Saipem by East Coast Promotions

COMPANY PROFILE

2015

Saipem S.p.A.

www.saipem.com | +39 02 5201

World Leaders in Oil Services Editorial: Ajuanne Payne

Saipem S.p.A. is an Italian world-leading EPCI oil services provider that has been dominating the market for more than five decades. Operating in over 60 countries with 48,000 employees and revenues of close to €13 billion - Saipem is a giant in the oil and gas sector, with capabilities encompassing procurement, pipeline engineering, construction and project management for major global projects. Saipem S.p.A. (Società Anonima Italiana Perforazioni E Montaggi) has a long and successful history as an oil services provider and contractor to the oil and gas industry. Originally founded in 1957 through the merger of Snam Montaggi and SAIP, Saipem started life as a services provider for Eni – who still own a 43% stake in the company today. Providing comprehensive engineering, procurement, construction and installation services, Saipem’s proficiency is expansive in all areas

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of onshore and offshore production – handling diverse pipeline, FPSO, platform and deepwater subsea development projects. After previously focusing on plant construction, drilling and onshore pipelaying, in the 1960’s Saipem began operating offshore. It was towards the end of that decade that the company also started operating autonomously of Eni, working on projects for clients who were not part of the Eni Group. The Mediterranean was the location for the beginnings of Saipem’s

operations offshore, which eventually expanded to the North Sea by 1972. Following its rapid growth and lucrative expansions, Saipem’s client list today boasts nearly all major independent oil and gas companies worldwide.

STRATEGIC INVESTMENT Towards the end of the 1990’s the company started to move, along with the global markets as a whole, towards deepwater prospects for offshore drilling - putting in place an investment and growth plan in order

Saipem S.p.A. to further cement its leading position in the industry. This investment plan is a significant contributing factor to Saipem’s market dominance today, and involved concerted investment into deep water field development, pipe-lay, deepwater drilling, leased FPSO and subsea robotics. Parallel to this was the company’s move towards projects in developing countries and the utilisation of local resources. Saipem recognised that, in order to ensure long-term success, as a company they needed to boost local content in their areas of operation. They were one of the first to put in a concerted effort in this area – developing key facilities in the Middle East, West Africa and the FSU and employing a significant number of locals. Today, Saipem can boast 29 engineering and project execution

offices worldwide and 11 fabrication yards in five continents. Locally, they have had a hand in the building and design of almost all of Italy’s pipeline network and has constructed over 100,000km of pipelines globally since inception. Saipem’s investments into its infrastructure have also put it in the ideal position to meet the growing demand for fully turnkey EPCI projects for both onshore and offshore operations. Naturally, for such a large organisation, a number of strategic acquisitions have played a large part in the exponential growth of the company. The largest crossborder acquisition in Europe in the oil services sector was Saipem’s purchase of Bouygues Offshore in 2002. Following this, in 2006 Snamprogetti was purchased –

an engineering and construction company involved in the execution and design of large onshore hydrocarbon and gas monetization projects internationally. An exceptional company such as Saipem is not created overnight – five decades of investment and growth have contributed to elevating the company to where it is today. Saipem has a reputation for being able to tackle projects in the most remote areas in some of the harshest climates – in a time when companies are having to go further and drill deeper in their oil explorations. Some of the company’s more recent investments – starting in 2006 following the acquisition of Snamprogetti, are in the areas that will service the increasing necessities of moving towards more inhospitable and difficult drilling projects.

The Scarabeo 7 undergoing her special periodic survey (SPS) during 2013/2014 at A-Berth in the Port of Cape Town, South Africa. DCD Marine Cape Town received an award from the Western Cape Provincial Government in recognition of the work performed on the project.

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It has invested heavily into expanding its drilling and construction fleet and other new technologies and assets designed to meet the challenges of oil and gas projects in very deep waters.

TECHNICAL CAPABILITIES The investments that Saipem have made along the way have enabled the contractor to adapt to changes in the market. Today, the company has an impressive fleet of construction vessels, drilling vessels and two FPSO’s, making a total of 54 vessels without counting the significant amount of ROV’s and construction units owned by the company. The offshore drilling fleet alone is made up of seven deep water units, two drillships and five semisubmersibles. It is also made up of two mid water semi-submersibles, two modern high spec jack-ups, four standard jack ups and one tender assisted unit. Going back to the beginning of Saipem’s offshore drilling fleet, the semi-submersibles, Scarabeo 3 and Scarabeo 4 were an answer to the demand for vessels that could handle mid-water operations in the 70’s. It wasn’t until Saipem seriously entered the deep water market in the 90’s that the company expanded its fleet further with the deep water semisubmersibles Scarabeo 5 and 6. Scarabeo 5 and 6 mainly contributed to Saipem’s development of the North Sea, namely Norway, and are still in operation today in offshore drilling operations. Around the same time that Saipem expanded its presence into South America, Africa, The Middle East and Caspian areas it also further expanded its fleet. The semi-submersible Scarabeo 7 joined the fleet in order to further service the company’s interests in deep and ultra-deep waters. The Scarabeo 8 and the Scarabeo 9 are PAGE 4

recent editions and bring the total to seven semi-submersible vessels out of a 16 unit drilling fleet.

LOCAL PARTNERSHIPS In the construction, repair and maintenance of its vast fleet, Saipem often adheres to one of its centralised values of using local expertise and facilities in the locations they are based. This core ethic of the company is one of the most important contributing factors to its success and strength over the decades. One example of the kind of localised working relationship Saipem builds up is with South African engineering and maintenance company, DCD, who have worked on the service and repair of some of its Scarabeo vessels. More recently, DCD has completed maintenance work on the Scarabeo 7 semi-submersible, now deployed in Indonesia, as a direct result of a six year working relationship with the global giant. This is just one instance of the types of relationships the company fosters in strategic areas to provide the infrastructure they need and to utilise local knowledge. As a result of its work with Saipem, the Cape Town company DCD actually won a local award for its hand in bringing over 1,000 jobs to the region – a mutually beneficial arrangement with Saipem and a story that has been repeated many times throughout the company’s operations.

THE ANGOLAN PROJECTS In April 2014, Saipem was awarded two key projects in Angola by Total which brings a total of US$4 billion into the company – almost a quarter of the revenue of the business for that year. The first US$3 billion contract is for the engineering, procurement, construction, installation and commissioning of two converted turret-moored FPSO’s for Total’s

Kaombo Field Development Project, offshore Angola. The Kaombo Field Development Project is an ultra-deep offshore operation that will contribute to the sustainable growth of Angola’s offshore resources and will be Block 32’s first development. Its final production capabilities are estimated to be around 230,000 barrels per day (bpd). Saipem’s second contract is for a seven-year contract of US$1 billion for the operation and maintenance services of the two FPSO vessels. The work will include the engineering, procurement, conversion of the tankers, fabrication and integration of the topsides and the installation of the turret mooring system. Once converted, the two FPSO’s will have a storage capacity of 1.7 million barrels of oil and a 100 million scfd gas compression capacity. On top of this, the Kaombo FPSO project will also be managed by Saipem’s Floaters Business Unit, which is based in France. While the topsides will be fabricated in Saipem’s Karimun Island Yard in Indonesia, the conversion of the tankers and integration of the topsides will be undertaken at a shipyard in the Far East. All other activities will be completed locally in Angola and the first of the two FPSO’s will be operational at the beginning of 2017 – with the second unit to be finished later that year. Commenting on the new contracts and their importance, Umberto Vergine, CEO of the company, said: “This contract is in line with Saipem’s strategy of pursuing growth opportunities in high complexity Floaters and FLNG construction in specific geographic areas, such as Asia Pacific and Africa, where the company can leverage its engineering capabilities, strong local content competencies and unique availability of fabrication yards.”

Saipem S.p.A. DCD Marine Cape Town is a safe, responsible shipyard with a recognised track record in providing innovative turnkey solutions to the upstream Oil & Gas sector.

SERVICING SOUTHERN AFRICA PORTS

DCD MARINE is a safe, responsible shipyard with a recognised track record in providing turnkey solutions to with the upstream Oil &track Gas sector. DCD MARINEinnovative is a safe, responsible shipyard a recognised record in providing innovative turnkey solutions to the upstream Oil & Gas sector.

SERVICING SOUTHERN AFRICA PORTS SERVICING SOUTHERN AFRICA PORTS

Walvis Bay Walvis Bay

A-Berth, Port of Cape Town A-Berth, Port of Cape Town

Saldanha Bay Saldanha Bay

Services Include: Services Include: PROJECT MANAGEMENT PROJECT MANAGEMENT RIG REPAIRS & UPGRADES RIG REPAIRS & UPGRADES CONVERSIONS & MODIFICATIONS CONVERSIONS DRY DOCKINGS& MODIFICATIONS DRY DOCKINGS STEEL & PIPE FABRICATION STEEL & PIPE FABRICATION BLASTING & COATING BLASTING & COATING

Port of Ngqura (Coega) Port of Ngqura (Coega)

VESSEL INSPECTIONS VESSEL SUBSEAINSPECTIONS FABRICATIONS SUBSEA FABRICATIONS TRAVELING REPAIRS & SUPPORT TRAVELING REPAIRS &(SLM SUPPORT ON-SITE MACHINING AFRICA) ON-SITE RIGGINGMACHINING (SLM AFRICA) RIGGING MECHANICAL & PROPULSION REPAIRS MECHANICAL & PROPULSION REPAIRS

Beyond Expectations Beyond Expectations

www.dcd.co.za www.dcd.co.za

CBN_DCD001A5 CBN_DCD001A5

CAPE TOWN - Tel: +27 (0)21 460 6000 | Fax: +27 (0)21 447 6038 | Email: marine@dcd.co.za CAPE TOWN - Tel: +27 (0)21 460 6000 | Fax: +27 (0)21 447 6038 | Email: marine@dcd.co.za

Succeeding through SAFETY Succeeding through SAFETY

CBN_DCD001A5.indd 1

QUALITY QUALITY

www.dcd.co.za

ON-TIME DELIVERY ON-TIME DELIVERY 2014/02/04 9:35

CBN_DCD001A5.indd 2014/02/04 9:35 CAPE TOWN1 - Tel +27 (0) 21 460 6000 | Fax +27 (0) 21 447 6038 | Email: marine@dcd.co.za

Succeeding through SAFETY | QUALITY | ON-TIME DELIVERY PAGE 5

CONTRACT WINS IN 2014 Two more major wins for Saipem in 2014 were for projects in Saudi Arabia and in Brazil – a total of US$4 billion in sales. Similarly to the Angolan contracts, these projects will be completed in 2017. In Saudi Arabia, Saipem will be carrying out onshore engineering and construction activities for Saudi Aramco as part of the Jazan

Integrated Gasification Combined Cycle Project in South Western Saudi Arabia. This will be one part of Saudi Aramco’s Jazan Refinery and Terminal project – a power plant which will be the largest gasifierbased power facility in the world. The scope of the work Saipem will be carrying out comprises of two packages that will cover the engineering, procurement, design,

installation, commissioning and start up assistance for two pipelines. The first package will be for the soot and ash removal unit, the gasification unit, the acid gas removal and the hydrogen recovery units. The second package will be for the six sulphur recovery unit trains and storage facilities. In Brazil, Saipem will be working for Petrobras on an EPCI contract

DCD Marine Cape Town: Successful projects build a productive, long-term relationship with Saipem As a shipyard and turnkey engineering solution provider for the upstream oil and gas sector, DCD Marine Cape Town has a world-class track-record with a number of drilling contractors servicing the industry both in Cape Town and various ports in Africa. The company has enjoyed an association with Saipem since the late 1990’s - a relationship which has been built up over years of successful project work. DCD Marine Cape Town, part of the DCD Marine Cluster, is proud of its track record of successful project delivery, and repeat contracts with prestigious drilling contractors such as Saipem. The relationship is a testament to DCD Marine Cape Town’s position as a leading provider of rig and vessel repairs, including project management services to the global oil and gas industry. “DCD Marine Cape Town has a very transparent relationship with Saipem; and we have a strong focus on safety, quality and on-time delivery. Our respective project management teams share the same ethos and work extremely well together as partners to ensure successful and timeous project delivery,” says Gerry Klos, Managing Director the DCD Marine Cluster. This partnership resulted in a joint award presented to both companies by the Western Cape Provincial Government in July 2014 in recognition of the recent work done on Saipem’s semi-submersible drilling rig, the Scarabeo 7. The project, the largest-ever rig project to have been completed in Cape Town, brought in excess of R1 billion to the province and created 1 193 jobs. The Scarabeo 7 project of 2013/2014 came in the wake of DCD Marine Cape Town’s special periodic survey (SPS) of Saipem’s drilling rig, Scarabeo 3 in 2012. DCD Marine Cape Town has also successfully completed work on Saipem’s pipe laying barges Saipem FDS (2010) and Saipem 3000 (2010). “DCD Marine Cape Town is strategically situated to service vessels active in the African oil and gas sector. Our capacity to meet client requirements as well as our strategically located facilities and safety performance form a strong basis for future opportunities in SPS, modifications and upgrade project work,” says Deon Truter, Business Development Manager at DCD Marine Cape Town. The fleet operating in the African oil and gas sector includes the Scarabeo 3 and Scarabeo 9 semisubmersible drill rigs, the Saipem 12 000 and Saipem 10 000 drill ships, the Saipem FDS, Saipem FDS 2 and Saipem 3000 pipe laying barges. These vessels will undergo SPS’s, dry dockings and necessary upgrades and modifications over the next few years. “We thank Saipem for the opportunities afforded to DCD Marine Cape Town in the past; and we look forward to assisting them on future projects. Our capacity for service delivery and a mutual understanding of each other’s requirements bode well for future collaboration,” Klos concludes. Kendal Hunt Managing Director Kendal Hunt Communications PR and Media Liaison Agency + 27 -11 462 6188 +27 - 82 823 6533 kendal@kendalhunt

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Saipem S.p.A.

for the Lula Norte, Lula Sul and Lula Extremo Sul Project in the Santos Basin Pre-Salt Region. The work will include the procurement, engineering, installation and fabrication of three offshore pipelines, with free standing hybrid risers and related terminations for the gas export systems. For this project, Saipem will use the Saipem FDS2 for the marine activities and will use its yard in Guarujá for the fabrication of the subsea equipment and the risers system – expecting to have this completed by the end of 2016.

MARKET CHANGES AND STAYING ONE STEP AHEAD

contributed to the company’s resilience and growth. Commenting on Saipem’s position at the end of 2014 and the near future, CEO Umberto Vergine states: “Overall, the sharp fall in the oil price has created uncertainty in the market, which will remain for as long as oil prices remain depressed. But the long term commitments we have secured to date should protect us from significant business fluctuations. “In offshore drilling, we achieved fleet utilization in excess of 96% and for the remainder of the year utilization is expected to remain stable. During Q3 we signed new contracts for about one third of the fleet, mainly in Latin America, with

a good balance between onshore and offshore. In particular, we are seeing a growing LNG market in the Americas, alongside legacy projects in Asia Pacific. In the Americas, Saipem this year has applied an increased commercial focus compared to the past, in particular in downstream and major pipelines.” The maximization of local content and the procurement and logistics strategy adopted by the company are the key elements of Saipem’s success. Other aspects – such as cementing their position in South America and the consistent development of new technologies, have ensured the company has

With current oil prices at an all-time low, Saipem has seen an impact and had to weather the storm as much as all the other major companies in the industry. Having a diverse offering and such a strong reputation for world-class delivery has definitely

durations ranging from three months to two years.” “Saipem is targeting an increasing number of projects around the world. The opportunities shown are for a broad mix of clients and there is

been able to stay one step ahead. They are one of only a handful of companies able to tackle the largest of EPCI projects in the oil and gas industry and are likely to remain in their leading position in years to come

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