

A brief History of Cameron in Saudi

3

Business Opportunities in Kingdom’s Oil & Gas Sector Large reserves of hydro carbons

- world largest reserves of conventional crude oil ( ~ 267 bn bbl)- 4th largest natural gas reserves - 5th largest reserves in Shale gas

Pivotal player in the global oil trade with the vast majority of the world’s spare production capacity & leading role in OPEC

Large refining base – set to grow over coming years with major greenfield projects & petrochemical base

Significant up-tapped natural gas reserves

Under explored resources – eg Offshore exploration in Red Sea nascent and EOR activity in the Neutral Zone.

Large investment plan in E&P spend

4

Saudi Aramco Vision and Goals

NOC’s Vision: Remain the world leader in the production of petroleum-based energy with commitment to:

Invest in Innovation & Entrepreneurship

Create educational opportunities Power economic progress Increase Environmental awareness Working in partnership for energy

sustainability.

Maintain sufficient surplus capacity (Increase production) - Assure Business

Continuity- Secure Supply Chain

Increase Local Content

Saudization

Improve HS&E

Tactical Goals

5

How Cameron transacted in the Kingdom in the early 2000’s.

Aramco CameronSingapore

Order

EquipmentAl Rushaid

Order

Equipment

Impact: Production Goals affected

- Reliability of overseas supply chain- Security of supply threatened

Domestic Goals at risk - Saudization- Economic progress limited- Technology transfer restricted

Local Saudi company

6

The Supply Chain today

CALPurchases

Equipment

Cameron Al Rushaid Ltd (CAL)

Legend Local Suppliers in Saudi

ToolsSupplies

Misc ShopConsumables

Supplies

Pipe and Make up services

Gas (N2)Supplies

Locally Provided Goods

$

$

$

CommunicationServices

Public Utilities

ElectricitySupplies

WaterSupplies

Taxes, Utilities & Local Salaries

Salaries & GOSI

Sub-contract Goods / Services

Boxing /CratingServices

NDTServices

ThreadingServices

PaintingServices

TorqueingServices

TransportationServices

CateringServices Housing

$

How the models compare- Delivery- Economic Multiplication Factor- Saudization- Transfer of Technology, Knowledge

& Skills- Economic Impact

7

Contributing to Saudi’s Economic Progress goalEconomic Multiplication Factor

Cameron Al Rushaid (CAL) proposed this alternate arrangement to help meet the country’s objectives;

- Creation of jobs, direct and within the local business environment- Develop business partnerships (eg subcontract vendors) - Identification of clusters to transfer technology and create sustainable growth

Commitment to the business environment through orders placed by CAL for local services:

- Training of personnel with skills currently not available in Kingdom- Encourage development of in-country capabilities by associated suppliers

CoatingPipe thread machining and make upPackaging materials & transportationSupply of components & daily consumables

Millions of dollars in total contribution to Saudi local economy in direct investments as well as through the economic multiplication factor.

SURFACE SYSTEMS

Welding

3 Sub Arc Welding Units.13 Other welding units.1 Cladding Unit.

Field Service/Operational Support

OnshoreOffshore 15 dedicated

resident Service Techs

Repair & Inspection in accordance to API

BOPDrilling ManifoldsGate valves Surface WellheadsOEM

Quality Systems

ISO 9001 ISO 29001 API Q1 API 6A,6D. API 16A,16C,16D

Surface treatment

Painting Sandblasting

Assembly/Testing

Assembly InstrumentationGas testingPressure testing

Machining

Fully equipment machine shop

11 Conventional machines

12 CNC machines

Storage

Outdoor Indoor

Contributing to Saudi’s Economic Progress goalDirect investments plus transfer of Technology, Knowledge & Skills into country

SURFACE SYSTEMS

1% 1%

16%

27%

2%

53%Bangladeshi Omani Filipino Indian

Pakistani Saudi

2013 Nationality of workforce

2001-2006 2012 2013 20170

10

20

30

40

50

60

70

80

55

70

Field Service Dept reached 60% Saudization

Asst General Manager, Welding Supervisor, Inventory Manager and FS Manager are Saudi nationals

Further increase in headcount to 205 predicted with Saudization target of 55% by year end

School graduates to be targeted for CAL training

Target set at 70% minimum by 2017 based on training initiatives with Universities/Collages

Loca

l hire

%

Saudization YTD 2013 currently at 53%

Contributing to Saudi’s Economic Progress CAL’s Saudization Vision

32%

48%

55%

70%

SURFACE SYSTEMS

Contributing to Saudi’s Educational OpportunitiesAcademic Sponsorship followed by Employment

Two year course at SPSP Sponsored by CAL

Attainment of SVQ level 3 after completion. UK City and Guilds structure in use.

CAL has plans in place for 15 students to be sponsored over a 2 year period- 10 mechanical technicians- 5 welders.

SURFACE SYSTEMS

Increasing Environmental Awareness in country Transfer of Cameron’s HSSE system to CAL

DAWFC – Over 2150 days (Almost 6 years) 2012 Year end Composite score: 88% PME Certificate received HSSE Legal Compliance audit carried out in Feb 2013. No major finding reported.

2009 2010 2011 2012

Measurement 2007 2008 2009 2010 2011 2012 2013 YTD

TRIR 2.55 1.1 0.98 0.00 0.65 0.82 0.00

Composite Score 59% 51% 74% 82% 88% 88% 91%

SURFACE SYSTEMS

PROGRAMME DESCRIPTION

Lease BOP‘s BOP stacks in stock and currently available for Lease Exchange

Manpower increase from 107 to 205 past 5 years

Increase head count to support greater in-country manufacturing and field services. Personnel machinists, welders, inspectors and Engineers.

Continuous investment in Manufacturing Technology and Capacity

Machines such as Mazak CNC Horizontal Borers, Puma Slant Bed CNC Lathes, Mazak Slant turn 60 CNC Lathe, Hankook vertical CNC Turning Lathe have been installed in CAL

Forecast ordering based on history

Flex planning put into place for BOPs, gate valve and drilling choke spares

Price Lists for standard spare parts Eliminate Quotes wait time

Visual milestone schedule for all departments

Gives ownership and visual focus on important milestones.

Focusing on Customer Experience Programs to better serve the customer base

SURFACE SYSTEMS

2011 2012 2013 YEE 2014

On/Offshore Trees 0 147 294 370

Gate Valves 561 1429 3100 3870

Spools 435 617 970 1215

DSPOs 206 308 531 670

250

750

1250

1750

2250

2750

3250

3750

4250

Uni

ts

2013 shows100% growth in Trees and Valves.

Approx 60% growth in Spools and DSPOs

Business growth aligned with Kingdom’s Production goals Continuous Returns on Investments for CAL joint venture

14

Foundation for a long term, successful partnership

Kingdom’s ObjectiveCameron Al Rushaid Solutions

Economic Progress Saudization Job Creation

Local Manufacturing of Wellhead Systems

Faster Manufacture to forecast with stocking of raw material

Dedicated capacity

Expansion of facility and local manufacturing

Increase usage of local suppliers, vendors & services

Investment in new capabilities Training Maximize local content

Increase Production Business Continuity Security of Supply

Innovation & Entrepreneurship Technology Transfer Expanded Local Content

(I) Ensure alignment of Goals & Objectives

SURFACE SYSTEMS

Have aligned visions and goals

Mutual understanding of both parties needs & expectations

Identify and utilize the strengths of each partner

Focus on serving the customer.

Demonstrated performance build trust & confidence

Foundation for a long term, successful partnership(II) Grounded by serving the customer

SURFACE SYSTEMS

THANK YOU