Working with an Experienced Company

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Working with an Experienced Company PESGB
Conference on New Business Practice 25th October
2005
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Who we are
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Petrofac Total Facilities Solutions
Petrofac is a global provider of total facilities
solutions for the oil gas industry. We build,
operate, finance and co-invest in plant -
upstream, midstream and downstream - underpinning
our activities with innovative engineering design
and comprehensive training programmes.
From concept to operations Petrofac delivers
throughout the project lifecycle
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Capability Summary

• Petrofac Engineering
• Conceptual Engineering Project Development

• Petrofac International
• Engineering, Procurement and Construction

• Petrofac Facilities Management
• Operations Maintenance of Oil Gas Facilities

• Petrofac Resources
• Pursuit of Investment Opportunities aligned with
  Engineering or Operations Involvement

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The Petrofac Group
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Engineering Development
Selected projects include
Paladin Wood and Gas Export Topsides FEED
RWE DEA Cavendish Field Facilities Engineering
TNK-BP Rospan Field FEED
BP Algeria In Amenas Field Engineering
Procurement Services
Sonatrach/Anadarko El Merk Field Engineering
Assistance Contract
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Engineering Construction
Selected EPC projects include
in 50/50 joint venture
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Petrofac Operating Services

• Petrofac Operating Services is an independent
  Service Operator and Duty Holder of 15 Oil Gas
  facilities in the North Sea
• Specialises in the transition, transformation and
  rejuvenation of mature assets as they pass from
  first generation owners (majors) to the new
  entrants
• As the only Service Operator and Duty Holder, has
  enabled many new companies to enter the North Sea
  by taking away barriers to entry posed by
  offshore operatorship
• Relationships with clients are typically long
  term (up to life of field) and commercially
  incentivised
• Member of UKOOA with a top quartile record in
  safety, production as well as cost

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Petrofac Resources

• Deliver investment support only to projects where
  Petrofac provide engineering, construction and/or
  operational services
• Services include
• Selective equity investment, alongside our
  customers
• Developing financing solutions which facilitate
  project viability
• Manage project risks and improve alignment
• Typical Investment types
• Facilities on a fully financed or build, own,
  operate, transfer basis
• Minority stake in upstream projects
• Majority stake in midstream or downstream projects

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How Operating Services work
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Petrofac Facilities Management

• Service Operator
• UK offshore Galley, Montrose, Arbroath, Hewett,
  Schooner, Ketch, Horne, Wren, Kittiwake, Thistle,
  Heather, Broom
• UK onshore Bacton Gas Terminal
• Overseas Cendor Malaysia, Interoil Papua New
  Guinea
• Operations Support
• UK offshore Armada, Britannia, Liverpool Bay,
  Morecambe Bay, Murchison, Ninian, Janice, Leadon,
  Gryphon, Beryl, Balmoral, Alwyn, Dunbar, Braes
• UK onshore Point of Ayr Gas Terminal, Barrow
  Gas Terminal
• Overseas Kuwait, Iran, Sudan, Equatorial Guinea
  and Gabon
• Emergency Response
• Primary 20 facilities offshore, one terminal
  onshore
• Secondary 22 facilities offshore, two terminals
  onshore
• 3,000 employees in the UK including 1,500
  offshore operations staff
• 500 employees overseas

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Business Delivery Model
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North Sea Mature Assets Transition to New Owners
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The journey so far
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Effective Incentivisation Pays Off
Production Efficiency Focus
Cost Cutting Focus
Innovation Improvement Schemes

• Adding value
• Extending asset life
• and the record to prove it

Time
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Petrofac Performance Galley / Northern Producer
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Petrofac Performance - Montrose
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Hewett and Bacton Operating Cost
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How we facilitate oil gas transactions
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Petrofac Operating Services and Ownership Change

• When late life offshore fields come onto the
  market, they often come with operatorship, legacy
  issues and suboptimal production performance
• Sale of such assets is complicated by transition
  issues and lack of ability of new entrants to
  assume the role of offshore operator
• Hence non-operated stakes usually sell well -
  operated stakes have a much lower uptake due to
  barriers to entry
• Petrofac removes these barriers for non-operating
  buyers by completing the transition from a
  previous owner and managing the operation
• Cooperation is governed through an incentivised
  Operating Service Agreement, typically for the
  life of field
• At the discretion of the client, Petrofac can
  also participate in the acquisition as a minority
  equity owner
• Our current duty holder clients include Paladin,
  Venture, Lundin and Tullow all assets involved
  were acquired through an acquisition

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Where Petrofac can help

• When selling operated upstream assets
• It makes sense to outsource production operations
  before sale
• By lowering barriers to entry this will broaden
  the market
• It will also desensitise the transaction
• When buying operated upstream assets
• New entrants often have low appetite for operated
  assets
• This need not be the case when using Petrofac
  Operating Services, the only service operator
  qualified as dutyholder
• Petrofac Operating Services has extensive
  experience in conducting due diligence, executing
  transition, assuming dutyholdership, providing
  onshore support and operational consultancy

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Ten years of experience in Asset Transitions

• Hutton, Murchison, Ninian 1995-96
  Oryx Transition from Conoco/Chevron 360 staff
• Galley 1997 Texaco FPF Conversion Field start
  up 60 staff
• Banff 1997 Conoco New build and Field start
  Up 60 staff
• Janice 1998 Kerr McGee Transfer from
  incumbent 60 staff
• Audrey, Ann, Alison 2001 Venture SNS Field
  operatorship
• Montrose, Arbroath 2003 Paladin Transition from
  BP 100 staff
• Hewett, Bacton 2003 Tullow Transition from
  ConocoPhillips 140 staff
• Kittiwake 2003 Venture Transition from Shell 60
  staff
• Alwyn, Dunbar 2004 Total Transition for Total 120
  staff
• Heather, Thistle 2005 Lundin Transition from
  Lundin 150 staff
• Schooner, Ketch 2005 Tullow Transition from Shell
• Horne, Wren 2005 Tullow New tie-back

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Supplying goods and services to Petrofac
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Vendor Registration

• For UK projects we use FPAL www.fpal.com
• Petrofac also operates a web-based global vendor
  registration system www.petrofac.com
• The database allows all projects access to
  registered vendors
• Petrofac does not have preferred vendors
• Vendor lists are compiled on a project-by-project
  basis
• We often look for companies with proven regional
  experience
• In some cases, vendors may need to be registered
  with end-client and/or be able to provide local
  content
• We encourage innovative solutions, especially
  where they give us an edge

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Procurement Centres
Main procurement centres
?
?
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Working with an experienced company
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Working with an experienced company

• We are a service business are therefore customer
  focussed by nature
• We provide engineering and operating services as
  well as finance and equity participation
• Many of our larger clients have grown from
  scratch to major industry players, we took them
  seriously then, look where they are now
• We continually innovate and expand our service
  proposition we take all new ideas very
  seriously
• We regularly and very quickly form alliances and
  joint ventures to pursue new ideas and concepts
• Were experienced, but still with a strong
  entrepreneurial view on life

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Lets be Positive!
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Further Information and Advice
Please do not hesitate to contact me for
assistance Willem.Bloem_at_petrofac.com
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Petrofac Operating Services