Aberdeen 20 April 2006

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Project Portfolio, Procurement Strategy,
Procurement Volumes

• Aberdeen 20 April 2006
• Graham Lord
• Supplier Quality Manager

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Project Portfolio, Procurement Strategy Volumes

• Agenda
• Project Portfolio
• Procurement strategy
• Procurement volume
• Summing up

• Vetco Aibel locations
• Norwegian projects
• Global projects

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Vetco Aibel Norwegian locations
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Vetco Aibel - Global locations
Norway
Kazakhstan
Italy
Iran
Egypt
Thailand
Nigeria
Equatorial Guinea
PNG
Congo
Angola
Brazil
Australia
MMO Activities
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Project Portfolio, Procurement Strategy Volumes

• Agenda
• Project Portfolio
• Procurement strategy
• Procurement volume
• Summing up

• Vetco Aibel locations
• Norwegian projects
• Global projects

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Vetco Aibel - Greater Ekofisk Modification
Contract Value 120 MUSD / year
Greater Ekofisk Area - EPCIC
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Vetco Aibel - Statoil Maintenance Modification
Contr.Value 140 MUSD / year
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Vetco Aibel Maintenance Modification Contr.
Value 350mill. NOK pr. year
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Vetco Aibel - Snøhvit MM, Hammerfest LNG plant

• Client Statoil
• Contract Maintenance Modification Snøhvit MM
• Duration 04.01.2006 31.12.2010 (Option 3 x 2
  year)
• Value pr. year 8 MUSD
• Hours pr.year Approx. 100 000

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Vetco Aibel - Statfjord A Modification Contract

• Client Statoil
• Project Topside Modification Statfjord A
• CA 13 April 2005
• Value 98 MUSD
• SOW EPCI Reconstruction of Statfjord A from
  Oil to Gas production
• Duration May 2005 - Approx. 30.08.2009

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Vetco Aibel PF - Alvheim project

• Client Marathon
• Contract EPCIC
• SOW Eng., proc., fabrication /assembly,
  completion and offshore hook-up- and
  commissioning assistance
• Duration January 2005 Nov 2006
• Value 340 MUSD
• Completion Dec 2006
• First Oil Q1 - 2007

MST Odin to be converted for Alheim
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Vetco Aibel - PF Volve Project

• Client Maersk Contractors
• Scope of Work Process, wellhead and power
  modules and rig modifications for Maersk
  Contractors in the Volve field for
  Statoil
• Value 150 MUSD EPC
• Module weight 3.000 tonnes
• Delivery Q3 2006
• Project location Billingstad,
  Singapore, Thailand, Haugesund

Maersk Inspirer
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Vetco Aibel P F - Ormen Lange
CondensateExport MEG regeneration system areas

• Client Norsk Hydro
• Contr. Type EPC contract
• Value 174MUS
• Dur./Compl. Sept 2004 - Oct. 2007

• Status
• 363.000 Construction hours performed with no no
  reportable personal injuries
• Designphase completed
• MEG Civil construction completed
• Installation work has started

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Project Portfolio, Procurement Strategy Volumes

• Agenda
• Project Portfolio
• Procurement strategy
• Procurement volume
• Summing up

• Vetco Aibel locations
• Norwegian projects
• Global projects

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Vetco Aibel Global Projects

• Australia
• Engineering facilities in Perth and Melbourne
  including a total of 30 engineers
• Operation of Wandoo AB platforms for Vermillion
  covering 30 operators / technicians
• Operation of Vanguard Wollybutt FPSO for Pernuda
  in co-operation with Total Marine Services,
  including provision of Operation / Maintenance
  personnel, Onshore supply base and Marine
  Services
• Maintenance and Modification services contract
  with Chevron at Kutubu PNG, covering 100
  engineers / technicians / labour
• Greenfield construction services for Otway gas
  Plant Covering 220 engineers and labour

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Vetco Aibel Global Projects

• Brazil
• Engineering center in Rio de Janeiro including
  250 engineers covering all disciplines
• Operational Supply base in Macae, including
  support personnel for offshore maintenance and
  possibilities for future fabrication facilities
• Turn key modification for Petrobras on offshore
  installations including Garoupa WRHU platform
• Maintenance support contracts on 4 Petrobras
  installations at the NE Asset. Contract covering
  450 technicians

• Maintenance support contracts on P-19/47
  Petrobras installations at the South Asset.
  Contract covering 75 technicians.
• Maintenance support contracts on P-20/26
  Petrobras installations at the South Asset.
  Contract covering 40 technicians.
• Qualified to tender for Petrobras 5 years
  Modification / Maintenance Frame contracts

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Vetco Aibel Global Projects

• Thailand
• Fabrication Set Up in Thailand for Topside
  Modules. Ban Chang Office Map Ta
  PhutAssembly

Berge Helene modules on Barge Ready to depart
for Singapore shipyard
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Project Portfolio, Procurement Strategy Volumes

• Agenda
• Project Portfolio
• Procurement Strategy
• Procurement Volume
• Summing up

• Business Ethics
• HSE
• Quality
• Strategy

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Vetco - Procurement Strategy- Business Ethics

• Vetco International Compliance Code of Conduct
• Vetco is dedicated to the highest standards of
  ethics integrity and compliance with the law. Our
  customers demand this as a matter of principle.
  Our fellow employees expect it as an essential
  part of a productive workplace. Our stakeholders
  require it because it is the proven way to
  protect and grow their investment.
• Compliance with the laws of the countries we
  operate in and also compliance with the USA
  Foreign Corrupt Practices Act.

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Compliance Code - Anti corruption rules

• Code Sections 3.1 and 11.1 prohibits us from
• offering, promising, paying, giving anything of
  value,
• directly or indirectly
• to a government employee or a government company
  employee, or anyone exercising a public function,
  or their agent, consultant, friend or family, or
  a politician, or an international organization,
• to influence an official act or decision, or
  induce them to do something they are not supposed
  to do (or omit to do what theyre required to),
  or use their influence with a government body to
  influence a decision,
• in order to assist in obtaining, retaining or
  directing business to any party.

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Vetco Aibel Procurement Strategy Business
Ethics

• Vetco requires the same high standards from its
  Subcontractors Suppliers and business partners.
• This is absolutely non-negotiable.

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Project Portfolio, Procurement Strategy Volumes

• Agenda
• Project Portfolio
• Procurement Strategy
• Procurement Volume
• Summing up

• Business Ethics
• HSE
• Quality
• Strategy

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Vetco HSE Culture Project

• Culture for Health, Environment Safety
• Joint project between Vetco Aibel and
  Rogalandsforskning, partly financed of the
  Norske Forskningsråd and Teknologibedriftenes
  landsforening (TBL)
• The intention is to increase consciousness and
  focusing on HSE as an important part of our
  culture

Vision Our culture is Value Creating "
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Vetco Aibel - HSE

• HSE - Development 1997 -2005

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Project Portfolio, Procurement Strategy Volumes

• Agenda
• Project Portfolio
• Procurement Strategy
• Procurement Volume
• Summing up

• Business Ethics
• HSE
• Quality
• Strategy

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Vetco Aibel Prequalification of Suppliers
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Project Portfolio, Procurement Strategy Volumes

• Agenda
• Project Portfolio
• Procurement Strategy
• Procurement Volume
• Summing up

• Business Ethics
• HSE
• Quality
• Strategy

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Six Stages of SCM Development
Effectiveness/ Cumulative savings
Decentralized Functional Focus
Centre Led cross-Functional Focus
Reduce cost
Savings through synergy
Total Cost of ownership
Supply chain optimization
Total Customer Satisfaction
Serve the factory
Focus

• CommercialTendering
• Negotiating
• Approved supplier lists

• Commercial
• Contracting
• Global sourcing

• Cross functional
• buying teams
• Systems integration
• Vendor rating etc.

• Outsourcing
• EDI/Internet
• E-Commerce
• Cost models

• Clerical
• Order processing

Activities

• Customer drivenactivities
• Contract manufacturing
• Supplierdevelopment
• Global supplier network

• Supplier base
• management

• Contract
• management
• Ethics

• Communication
• and information
• infrastructure

• Social
• resistance

• Internationalization
• HRM

Challenges

• Initial purchasing
• Control of purchasingexpenditure

Time
Stage 3 Purchasing co-ordination
Stage 1 Transactional orientation
Stage 2 Commercial orientation
Stage 5 Ext. Integration
Stage 4 Internal integration
Stage 6 Value chain integration
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Project Portfolio, Procurement Strategy Volumes

• Agenda
• Project Portfolio
• Procurement Strategy
• Procurement Volume
• Summing up

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Vetco Aibel Procurement Volumes

• In 2005 the total external commitments for Vetco
  Aibel Norway was approx 800MUSD or approx 68 of
  Vetco Aibel revenue

• Through continuing high activity levels, combined
  with limitations on our own resources, we are
  buying more and more each year

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Vetco Aibel Procurement Volumes

• Vetco Aibels procurement volumes 2005
• Buying from Norwegian suppliers 649 MUSD
• Foreign buying 123 MUSD

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Vetco Aibel Top line growth
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Project Portfolio, Procurement Strategy Volumes

• Agenda
• Project Portfolio
• Procurement Strategy
• Procurement Volume
• Summing up

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Project Portfolio, Procurement Strategy Volumes

• Norway busy
• Global expansion
• More internal controls
• Compliance Code
• SOX
• Global roll out of tools and procedures
• New Stavanger Offices 15.10.2006

Please come and visit
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