New Kvaerner Corporate Structure Kjell Almskog President CEO

“New” Kvaerner Corporate Structure Kjell Almskog President & CEO KVAERNER ASA Core Business Area Keith Henry Jan T. Jørgensen CEO Engineering & Construction Oil & Gas EPC and Technology provider to Process-based Industrial sectors EPC and Technology provider to Offshore oil & gas installation and services Discontinuing businesses * Shipbuilding * Energy * Mechanical Fabrication TM * Property Development * Infrastructure Investments * Pulp & Paper * Misc. businesses * Construction

Kvaerner Oil & Gas / E&C - Worldwide Locations Scandinavia Canada • Norway • Oslo, Bergen, Moss, • Calgary • Edmonton • St. Johns • Hamilton • Toronto Stavanger, Egersund Russia • Moscow UK • Aberdeen • London • Portsmouth • Methil / Teesside • Northampton • Warrington USA • Houston • Wellsville • Bridgewater • Charleston • Louisville • Merrillville • Pittsburgh • San Francisco • San Remon • Salt Lake City • Tucson • Washington, PA China • Beijing • Shanghai Europe • Belgium • France • Holland • Switzerland Azerbaijan • Baku India Africa South America • Brazil - Curitiba • Venezuela - Caraccas • Chile • Peru TM • Algeria • Nigeria - Lagos • Angola - Luanda • South Africa • Mumbai • Pune South East Asia Middle East • Saudi Arabia • UAE • Iran • Thailand • Singapore • Malaysia • Indonesia • Philippines Australia • Melbourne • Brisbane • Perth

Conducting business internationally Today’s topic: Project execution in light of local framework conditions • • • Understanding people & cultures Managing communications Creating network & alliances Securing team spirit and participation Build on lessons learned TM

. . based on personal experience / observations 5 years 3 years 2 years 3 years 6 years 2 years TM

The need to “think global - act local”. . managing the 3 rd Dimension. …locally Dimension. … 4 Quality /Technology 4 Network 4 Alliances 4 Culture 4 Presence Contract 4 Credibility 4 Financial Engineering 4 Facilitation X 4 Price TM

COMMUNICATION SENDER C O D E SIGNAL D E C O D E RECEIVER Standardisation of decoders are required to improve multi-cultural communication TM

HAVE YOU SEEN THE LIGHT ? WHAT WE KNOW - WE KNOW WHAT WE KNOW - WE DON’T KNOW WHAT WE DON’T KNOW - WE DON’T KNOW TM

LESSONS LEARNED THE SHORTEST DISTANCE BETWEEN TWO POINTS IS NOT A REMEMBER NORWAY RULES THE WAVES “INDONESIA” WAVES THE RULES TM

THE GLOBAL DIMENSION Def. The global perception is an understanding that members of a culture adhere to. The global perception is used to form values and norms, to explain the meaning of life and the role of the human being in relation to: the universe / super natural powers / other human beings THE INDIVIDUAL DIMENSION THE SOCIAL DIMENSION • • • Perception – ( how impressions are created ) • Cognition – ( how we think ) • Emotion – ( How we feel ) TM Status & role Family, age & authority Sex Politics

WHAT CONTROLS YOUR MIND ? PERSONALITY PROFESSIONALISM TM CULTURAL BACKGROUND

THE CULTURAL GAP IMPORTANCE WORDS LOW CONTEXT STATUS POSITION EVENT CONVERSATION SITUATION SENTIMENT AGE SOCIAL CONDITIONS HIGH CONTEXT EXPRESSION BACKGROUND BODY LANGUAGE GERMANY FRANCE GERM. SUISSE NORWAY -5 -4 -3 TM USA -2 -1 ITALY/SPAIN ENGLAND +1 +2 SOUTH AMERICA AFRICA M. EAST +3 +4 ASIA +5

ATTITUDE TOWARDS WORK IN ASEAN INDONESIA MALAYSIA SINGAPORE A B C 4, 5 % 49, 3 % 46, 3 % 19, 0 % 59, 5 % 21, 4 % A B C 1, 5 % 39, 8 % 59, 7 % 4, 8 % 47, 6 % INITIATIVE A B C 0% 9, 0 % 91, 0 % 0% 23, 8 % 76, 2 % LOYALTY A B C 0% 16, 4 % 83, 6 % PUNCTUALITY JOB CONCENTRATION 0% 11, 9 % 88, 1 % A = EXCELLENT; 16, 7 % 50, 0 % 33, 3 % 5, 6 % 72, 2 % 22, 2 % 1, 9 % 37, 0 % 61, 1 % 0% 18, 5 % 81, 5 % B = GOOD; THAILAND PHILIPPINES 6, 3 % 50, 0 % 43, 8 % 3, 7 % 48, 1 % 1, 6 % 45, 3 % 53, 1 % 0% 18, 5 % 81, 5 % 1, 6 % 21, 9 % 76, 6 % 3, 7 % 22, 2 % 74, 1 % 1, 6 % 14, 1 % 84, 4 % 0% 18, 5 % 81, 5 % C = POOR; % = Percentage of workers within a single category TM SOURCE ; ICHIMURA SHINICHI ; NIHON KOGYO IN ASIA (JAPANESE COMPANIES IN ASIA), 1988

Experiences from Asia …. . from one of Kvaerner’s Fab. shop supervisors in Malaysia • Not only Norway can. . - also Asia has capabilities / competence • Hard-working people - who with proper guidance and follow-up can achieve great results • Pleasant people to work with • Don’t have too many “white people” in the loop • All over Asia there are different cultures - we have to recognise this • Need to make an effort to understand the different culture(s) – mindset, mentality, work-practices & attitudes, etc. • Willing - and able - to learn • If they say “no problem” - then you have a problem ! • Asians recognise that they have to “import” knowledge & technology from Western cultures • Have to take weather / seasons into account. Heat, humidity & rain • Oil & Gas industry is very attractive - as the region is energy scarce TM

RELOCATION OF EMPLOYEES & THEIR FAMILIES PHASES OF PSYCHOLOGICAL ADJUSTMENT PREDEPARTURE ARRIVAL IN THE NEW COUNTRY HONEYMOON PHASE RETURN TO HOME COUNTRY PREDEPARTURE WELCOME HEALTHY ADJUSTMENT NORMAL WHAT’S NEXT? THE PARTY IS OVER CRISIS ADAPTED FROM HARRIS & MORAN 1979, DE CIERI 1989 TM HEALTHY ADJUSTMENT CRISIS

AN OLD POEM A WISE OLD OWL SAT IN AN OAK. THE MORE HE HEARD, - THE LESS HE SPOKE, - THE MORE HE HEARD. WHY CAN’T WE ALL BE LIKE THAT WISE OLD BIRD TM

. . a practical example • Offshore N. W. Shelf Australia The Greater Gorgon Area • Mission: Deliver an Integrated Business Solution for the Greater Gorgon Area which provided a superior investment opportunity • Front-end Engineering Design Using an Alliance Framework Contract Long term vision: Progress from front end loading support into design, procurement, construction assistance and finally into operations / maintenance / op’s engineering support TM

What should be the relationship framework? “Client participating alliance” Operations Drilling Operations Platform TM Subsea Pipelines

Strategies to Achieve Vision & Mission Relationships: Build lasting relationships. Work Processes: Identify and apply best practice. Technology: Apply creative technology. People: Use the best talent from around the world. TM TOOL BOX

Why Start Early to Form the Relationship? Shall we jump? Risky! Shall we shout to communicate? Misunderstanding Shall we wait to see what happens? No progress Shall we build a bridge? That takes time Start Early!! TM

World Class Team Mobilised Total Integration Best in Class approach TM

The need to “think global - act local”. . managing the 3 rd Dimension. …locally Dimension. … 4 Network 4 Alliances 4 Culture 4 Presence 4 Quality /Technology Q&A Contract 4 Credibility 4 Financial Engineering 4 Facilitation X 4 Price TM