2015 RICE GLOBAL E&C ANNUAL FORUM

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Strategic Options Available in a Continuously Volatile Market

By Mr. Jeff Reilly Group President – Strategy & Business Development Amec Foster Wheeler plc

www.forum.rice.edu Outline

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• Industry context – Volatility, consolidation and growth options • AMEC/Amec Foster Wheeler’s journey • What could happen next?

Oil price volatility… Nothing unusual 3 Midstream and downstream Capex volatility… Nothing new here either! 4

LNG Capex ($ in billion) Petrochemical Capex ($ in billion)

Refining Capex ($ in billion) Rebased 2012 Capex forecast trends Leading E&C contractors over time Consolidation is ongoing… 5

Mid 1980s Mid 2000s Early 2015 Bechtel Bechtel Bechtel Fluor Daniel Fluor Fluor JGC JGC JGC Toyo Toyo Toyo

Badger Shaw Group CB&I Stone & Webster ABB Lummus Global CE Lummus Crest KBR Global Engineering KBR Brown & Root WorleyParsonsColt CF Braun WorleyParsons MW Kellogg Worley Technip Parsons Saipem Technip Saipem Coflexip Snamprogetti Amec Foster Wheeler KTI Jacobs++ Foster Wheeler Foster Wheeler Jacobs+ Jacobs Wood Group PSN++

Koreans EPCs Chinese EPCs Larson & Toubro, Punj L., Tata, HCC New entrants New entrants - Mustang - Korean EPCs - CB&I - Chinese EPCs - AMEC - Larson & T - Petrofac New entrants - Wood Group Aecom – URS – Wash. Gr Flint Kentz

The OFS leaders are on the acquisition trail… Two recent very big deals, but not a new trend!

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November 17, 2014 August 26, 2015 and reach to buy oilfield gear agreement to combine in cash and maker Cameron in $14.8bn deal stock transaction valuing BHI at $34.6bn

… will yield nearly $2bn of operating … more complete solution to synergies and will help increase customers … will allow to bundle offerings to customers while boosting offerings from surveying to drilling returns of capital… plans to shed wells with pressure valves and overlapping assets generating as much blowout preventers… as $7.5bn…

Pro-forma revenues of $57bn Pro-forma revenues of $59bn Options for growth and adaptability (Excluding transformational steps) 7

Geographic expansion • Entry in new countries • Increased coverage in country

Execution/ Delivery model • Self-perform/ vertical integration • HVEC • Supply chain involvement • Partnerships

Services/Offerings Markets/Sectors • Services/scope expansion • Expansion beyond • Bundling of existing offerings current boundaries • (LS(TK)) EPC (both in O&G & elsewhere) • New business models/mix change (Risk transfer, partial ownership/BOO(T)) • Gap filling • Technology based offerings • Access to new • Assets based offerings ‘distribution’ channels • Fabrication • Increased share, • Full(er) lifecycle coverage all else being equal • Consulting • Innovative approaches (modularisation, design once, etc.) Amec Foster Wheeler Overview A leading services company with strong oil and gas focus

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• Listed in: UK (LSE) and US (NYSE)

• Market capitalisation: ~$5bn

• Annual revenue: ~$10bn

• Operating margin: 7-8%

• Employees: ~40,000

• Offerings: Consultancy, engineering, project management, operations and construction services, specialized power equipment

• Markets: Oil & Gas (upstream and downstream), mining, clean energy, environmental & infrastructure Amec Foster Wheeler’s journey Long-term track record of growth 9

2006 2007 2008 2009-2010 2011 2012 2013 2014

Disposal of Sale of UK-based Acquired Sold AMEC Wind Acquired Acquired Serco‘s Completed Acquired Foster Wheeler which AMEC SPIE and civil consulting UK to Vattenfall MACTEC, a US nuclear services; £400m share brings downstream market access, appointment of construction companies based firm Unidel, a buy-back (over proprietary process technologies, new CEO businesses Geomatrix, RHi Acquired GRD, providing Brisbane-based 12 months) and a boiler supply business and BDR an Australian engineering consulting mining business environmental company and Acquisitions also provided greater and Entec, a UK and construction 50% stake in reach in emerging markets

Key Milestones Key E&I firm services KROMAV

Year end market7,000 £899m £1,143m £1,406m £2,830m £1,665m £2,677m £3,887m £3,067m £3,089m £3,238m £3,316m £3,399m 12% cap. (£m) 10% 10% ~6,000 6,000 10% 9% 8.2% 8.6% 5,000 8.0% 8%

4,088 7% 3,974 120 3,993 4,000 320 3,133 73 6% 2,786 3,000 5% 2,606 Turnover* 2,356 2,452 (£m) 2,122 1,582 1,789 4% EBITA2,000 3% 3% 3% 3,768 3,854 3,920

% margin Historic Historic Performance 1,000 2%

0 0%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015C

Source: Company filings, market consensus Our range of services 10 Typical TIC* split ► ► ► Diverse Adaptable Scalable Eng & PM

Procurement

Construction

argin Group average margin

M

es Technology Design & Consulting Engineering Project Construction Procurement c

i Supply management

v Ser

* Total Invested Capital What have we done… (Excluding transformational steps) 11

√ √ Geographic expansion Execution/ Delivery model

√ Services/Offerings √ Markets/Sectors

Amec Foster Wheeler A compelling business combination 12

AMEC Foster Amec Competitor Standalone Wheeler Foster A B C D E Wheeler

Offshore top side facilities

Onshore facilities engineering

Maintenance, Modifications, Operations Upstream

Oil sands

Gas processing, LNG, GTL *

Refineries

Petrochemicals

Mid & downstream Mid Maintenance, Modifications, Operations *

Project management consultancy

Environmental consulting

Key: Strong Position Limited Position No material position * Growth aspiration

Source: Corporate websites. Analysis is indicative and is not intended to represent the entirety of the market Amec Foster Wheeler –Priorities

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► Deal with continued challenging markets  Diverse/Adaptable/Scalable model

► Build on our track record  Services, reimbursable and fixed priced EPC, PMC, HUCC, etc.

► Adapt and innovate  Create new opportunities e.g. More4Less, revenue synergies

► Stay lean and efficient  Integration cost savings and continuous improvement Next step as industry Food for thought… 14

Cumulative global market shares for key O&G industry segments

Completion fluids ($17bn)

Pressure pumping ($47bn)

Directional drilling ($16bn)

Subsea equipment ($28bn)

Offshore construction ($48bn) Is the fragmentation justified ? Onshore E&C ($102bn)

SURF ($29bn)

Offshore supply vessel ($16bn)

Onshore drilling ($31bn)

Offshore drilling ($49bn)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Leader #2 #3 #4 #5 Source: Societe Generale research – 27 August 2015