AN OFFSHORE ENGINEERING COMPANY’S EXPERIENCE ENTERING THERUSSIAN MARKET10 SEPTEMBER 2019 – IRO - MARITIEM MUSEUM - ROTTERDAMHan Tiebout – Director Business Development

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AGENDA• Safety moment

• GustoMSC profile

• Introduction Han Tiebout

• GustoMSC project experience in Former Soviet Union

• Reasons to go after Russian market again

• Business development approach

• Experiences working with Russian clients

• Lessons learned

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SAFETY MOMENTHEED ADVICE FROM JUDGE ROY BEAN – PROPRIETOR – EAGLE’S NEST – LANGTRY, TX

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GUSTOMSC PROFILETHE PIONEERS OF OFFSHORE ENGINEERINGGustoMSC is a reputable design & engineering company for:

• Design of mobile offshore units

• Supply of associated equipment

In close cooperation with our clients, we translate experience, science and technical knowledge into realistic & innovative ideas.

In this way, GustoMSC enables and supports safe and efficient operations at sea, contributing to a sustainable future.

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INTRODUCTION HAN TIEBOUTActive in the offshore energy industry since 1978

• Apprentice Gusto Engineering, after graduation TU Delft employed as Project Design Engineer

• Cameron 1985 – 1996 Houston, TX – Broussard, LA - The Hague – Aberdeen/Leeds, UK – Hoogezand

• Varco BJ 1997 – 1999 Etten-Leur

• ModuSpec 1999 – 2001 Serooskerke

• GustoMSC 2001 – 2008 Schiedam

• SBM Offshore 2008 – 2010 Schiedam – Monaco

• GustoMSC 2011 – now Schiedam

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GUSTOMSC PROJECT EXPERIENCE IN FORMER SOVIET UNION

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Between 1965 and 2005 a total of 14 mobile offshore units were delivered:Jack-ups – drillships – crane/pipelay vessels – offloading tower

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REASONS TO GO AFTER RUSSIAN MARKET AGAIN ARCTIC OUTLOOK – USGS 2009

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REASONS TO GO AFTER RUSSIAN MARKET AGAINARCTIC OUTLOOK – USGS 2009

The Arctic holds an estimated 13% (90 billion barrels) of the world's undiscovered conventional oil resources and 30% of its undiscovered conventional natural gas resources, according to an assessment conducted by the U.S. Geological Survey (USGS).

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REASONS TO GO AFTER RUSSIAN MARKET AGAINARCTIC OUTLOOK 2009

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REASONS TO GO AFTER RUSSIAN MARKET AGAINOIL OUTLOOK

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REASONS TO GO AFTER RUSSIAN MARKET AGAINGAS OUTLOOK

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REASONS TO GO AFTER THE RUSSIAN MARKET AGAINRUSSIA HAS THE LARGEST OFFSHORE ARCTIC AREAS

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REASONS TO GO AFTER THE RUSSIAN MARKET AGAINRUSSIA HAS THE LARGEST OFFSHORE ARCTIC AREAS

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REASONS TO GO AFTER THE RUSSIAN MARKET AGAINRUSSIA HAS THE LARGEST OFFSHORE ARCTIC AREAS

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BUSINESS DEVELOPMENT APPROACH FOR RUSSIATIMELINE OF ACTIVITIES

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2011 – 2014Business

development

2008 – 2011Business research

2015 – 2019Adjusted business

development

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BUSINESS DEVELOPMENT APPROACH FOR RUSSIAPHASED APPROACHBusiness research – market study (2008 – 2011)

• Desk research

• Conferences

• Follow-up meetings

• Final report

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BUSINESS DEVELOPMENT APPROACH FOR RUSSIAPHASED APPROACHBusiness development (BD) with Lighthouse Russia (LHR) (2014 – 2015)

• LHR to understand GustoMSC business

• LHR to benchmark GustoMSC BD in Russian context

• LHR to advise GustoMSC BD to enter Russian market

LHR and GustoMSC together extending Russian network (2015 – 2017)

• Identifying the strong selling points–history/tailored designs

• Establishing contacts with higher echelons

• Connecting the dots

• Conducting strategy sessions with management team

• Development of yearly BD plans

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BUSINESS DEVELOPMENT APPROACH FOR RUSSIAPHASED APPROACH - RESULTS

• Mapping of offshore projects

• Russian parties identified for cooperation

• National oil & gas companies

• Independent oil & gas companies

• Majors working in Russia

• Key players (contractors, shipyards, academia)

• RMRS

• Pipeline developed for multiple projects

• Invitations to bid received

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BUSINESS DEVELOPMENT APPROACH FOR RUSSIACHANGE OF COURSE - 2014

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EXPERIENCES WORKING WITH RUSSIAN CLIENTS“IT IS A CULTURAL THING”

Everything is managed “top-down” – necessity to connect with the higher echelons

Russian government is playing major role

Russian companies have politically motivated strategies

Russian companies have longer term strategic plans

It takes time to develop a trustworthy relationship

Russian companies demand high quality and commitment

It is required to have a Russian partner crossing the bridges, especially linguistically and culturally

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BUSINESS DEVELOPMENT RECOMMENDATIONSTOP 5Execute Business Research

• What is market - who are the players – what business models do apply?

SWOT analysis = Strengths, Weaknesses, Opportunities, Threats

• Can we play a role here - if yes, what do we need – what is market outlook - competition?

If required, seek Local Assistance

• Cut culture/language barriers – linking to the right people

Develop Business Development Plan

• Road map – clear goals - supported by senior management

Yearly Review of activities, change plan if required22

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LESSONS LEARNED

Think like Russians do ….. or at least understand that they think differently

Politics overrule common business sense

Show proven technology

Patience, patience, patience….. and commitment!

”Forever friends”, once relationship is established Russians like to continue the business on that basis

Flexibility needed – in our case from Russian Arctic to Baltic to Caspian

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This document contains trade secrets and confidential proprietary knowhow of GustoMSC, its partners and/or customers. No disclosure to third parties is allowed without prior written approval by GustoMSC. Unauthorized reproduction or transmission of any part or all of the work may result in civil or criminal liability.

THANK YOU KINDLY FOR YOUR ATTENTIONhan.tiebout@gustomsc.com