KEPPEL DEFINITIVELY

REPORT TO STAKEHOLDERS 2011 OUR VISION IS TO BE THE PROVIDER OF CHOICE AND PARTNER FOR SOLUTIONS IN THE GLOBAL OFFSHORE

AND MARINE INDUSTRY. 1

Keppel Offshore & Marine is a global leader in offshore rig design, construction and repair, shiprepair and conversion, and specialised shipbuilding. We harness the synergy of 20 yards worldwide to be near our customers and their markets.

CONTENTS 1 Key Figures 2011 64 Sustainability Report 2 Chairman’s Statement Sustaining Growth 8 Interview with CEO and COO 66 – Productivity, Quality and 14 Group Financial Highlights Eco-consciousness 16 Group at a Glance 68 – Business Continuity 18 Board of Directors Empowering Lives 22 Key Personnel 70 – People Development 32 Special Feature – Safety is Nurturing Communities Everyone’s Business 78 – Community Development 38 Operations Review & Outlook 86 Global Network 58 Technology & Innovation 92 Corporate Structure KEY FIGURES 2011

$10b $9.4b NEW ORDERS SECURED NET ORDERBOOK The total value of new contracts secured The balance as at end-2011 in our for 2011 hit a record high. orderbook with deliveries extending to 2015.

41 $160m MAJOR DELIVERIES INVESTMENTS IN PRODUCTIVITY The number of major projects delivered The amount of investments to improve on time and within budget worldwide. facilities and capabilities worldwide during the year.

0.24 74 2 ACCIDENT FREQUENCY RATE TRAINING HOURS The latest accident frequency rate, down The average number of hours each from 0.29 in 2010. employee spent on training during the year.

1. Harnessing the synergy of its businesses and core competencies in the Offshore, Marine and Specialised Shipbuilding divisions, Keppel O&M is the provider of choice and partner for solutions in the industry.

2. Keppel FELS is focused on excellent execution of its current orderbook which extends to 2015.

Key Figures 2011 1 CHAIRMAN’S STATEMENT

“WITH INCREASING COMPETITION IN THE INDUSTRY, KEPPEL OFFSHORE & MARINE IS FOCUSED ON HARNESSING ITS COLLECTIVE STRENGTH SO THAT IT CAN COMPETE EFFECTIVELY AS ONE STRONG TEAM.” $992m ECONOMIC VALUE ADDED Grew 5% in 2011 compared to 2010.

2011 saw record new orders of 23 jackups, with the majority for Keppel FELS’ proprietary designs.

DEAR STAKEHOLDERS, vessels. This surpassed the previous the year. On 3 June 2011, Brazilian While 2011 was an eventful year, the high of $7.4 billion of new orders President Dilma Rousseff witnessed the fundamentals of the offshore and achieved in 2007. As at end-2011, christening of the Floating Production marine industry remained intact. The our net order book stood at $9.4 billion, Unit (FPU) P-56, which is the fi rst global energy sector continued with with deliveries extending to 2015. semisubmersible to be completely built investments despite macro headwinds in Brazil by Keppel. Measuring 125m like the Eurozone debt crisis, economic Financially, Keppel O&M recorded long, 110m wide and 137m high and uncertainties in the US and concerns of a revenues of $5.7 billion with a net profi t with a displacement of 50,000 tonnes, China with a moderated pace of growth. of $1.1 billion, and raised Economic P-56 is the world’s largest FPU. The Value Added by 5% to $992 million. project achieved nine million man hours The resilience of the offshore and marine without lost-time incidents. This industry is due to two key factors. Firstly, RELIABLE EXECUTION accomplishment has further fortifi ed the Macondo incident in the Gulf of In 2011, a total of 41 major projects the position of our BrasFELS yard as the Mexico in April 2010 continues to cast its were successfully delivered, backed leading offshore yard in Latin America. infl uence, sharpening the focus of the oil by enhanced productivity, meticulous and gas industry on safety and quality. project management and the In Singapore, Keppel FELS completed This has caused owners to relook at their commitment of our project teams. a rig which has been chartered by aging fl eets of rigs and vessels. Secondly, Petrobras for six years to support unrest in the Middle East region and Of these, the Offshore Division delivered exploration and production (E&P) natural disasters around the world eight newbuild rigs, comprising three activities in offshore Brazil. Alpha sustained an elevated oil price which jackups, three semisubmersibles, and Star, the second of two DSSTM38 averaged US$95 per barrel for the year. two drilling tenders, together with semisubmersibles, was delivered to As a result, strong interest was ignited one rig completion and one drillship Brazilian company Queiroz Galvão Óleo in new rigs, most notably in the fi rst half upgrade. Our Marine and Specialised e Gás, four months ahead of schedule of 2011. Shipbuilding Divisions converted and and with zero lost time incidents. In upgraded seven FPSO/FSO units and recognition of our execution excellence, At Keppel Offshore & Marine delivered 11 vessels, as well as an QGOG awarded Keppel FELS a bonus (Keppel O&M), we benefi ted from this outfi tting job for a drillship, among other of US$8 million. trend and achieved healthy performance repair jobs. in 2011, with a record $10 billion worth These two deliveries in 2011 added to of contracts secured for 24 jackups, We are particularly proud of some of our track record for Brazil, and we are three semisubmersibles, six the signifi cant projects which were poised to deliver and contribute towards conversion jobs and 17 specialised completed and delivered during Brazil’s aggressive E&P programme.

Chairman’s Statement 3 CHAIRMAN’S STATEMENT

Apart from Brazil, we also strengthened jumped to 443 man days lost per million our relationships with our key man hours worked, from 139 in 2010. customers in Vietnam and the Middle This was due to an increased number of East. In the last quarter of 2011, fatalities across the Group, including a Keppel FELS delivered Vietnam’s fi rst serious incident which happened at one semisubmersible drilling tender (SSDT) of our shipyards in the Philippines. We ahead of schedule, within budget and are greatly saddened by the loss of lives, with a perfect safety record. This and have gleaned useful lessons so that marks yet another milestone in we can continue to enhance our safety the longstanding partnership which systems and practices. Keppel has had with Vietnam over the last 25 years. Towards this end, we are reinforcing our Keppel Workplace Safety and Health Since its opening in November 2010, 2018 strategy, and through this, we Nakilat-Keppel Offshore & Marine are putting in place a common set of in Qatar has established itself as the safeguards, strengthening accountability region’s premier offshore and marine and promoting safety ownership. The yard, with over 40 repair projects journey to an incident-free workplace completed in its fi rst year of operation. demands strong determination and A milestone project it has undertaken unwavering commitment to stay was the fi rst LNG carrier, Simaisma, focused. We will continue to foster open to drydock in Qatar. The yard also communication, support one another undertook critical repair, modifi cation and share best practices. and upgrading works on Gulf Drilling International (GDI)’s jackup rig, Al-Doha. COMPETITIVE DESIGNS Our record new orders secured in 2011 VIGILANCE IN SAFETY can be attributable to our competitive, With safety fi rmly imbibed as a Keppel innovative and cost-effective solutions core value, we have continued to invest for our customers. During the year, signifi cant resources over the past year we launched a number of enhanced to inculcate a robust safety culture rig designs, including the DSSTM38E across the Group. As Chairman, I am semisubmersible design for Brazilian rallying the leadership team to send out drilling contractor Sete Brasil. a strong message to all our employees An enhancement from the DSSTM38 that safety is everyone’s business, and semisubmersible design, our proven we must stand fi rm in our belief that all fi fth generation deepwater solution, accidents can be prevented. the DSSTM38E is rated to drill to depths of 10,000 metres below the rotary Refl ecting this fi rm commitment, we table in 3,000 metres water depth. invested around $16 million in 2011 With improved capability and operability, on safety infrastructure upgrades, it is suited to the stringent requirements process improvements, training and of the deepwater “Golden Triangle” communication, with the aim of promoting region, comprising Brazil, Africa and safe work behaviour and practices. the Gulf of Mexico.

Our efforts in this area were recognised Apart from the DSSTM38E, we also by Singapore’s Workplace Safety introduced the Keppel FELS Super A and Health (WSH) Council and the Class jackup design in 2011. Customers Ministry of Manpower, which accorded welcomed this new design, with fi ve the Keppel O&M Group with 20 awards units ordered by established drilling last year. operators like Ensco and Discovery Offshore. What differentiates this jackup While we are encouraged by the rig from the rest is its versatility. It is accolades, 2011 was a challenging year able to operate in water depths of 400 ft for us. Our accident frequency rate and drill up to 35,000 ft, and is suitable improved from 0.29 reportable cases for various parts of the world like the for every million man hours worked, to UK, Danish and Dutch sectors of the 0.24. However, our accident severity rate North Sea.

Keppel Offshore & Marine Ltd 4 Report to Stakeholders 2011 Mr Choo Chiau Beng (centre), CEO of Keppel Corporation and Chairman of Keppel O&M, and senior management during a safety walkabout with consultant company, DuPont.

With the growing demand for fl oating offered for bareboat charter or sale accommodation units, we offered a when completed. new design, SSAUTM4000NG, to Floatel. This new design, capable of operating We will continue to drive our R&D efforts alongside fi xed platforms, fl oating to bring innovative and cost-effective platforms and FPSOs, meets the designs to the market. Over the past stringent UK HSE requirements for work year, our proprietary products have in the UK sector of the North Sea as well been gaining market acceptance. The as the Gulf of Mexico, Brazil and Western three KFELS N Class jackups, designed Australia. The unit, called Floatel Victory, specifi cally for the harsh environment in is currently being constructed and will the North Sea, have commenced drilling be completed by the fi rst quarter of 2014. operations. The fi rst multi-purpose self- It has secured a contract from BP for its elevating platform secured a charter for Clair Ridge Development project in the wind farm foundation work in the North UK Continental Shelf. Sea. The KFELS Super A Class jackup for Ensco and a semisubmersible drilling In Brazil, Petrobras has articulated tender for Seadrill, both ordered in 2011, its need for over 100 Brazilian-built have already been awarded charters. offshore support vessels by 2020. To meet this demand, our technology Moving ahead, we are confi dent that unit Marine Technology Development has our proprietary designs will continue to a number of new designs which cater to meet the evolving needs of the industry. the Brazilian Continental Shelf. They are the MTD9045-DE, a 4,500 deadweight INVESTING IN THE FUTURE tonne Platform Supply Vessel (PSV), According to research reports, global and MTD80210A, an 18,000 horsepower demand for oil is projected to continue Anchor Handling Tug Supply (AHTS) to rise. Major oil companies have vessel, capable of bollard pull in excess announced increased budgets for of 210 tonnes. Keppel Singmarine exploration and production to address Brasil, our new 7.6-ha yard in Santa the decline in production capacity and Catarina, is currently building two replace depleting reserves. Dayrates PSVs for our ship owning arm Guanabara are strengthening for both jackups and Navegacao. These vessels will be semisubmersibles. The prospects for

Chairman’s Statement 5 CHAIRMAN’S STATEMENT

10-Year Growth in Revenue and Net Profit ($ million)

10,000 1,100

8,000 880

6,000 660

4,000 440

2,000 220

0 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Revenue 1,889 1,442 2,394 4,068 5,743 7,258 8,569 8,273 5,577 5,706 Net Profit 180 110 192 232 464 542 688 862 1,062 1,144

10-Year Growth of our Global Workforce

35,000

28,000

21,000

14,000

7,000

0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

13,819 15,363 17,927 19,638 24,613 27,268 30,144 27,119 27,567 30,490

Keppel Offshore & Marine Ltd 6 Report to Stakeholders 2011 our deepwater solutions will continue offshore wind turbine installation and the Group. We are pleased that Peng to improve as offshore drilling moves support vessels. Sang has agreed to remain on the Board towards deeper waters. of Keppel O&M, to help us mentor the These strategic moves into niche areas younger leaders within the Group. Keppel O&M is focusing on executing are expected to translate into steady and the orders that have been secured, recurring earnings for the Group in the Lastly, I would like to thank our Board maintaining our track record for on time, years ahead. of Directors, all our valued customers, on budget deliveries and extracting business associates, class societies, maximum value from each project. With BOOSTING BENCH STRENGTH vendors, suppliers, contractors and increasing competition in the industry, it As part of the continual efforts by the union leaders for their continuous is of paramount importance to harness Group to build up our next generation of support and confi dence in Keppel the collective strengths of the Group so leaders, several key appointments were O&M. I also wish to acknowledge the that we can compete effectively as one made during the year. assistance and support of all local, strong team. state and federal authorities in the host Chow Yew Yuen, who was instrumental countries where we operate. Looking into the near term, the next few in establishing and growing years will be busy for us as we deliver Keppel O&M as a credible solutions 2012 marks the 10th anniversary of our orderbook of close to $10 billion. provider in the Americas, has been the formation of Keppel O&M. We have In 2013 alone, we expect to complete appointed Chief Operating Offi cer of much to celebrate as we have enjoyed 20 jackup rigs. Meeting this demanding Keppel O&M. In this new role, healthy growth over the last 10 years. workload will require us to raise our he supports CEO Tong Chong Heong Our net profi t in 2002 was $180 million, productivity. We have therefore set up a in driving the growth and development generated by a workforce of around productivity improvement taskforce to of Keppel O&M’s businesses. 14,000. As at end 2011, our net profi t has look into ways to improve our operational reached over $1 billion and our global effi ciencies and skills training for our Following the completion of his workforce has increased to 30,500. workforce. In all, $160 million was secondment as CEO of our N-KOM yard invested in 2011 to expand our global in Qatar, Yong Chee Min has returned The sterling performance achieved by yard facilities and boost capabilities. to Singapore to assume the position Keppel O&M over the years would not These investments will position us of General Manager (Projects). have been possible without dedicated strongly to capture more opportunities Chee Min is also resuming his previous and loyal Keppelites with their passion as we continue to respond to market portfolio as General Manager (Health, and Can Do! spirit. I am confi dent that demand and deliver on our promises. Safety & Environment), taking over Keppel O&M is well poised to grow from Chandru Sirumal Rajwani, who further and deliver sustained value to all Aiming to equip ourselves to better is posted to Azerbaijan to head Caspian our stakeholders. serve our customers, we continued to Shipyard. There are also changes invest in adjacent businesses. Our 27.8% at our technology R&D arm, KOMtech. Yours sincerely, stake in SGX-listed topside module Aziz Amirali Merchant, Executive fabricator, Dyna-Mac, is strengthening Director (Engineering) of Keppel FELS Keppel O&M’s capabilities as a core and Executive Director of Deepwater solutions provider in fl oating production Technology Group, will co-head systems such as FPSOs. KOMtech with Dr Foo Kok Seng. Aziz will be Executive Director, Early this year, we also expanded our Deepwater Technology, while Kok Seng CHOO CHIAU BENG suite of solutions for offshore wind will be Executive Director, Shallow CHAIRMAN farm installation with the acquisition Water Technology. 28 March 2012 of a 49.9% stake in leading offshore wind turbine jacket foundation designer ACKNOWLEDGEMENTS OWEC Tower. To-date, OWEC Tower is During the year, Mr Bjarne Hansen and the only company with a track record of Professor Neo Boon Siong stepped down having its proprietary jacket foundation from the Board of Keppel O&M. design installed for offshore wind I would like to thank them for their farms. Besides getting a slice of the invaluable contributions and wise offshore wind foundation business, this counsel to the Board during their tenure. investment will allow us to tap OWEC Tower’s expertise to provide further I would also like to record my sincere value-added solutions to our customers appreciation to Sit Peng Sang, Executive in the offshore wind market, in addition Director of Keppel O&M, who has retired to the design and construction of after 40 years of dedicated service to

Chairman’s Statement 7 INTERVIEW WITH CEO AND COO

CEO MR TONG CHONG HEONG AND COO MR CHOW YEW YUEN ARE FOCUSED ON LEADING AND RALLYING THE GROUP TO STRENGTHEN ITS COMPETITIVE EDGE AND STAY AHEAD IN THE INDUSTRY.

as investing in and driving adjacent WHAT IS KEPPEL businesses to widen the range of Q O&M DOING TO STAY our offerings. COMPETITIVE IN 2012 AND BEYOND? With people as our core asset, we continue to grow our team and groom new talent. We are stepping up efforts to train and develop our people, to equip them not only with the necessary skills, but also to imbue them with the Keppel core values.

Mr Tong: We are pleased with Mr Chow: Over the years, we have A our performance in 2011, but placed a lot of emphasis on improving we will not rest on our laurels. our productivity. This has enabled us Our priority is always to ensure that to deliver an increasing number of Keppel O&M is fi ghting fi t and ready projects each year. In 2009, we delivered to meet the challenges ahead. Our a record 14 rigs across the Group. competitive edge is our willingness to In 2013, we will be delivering over go the extra mile, and our versatility in 20 rigs. We are currently doubling meeting the needs of customers. We our efforts in raising our operational will continue to drive such values across effi ciencies, so that we continue to be the Group. Currently, we are focused on well positioned to meet the growing executing our existing orders well, and demand for quality solutions. to deliver them safely and on time. To drive our efforts in this area, At the same time, we are mindful we formed a Productivity Improvement of the intensifying competitive Taskforce some years ago. This landscape. Hence, we are dedicating Taskforce is responsible for overseeing signifi cant resources to enhance our the development of strategic competitiveness through improving productivity improvement plans, our overall productivity, managing our and ensuring that productivity costs more effectively and honing our improvement initiatives are executed technology and R&D competencies. across all the yards in our global We are also harnessing the synergies network. We reap the largest of our global network of yards to productivity gains through innovative offer value-added solutions, as well improvements of our systems and

Keppel Offshore & Marine Ltd 8 Report to Stakeholders 2011 processes. We are therefore continuing customised rigs with improved quality to drive process improvements in all WHAT ARE YOUR VIEWS and enhanced safety features. our business units. Q ON THE OUTLOOK OF THE OFFSHORE AND MARINE Dayrates will continue to rise, In addition, we continue to strengthen INDUSTRY IN THE NEXT indicating the market’s need our technology leadership to position FIVE YEARS? for more rigs. Although 2013 will see us ahead of the competition. With many rigs entering the market, we the exploration of oil and gas moving believe there is still a high level of into harsher environments and demand, and the newbuild rigs will deeper waters, we are working on be absorbed by the market. a number of new designs this year. Among these is our joint project Mr Chow: According to industry with ConocoPhillips to design a estimates, by 2015 more than 50% of fi rst-of-its-kind ice-worthy jackup Mr Tong: While the overall the jackup rig fl eet will be over 30 years rig to operate in one of the world’s A global economic outlook is of age. This is fi ve times the number of harshest marine frontiers, the expected to be weak in the next units at that age today and we expect Arctic Sea. We have since received few years, there is returning confi dence the replacement cycle to continue. good market response on this in the global oil and gas industry. This is In the North Sea, we are seeing more design project and are excited about driven mainly by the continued growth in demand for ultra-premium rigs to work its prospects. We are also working energy demand across countries in the in harsher environments. Also adding on a series of new harsh environment Asia Pacifi c and Latin America. multiple jackups to their fl eets are sixth-generation semisubmersibles, Saudi Aramco in the Middle East and the DSSTM51HE and DSSTM60HE. Many E&P companies are in the PEMEX in Mexico. These designs are suitable for catch-up mode on delayed projects, worldwide operations including with key focus in the next few years In the ultra deepwater market, the North Sea. on offshore deepwater. Global demand is exceeding supply. According deepwater oil and gas production to Pareto, there are not enough To us, our innovations must add value is expected to grow 31% by 2015. available rigs in 2012 and the market to our customers. They must be With the oil price averaging around is expected to fully absorb the new commercially viable, and must help our US$95 per barrel and signifi cant units arriving in 2013 and 2014. customers meet their business goals. exploration fi nds reported in 2011, Going into 2016, Douglas-Westwood To strengthen our R&D efforts, Aziz the prospects of the offshore market expects Brazil to be the largest Amirali Merchant is joining Dr Foo Kok in 2012 and beyond are healthy. deepwater market, while deepwater Seng to helm the Keppel Offshore & activity is resuming in the US Gulf Marine Technology Centre. Aziz will be In terms of the specifi c market of Mexico. Deepwater capital responsible for our R&D efforts in the segments, the continued infl uence of expenditure in the Asia Pacifi c is deepwater area, while Kok Seng will the Macondo incident is expected to forecast at US$29 billion over the focus on shallow water technologies. translate into increasing demand for next fi ve years.

Interview with CEO and COO 9 INTERVIEW WITH CEO AND COO

In the Floating Production market, industry experts say that the world 1 2 will need more than 100 such units, equivalent to a value of US$45 billion, in the next four years. Barclays Capital expects an FPSO upcycle that could double the current worldwide fl eet beginning in late 2012 or 2013. Brazil will require a majority of the vessels in the fl oating production sector in the coming years. For example, Petrobras expects installation of 54 new production systems over the next 10 years. OGX says it will require 19 FPSOs for their fi elds.

With the healthy outlook, we are going full steam ahead in all aspects of our business to ensure we leverage our With an established yard and track record 1. With an established yard and workforce in 3 Brazil, Keppel O&M is committed to work with established core competencies to meet in Brazil, where we have built some of WHAT ARE THE our Brazilian customers to meet the country’s and benefi t from the upcoming demand the world’s largest fl oating production Q NEW AREAS WHICH requirements for rigs and vessels. for rigs and vessels. platforms, we have since secured KEPPEL O&M IS 2. As a mark of the long-standing friendship a newbuild semisubmersible order LOOKING AT? between Keppel and Petrobras, former from Sete Brasil. We are currently in Petrobras CEO Mr Jose Sergio Gabrielli and PLEASE COMMENT ABOUT discussions on potential additional orders. team visited Keppel O&M in September 2011. Q BRAZIL AND WHAT CAN 3. Our associated company Dyna-Mac worked BE EXPECTED OF KEPPEL On the OSV front, our new shipbuilding on the topside modules of FPSO Okha, which was delivered by Keppel Shipyard to O&M IN BRAZIL FOR 2012 yard in Santa Catarina is currently SBM in June 2011. AND BEYOND. being developed. Ahead of its opening, it is building six tugboats as well as two technologically-advanced Platform Supply Vessels (PSV) Mr Tong: A key characteristic based on our proprietary designs, A of our growth strategy for our ship owning arm Guanabara has been to integrate our Navegacao. When completed, these competencies along the value chain. two PSVs will be offered for bareboat Over the years, we have selected niche Mr Tong: As we all know, charter or sale. areas where we do not compete with A Petrobras has revised its most of our customers. capital expenditure upwards We are committed to our presence in contractors, and the rigs are to be unions and workforce so that they for the period from 2011 to 2015 to Brazil, and are working to enhance our built in Brazil with between 55% to continue to be aligned with our We have acquired a stake in Dyna- US$225 billion. Of the US$127.5 billion capabilities in Brazil to better meet 65% local content. An additional interests. Capacity maximisation Mac, a topside module fabricator, to to be spent on E&P, around Petrobras’ requirements. 150 OSVs are also required by 2015, is another area which we are working strengthen our capabilities as a core US$53 billion will be set aside to a third of which are 4500dwt PSVs. on. Our team at our BrasFELS yard solutions provider in fl oating production develop the pre-salt regions. According Mr Chow: Over the next few years, is considering various ways to further systems. We have taken a 47% stake to the US Energy Information we will be focused on strengthening While there is strong demand in Brazil, modernise our yard facilities with in Floatel International, which owns Administration, the pre-salt area our competencies in Brazil. In the we are also mindful of the upcoming the aim of increasing output and and operates accommodation vessels is estimated to potentially hold at 2011–2015 business plan unveiled new shipyards which will pose optimising utilisation. that will enable us to better tap least 50 billion barrels of oil and by Petrobras in November 2011, the competition to us. We are therefore growth prospects in quality fl oating gas reserves. national oil company stated that by adopting a number of initiatives to boost Beyond this, we are continually accommodation semisubmersibles. 2015, they will require 37 deepwater our competitive edge in Brazil. seeking opportunities in Brazil which In anticipation of demand for offshore As a result, Petrobras has announced rigs, 479 supply and special vessels, can support us in expanding our vessels in Brazil, we started a new ship its requirement for a large number 61 production platforms (both Firstly, we are using our knowledge suite of value-added solutions to owning company which will offer PSVs of deepwater rigs, FPSOs and OSVs semisubmersibles and FPSOs) and of operating in Brazil over the last Petrobras and other customers in for bareboat charter or sale. to work on its pre-salt fi elds. It has 81 jackets and TLWPs. 10 years to further enhance the Brazil. On the whole, we are positive also made known its local content productivity of our operations in on the prospects of Brazil and we Our participation in the offshore wind requirements for these rigs and So far, Petrobras has confi rmed the our yard in Angra dos Reis. At the same hope to continue to deepen our sector is also progressing well. We are vessels. New players like OGX are also leasing of 33 deepwater drilling rigs time, we are ensuring we relationship with all our customers seeking to build more offshore wind aggressively increasing their assets. for 15 years from two drilling engage well with the Brazilian operating in Brazil. installation vessels and have developed

Keppel Offshore & Marine Ltd Interview with CEO and COO 10 Report to Stakeholders 2011 11 INTERVIEW WITH CEO AND COO

a new cable-laying vessel design meant from around the world. Few other for future offshore wind farm projects. offshore and marine companies have KEPPEL O&M SUFFERED We have taken a stake in a Norwegian the same network as we have, and Q SOME FATALITIES IN 2011. offshore wind turbine jacket foundation we intend to continue this geographic HOW ARE YOU ENFORCING designer, OWEC Tower, and are looking expansion in a targeted way. GOOD SAFETY MEASURES for more similar opportunities. ACROSS THE GROUP? Currently, our expansion plans To further add to our design capabilities, are focused on Brazil, the Caspian we acquired ownership of Bennett & region and the Middle East. In the Associates, a naval architecture, design Caspian region, E&P activities are and consulting fi rm in Houston. This picking up. The development of our fi rm has developed its own series of new shipyard in collaboration with jackups and semisubmersibles. SOCAR, Azerbaijan’s national oil company, is progressing. When ready, Mr Tong: 2011 was indeed Looking ahead, we will continue this Baku yard will be able to construct A a challenging year for us. to seek opportunities in areas which a variety of vessels ranging from We deeply regret the loss can enhance our value-add to our offshore support vessels to tankers, of lives, and as a result, we are customers and fortify our position as the as well as carry out ship repairs and determined to ensure that such provider of choice and partner conversions. Our existing Caspian incidents do not happen again. We are for solutions for the global offshore and Shipyard in Azerbaijan is in discussions drawing invaluable lessons from the marine industry. on a potential order to construct a incidents and stepping up efforts to new semisubmersible for SOCAR. enhance safety practices across the Group. This is done through pushing WHAT NEW MARKETS In the Middle East, our Nakilat-Keppel ahead with the programmes under Q ARE YOU FOCUSING ON IN Offshore & Marine (N-KOM) yard has the Keppel Workplace Safety & Health 2012, AS PART OF YOUR steadily ramped up its operations (WSH) 2018 strategy introduced across “NEAR MARKET NEAR since opening in November 2010. In its the Keppel Group in October 2010. CUSTOMER” STRATEGY? fi rst year of operations, the yard has worked on over 40 repair projects and a The key thrusts of this strategy are number of offshore projects, earning the to establish an integrated WSH confi dence of the marine and offshore framework, implement an effective industry in the Middle East region. safety management system, enhance safety ownership and strengthen Possible future areas which we are safety partnerships. considering include West Africa, Mr Chow: Through the Russia and Mexico. We will evaluate At Keppel O&M, a key aspect of A years, we have steadily and these countries carefully before our safety enhancement strategy selectively built up a network making any decisions to ensure includes structured training and of 20 yards and engineering offi ces we can extract value from operating development of safety leaders. in 16 countries, serving our customers in these locations. Our Keppel Safety Training Centre

1

Keppel Offshore & Marine Ltd 12 Report to Stakeholders 2011 1. Our Nakilat-Keppel Offshore & Marine 2 (N-KOM) yard in Qatar has done well in its fi rst year of operations, with the successful completion of over 40 repair projects and a number of offshore projects.

2. At all our yards around the world, we are enforcing the importance of adopting safe work habits through the “Plus 5 for Safety” initiative.

3. We are committed to inculcate a vigilant safety culture through teamwork, open communication and proactive initiatives.

offers a complete range of safety around the world, this Portal is training and certifi cation courses useful in connecting our global and 3 for our workforce across all areas and diverse workforce. We are actively levels. We are also actively training a encouraging all our employees to pool of safety assessors whose main make full use of this Portal. role is to promote safety leadership and inculcate safe habits. We have also institutionalised a cross-pollination programme, We also have the “Plus 5 for Safety” where employees in key positions initiative where our workers are are seconded to other business units encouraged to report near misses. for short stints to learn and share Under this initiative, supervisors safety practices. are expected to promote better communications within the workforce Another ongoing programme regarding safety practices. which we are reinforcing is the comprehensive review of our Safety Mr Chow: In our opinion, the Journey. This is part of a three-year fundamentals of safety training exercise benchmarked against the should start from the very top and Singapore operations of global cascade down to the workers. company DuPont. Through this Training and effective communication Safety Self Assessment Programme, are therefore two important pillars for we hope our safety processes and us in inculcating a safety culture. culture will emerge stronger.

To ensure more effective Changing mindsets and behaviour communication, we introduced will continue to be a main focus for an e-Safety Portal in late 2011 Keppel O&M. To us, upholding good to encourage active sharing of safety standards requires constant safety best practices across business vigilance, open communication and units and work places. With 20 yards active implementation.

Interview with CEO and COO 13 GROUP FINANCIAL HIGHLIGHTS

2011 2010 S$’000 S$’000 Consolidated Balance Sheet as at 31 December 2011 Share capital 339,716 339,716 Reserves 1,543,002 1,532,669 Shareholders’ funds 1,882,718 1,872,385 Non-Controlling interests 207,291 180,642 Capital employed 2,090,009 2,053,027

Represented by:

Fixed assets 1,227,407 1,247,443 Associates 386,013 171,500 Loans receivable 47,677 40,864 Goodwill 36,363 50,042 Investments 173,682 171,425 1,871,142 1,681,274

Current assets Stocks 273,663 118,241 Work-in-progress (cost > billings) 1,081,491 552,241 Related companies & associates 212,297 137,321 Other assets 308,594 195,061 Debtors 610,145 731,638 Bank balances, deposits & cash 2,343,971 2,805,602 4,830,161 4,540,104

Current liabilities Creditors 2,351,840 2,189,323 Work-in-progress (billings > cost) 1,575,152 1,389,554 Other liabilities 81,043 8,240 Short term loans 32,762 20,683 Taxation 292,851 243,252 4,333,648 3,851,052

Net current assets 496,513 689,052

Non-current liabilities Long term loans 171,388 213,559 Deferred taxation 80,313 85,734 Deferred liabilities 25,945 18,006 277,646 317,299

Net assets 2,090,009 2,053,027

Keppel Offshore & Marine Ltd 14 Report to Stakeholders 2011 2011 2010 Change S$’000 S$’000 % Consolidated Profi t & Loss Account for the fi nancial year ended 31 December 2011 Revenue 5,705,966 5,577,010 +2

Operating profi t 1,397,759 1,195,047 +17 Net Interest/investment income 54,564 72,542 -25 Share of results of associates 44,266 48,773 -9 Profi t before tax 1,496,589 1,316,362 +14 Taxation (309,521) (242,059) +28 Profi t after tax 1,187,068 1,074,303 +11 Non-Controlling interests (43,381) (12,606) +244 Profi t before exceptional items 1,143,687 1,061,697 +8 Exceptional items (44,994) (24,762) +82 Net profi t 1,098,693 1,036,935 +6

Economic Value Added (before exceptional items) 992,467 947,112 +5

Keppel Offshore & Marine achieved The Group’s return on equity (before another outstanding set of results in exceptional items) was slightly lower 2011. Revenue increased by 2% to at 61%, while Economic Value Added of $5.7 billion due to higher workload, $992.5 million was $45.4 million higher as revenue recognition commenced on than that of the previous year. some of the orders secured since the last quarter of 2010. The completion The Group delivered 8 rigs, 7 FPSO/FSO of jobs secured prior to 2010 with conversions, 11 specialised vessels and higher margins and greater operating 25 other major projects in 2011. The effi ciencies contributed to a higher total value of contracts secured for the operating profi t of $1,398 million, year was $10.0 billion, and the Group 17% above that of 2010. Net interest ended the year with a net orderbook of income was lower at $51.5 million. $9.4 billion, with deliveries extending Contributions from associates of to 2015. $44.3 million was 9% lower. Profi t after tax was up 10% to $1,187.1 million, while profi t before exceptional items increased by 8% to $1,143.7 million. Exceptional items of $45.0 million were related to impairment of assets.

Group Financial Highlights 15 GROUP AT A GLANCE

KEPPEL OFFSHORE & MARINE Global leader in offshore rig design, construction and repair, ship repair and conversion, and specialised shipbuilding.

Headquartered in Singapore, Keppel O&M integrates GROUP FOCUS FOR 2012/2013 and harnesses the experience and expertise of 20 yards FORTIFY CORE COMPETENCIES worldwide to optimise deployment of resources and – Build on operational excellence and raise productivity effectively execute our Near Market, Near Customer strategy. levels to deliver projects safely, on time and within budget. The head offi ce serves two central functions, providing Operational Services including technology, design and LEVERAGE GROWTH PLATFORMS development, engineering and procurement, as well – Extend expertise to offer a wider range of products, as Corporate Services covering fi nance, legal, human solutions and services for the offshore and marine resources, information services and corporate development. industry through R&D.

Driven by innovation and a workforce with the Can Do! spirit, HARNESS GLOBAL SYNERGIES we strive to become the provider of choice and partner for – Develop and draw on the collective strength of global solutions for the offshore and marine industry. yards and offi ces to reinforce Near Market, Near Customer strategy and deliver value to customers.

INCREASE BUSINESS ROBUSTNESS – Seek opportunities to strategically acquire or co-invest with partners in new capabilities and facilities, and enter into new markets.

Keppel Offshore & Marine Ltd 16 Report to Stakeholders 2011 OFFSHORE MARINE SPECIALISED Leading designer, Trusted industry SHIPBUILDING builder and repairer partner for the repair, Designer and builder of high-performance conversion and of a wide spectrum mobile offshore upgrade of a diverse of highly specialised drilling rigs. range of vessels. ships for a global clientele.

The Offshore Division, helmed The Marine Division is represented The Specialised Shipbuilding by Keppel FELS, is a leading by Keppel Shipyard, trusted for the Division led by Keppel Singmarine designer, builder and repairer repair, conversion and upgrade of a has a track record of some 400 of high-performance mobile offshore diverse range of vessels. newbuild vessels of diverse functions drilling rigs. and sophistication. Keppel Shipyard is a leader in the The Division’s portfolio of conversion of Floating Production Its portfolio of customised vessels proprietary designs and fl oating Storage and Offl oading; Floating spans Anchor Handling Tug/Supply production solutions meets a Storage and Offl oading; and Floating vessels, multi-purpose Offshore broad spectrum of operating Storage Re-gasifi cation Units. Its Support Vessels and tugboats to requirements including deep competencies include topside and highly advanced solutions such as waters and harsh environments. turret fabrication. ice-capable vessels.

With technology innovation and With strong commitment to Health, Harnessing its suite of design competent design and engineering Safety and Environment and an and engineering solutions, strong capabilities, this Division offers established reputation of reliability, logistics and infrastructure viable, cost-effective and highly fl exibility and quality for complex support in Singapore, this Division adaptable solutions for newbuilds projects with quick turnaround, the provides customers with one-stop and upgraded offshore units. Division continues to deliver high value-added services. value to its customers.

Group at a Glance 17 BOARD OF DIRECTORS

CHOO CHIAU BENG TONG CHONG HEONG CHOW YEW YUEN

CHAIRMAN CHIEF EXECUTIVE OFFICER CHIEF OPERATING OFFICER Keppel Offshore & Marine Ltd Keppel Offshore & Marine Ltd Keppel Offshore & Marine Ltd Keppel FELS Limited Keppel FELS Limited Keppel Shipyard Limited Keppel Shipyard Limited CHAIRMAN Keppel Land Limited Keppel AmFELS, Inc Keppel Energy Pte Ltd CHAIRMAN Keppel Integrated Engineering Limited DEPUTY CHAIRMAN CHIEF EXECUTIVE OFFICER Keppel FELS Brasil SA Keppel Corporation Limited SENIOR EXECUTIVE DIRECTOR Keppel Corporation Limited PRESIDENT Keppel Offshore & Marine USA, Inc

Keppel Offshore & Marine Ltd 18 Report to Stakeholders 2011 STEPHEN PAN YUE KUO PROF MINOO HOMI PATEL DR MALCOLM SHARPLES

CHAIRMAN PROFESSOR OF MECHANICAL PRESIDENT World-Wide Shipping Agency Limited, ENGINEERING AND Offshore Risk & Technology Hong Kong DIRECTOR OF DEVELOPMENT Consulting Inc, USA School of Engineering, Cranfi eld University, UK

Board of Directors 19 BOARD OF DIRECTORS

PO’AD BIN SHAIK ABU BAKAR MATTAR TAN EK KIA LIM CHIN LEONG

INDEPENDENT DIRECTOR CHAIRMAN FORMER CHAIRMAN OF ASIA Hong Leong Finance Limited City Gas Pte Ltd Schlumberger Tiger Airways Holdings Limited INDEPENDENT AND NON-EXECUTIVE DIRECTOR Keppel Corporation Limited

Keppel Offshore & Marine Ltd 20 Report to Stakeholders 2011 TEO SOON HOE SIT PENG SANG LOH CHIN HUA

SENIOR EXECUTIVE DIRECTOR DIRECTOR CHIEF FINANCIAL OFFICER Keppel Corporation Limited Keppel AmFELS, Inc Keppel Corporation Limited

CHAIRMAN CHAIRMAN Keppel Telecommunications and Alpha Investment Partners Limited Transportation Ltd M1 Limited

Board of Directors 21 KEY PERSONNEL

OFFSHORE & MARINE

1. WONG NGIAM JIH 5. TONG CHONG HEONG 9. LAI CHING CHUAN CHIEF FINANCIAL OFFICER CHIEF EXECUTIVE OFFICER SENIOR GENERAL MANAGER (CORPORATE DEVELOPMENT) 2. CHEE JIN KIONG 6. HOE ENG HOCK EXECUTIVE DIRECTOR EXECUTIVE DIRECTOR 10. MICHAEL CHIA (HUMAN RESOURCES) (KEPPEL SINGMARINE) MANAGING DIRECTOR (OFFSHORE) 3. CHOW YEW YUEN 7. WONG KOK SENG CHIEF OPERATING OFFICER MANAGING DIRECTOR (KEPPEL FELS) 4. CHOO CHIAU BENG CHAIRMAN 8. NELSON YEO MANAGING DIRECTOR (MARINE)

8 6 7 4 9 10

1

3 5 2

Keppel Offshore & Marine Ltd 22 Report to Stakeholders 2011 1. YONG CHEE MIN 4. DR LEE CHAY HOON 7. CHOON YONG BOON GENERAL MANAGER GENERAL MANAGER ASSISTANT GENERAL MANAGER (PROJECTS) (ORGANISATION DEVELOPMENT) (INFORMATION SYSTEMS)

GENERAL MANAGER 5. FONG SWEE THENG 8. KENNETH CHONG (HEALTH, SAFETY & GROUP FACILITIES MANAGER ASSISTANT GENERAL MANAGER ENVIRONMENT) (LEGAL) 6. ANTHONY TOH 2. EDMUND MAH GROUP SECURITY MANAGER COMPANY SECRETARY GENERAL MANAGER (FINANCE)

3. JEFFERY CHOW GENERAL MANAGER (LEGAL)

6 7 8 5 4 3

1 2

Key Personnel 23 KEY PERSONNEL

KEPPEL FELS

1. CHRIS ONG 4. WONG FOOK SENG 6. WONG KOK SENG GENERAL MANAGER SENIOR GENERAL MANAGER MANAGING DIRECTOR (ENGINEERING) (OPERATIONS) 7. YEO YUE NGIAP 2. AZIZ AMIRALI MERCHANT 5. KEITH TEO GENERAL MANAGER EXECUTIVE DIRECTOR GENERAL MANAGER (COMMERCIAL) (ENGINEERING) (MARKETING)

3. DAVID LEE FINANCIAL CONTROLLER

1 3 4

2 5 7 6

Keppel Offshore & Marine Ltd 24 Report to Stakeholders 2011 KEPPEL SHIPYARD

1. LOUIS CHOW 5. CHARLES SIM 8. SPENCER LEONG SENIOR GENERAL MANAGER GENERAL MANAGER GENERAL MANAGER (COMMERCIAL) (OFFSHORE PRODUCTION) (DEVELOPMENT)

2. JIM LIM 6. BURT LOH 9. TAN PENG PONG FINANCIAL CONTROLLER GENERAL MANAGER GENERAL MANAGER (OPERATIONS) (ENGINEERING & SYSTEMS 3. NELSON YEO DEVELOPMENT) MANAGING DIRECTOR 7. MAH CHAN WAH GENERAL MANAGER 4. CHOR HOW JAT (COMMERCIAL – SHIPREPAIR) EXECUTIVE DIRECTOR

6 8 2 4 5 9

7 1 3

Key Personnel 25 KEY PERSONNEL

KEPPEL SINGMARINE

1. TOH KO LIN 4. EDMUND LEK 6. AU-YEONG KIN HO SENIOR GENERAL MANAGER SENIOR GENERAL MANAGER GENERAL MANAGER (COMMERCIAL) (OPERATIONS) (ENGINEERING)

2. TAN CHENG HUI 5. CHARLES YAP 7. POON TAI LUM SENIOR GENERAL MANAGER GENERAL MANAGER GENERAL MANAGER (ENGINEERING) (PURCHASING/WAREHOUSE) (COMMERCIAL/MARKETING)

3. HOE ENG HOCK EXECUTIVE DIRECTOR

5 6 7 1 4 2 3

Keppel Offshore & Marine Ltd 26 Report to Stakeholders 2011 RESEARCH & DEVELOPMENT

1. DR ASBJORN MORTENSEN 4. DR MATTHEW QUAH 8. DR FOO KOK SENG SENIOR PROGRAMME MANAGER SENIOR PROGRAMME MANAGER EXECUTIVE DIRECTOR (DRILLING EQUIPMENT), (OFFSHORE STRUCTURES), (SHALLOW WATER TECHNOLOGY), KOMTECH KOMTECH KOMTECH

2. CHARLES SIM 5. AU-YEONG KIN HO EXECUTIVE DIRECTOR, PROJECT DIRECTOR GENERAL MANAGER, OFFSHORE TECHNOLOGY (FPSO AND OFFSHORE MARINE TECHNOLOGY DEVELOPMENT PRODUCTION), DEVELOPMENT KOMTECH 9. CHONG WEN SIN 6. CHARLES FOO SENIOR PROJECT MANAGER 3. AZIZ AMIRALI MERCHANT DIRECTOR/ADVISOR, (OFFSHORE LNG DEVELOPMENT/ EXECUTIVE DIRECTOR KOMTECH FPSO/ENVIRONMENTAL (DEEPWATER TECHNOLOGY), ENGINEERING), KOMTECH 7. TAN CHENG HUI KOMTECH RESEARCH CONSULTANT EXECUTIVE DIRECTOR, (MARINE), 10. ANIS ALTAF HUSSAIN DEEPWATER TECHNOLOGY GROUP KOMTECH GENERAL MANAGER, DEEPWATER TECHNOLOGY GROUP SENIOR GENERAL MANAGER, MARINE TECHNOLOGY DEVELOPMENT

1 4 2 5

3 10 9

7

8 6

Key Personnel 27 KEY PERSONNEL

OVERSEAS MANAGERS

1. JOHN J. BAJOR 3. KWOK KAI CHOONG 5. ABU BAKAR MOHD NOR KEPPEL MARINE AGENCIES KEPPEL FELS BRASIL GROUP NAKILAT-KEPPEL OFFSHORE INTERNATIONAL, LLC & MARINE LTD (NEW JERSEY, USA) 4. HAROLD LINSSEN KEPPEL VEROLME BV 6. MOK KIM WHANG 2. ROY SLETTEN KEPPEL PHILIPPINES KEPPEL NORWAY AS MARINE, INC

KEPPEL SUBIC SHIPYARD, INC

1 453

2 4 6

Keppel Offshore & Marine Ltd 28 Report to Stakeholders 2011 1. TAN GEOK SENG 3. CHANDRU SIRUMAL RAJWANI 5. MICHAEL HOLCOMB KEPPEL AMFELS, LLC CASPIAN SHIPYARD COMPANY LTD KEPPEL MARINE AGENCIES INTERNATIONAL, LLC 2. YICK PING WONG 4. LEE TAI KWEE (TEXAS, USA) KEPPEL KAZAKHSTAN LLP KEPPEL NANTONG SHIPYARD CO. LTD 6. JIMMY LOH ARAB HEAVY INDUSTRIES PJSC

13 5

24 6

Key Personnel 29 KEY PERSONNEL

Overseas Operational Centres ALBERT GARCIA LAU KUAT PIN Financial Controller Vice President

ARAB HEAVY INDUSTRIES PJSC ERIC PHUA ELSHAN GURBANOV JIMMY LOH Vice President (Commercial) Chief Financial Offi cer Managing Director JUAN CRUZ KEPPEL NORWAY AS CHAN LIM HONG Vice President (Operations ROY SLETTEN General Manager and Engineering) Acting CEO

PT BINTAN OFFSHORE KEPPEL FELS BRASIL GROUP DANNY ANG KOK BOON HENG KWOK KAI CHOONG Chief Financial Offi cer General Manager President & Chief Executive Offi cer KEPPEL NANTONG SHIPYARD KEPPEL PHILIPPINES MARINE, INC TOMMY SAM CO. LTD MOK KIM WHANG Vice President LEE TAI KWEE President President GILBERTO ISRAEL STEFAN TONG Commercial Director EDMUND LEK Executive Vice President Deputy President JERALD LEE AGNES BARBARA L. LORENZO Chief Financial Offi cer WONG PHUAY CHENG Vice President Vice President (Operations) (Administration & Finance) ALCEU MARIANO Institutional Director LI GANG KEPPEL BATANGAS SHIPYARD, INC Vice President (Commercial) POH LEONG KOK EDMUNDO SANTOS Senior Vice President Operations Director BEN ANG Vice President (Finance) KEPPEL SUBIC SHIPYARD, INC LOW TIAU TONG MOK KIM WHANG Assistant Operations Director NAKILAT-KEPPEL OFFSHORE President & General Manager & MARINE LTD KEPPEL VEROLME BV ABU BAKAR MOHD NOR LEONG KOK WENG HAROLD LINSSEN Chief Executive Offi cer Senior Vice President Managing Director ALBERT KEE FROILAN DELA CRUZ WONG WEI KEI General Manager (Operations) Vice President Chief Financial Offi cer (Commercial & Marketing) REGENCY STEEL JAPAN LTD KEPPEL KAZAKHSTAN LLP WONG CHUN YU KEPPEL OFFSHORE & MARINE USA, INC YICK PING WONG President TOMMY SAM Executive Director Vice President SHIGEYUKI HATANO ANIL KUMAR SULTAN Chief Operating Offi cer CHEUNG TAK ON Executive Vice President Vice President (Technology) KEPPEL SINGMARINE BRASIL LTDA LIM AH BENG HOE ENG HOCK SIMON LEE Assistant General Director Executive Director Vice President (Projects) CHOW WAI HOONG TAN CHONG KEE KEPPEL AMFELS, LLC Chief Financial Offi cer General Manager TAN GEOK SENG President & Chief Executive Offi cer CASPIAN SHIPYARD COMPANY LTD BAKU SHIPYARD LLC CHANDRU SIRUMAL RAJWANI DAVID LOH GILBERT ELIZONDO President General Manager Vice President (Human Resources)

Keppel Offshore & Marine Ltd 30 Report to Stakeholders 2011 Engineering/Technology Centres DEEPWATER TECHNOLOGY Representative Offi ces GROUP PTE LTD AZIZ AMIRALI MERCHANT KEPPEL OFFSHORE & MARINE Executive Director KEPPEL MARINE AGENCIES TECHNOLOGY CENTRE PTE LTD INTERNATIONAL, LLC DR FOO KOK SENG ANIS ALTAF HUSSAIN MICHAEL HOLCOMB Executive Director (Shallow General Manager President/Director, Texas Water Technology) MARINE TECHNOLOGY JOHN J. BAJOR AZIZ AMIRALI MERCHANT DEVELOPMENT PTE LTD Director, New Jersey Executive Director (Deepwater TAN CHENG HUI Technology) Senior General Manager KEPPEL PRINCE ENGINEERING PTY LTD CHARLES FOO AU-YEONG KIN HO CHARLES CHIAM Director/Advisor General Manager Director

TAN CHENG HUI BLUE OCEAN SOLUTIONS PTE LTD Research Consultant (Marine) DR JERRY NG Marine Services Chief Executive Offi cer CHARLES SIM ASIAN LIFT PTE LTD Project Director (FPSO and BENNETT & ASSOCIATES, LLC JOHN CHUA Offshore Production) JOSE VAZQUEZ General Manager President & Chief Executive Offi cer DR MATTHEW QUAH KEPPEL SMIT TOWAGE PTE LTD Senior Programme Manager FLOATEC, LLC BEN CHEW (Offshore Structures) ERIC H. NAMTVEDT General Manager (Regional) President DR ASBJORN MORTENSEN JERRY WONG Senior Programme Manager KEPPEL FELS BALTECH LTD General Manager (Drilling Equipment) LYUDMIL STOEV General Manager CHONG WEN SIN Employee Unions Senior Project Manager IVAN PETROV PELOV (Offshore LNG Development/FPSO/ Senior Engineering Manager Environmental Engineering) KEPPEL EMPLOYEES UNION MOHAMED YUSOP BIN MANSOR KEPPEL FELS ENGINEERING President OFFSHORE TECHNOLOGY SHENZHEN CO. LTD DEVELOPMENT PTE LTD HO JONG HENG MOHD YUSOF B MOHD DR FOO KOK SENG General Manager Executive Director General Secretary

KEPPEL FELS OFFSHORE & KEPPEL FELS EMPLOYEES UNION LIM TENG KIAT ENGINEERING SERVICES MUMBAI General Manager VINCENT HO MUN CHOONG PTE LTD President SYED AHAMED KABEER General Manager ATYYAH HASSAN General Secretary

SHIPBUILDING & MARINE ENGINEERING EMPLOYEES UNION WONG WENG ONG President

MAH CHEONG FATT Executive Secretary

GOH SOR IMM Deputy Executive Secretary

Key Personnel 31 SPECIAL FEATURE

SAFETY IS EVERYONE’S BUSINESS

Our safety journey is a continuous one. With strong commitment from management and ownership from every Keppelite towards safety, we can achieve our vision of creating an incident-free workplace.

Keppel Offshore & Marine Ltd Special Feature 32 Report to Stakeholders 2011 Safety is Everyone’s Business 33 SPECIAL FEATURE

GROWING OUR SAFETY CULTURE Keppel O&M Safety Statistics For Keppel O&M, at the heart of workplace safety is a sense of AFR ASR responsibility. As we journey towards an 0.6 450 incident-free workplace, we constantly align efforts across our yards worldwide to encourage best safety practices, 0.4 300 improve safety management systems as well as to instil the importance of 0.2 150 creating a safe workplace.

In 2011, we invested over $16 million 0 0 on safety infrastructure as well as skills 2007 2008 2009 2010 2011 and knowledge development. AFR 0.37 0.37 0.35 0.29 0.24 Our safety culture is also rooted in close ™ collaboration with stakeholders including ™ASR 187 110 83 105 443 contractors, customers, industry * AFR – Refers to the number of workplace accidents per million man hours worked. Figures used suppliers, partners and regulatory are incident-based. * ASR – Refers to the number of industrial man days lost to workplace accidents per million bodies. This is a key element of our man hours worked. strategy to eliminate workplace incidents as we strive to train and empower every single stakeholder to be responsible for his own safety, as well as the well-being Our experiences in 2011 clearly show as safety assessors, whose role is of others around him. that safety is an ongoing journey and we to promote safety leadership and must never be complacent. From the inculcate safe habits. To date, we We believe that everyone has a role to lessons learnt, we will emerge stronger. have trained 11 lead assessors and play in protecting people, property and 20 assessors across Keppel Group. the environment. ENHANCING SAFETY PERFORMANCES For 2012 and beyond, Keppel O&M has As an extension of being a RISING TO THE CHALLENGE identifi ed four focus areas to further responsible leader in the offshore Over the years, we have maintained a strengthen and improve our safety and marine industry, we participate good safety record working and focusing processes and initiatives. actively in national and industry on high-risk sectors. From 2007 to safety initiatives and events, such 2010, our accident frequency rate (AFR) 1. LEADING BY EXAMPLE as Singapore’s Workplace Safety and accident severity rate (ASR) were We believe that leaders must walk and Health (WSH) Conference and signifi cantly lower. the talk as they play a key role in WSH Council (WSHC)’s bizSAFE shaping the Group’s safety journey Convention to share our experiences. However, we faced one of our toughest and performance. As leaders often years in our safety journey in 2011. drive learning and sharing platforms 2. DRIVING OWNERSHIP Despite tremendous efforts to such as training programmes To foster a culture of safety enhance safety, Keppel O&M suffered and safety campaigns, they need ownership at the ground level, 11 fatalities in Singapore and overseas. to be in touch with the workforce we introduced the “Plus 5 for The impact of these cases spiked our to better understand the working Safety” initiative. This initiative ASR from 105 man days lost per million environment. During the year, aims to enhance the existing man hours worked in 2010 to 443 in 2011. Keppel’s Board Safety Committee safety toolbox meeting process members and our safety leaders by extending it to focus on We are saddened by the loss of conducted several site visits to supervisory leadership skills these lives and are determined to facilities in Singapore and overseas. and workers’ participation. draw lessons from them to prevent These visits are useful input for any recurrence. Independent lead them in their decision-making Supervisors are frontliners of investigators were appointed by the CEO process on safety enhancement safety. Through this initiative, we of Keppel Corporation to fi nd the causes strategies for the Group. hope to enhance ownership in of these incidents. At the same time, our supervisors, who must take this helps to facilitate a fresh review of In addition, we continue to reinforce responsibility in ensuring the safety the established safety systems in areas the training of safety leaders at of their charges. It is important where the incidents happened so that Keppel. In 2011, selected HSE and that they conduct proper briefi ngs improvements can be made. operational personnel were trained and risk assessments before

Keppel Offshore & Marine Ltd 34 Report to Stakeholders 2011 any job starts. Workers are also and subcontractors, we need to At Keppel O&M, we are aligned encouraged to voice out potential ensure that safety practices are with Keppel Group’s efforts to hazards and report near-misses systematically integrated into all further improve our execution without fear of penalty. work processes, leaving no room of the four key thrusts of Keppel’s for mistakes. To further enhance WSH 2018 strategy launched in Driving ownership is also a key the safety management system, we 2010. The reach and effi cacy of this focus in the ongoing “Safety encourage all employees to adhere strategy was further broadened Buddy” programme, where strictly to safety procedures. with the commitment by Keppel’s employees and subcontract overseas business units at the workers are assigned to ”Buddy In 2011, we embarked on a Keppel Group Safety Convention Groups” so that they can look out comprehensive three-year 2011 to implement the initiatives for one another and encourage exercise to review our safety under the strategy. each other to adopt safe work journey, benchmarked against habits. Such Buddy Groups are that of the Singapore operations The Keppel Safety Training Centre guided by safety mentors who play of global company DuPont. continues to be a strong advocate an important role in infl uencing Following a safety perception of the Group’s safety excellence, and motivating the group members, survey conducted in January 2011, equipping employees and as well as inculcating our safety 18 site safety assessments were subcontractors with the relevant values in them. subsequently held to validate the training and procedures. The Centre fi ndings of this survey. employs the latest equipment, At the annual Group Safety simulations and methodologies Innovation Convention, teams from Over the next two years in 2012 to conduct its courses. In 2011, across the yards also have the and 2013, Phase Two of this 3,088 workers and subcontractors opportunity to generate creative Group-wide exercise will were trained at the Centre and key ideas with the potential to be incorporate coaching for safety courses are tied strongly to High implemented to improve workplace assessors to hone their skills, Impact Risk Activities awareness. safety. This in turn serves to instill a as well as development of sense of ownership towards safety databases to keep track of follow- in our workforce. up action items. Other potential initiatives under this exercise 3. ADHERING TO PROCEDURES include the development of In 2011, we trained 3,088 workers and subcontractors at the Keppel Safety Training In managing a global workforce personal safety action plans for Centre and key courses are tied strongly to of more than 40,000 employees key safety management. High Impact Risk Activities awareness.

Special Feature Safety is Everyone’s Business 35 SPECIAL FEATURE

4. COMMUNICATING PROACTIVELY with growing participation. Under We continue to have our regular take ownership of safety by conducting utilised this platform and shared Award won by Keppel Shipyard’s We can have the best safety the programme, safety offi cers from campaigns and programmes where monthly site inspections under the safety policies aimed at strengthening Mr Sivasamy Gopalakrishnan, and a procedures and initiatives in place Singapore and overseas across the we constantly communicate and Contractors HSE watch group and the companies’ safety culture and Silver award in the WSH Performance but if they are not communicated business units in the Keppel Group emphasise the fundamental safety Workforce Safety Council. measures, and also raising the bar on category won by Keppel Singmarine. properly or acted upon, they will not learn and share best practices with rules, and remind workers of their safety standards for the region’s oil and In October 2011, for the second year be effective. each other, so as to gain a better responsibility to stay vigilant as well At Keppel FELS, the Subcontractors gas, and offshore and marine industries. running, Keppel FELS won the Lloyd’s understanding of the diverse safety as look out for one another. Executive Council Safety Committee, List Asia Awards for Achievement To embrace open communication practices and challenges faced in which consists of representatives from For the fourth consecutive year, in Safety. and lend support to each other the different industries. PARTNERSHIP WITH STAKEHOLDERS different trade sections, meet weekly Keppel FELS, Keppel Shipyard, Keppel in sharing best practices, Keppel In our march towards an incident-free to discuss concerns and initiatives. Singmarine and other business units Our safety innovations were recognised O&M launched the e-Safety Portal In June 2011, two safety offi cers workplace, we rally the participation The contractors’ supervisors are also within Keppel O&M sponsored the at the Association of Singapore in November 2011. This ensures from Keppel Shipyard and Keppel of stakeholders who contribute to the appointed as leaders to help educate annual bizSAFE Convention 2012 Marine Industries’ 14th Convention that senior management and key FELS in Singapore were sent to success of our safety initiatives. workers on proper procedures as well organised by WSHC. As bizSAFE for Workplace Safety and Health safety personnel are kept abreast Keppel FELS Brasil where they as enforce safety rules. partners, we provide incentives to Innovations in Marine Industry in of incidents and, where applicable, shared on HSE initiatives, such as In Singapore, we continue to work motivate our contractors and vendors August 2011. Keppel FELS received immediate corrective measures High Impact Risk Activities and closely with the Ministry of Manpower Another way which Keppel O&M conveys to progress through the various levels Silver for its “Smart Intelligent Trolley” are taken in the relevant areas. how they can be adapted to suit (MOM) and WSHC to implement its commitment to safety is its support of the bizSAFE programme. project, while Keppel Singmarine took Through a specially set up web respective yards and countries. initiatives that help to raise safety for industry-wide safety platforms. Bronze for its “Safe Puncher” project. portal, sharing of lessons learnt The two safety offi cers also had the standards within our industries. In 2011, we hosted delegates from WINNING RECOGNITION can be done across the Group in opportunity to visit the upcoming ASEAN at the inaugural Association of As a testament to our safety efforts, Notwithstanding recognition from different locations and countries in Keppel Singmarine Brasil. The We helped to equip over 600 Southeast Asian Nations Council on Keppel O&M clinched a record the government and the industry, a systematic way. experience was enriching with subcontractors with competencies Petroleum (ASCOPE) Safety Workshop. 20 Workplace Safety and Health our greatest reward is seeing everyone both safety offi cers returning with to carry out their tasks safely as well More than 80 participants comprising Awards from Singapore’s WSHC return home safely from our yards Our “Cross Pollination Programme” good HSE practices shared by their as instil in their workers a strong ASCOPE delegates, industry speakers and MOM in July 2011. Among the at the end of each work day. continues to gather momentum Brazilian counterparts. commitment to safety. Our contractors and Keppel O&M employees fully 20 awards was the WSH Supervisors

SAFETY SELF-AUDIT

A keen understanding of attitudes safety levels, and the differences are need to build a pool of key personnel 1 2 is critical to build cultures and identifi ed through this Safety Perception across business units, hierarchies and effect change. As such, the Keppel Survey and on-the-ground evaluations. professions to foster a culture of safety. Safety Perception Survey, launched The assessors are also developing Passionate and well-trained in safety, on 5 January 2011, serves a critical benchmarking indices and safety their mission is to infl uence others role in enhancing Keppel O&M’s roadmaps for each of the business units around them to be safety ambassadors safety management system. within Keppel Group. as well.”

This review effort is an extension of Chairman of the Keppel Board Safety the Keppel Workplace Safety and Committee, Mr Sven Ullring, said, Health (WSH) 2018 initiative, which “DuPont, the world’s top safety seeks to signifi cantly reduce Keppel consultant, is assisting us in our self- Group’s incident rates over the next assessment exercise. Part of DuPont’s few years. More than 20,000 employees scope is to impart its know-how to us and subcontractors’ workers across and subsequently leave us to run by the Keppel Group participated in this ourselves. This is so that we will not 24-question survey, which aims to need consultants in the future – just assess our safety culture, systems auditors, every second year or so – to and performance as well as gather make sure that we are in compliance ideas for improvement. with our own systems and procedures. 1. 12 safety assessors participated in the inaugural Leadership Development Sailing Programme held on 2 to 4 June 2011. A pool of assessors from across the “This exercise provides us with the tools Group are being trained and equipped to signifi cantly improve and align safety 2. Keppelites reinforced their support for the Keppel Workplace Safety and Health 2018 with safety competencies to address across our business units. We believe initiative at the Keppel Group Safety the gaps between perceived and actual we have the systems in place. Now we Convention 2011.

Keppel Offshore & Marine Ltd Special Feature 36 Report to Stakeholders 2011 Safety is Everyone’s Business 37 DEFINITIVELY KEPPEL

RELIABLE

VIGILANT INNOVATIVE

COMPETITIVE PRESENT OPERATIONS REVIEW & OUTLOOK

Harnessing the Group’s collective strength, we are committed to meet our customers’ needs through execution excellence and technology-based innovation.

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2011 was another year of successful of new orders in 2011, the company the fi rst of the three N Class jackups deliveries for the Group. With hard continued to uphold its commitment built by Keppel FELS. work and dedication, we once again to its customers with on time and delivered our promises to our within budget deliveries, further The fi fth newbuild of the ENSCO 8500 customers worldwide with our attesting to its reputation as the series, ENSCO 8504, was delivered on hallmark of execution excellence. global offshore industry’s preferred time and secured a charter to drill for solutions provider. TOTAL in Brunei. Alpha Star, the second Our business units across our global DSSTM38 drilling semisubmersible for network collectively delivered eight rigs, In 2011, Keppel FELS secured a Brazilian customer Queiroz Galvão Óleo seven FPSO/FSO conversion projects total of 25 new orders, comprising e Gás (QGOG), was delivered a record and 11 specialised vessels, among other 23 jackups and two semisubmersibles. four months ahead of schedule. This repair, upgrade and completion projects. Of these new orders, 23 were for sterling early delivery was rewarded Keppel FELS’ proprietary designs, with a US$8 million bonus from QGOG. Against a backdrop of returning interest which refl ects the market’s acceptance Two semisubmersible drilling tenders, in newbuild rigs, sustained high oil and industry recognition of our suite built to the award-winning KFELS prices and continued bifurcation of offshore solutions. SSDTTM3600E design, were delivered in towards higher quality assets, we 2011. They are West Jaya, which is now secured a record $10 billion worth of On deliveries, a total of six newbuilds Seadrill’s seventh SSDT in its lineup, and new contracts, culminating in a net were completed, comprising two PV Drilling V, the fi rst-ever SSDT order book of $9.4 billion as at end 2011, jackups and four semisubmersibles. built for PetroVietnam Drilling & with deliveries extending into 2015. Among the deliveries were two KFELS Well Services Corp in a successful N Class jackups, Rowan Stavanger 25-year partnership. OFFSHORE and Rowan Norway. The pair of rigs KEPPEL FELS has since obtained attractive charters Meanwhile, Keppel FELS continues to It was a busy year for Keppel FELS. in the North Sea market, successfully maintain its reputation as the port of While it secured a record number following the footsteps of Rowan Viking, call for rigs requiring repairs, upgrades

Keppel Offshore & Marine Ltd 40 Report to Stakeholders 2011 2

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1. It was a busy year for Keppel FELS in 2011, with deliveries of eight rigs and a major completion, as well as the award of 25 newbuild orders comprising mainly our proprietary jackup designs.

2. Delivered on time and within budget, ENSCO 8504 is the fi fth of seven ultra- deepwater drilling rigs Keppel is building exclusively for Ensco.

3. Equipped to operate in some of the harshest offshore environments in the world, Rowan Stavanger is the second KFELS N Class jackup rig built for Rowan Companies, Inc.

Operations Review & Outlook 41 OPERATIONS REVIEW & OUTLOOK

and completion works. The complex New Orders Secured by Keppel FELS in 2011 installation, commissioning and refurbishment works for Scarabeo 9, Jackups a semisubmersible owned by Saipem, Standard Drilling 6 KFELS B Class was completed in 2011, and the rig Asia Offshore Drilling 1 KFELS B Class is slated to drill in Cuba. Another Gulf Drilling International 2 KFELS B Class Bigfoot signifi cant refurbishment work was Dynamic Offshore Drilling 1 KFELS B Class Bigfoot secured for a KFELS B Class jackup Japan Drilling Company 1 KFELS Super B Class to be delivered to Safi n Gulf FZCO. Transocean 3 KFELS Super B Class Bigfoot During the year, Keppel FELS’ Flying Discovery Offshore 2 KFELS Super A Class Squad was deployed to Nigeria to assist SeaWolf Oil Services in leg repairs Ensco 3 KFELS Super A Class for its jackup, Seawolf Onome. Maersk Drilling 2 MSC CJ70-X150-MD Jasper 1 KFELS B Class KEPPEL AMFELS Safi n Gulf 1 KFELS B Class Keppel AmFELS fortifi ed its reputation Semisubmersibles as the yard of choice in the Gulf of Floatel International 1 KFELS SSAUTM4000NG Mexico region with the delivery of its Seadrill 1 KFELS SSDTTM3600-E unit fourth EXL jackup rig to Rowan with a perfect safety record, four months ahead of schedule and within budget. The year 2011 also saw Keppel AmFELS will be built to the LeTourneau The yard also completed a number of win a contract from Mexico’s Perforadora Super 116E design. repair and fabrication jobs for major Central SA de CV to build a repeat customers including Noble, Seadrill, jackup rig. Slated for delivery in Post-Macondo, Keppel AmFELS is CAL-Dive and Diamond Offshore. 1Q 2013, this high-specifi cation unit well positioned to support customers

BRAZILIAN PRIDE

In 2011, the consortium of Keppel O&M Mr Choo Chiau Beng, Chairman of and Technip Engenharia S/A delivered Keppel O&M and Singapore’s non- the fi rst 100% made-in-Brazil Floating resident Ambassador to Brazil, Production Unit (FPU), P-56, to Petrobras commented, “P-56 is a shining Netherlands BV safely, on time and example of the technology expertise within budget. With a displacement of and execution capabilities built up 50,000 tonnes, the P-56 is one of the by our BrasFELS yard and Brazil’s world’s largest FPUs, and it measures offshore and marine industry. This 125m long, 110m wide and 137m high. achievement has been built up The project teams for P-56 achieved nine incrementally through previous million man hours without lost-time projects such as the P-52 and P-51 incidents on its construction. FPUs. Today, we have turned vision into reality in establishing Brazil Brazilian President HE Dilma Rousseff, as a centre for world-class who was present to witness the shipbuilding, with the fi rst rig christening of P-56 by Congresswoman built entirely in Brazil.” Luiza Erundina on 3 June 2011, said, FPU P-56 was christened in the presence “We have proved that it is possible to P-56 is capable of processing and of Brazilian President HE Dilma Rouseff build rigs, platforms and equipment treating 170,000 barrels of liquids (second from right). for offshore exploration in Brazil. and 100,000 barrels of 16°API oil, We shall count on the partnership of six million cubic metres of natural gas, companies which come from far away, and can inject some 280,000 barrels such as Keppel FELS from Singapore. of water into the reservoir. It is being They know that if they come to Brazil, deployed at depths of 1,670m, off the they will have the guarantee of a Marlim Sul fi eld in the Campos Basin demand from Petrobras.” offshore Brazil.

Keppel Offshore & Marine Ltd 42 Report to Stakeholders 2011 1

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1. Completed more than two weeks ahead of schedule, within budget and with a perfect safety record, West Jaya is the seventh SSDT delivered to Seadrill by Keppel FELS.

2. Keppel AmFELS delivered the Rowan EXL-IV ahead of schedule and with zero lost-time incidents.

3. For the Scarabeo 9 semi completion project, we leveraged our in-house engineering expertise, proven project management and execution capabilities to ensure quick turnaround time.

Operations Review & Outlook 43 OPERATIONS REVIEW & OUTLOOK

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1. P-56 FPU, one of the largest in the world, is a in the Gulf of Mexico region seeking projects consisted of repairs to man hours worked without LTI on both KEPPEL VEROLME The yard’s key deliveries in 2011 include shining example of the expertise and execution capabilities of our BrasFELS yard. to renew or upgrade their rig fl eets. semisubmersibles for major customers the P-61 TLWP and MODEC’s Cidade de Keppel Verolme reaffi rmed its ability several outfi tted and mechanically The yard started 2012 on a positive Ensco, Transocean and Noble. Sao Paulo. to provide quick turnaround on the completed Pipe Rack Modules, fi ve units 2. Caspian Shipyard is well positioned to capture note with a contract to construct repair and upgrade of a wide spectrum of pontoons for Agip and some steel potential new orders in 2012. and upgrade a semisubmersible for The yard is currently carrying our works CASPIAN SHIPYARD COMPANY of offshore and marine vessels, with works as part of the Kashagan oil fi eld 3. Thialf, Heerema Marine Contractors’ largest Diamond Offshore. Keppel AmFELS on several signifi cant projects, including 2011 was a good year for Caspian projects ranging from jackups to development. crane vessel, arrived at Keppel Verolme in will continue to enhance its presence the P-61 Tension Leg Wellhead Platform Shipyard Company (CSC), with a number semisubmersibles, pipelay vessels, the Netherlands for repair, maintenance and painting works. as a trusted solutions provider to the (TLWP) for the Papa Terra Joint Venture of contracts secured during the year. container carriers and barges. Keppel Kazakhstan is one of the Mexican market. comprising Petrobas and Chevron, In early 2011, it was awarded a crane Keppel Verolme’s ability to meet most modern and well equipped the integration of two FPSOs and the installation contract by Bumi Armada market demands and deliver on fabrication yard facilities in the region. KEPPEL FELS BRASIL upgrading of Noble’s drillship Noble and another from oil major BP for the its promises was reinforced with It enjoys a strong reputation for its Keppel FELS Brasil’s BrasFELS yard Roger Eason. upgrade of the STB-1 launch barge. the safe and timely completion of reliability and capability to deliver achieved several deliveries in 2011. Both jobs were completed by the end upgrade and repair jobs for pipelay quality products, on time and with The major highlight was the delivery The year ended well for Keppel of the year to the satisfaction of the vessel Lorelay, Saipem’s S44 barge, the highest HSE standards. As at the of P-56 Floating Production Unit (FPU) FELS Brasil with the order of a customers. The yard also carried out and two Maersk jackups. end of 2011, the yard has achieved to Petrobas safely, on time and within semisubmersible to be built to wheelhouse reinstatement work for 11 million man hours without any budget. This is the fi rst FPU to be built Keppel’s proprietary DSSTM38E design, BUE’s Caspian Provider, an Anchor The yard also received added LTI on all projects. This achievement completely in Brazil and is one of the from Sete Brasil, with a contract value Handling Tug Supply (AHTS) vessel. certifi cation for Environmental further affi rms the yard’s continued world’s largest. This marks a signifi cant of approximately US$809 million. Management (ISO 14001) and Health commitment towards a zero-incident milestone for Keppel in Brazil since The DSSTM38E is an enhancement Together with Keppel FELS in Singapore, and Safety (OHSAS 18001) in 2011. workplace and cements its reputation its BrasFELS yard was set up in 2000, of the DSSTM38 semisubmersible, CSC was involved in the re-installation of Since 1993, Keppel Verolme has been as the choice yard in the region. further establishing BrasFELS as the Keppel’s proven fi fth-generation the legs of a jackup in Turkey. certifi ed by DNV for Quality Management leading yard in Latin America. deepwater solution (Please refer to (ISO 9001) and Safety Management MARINE the chapter on Technology & Innovation CSC is looking forward to another good (Safety Checklist for Contractors). KEPPEL SHIPYARD The BrasFELS yard also successfully on page 58 for more details on the year in 2012. The yard is in discussions Despite another challenging year converted the FS-1 mating barge DSSTM38E design). over a potential order for a turnkey KEPPEL KAZAKHSTAN for the shiprepair and conversion into the biggest fl oating dock in Latin construction of a semisubmersible for Since its establishment in 2005, industry, Keppel Shipyard continued America, with the ability to dock a The yard scored well overall in terms of Azerbaijan’s national oil company SOCAR, Keppel Kazakhstan has completed to perform well. vessel weighing up to 22,000 metric safety. It was awarded safety bonuses which is working with other oil and gas and delivered about 60,000 tonnes of tonnes. This has signifi cantly extended from Noble and Transocean for its work companies active in the Caspian region. pipe rack modules, steel structures, The company repaired a total of 281 the yard’s capacity in providing docking on vessels Noble Leo Segerius and With CSC’s established track record, it is barges, pontoons and other pre- vessels, with the majority being tankers, services to most of the drilling units Falcon 100 respectively. BrasFELS also well placed to continue to meet the needs fabrication works to support the container ships and gas carriers. Repeat operating in the region. Other completed attained milestones of one million of customers in the region. Kashagan fi eld development. customers, including those with fl eet

Keppel Offshore & Marine Ltd Operations Review & Outlook 44 Report to Stakeholders 2011 45 OPERATIONS REVIEW & OUTLOOK

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1. Keppel Shipyard provided a full range arrangements, contributed more than the Safety Award by Seatrade. The yard of conversion services, including the fabrication of the topsides and turret 80% of Keppel Shipyard’s shiprepair also won the Lloyd’s List Asia Shipyard for FPSO Armada TGT1. turnover. This provided a stable volume of the Year Award and secured 10 Safety of repair work for the company, and Health Award Recognition for 2. CMA CGM Kailas was the fi rst container vessel to dock at Nakilat-Keppel Offshore & Marine. refl ecting the close relationships Projects (SHARP) for its major contracts. which Keppel Shipyard has built with its customers, founded on the reliable KEPPEL PHILIPPINES MARINE services it provides. In 2011, Keppel Philippines Marine’s shipyards in Batangas and Subic Beyond shiprepair, Keppel Shipyard maintained high productivity levels and completed seven FPSO/FSO conversions/ serviced a total of 147 vessels. modifi cations, one turret fabrication, one livestock carrier conversion, one derrick Key projects completed by Keppel lay barge completion and two drillship Batangas included the construction integration/completion projects. of crane barge Ratu Giok 1 and the conversion of tanker White Cattleya 09. Several new contracts were secured The yard also retrofi tted the Philippine in 2011. These included the conversion Navy’s vessel BRP Gregorio Del Pilar, and upgrade of six FPSO/FSO/ an ex-Hamilton class American naval FSUs from repeat customers Bumi ship. With the excellent work done Armada and SBM. Rubicon Offshore on Ratu Giok 1, Keppel Batangas was International also awarded a fast-track rewarded with repeat orders for coal fabrication and integration project for barges Ratu Giok 2 and Ratu Giok 3. an external turret mooring system. The highlight for Keppel Subic At year-end, the yard had nine Shipyard in 2011 was the delivery of FPSO/FSO/LNG FSU projects and one Princess Chloe, a RINA-classed non- pipelay vessel completion in various propelled open sea fl oating crane coal stages of work. transshipper barge. This is the third special purpose barge delivered. In recognition of its business and operational excellence, Keppel Shipyard Over the years, Keppel Batangas was conferred the Repair Yard Award and and Keppel Subic Shipyard have

Keppel Offshore & Marine Ltd 46 Report to Stakeholders 2011 VIETNAM’S FIRST TENDER RIG

Sealing a long-standing relationship with Second Minister for Home Affairs and Vietnam, Keppel FELS has delivered the Trade & Industry, together with Mr Le country’s fi rst semisubmersible drilling Duong Quang, Vietnam’s Vice Minister tender (SSDT) to PetroVietnam Drilling & of Industry and Trade, as well as Mr Chu Well Services Corp (PV Drilling). Ngoc Anh, Vietnam’s Vice Minister of Science and Technology. Built to Keppel’s award-winning KFELS SSDTTM3600E design, the rig is Keppel O&M has been actively involved customised to meet PetroVietnam’s with Vietnam since the 1980s. In 1988, requirements for high specifi cation rigs, Keppel FELS delivered Vietnam’s fi rst and is well-suited for offshore Vietnam’s drilling rig, a jackup rig, Tam Dao 1, for harsh environment. The rig is deployed Vietsovpetro, a Vietnam-Russian joint on a multi-year charter to PetroVietnam’s venture. More recently in 2007, Keppel Bien Dong Petroleum Operating Company. FELS built the fi rst modern jackup rig PV Drilling I, based on the KFELS B In 2009, this SSDT design was recognised Class design, for PV Drilling. PV Drilling by the Institution of Engineers Singapore subsequently awarded Keppel FELS two Mr Truong Tan Seng, President of the Socialist Republic of Vietnam (fi rst from left), for its eco-friendly features, which have other similar jackup rigs, which were visited Keppel FELS prior to the naming contributed signifi cantly to sustainable delivered in 2009. of PV Drilling V in 2011 to mark Vietnam’s long operations, as well as the safety and standing friendship with Keppel. well-being of the rig crew. Keppel Shipyard has also converted several FSO/FPSO vessels which The rig was named PV Drilling V at are currently operating in waters off Keppel FELS on 1 October 2011 in the Vietnam. This included one of Vietnam’s presence of Mr S Iswaran, Singapore’s largest FPSOs delivered in 2011 to Minister in Prime Minister’s Offi ce and PV Keez for the Chim Sao fi eld.

established a good track record in the cost controls and enhanced The yard also completed 43 repair coal transshipper sector, which led communication with customers. projects, including 19 LNG vessels, to the award of a number of projects fi ve container vessels, three tankers, for the newbuilding and conversion NAKILAT-KEPPEL OFFSHORE fi ve jackups and 10 support vessels. of coal barges during the year. Both & MARINE In addition, it undertook major works yards will continue to execute their Nakilat-Keppel Offshore & Marine for Nakilat-Damen Shipyard Qatar projects well and work hard to uphold (N-KOM) is a 43-ha world-class by fabricating the 6,000mt hull their competitive edge in the Philippine shipyard facility jointly developed by structure for the Load-Out Recovery marine industry. Keppel O&M and Qatar Gas Transport Barge Project. Company (Nakilat) in Qatar’s Ras Laffan ARAB HEAVY INDUSTRIES Industrial City. In its fi rst year of operation, Keppel O&M’s associate company N-KOM became compliant with the Arab Heavy Industries PJSC (AHI) 2011 was an important year where International Code for the Security in Ajman, United Arab Emirates, N-KOM established its track record and of Ships and Port Facilities (ISPS Code). received a consistent stream of reputation with a series of successful The yard also received certifi cation shiprepair work from repeat customers deliveries. LNG SIMAISMA, chartered from the American Society of in 2011. A total of 186 ships were by RASGAS, the second largest LNG Mechanical Engineers (ASME) repaired during the year. Signifi cant producer in the world, was the fi rst LNG as well as from the National Board projects completed include carrier drydocked in Qatar and the fi rst “R” Stamp, which qualify N-KOM Regina 250 and Rock 6. AHI also vessel to drydock at N-KOM. N-KOM to secure onshore work as well as undertook major steel renewal on was awarded a bonus by the vessel’s marine and offshore pressure vessel the legs of Emirates Provider, manager and operator, MARAN Gas fabrication and piping repair work. a jackup barge, and completed Maritime, for the successful delivery The yard is in the process of obtaining extensive repairs on the crane of this project ahead of schedule and accreditation from the American as well as overhaul of fi ve thrusters without incidents. Petroleum Institute (API). for tender barge Mermaid Siam. Other signifi cant projects clinched SPECIALISED SHIPBUILDING Amidst the intense competition by N-KOM during the year include KEPPEL SINGMARINE and reduced volume of shiprepair the repair, modifi cation and upgrading It was a busy year at Keppel Singmarine work due to ship owners’ cautious works for Gulf Drilling International’s with 13 vessels under construction. approach, AHI remains committed to offshore jack up rig, Al Doha, Three of these vessels were delivered deliver value to customers through and the conversion of Zikreet from a in 2011 and the yard achieved a good productivity improvements, stricter drilling rig to an accommodation rig. safety record for the year.

Operations Review & Outlook 47 OPERATIONS REVIEW & OUTLOOK

A signifi cant completion in 2011 KEPPEL SINGMARINE BRASIL was Global 1201, the second new- 1 2 The Keppel Singmarine Brasil yard generation derrick pipelay vessel, in Navegantes, Santa Catarina, which was delivered to Global Industries allows the Group to offer its ship design safely, on time and within budget. and construction expertise to help Keppel Singmarine also delivered satisfy demand for support vessels the coal transshipment barge Straits in Brazil. Focusing on the construction Venture and AHTS Seaways 20, to of offshore support vessels, Keppel Straits Corporation and Seaways Singmarine Brasil will complement International respectively. Keppel’s BrasFELS yard in offering a suite of solutions for Brazil’s offshore During the year, Keppel Singmarine oil and gas sector. secured 10 newbuild contracts, comprising a multi-purpose diving 2011 was a positive year for Keppel support construction vessel for SBM, Singmarine Brasil when it secured one container ship and three bulkers for a steady stream of work ahead of OK Tedi Mining, a coal transshipment its offi cial opening. The contracts barge for our repeat customer PT Indo comprised six 45-tonne bollard pull Straits and four tugboats for various azimuth stern drive harbour tugs owners. The yard is also working on for Smit Rebras Rebocadores do four jackup hulls with living quarters for Brasil S.A, and one electrically propelled sister company Keppel FELS. 4500 DWT platform supply vessel (PSV) from Guanabara Navegacao Ltda, the In view of the need to raise productivity ship owning arm of Keppel O&M. to mitigate the tight labour situation 3 4 The yard has already started on the in Singapore, Keppel Singmarine construction of the fi rst four tugs has implemented a number of and the PSV. facilities upgrade initiatives such as the extension of the quay, The fi rst phase of the modernisation enhancement of the existing panel and upgrading programme of the yard line and pipe shop as well as the is well underway with new equipment construction of a new panel line shop installed and construction of a new complementary to the existing one. 130m x 28m slipway, 90m wharf, heavy lift gantry crane and pipe shop KEPPEL NANTONG facility. The fi rst phase will be Keppel Nantong had a productive completed in 1Q 2012 and the second year with six deliveries of six 65-tonne phase of the yard development bollard pull ASD tugs to Keppel will commence in 2Q 2012. The yard Smit Towage and Maju Maritime. could complete an average of eight As at year-end, ongoing projects in newbuild vessels a year when it is the yard comprised a 5,000-tonne fully completed. heavy lift crane barge and a 12,000-tonne lifting capacity fl oating dock. 1. Located at the north-eastern tip of Qatar within the Ras Laffan Industrial City, N-KOM Keppel Nantong Heavy Industries is designed to carry out repair, conversion and construction activities for a range of marine was incorporated to undertake and offshore vessels and structures. construction of jackups and other heavy offshore fabrications at the 2. Seaways 20, an anchor handling tug supply vessel, is the third vessel delivered by Keppel newly acquired land adjacent to Singmarine to Seaways on schedule and Keppel Nantong Shipyard. Civil works without incidents. for the fi rst phase development has 3. Keppel Singmarine has delivered ROCKPIPER, commenced with the construction a new generation rock dumping fall pipe of a jetty, a 140m x 84m slipway, vessel, safely, on time and within budget to panel line fabrication shops, electrical Royal Boskalis Westminster N.V. substation, foundation for gantry 4. Keppel Nantong is building the 5,000-tonne cranes, workers quarters and other Asian Hercules III, which will be the world’s largest sheerleg crane vessel when completed related facilities. in 2013.

Keppel Offshore & Marine Ltd Operations Review & Outlook 48 Report to Stakeholders 2011 49 OPERATIONS REVIEW & OUTLOOK

BAKU SHIPYARD Caspian Sea, Baku Shipyard is expected to Keppel Nantong to build a heavy lift The new 52-ha shipbuilding and to contribute signifi cantly to meet sheerleg crane vessel, Asian Hercules shiprepair facility in Baku, Azerbaijan, the growing needs of the oil and gas III, which is scheduled to be completed is a joint venture between Keppel industry in the Caspian region. Spanning in 3Q 2013. When completed, this O&M, State Oil Company of Azerbaijan a 1,630-metre waterfront, the yard 5,000-tonne fl oating crane will be Republic (SOCAR) and Azerbaijan will be able to undertake 80 to 100 the largest and most versatile heavy Investment Company. repairs and conversions per year, and is sheerleg crane vessel of its kind in estimated to achieve an average annual the world. It will have enough power to Construction of the Baku Shipyard steel throughput of 25,000 tonnes when lift a weight equal to over 5,000 saloon commenced in the middle of 2011 and operating at full capacity. cars. With the weight of modules and the yard is expected to be operational other components increasing, Asian in 3Q 2013. The construction of various OTHER SERVICES Hercules III will be well placed to workshops, buildings and shipbuilding/ ASIAN LIFT meet the needs of the market for shiprepair berths are in progress Asian Lift provides specialised marine greater lifting capacity. with the relevant facilities including heavy-lift services with its fl eet of a 300-tonne gantry crane, 25-tonne sheerleg cranes. The company’s rich KEPPEL SMIT TOWAGE/ quay cranes and a ship transfer trolley experience and expertise cover various MAJU MARITIME system. When fully operational, the yard challenging projects including the lifting Collectively, Keppel Smit Towage will be able to undertake construction of FPSOs and offshore platform modules and Maju Maritime manage of a variety of vessels ranging from in various parts of the world, such as and operate a fl eet of 58 tugs, offshore support vessels to tankers, as Canada, Brazil, Europe, the Middle East, of which 20 are currently based in well as ship repairs and conversions. Sri Lanka, Hong Kong and China. Singapore, 13 under time charter and the remaining 25 operating Strategically located along the In 2011, a key highlight for the in various foreign ports. The tugs East-West energy corridor of the company was the award of a contract undertake harbour and ship towage

FIRST FPSO FOR OSX

Close collaboration between Keppel accorded dedicated and professional Shipyard and OSX on the FPSO OSX-1 services, and I am confi dent that it will project paved the way for fi rm relations be an asset to OGX and Brazil’s oil and between the two companies. At Keppel gas industry.” Shipyard for modifi cation and upgrading works, the FPSO is the fi rst vessel in Keppel Shipyard’s work scope on FPSO OSX’s fl eet. Chartered to OGX, FPSO OSX-1 includes fabricating, modifying OSX-1 is deployed in the Waimea fi eld and upgrading the topside process in the Campos Basin, offshore Brazil. modules. The yard had partnered sister company DPS (Bristol) Ltd to undertake Lady Sponsor Cristina Pinto named detailed engineering and procurement the vessel on 13 August 2011 in the work for the topside modules. presence of Mr Joao Ziccardi Navajas, Minister Counsellor at the Embassy of OSX had engaged BW Offshore for Brazil in Singapore, and Mr Reinaldo project management, engineering Belotti, Production Director of OGX. services and technical guidance services for this project. Previously named Keppel Shipyard completed the modifi cation Mr Carlos Bellot, Director of Nexus-1, the FPSO OSX-1 left the yard and upgrading of FPSO OSX-1 and was Engineering, Leasing and Operations in 3Q 2011. awarded the contract to convert FPSO OSX-2. of OSX, said, “FPSO OSX-1 is our fi rst unit, and was developed to meet OGX’s Keppel Shipyard was subsequently demand. With a strong track record in awarded another contract by OSX to FPSO projects, Keppel Shipyard is the convert FPSO OSX-2. choice yard for the modifi cation and upgrading of FPSO OSX-1. The unit was

Keppel Offshore & Marine Ltd 50 Report to Stakeholders 2011 activities as well as provide marine support to offshore projects and emergency situations.

Revenue from both harbour towage activities and the spot market sector improved signifi cantly in 2011, owing to the addition of nine new customers, increased orders from major shipping agencies and several offshore projects. The time charter segment remains stable with the addition of three new charters in Indonesia, Vietnam and Australia.

The joint venture in Brunei, Briny Marine Services Sdn Bhd, received a letter of commendation from Brunei Shell Petroleum for achieving one million man hours without LTI for the three tugs on charter to them. Kejora Enam, a tug belonging to our Malaysian joint venture, Kejora Resources Sdn Bhd, was also awarded the Smit Corporate Survey for the best tug in 2011.

REGENCY STEEL JAPAN Regency Steel Japan (RSJ) is a joint venture company between FELS Offshore Pte Ltd, Mitsui & Co. Ltd and Nippon Steel Corp. It specialises in the fabrication of heavy steel structures and is a solutions provider for heat treatment of high-end steel products.

The rack and chord fabrication business continues to contribute signifi cantly to the company’s revenue, which is supplemented by a domestic market for steel fabrication.

To meet the surge of jackup orders secured in 2011, RSJ invested in the upgrade of facilities. This includes the replacement of press machines and additions of welding machines, plasmas cutting machines and heavy-duty forklifts. The upgrading of the facilities was completed by the end of 2011 and will place the company in a good position to raise productivity levels and cost competitiveness in 2012.

The record new orders of jackups secured by Keppel FELS in 2011 meant increased demand for high-end steel products from Regency Steel Japan, a joint venture company of Keppel O&M.

Operations Review & Outlook 51 OPERATIONS REVIEW & OUTLOOK

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1. Keppel Shipyard partnered sister company KEPPEL NORWAY topside design and supply for both DPS (Bristol) to complete the modifi cation and upgrading of FPSO OSX-1, which is Over the years, Keppel Norway conversion and new build FPSOs, and deployed in the Waimea fi eld in Campos Basin supported the construction activities has built up a track record in FPSO offshore Brazil. within the Keppel O&M group. In upgrades with the completion of 2. Keppel Norway contributed to the successful 2011, the company contributed to the engineering for the upgrades of the delivery of Alpha Star, the second of two successful deliveries of the automation FPSO OSX-1, Berantai and BW Athena TM DSS 38 semisubmersibles built by Keppel and drive systems of Alpha Star, Rowan projects within 2011. FELS for Brazil’s Queiroz Galvão Óleo e Gás. Stavanger and Rowan Norway. In addition to the detailed engineering Moving forward, the company will be of topsides, DPS also completes pursuing opportunities in electrical fi eld development planning, concept and mechanical products, systems and screening and Front End Engineering services in the Norwegian Continental Design (FEED) work for oil companies Shelf as it aims to become a full-fl edged and FPSO operators. DPS operates from service yard. its main engineering centres in the UK, Singapore and India, and has generated DPS (BRISTOL) a portfolio of more than 200 patents DPS (Bristol) Ltd (DPS) is a UK-based from its R&D centres in the UK and USA. engineering design consultant and integrator of process technologies and production topsides. A subsidiary of Keppel O&M, DPS provides the basic and detailed engineering design and project management services necessary for executing upstream oil and gas projects in both offshore and onshore environments.

DPS remains one of the leading engineering companies in the design of FPSO topsides, having completed more than 400 man years of engineering during 2011. The company completes

Keppel Offshore & Marine Ltd 52 Report to Stakeholders 2011 Major Projects Delivered in 2011 Quarter Type Customer Shipyard OFFSHORE Newbuild jackups Rowan Stavanger 1Q KFELS N Class Rowan Companies Keppel FELS Rowan Norway 3Q KFELS N Class Rowan Companies Keppel FELS Rowan EXL IV 3Q LeTourneau Super 116E Rowan Companies Keppel AmFELS Newbuild semisubmersibles West Jaya 1Q SSDTTM3600E Seadrill Keppel FELS Alpha Star 1Q DSSTM38 QGOG Keppel FELS P-56 3Q Production semisubmersible Petrobras Keppel FELS Brasil ENSCO 8504 3Q ENSCO 8500 Series Ensco Keppel FELS PV Drilling V 4Q SSDTTM3600E PetroVietnam Keppel FELS MARINE FPSO/FSO conversions and upgrading FPSO Okha 2Q FPSO SBM Keppel Shipyard FPSO Lewek Emas 2Q FPSO Emas/PV Keez Keppel Shipyard FPSO Armada TGT1 3Q FPSO Bumi Armada Keppel Shipyard FPSO P58 3Q FPSO Petrobras Keppel Shipyard FSO Sepat 3Q FSO Bumi Armada Keppel Shipyard FPSO Aseng 3Q FPSO SBM Keppel Shipyard FPSO OSX-1 4Q FPSO OSX Keppel Shipyard SPECIALISED SHIPBUILDING Newbuild vessels Princess Chloe 1Q Barge P.T. Mitra Keppel Subic Shipyard Ratu Giok 1 1Q Barge P.T. Pelayaran Kartika Keppel Batangas Straits Venture 2Q Barge PT Indo Straits Keppel Singmarine KST 57 2Q Tug Keppel Smit Towage Keppel Nantong KST 58 2Q Tug Keppel Smit Towage Keppel Nantong KST 59 3Q Tug Keppel Smit Towage Keppel Nantong Maju 510 3Q Tug Maju Maritime Keppel Nantong GLOBAL 1201 4Q Derrick pipelay vessel Global Industries Keppel Singmarine Seaways 20 4Q AHTS Seaways Keppel Singmarine Maju 511 4Q Tug Keppel Smit Towage Keppel Nantong Maju 512 4Q Tug Keppel Smit Towage Keppel Nantong MAJOR UPGRADES/REPAIRS/OUTFITTINGS BGL-1 1Q Derrick barge upgrade Petrobras Keppel FELS Brasil Atlantic Star 1Q Semisubmersible repair QGOG Keppel FELS Brasil Falcon 2Q Semisubmersible repair Transocean Keppel FELS Brasil Ensco 7500 2Q Semisubmersible repair Ensco Keppel FELS Noble Bully 1 3Q Drillship outfi tting Noble Keppel Shipyard Scarabeo 9 3Q Semisubmersible completion Saipem Keppel FELS Magellan 3Q Jackup repair Transocean Keppel Verolme Jack Bates 3Q Semisubmersible repair Transocean Keppel FELS Ben Loyal 3Q Semisubmersible repair KCA Deutag Keppel AmFELS Pride Rio de Janeiro 3Q Semisubmersible repair Ensco Keppel FELS Brasil Maersk Resilient 3Q Jackup repair Maersk Keppel Verolme Maersk Reacher 3Q Jackup repair Maersk Keppel Verolme Noble Leo Segerius 4Q Drillship upgrade Noble Keppel FELS Brasil Ocean Yorktown 4Q Jackup repair Diamond Offshore Keppel AmFELS Dareen 4Q Livestock carrier conversion Hijazi & Ghosheh Group Keppel Shipyard

Operations Review & Outlook 53 OPERATIONS REVIEW & OUTLOOK

12 3

1. With record new orders in 2011, Keppel FELS’ INDUSTRY OUTLOOK growth are holding back recovery in the reaching 89.4 million bbl/d in 2012 and Capital estimates that half of the world’s statistics, about 60% of the world’s focus in 2012 is on executing the orders well with optimal productivity and innovation. MARKET REVIEW US. The Eurozone economy, weighed 90.9 million bbl/d in 2013, driven by jackup fl eet will be over 30 years old semisubmersibles are aged over 2011 was a year of uncertainties. down by the debt crisis, will see a population and economic growth from by 2015, even with the addition of 25 years. Spurred by the increasing 2. Keppel Shipyard had a good year in 2011 The global economy was impacted mild recession in 2012, based on the developing countries across the 150 new jackups. The Macondo incident E&P expenditure of oil companies and it will continue to work closely with long standing customers based on its by the European debt crisis, the credit forecast by the International Monetary Asia Pacifi c and Latin America. has contributed to the bifurcation in and the need to resume investments established track record. rating downgrades for major countries Fund (IMF). Emerging and developing the utilisation and dayrates between in deepwater drilling, recent dayrates including the US, the social unrest economies will also be affected due to Although the International Energy premium and commodity jackups. This of semisubmersibles have reached 3. Our BrasFELS yard in Brazil is seeking ways to enhance its operational effi ciencies to meet the in the Middle East and the tsunami the worsening external environment and Agency (IEA) has projected lower oil will result in a sustainable replacement over US$500,000 per day, with current demand for locally-built rigs in Brazil. in Japan. Notwithstanding the macro a weakening of internal demand. products demand growth in 2012, it cycle over the mid-term horizon. utilisation rate at around 90%. The headwinds, capital spending in the nonetheless anticipates global energy impending return to normalcy of oil and gas industry continued to Despite the muted economic outlook, demand to increase by 40% between With new discoveries being made drilling activities in the Gulf of Mexico increase in 2011. The sustained there is returning confi dence in the 2009 and 2035. Oil will continue to be in Northern Europe, specifi cally in will further tighten the demand for investments were driven mainly by global oil and gas industry. A survey the leading fuel in the energy mix, UK and Norway, an increased level deepwater rigs. strong oil prices averaging US$95 of some 350 oil and gas companies while demand for natural gas is of exploration activity is expected in per barrel in 2011, and the increased by Barclays Capital indicates that expected to experience the fastest this region in the coming years. The Spillover demand from Petrobras’ demand for high quality assets exploration and production (E&P) growth at 1.7% a year on average Avaldsnes/Aldous Major South discovery massive newbuilding programme post-Macondo. The aging global fl eet spending is expected to increase from 2009 to 2035. is estimated to contain gross contingent is expected to drive the offshore of jackups, with around 68% over 10% from US$544 billion in 2011 reserves of between 1.7 billion and deepwater market in the medium 25 years old, coupled with improving to US$598 billion in 2012, marking With the longer-term fundamentals 3.3 billion barrels of recoverable oil. term. Additionally, the emergence dayrates and utilisation rates, provided a record year for the industry. It is of the offshore and marine industry This makes the discovery one of the fi ve of more ultra-deepwater drilling impetus for rig owners to embark on forecast that E&P spending will remaining sound amidst the continuing largest ever made in the Norwegian programmes in new frontiers such rig replacement programmes for older grow in double digits annually from uncertainties in the global economy, Continental Shelf and the largest as West Africa, Australia and Southeast drilling units in the market. 2013 to 2015, potentially crossing Keppel O&M stands ready to ride on its exploration fi nd in the world in 2011. Asia will further support demand the US$800 billion mark in 2015. established track record and leverage growth for deepwater rigs. 2012 is expected to be another This would be double the level of its core competencies to meet the Offshore Deepwater Prospects challenging year. According to the E&P spending in 2009. growing demand for quality offshore and While demand for new jackups The deepwater segment, as a whole, United Nations, world economic growth marine solutions. picked up momentum, orders for is buttressed by the sound long-term is projected to slow further. In their World oil consumption grew by an semisubmersibles have been lacklustre fundamentals. Half of the discoveries 2012 World Economic Situation and estimated 1.0 million bbl/d in 2011 Offshore Shallow Water Prospects in recent years, compared to the period made in the last decade have been Prospect report, global growth for to 88.1 million bbl/d. The US Energy The pickup in enquiries for newbuild between 2004 and 2008. This is despite offshore and primarily in the deepwater 2012 is forecast at 2.6%, lower than Information Administration (EIA) jackups began in the last quarter of the age profi le of the global fl eet of regions. Oil service companies continue the 2.8% recorded for 2011. Persistent expects this growth to accelerate over 2010. Since then, some 60 jackups semisubmersibles being similar to to shift their E&P spending and high unemployment and low wage the next two years, with consumption have been ordered globally. Barclays that of jackups. According to industry activities towards deepwater projects,

Keppel Offshore & Marine Ltd Operations Review & Outlook 54 Report to Stakeholders 2011 55 OPERATIONS REVIEW & OUTLOOK

1 2

1. SEAFOX 5, the KFELS MPSEP offshore wind which offer greater potential in terms 35 units annually over the next fi ve turbine installation vessel, has secured a contract to be deployed in the German Sector of reserve volumes, productivity and years. 80% of these units are expected of the North Sea. profi tability. Barclays Capital foresees to be FPSOs, of which half will be that deepwater CAPEX spending could converted units. The FPSO market is 2. Keppel O&M invested in OWEC Tower, a leader in the design and engineering of offshore wind double within fi ve years. therefore expected to remain healthy, turbine jacket foundations. with FPSOs continuing to be the Looking ahead, the far-reaching preferred solution for production in implications of the Macondo incident deepwater fi elds. Just as the large are expected to further alter the offshore discoveries have resulted in a regulatory and operating climate of the rig construction boom, Barclays Capital global offshore and marine industry. expects that an FPSO upcycle is on The stricter regulatory environment the horizon, and this could double the has resulted in a strong focus on newer current worldwide fl eet. The cycle is drilling units with superior technical expected to kick in towards late 2012 and safety capabilities, which Keppel or 2013. According to IMA, the current O&M is well-poised to deliver. The order global FPSO fl eet stands at around 160, of a semisubmersible, built to Keppel with another 40 already on order. FELS’ proprietary DSSTM38E design, by Sete Brasil towards the end of 2011 Looking ahead, strength in this was a strong vote of confi dence in sector will largely be driven by Latin Keppel’s design, product capability and America, due to the developments in the key role of semisubmersibles in the offshore Brazil and its pre-salt regions. deepwater segment. Petrobras’ updated business plan for 2011–2015 highlighted the requirement Production Units for another 50 production platforms Production vessels could form the next (both semisubmersibles and FPSOs). wave of orders following the drilling rig Other regions such as South East Asia replacement cycle. and West Africa also have signifi cant potential production fl oater projects. Based on projections by the International Maritime Associates Specialised Ships (IMA), orders for production fl oaters Overbuilding in the specialised could average between 25 and shipbuilding sector has caused

Keppel Offshore & Marine Ltd 56 Report to Stakeholders 2011 ROCK SOLID PERFORMANCE

Keppel Singmarine celebrated the maritime infrastructure and maritime completion of its fi rst new-generation services sectors.” rock dumping fall pipe vessel, ROCKPIPER, for Dutch dredging and Rock dumping fall pipe vessels are marine contractor Royal Boskalis capable of depositing large amounts Westminster N.V. (Boskalis). of rocks in deep waters with great precision to protect and stabilise cables, A christening ceremony for ROCKPIPER and oil and gas pipelines on the seabed. was held on 28 January 2012 at Keppel ROCKPIPER has a carrying capacity for Singmarine, and the vessel was named 24,000 tonnes of rock and is equipped to by Lady Sponsor, Mrs Else Buijs, carry out precise rock depositing works Company Secretary of Boskalis. at water depths of more than 1,000m. Equipped with dynamic control, the Mr Theo Baartmans, member of the vessel is able to navigate a specifi c path Board of Management, Boskalis, while lowering rocks through a fall pipe commented at the christening at a controlled rate. ceremony, “We have a long-standing Keppel Singmarine delivered ROCKPIPER, a new generation rock dumping fall pipe relationship with Keppel and are Keppel Singmarine was awarded vessel safely and within budget to Royal familiar with its quality of work. Keppel a S$25,000 bonus from Boskalis Boskalis Westminster N.V. Singmarine is well known for its strong for achieving zero incidents in the expertise in handling sophisticated construction of the 159 metre-long vessels, especially those equipped double-hull vessel. Keppel’s relationship with diesel electric drives and dynamic with Boskalis dates back more than a positioning capabilities. The ROCKPIPER decade, with the successful deliveries is an important addition to our fl eet as of various shiprepair, jumboisation and we expand our foothold in the dredging, upgrading projects.

downward pressure on charter rates target of 40 GW to be installed by 2020 took a stake in OWEC Tower, a Norwegian over the past two years. However, with and 150 GW by 2030 for offshore wind company which is a leader in the design the growing global rig fl eet requiring power, up from the 2.9 GW as at end and engineering of offshore wind more support services, and replacement 2010. Investments in offshore wind turbine jacket foundations. demand from an aging offshore support farms in Europe alone are projected at vessel (OSV) fl eet, the sector could €209 billion from 2010 to 2020. In the longer run, Keppel O&M aims to improve in the near future. Changing broaden the value chain of services that customer requirements, stricter The offshore wind industry in Europe is it offers to the offshore wind industry, operating environments and regulatory set to get a further boost from the particularly in Europe. frameworks are further driving £3 billion Green Investment Bank set demand for OSV innovations to improve up by the UK Government. The bank operational effi ciency and safety. is expected to place a major focus on offshore wind. With this latest Signifi cant demand for newbuild development, the offshore wind power OSVs should arise from the Prorefam industry in Europe may grow at an programme where Petrobras seeks accelerated pace. to increase its supply and specialised vessels to 568 units by 2020, from Keppel O&M started to offer solutions the current 287 units. This includes to the offshore wind industry in 2010. the requirement of another 88 supply Currently, Keppel FELS is building a vessels by 2014. multi-purpose self-elevating platform (MPSEP) offshore wind turbine NEW GROWTH AREA installation vessel, known as SEAFOX 5, Offshore wind continues to gain for the German sector of the North Sea. momentum in the global arena Owned and managed with the Seafox as a renewable source of energy, Group, the vessel is on track to be providing healthy market potential completed in the second half of 2012. for new designs and solutions for Keppel Verolme, our yard in the offshore wind farms. Netherlands, is constructing a 400 MW transformer platform for the German Europe is currently the world leader offshore wind sector. With the aim of in offshore wind energy. The European getting a slice of the offshore wind Wind Energy Association has set a foundation business, Keppel recently

Operations Review & Outlook 57 TECHNOLOGY & INNOVATION

Our technological innovations aim to address the longer-term needs of our customers as well as the more immediate enhancement of prevailing offshore and marine solutions.

1

As the exploration of oil and gas MTD 3265T tugboat and MTD 13028 We continue to work closely with our reserves moves to less hospitable FSO-IC ice-class Floating Storage and customers on their requirements terrains and becomes more complex, Offl oading vessel, among others. and to deliver to them solutions technological capability is a key which are designed for safe and differentiator in the ability to stay We have the in-house expertise and sustainable operations. ahead. Harvesting hydrocarbons in fl exibility to further adapt these designs these harsh environments is neither to incorporate advancements in ULTRA-DEEP FRONTIERS easy nor cheap. Operators and oil technology, as well as to suit the various The drawdown of global oil and gas services companies are looking operating environments. In response reserves has driven the search for for providers to deliver innovative to the industry’s diverse needs, we are hydrocarbons further into the ultra- solutions with quality, on time, tapping deep into our core competencies deep realms of Brazil, Gulf of Mexico, within budget and safely. and harnessing the synergy of our four West Africa and North Sea. technology arms to create value-added As a global leader in our chosen solutions for new offshore frontiers. UPCOMING INDUSTRY WORKHORSE: business segments, Keppel Offshore DSSTM38E SEMI & Marine (Keppel O&M) constantly To continually strengthen our design In December 2011, the order of a seeks to adapt and innovate to address capabilities, we also listen closely semisubmersible rig built to these needs and challenges. Our aim is and carefully to our customers and Keppel FELS’ proven sixth generation to conceive and bring viable solutions work with their needs. The Macondo deepwater DSSTM38E design by to the market promptly. oil spill incident in the US Gulf of Sete Brasil was a strong vote of Mexico has signifi cantly sharpened confi dence in Keppel’s design and Our innovations include our KFELS B the industry’s focus on newer drilling product capability, as well as the strength Class jackups, KFELS N Class harsh units with superior technical and of the semisubmersible in the deepwater environment jackups, DSSTM series safety capabilities. This has resulted segment. With improved capability of deepwater rigs, KFELS SSDTTM in increased demand for customised and operability, the rig is suited to the semisubmersible drilling tenders, rigs which will improve cost effi ciencies. stringent requirements of the deepwater

Keppel Offshore & Marine Ltd 58 Report to Stakeholders 2011 2

3

1. Keppel O&M pushes technology frontiers by developing cutting-edge technologies to meet future market needs.

2. Well suited for offshore Brazil, the DSS™38E is an enhancement of the design of Keppel’s fi rst two drilling rigs built for Brazil, Gold Star and Alpha Star, which are successfully operating in offshore Brazil.

3. Named Floatel Victory, this innovative SSAUTM4000NG fl oatel design features the latest technology such as Dynamic Positioning (DP) 3 capability and enhanced station- keeping.

Technology & Innovation 59 TECHNOLOGY & INNOVATION

“Golden Triangle” region, comprising These two designs were developed Equipped with Dynamic Positioning Brazil, Africa and the Gulf of Mexico. based on the successful DSSTM20, (DP) 3 capability with operating DSSTM21, DSSTM38 and DSSTM51 conditions up to Beaufort10, these two An innovative and cost-effective design, semisubmersible designs, and benefi ted harsh environment semisubmersibles the DSSTM38E is rated to drill to depths from the wealth of data gathered from have winterised features such as of 10,000 metres below the rotary table various model test verifi cations. derrick cladding and machinery space in 3,000 metres water depth. Scheduled heating and have accommodation for delivery in 4Q 2015, the rig is DSS™51HE has an operational facilities to house 200 men. With intended to support the exploration of displacement of 52,000 metric tonnes enhanced safety and environmental Brazil’s estimated 50 billion barrels and a high variable deck load of features, they aim to provide maximised of deep-sea oil and gas reserves. 6,000 metric tonnes, while DSSTM60HE uptime and drilling effi ciency and has an operational displacement of around optimum working conditions. HARSH ENVIRONMENT 61,000 metric tonnes and a higher SEMISUBMERSIBLES variable deck load of 7,500 metric tonnes. ACCOMMODATION SOLUTIONS The need for high-specifi cation harsh The two new rigs have superior motion FOR HARSH WATERS environment semisubmersibles to characteristics and are designed with Apart from drilling rigs, DTG has support exploration and production drilling equipment suitable for well also developed an enhanced harsh work in the North Sea deepwater region work-over intervention, exploration drilling environment accommodation gave our Deepwater Technology Group and development drilling. They are capable semisubmersible to support exploration (DTG) and its partner, Marine Structure of operating in water depth of up to and production work in the North Sea Consultants (MSC), strong impetus to 7,500 feet and can drill up to 30,000 feet deepwater region. This innovative develop the sixth generation DSSTM51HE from the rotary table, for year-round SSAUTM4000NG design features the and DSSTM60HE semisubmersibles for operations. The rigs are also provided latest technology such as DP3 capability worldwide operations, in particular the with self-contained mooring of up to and enhanced station-keeping. It is North Sea environment. 500 metres water depth for the North Sea. capable of operating alongside fi xed

TECHNOLOGY DEVELOPMENT STRATEGY

Our technology innovation efforts are Construction Deepwater spearheaded by four divisions, namely: Process Rig Design Technology – Keppel Offshore & Marine Jackup Design Technology Centre (KOMtech) hn focuses on developing offshore Tec olog ine y and marine competencies r D Ship Design a ev and conducting R&D into new Project & IT M e Technology l technologies and processes & o e p r m Critical o PROCESS COMMERCIAL e Equipment – Offshore Technology Development h n s IMPROVEMENT VIABILITY Development (OTD) specialises in jackup rigs and f t

f

S

O

their critical components t

r

l KNOWLEDGE CUSTOMER

a

e

BUILDING NEEDS t

p

– Deepwater Technology Group (DTG) e

p g

e

specialises in semisubmersibles y Specialised K Drilling & and other fl oating structures Capability/Skills Production Development Technology – Marine Technology Development & Acquisition (MTD) specialises in Offshore Support Vessels and tugboats Technology Rig Systems Foresight

Keppel Offshore & Marine Ltd 60 Report to Stakeholders 2011 1 2

1. With enhanced safety and environmental platforms, fl oating platforms and Brazil’s national oil company, Petrobras, features, the sixth generation DSSTM51HE semisubmersible aims to provide Floating Production Storage and has unveiled a strategic plan where maximised uptime and drilling effi ciency Offl oading (FPSO) vessels, with it will require 100 Brazilian-built and optimum working conditions for the a full complement of deck cranes offshore support vessels by 2020. North Sea environments. and fi refi ghting capabilities. This is to facilitate the exploration and 2. MTD has developed a 4,500 dwt PSV to cater development of the deepwater pre-salt to the Brazilian Continental Shelf. The design has secured a contract fi elds in the Santos Basin. from Floatel International (Floatel). Named Floatel Victory, it has been To meet this demand, our Marine chartered by BP Exploration Operating Technology Development (MTD) Company Limited for work in offshore has developed designs for offshore UK. Scheduled to be delivered in support vessels catering to the February 2014, Floatel Victory marks Brazilian Continental Shelf. The designs Keppel FELS’ third accommodation are MTD 9045-DE, a 4,500-deadweight semisubmersible project with Floatel, tonne PSV, and MTD 80210A, an after the delivery of Floatel Reliance and 18,000-horsepower Anchor Handling Floatel Superior in 2010. Tug & Supply (AHTS) Vessel capable of bollard pull in excess of 210 tonnes. Equipped with state-of-the-art accommodation and recreational Equipped with a diesel-electric facilities, the SSAUTM4000NG provides propulsion system and DP 2, increased comfort for the 500 persons MTD 9045-DE PSV is well-suited it can accommodate in one-man to operate in a variety of offshore and two-man cabins. It meets the conditions. Its internal tanks stringent UK HSE requirements to work arrangement and systems are in the UK sector of the North Sea as designed to function as a fl uid carrier well as the Gulf of Mexico, Brazil and (Fluideer) – suited for carrying oil-based Western Australia. and water-based mud, N-Paraffi n brine, drilling brine and dry bulk – or diesel POWERFUL OFFSHORE SUPPORT oil carrier (Oileer). As the Brazilian offshore energy market grows, it will require an increasing As for the MTD 80210A, it is a large- number of offshore support vessels. sized AHTS vessel with a deadweight

Technology & Innovation 61 TECHNOLOGY & INNOVATION

1

1. The fi rst-of-class ice-worthy jackup capacity of 3,500 metric tonnes. Its post-laid cable inspection. Therefore, development drilling unit, jointly designed by Keppel and ConocoPhillips, will operate tanks are designed to carry drilling it is not possible for a single cable in one of the harshest marine frontiers, brine and marine gas oil. laying vessel to perform all of the the Arctic Seas. abovementioned tasks, and they are 2. Technology Review is a journal published This vessel design is distinct for its usually supported by other vessels annually by KOMtech as a record and sharing large array of deck machineries, to perform their cable laying jobs. of its research efforts. including double drums main towing/ These have in turn resulted in longer anchor handling winch, double drums delays and higher costs incurred secondary towing winch and four large for companies. storage reels. They have been arranged for operational effi ciency and to meet To address this issue, Keppel Offshore stringent deepwater anchor handling & Marine Technology Centre, or and towing requirements. KOMtech in short, is developing two types of dedicated cable laying vessels INNOVATIVE WIND SOLUTIONS (CLV) designs – in-fi eld CLV and Offshore wind farms are fast gaining export CLV for future offshore wind momentum in the global arena as a farm projects. An in-fi eld CLV lays renewable source of energy in terms cables between the wind turbines of turbine size and capacity. As wind and substations whereas an export farms move into deeper waters, there CLV lays cables between substations is demand for larger scale and more and shore facilities. complex networks of subsea power cables to generate electricity for delivery The hull and marine equipment to land-based substations. of KOMtech’s CLVs are specially designed for cable laying capabilities. Currently, there are issues about Their key features include better existing cable laying vessels not being manoeuvrability and stability to work able to lay underwater communication in specifi ed environmental conditions, cable networks properly and effi ciently. a bigger deck space to accommodate all This is because offshore power cable the necessary cable laying equipment laying operations involve multi-functional and a larger cable carousel to carry tasks, which include route planning, subsea power cables required for a cable laying, seabed trenching and wind farm project.

Keppel Offshore & Marine Ltd 62 Report to Stakeholders 2011 GLOBAL ENGINEERING HUB

The activities of our engineering offi ces Pool of Engineering Knowledge in Singapore, Bulgaria, Mumbai and shared across Keppel O&M Shenzhen are seamlessly integrated through an advanced web-based environment offering 3D design tools and data management functions.

The state-of-the-art Smartmarine Global Application Engineering Support Helpdesk to yards 3D technology allows our engineers in Singapore to review designs and drawings carried out by the other offi ces and vice-versa. Drawings are automatically extracted after the engineers have reviewed and made Keppel FELS changes. This enhances design Engineering Hub accuracy, speeds up communication and prevents expensive and unnecessary revisions.

This system enables our engineering Centralised Engineering Centralised Project centres operating in different time zones Data Control Execution & Control to work on projects with high effi ciency, round-the-clock. The lessons learnt can also be shared almost instantaneously across borders.

KOMtech’s CLVs are also equipped In leveraging the combined expertise, 2 with bollard pull capacity to tow a cable resources and research fi ndings of laying device as well as conveyor belts Keppel O&M and ConocoPhillips, for smooth running of cable and to both parties aim to achieve signifi cant prevent cable damage. In addition, the breakthroughs in this joint project for unique arrangements for cable load-out Arctic development drilling. of these two vessels also ensure the smooth laying of power cables in TECHNOLOGY REVIEW 2012 a simple and safe way. Since its inception in 2007, KOMtech has been providing technology foresight ICE-WORTHY ARCTIC DRILLING UNIT into alternative energy applications as In a concrete step forward, KOMtech well as developing designs, systems and is collaborating with ConocoPhillips critical equipment for rigs and ships. to design a fi rst-of-class ice-worthy jackup development drilling unit to Each year, a good sampling of the operate in one of the harshest marine vast research work by KOMtech is frontiers, the Arctic Seas. showcased in its Technology Review publication. For the 2012 edition, This jackup unit will have dual cantilevers the journal focuses on the trends to maximise drilling operations within of jacket substructures for offshore specifi c time windows. The rig is capable wind turbines, hose transfer handling of operating in a self-sustained manner system for Liquefi ed Natural Gas for 14 days and is equipped with a hull (LNG) offl oading and the wet scrubbing that is designed for towing in ice. It is also process for marine emission control. able to resist impacts from multi-year ice fl oes and ridges as well as withstand level Prior issues of the Review have received of ice sheds impinging up to its design substantial interest from the offshore thickness. This joint design project is and marine industry, which includes expected to be completed by end-2013. our customers, professional institutions and academia. Several of KOMtech’s The features of this jackup unit make papers have also been presented at it a cost-effective and promising major offshore and marine conferences drilling solution for the Arctic Offshore. and seminars.

Technology & Innovation 63 TECHNOLOGY & INNOVATION

5 Kogalym 6 West Callisto 4 KST 59 3 Yuri Korchargin

2 Raissa

1 Varandey & Toboy

9 ETLP (up to 6,000 ft) 8 FPSO 6 Jackup Rig 7 Fixed Platform (>4,000 ft) 1 (up to 500 ft) (100 – 1,300 ft) Icebreaker 5 4 Harbour AHTS Tug

3 Ice-class FSO 2 Submersible (<100 ft) (<30 ft)

1 Icebreaker 3 Ice-class Floating Storage and 4 Harbour Tug 6 Jackup Rig 7 Fixed Platform 9 Extended Tension – A support vessel that Offl oading (FSO) Vessel – A small and powerful boat which (up to 500 ft) (100 – 1,300 ft) Leg Platform (ETLP) forges passages through (<100 ft) assists ships when docking, – A self-elevating mobile drilling – A platform that provides (up to 6,000 ft) icy waters for oil tankers – An ice-resistant vessel tying up to the piers and during unit that stands on its legs on accommodation facilities – A vertically moored fl oating that receives crude oil from departure the seabed during operation structure which is used for the 2 Submersible a fi xed platform and offl oads – KFELS MOD VI 8 Floating Production offshore production of oil or gas (<30 ft) it to shuttle tankers 5 Anchor Handling Tug/ – KFELS A Class Storage and Offl oading (FPSO) – A mobile unit which sits entirely Supply Vessel (AHTS) – KFELS Super A Class Facility on the seabed during operation – An offshore support vessel – KFELS B Class (>4,000 ft) equipped for emergency – KFELS Super B Class – A ship-shaped production facility stand-by/rescue, oil recovery – KFELS C Class used for the processing and and fi re fi ghting – KFELS G Class storage of oil or gas – KFELS N Class 8 FPSO Armada Perdana 9 Magnolia

11 PV Drilling V

12 Floatel Superior

13 Gold Star

14 P-56

10 SPAR (up to 8,000 ft) 11 SSDT (up to 8,000 ft) 12 Semisubmersible Accommodation Unit 13 Semisubmersible (up to 8,000 ft) Drilling Rig (up to 10,000 ft)

14 Semisubmersible FPU (up to 10,000 ft)

15 Drillship (up to 12,000 ft)

10 SPAR 11 Semisubmersible 12 Semisubmersible Accommodation 13 Semisubmersible 14 Semisubmersible 15 Drillship (up to 8,000 ft) Drilling Tender (SSDT) Unit Drilling Rig Floating Production Unit (FPU) (up to 12,000 ft) – A large cylindrical unit which (up to 8,000 ft) (up to 8,000 ft) (up to 10,000 ft) (up to 10,000 ft) – A compact and highly supports a rig platform, and – A fl oater that operates alongside – A fl oating unit that provides – A fl oating unit which can – A fl oating platform used effi cient unit with equipment anchors it to the seafl oor using SPARs and Tension Leg accommodation for crew perform drilling operations to produce oil and gas suitable for well workover cables and chains Platforms, and is able to – SSAU™3600 at water depths of up to 10,000 ft in deepsea and exploration drilling maintain station keeping in – DSS™20NS – DSS™20 – DeepDraft Semi – DrillDeep DS12000 water depths of up to 8,000 ft – SSAU™4000NG – DSS™38 – SSDT™3600E – DSS™51 – DSS™38E – DSS™51HE – DSS™60HE Sustainability Report

Our drive for excellence refl ects our commitment to operate our business in a sustainable and socially responsible manner, to promote the interests of people and to protect the environment.

Keppel Offshore & Marine Ltd 64 Report to Stakeholders 2011 Sustaining Growth

PAGE 66–69 Our drive for business excellence is underpinned by an unwavering focus on Safety, Health and Environment, meticulous project management as well as prudent risk management.

Through an ongoing process of optimising resources and increasing productivity, we continue to deliver innovative projects with strong value offerings and hallmark quality to create value for customers worldwide.

Empowering Lives

PAGE 70–77 People are the cornerstone of our business. As an employer of choice, we are committed to grow and nurture our talent pool through continuous training and development to help our people reach their full potential.

We seek to develop a formidable and results-driven workforce with strong leaders imbued with our core values to take the company into the future.

Nurturing Communities

PAGE 78–85 As a global citizen, we aim to give back to communities wherever we operate in a variety of areas spanning knowledge building and education, social development and environmental protection.

We engage employees in contributing actively as change agents to effect improvement in their surroundings and in the lives of those around them.

Sustainability Report 65 Sustaining Growth

Productivity, Quality and Eco- consciousness Through productivity, quality improvements and eco-friendly measures, we sustain our competitiveness.

Keppel O&M garnered double accolades at Lloyd’s List Awards, Asia 2011 – Keppel Shipyard received the Shipyard of the Year Award while Keppel FELS received the Safety Award.

Keppel Offshore & Marine (Keppel O&M) and assess its workers’ workmanship. RAISING PRODUCTIVITY continues to set itself apart from its Rewards are given to exemplary Keppel O&M’s Productivity Improvement competition by ensuring high levels of workers. Moreover, workers Steering Committee (PISC) reviews and effi ciency and quality in all its operations. who consistently produce quality evaluates the Group’s operations as well work are recognised at Keppel as synergises its productivity efforts. MEETING QUALITY BENCHMARKS Shipyard’s annual Quality The Group’s management systems Plus Day ceremony. Chaired by Mr Chow Yew Yuen, COO and processes meet industry of Keppel O&M, PISC has stimulated and global standards for high Applying manufacturing methodology improvements to processes and the performing companies. to its rigbuilding operations, in dissemination of these practices across 2008 Keppel FELS became the fi rst the Keppel O&M yards worldwide. During 2011, SPRING Singapore, Singaporean company to receive the Singapore’s national body for enterprise Manufacturing Excellence Award At the business unit-level, Keppel development, renewed Keppel FELS’ (MAXA), which is accorded to Singapore- FELS’ Quality and Productivity Singapore Quality Class (SQC) STAR based companies that have achieved Improvement Teams (QPIT), meet Certifi cation and Keppel Shipyard’s SQC world-class manufacturing standards. monthly with Mr Wong Kok Seng, Certifi cation – these certifi cates indicate Sustaining operational excellence, Managing Director of Keppel FELS, overall business excellence. Keppel FELS continues to be engaged to review each department’s Key by the MAXA community to share its Performance Indicators (KPI) and In addition, for providing customers lean manufacturing processes and discuss areas for improvement. QPITs with prompt and high-quality services project management capabilities. comprise Executive Directors, General consistently, Keppel Shipyard was Indeed, in 2011, the company was Managers and Sections Heads. lauded with the Shipyard of the Year invited to host a tour of its facilities Award at the Lloyd’s List Awards, Asia for MAXA participants for the third QPITs seek to help Keppel FELS 2011, and the Repair Yard Award at consecutive year. achieve the next leap in productivity Seatrade Asia Awards 2011. levels. The teams focus on areas such To further enhance its quality assurance as work redesign and skills upgrading Keppel Shipyard’s high quality and control practices, Keppel FELS as well as infrastructure, systems and standards are underpinned by a engaged in knowledge-sharing and equipment enhancements. range of quality-enhancing initiatives benchmarking activities with Abbott which it undertakes throughout Manufacturing Singapore and Defence For example, greater automation has the year. The yard conducts quality Science and Technology Agency (DSTA) been introduced for the fabrication of walkthroughs regularly to monitor in 2011. steel panels and pipes. In addition,

Keppel Offshore & Marine Ltd 66 Report to Stakeholders 2011 QPITs have spearheaded upgrades (iQC) competitions where teams share is treated wastewater that has been in the Group’s software systems their ideas for reducing construction purifi ed through advanced technologies and enhancements to supply chain time and costs or improving quality. such that it is potable and fi t for management systems; all these help to Teams with exceptional ideas are then industry use. improve work fl ow and reduce wastage. shortlisted to showcase their solutions at the National iQC Convention. During the year, we recycled about Similarly, Keppel Shipyard’s semi- 626,000 tonnes of waste comprising automated pipe shops have helped to At the 2011 convention, Keppel ferrous scrap metals and grit, while improve productivity and ensure quality FELS garnered four Star Awards and disposing and incinerating about in pipe fabrication. Keppel Shipyard eight Gold Awards. 116,000 tonnes of non-recyclable continued to install new equipment at waste. At Keppel Shipyard, ferrous these pipe shops over the last year, Keppel O&M also actively participates scrap metals are separated from further increasing productivity. Indeed, in knowledge exchange platforms to general waste and sold to licensed as a result of these enhancements, stimulate ideas for innovation. recycling companies. one of its pipe shops was able to cut production man hours by 17% more Keppel FELS was asked to play Our yards continue to explore than it had targeted at the start of 2011. host to the participants of the engineering solutions and energy- International Exposition on Team effi cient processes to reduce emissions Over at Keppel Singmarine, it has Excellence (IETEX) Convention, while increasing productivity and quality. implemented a number of facility which was held at Resorts World We are also cultivating behavioural upgrade initiatives to increase Sentosa in June 2011. Keppel FELS changes through education and training productivity, such as the extension of discussed with the IETEX delegates to increase awareness and encourage the quay, enhancement of the existing the challenges and solutions for the conservation of resources. panel line and pipe shop as well as the developing a strong innovation culture. construction of a new panel line shop With the exception of NEWater, to complement the existing one. For its efforts and achievements in all the fi gures provided above include sustaining innovation, Keppel FELS Keppel O&M’s Singapore and Meanwhile, employees at all levels also received the Innovation Class overseas subsidiaries. are empowered with the knowledge (I-Class) certifi cation from and skills to ensure that all operations SPRING Singapore. and processes are streamlined and effi cient. A Lean Practice Workshop PROTECTING THE ENVIRONMENT was conducted in 2011. The workshop We continue to look for ways to generate addressed topics such as how to energy savings through investment in identify and minimise wastage, analyse equipment and infrastructure. Through processes as well as design solutions investments in energy saving equipment for improvements. and infrastructure, Keppel O&M sees the total estimated energy saving of Widely-recognised for its productivity some 19,200 gigajoules (GJ) annually. enhancement measures, Keppel has often been invited to share them We retrofi tted energy-effi cient at industry and business platforms. lightings in the yards, plants and Mr Choo Chiau Beng, CEO of offi ces, and installed motion sensors Keppel Corporation and Chairman along corridors, toilets and areas with of Keppel O&M, provided details on less human traffi c. In 2011, we also the tenets of what productivity entails consumed about 61 million cubic at Keppel Group at the Building and metres of potable water and about Construction Authority’s (BCA) annual 720,000 cubic metres of NEWater. staff conference. Potable water is used for drinking, general washing and supplying to IGNITING INNOVATION vessels. NEWater on the other hand Innovation is a crucial means by which is used for testing purposes as well Keppel O&M drives improvements in as cleaning and hydro jetting marine productivity and quality. vessels and machinery.

Keppel FELS, Keppel Shipyard and NEWater is reclaimed water produced Keppel Singmarine all hold annual by and purchased from Singapore’s in-house Innovation and Quality Circles Public Utilities Board. Specifi cally, it

Sustaining Growth Productivity, Quality and Eco-consciousness 67 Sustaining Growth

ENTERPRISE RISK MANAGEMENT All investment proposals need to Business Keppel Offshore & Marine’s include an assessment of key factors (Keppel O&M) Enterprise Risk which could carry potential risks, such Management (ERM) framework as alignment with strategic objectives, Continuity provides a holistic and systematic operational controls, fi nancial viability, Robust risk and process for identifying, analysing and potential contingent liabilities, specifi c managing risks to better prepare the country laws and regulations, technical business continuity Group to respond to uncertainties and competency and available resources, for leverage new business opportunities the approving authority’s deliberation. management equip to maintain its competitive edge. The Board of Directors, assisted by the Risk-related policies and risk limits us to meet the Keppel O&M Audit Committee, is are subject to periodic reviews to ensure responsible for overseeing the risk that they continue to support business challenges in our management of the Group, where key objectives, address business risks dynamic global risks and the progress of signifi cant effectively and take into consideration projects are reviewed, monitored and the prevailing business climate, environment. discussed with the management. opportunity and risk appetite within Keppel O&M. As part of the Group’s risk management processes, signifi cant The types of risks which the Group risks associated with value drivers actively monitors include customer to achieve corporate strategies are default, fl uctuations of foreign identifi ed. Risks are assessed with currencies, potential credit tightening, regards to their impact on the Group’s cash fl ow management, unfavourable operations, fi nancial performance regulatory changes, labour shortages, and reputation. Mitigating actions are cost escalation, non-performance established and closely monitored. of suppliers and subcontractors,

Prudent business continuity management prepares us to meet the challenges and succeed in our dynamic global environment.

Keppel Offshore & Marine Ltd 68 Report to Stakeholders 2011 disruptions to supply chain and and subcontractors. This is achieved to mitigate threats with the aim of natural disasters, among others. through training and enforcement of resuming key business operations An occurrence of any of these risks safety standards at the work sites. within a pre-established targeted time may potentially result in project With guidance from the Board frame. Business units in Singapore delays and cost over-runs. Safety Committee of Keppel Corporation, and overseas have established specifi c Keppel O&M Group Safety Committee business continuity and crisis response Strong management commitment in exercises oversight of the effectiveness plans, which are continually reviewed driving Group-wide ERM systems and of its safety management system. and tested, to ensure effective response processes over the years has enabled to unforeseen events while minimising the Group to be better equipped CULTIVATING A RISK CENTRIC- operational disruptions. in managing risks in the dynamic CULTURE business environment, both locally and The Group continues to strengthen its To bolster crisis management internationally. Risk management is risk-centric culture through various competency within Keppel O&M, integrated into the day-to-day business initiatives. These include continuous crisis communications training for key operations to enable early risk detection education and regular communication spokespersons is conducted to prepare for proactive risk management. through various forums and in-house them to communicate effectively with publication on risk management-related the media and stakeholders, and to MANAGING PROJECT RISKS topics to raise awareness. Workshops familiarise them with possible scenarios For Keppel O&M, projects executed are organised to share good practices that may play out during a crisis. over an extended period of time form in project risk management and project a large part of the Group’s operations. post-mortem analysis, and regular In addition, during the year, oil pollution To help manage the risks throughout discussion forums are held on country simulation drills were conducted at our the duration of the projects, the Group risk issues. yards’ coastal line to test the response adopts a standardised risk assessment and readiness of the yards’ personnel and monitoring process, with The Group’s orientation programme to manage an oil spill. Evacuation drills adaptations to suit local environments. serves as a platform to communicate at buildings were carried out. Joint the ERM methodology and practices exercises were also conducted with the During the tendering stage, the to new employees. In addition, ERM Singapore Civil Defence Force to test tender team, comprising experts of workshops are conducted to help all the readiness in the event of a fi re, as different functions, identifi es and business units implement a systematic part of the annual Company Emergency evaluates key risks concerning the process in identifying key risks and Response Audit. customer’s expectations, technical mitigating plans. challenges, contractual liabilities, The different yards within the cost estimation, project cash fl ow, Risk management is one of the Group regularly conduct fi re and and resource availability. Potential KPIs incorporated into the annual evacuation drills on board rigs and risks are addressed extensively for performance appraisal of management vessels, together with the owners’ solutions to establish mitigating and senior staff to enhance risk representatives and our staff. Drills actions. The evaluation takes into ownership and accountability. Periodic are also held to test critical enterprise consideration whether the project risks country risk updates are circulated to systems and applications, and to are manageable within feasible means keep senior management informed of enable disaster recovery plans to be to meet the business objectives. the changes in the political and economic tested and reviewed to ensure that situations of the countries where the IT systems and applications can be At the execution stage, key risk areas Group operates in so that appropriate restored and resumed within the involving costing, scheduling, planning, mitigating actions can be taken. stipulated time-frame. engineering design, procurement, quality control, health, safety and BUSINESS CONTINUITY MANAGEMENT Post-mortem analyses are performed environment management are closely Business Continuity Management to refi ne action plans with the gaps monitored to ensure that pre-emptive (BCM) is part of the Group’s ERM identifi ed from the drills. All Business measures are taken and appropriately initiatives to address and manage Continuity Plans are reviewed, tested implemented. The aim is to ensure that potential threats and disruptions to and refi ned periodically to enhance the projects are executed and completed operations arising from events such as Group’s overall operational resilience. on time, within budget, with standards an epidemic outbreak, act of terrorism, of safety and quality that meet or natural calamities and damage to exceed contractual specifi cations. critical facilities.

The Group spares no effort in The BCM Committee oversees the inculcating safety awareness among all implementation of the Group’s BCM stakeholders, in particular employees programme and develops action plans

Sustaining Growth Business Continuity 69 Empowering Lives

People Development By developing and empowering our people, we have an effective workforce that delivers value to our customers worldwide.

Keppel O&M takes a holistic approach in promoting the safety, health and well-being of employees, and regularly rolls out activities that strengthen bonding and work-life balance.

At Keppel Offshore & Marine (Keppel Singapore, which recognises the practical investigation skills necessary O&M), all employees are guided by our company’s excellence in the area of to conduct thorough and credible eight core values of Can Do, Customer human capital. This certifi cation is investigations of incidents. Focus, Commitment to Health, Safety given to organisations which excel in and Environment (HSE), Accountability, fi ve people-related categories, namely, Striving for continuous improvement Integrity, Innovation and Learning, Leadership, Planning, Information, gives us an edge in an increasingly Global Mindset, People and Teamwork. People and Results. competitive landscape. To increase productivity and encourage innovation The overarching principle which NURTURING PEOPLE at the workplace, employees are binds our people together and makes Every year, Keppel O&M makes encouraged to attend the workshops us defi nitively Keppel is our pursuit signifi cant investments in the training which are conducted regularly. of excellence in everything we do. and development of its employees. We believe that a fi rm commitment In 2011, a total of $17.8 million was In 2011, we organised a key workshop to nurture and develop our people spent on the training of our global to inculcate the benefi ts of “Lean propels them to perform at their best in workforce of 30,500. Practice”. Participants were introduced achieving high standards and quality in to the fi ve lean practices and were our products and services. This is what Apart from skills upgrading, we also taught to identify the types of wastage, drives our holistic approach in fortifying dedicate considerable resources on how to minimise wastage, the use our human capital. continuous safety training for our of value stream map in analysing workforce. The Keppel O&M Group processes and identifying potential As a testimony to our strong Training Centre offers a comprehensive areas of improvement. commitment towards people range of safety training programmes, development, our CEO Mr Tong Chong including the Safety Core Competency Many current members of Keppel Heong was conferred the “Champion Training, Safety Promoter Training and O&M’s management team were of HR” award at the Singapore HRM Safety Leadership Training, among others. groomed through the management Awards 2012. This award is a recognition trainee scheme. Now into its 26th year, of the focus and emphasis of the In 2011, as part of Keppel Corporation’s the scheme continues to be an effective leadership at Keppel O&M in growing continuous effort to improve its overall way to develop a pipeline of young and our people resources. performance in the area of HSE, talented new recruits with the potential Det Norske Veritas (DNV) was engaged to take on various management In addition, for the second time, to conduct a professional investigation positions within the Group. Targeted Keppel FELS received the People and analysis technique course, which at fresh graduates, the scheme Developer certifi cation by Spring aims to equip participants with the provides comprehensive and

Keppel Offshore & Marine Ltd 70 Report to Stakeholders 2011 all-rounded training for participants. This programme, specifi cally tailored 1. Our eight core values are represented by icons symbolising productivity, In 2011, a total of 125 Management to meet the needs of Keppel O&M, unity and strength. Trainees were selected for the comprises four courses conducted programme, which saw them undergo over a year, with coaching and review modules comprising classroom sessions done after each course to training, experiential sharing, ensure the optimal transfer of on-the-job attachment and workshop knowledge to their work. skills training. The participants’ supervisors are The rigorous training provided in involved during the coaching sessions this two-year programme enables to show their full support for the the Management Trainees to better programme. Through this programme, understand and appreciate Keppel the new managers acquire knowledge O&M’s operational procedures and on team management and problem processes, and provides them with solving skills, among others, which exposure to the different functions enable them to become more within the Group, thereby giving them a effective managers. good head start in their careers with us. Keppel O&M employees also continue GROOMING LEADERS to benefi t from the training and As part of effective succession planning development at the Keppel Group to support the growth of Keppel O&M, level. Keppel College is Keppel Group’s we continue to actively identify high- fl agship educational initiative for potential employees and offer them leadership and executive development, opportunities to hone their skills to and its key programmes include the prepare them for future leadership Keppel Young Leaders Programme, roles. We adopt a structured approach Outward Bound School and Financial which gives us a ready pool of talent, Acumen for Non-Finance Managers. and ensures that these young leaders These programmes are designed to get the necessary development develop the management skills of our opportunities to be exposed and tested. future leaders.

As part of this approach, a new In an effort to be always prepared for programme known as “Leadership the unexpected, Keppel O&M’s senior Excellence for New Managers” management attended a one-day was launched in 2011 to hone the crisis communications workshop leadership skills of new managers. organised by Group Corporate

1 Manpower Distribution by Country 2011 (%) ™H^c\VedgZ )- ™6bZg^XVh '+ ™B^YYaZ:Vhi && ™:jgdeZ ' ™6h^V &( 30,500 IdiVa &%%

Empowering Lives People Development 71 Empowering Lives People Development

Communications. A total of three Recognising the reservoir of knowledge mentors to new employees. Besides workshops were conducted in 2011 by and experience embodied by our older helping them to assimilate into the experienced external consultants. This employees, we have been actively Keppel culture, older employees guide series of workshops aimed to impart re-hiring those who have reached new employees in all aspects of their and reinforce the appropriate skills retirement age, even prior to the career and personal development so that participants can effectively implementation of the Retirement such as communication and people communicate with the media in the and Re-employment Act by the management skills. By tapping on event of a crisis. Singapore Government in January 2012. the knowledge and experience of In Singapore, we rehired a total of these older colleagues, our younger RETAINING EXPERIENCE 85 employees who had reached employees can learn in a more effective We believe that the wealth of experience retirement age in 2011. Employees are way. At Keppel O&M, we ensure that of our long-serving and older employees usually re-hired on a contractual basis, the more experienced employees are is an invaluable resource to the with no change to their existing roles. equipped with the right mentoring company. As such, we take a proactive skills. Employees who are earmarked as stance in managing the needs of our If any of the older employees are not mentors are given ample opportunities older employees and workers to ensure able to continue in their current roles to attend workshops to hone their that we preserve this pool of experience due to health reasons, we will re-deploy coaching and mentoring skills. and knowledge within Keppel O&M. them to other more suitable roles. In the re-deployment of these older PROMOTING WORKPLACE WELLNESS Every year, Long Service Awards workers, we endeavour to balance Keppel O&M believes that a fi t and are presented to our long-serving the employees’ interests with the healthy workforce is important to the employees in recognition of their requirements of the company. productivity of our business in the long contributions. In 2011, a total of run. As part of our growth strategy, we 396 employees in Singapore received We are also keenly aware that older make substantial investments in the their awards. employees serve the crucial role of health and well-being of our workforce.

BONDING ALUMNI

The saying “Once a Keppelite, O&M, also shared his career and always a Keppelite” proved itself personal development in Keppel and well when retired Keppelites as well how the Group has evolved and grown as Keppelites who have ventured over the last 40 years. to other pastures convened at the inaugural Keppel O&M Alumni dinner “Our retirees and former Keppelites at the Refl ections at Keppel Bay show are not forgotten, and we intend to gallery on 26 July 2011. preserve our rich tradition and heritage. We hope you will help us impart the Mr David Chin, Chairman of the Keppel spirit to the new generation Pro-Tem Committee of the Keppel O&M of Keppelites through sharing your Alumni and former Marketing Manager experiences and mentoring them, of Keppel Shipyard, said, “There has and building on our solid foundation. been an intention to set up the They have much to learn and gain Keppel O&M Alumni for some time from your experience,” he said in his now. Keppel has given me many address to the Alumni members. fantastic years, and I think it is Keppelites, retired Keppelites and those who very important that we give back. Apart from this Alumni gathering, have ventured to other pastures, gathered at Tonight, we mark the beginning of Keppel O&M organised a get-together the inaugural Keppel O&M Alumni dinner to our combined efforts to capture and dinner for 71 retirees with senior reminisce and share their rich experiences. share our experience with a new management, HR managers and generation of Keppelites.” union representatives at the Singapore Recreation Club, where Mr Choo Chiau Beng, CEO of Keppel the retirees had a good time Corporation and Chairman of Keppel reminiscing about the past.

Keppel Offshore & Marine Ltd 72 Report to Stakeholders 2011 1

2

1. Keppel O&M offers a variety of opportunities for high potential employees to hone their skills and be developed for leadership positions.

2. The annual Keppel FELS HSE promotion campaign is a key part of the yard’s efforts to create a healthy workforce committed to safety.

Empowering Lives People Development 73 Empowering Lives People Development

We employ a combination of tools such as company policies, environmental intervention, and imparting lifestyle and personal health skills to ensure our employees stay healthy.

“Commitment to Health, Safety & Environment” is one of our core values, and we encourage our employees to take responsibility for their own health and well-being. One way which we aim to achieve this is through the promotion of our HSE policy to constantly remind employees to place health and safety as a priority. Keppel O&M also adheres to the Health Charter, which commits the company to take active steps in promoting HSE among our workforce.

At a more operational level, we started the Workplace Health Programmes, or WHP in short, and Keppel O&M’s management team plays an active role in supporting the implementation of this programme, which is spearheaded by a WHP Committee. With the full support of the leadership team, the various business units within Keppel O&M actively plan and implement initiatives under WHP and ensure that the programmes have active participation from all levels of the workforce.

An active participant of WHP, Keppel FELS has named every December as the Health Month, where a series of programmes are lined up to promote healthy living. The theme for 2011’s Health Month was “Eat Well. Live Well. Stay Healthy.” Some of the activities held include bazaars selling healthy food and fruits, health screening at the workplace, and lunchtime exercise classes such as fun aerobics and street jazz. The grand fi nale of the Health Month was ACTIVE DAY 2011, where over 2,000 Keppelites came together to exercise though an energetic workout led by fi tness instructors. Senior management of Keppel O&M also joined in.

More than 2,000 Keppelites worked up a hearty sweat at the annual Keppel FELS ACTIVE Day campaign to promote better health and wellness amongst employees.

Keppel Offshore & Marine Ltd 74 Report to Stakeholders 2011 At the Keppel O&M level, regular In the US, Keppel AmFELS, our yard 18,000 employees and their families health talks are organised. In addition, in Brownsville, Texas, has a Wellness had a fun outing and over $27,000 was we rolled out the Workplace Smoking Programme which includes a monthly raised for the Association for Persons Control Programme in May 2011. newsletter to all its employees, with Special Needs (APSN) and the This is an initiative started by providing them with information on Singapore Association of the Visually Singapore’s Health Promotion Board, ways to live healthily. The yard also Handicapped (SAVH). At our overseas targeted at employees of companies, has a well-equipped fi tness centre, yards, Keppel Batangas Shipyard which aims to discourage smoking comprising a gymnasium with sauna, organised a picnic for all employees at the workplace. Keppel FELS and indoor racquetball court, weight room, and their families, which provided a Keppel Shipyard participated in this outdoor basketball court and exercise good opportunity for bonding outside programme as part of their efforts videos available to all employees who of work. to ensure a healthy workforce and sign up as members. In conjunction with to increase work productivity. The a city-wide promotion, Keppel AmFELS PARTNERING OUR UNIONS programme comprises roadshows, organised a weight loss programme A key priority for Keppel O&M exhibitions, workshops and counselling and gave out prizes to the top three in ensuring a motivated and sessions for employees. employees who lost the most weight. productive workforce is the active engagement with our unions. Our workplace health programmes Keppel O&M organises events In 2011, we continued to maintain extend beyond the shores of Singapore. regularly as part of employee welfare. good relations with our unions Keppel Batangas Shipyard in the Activities in 2011 include a family day through regular dialogue sessions Philippines conducts regular health held at the Singapore Discovery Centre on a range of topics concerning the talks, and a free eye checkup for all on 23 October 2011, with Madam welfare of employees. its employees. In 2011, the shipyard Halimah Yacob, Minister of State, Ministry also organised a dengue fever of Community Development, Youth and A new dialogue session entitled awareness campaign. Sports, as the Guest of Honour. Around “Productivity Roadmap for the

LENDING A LISTENING EAR

24-HR Helpline Service Keppel O&M constantly seeks to One of the welfare offi cers, Dr Rezwana improve the welfare of its foreign Islam, is a general practitioner who 2 workers and cares not just for the received training in counselling as 4 -Hour Crisis Helpline 8100 0255 physical needs but also their part of her degree. She said, “Being Help is just a call away emotional needs. of the same nationality is a big help in building rapport and connecting with Mr Steven Lee, General Manager them, because for most Bangladeshis, of Keppel Housing, said, “The safety counselling is still a foreign concept.” and welfare of our foreign workers are paramount. This includes Another welfare offi cer, Yang Kun, their mental well-being, which we a psychology graduate from Hunan understand includes having to adjust Province in China, explained that Depressed? Anxious? Nervous?

Help is available. to a foreign country and being away language barriers are key challenges for We are here 24/7 to provide support and counseling. from their loved ones.” mainland Chinese working in Singapore. If you know someone who is feeling depressed or suicidal, please inform us immediately. He said, “A lot of them are from different Talk to somebody. We are here to listen. In line with this, Keppel Housing provinces in China, each with their own Call us @ 8100 0255 launched a counselling programme dialect. Sometimes they have diffi culty for the residents of its dormitories communicating among themselves, let in October 2011. The workers can alone in English.” now turn to three full-time welfare offi cers – a Bangladeshi, a Chinese By providing support and encouragement, Posters were put up at all dormitories to inform workers about the 24-hour counselling and an Indian national – when they the welfare offi cers ease the minds of the hotline service, as part of Keppel Housing’s need a listening ear. There is also foreign workers, enabling them to better new welfare initiatives to ensure residents’ a 24-hour counselling hotline. concentrate on their work. mental and emotional health are taken care of.

Empowering Lives People Development 75 Empowering Lives People Development

Marine Industry” was held during with a wide range of recreational the year, which helped to collate 1 2 amenities such as multi-purpose halls, useful feedback on the training needs gymnasiums, basketball courts and and concerns of Singapore’s marine computer facilities. industry. The dialogue session was jointly organised by the Various recreational activities Shipbuilding and Marine Engineering are organised regularly at these Employees’ Union (SMEEU), dormitories to encourage harmonious Singapore’s Workforce Development living and team bonding. These Agency (WDA), NTUC LearningHub include bazaars and safety roadshows and the Employment & Employability which adopt a fun, interactive and Institute (e2i). engaging format. To improve the mental and emotional health of our Apart from dialogue sessions, our foreign workers, Keppel Housing unions are actively involved in our introduced a counselling programme employee welfare activities. This is best in October 2011. demonstrated by the close involvement of union representatives in the planning Our management and Human and organisation of the Keppel O&M Resources departments visit the Family Day 2011. various dormitories regularly to gather feedback on ways to continually improve Our overseas business units are also the living conditions of the residents. focused on maintaining good industrial relations. Keppel Verolme, our yard in the Netherlands, renewed its collective agreement with its unions for another two years, while Caspian Shipyard continues to actively support its union in the organisation of events and activities for its workforce.

INTEGRATING OUR FOREIGN WORKERS As foreign workers form a sizable part of our workforce in Singapore, we are committed to support their smooth assimilation into their new living environment in Singapore. 3 4 Keppel O&M was the fi rst company in Singapore to provide highly- subsidised dormitories for our foreign workers, and we continue to improve the facilities in our dormitories to better meet the needs of our foreign workers. To date, we have developed and are managing fi ve dormitories – Acacia Lodge, Juniper Lodge, Lantana Lodge, Kian Teck Dormitory and Cassia@Penjuru.

Cassia@Penjuru, the fi fth dormitory, opened its doors in 2011 to cater 1. Besides bonding over food and games to the needs of our foreign workers. with families, Keppelites also showcased their talents at the Keppel O&M Family Day Our fi ve dedicated dormitories offer at the Singapore Discovery Centre on modern amenities such as canteens, 23 October 2011. minimarts, barber shops and wet 2, 3, 4. Keppel O&M is committed to improve markets that cater to the daily needs the facilities at its subsidised dormitories and well-being of the residents. for foreign workers, to enable them to assimilate smoothly into their living The dormitories are also equipped environment in Singapore.

Keppel Offshore & Marine Ltd Empowering Lives 76 Report to Stakeholders 2011 People Development 77 Nurturing Communities

In 2011, Keppel Offshore & Marine’s the young to the opportunities and Community (Keppel O&M) global network of challenges of our sector. yards and offi ces actively contributed to causes spanning knowledge GROWING THE KNOWLEDGE Development building and skills upgrading, social RESERVOIR We take active interest development, disaster relief and We continue to support various environmental protection. academic events which inspire research and ownership into and discussions on issues relating Recognising that everyone has a part to the offshore and marine industry. in sustaining the to play in helping to build a better tomorrow, we encourage Keppelites Through our long-term initiatives such development of our to organise and participate in a wide as Keppel Professorship at the National array of volunteer initiatives, nurturing University of Singapore (NUS), we help industry as well as the communities where Keppel is present. to jump-start research programmes communities in which and encourage the development of new FORTIFYING OUR INDUSTRY offshore technologies. we operate. Keppel O&M continues to share our insights and experiences at regional The Keppel Professorship also organises and international platforms, stimulating the Keppel Offshore & Marine Lecture ideas and innovation for better services series, which brings academics and and solutions. industry professionals together to share their insights and experiences. Professor We also take an active interest in Mark Randolph, a senior researcher at the cultivating talents for the industry. Centre for Offshore Foundation Systems Through talks at schools, educational at the University of Western Australia, tours of our facilities and internship spoke on pipeline geotechnics at the fi rst programmes, we open the eyes of of two public lectures held last year.

We encourage our employees to help build a better tomorrow by contributing their time and energy to meaningful causes.

Keppel Offshore & Marine Ltd 78 Report to Stakeholders 2011 The guest speaker of the second both held in Oslo, Keppel O&M outlined Mr Seow Tiang Keng (third from left), Senior Manager (Electrical and Instrumentation), lecture was Mr Seow Tiang Keng, the synergies between its network of Keppel FELS, shares insights from his 40 years Senior Manager (Electrical and yards worldwide as well as its extensive as an engineer in the offshore and marine industry Instrumentation), Keppel FELS. capabilities and solutions. with young minds at the 8th Keppel Offshore & Marine Lecture. Drawing on more than 40 years of experience in the industry, Mr Seow Meanwhile, through platforms such as shared his observations and insights the Brunei Energy Expo, Hanoi Oil and of the offshore and marine sector. Gas in Vietnam and Marine Science & Technology Conference (MARSTEC) Besides academic events, Keppel in Malaysia, Keppel O&M helped to O&M’s global network of yards also raise awareness of country-specifi c actively supported trade and industry oil and gas and offshore and marine conventions and exhibitions, by learning opportunities. Furthermore, the Group and sharing best practices and the gave strong support to the Latin Asia latest industry trends and development. Business Forum and Turkmenistan- Asia Oil and Gas; both events sought to Keppel O&M had a strong presence promote inter-regional trade. at the 25th Offshore Technology Conference (OTC) held in Houston, Keppel O&M also helped to Texas, as well as the fi rst OTC held in champion practices and measures Rio, Brazil. We showcased our global to achieve effective operations yards, technologies and capabilities through its endorsement of events alongside international oil and gas such as SmartShipping, which companies and service providers. had been convened by ShipServ, an e-solutions provider for marine In addition, we were profi led strongly at and offshore companies. Sea Asia 2011, which covers a range of topics including ship fi nance, technical In addition, throughout the year, our rules and regulations and recent yards facilitated knowledge exchange industry developments. by welcoming government, industry and business delegates from far and wide At Norwegian events, Pareto Oil & who were keen to learn more about Offshore Conference and Nor-Shipping, our operations.

Nurturing Communities Community Development 79 Nurturing Communities Community Development

1

DEVELOPING THE TALENT POOL and industry experience through tsunami in Japan in March. The Group’s Recognising that people underpin fruitful internships at various companies affi liated companies Regency Steel the Group’s successes, Keppel O&M in Keppel O&M. Japan and Nakilat-Keppel Offshore takes a keen interest in developing the & Marine (N-KOM) initiated donation talent pool for the offshore and marine Keppel O&M also introduced the young to drives for this cause as well. industry, ensuring sustained growth of the vibrant offshore and marine industry the sector into the future. through school talks and yard tours. Furthermore, Keppel O&M participated In 2011, Keppel O&M extended these in the annual fundraising activity Besides scholarships, Keppel O&M educational activities beyond tertiary organised by the Singapore Children’s inspires entrants and grooms talents for institutes to secondary schools. Society to nurture children and youths, the industry by contributing to awards and co-sponsored $100,000 for the and book prizes as well as providing ENRICHING OUR COMMUNITIES KOM/KIE-Metta Charity Golf 2011. internship opportunities, conducting We strongly believe in sharing the industry and career talks and hosting fruits of our successes, giving back As a partner of the Community Chest visits to its facilities. to the community, benefi ting people of Singapore’s (ComChest) Heartstrings from all walks of life economically, Walk 2011, Keppel O&M contributed In 2011, Keppel O&M sponsored socially and culturally. $50,000, which goes towards benefi ting awards for top students at the children with special needs, persons Royal Institute of Naval Architects, SUPPORTING THE LESS FORTUNATE with disabilities, families in need, etc. Ngee Ann Polytechnic and Institute In 2011, Keppel O&M gave monetary Keppelites also helped raise awareness of Technical Education (ITE). support and donations in kind to a for ComChest causes by participating in wide range of social development this charity walk. In addition, the Group partnered Keppel and disaster relief programmes. Credit Union (KCU) to encourage its In addition, Keppelites also embarked In Brazil, Keppel FELS Brasil donated employees and their children to engage on various initiatives, which helped R$80,000 to the Pestalozzi Association in lifelong learning and achieve academic to raise awareness for these causes of Angra dos Reis. The association excellence. Last year, KCU gave out 33 and brightened the lives of the aims to promote the study, treatment, book prizes. Twenty of these prizes, less fortunate. care, education and social interaction totalling $10,400, were given out to the of children, adolescents and adults children of Keppel O&M’s employees. Collaborating with the Singapore Red diagnosed with intellectual disability Cross Society, Keppel O&M conducted and developmental delays. Employees Meanwhile, 203 students from local a donation drive in Singapore, raising of Keppel FELS Brasil also helped to and overseas institutions gained work $21,000 for those affected by the brighten the lives of elderly folks by

Keppel Offshore & Marine Ltd 80 Report to Stakeholders 2011 2

3

1. Keppel O&M opens the eyes of the young to the opportunities and challenges of the offshore and marine industry by participating in school talks, conducting educational tour of our yards and providing internship opportunities.

2. Singapore’s President Mr Tony Tan and Mr Tong Chong Heong, CEO of Keppel Offshore and Marine at the Community Chest Awards Presentation Ceremony, where Keppel FELS was conferred the 5-Year Outstanding SHARE Platinum Award and the SHARE Platinum Award, while Keppel Singmarine garnered the SHARE Platinum Award.

3. Keppel O&M’s business units in the US, the Philippines and in Singapore help mobilise employee support for blood donation drives.

Nurturing Communities Community Development 81 Nurturing Communities Community Development

providing a fresh coat of paint to O Bem More than 70 employees participated The yard also took Cawag Elementary Querer A Casa Do Idoso, an old age in each of these exercises. School under its wing through the home in Japuiba, Angra dos Reis. “Adopt-a-School” Programme. In Singapore, Keppel’s business units, As part of this initiative, the yard Keppel Singmarine Brasil has also including Keppel FELS, Keppel Shipyard sponsored the allowance and been extending help to the community. and Keppel Singmarine, are strong training expenses of one teacher The yard made contributions to a local supporters of the annual Keppel Group for a year. school, Escola Municipal Izilda Reiser Blood Donation. More than 450 packets Mafra, to support its Christmas and of blood were collected in this Keppel Subic Shipyard is active in New Year parties. The students were initiative last year. In the Philippines, supporting disaster relief efforts as also visited by a Keppelite dressed as Keppel Subic Shipyard too carried well. In August 2011, it carried out Santa Claus who brought gifts from out a blood donation drive, in which a “Feeding Programme” to help colleagues from the yard. 75 employees participated. more than 60 families affected by a mudslide. The victims received In the US, Keppel AmFELS held its Keppel Subic Shipyard provided canned goods, bottled water, annual charity golf tournament for much support to school-related blankets, mats and medicines from the seventh year running in November initiatives in 2011. The yard contributed Keppel Subic Shipyard, and clothes 2011. The event raised US$50,000 to the Department of Education’s and toys from its employees. for its adopted charities. Earlier in the “Brigada Eskwela” programme by year, employees of Keppel AmFELS purchasing cleaning materials for Keppel Philippines Marine has had participated in Relay for Life, public elementary schools. In addition, been helping to alleviate the plight which seeks to raise funds for cancer it donated items such as chairs, of disaster victims. It supported research as well as honour cancer electric fans and computers to the fl ood victims of Mindanao by survivors. Keppel AmFELS also various institutions to improve their donating items such as clothes, organised three blood donation drives. learning environment. food and canned goods.

CONTINUING CORPORATE VOLUNTEERISM

We encourage our employees to initiate Keppel Volunteers has also helped as well as participate in community APSN explore avenues for regular activities. As such, staff volunteerism income. Muffi ns and cookies baked is a key feature of our community by the benefi ciaries of APSN were involvement efforts. sold at bake sales held at various Keppel O&M yards in Singapore. Since 2000, Keppel Volunteers has been spearheading activities that Another one of Keppel Volunteers’ make meaningful contributions to regular programmes is the home local communities, social institutions maintenance initiative. Once a month, and non-profi t organisations. Keppelites gather to assist the elderly with their domestic chores. Keppel Volunteers organises fundraisers as well as monthly activities for Keppel’s adopted charity, the Association for Persons with Special Needs (APSN). Besides assisting senior citizens with cleaning and maintaining their homes, Keppel In 2011, Keppel Volunteers engaged the Volunteers brought a number of them on a visit APSN benefi ciaries in activities like to the Chinatown Heritage Centre. mural painting, and organised outings to places and events such as the ArtScience Museum and Singapore National Day Parade rehearsals.

Keppel Offshore & Marine Ltd 82 Report to Stakeholders 2011 Employees of Keppel Batangas Shipyard marched As for Keppel Batangas Shipyard, April 2011, and all the houses are on the streets to urge donations towards putting out-of-school youths back into classrooms. it provided prompt support to the expected to be completed by mid-2012. fi refi ghters of Batangas Province on 18 January 2011. The yard’s Health, PROTECTING THE ENVIRONMENT Safety and Environment (HSE) team Doing its part of protect the and its fi re truck responded immediately environment, Keppel O&M continues to calls for help to put out fi res at a to support a number of eco-friendly row of commercial buildings. initiatives and encourage its employees to adopt green behaviour. The employees of Keppel Batangas Shipyard also contributed to In 2011, Keppel Philippines Marine “Alay Lakad”, an annual, nationwide worked with the Department of initiative which seeks to put out-of- Environment & Natural Resources school youths back into classrooms. (DENR) of the Philippines to carry Marching on the streets, these out mangrove planting. Keppel Subic Keppelites urged the community to Shipyard participated in a similar activity. donate to this cause. Meanwhile, Keppel Batangas Shipyard Over the last year, Keppel Philippines converted used oil drums into garbage Marine and Keppel Batangas Shipyard bins, which were then donated to led Keppel Group’s collaboration the community to help ensure a with the charity organisation Gawad litter-free environment. Kalinga (GK) to develop Keppel-GK Eco Village (Bauan), a 60-unit housing Over in Qatar, Nakilat-Keppel Offshore project for needy families. Keppel & Marine (N-KOM) carried out a Philippines Marine pledged to seed “N-KOM Go Green” campaign, which an initial sum of PhP 9 million to culminated in a beach clean-up effort. support the development of the Eco Village, while employees In Brazil, Keppel Singmarine Brasil from Keppel Batangas Shipyard urged its employees to reuse, reduce enthusiastically contributed to the and recycle by distributing more building process. The groundbreaking than 100 eco-friendly bags on World of the Eco Village took place in Environment Day.

Nurturing Communities Community Development 83 Nurturing Communities Community Development

1 2

1. With Keppel O&M’s support towards Keppel O&M’s yards in Singapore and In addition, Keppel O&M networked with Capoeira Festival in Singapore, Keppelites have a chance to experience Brazilian the Philippines extended their support energy agencies and companies from martial arts through a workshop. for the global climate change movement the Southeast Asia region at the fi ve-day by participating in Earth Hour 2011. 24th ASCOPE Games, held in Thailand. 2. Keppel O&M participated in the 8th ASCOPE Games, where the energy Non-critical lights were switched off agencies and companies from across at offi ces and open-air car parks. Meanwhile, 18 Keppelites from Southeast Asia promoted goodwill and Eco-friendly tips were also disseminated Keppel O&M’s yards in Brazil, the friendship through sports. to employees. Netherlands, Qatar and Singapore traveled to Copenhagen, Denmark, Keppel O&M’s dormitories for its to participate in a friendly football foreign workers, Acacia, Juniper and competition with fl eet owners and Kian Teck also joined in the dimming operators as well as key suppliers of lights. Collectively, 504 kilowatts of within the industry at the inaugural energy were saved during Earth Hour. Offshore World International Football Tournament. PROMOTING THE ARTS AND SPORTS By sponsoring and supporting art Over in the Netherlands, employees performances and sporting activities, from Keppel Verolme participated Keppel O&M promotes cultural in a sailing competition organised appreciation and active lifestyles. by the Dutch Shipbuilding Association, Serving as platforms for social Scheepsbouw Nederlands. The team interaction, these events and activities helped raise the profi le of the sport also help us build stronger ties with as its members interacted with members of the industry. the Netherlands’ marine and offshore industry. Keppel O&M helped raise the profi le of capoeira, a Brazilian art form, by sponsoring $50,000 for the fi rst women’s Capoeira Festival in Singapore. The event brought in high-ranking practitioners from all over the world, who participated in workshops, as well as pitted their skills against each other in competitions.

Keppel Offshore & Marine Ltd 84 Report to Stakeholders 2011 1

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1. Eighteen Keppelites from Keppel O&M’s yards in Brazil, the Netherlands, Qatar and Singapore, travelled to Copenhagen, Denmark, to participate in a friendly football competition with fl eet owners and operators as well as key suppliers within the industry at the inaugural Offshore World International Football Tournament.

2. Keppel O&M’s dormitories for its foreign workers – Acacia, Juniper and Kian Teck – participated in Earth Hour 2011. Collectively, the dormitories saved 504 kilowatts from this activity.

Nurturing Communities Community Development 85 BULGARIA AZERBAIJAN CHINA GLOBAL NETWORK Keppel FELS Baltech Ltd Caspian Shipyard Company Ltd Keppel Nantong Shipyard Offshore & marine Builder & repairer of rigs & ships Co. Ltd engineering company Baku Shipyard LLC Builder of offshore support Builder & repairer of offshore vessels & tugboats support vessels and tankers Keppel FELS Engineering THE NETHERLANDS Shenzhen Co. Ltd Keppel Verolme BV Offshore & marine engineering The most established offshore & KAZAKHSTAN company marine yard in Europe Keppel Kazakhstan LLP Offshore engineering & construction facility VIETNAM YARDS & OFFICES: Harnessing the synergy of 20 yards NORWAY Keppel FELS Ltd (Vietnam) Keppel Norway AS worldwide keeps us Near Market, Near Customer. Provider of offshore QATAR & marine-related Nakilat-Keppel THE PHILIPPINES engineering services Offshore & Marine Ltd Keppel Philippines Repairer of vessels up to ULCCs Marine, Inc Comprehensive solutions provider for marine and UNITED ARAB EMIRATES offshore projects Arab Heavy Industries PJSC Keppel Batangas Shipyard, Inc Repairer & builder of small Repairer & builder of small to medium-sized vessels to medium-sized vessels & offshore fabrication facility Keppel Subic Shipyard, Inc INDIA Provider of shiprepair, Keppel FELS Offshore and conversion & construction Headquarters Engineering Services Mumbai solutions Singapore Pte Ltd Offshore & marine engineering Offshore & Marine company JAPAN Azerbaijan Brazil Regency Steel Japan Ltd C h i n a Manufacturer of large, Indonesia high-quality steel structures Japan Kazakhstan Norway Qatar Singapore The Netherlands The Philippines United Arab Emirates USA USA Engineering/ Keppel Offshore & Marine USA, Inc R&D Centre Solutions provider for Bulgaria offshore structures China Keppel AmFELS, LLC India Best-equipped offshore yard in the Singapore Gulf of Mexico USA FloaTEC, LLC Representative Offi ces Solutions provider for fl oating Australia production units USA Keppel Marine Agencies Vietnam International, LLC

Marine Services Singapore

SINGAPORE Keppel Offshore & Marine Ltd (Headquarters) Global leader in offshore Offshore Technology & marine Development Pte Ltd Keppel FELS Ltd Designer of jackup rigs & World leader in design & construction critical equipment of mobile offshore structures Deepwater Technology Group Pte Ltd Keppel Shipyard Ltd Designer & developer of deepwater BRAZIL Leader in the repair & semisubmersible solutions Keppel FELS Brasil SA/ conversion of all kinds Marine Technology Development AUSTRALIA BrasFELS of vessels Pte Ltd Keppel Prince Engineering Largest & best-equipped Keppel Singmarine Pte Ltd Designer of offshore support vessels Pty Ltd offshore yard in the Leading builder of offshore & tugboats Southern Hemisphere support vessels & tugboats Asian Lift Pte Ltd Keppel Singmarine Brasil Ltda KOMtech Centre Pte Ltd Specialist in heavy lift INDONESIA Builder of offshore support R&D Centre for new Keppel Smit Towage Pte Ltd PT Bintan Offshore vessels & tugboats technologies and processes Coastal towage solutions provider Offshore fabrication facility

Keppel Offshore & Marine Ltd Global Network 86 Report to Stakeholders 2011 Yards & Offi ces 87 GLOBAL NETWORK FACILITIES

Total land area Type Dock capacity Berthage Outfi t quay (square metres) Capacity (dead Size Length Draft Building berth Length Depth weight tonnes) (metres) (metres) (metres) (capacity) (metres) (metres) Singapore Keppel FELS Ltd (Pioneer) 284,292.3 Admiral Dock Drydock 400,000 380 x 80 380 13 FELS CAN DO Semisubmersible 30,000 lifting 138 x 78 Barge Berthspace 1,400 8 – 10 Pioneer Yard II 139,073 Berthspace 350 4.5 – 6 Shipyard Road 88,289 Berthspace 500 4.5 Crescent Yard 98,919 Berthspace 740 6 Keppel Shipyard Ltd (Tuas) 443,428 2,437 Tuas Dock Drydock 360,000 350 x 66 6.6 Raffl es Dock Drydock 330,000 355 x 60 6.6 Temasek Dock Drydock 150,000 301 x 52 7.4 Temasek Pier East Berthspace 280 7.2 Finger Pier West Berthspace 350 9 Finger Pier East Berthspace 370 8.5 Raffl es Pier West Berthspace 430 8.5 Raffl es Pier East Berthspace 230 6.1 West Quay Berthspace 380 7.1 South Quay Berthspace 177 8 Raffl es Dock Entrance Berthspace 220 7.1 Keppel Shipyard Ltd (Benoi) 349,934 1,163 Drydock No. 1 Drydock 300,000 350 x 60 Drydock No. 2 Drydock 170,000 300 x 60 Landing Quay 100 5 Quay No. 1 217 7 Quay No. 2 352 10 Quay No. 3 270 8 Quay No. 4 224 7 Keppel Shipyard Ltd (Gul) 139,073 530 FD No. 1 Floating Dock 14,000 lifting 192 x 32 FD No. 2 Floating Dock 5,000 lifting 114 x 27 FD No. 3 Floating Dock 12,000 lifting 170 x 26 North Quay 1 Berthspace 177.5 5 North Quay 2 Berthspace 193 6.5 North Quay 3 Berthspace 160 6.5 Keppel Singmarine Pte Ltd 146,794 Drydock in Benoi 5 Drydock 5,000 105 x 18.5 Building Berth in Benoi 15 Slipway 225 x 70 Building Berth in Benoi 5 Slipway 120 x 27.5 Wharf in Benoi 5 Berthspace 60 5 Azerbaijan Caspian Shipyard Company Ltd 60,000 Yusif Ibrahimov (Hull 901) Floating Dock 15,000 128 x 74 6.5 Floating Dock (Hull 953) Floating Dock 5,000 124.8 x 23.3 6.5 Floating Dock (Hull 806) Floating Dock 4,500 124.8 x 21 6.5 Jetty 3 400 6.5 Jetty 4 100 6.5 Brazil Keppel FELS Brasil SA 532,780 (BrasFELS Yard) Drydock Graving Dock 125 x 70 Slipway No. 1 Slipway 35,000 174 x 30 Slipway No. 2 Slipway 150,000 310 x 45 Slipway No. 3 Slipway 185 x 70 Finger Pier East Outfi t Quay 350 12 Finger Pier West Outfi t Quay 350 11.5 Outfi t Pier East Outfi t Quay 300 6 – 7 Outfi t Pier West Berthspace 120 7 – 8 Slipway 2 Pier Berthspace 80 8 – 9 Slipway 3 Pier 1 Outfi t Quay 160 9 – 10 Slipway 3 Pier 2 Outfi t Quay 160 9 – 10 Keppel Singmarine Brasil Ltda 74,000 Shipway No. 1 Slipway 130 x 28 Quay No. 1 Berthspace 89 6

Keppel Offshore & Marine Ltd 88 Report to Stakeholders 2011 Total land area Type Dock capacity Berthage Outfi t quay (square metres) Capacity (dead Size Length Draft Building berth Length Depth weight tonnes) (metres) (metres) (metres) (capacity) (metres) (metres) China Keppel Nantong Shipyard Co. Ltd 425,864 Slipway No. 2 Slipway 84 x 200 Kazakhstan Keppel Kazakhstan LLP 444,058 North Yard Launching Way 220 x 100 4.5 Load-out Quay 243 4.5 Berth space 488 4.5 The Philippines Keppel Subic Shipyard, Inc 663,000 Pacifi c Dock Graving Dock 550,000 550 x 65 C Quay 279 9 E1 Quay 351 9 E2 Quay 312 9 Keppel Batangas Shipyard, Inc 353,000 President Dock Graving Dock 50,000 200 x 38 Ship Lift System Lift Platform 20,000 172 x 28 Dry Berth: 8 off Dry Berth: 8 off Pier No. K1 100 x 2 9 Pier No. K2 100 x 2 9 Alongside FD No. 1 100 8 Pier Block No. 1 183 9 Pier Block No. 2 160 9 Pier Block No. 3 82 8 Pier Block No. 4 155 9 The Netherlands Keppel Verolme BV 554,000 1,600 9 – 12 400 9 – 12 Dock No. 5 Graving Dock 65,000 230 x 35.5 9.8 Dock No. 6 Graving Dock 130,000 275 x 41 10.6 Dock No. 7 Graving Dock 500,000 405 x 90 12.2 Qatar Nakilat-Keppel Offshore 430,000 2,400 & Marine Ltd Dry Dock No. 1 Drydock 350,000 360 x 66 Dry Dock No. 2 Drydock 450,000 400 x 80 1 Quay 400 11 1 Quay 400 11 Loading Quay 150 11 1 Pier 400 11 1 Pier 400 11 1 Pier 400 11 1 Pier 400 11 United Arab Emirates Arab Heavy Industries PJSC 273,000 Al Zora Drydock Graving Dock 30,000 175 x 32 7 7 Slipway No. 1 Slipway *1,500 120 x 16 Slipway No. 2 Slipway *1,500 120 x 16 5 Slipway No. 3 Slipway *2,500 120 x 16 Slipway No. 4 Slipway *3,000 120 x 16 5 Al Zora Wharf Wharf 250 East Wharf Wharf 200 5 West Wharf Wharf 83 5 USA Keppel AmFELS, LLC 554,000 Floating Drydock (Rig mode) Floating Drydock 35,054 94 x 111 Floating Drydock (Ship mode) Floating Drydock 35,054 37 x 189 Launching Way 336 9.14 West Dock Quay 153 9.14 153 9.14 East Dock Quay 297 10.67 297 10.67 Norway Keppel Norway AS 23,500 Outfi tting Quay Outfi t Quay 200 15 * Light Displacement Tonnage

Global Network Facilities 89 GLOBAL NETWORK CONTACTS

SINGAPORE KEPPEL OFFSHORE & MARINE TECHNOLOGY AZERBAIJAN KEPPEL OFFSHORE & MARINE LTD CENTRE (KOMTECH) PTE LTD CASPIAN SHIPYARD COMPANY LTD (Head Offi ce) 31 Shipyard Road South Bay, KMNF Basin 50 Gul Road Singapore 628130 Baku AZ1023, Azerbaijan Singapore 629351 Tel: +65 6591 5450 Tel: +994 12 449 9930 Tel: +65 6863 7200 Fax: +65 6265 9513 Fax: +994 12 449 9931 Fax: +65 6261 7719 www.keppelom.com Email: [email protected] Email: [email protected] Contact Person: Contact Person: Chandru Sirumal Rajwani, KEPPEL FELS LTD Dr Foo Kok Seng, Executive Director President (Pioneer Yard 1 – Head Offi ce) (Shallow Water Technology) 50 Gul Road Aziz Amirali Merchant, Executive Director BRAZIL Singapore 629351 (Deepwater Technology) KEPPEL FELS BRASIL SA Rua da Quitanda nº 86 sala 301, (Pioneer Yard 2) OFFSHORE TECHNOLOGY DEVELOPMENT 3º andar, Centro - CEP20091 - 005, 55 Gul Road PTE LTD Rio de Janeiro, RJ, Brazil Singapore 629353 55 Gul Road Tel: +55 21 2102 9400 Singapore 629353 Fax: +55 21 2102 9425 (Shipyard Road) Tel: +65 6863 7409 31 Shipyard Road Fax: +65 6862 3465 ESTALEIRO BRASFELS LTDA Singapore 628130 Av. Conde Mauricio de Nassau, Email: felsotd@pacifi c.net.sg S/n - Jacuecanga (Crescent Yard) Contact Person: Dr Foo Kok Seng, 23914 - 460 - Angra dos Reis 60 Shipyard Road Executive Director RJ, Brasil Singapore 628131 Tel: +55 24 3361 6000 DEEPWATER TECHNOLOGY GROUP PTE LTD Fax: +55 24 3361 6258 Tel: +65 6863 7200 50 Gul Road Fax: +65 6261 7719 Singapore 629351 www.kfelsbrasil.com.br Tel: +65 6863 7291 Email: [email protected] www.keppelfels.com Fax: +65 6863 1739 Contact Person: Kwok Kai Choong, Email: [email protected] President & CEO Contact Persons: Email: [email protected] Wong Kok Seng, Managing Director Contact Person: KEPPEL SINGMARINE BRASIL LTDA Aziz Amirali Merchant, Executive Director Aziz Amirali Merchant, Executive Director Rua Prefeito Manoel Evaldo Müller (Engineering) Email: [email protected] 3388 Bairro Volta Grande, Navegantes Keith Teo, General Manager (Marketing) Contact Person: Santa Catarina, Brasil Anis Altaf Hussain, General Manager CEP: 88.375.000 KEPPEL SHIPYARD LTD Tel: +55 47 3342 6460 (Tuas Yard – Head Offi ce) MARINE TECHNOLOGY DEVELOPMENT Fax: +55 47 3405 0170 51 Pioneer Sector 1 PTE LTD Singapore 628437 15 Benoi Road Email: [email protected] Tel: +65 6861 4141 Singapore 629888 Contact Person: Fax: +65 6861 7767 Tel: +65 6860 2858 Tan Chong Kee, General Manager Fax: +65 6862 2562 (Benoi Yard) BULGARIA 15 Benoi Road Email: [email protected] KEPPEL FELS BALTECH LTD Singapore 629888 Contact Person: Tan Cheng Hui, 54 Debar Street Tel: +65 6861 6622 Senior General Manager Varna 9000, Bulgaria Fax: +65 6861 4393 Tel: +359 52 684 250 ASIAN LIFT PTE LTD Fax: +359 52 684 252 (Gul Yard) 23 Gul Road 55 Gul Road Singapore 629356 Email: offi [email protected] Singapore 629353 Tel: +65 6668 4222 Contact Person: Tel: +65 6861 3007 Fax: +65 6668 4333 Lyudmil Stoev, General Manager Fax: +65 6862 3645/7 Email: [email protected] CHINA www.keppelshipyard.com Contact Person: John Chua, General Manager KEPPEL NANTONG SHIPYARD CO. LTD Email: [email protected] No. 9 Yan Jiang Road Contact Persons: KEPPEL SMIT TOWAGE PTE LTD Nantong City, Jiangsu Province Nelson Yeo, Managing Director 23 Gul Road P.R. China 226005 Chow How Jat, Executive Director Singapore 629356 Tel: +86 513 8530 0000 Louis Chow, Senior General Manager Tel: +65 6668 4222 Fax: +86 513 8530 0011 (Commercial) Fax: +65 6897 8056 Mah Chan Wah, General Manager Email: [email protected] (Commercial – Shiprepair) Email: [email protected] Contact Person: Lee Tai Kwee, President Contact Persons: KEPPEL SINGMARINE PTE LTD Ben Chew, General Manager (Regional) KEPPEL FELS ENGINEERING SHENZHEN CO. LTD 15 Benoi Road Jerry Wong, General Manager (Singapore) 3rd Floor, Chiwan Petroleum Building Singapore 629888 Chiwan Road No. 5 Tel: +65 6861 6622 AUSTRALIA P.R. China 518068 Fax: +65 6862 1792 KEPPEL PRINCE ENGINEERING PTY LTD Tel: +86 755 26851902/+86 755 26851959 Level 7, 3 Bowen Crescent +65 6863 7215 (Singapore Contact) www.keppelsingmarine.com Melbourne, Victoria 3004, Australia Fax: +86 755 26851670 Email: [email protected] Tel: +61 3 9820 9033 Contact Persons: Fax: +61 3 9866 6110 Email (China): [email protected] Hoe Eng Hock, Executive Director Email (Singapore): [email protected] Poon Tai Lum, General Manager Email: [email protected] Contact Person: Ho Jong Heng, General Manager (Commercial/Marketing) Contact Person: Charles Chiam, Director

Keppel Offshore & Marine Ltd 90 Report to Stakeholders 2011 INDIA THE PHILIPPINES KEPPEL AMFELS, LLC KEPPEL FELS OFFSHORE AND ENGINEERING KEPPEL PHILIPPINES MARINE, INC 20000 State Highway 48 SERVICES MUMBAI PTE LTD Unit 3-B Country Space 1 Building Brownsville, Texas 78523, USA Unit 3&4, 8th Floor Sen. Gil Puyat Avenue, Tel: +1 956 831 8220 Prism Tower-A Salcedo Village, 1200 Makati City Fax: +1 956 831 6220 Mindspace, Link Road Philippines Goregaon (West) Tel: +63 2 892 1816 Email: [email protected] Mumbai 400 062, India Fax: +63 2 815 2581 Contact Person: Tel: +91 22 40018888 Tan Geok Seng, President & CEO Fax: +91 22 40018898 www.keppelphilippinesmarineinc.com Email: [email protected] or FLOATEC, LLC E-mail: [email protected] [email protected] 14701 St. Mary’s Lane, Suite 250 Contact Person: Syed Ahamed Kabeer, Contact Persons: Houston, TX 77079, USA General Manager Mok Kim Whang, President Tel: +1 281 870 5200 Stefan Tong, Executive Vice President Fax: +1 281 870 5210 INDONESIA PT BINTAN OFFSHORE KEPPEL BATANGAS SHIPYARD, INC www.FloaTEC.com Jalan Nusantara KM 23 Keppel Philippines Marine – Email: ehnamtvedt@fl oatec.com Kecamatan Bintan Timur Special Economic Zone Contact Person: Eric H. Namtvedt, President Kabupaten Bintan BO. San Miguel Propinsi Kepulauan Riau 4201 Bauan, Batangas KEPPEL MARINE AGENCIES INTERNATIONAL, LLC Indonesia Philippines (Texas Offi ce) Tel: +62 771 462 800 Tel: +63 43 727 1532 to 36 5177 Richmond Ave, Suite 1065 Fax: +62 771 462 575 Fax: +63 43 727 4885 Houston, TX 77056, USA +63 43 727 1453 Tel: +1 713 600 8371 Email: [email protected] Fax: +1 713 600 8374 Contact Person: www.keppelphilippinesmarineinc.com Kok Boon Heng, General Manager Email: [email protected] Email: [email protected] Contact Person: Contact Person: JAPAN Poh Leong Kok, Senior Vice President Michael Holcomb, President/Director REGENCY STEEL JAPAN LTD Mobile: +1 713 816 0438 46-59 Nakabaru, Tobata-ku KEPPEL SUBIC SHIPYARD, INC Email: [email protected] Kitakyushu, Fukuoka 804-8505 Japan Subic Shipyard – Special Economic Zone Contact Person: Tel: +81 93 861 3103 Cabangaan Point, Cawag John J. Bajor, Marketing Manager Fax: +81 93 861 3114 2209 Subic, Zambales Mobile: +1 713 922 3226 Philippines Email: [email protected] Tel: +63 47 232 2380 (New Jersey Offi ce) Contact Person: Wong Chun Yu, President Fax: +63 47 232 3883 to 84 or 15 Huddy Avenue, PO Box 417 +63 47 232 3350 Highlands, New Jersey, USA KAZAKHSTAN Tel: +1 732 872 8800 KEPPEL KAZAKHSTAN LLP Email: [email protected] or Fax: +1 732 872 8801 Special Economic Zone “Seaport Aktau” [email protected] Aktau 130001 Contact Persons: Email: [email protected] Mangystau Region Mok Kim Whang, President & General Manager Contact Person: John J. Bajor, Director Republic of Kazakhstan Leong Kok Weng, Senior Vice President Tel: +7 7292 571 100 VIETNAM Fax: +7 7292 571 110 QATAR KEPPEL FELS LTD NAKILAT-KEPPEL OFFSHORE & MARINE LTD PetroVietnam Tower E-mail: [email protected] Erhama Bin Jaber Al Jalahma Shipyard Suite 150M Contact Person: Southern Break Water, 8 Hoang Dieu Street Yick Ping Wong, Executive Director Ras Laffan Industrial City (RLIC) Ward 1, Vung Tau City PO. Box 28388, Qatar S.R. Vietnam THE NETHERLANDS Tel: +974 4419 7300 Tel: +84 643 850098 KEPPEL VEROLME BV Fax: +974 4419 7301 Fax: +84 643 850089 Prof. Gerbrandyweg 25 3197 KK Rotterdam-Botlek Email: [email protected] Email: [email protected] Harbour no. 4550 Contact Persons: Contact Person: John Chin, Country Manager P O Box 1001 Abu Bakar Mohd Nor, CEO 3180 AA Rozenburg Chin Sze Kiun, Senior Commercial Manager RUSSIA The Netherlands MARINE & SHELF DEVELOPMENT LTD Tel: +31 181 234300 UNITED ARAB EMIRATES 129090 Moscow, 12 Fax: +31 181 234346 ARAB HEAVY INDUSTRIES PJSC B. Spasskaya str., P O Box 529 Offi ce 101, Russia www.keppelverolme.nl Ajman, UAE Tel: +7 495 937 8966 Email: [email protected] Tel: +971 6 526 3232 Fax: +7 495 937 8978 Contact Person: Fax: +971 6 526 3233 Harold Linssen, Managing Director Email: [email protected] www.ahi-uae.com [email protected] NORWAY Email: [email protected] Contact Person: Sergei Vasnin, General Director KEPPEL NORWAY AS Contact Person: Jimmy Loh, Managing Director Strandgaten 147 P O Box 425 USA 4304 Sandnes, Norway KEPPEL OFFSHORE & MARINE USA, INC Tel: +47 5160 2500 5177 Richmond Ave, Suite 1065 Fax: +47 5160 2510 Houston, TX 77056, USA Tel: +1 713 600 8380 www.keppelnorway.com Fax: +1 713 600 8384 Email: [email protected] Contact Person: Roy Sletten, Acting CEO Email: [email protected] Contact Person: Tommy Sam, Vice President

Global Network Contacts 91 CORPORATE STRUCTURE

Keppel Offshore & Marine Ltd

Singapore The Netherlands The Netherlands USA Keppel FELS Ltd KV Enterprises BV Keppel Verolme BV Keppel AmFELS, LLC

Singapore Azerbaijan USA USA Keppel Shipyard Ltd Caspian Shipyard Company Ltd Keppel Offshore & Marine USA, Inc Keppel Marine Agencies International, LLC

Singapore Kazakhstan Norway USA FloaTEC, LLC Asian Lift Pte Ltd Keppel Kazakhstan LLP Keppel Norway AS

Singapore India United Kingdom USA FELS Offshore Pte Ltd Keppel FELS Offshore & Engineering DPS Bristol (Holdings) Ltd Offshore Innovative Solutions, LLC Services Mumbai Pte Ltd

China Brazil USA Keppel FELS Engineering Shenzhen Keppel FELS Brasil SA Bennett & Associates, LLC Co. Ltd

Japan Brazil Brazil Regency Steel Japan Ltd Keppel Singmarine Brasil Ltda Estaleiro BrasFELS Ltda

Indonesia Azerbaijan PT Bintan Offshore Baku Shipyard LLC

Bermuda Singapore Floatel International Ltd Keppel Offshore & Marine Technology Centre Pte Ltd

Singapore Offshore Technology Development Pte Ltd

Singapore Deepwater Technology Group Pte Ltd

Singapore Singapore KS Investments Pte Ltd Keppel Singmarine Pte Ltd

Singapore Singapore Atwin Offshore & Marine Pte Ltd Blastech Abrasives Pte Ltd

Singapore Malaysia Keppel Smit Towage Pte Ltd KSP Towage Sdn. Bhd

Singapore Malaysia Maju Maritime Pte Ltd Kejora Resources Sdn. Bhd

UAE UAE Arab Heavy Industries PJSC Arab Eagle Marine Engineering LLC

Singapore Alpine Engineering Services Pte Ltd

The Philippines The Philippines Keppel Philippines Marine, Inc Keppel Batangas Shipyard, Inc

Singapore The Philippines Marine Technology Development Pte Ltd Keppel Subic Shipyard, Inc

China Keppel Nantong Shipyard Co. Ltd

China Keppel Nantong Heavy Industry Co. Ltd

Qatar Nakilat-Keppel Offshore & Marine Ltd

Singapore Dyna-Mac Holdings Ltd

Keppel Offshore & Marine Ltd 92 Report to Stakeholders 2011 This report is printed on Meridien Silk, Eco-Frontier and Exel Satin. These papers are certifi ed by the Forest Stewardship Council (FSC). Eco-Frontier and Exel Satin are also endorsed under the Singapore Green Labelling Scheme, which is administered by the Singapore Environment Council.

These papers are produced with a minimum content of 51% recycled paper and a minimum of 10% post-consumer waste.

For more information on FSC, please visit www.fsc.org. KEPPEL OFFSHORE & MARINE LTD (Incorporated in the Republic of Singapore) 50 Gul Road Singapore 629351

Tel: (65) 6863 7200 Fax: (65) 6261 7719 / (65) 6265 1927 www.keppelom.com www.keppelfels.com www.keppelshipyard.com www.keppelsingmarine.com

Co Reg No: 199900642R