Kvaerner is an international engineering, procurement and construction company focused on offshore oil and gas projects. The company operates yards in Norway and Finland and is currently working on several major projects in the North Sea. The Norwegian market offers opportunities for Finnish companies to participate as subcontractors, providing engineering and fabrication services. However, companies need to focus on cost competitiveness due to the current downturn in oil prices which is driving demand for lower costs across the industry.

1. Mitä Norjan markkinat voivat tarjota suomalaiselle yrityksille
Kokemuksia Norjan markkinoista
Heidi Palmgren
Managing Director
Kvaerner Finland Oy
Satakunnan ELY-keskus, 04 Feb 2015

2. © Kvaerner 2013 12.06.2013
Contents
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1. Kvaerner AS
2. Kvaerner Finland Oy
3. Market
4. Opportunities

3. © Kvaerner 2013 12.06.2013
Kvaerner is an international company
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Kvaerner well positioned in booming markets as well as “blue oceans” –
but still actively looking for new areas to expand
Kvaerner offices
Target markets

4. © Kvaerner 2013 12.06.2013
The upstream offshore oil and gas value chain – Kvaerner is
focusing on EPCI projects in the field development phase
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Licensing Exploration Field Development Production Abandonment
Feasibility,
concept, FEED
Procurement Assembly and
Integration
Studies to
evaluate
potential field
development
solution
Global design
of chosen
solution
Completion &
Commissioning
Engineering Construction Marine
operations
Engineering
management
System
definition
Detailed
design/volume
engineering
Follow on
engineering
Technical
procurement
Commercial
procurement
Sourcing
Labour
Subcontractors
Construction
management
Shop
engineering
Pre-fabrication
Fabrication
Logistics
Assembly
procedures
Assembly
Integration
Tow-out
Tie-ins
HUC
Start up and
testing
Seismic data
Government
auctions and leases
to operators
Reservoir info
Exploration drilling
Appraisal drilling
Well completion
Front End
EPC projects
Ready for
operations
Production drilling
Field maintenance
Reservoir stimulation
Logistics and supply
Decommissioning
Abandonment
(plugging the well)
2-3 years 1-2 years1-2 years ~4-8 years ~10-40 years

5. © Kvaerner 2013 12.06.2013
Kvaerner business areas
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Topsides
Floaters
Leading EPC contractor
to the North Sea market
LNG facilities
Gas receiving and
processing plants
Major modifications
Large steel jackets for
oil & gas installations
European leader in steel
jackets
Global
North Sea
Intl. markets
North Sea
Intl. markets
North Sea
Intl. markets
CONCRETE
SOLUTIONS
JACKETS TOPSIDES ONSHORE
Onshore upstream
facilities
Global leader in
gravity based
concrete structures
Concrete substructures
CONDEEPTM GBS
Floating concepts
LNG production
and receiving terminals
Specialised in engineering, procurement, construction and installation (EPCI)
Stock listed in Norway July 2011
2013 Revenues of NOK 12.8 billion (~2.2 bn USD)
Order backlog of NOK 19.4 billion (~3.6 bn USD) at Q3 2014
Executed 20.2 million hours or 12 000 man years in 2014
Capability, Products, Technology

6. © Kvaerner 2013 12.06.2013
Current project portfolio
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7. © Kvaerner 2013 12.06.20137
Aasta Hansteen Upending & Hook-up
Milestone contract signing for first Sverdrup
substructure

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Kvaerner Stord Yard
 Annual throughput capacity: 20 000 tonnes
 Parallel fabrication capacity: 1-2 Oil & Gas
topsides
 Lifting capacity 800 tonnes
 200.000 m2

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Kvaerner Verdal Yard
 Annual throughput capacity: 20 000 tonnes
 Parallel fabrication capacity: 1-2 Jackets
 650.000 m2

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Innovation still ongoing
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SOS® Mindset to be maintained
Wireline operation on SOS® :
 Kværner Integrated Standardised Systems –
iKværner™
 Well intervention equipment development
– Split of equipment between SOS and boat
– Service, supply and utility at boat as main
solution
– Reduce weight and size of the equipment

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CONDEEP™ Deep Floater
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12. © Kvaerner 2013 12.06.2013
Kvaerner Organization Chart
Business
Development
Risto Neuvo
SVP, London
Business
Support
Knut Johan Malvik
SVP, Oslo
President & CEO
Jan Arve Haugan
Oslo
CFO
Eiliv Gjesdal
EVP, Oslo
Legal & Compliance
Henrik Inadomi
SVP, Oslo
Topsides
Steinar Røgenes
EVP, Stord
Jackets
Sverre Myklebust
EVP, Verdal
Concrete Solutions
Arnt Knudsen
EVP, Oslo
Onshore
Olav Jan Støve
EVP, Oslo

13. © Kvaerner 2013 12.06.2013
Kvaerner Finland Oy
Kvaerner Finland Oy, Ulvila
 100% owned subsidiary of Kvaerner
AS
 Founded 2001, part of Kvaerner
since 2008
 Turnover abt 5 MEur
 34 Employees
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02.0
2.20
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© Kvaerner 2011
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Kvaerner Finland
Strategy :
Resource and Service Provider to Kvaerner, Aker and
third party companies
Own competence and qualified Finnish subcontractors
Construction/Project Management
Procurement & logistics, Construction management, Project planning &
support/administration, incl. Experience in Russian projects
Engineering services
Steel structures & Outfitting, Piping:
 Engineering, all phases – FEEDs, basic, detail and workshop engineering

15. © Kvaerner 2013 12.06.2013
Kvaerner’s international EPC project execution
model is based on partnerships
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Kvaerner Intl. scope
Partner/Subcontractor
scope
Senior personnel
highly competent at
early phase
appraisal and
concept selection
Sufficient senior
engineering
capability to control
project risk and
manage
subcontractors
Efficient and knowledgeable
procurement capabilities with ability
to cater for local content requirements
Sufficient construction
management capability to
ensure delivery on time and
quality
Partners
Business Development
& Front End E(15-20%) P(50-60%) C(25-35%)
Flexibility of choice
to comply with local
content
requirements,
customer furnished
partners etc.
Flexibility of choice to
comply with local content
requirements, e.g.
COOEC
Marystown
Dubai Dry Docks
L&T
Etc.
Concept studies
Pre FEED
FEED
Oslo
London
Houston
Engineering mgmt
System engineers
Discipline leaders
High value
engineering centers
Strong global procurement capability
Oslo
London
Beijing
Construction mgmt
Wholly or partly owned
yards, e.g. Aktau, Zhuhai,
etc.
JVs (risk sharing)
Project management - process mentality and understanding from A-Z required for optimal execution
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Current major development in NS and major short
term focus for Kvaerner
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Current focus is Johan Sverdrup
 Tendering for first platform on-going
 Will consume majority of Kvaerner resources
Kvaerner is looking for growth from international projects
 Stord resources essential to ensure execution according to Kvaerner PEM, systems
and tools
International projects will be based on partnerships

17. 02.02.2015© Kvaerner 201117
2014 and forward
Manage through the storm
11 platforms in Norway w/ oil price 60
5 platforms in UK w/ oil price 60-80
Oversupply
Demand below expectations
Weaker global economy
Headwind from Russia
STEP
= Statoil Technical Efficiency Program
Projects in hold
Too high cost level > Back to basics
Huge oversupply for at least 6-12
months, oversupply till 2019?
Samsung Hyundai and Saipem profit
warnings
Project cost cut > -20%

18. Predictability is key to success:
16 May 2014 was illustrative ….
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On time
On budget
Right quality
> 2 years delay
Numerous quality issues
~2,5 bn USD cost overruns

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Experience in nut shell
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Resources and services
 highly qualified and mobile specialists are welcome
 high mobilisation costs tends to eat the salary difference
 work performed in Finland is beneficial for both parties
Subcontracting
 Norway looks for 15 – 20% project cost cut
 Total value chain productivity
 Bigger entities/constructions/modules needed > Team up
Sales, sales, sales and sales

20. © Kvaerner 2013 12.06.2013
Subcontracting opportunities
Procurement is complex and require close focus throughout the
project
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11 500 tonnes
structure steel
4 900 tonnes
mechanical
equipment
2 500 tonnes pipes
6 800 valves
340 000
metres of cable
installed
25+ nationalities
250 companies
involved
~3 900 000
working hours on site
Total of 3 500
people involved in the
project
Ormen Lange example
Typical procurement
value of NOK 3-4 billion

21. © Kvaerner 2013 12.06.2013
Copyright
Copyright of all published material including photographs, drawings and images in this document remains vested in Kvaerner and third party contributors as appropriate.
Accordingly, neither the whole nor any part of this document shall be reproduced in any form nor used in any manner without express prior permission and applicable
acknowledgements. No trademark, copyright or other notice shall be altered or removed from any reproduction.
Disclaimer
This Presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to
differ. These statements and this Presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the
regions and industries that are major markets for Kværner ASA and Kværner ASA’s (including subsidiaries and affiliates) lines of business. These expectations, estimates and
projections are generally identifiable by statements containing words such as “expects”, “believes”, “estimates” or similar expressions. Important factors that could cause actual
results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets
for Kvaerner’s businesses, oil prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange
rates and such other factors as may be discussed from time to time in the Presentation. Although Kværner ASA believes that its expectations and the Presentation are based
upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the Presentation. Kværner ASA is
making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither Kværner ASA nor any of its directors,
officers or employees will have any liability to you or any other persons resulting from your use.
Copyright and disclaimer
Copyright
Copyright of all published material including photographs, drawings and images in this document remains vested in Kvaerner and third party contributors as appropriate.
Accordingly, neither the whole nor any part of this document shall be reproduced in any form nor used in any manner without express prior permission and applicable
acknowledgements. No trademark, copyright or other notice shall be altered or removed from any reproduction.
Disclaimer
This Presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to
differ. These statements and this Presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the
regions and industries that are major markets for Kværner ASA and Kværner ASA’s (including subsidiaries and affiliates) lines of business. These expectations, estimates and
projections are generally identifiable by statements containing words such as “expects”, “believes”, “estimates” or similar expressions. Important factors that could cause actual
results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets
for Kvaerner’s businesses, oil prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange
rates and such other factors as may be discussed from time to time in the Presentation. Although Kværner ASA believes that its expectations and the Presentation are based
upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the Presentation. Kværner ASA is
making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither Kværner ASA nor any of its directors,
officers or employees will have any liability to you or any other persons resulting from your use.
Copyright and disclaimer
21