The Onshore and Offshore E&C Scene - Risks and Opportunities

Thierry PILENKO, CEO TechnipParis ECRI Sponsors meeting, June 07, 2012

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Contents

1. Technip Today

2. Onshore/Offshore Market Outlook

3. Onshore/Offshore Technip Strategy

4. Risks & Opportunities Management at Technip

1. Technip Today

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Technip TodayWith engineering, technologies and project management, on land and at sea, we safely and successfully deliver the best solutions for our clients in the energy business

Worldwide presence with around 30,000 people in 48 countries

Industrial assets on all continents, a fleet of 34 vessels (of which 4 under construction)

2011 revenue: €6.8 billion

A World Leader Bringing Innovative Solutions to the Oil & Gas Industry…

Onshore/Offshore

Proven track record with customers & business partners

Engineering & constructionProject execution expertise

KnowhowHigh added-value process skillsProprietary platform designOwn technologies combined to close relationship with licensors

Low capital intensity

Worldwide leadershipUnique vertical integration

Design & Project ManagementManufacturing & SpoolingInstallationR&D

First class assets and technologies

Manufacturing plantsHigh performing vesselsAdvanced rigid & flexible pipes

Subsea

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Growing Backlog

Backlog

Subsea backlog

2009 2010 1Q 2012

10,416

8,0189,228

12,344

Onshore/Offshore backlog

€ million

20112008

7,208

Onshore/Offshore Strong Positioning

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Petrochemical & Ethylene

LNG & GTL

Floating LNG

Spar

Fixed platform

Expertise in Full Range of Offshore FacilitiesOnshore Downstream Unique Position

FPSOFertilizer

Refining

2. Onshore/Offshore Market Outlook

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Offshore/Onshore Business Environment

Tendering continues across the Gulf of GuineaGas discoveries in Eastern Africa Political uncertainty in North Africa

Strong momentum in gas-related mega projectsInvestments in refining, petrochemicals and fertilizer across countries

Conventional works very activeContinuous focus on logistics & local contentExpanding Onshore/Offshore opportunities with various clients

Brazil

Africa

Drilling permits increase in 2012 driving several offshore developments in US watersIncreasing activity offshore Mexico

Gulf of Mexico

Low price shale gas drives downstream investments

North AmericaPositive trend continues in mature fieldsOffshore platform opportunitiesStep change in size and complexity of projects

North Sea

First major offshore wind farm awards in FranceSome opportunities in CIS across segments

Europe

Good volume of activity upstream & downstream in refining and petrochemicals, both offshore & onshore

Middle East

Asia PacificDownstream prospects across the continent Several potential offshore developments

Latin America

Shift to South & EastLatin AmericaAsia Pacific

Large investments all along the value chain, notably downstream (including US petrochemical investments driven by low price shale gas)

Technology requirements to support larger capacities & more complex developments

Country development requirements

Onshore/Offshore Market Evolution

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3. Onshore/Offshore Technip Strategy

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Onshore/Offshore Unique Positioning

National content

Vertical integration

Execution capability

Well diversified, profitable backlog

Key differentiating assets

Technology

Our Strategic Priorities

Ability to tackle reimbursable and lump-sum contracts

High-end engineering capabilities

Service offering covering the full value chain: from conceptual to start-up

Wide range of offshore & downstream proprietary technologies and alliances

Local engineering centers close to clients across countries

Our Positioning

Strong project management skills

27%

11%

13%18%

31%

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Diversified Backlog Across All Markets

Europe / Russia Central Asia

Africa

AsiaPacific

Americas

Middle East

€12,3 bn

Backlog by geography as of March 31, 2012Backlog by geography as of March 31, 2007

48%

10%

11%

18%

11%Americas

Europe / Russia Central Asia

Africa

AsiaPacific

Middle East€9,9 bn

Differentiation, integration, technology: from Concept to Plant Start-up

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Proprietary technologies

EP, EPCm, EPC

Process Technologies

Licensing, engineering services & proprietary equipment

Full project management and execution

scopes

High-end engineering &

design capabilities

Conceptual, FEED, PMC

A Wider Offer Involvement From Conceptual to Start-up

Technip

Stone & Webster process technologies and associated oil and gas engineering capabilities

Renowned process and project engineering skills

Ability and willingness to take full EPC responsibility

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Spar

Developing Proprietary Technologies & Partnership with Licensors

Proprietary technology

Production solutions for harsh environments

Partnership with Wieldand

Heat exchanger efficiency & capex reduction

LNG

Partnership with CIMV

Enable bio-chemicals through further conversion of vegetable feed stock

Proprietary steam reformer technology

Global alliance with Air Products for “over-the-fence” H2 plants

LNG Export

Proprietary cryogenic flexible lines technology

Application for floating LNG offloading facilities

Bio-refining Hydrogen

The technologies portfolio will be broadened by the future acquisition of Stone & Webster process technologies

Execution Capability:Large Projects Need a Worldwide Response

Ethylene XXI Complex FEEDClient: Braskem-Idesa in MexicoTechnology provider: Technip1,050 kilotons/year ethylene cracker

Worldwide centers of excellence to support local Mexican team

Relationship with Client: RioExpertise in ethylene process: Rome & LyonExpertise in ethylene furnaces: Claremont

Project managed to ensure transfer of knowledge, technology and know-how

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4. Risks & Opportunities Management at Technip

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Technip Risk Management Framework

Operations Objectives

RE

Pre‐bidding stage

Proposal phase Execution stage

Key risk metrics :Backlog concentration: country, clients, suppliers, partners, contract types

Portfolio analysis:Company risk profile, segment analysis

Control Reporting

Strategy

Project Risk Management

Shell FLNG Experience

Portfolio Analysis & Key Metrics

• Selection of representative projectsfrom projects portfolio

• Allocation of risk profile on margin at completion

• Aggregation of such profilesto assess uncertainties attached to portfolio forecast margin

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• Geography

• Exposure to third party

• LSTK exposure

• Workload, Asset availability…

Mutual Benefits for Project Team, Partners, Clients and Investors

Support decision‐making

Risk Management creates values and confidence

Federate the partners around the project

Support effective use of resources

Promote continuous improvement

Put in place a fair and clear communication

Reassure Client’s stakeholders

Establish a confidence‐building approach

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Key Success Factor – The Human Capital Element

Strong Risk Culture  within the Group

High involvement of Technip personnel

Risk Management responsibilities shared at all level of the Company

Senior Management supporting Risk Identification

Alignment of methods between all risk areas (Audit, HSE, Projects…)

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Thank You