Annual Report 2001 Projects | Technologies | Services | Developments Worley International Locations

ANNUAL REPORT 2001 PROJECTS | TECHNOLOGIES | SERVICES | DEVELOPMENTS WORLEY INTERNATIONAL LOCATIONS

8 3 12 4 9 11 6 2 10 5

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1 AUSTRALIA 4 INDIA 7 NEW ZEALAND 10 SINGAPORE 13 REPUBLIC OF IRELAND 2 BRUNEI 5 INDONESIA 8 QATAR 11 THAILAND 14 UNITED STATES OF 3 CHINA 6 MALAYSIA 9 SAUDI ARABIA 12 UNITED ARAB EMIRATES AMERICA

WORLEY LIMITED ACN 001 279 812 CONTENTS CHAIRMAN’S REPORT 2 GROUP FINANCIAL HIGHLIGHTS 4 CHIEF EXECUTIVE OFFICER’S REPORT 6 HOW WE DO IT 10 GLOBAL 10 PARTNERSHIP 10 PEOPLE 10 IDEAS 11 SYSTEMS 11 RESULTS 11 PROJECTS 12 TECHNOLOGIES 20 SERVICES 23 DEVELOPMENTS 27 ADVISORY BOARD 30 CORPORATE GOVERNANCE 32 FINANCIAL REVIEW 33 FINANCIAL STATEMENTS 34 DIRECTORY IBC WORLEY IS AN AUSTRALIAN BASED, GLOBAL DESIGN AND PROJECT SERVICES BUSINESS. IN 32 LOCATIONS WORLDWIDE, IT DELIVERS IDEAS AND RESULTS TO CLIENTS THROUGH ITS SKILLS IN PROJECTS, TECHNOLOGIES, SERVICES AND DEVELOPMENTS. CHARACTERISING ALL OF WORLEY’S OPERATIONS IS AN APPROACH BASED ON SUPERIOR SYSTEMS AND FOCUSED ON PARTNERSHIP WITH CLIENTS AND JOINT VENTURE PARTNERS. THIS ALLOWS SHARING OF THE RISKS AND THE REWARDS, AND SO CREATES A PLATFORM FOR PEOPLE TO DELIVER VALUE ON BOTH SIDES OF CONTRACTS.

WORLEY

PROJECTS TECHNOLOGIES SERVICES DEVELOPMENTS

• OIL & GAS • ADVANCED ANALYSIS • ASSET MANAGEMENT • INVESTMENT

• CHEMICALS & MINERALS • COMMUNICATIONS • CORROSION & INTEGRITY • PROJECT INSTIGATION MANAGEMENT • DEFENCE • DAD • DUE DILIGENCE • INFRASTRUCTURE • ENERGY COMMERCE • ENVIRONMENT • MANUFACTURING • FLEET ANALYSIS • INTEGRATED SERVICES • PIPELINES & TERMINALS • INSTRUMENTATION & CONTROLS • MAINTENANCE • POWER ENGINEERING • PROPRIETARY • REFINING & TECHNOLOGIES • OPERATIONS SUPPORT PETROCHEMICALS • SYSTEM INTEGRATION • SAFETY & RISK • WATER & WASTEWATER MANAGEMENT

Some operations are conducted through joint ventures.

PROJECTS | TECHNOLOGIES | SERVICES | DEVELOPMENTS | 1 CHAIRMAN’S REPORT

MY FIRST FULL YEAR AS CHAIRMAN OF WORLEY HAS BEEN ONE OF MIXED EXTERNAL CIRCUMSTANCES FOR THE WORLEY GROUP. THE PERIOD HAS SEEN RECORD LEVELS OF ACTIVITY IN THE OIL & GAS INDUSTRIES, ONE OF WORLEY’S KEY CENTRES OF FOCUS, COMBINED WITH ECONOMIC DOWNTURNS IN AUSTRALIA, MUCH OF ASIA AND THE US. DESPITE THESE VOLATILE TIMES, WORLEY HAS PROSPERED, SETTING NEW LEVELS OF ACTIVITY AND RETURN.

As my involvement in the business has deepened, I have been impressed by the combined energy, enthusiasm and capability of Worley staff, as well as the resilience and innovation alive in all parts of the business. In other contexts, I have been an outspoken advocate of businesses creating the right strategic platform for success, defined as a capacity to excel and profit when competing with the global best in their class. That platform must comprise: • the right strategy • smart people • supporting infrastructure • motivation and a pervasive recognition that without satisfied clients neither our jobs nor Worley would exist. Worley has in place, and continues to develop, each of these elements. The Worley strategy is to compete and excel in four key areas – Projects, Technologies, Services and Developments. Building on our core strength in project engineering and related services, Worley is moving adroitly ahead of the market to extend into commercialisation of leading technologies and investment in various developments. In each expansion decision, the key issue is the extent to which we can add value to clients’ businesses, while building and growing our shared capability. The strategy is centrally dependent on partnership with clients that is focused on achieving outstanding results together. So, by definition, it takes Worley into global marketplaces. It also requires us to continue to build an organisation that encourages people to create ideas, and supports the rigorous testing of the commercial saliency of those ideas. Worley now employs around 3500 people in 32 offices in 15 countries. In last year’s Annual Report, John Grill explained that the Worley approach is to devolve authority and responsibility to all levels in the organisation and encourage our people to “lead, invent, achieve and enjoy to the highest possible level”, creating opportunities without limits. Rather more simple to say than do, Worley achieves this vision of its workplace. However, because of the substantial success in the last year and the current level of forward orders, a challenge for the year ahead is to retain our staff and to attract experienced, as well as newly graduated staff, of the right quality and in sufficient quantity throughout our global operation.

2 | PROJECTS | TECHNOLOGIES | SERVICES | DEVELOPMENTS In terms of the development of our infrastructure, this has been a most significant year for Worley. In the technology area, agility is the key to our approach. It is our unwavering commitment that we will create an agile framework for value added business delivery, flexible enough to meet the changing needs of the business and our clients. Looking to the future, it is imperative that Worley develops a well defined corporate memory and enhanced capacity to share and harness intellectual capital globally. Our systems plans are on track to achieve this. Equally important is the network of offices that Worley has created in 15 countries, and their capacity to work together as one team deploying resources wherever clients need them. Finally, motivation is key. At Worley, one motivation is the capacity to work in a creatively permissive environment, led by an outstanding management team, on the largest and best projects around the world. However, Worley recognises the importance of fair, generous, performance based remuneration. The new remuneration scheme has seen its first full year of operation and, combined with the financial success achieved during this period, is off to a good start. While there are refinements required, we believe that we have the right structure in place for both reward and recognition to act as motivational tools for us and for the benefit of our clients.

JOHN SCHUBERT CHAIRMAN ADVISORY BOARD

PROJECTS | TECHNOLOGIES | SERVICES | DEVELOPMENTS | 3 GROUP FINANCIAL HIGHLIGHTS

2001 PROJECTS Oil & Gas involved in outstanding projects across 2000 Asia and the Middle East PROJECTS Acquisition of Toussaint & Richardson creates Worley 1996 1998 Chemicals & Minerals CHEMICALS & MINERALS Three year alliance signed INSTRUMENTATION & Port Kembla Copper Smelter with BP’s Kwinana Refinery for CONTROLS upgrade exclusive services I&E Systems joint Wagerup Alumina Refinery Chemicals & Minerals, in joint venture Worley ABB – Longford Gas upgrade – Alcoa venture with MAMIC, sign PETROCHEMICALS Plant upgrade, Esso three year alliance with WMC OIL & GAS Mobil alliance – Oil & Gas appointed to Bayu- Fertilizers TIGA joint venture Port Stanvac Refinery Undan, Tantawan, Benchamas Bayu-Undan preliminary TECHNOLOGIES POWER & WATER and North Pailin projects detailed design Worley Energy Commerce Burns and Roe Worley Pipelines & Terminals formed – total fuel joint venture appointed as long term management through OIL & GAS 1999 consultant partners to Epic Electronic Fuel Commerce, Fuel Transfield Worley (TW) Energy Facility Management and Fuel Woodside alliance INSTRUMENTATION & TECHNOLOGIES Facility Asset Management US office moved to Houston – CONTROLS DAD proven in Esso Antwerp Worley Management and centre of oil and gas market I&E Systems – Woodside and TIGA Timor Sea projects Project Control systems attract Apache EPCM – China instrument upgrade InControl and ePROCS proven worldwide attention Cakerawala conceptual design Cork office opened and commercialised for Worley web based knowledge 1997 – Carigali Triton DAD developed; initial project control management system licence sales Worley McConnell Dowell ‘Incubator’ created to focus on expanded worldwide CHEMICALS & MINERALS PETROCHEMICALS joint venture – Murrin Murrin and invest in technologies SERVICES Ammonium Nitrate Plant Qenos (formerly Kemcor) Gas Pipeline Worley expert opinion sought – CSBP Perth alliance SERVICES Alliances continue to dominate internationally – global US OIL & GAS Huntsman alliance Integrated Services for clients Navy pipeline integrity study; Worley ABB EPC – Esso NZ Refining Co alliance due diligence study of Chinese POWER & WATER ExxonMobil, Woodside, BOC TW BOC alliance aluminium industry; concept Burns and Roe Worley – Mt Shell, Todd Oil Worley Bayu-Undan screening and selection study Stuart Power Station EPC Maintenance Engineering conceptual design of New Zealand Pohokura OIL & GAS becoming a core service Resak Gas Platform development for Fletcher – Petronas Carigali Worley ABB – Longford Esso/Worley ABB awarded Victorian Premier’s Challenge Energy Brisbane office opened reconstruction, Esso Compressor Stations – Epic Commission for 10 years’ Esso/Worley ABB integrated Gas Compressor Stations Energy Bunbury to Karratha work, 1,500,000 hours of work service team at Longford reach – Alinta Gas Pipeline without Lost Time Injury (LTI) 1,000,000 hours of work Fitzroy Worley joint venture DEVELOPMENTS without LTI Shell Todd alliance Equity stake taken in DEVELOPMENTS Ampa Fairley rationalisation Kwinana Port development Burns and Roe Worley – Brunei Shell awarded preferred bidder status for Western Power IPP at Esperance

4 | PROJECTS | TECHNOLOGIES | SERVICES | DEVELOPMENTS 1998 1999 2000 2001 $’000 $’000 $’000 $’000 OPERATING DATA Revenue* 186,030 254,260 244,908 337,667 EBIT 6,445 9,093 8,983 14,819 Net Profit 4,635 4,764 5,506 9,079 Shareholder Equity 14,225 19,774 26,789 34,240

1999 2000 2001 %%% PERFORMANCE MEASURES Revenue Growth* 36.68% (3.68)% 37.88% EBIT Margin 3.58% 3.67% 4.39% Net Profit Growth 2.78% 15.58% 64.89% Return on Average Equity 28.02% 23.65% 29.75% * Revenue includes Worley’s share of revenue from incorporated joint ventures

Revenue $m Net Profit $m Return on Shareholder Equity % $4.635 $4.764 $5.506 $9.079 $28.02% $23.65% $29.75% $350 $186.030 $254.260 $244.908 $337.667 $10 36%

$300 $8

24% $250 $6

$200 $4 12%

$150 $2 2001 2001 2001 1999 2000 2000 2000 1998 1999 1998 1999

PROJECTS | TECHNOLOGIES | SERVICES | DEVELOPMENTS | 5 CHIEF EXECUTIVE OFFICER’S REPORT

RESULTS THE 2001 YEAR GENERATED PARTICULARLY GOOD RESULTS. AS THE BULK OF WORLEY’S REVENUE IS DERIVED FROM LONG TERM CONTRACTS AND ALLIANCES, INCOME STREAMS CAN BE PREDICTED MORE THAN APPROXIMATELY AND RESULTS WERE AS EXPECTED AND BUDGETED. AFTER TAX PROFIT WAS UP BY 65%, EBIT INCREASED BY 65%, RETURN ON AVERAGE EQUITY GREW TO 29.75%, UP 6.1% ON LAST YEAR. A KEY CHALLENGE HAS BEEN AND WILL CONTINUE TO BE TO MANAGE PROFITABILITY AS DEMAND FOR RESOURCES (SKILLED PERSONNEL) HAS GROWN FASTER THAN SUPPLY, AND COSTS THEREFORE ARE EXPECTED TO RISE. WORLEY’S SUCCESS THIS YEAR IN WINNING AN IMPRESSIVE NUMBER OF LONG TERM CONTRACTS, PARTICULARLY IN THE OIL & GAS AND PIPELINES & TERMINALS ARENAS, COUPLED WITH A LOW AUSTRALIAN DOLLAR AND STRONGER OIL PRICE, MEANS THAT WORLEY HAS NEVER BEEN BETTER POSITIONED.

GENERAL COMMENT The year has been both challenging and satisfying. It has been challenging because we have worked hard to find innovative solutions to meet the great opportunities presented to us around the world, and satisfying because we have met these challenges all the while bedding down a very solid base for the year ahead. That’s exciting – challenge coupled with reward. The year’s results were influenced by both external and internal factors. Externally we have benefited from prevailing economic conditions and increased demand for our broad ranging, highly regarded engineering skills, while internally Worley is stronger through the implementation of strategic change in two areas: organisational structure and individual motivation. These two very important internal changes have been successful in progressing our ‘one Worley’ strategy which is to build Worley as a single entity with all parts of the whole working together for mutual benefit. Note, however, there is more work to be done! First, our enhanced internal strength is borne of a restructuring along an industry/geography matrix. As a result, we now have a director responsible for each industry and a director responsible for each geographic area, with individual business unit managers supported by both. Additional directors with responsibilities in risk management, marketing, and technology and development also provide support to business unit managers. This new approach has been proven with skills from diverse locations being deployed in China – due diligence services out of Perth and engineering design services out of Melbourne both working on completely different assignments. Second, our internal strength has been shored up by our revamped profit sharing scheme which is based on return on equity and which has seen a substantial first year bonus pool. As we become more familiar with this scheme, further positive results will eventuate.

6 | PROJECTS | TECHNOLOGIES | SERVICES | DEVELOPMENTS GLOBAL The more one looks at Worley the more one sees a diverse services organisation emerging as a major international player in fields that leverage off first rate core skills, the result of a strategic decision taken in 1989 to guarantee Worley a larger role in its four key operating areas: Projects, Technologies, Services and Developments. The last three years have further consolidated our efforts in pursuing this strategy globally. Worley began working outside Australia in 1976 with our US presence established in 1993. We have been servicing overseas work from Perth since 1995, and more recently from Melbourne and Brisbane. Our Kuala Lumpur joint venture office, which opened in 1989, is now becoming recognised as a force in the Asian region. Worley opened in Saudi Arabia in 2000, and spread to Qatar in 2001. The directory on the inside back cover of this Annual Report details our total global coverage. Some quick figures from this year’s results also evidence Worley’s global positioning: • 32% of turnover is generated overseas; and • 20% of Worley’s people are based overseas. These numbers are possible because our offices feed each other business, linking to present a single Worley able to access its extensive resources wherever they are based. One of our key strategies is to handle high value and complex work from centres of excellence in high technology offices such as Houston, Melbourne and Perth, and volume work in lower cost base offices such as Kuala Lumpur and Jakarta. This strategy is paying off and we aim to extend it by developing Houston as a portal through which work can be channelled to lower cost Worley offices, with fewer resource constraints, in Australia and Asia.

PROJECTS | TECHNOLOGIES | SERVICES | DEVELOPMENTS | 7 CHIEF EXECUTIVE OFFICER’S REPORT

SYSTEMS Worley could not be global without its systems. Here, our major advantage is the youth of our technology platform. Our systems are built on more contemporary software platforms than our competitors, making Worley more flexible when it comes to integrating systems for a seamless, cost effective business process. This is a competitive advantage well acknowledged by both clients and competitors. We have made tremendous systems progress this year. In February, we introduced a Business Systems Group to ensure our systems development continues to be driven by the real needs of clients. This has led to Worley being able to offer a single suite of compatible systems encompassed on a single database (ATLAS). A further major development has been the Worley Knowledge Base (WKB), a sophisticated, globally secure, web based computer program that pools Worley’s extensive intellectual capital and is instantly accessible from anywhere in the world. Developed in house by Worley’s Advanced Analysis Group and based on the Beta version of Microsoft’s SharePoint package, WKB’s key beneficiary is Worley’s client base which profits directly from a vastly more dynamic, efficient and effective use of Worley’s knowledge bank which is a valuable company asset.

PARTNERSHIP This year’s results confirm Worley’s reputation at being good at forming and maintaining long term relationships. Our alliances and joint ventures look like generating up to 60% of our revenue in the next financial year. When asked why we are good at relationships, the answer always lies in the words ‘mutually beneficial’ and ‘commitment’. Because we structure our alliances on an open book, cost only basis, and then share the risks and rewards with our clients, Worley is totally committed to making sure the alliance works. Our joint ventures are founded on mutual respect and recognition of each partner’s skills. We joint venture with partners whose skills complement ours to ensure a project’s success. Our new joint venture in North Queensland with Maunsell subsidiary, MAMIC, for a WMC Fertilizers project is a case in point. MAMIC has an established Townsville office with staff of over 60 and has been providing engineering services in the region for more than 50 years. Worley Chemicals & Minerals has had a relationship with WMC for more than 15 years. Opportunities for integrated services contracts continue to expand as large scale clients move back to their core competencies and develop long term relationships with suppliers like Worley and its joint venture partners. We acknowledge the great assistance and contribution all our partners make to our business, and look forward to moving ahead with them in the future.

8 | PROJECTS | TECHNOLOGIES | SERVICES | DEVELOPMENTS IDEAS Worley has become more strategic in the past decade, looking to ideas based on our core technical strengths to advance our business in all areas and as the foundation upon which we grow. The year 2001 was brimful of ideas: • we established Worley Energy Commerce; • we partnered with Canadian waste management technology company Conporec; • we pursued and continue to pursue opportunities in rail and road freight solutions; • we looked and continue to look at alternative power sources such as biofuels; and, • we became plugged into power generation in Esperance in Western Australia. Importantly, ideas do not have to be big to make a difference but they are the currency of Worley’s business. Managed well and implemented carefully, ideas will take Worley to its desired destination.

PEOPLE Last but not least, I record my respect for and admiration of the people behind Worley, our 3500 staff in 32 offices around the world. Our strong performance this year is due in no small part to their continued efforts to reach beyond the everyday to produce performances that are quite extraordinary. This Annual Report aims to showcase some of those performances that position Worley as a leader in its fields. Without our people who are prepared to travel and move to wherever it is necessary to design and manage a project, develop and install a technology, provide a service or manage an alliance or client relationship, and propose or investigate a development or investment opportunity, Worley would not exist. An interesting yet little known fact is that Worley has more offices, albeit smaller, than many of its major and considerably larger competitors. We are able to do this because our people are mobile, and because the work we do demands a closeness to our clients with whom we build strong relationships. It is the high calibre of our people that wins Worley the great jobs. Australian engineering skills are well regarded. Our resource rich economy gives Worley access to a talented pool of people who fit our target markets well, and whose ability to share knowledge and expertise with non Australian Worley people overseas means we can build well rounded teams. Backed by a culture where autonomy, responsibility and authority are devolved throughout the organisation, and people who are prepared to accept challenge, Worley’s senior executives can create and develop relationships with decision makers, ensuring that business development takes place at the very highest level and providing an enviable strike rate. This is a key point of competitive difference and one we must nurture by continuing to develop our people wherever they are, through opportunity, challenge, training and recognition.

JOHN GRILL CHIEF EXECUTIVE OFFICER

PROJECTS | TECHNOLOGIES | SERVICES | DEVELOPMENTS | 9 HOW WE DO IT KEY TO WORLEY’S SUCCESS IS ITS COMMITMENT TO SIX CONCEPTS THAT DEFINE HOW IT DELIVERS RESULTS TO CLIENTS: GLOBAL, PARTNERSHIP, PEOPLE, IDEAS, SYSTEMS AND RESULTS. THESE CONCEPTS DO NOT EXIST IN ISOLATION BUT WORK TOGETHER TO PRESENT A SINGLE WORLEY IN THE MARKETPLACE. IMPORTANTLY, IT IS HOW WORLEY PUTS THESE CONCEPTS INTO PRACTICE ON A DAILY BASIS THAT REINFORCES ITS LEADERSHIP POSITION AND WILL SECURE ITS FUTURE. LIVING BY THESE CONCEPTS IS NOT ALWAYS EASY BUT THEY ARE CERTAINLY VITAL IN PROVIDING WORLEY WITH A COMPASS READING FOR ITS FUTURE DIRECTION.

GLOBAL PARTNERSHIP PEOPLE Its ever expanding network of offices around Partnership concepts are now deeply ingrained People seem to thrive in Worley’s loose/tight the world evidences Worley’s global nature. in the Worley culture. We enter partnerships organisational structure. They often talk about Relying on our systems, our virtual network understanding that success depends on the freedom and the sense of empowerment and our first rate people who are readily developing relationships, understanding they feel at Worley. Our clients and partners relocated to wherever our clients need us, objectives and aligning goals. Some people see the difference too. They like to work with Worley has developed an attitude that is truly have questioned why Worley partnerships Worley people and they see the results in global. Our international presence is driven by endure. The real secret to Worley’s strong productivity levels. This is a real competitive client needs and our desire to provide clients partnership track record is our commitment. advantage for Worley. After all, success gets with the best possible results. To achieve this Alliances, joint ventures and partnerships often down to people whether you are performing we work with high calibre partners in countries require short term sacrifice to ensure long term work or pitching for it. The beauty is that since where we need to, channel high value and success. Flexibility is vital. Change in objectives, this is all about culture – shared attitudes and complex work through high technology centres commercial arrangements, goals and even values that have been built up over the years of excellence, and process volume work people can be expected as we continue to strive and that determine norms for how people are through lower cost base offices. It is a strategy for optimal performance. Partnerships represent expected to behave – then it is not something that is paying off. a better way to do business. our competitors can easily copy. JOHN GRILL PETER MEURS RUSSELL STALEY CHIEF EXECUTIVE OFFICER EXECUTIVE DIRECTOR EXECUTIVE DIRECTOR

10 | PROJECTS | TECHNOLOGIES | SERVICES | DEVELOPMENTS IDEAS SYSTEMS RESULTS One of the superior capabilities that Worley A system is “a set of connected things, Results – for clients, partners, shareholders demonstrates in its day to day work with arranged to work together”. This is exactly and staff – are the cornerstones of any clients is not just the capacity to generate what our systems achieve, dynamically and business. Worley is renown for its singular powerful, practical ideas but to take them flexibly. Our systems connect our people and focus on delivering beyond the expected for all through to realistic commercial application. our clients globally, enabling us to work its many stakeholders. To do this, we have Achieving this balance between creative together to deliver results timely and established very high levels of achievement capacity and the real situation in specific efficiently. They provide the framework for and provided the capabilities and support to projects is often complex, and indeed it relies integrating and managing the knowledge accomplish them. In financial terms, this year on a number of characteristics that are clearly within our business, enabling us to continually has been the best on record for Worley but evident throughout Worley. These include a improve and learn from the past, and are success for clients and the progress made by devolved authority structure, mutual support designed to reflect the way in which we work, and for staff sit even more proudly as and teamwork, and a workplace that and to support our business strategies. They substantial achievements. empowers individual and team creativity. Most deliver the information we need to measure DAVID HOUSEGO importantly, it relies on close partnership with our performance against set objectives. Above CHIEF FINANCIAL OFFICER clients, sharing not just risk and reward, but all, our systems are built to be flexible, vision and ideas. interactive and compatible. JOHN SCHUBERT DAVID MOFFLIN CHAIRMAN EXECUTIVE DIRECTOR ADVISORY BOARD

PROJECTS | TECHNOLOGIES | SERVICES | DEVELOPMENTS | 11 PROJECTS WORLEY’S PROJECTS ARM BRINGS TOGETHER ALL FACETS OF THE GROUP IN AN ENGINEERING AND PROCESS DESIGN POWERHOUSE CAPABLE OF MANAGING AND DELIVERING PROJECTS ANYWHERE IN THE WORLD AT BEST IN CLASS LEVELS. USING INVENTIVE APPROACHES, TECHNOLOGIES AND TEAMING IN BOTH CONVENTIONAL AND EMERGING FIELDS, WORLEY PROJECTS IS CURRENTLY ACTIVE IN OIL & GAS, CHEMICALS & MINERALS, DEFENCE, INFRASTRUCTURE, MANUFACTURING, PIPELINES & TERMINALS, POWER, REFINING & PETROCHEMICALS, AND WATER & WASTEWATER MANAGEMENT.

PROJECTS – OPERATIONAL AREAS WORLEY PROJECTS OPERATES ACROSS A BROAD RANGE OF INDUSTRIES PROVIDING WORLD CLASS ENGINEERING AND MANAGEMENT SERVICES FOR ITS CUSTOMERS THROUGHOUT A PROJECT LIFE CYCLE:

WORLEY SCOPE OF SERVICES PHASE 1: IDENTIFY PHASE 4: EXECUTE • Preliminary plans and schedules • Detailed design • Risk assessment • Procurement • Economic modelling • Construction management PHASE 2: SELECT • Project management • Feasibility studies • Operations and maintenance planning • Contracting model PHASE 5: OPERATE • Cost estimates • Health, Safety and the Environment (HSE) PHASE 3: DEFINE compliance • Front End Engineering and Design (FEED) • Integrated services (maintenance and modifications) • Detailed execution plans • Operations assistance • Refine estimates and develop Authority for Expenditure (AFE)

12 | PROJECTS | TECHNOLOGIES | SERVICES | DEVELOPMENTS PROJECTS | OIL & GAS | WORLD STAGE SIGNIFICANT IN 2001 HAS BEEN WORLEY’S PERFORMANCE IN OIL & GAS PROJECTS GLOBALLY. IN AN INSPIRATIONAL YEAR, WORLEY HAS WON LEADING EDGE WORK ON PROJECTS WITH COMBINED CAPITAL EXPENDITURE (CAPEX) IN EXCESS OF USD1.0 BILLION IN ASIA AND THE MIDDLE EAST. PARTLY ASSISTED BY AUSTRALIA’S LOW EXCHANGE RATE AND THE UPWARD MOVEMENT IN THE OIL PRICE, WORLEY’S SUCCESS IS MUCH MORE A REFLECTION OF ITS COMMITMENT TO DEVELOPING ITSELF AS A MAJOR GLOBAL PLAYER THROUGH WORLD CLASS SYSTEMS, SUPERIOR PROJECT MANAGEMENT AND BREAKTHROUGH SOLUTIONS.

ANDREW WOOD, IAIN ROSS, PETER BROOKS

| 13 PROJECTS | OIL & GAS | ASIA FOUR KEY PROJECTS THROUGH ASIA, WITH COMBINED PROJECT VALUES OF MORE THAN USD500 MILLION, CONTINUE WORLEY’S SUCCESS IN THIS REGION. NEW PROJECTS IN VIETNAM AND CHINA OPEN INTERNATIONAL DOORS FOR WORLEY’S PERTH AND MELBOURNE OFFICES AND GAIN ENTRY INTO KEY NEW MARKETS AT LOW RISK, WHILE WORLEY’S LONG TERM RELATIONSHIPS WITH CHEVRON AND UNOCAL IN THAILAND KEEP THE WORK FLOWING IN THE BURGEONING ASIAN REGION.

KEY FEATURES Meanwhile, Worley’s Houston office is FUTURE Winning a slice of the USD175 million Rang contributing to the detailed design of Apache’s Working in an integrated team environment, Dong Offshore Field Development project for USD200 million Zhao Dong Offshore project in the Rang Dong project provides Worley with Japan/Vietnam Petroleum Corporation (JVPC) China’s Bohai Bay. An integrated team of low risk entry into Vietnam and the opportunity realised a long term goal of Worley’s to work people from Apache, Petrochina, Worley to build relationships with JVPC’s partners, in Vietnam. Worley will utilise the skills of up and other contractors is likely to continue Conoco and Petrovietnam, as well as the scope to 100 people based in Perth and advanced through the construction stage of this to extend the relationship to an integrated web based communications to facilitate important development. services contract. provision of engineering services on this Worley’s 10 year unbroken succession of China projects, Dong Fang and Zhao Dong, international project. project work in the Gulf of Thailand continues confirm Worley’s presence in a potentially China, the world’s fastest growing oil and gas after securing the Offshore Management large market, while the continued confidence region, is also proving a solid market for program for Chevron Offshore Thailand Ltd. of Unocal and Chevron in Worley’s abilities Worley with Melbourne and Houston offices Over 90 staff managed from Perth are involved means greater scope for future work signing projects this year. Worley is contracted in an initial project to install six state of the art throughout Indochina. to China Offshore Oil Engineering Corporation Minimum Facility Platforms and to increase the (COOEC) for the topsides detailed design on processing capacity of the existing Benchamas the USD50 million Dong Fang Offshore Facility. This relationship has helped Worley Development project, requiring 60 people strengthen its Bangkok support office and the based in Melbourne to work in an integrated intention is to service other Thailand based team that includes COOEC engineers. clients such as Unocal, and extend support to Chevron for its developments in neighbouring countries.

ANDY LE MESSURIER, IAN MCDONALD, STUART CROFTS

14 | OIL & GAS MIDDLEJOHN ETHERINGTON, EAST JIRATH SRISONTISUK, DENNIS LUCEY, IAN WILKINSON

PROJECTS | PIPELINES & TERMINALS | OIL & GAS | MIDDLE EAST JANUARY 2000 HERALDED A WATERSHED FOR WORLEY IN THE MIDDLE EAST WHEN IT ENTERED A JOINT VENTURE AGREEMENT WITH PETROCON ARABIA. THE BENEFITS OF THIS KEY STRATEGIC MOVE RESOUNDED IN 2001 WITH WORLEY EXPANDING ITS WORKBASE SIGNIFICANTLY IN THE AREAS OF PIPELINES & TERMINALS AND OIL & GAS. AFTER ESTABLISHING WORLEY ARABIA IN AL KHOBAR IN 2001, WORLEY NOW HAS OFFICES IN SAUDI ARABIA, QATAR AND ABU DHABI, WITH STAFF NUMBERING CLOSE TO 250 SERVING THESE LOCATIONS.

KEY PROJECTS the early phase of a project. Worley’s FUTURE In the Pipelines & Terminals area, Worley is optimised design of structure and process With offices in Saudi Arabia, Qatar and Abu providing technical resources and assistance to will significantly reduce capital expenditure Dhabi, and systems support from Worley partner Petrocon Arabia which is executing and increase revenue through greater offices around the world, Worley is positioning upstream and downstream pipeline projects in condensate production. Additionally, Bul itself to win major projects in the Middle East the Saudi Aramco Haradh Gas Plant for clients Hanine highlights Worley’s global capabilities, and aims to become a preferred partner to key Technip and Suedrohrbau. In Oil & Gas, Worley with the project managed from Qatar tapping clients in one of the world’s most active oil and is involved in projects in Qatar with major new inter office expertise in Kuala Lumpur, Perth gas regions. Importantly, Worley is becoming clients Qatar Petroleum and Maersk. and Melbourne. known for its ‘alliance’ mentality, its innovative Further strengthening Worley’s position in the systems and ability to deliver valued added KEY FEATURES Middle East is a two year Brownfields services at world class standards. Assisting partner Petrocon Arabia in the areas Engineering Support contract with Maersk for of detailed design, procurement and the development of its Block 5 Offshore Field construction and commissioning, Worley is that has seen Worley establish a satellite providing pipelines and terminals skills for the design office for Maersk in Qatar. Haradh Gas Plant projects: with Technip to install five Gas Transmission Pipelines totalling more than 390kms in gas and condensate pipelines, including connections to Saudi Aramco’s Master Gas System; and with Suedrohrbau installing three Gas Production Manifolds to collect and transport non associated gases from the Haradh, Tinat, Waqr/Wudayhi areas to feed the Haradh Gas Plant. Qatar Petroleum’s engagement of Worley to complete the advanced FEED on the USD300 million Bul Hanine Offshore Gas Recycling project has already seen the benefit of Worley’s commitment to value engineering in

PROJECTS | TECHNOLOGIES | SERVICES | DEVELOPMENTS | 15 PROJECTS | OIL & GAS | AUSTRALIA AND NEW ZEALAND WORLEY IS WORKING ON THE PRE FEED PHASE OF THE POHOKURA GAS PROJECT IN NEW ZEALAND FOR FLETCHER CHALLENGE ENERGY (RECENTLY ACQUIRED BY SHELL). IN AUSTRALIA'S BASS STRAIT, WORLEY'S JOINT VENTURE WITH ABB IS INVOLVED IN A MAJOR CONTRACT WITH EXXONMOBIL, AND WORLEY IS WORKING WITH ORIGIN ENERGY AND DUKE ENERGY ON GAS RELATED PROJECTS. IN THE WEST, WORLEY IS IN JOINT VENTURES WITH FLUOR DANIEL ON THE PHILLIPS PETROLEUM USD1.5 BILLION BAYU-UNDAN GAS RECYCLE PROJECT, AND TRANSFIELD ON THE LONG TERM NORTH WEST SHELF INTEGRATED SERVICES CONTRACT (ISC) FOR WOODSIDE.

KEY FEATURES its size (USD1.5 billion and 500 personnel), offshore projects – in Australia, New Zealand Pohokura is the largest gas field discovered in confirming Worley’s engineering, procurement and further afield. 30 years in New Zealand, and Worley’s work at and construction support capabilities in major Worley’s involvement with Origin Energy and the early stage of concept screening and offshore developments, and Woodside for its Duke Energy in their Bass Strait projects opens selection gives its Transfield Worley (TW) JV in ‘life of field’ ISC (average AUD90 million pa) further opportunities as they expand their New Zealand the opportunity to be involved in providing TW with a stable, predictable operations locally and internationally, while the FEED works and then the detailed design workload and broad development opportunities the TW Woodside relationship provides the and project management phases later on. for some 550 personnel. foundation for other ISCs. Continuing its contribution to networking gas FUTURE supplies throughout Australia, Worley is Through Pohokura, and the long term contract involved in the AUD300 million Duke Energy with Shell Todd Oil Service in partnership with Victoria to Tasmania Gas Pipeline out of Transfield, Worley’s New Zealand office has Melbourne. From Brisbane, Worley has some 40 entrenched itself in the local offshore oil and people working on the FEED project for Origin gas development market while also broadening Energy’s AUD400 million BassGas project. Worley’s global capabilities. Working with Bayu-Undan and Woodside’s North West Shelf Phillips Petroleum on Bayu-Undan positions projects are long running, important, high Worley well in future bids for other large scale value JV projects: Bayu-Undan particularly for

MIKE WHITFIELD, MIKE MOLLISON, FRANK LOSTY OIL & GAS WORLD STAGE

16 | SOUTH AFRICAMOZAMBIQUE PIPELINBEVAN DICKERSON, RICHARD BROOKE-SMITH, MICK O’BRIEN

PROJECTS | PIPELINES & TERMINALS | MOZAMBIQUE–SOUTH AFRICA GAS PIPELINE

KEY PROJECT IN 2001, WORLEY WON A CONTRACT IN INTERNATIONAL COMPETITION FOR SOUTH AFRICAN CLIENT SASOL TECHNOLOGIES’ 860KM NATURAL GAS PIPELINE FROM TEMANE IN MOZAMBIQUE TO SECUNDA IN SOUTH AFRICA. SO FAR, THE PROJECT HAS INVOLVED BASIC ENGINEERING DESIGN OF THE PIPELINE AND PRESSURE PROTECTION STATION, PROCUREMENT OF LINE PIPE, ENGINEERING, PROCUREMENT, CONSTRUCTION (EPC) CONTRACTOR AND QUALITY AND ACCOUNTING CONTRACTS, PREPARATION OF CAPITAL EXPENDITURE ESTIMATE AND CONSTRUCTION MANAGEMENT. THE MAJORITY OF THE DESIGN AND PROCUREMENT WORK WAS CARRIED OUT BY WORLEY IN PERTH, WHILE THE SITE WORK WAS EXECUTED BY A TEAM OF WORLEY PERSONNEL WITH SUBCONTRACTOR AFRICON PROVIDING LOCAL EXPERTISE AND LOGISTICAL SUPPORT.

KEY FEATURES FUTURE Key to the project has been the successful The Sasol project has helped reinforce interfacing of Worley systems InControl, Worley’s position as a leading global Axium, Primavera P3, EMS 2000 and consultant in project management, engineering SharePoint, to provide a flexible portal through and design of pipeline systems, and is an which the project can be managed, controlled, important step forward in putting Worley on reported on and assessed. Limited a little by the map in a resource rich and rapidly communications links between South Africa developing part of the world. It also heralds and Australia, the project’s success ultimately the securing of a new major international proves the functionality of combining these client currently undertaking numerous projects systems to ensure a project’s delivery on time around the globe. Seen as a stepping stone to and on budget. The 860km, 26” diameter ANSI securing other business in the area, the Sasol Class 900 pipeline will provide gas from fields project opens up geographical and divisional near Temane in Mozambique as supplementary growth opportunities. feedstock for Sasol’s existing coal to liquids plant at Secunda.

KEY PROJECT A THREE YEAR ALLIANCE SIGNED RECENTLY WITH WMC FERTILIZERS (WMCF) SEES WORLEY IN JOINT VENTURE FOR THE FIRST TIME WITH MAUNSELL SUBSIDIARY, MAMIC, TO PROVIDE ENGINEERING, PROCUREMENT AND CONSTRUCTION MANAGEMENT (EPCM) SERVICES TO THREE GEOGRAPHICALLY REMOTE WMCF LOCATIONS. ENGINEERING SERVICES WILL BE PROVIDED FROM AN ALLIANCE HUB IN TOWNSVILLE, QUEENSLAND, TO PHOSPHATE HILL (AMMONIUM PHOSPHATE FERTILIZERS), MT ISA (SULPHURIC ACID) AND TOWNSVILLE PORT (STORAGE AND SHIPPING FACILITIES). WORLEY PROJECT MANAGEMENT, QUALITY AND ACCOUNTING SYSTEMS WILL BE UTILISED VIA A HIGH SPEED DATA LINK TO SERVERS IN BRISBANE. THE ALLIANCE OFFICE WILL ALSO ACCESS WORLEY’S INTRANET SYSTEM ENABLING REMOTE IT SUPPORT.

KEY FEATURES FUTURE The Worley/MAMIC WMCF alliance will As well as giving Worley the opportunity establish a Townsville hub employing 27 people to establish further alliances in North including multi disciplined engineers and drafters Queensland, this alliance will develop from all three companies supported by Worley Worley’s JV with MAMIC which has a strong and MAMIC resources around Australia. The presence in the region after 50 years. WMC Queensland Fertilizer Operations plant will Success of the alliance may provide the replace more than half Australia’s current possibility of rolling out the model to other demand for ammonium phosphate fertilizers WMC sites such as its nickel and copper (1,000,000 tonnes pa) and export to Asia. plants. There is also the potential to develop Providing EPCM services for capital projects the alliance into an ISC, involving a valued at approximately AUD30 million pa, the maintenance contractor as an alliance alliance is an incentivised contract based on a member to provide total project delivery. risk/reward model that will be measured by key performance indicators drawn from the aligned values of all participants. Key to the alliance’s success is the meshing of all personnel into a motivated team driven by the same values. A program of continuous performance improvement also exists.

DAVE RICHARDSON, PHIL HAYWARD, RON TOUSSAINT AMMONIUM PHOSPHATE FERTILIZERS (NH4)2HPO4

18 | O2 CLEAN FUELS

PROJECTS | REFINING & PETROCHEMICALS | BP KWINANA CLEAN FUELS PROJECT

KEY PROJECT WITH ONLY 12 MONTHS FOR A 20 MONTH PROJECT, WORLEY PARTNERED WITH BP TO INSTALL A NEW CATALYTIC CRACKED SPIRIT SPLITTER AND REVAMP A NAPHTHA HYDROTREATER AND HYDROFINER AT ITS KWINANA REFINERY IN WESTERN AUSTRALIA (WA) TO MEET REDUCED DIESEL AND PETROL SULPHUR EMISSION LEVELS REQUIRED UNDER WA’S EURO 2 & 3 FUEL REGULATIONS. COMPLETING THE PROJECT TWO WEEKS AHEAD OF SCHEDULE ON 5 DECEMBER 2000 AT A COST OF USD14.4 MILLION, NEARLY 20% UNDER THE INDUSTRY BEST BENCHMARK, AND WITHOUT LOST TIME FOR INJURY (LTI), MEANT WORLEY AND BP COULD DONATE AUD10,000 TO WA CHILDREN’S CHARITIES, CAMP QUALITY AND CANTEEN.

KEY FEATURES FUTURE A seamless site based partnership between Site based integrated teams supported by BP Refinery Projects and Operations Groups, superior systems and technologies, and United Maintenance (UM) and Worley, motivated by shared risks and rewards, will focused squarely on safety, schedule and cost, generate greater returns for Worley and its enabling an innovative and streamlined clients than standard contractual approach to both process and concept arrangements because they are based on engineering. Worley perfomed at all levels: win/win concepts. Significantly, BP’s Clean front end and detailed design, procurement, Fuels project delivered on promises made at materials management and construction sanction: it cost less than expected (70% top support. Based on its size, this project was quartile average); beat a very tight schedule; noted as one of BP’s top four projects globally, adopted innovative solutions to save cost, delivering extraordinary cost and time savings schedule and energy; and proved that due to high performance across technology efficient, cost effective business can be selection, waste minimisation, energy achieved without compromising safety while optimisation and value engineering. A key to also enhancing community benefits. its success was the streamlined integration of all parties achieved through open communication across all teams.

PROJECTS | TECHNOLOGIES | SERVICES | DEVELOPMENTS | 19 TECHNOLOGIES WORLEY’S TECHNOLOGIES ARM HARNESSES ALL THE TECHNOLOGIES THE COMPANY USES AND DEVELOPS IN ITS DAILY WORK, AND SEEKS OUT NEW TECHNOLOGIES TO EMPLOY IN AS MANY WAYS AS POSSIBLE FOR THE BENEFIT OF ALL ITS CLIENTS AND PARTNERS ON A GLOBAL BASIS. TECHNOLOGICAL INNOVATION FOR THE PURPOSE OF POSITIVE CHANGE IS A FOUNDATION WORLEY BUSINESS. WORLEY TECHNOLOGIES IS CHARGED WITH COMMERCIALISING THE COMPANY’S PROPRIETARY AND INTRODUCED TECHNOLOGIES.

TECHNOLOGIES – OPERATIONAL AREAS WORLEY SCOPE OF SERVICES WORLEY TECHNOLOGIES DEVELOPS, SOURCES AND MARKETS • DESIGN TECHNOLOGIES ON A GLOBAL BASIS, WORKING IN THE DISCRETE • ANALYSIS AREAS OF: • TESTING • ADVANCED ANALYSIS • CONSULTING Dynamic/thermal Finite element • INSTALLATION Failure/fracture • PROJECT MANAGEMENT Site • COMMUNICATIONS Project design & management Construction Installation Testing • DAD (COMPLEX SYSTEM DATA MANAGEMENT) Systems database development • INSTRUMENTATION & CONTROLS Project design & management to system integration Commissioning Installation • PROPRIETARY TECHNOLOGIES Technology development & marketing ePROCS InControl Fleet Analysis Fenderfuse Rail Gauge Worley Reclaim Valve Worley Zeta Beta Worley Energy Commerce • SYSTEM INTEGRATION Operating systems Multi system database tool development

WORLEY HAS ALWAYS BEEN AN INCUBATOR OF TECHNOLOGIES. ITS EXISTING PROPRIETARY TECHNOLOGIES PROVE THIS CONTINUALLY AS THEY ASSIST WORLEY IN WINNING KEY PROJECTS GLOBALLY: ePROCS TOTAL PROJECT CONTROL InControl INFORMED DECISION MAKING BASED ON COSTS, TIME AND RESOURCES FLEET ANALYSIS VEHICLE AND DRIVER PERFORMANCE ANALYSIS FENDERFUSE ECONOMICAL UPGRADE OF BERTHING FACILITIES FOR LARGER VESSELS RAIL GAUGE ELECTRONIC ANALYSIS FOR ACCURATE RAIL GRINDING WORLEY RECLAIM VALVE REDUCED COSTS IN RECLAIM TUNNEL CONSTRUCTION WORLEY ZETA BETA IMPROVED PERFORMANCE AND FATIGUE LIFE OF TALL STRUCTURES

HOT TECHNOLOGY KEY FEATURES FUTURE In 2000, Worley moved strategically to Worley Energy Commerce provides effective, Developing, sharing and commercialising establish a technology incubator to focus on comprehensive control of fuel as a major technological innovation has become a and invest in technologies relevant to its business expense through three aspects: an foundation business for Worley. Committed various fields of operation. Devised Electronic Fuel Commerce facility minimises to technological development as a force of independently, or through collaborating with purchase costs and manages fuel price risk to positive change in projects and services for its clients and partners, technologies borne in provide a productive, paperless channel for its clients, Worley is on a path that will this incubator will change the way Worley B2B electronic commerce across national and continue to drive it forward successfully on works and will deliver better results. A major regional oil markets; a Fuel Facility a global basis. result of this incubator approach in 2001 Management system provides a complete was the establishment of Worley Energy supply chain management solution that Commerce, a business that provides total targets cost control and allocation, fraud fuel management through Electronic Fuel prevention, enhanced energy efficiency, and Commerce, Fuel Facility Management and environmental monitoring; and, Fuel Facility Fuel Facility Asset Management. Asset Management ties both these together with expert engineering management of bulk fuel assets for companies looking to outsource their fuel operations.

MARK TRUEMAN, BRETT JOBSON GLEN MIDDLETON, WARWICK RICHARDS ELECTRONIC B2BFUEL COMMERCE

| 21 TECHNOLOGIES | SYSTEMS INTEGRATION | SYSTEMS FOR TOMORROW’S TECHNOLOGIES

WORLD CLASS SYSTEMS EXECUTING MULTI SITE/MULTI TASK PROJECTS AROUND THE WORLD, WORLEY NEEDS CONSISTENT AND COMPLEMENTARY BUSINESS SYSTEMS THAT CAN BE USED ANYWHERE IN THE WORLD AT ANYTIME, AND THAT ENSURE MAXIMUM VALUE IS ADDED TO ANY PROJECT WHEREVER IT MIGHT BE. WORKING WITH LEADING TECHNOLOGY, WORLEY’S SYSTEMS DEVELOPMENT IS DRIVEN BY THE REAL NEEDS OF CLIENTS AND THE PROJECT MANAGERS RUNNING THEIR PROJECTS, WHICH ARE NOT ONLY LARGE SCALE AND COMPLEX BUT ALSO GLOBAL AND THAT REQUIRE A SINGLE SUITE OF COMPATIBLE SYSTEMS TO FACILITATE THE PROCESS OF BUSINESS. WORLEY WINS WORK INTERNATIONALLY BECAUSE ITS SYSTEMS ARE CREDIBLE AND AT THE CUTTING EDGE. A SINGLE DATABASE, ATLAS, WILL SHORTLY INTEGRATE AND INTERFACE ALL OF WORLEY’S SYSTEMS ENCOMPASSING EVERY FACET OF ITS WORK:

PROJECT CONTROLS ESTIMATING FINANCE MATERIALS MANAGEMENT CLIENT SYSTEMS HUMAN RESOURCES DOCUMENT MANAGEMENT QUALITY MANAGEMENT KNOWLEDGE MANAGEMENT

IAN HORGAN

THIS INTERNET MAP SHOWS THE POTENTIAL PATH OF AN EMAIL MESSAGE ORIGINATING IN THE US AND TRAVELLING THROUGH EACH OF THE WORLD’S 95,800 REGISTERED NETWORKS (1999) KEY FEATURES FUTURE Worley’s Business Systems Group is driven by The key differentiator in winning future the need to remain at the cutting edge. A core business will be the availability of appropriate group develops internally and externally and efficient business systems that maximise derived systems in a disciplined manner based added value. Worley’s systems significantly on needs identification, in house consultation, differentiate Worley from its competitors. information gathering, systems assessment Their flexibility and ease of use enable quick and functional specification. A larger team is restructuring of proposals to suit client needs involved in subsequent systems and, because they have been developed in implementation, training and support. Worley’s real project environments, they work in the systems are developed on a ‘need to have’ not way projects work. Distinguished by their ‘nice to have’ basis which focuses on needs clarity and usefulness in reporting, Worley’s rather than desires, and is spread throughout systems are adaptable and highly integrated, the company by using both people and and more responsive to developing needs and capabilities Worley wide. InControl manages trends. By dedicating a team of highly skilled projects; EMS 2000 (enterprise management people to planning systems for tomorrow’s system) manages Worley’s key business technology, Worley is ensuring its market processes to ensure consistency and quality; leadership position, and that clients will select ePROCS is the next generation project control Worley for its ‘systems of choice’. software; while MMS (materials management system) assists in procuring and managing PHIL TOOHEY, COLIN MCIVOR, VITO FORTE valuable assets.

| 23 SERVICES WORLEY’S SERVICES ARM EXTENDS THE COMPANY’S CORE SKILL RANGE BEYOND ‘TRADITIONAL ENGINEERING’ WORK THROUGH ALLIANCES, JOINT VENTURES, AND INTEGRATED SERVICES AND OTHER CONTRACTS THAT FAR OUTREACH ITS PROJECTS PORTFOLIO AND ADD VALUE TO CLIENT PROJECTS AND OPERATIONS AROUND THE WORLD. BY DIRECTING ITS SKILLS OUTWARDS ON A STAND ALONE BASIS IN THE AREAS OF ASSET MANAGEMENT, DUE DILIGENCE, ENVIRONMENTAL MANAGEMENT, INTEGRATED SERVICES, MAINTENANCE, OPERATIONS SUPPORT, AND SAFETY & RISK MANAGEMENT, WORLEY SERVICES ENSURES WORLEY’S UNIQUE STATUS.

SERVICES – OPERATIONAL AREAS WORLEY SERVICES LEVERAGES WORLEY’S CORE SKILL RANGE ACROSS MOST INDUSTRIES IN THE AREAS OF: • ASSET MANAGEMENT • DUE DILIGENCE • ENVIRONMENTAL MANAGEMENT • INTEGRATED SERVICES (TOTAL EPCM CONTRACTS) • MAINTENANCE ENGINEERING & OPERATIONS SUPPORT • SAFETY & RISK MANAGEMENT (HEALTH, SAFETY & ENVIRONMENT)

WORLEY SCOPE OF SERVICES • process improvements • change management • technical integrity audits • environmental surveys, impact assessments & audits • compliance monitoring • risk engineering & hazard management • quantified risk assessment • loss prevention through design safety • training • reliability studies in stand alone projects or as part of broader integrated services contracts, alliances or joint venture work.

24 | PROJECTS | TECHNOLOGIES | SERVICES | DEVELOPMENTS SINGAPORE

SONOKO POWER STATIONJOHN BOLTO, ROD TOUZEL, LINDSAY WHEELER

SERVICES | DUE DILIGENCE | RAILWAYS, POWER AND ALUMINIUM

KEY PROJECTS INTERNATIONAL FINANCIAL INSTITUTIONS RECOGNISE WORLEY’S REPUTATION AS A LEADING PROVIDER OF TECHNICAL AND ENVIRONMENTAL DUE DILIGENCE SERVICES IN THE OIL & GAS, PROCESS, POWER AND INFRASTRUCTURE, AND NOW CHEMICALS & MINERALS SECTORS. THIS WAS DEMONSTRATED IN 2001 BY THE APPOINTMENT OF BURNS AND ROE WORLEY AS THE KEY TECHNICAL ADVISER ON TWO MAJOR PROJECTS – THE ALICE SPRINGS TO DARWIN RAILWAY (ASDR) AND THE PRIVATISATION OF SINGAPORE’S STATE OWNED POWER GENERATING ASSETS – AND WORLEY OUT OF PERTH ON A REVIEW OF CHINA’S ALUMINIUM INDUSTRY IN PREPARATION FOR AN INTERNATIONAL IPO.

KEY FEATURES technical adviser for the privatisation of all of FUTURE Valued at AUD1.3 billion, the ASDR is Singapore’s state owned power generating Over the last six years, Worley has emerged currently Australia’s largest infrastructure assets. Using the Worley Singapore office as as a leading provider of technical due project. Appointed by the senior funding banks a base, Burns and Roe Worley conducted diligence services in Australia and Asia and to undertake a technical risk assessment for several site inspections and is now preparing has a well earned reputation with Australia’s financial closure, Burns and Roe Worley detailed condition assessment reports and leading banks, legal and accounting houses as project managed the input of several Worley technical information memoranda for the well as government. This success has resulted business units (including Williams Worley for forthcoming asset sales, which should realise from Worley providing clients with comfort rolling stock and permanent way issues and several billion dollars. about identifying, quantifying and managing or Worley Fraser for the port component) in its In what was the first China based project in eliminating technology risk – a discipline in lead role on regulatory, design and construct, Chemicals & Minerals for Worley, a three which Worley now excels. and contractual issues. Following financial month review of the Chinese aluminium closure, Burns and Roe Worley was appointed industry was a major achievement in terms of Lenders’ Engineer for the three year organisation, systems management, skills construction period and operational phases. selection and international recognition. In late 2000, Burns and Roe Worley was appointed by Temasek Holdings to act as

KEY PROJECT A TEAM OF ALMOST 500 PEOPLE FROM THE CLIENT, WORLEY ABB AND OTHER SUBCONTRACTORS RUN THE LARGEST ENGINEERING, PROCUREMENT AND CONSTRUCTION MANAGEMENT (EPC) PROJECT THAT WORLEY HAS EVER BEEN INVOLVED IN. KNOWN AS THE LONGFORD PROJECTS ORGANISATION, THIS INTEGRATED TEAM WORKS TOGETHER TO COMPLETE WORK ON ONSHORE PROCESSING PLANTS AT LONGFORD, VICTORIA, SAFELY, WITHIN BUDGET AND ON SCHEDULE. THE TEAM’S UNIQUE STRUCTURE ALLOWS WORK TO MOVE QUICKLY AS BARRIERS TO IMPLEMENTATION HAVE BEEN REDUCED WHILE DUPLICATION OF ROLES IS NON EXISTENT BECAUSE PEOPLE FROM ALL PARTIES OCCUPY KEY POSITIONS WITHIN THE TEAM.

KEY FEATURES procedures and processes, harnessing the best FUTURE Driving the project’s success is the support it of both worlds. The project provides expanded This project is a world class showcase of receives from senior management – Worley responsibility for all people involved – Worley Worley’s capacity to manage brownfields CEO John Grill is a member of the project’s people work alongside operations and integrated EPC projects, giving it an extremely steering committee. Other success factors are maintenance personnel, giving them a unique competitive edge in an important market, the inclusion of key subcontractors as understanding of executing major project work which is growing domestically and members of the construction management in an operating plant. internationally. Positioning Worley favourably team, and the fact that the project has its own in this market, this project has been identity evidenced by its newsletter, systems, instrumental in realising Worley’s success in and templates. Existing systems requirements major offshore projects such as the recently have driven the development of the project’s awarded Dong Fang project in China.

CRAIG REEVES, SIMON TAYLOR, LAURIE JOYCE, PAUL HARRISON

26 | PROJECTS | TECHNOLOGIES | SERVICES | DEVELOPMENTS DUE FRANCISDILIGENCE MCNIFF PIPELINES

SERVICES | DUE DILIGENCE | US NAVY WORLDWIDE PIPELINE INTEGRITY PROGRAM

KEY PROJECT WINNING ITS SECOND THREE YEAR CONTRACT WITH THE US NAVY IN SEPTEMBER 1999, WORLEY EXECUTES PIPELINE INTEGRITY PROJECTS COVERING 400 PETROLEUM, OILS AND LUBRICANT PIPELINES AND ASSOCIATED FACILITIES AT US MILITARY BASES AROUND THE WORLD FROM HOUSTON. PERFORMING IN THE AREAS OF PLANNING, ENGINEERING, PROCUREMENT AND CONSTRUCTION MANAGEMENT, WORLEY CARRIES OUT INTELLIGENT INSPECTIONS, PRESSURE TESTING AND FACILITY REHABILITATION THROUGH TO MOBILISATION OF SPECIALISED SUBCONTRACTORS AND EQUIPMENT, AND FACILITY RE COMMISSIONING.

KEY FEATURES remote locations. Notably, Worley won this FUTURE With a core team in Houston, and using flagship contract through a US Government Rapid expansion of the US Pipeline Integrity Worley’s database systems to manage existing tender, bidding against major US competitors. industry is expected following the recent pipeline data and field inspection results, This second contract term affirms the US introduction of new stringent regulations for together with other proprietary Worley Navy’s recognition of Worley’s ability to the planning and management of liquids and technologies (InControl, ePROCS, EMS 2000, deliver large, complex projects in terms of gas pipelines. Worley’s track record with the Quality Management systems and Risk both quality and time, and positions Worley as US Navy allows it to aggressively pursue this Management tools), Worley and the US Navy a leading provider of total integrity services. growth industry with confidence, entering the work as an integrated team throughout the US long term integrated services and asset and internationally in locations including management business in the US. Worley’s Guam, Cuba, the Caribbean and Japan. highly successful Australian experience in this Pipeline systems inspected can range from field is providing it with the business and lengths of several kilometres in highly contract models necessary to expand into the populated areas to cross country pipelines in potentially huge US market.

PROJECTS | TECHNOLOGIES | SERVICES | DEVELOPMENTS | 27 DEVELOPMENTS WORLEY’S DEVELOPMENTS ARM AIMS TO EXPAND THE COMPANY’S SCOPE BEYOND BEING AN ADVISER, SERVICE PROVIDER AND EQUITY PARTNER TO BECOMING AN INVESTOR, THEREBY EXTENDING ITS THRESHOLD OF EARNING TO INCLUDE INVESTMENT IN OPPORTUNITIES OFFERING A DIRECT LINK TO WORLEY’S CORE SKILLS. SEEN AS A LOGICAL PROGRESSION FOR SUCH A BUSINESS, WORLEY DEVELOPMENTS IS CONSTANTLY SEEKING OUT PROJECTS AND OPPORTUNITIES SUCH AS ESPERANCE PIPELINE AND POWER STATION, AND KWINANA PORT.

DEVELOPMENTS – OPERATIONAL AREAS WORLEY DEVELOPMENTS SEEKS EQUITY INVESTMENT POSITIONS IN COMPLEMENTARY BUSINESSES AND OPPORTUNITIES TO INSTIGATE PROJECTS WHERE THERE IS A DIRECT LINK BETWEEN WORLEY’S CORE SKILLS AND THOSE OF COMPATIBLE PARTNERS. Current equity positions are held in • Kwinana Port • Esperance pipeline and power development • Rail • Biofuels • Waste management – Conporec

KEY PROJECT PROPOSING THE DEVELOPMENT OF AN AUTOMATED HIGH EFFICIENCY/LOW EMISSION GAS TURBINE POWER STATION, OFFERING BOTH COMMUNITY AND ENVIRONMENTAL BENEFITS FOR THE ESPERANCE REGION IN WESTERN AUSTRALIA, HAS WON BURNS AND ROE WORLEY PREFERRED BIDDER STATUS AHEAD OF 22 OTHERS IN A SIGNIFICANT AUSTRALIAN POWER DEVELOPMENT. AT AN EXPECTED OVERALL COST OF AROUND AUD75 MILLION, THE WESTERN POWER DEVELOPMENT INVOLVES A 320KM NATURAL GAS PIPELINE FROM KAMBALDA TO ESPERANCE PORT WHERE A LOW EMISSION GAS POWER STATION WILL OPERATE. THE PROJECT INCORPORATES THE PURCHASE OF RENEWABLE ENERGY FROM WESTERN POWER’S EXISTING WIND FARMS AND INCLUDES THE POSSIBILITY OF A BIOMASS FUELLED PLANT.

KEY FEATURES FUTURE Working together with Solar Turbines Australia, Pending the successful conclusion of Burns and Roe Worley’s proposal offers efficient negotiations with Western Power, construction power production by using the best technology of the project is expected to start in mid 2002 available in terms of both construction and and be completed by late 2003. A long term operation. Additionally, the project will mean contract with a sharp focus on future that homes and businesses in the Esperance sustainability, the Esperance power project is region can access gas supply at competitive the launching point for Burns and Roe Worley prices, and supports the possibility of a to take a major role in the Australian power desalinated water pipeline from Esperance to industry. The project will demonstrate Burns Kalgoorlie. Burns and Roe Worley’s success and Roe Worley’s expertise and ability to meet proves that major projects are not simply high standards of supply reliability and quality assessed on a cost basis. as it retains responsibility for both features for the term of the contract, which may be exposed to competition for the supply of power from 2006 onwards.

LES GREEN, DAVE STEELE, PETER SHAW ESPERANCEPOWER

| 29 ADVISORY BOARD

JOHN SCHUBERT JOHN GRILL ROBERT BRUCE GRAHAME CAMPBELL JOHN GREEN Chairman Chief Executive Officer Non Executive Member Non Executive Member Non Executive Member Non Executive Member Executive Director Advisory Board Advisory Board Advisory Board Advisory Board After a successful career A specialist in corporate Grahame has over 30 John is an investment A chemical engineer by with Esso, John founded strategy and financial years’ experience as an banker whose particular training, John began his Wolohan Grill & Partners management, Robert is engineer and in the focus is on mergers, career in 1969 with Esso in 1971. This specialised the Principal of Robert management of major acquisitions and equity in Australia. In his 24 engineering practice Bruce and Company and infrastructure projects finance. John is an years with Esso, he held purchased Worley a Visiting Fellow at and was formerly Executive Director of many positions in Engineering (Aust) in Macquarie Graduate Managing Director of Macquarie Bank where Australia and 1987. His personal School of Management. CMPS&F in Australia. he heads its Financial internationally, expertise is in every With a background and Today, he is a director of Institutions Group. He is culminating in his seven aspect of project delivery early career in Utility Services a member of the Listings year role as Chairman and he has acted for all of engineering, Robert Corporation, Iluka Advisory Panel of the and Managing Director in Worley’s major clients. He moved into finance and Resources and others. He Australian Stock Australia. In 1993, he remains closely involved was a Vice President of is a former director of Exchange and is a was appointed Managing at board level with two of Citibank with whom he Statewide Roads, former director of the Centre for Director of Pioneer Worley’s major joint worked in Australia, the President of the Independent Studies. International where he ventures – those with Philippines and New Association of Consulting presided over the merger Transfield and ABB. York. He is the author of Engineers in Australia, with Hanson Plc. John is “Creating Your Strategic and a member of PBEC. the President of the Future”. Business Council of Australia and sits on many boards including those of the Commonwealth Bank, Qantas and Hanson Plc. John accepted the position of Worley Chairman in 2000.

30 | PROJECTS | TECHNOLOGIES | SERVICES | DEVELOPMENTS DAVID HOUSEGO PETER MEURS DAVID MOFFLIN RUSSELL STALEY Chief Financial Officer Executive Director Executive Director Executive Director Executive Director Peter has been a key David is responsible for Russell heads the Oil & David is responsible for all contributor to the growth the Western Australian Gas division for Worley of Worley’s financial of Worley during the past operations of Worley, globally and is the management, company 14 years. He established which is its largest and contact director for the secretarial and the foundations of the most diverse office. He is New Zealand operations. administrative functions. complex process also director responsible He joined Worley in 1979 Prior to joining Worley, he business, pioneered the for Worley Infrastructure, and has been a key was in the business New Zealand office and has a support role in player in developing its development and planning development and has Worley Pipelines & strategic growth, arena with Coca-Cola continued to play a key Terminals. Following a including establishment Amatil and previously had role in alliance successful career in of its Perth office and a background in financial developments including construction and as an growing the Asian management in Australia acting as manager for the academic in the US and operations. His input has and the UK. He is a Woodside alliance. Canada, David joined been central to Worley’s member of the CPA Throughout his career, Worley to manage the innovations in integrated Australia’s Strategic Peter has been a Civil & Structural group services contracts and Business Management champion of using in Western Australia. He alliances, solutions for Centre of Excellence and a technology products to was instrumental in marginal oil fields and regular speaker on finance enhance quality and establishing operations in client relationship and accounting issues. improve the efficiency of Asia. More recently, he management. the design process. has played a leading role in the growth strategy for the Chemicals & Minerals business unit and the purchase of Toussaint & Richardson.

PROJECTS | TECHNOLOGIES | SERVICES | DEVELOPMENTS | 31 CORPORATE GOVERNANCE

PATRICK IGNATIUS TUOHEY, STEPHANIE WHITE

ADVISORY BOARD SAFETY MANAGEMENT Worley recognises that a key to its strong and continued growth is the Worley is committed to ensuring the health and safety of its people, and establishment of an Advisory Board that includes Non Executive protection of the environment. This is demonstrated on a number of fronts. Directors and the Executive Directors of the company. The Advisory All Worley offices comply with statutory requirements for health and Board functions in a similar way to the board of a listed company, safety, and take a very proactive approach to this area for employees drawing on the relative strengths and experiences of all members to and everyone who visits the offices. review performance and agree strategies for future growth. The Worley works in industries with a high risk of injury including oil and Advisory Board has undertaken a review of its performance and intends gas, refining, petrochemicals, chemicals, minerals processing and to institute a process of regular review. The Advisory Board decided power. Care of the safety of all people and the environment are that an Audit Committee should be established in 2002. Profiles of the therefore a major focus. During the year, Worley was awarded a Advisory Board members are included on pages 30 and 31. number of accolades for its environmental and safety leadership, DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE including: During the financial year, the company paid a premium for an insurance • BP Clean Fuels Project – Engineering Excellence Award (2001 West policy insuring any past, present or future director, secretary, executive Australian IEAust.) officer or employee of the Company or its subsidiaries against certain • Longford Projects for ExxonMobil – 1,000,000 manhours LTI free. liabilities. In accordance with common commercial practice, the insurance policy prohibits disclosure of the nature of the liabilities The company focus on HSE will continue with the aim being continual insured against and the amount of the premium. improvement within the group, and a vision that these efforts will further stimulate the HSE performance for partners and clients. RISK MANAGEMENT Worley has well established risk management policies and procedures across the group in areas such as health, safety and the environment (HSE), quality management and contract management. The risk management systems are based on the Australian Standard AS/NZS 4360:1999. A key focus of the risk management process is to create and encourage a greater awareness among all managers and employees, of the commercial and technical risks inherent in the operations, and to identify, analyse and evaluate risks so that an appropriate level of risk is accepted. During the financial year, a comprehensive education and review program was instituted within Worley to reinforce its risk management principles across the 100% owned Worley entities and increasingly in its joint ventures.

32 | PROJECTS | TECHNOLOGIES | SERVICES | DEVELOPMENTS FINANCIAL REVIEW

H C CHIAM, BASIL IRELAND, DEBBIE COSSE, GREG CLINNICK

For the 2001 financial year, the Worley group achieved a net profit after Plant and equipment purchases increased substantially during the year, tax of $9.1m, an increase of 65.0% from the previous financial year. reflecting an investment in the upgrade of much of Worley’s information Revenue in 2001, inclusive of Worley’s share of its incorporated joint technology capability and infrastructure. ventures, increased by $92.7m to $337.7m, an increase of 38.0%. Total liabilities increased to $76.3m, up from $54.2m in the prior Overall return on average equity was 30.0%, up 6.0% from 24.0% in financial year, with the major increases in trade creditors and employee 2000. Return on equity is the key measure for the organisation and is provisions, both reflecting the underlying growth in the business. the basis for calculation of the new performance management There were no increases in issued capital during the financial year. No incentive scheme. options were issued under the Worley option scheme due to the The effective tax rate for the year was 34.5% (36.4% in 2000) reflecting impending restructure of the legal structure of the Worley group. the restatement of deferred tax balances in line with the change in the FINANCING ARRANGEMENTS Australian corporate tax rate. The PCS and Worley Limited (Hong Kong) have access to a bank A narrative of the factors contributing to the results is contained in the overdraft facility and a multi option facility that allows for a mixture of Chief Executive Officer’s report on page 6 of this Annual Report. off and on balance sheet facilities within an overall limit. These DIVIDENDS PAID facilities are secured by fixed and floating charges over the assets of The entities in the Pegged Corporate Structure (PCS), Worley Limited those entities. During the year, the facilities available to the PCS were and Worley Engineering Pty Ltd, paid fully franked dividends of $1.043m increased to allow for sufficient working capital to meet the increased each on 21 August 2000 and 26 February 2001. The PCS holds sufficient growth and investment across the business. franking credits to ensure that dividends payable in the year ending 30 In addition to the increased bank overdraft facility available to the PCS, June 2002 will be fully franked also. the entities in the PCS established an information technology No dividends were paid out of the Worley Limited (Hong Kong) entities equipment facility with IBM Global Financing for $4.0m and increased during the year ended 30 June 2001. the existing bond facility available to the PCS to $15.0m.

STATEMENT OF FINANCIAL POSITION CASH FLOW At 30 June 2001, total assets of the Worley group were $112.0m, an Net cash flow from operating activities decreased during the year to increase of $30.0m during the financial year. The majority of the asset $4.4m, with the decrease in operating cash attributable to increased growth continues to be in outstanding receivables across the Worley working capital, the payment of GST under the New Tax System group. Total receivables stood at $73.2m. introduced in Australia at the start of the financial year, and higher interest and finance costs. Increases were also seen in investments, up $2.6m during the financial year, reflecting the increased investment in Petrocon Arabia, initial Cash used in investing activities was $8.4m, with the majority being the investment in the establishment of Worley Qatar, and increases investment in the upgrade of Worley’s information technology in the value of a number of the existing investments in incorporated infrastructure and additional computing resources required to meet the joint ventures. increased operational headcount. In addition, Worley invested $1.6m in acquisitions, principally TYP. In addition, during the year Worley acquired the business of Newcastle based engineering consultancy and Worley joint venture partner, TYP, Cash used in financing activities included the continuation of dividend for $1.6m and contributed funds of $0.5m to the establishment and payments ($2.1m), scheduled repayments of the short term debt facility formation of Transfield Worley Solutions, an extension of its existing established for the acquisition of Worley Chemicals & Minerals relationship with Transfield Services. Worley also increased its share of ($0.75m), and ongoing lease repayments. Indonesian entity, Ceria Worley, to 87.5%.

PROJECTS | TECHNOLOGIES | SERVICES | DEVELOPMENTS | 33 WORLEY PROFORMA GROUP CONCISE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2001

IMPORTANT INFORMATION TO MEMBERS The Directors’ Report, Concise Proforma Financial Report and Auditor’s Statement contained within this document represent a Concise Proforma Report. The full financial reports of the combined results of Worley Limited and Worley Engineering Pty Limited (the Pegged Corporate Structure) and Worley Limited (Hong Kong) for the year ended 30 June 2001 and the Auditors’ Reports thereon will be provided to members free of charge upon request. The Concise Proforma Financial Report contained within this document has been derived from the full financial reports of the Pegged Corporate Structure and Worley Limited (Hong Kong) for the year ended 30 June 2001 and cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the proforma group as the full financial reports.

34 | DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2001

The directors of the Proforma Group (consisting of the Pegged Corporate Structure and Worley Limited (Hong Kong)) submit the following report in respect of the year ended 30 June 2001. 1 DIRECTORS The directors of Worley Limited and Worley Engineering Pty Limited in office at the date of this report are John Grill, Peter Meurs, David Mofflin and Russell Staley. The directors of Worley Limited (Hong Kong) are John Grill, Russell Staley and Andrew Wood. 2 PRINCIPAL ACTIVITIES The principal activities of the Proforma Group are: • project and asset management; • technology development; • project development; and • provision of engineering services. 3 TRADING RESULTS The net profit of the Proforma Group for the year was $9,079,363 (2000 $5,506,439) after deducting income tax expense of $4,942,192 (2000 $3,204,195) and profits attributable to outside equity interests in controlled entities of $273,692 (2000 $90,174). 4 DIVIDENDS Fully franked dividends of $1,043,104 and $1,043,104 where paid on 21 August 2000 and 26 February 2001, respectively. 5 EVENTS SUBSEQUENT TO BALANCE DATE Since the end of the financial year, the directors are not aware of any matter or circumstance not otherwise dealt with in this report that has significantly or may significantly affect the operations of the Proforma Group, the results of those operations or the state of affairs of the Proforma Group in subsequent financial years. 6 ENVIRONMENTAL ISSUES The Proforma Group’s operations are not regulated by any significant environmental regulation under a law of the Commonwealth or of a State or Territory. 7 INDEMNIFICATION AND INSURANCE OF OFFICERS During the year Worley Engineering Pty Limited paid insurance premiums in respect of directors’ and officers’ liability insurance. The directors’ and officers’ liability insurance is for the benefit of the directors named above and executive officers of the Company and its controlled entities. It provides cover against any loss for which a director or officer becomes legally obligated to pay in respect of any claims for a wrongful act.

Signed in accordance with a resolution of the Boards of Directors:

JOHN GRILL RUSSELL STALEY DIRECTOR DIRECTOR DATE: 14 SEPTEMBER 2001

| 35 STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2001

Note 2001 2000 $$ Revenues from ordinary activities 3 280,043,437 187,085,522

Share of associates’ profits 2,399,892 6,790 Staff expenses (179,069,815) (118,756,644) Reimbursable expenses (39,254,747) (26,142,005) Depreciation and amortisation expense (4,429,870) (2,911,831) Financing and rental expense (3,620,542) (3,485,930) Other expenses (39,459,108) (26,829,093) Provision for support to related entity (2,314,000) (166,000) Operating profit before income tax 14,295,247 8,800,809 Income tax attributable to operating profit (4,942,192) (3,204,195) Operating profit after income tax 9,353,055 5,596,614 Outside equity interests in net profit (273,692) (90,175) Net profit attributable to members of the Proforma Group 9,079,363 5,506,439 Net exchange difference on translation of financial report of foreign controlled entity 457,916 48,791 Total changes in equity other than those resulting from transactions with owners as owners 9,537,279 5,555,230

The accompanying notes form an integral part of these accounts.

36 | STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2001

Note 2001 2000 $$ CURRENT ASSETS Cash assets 8 8,114,857 9,564,110 Receivables 73,184,131 47,139,490 Total current assets 81,298,988 56,703,600

NON-CURRENT ASSETS Investments accounted for using the equity method 6 8,424,799 5,859,068 Other financial assets 119,345 24,115 Plant and equipment 9,173,293 5,485,851 Intangibles 8,667,266 9,601,802 Deferred tax assets 4,208,412 3,370,594 Other 61,655 901,389 Total non-current assets 30,654,770 25,242,819 TOTAL ASSETS 111,953,758 81,946,419

CURRENT LIABILITIES Payables 43,012,986 29,919,909 Interest bearing liabilities 13,012,731 9,194,236 Current tax liabilities 156,053 768,737 Provisions 7,391,601 3,877,752 Total current liabilities 63,573,371 43,760,634

NON-CURRENT LIABILITIES Interest bearing liabilities 2,477,970 3,272,216 Deferred tax liabilities 8,743,875 6,286,849 Provisions 1,522,028 917,004 Total non-current liabilities 12,743,873 10,476,069 TOTAL LIABILITIES 76,317,244 54,236,703 NET ASSETS 35,636,514 27,709,716

EQUITY Contributed equity 5 8,514,764 8,514,764 Reserves 976,958 519,042 Retained profits 7 24,748,639 17,755,484 Equity attributable to members of the Proforma Group 34,240,361 26,789,290 Outside equity interests 1,396,153 920,426 TOTAL EQUITY 35,636,514 27,709,716

The accompanying notes form an integral part of these accounts.

| 37 STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2001

Note 2001 2000 $$ CASH FLOWS FROM OPERATING ACTIVITIES Cash receipts in the course of operations 255,874,793 185,207,324 Cash payments in the course of operations (243,469,822) (172,354,941) Dividends received 758,210 1,250,000 Interest received 1,161,803 579,493 Goods and services tax paid (4,294,872) – Interest and other finance costs paid (1,685,626) (714,168) Income taxes paid (3,934,077) (3,502,207) Net cash provided by operating activities 4,410,409 10,465,501

CASH FLOWS FROM INVESTING ACTIVITIES Proceeds on disposal of plant and equipment 74,025 183,802 Payment for investments (821,448) (2,781,796) Payment for plant and equipment (6,030,996) (2,827,999) Acquisition of business (1,633,215) (208,369) Acquisition of controlled entities – (4,420,585) Net cash used in investing activities (8,411,634) (10,054,947)

CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings (750,000) – Bank loan – 4,190,000 Loan from associates 1,474,640 695,000 Loan to associates (1,868,587) – Lease payments (475,810) (599,922) Dividends paid (2,086,208) (2,000,000) Distribution by controlled entities to outside equity interests (47,325) (48,600) Net cash provided by/(used in) financing activities (3,753,290) 2,236,478 Net increase/(decrease) in cash held (7,754,515) 2,647,032

CASH AT THE BEGINNING OF THE FINANCIAL YEAR 8,690,992 4,480,745 Cash balances in controlled entities acquired – 1,568,055 Effect of exchange rates on opening cash 230,607 (4,840) CASH AT THE END OF THE FINANCIAL YEAR 8 1,167,084 8,690,992

The accompanying notes form an integral part of these accounts.

38 | DISCUSSION AND ANALYSIS OF RESULTS

OPERATING RESULT Revenue increased by 49.7% during the year ended 30 June 2001. The growth in revenue is explained by the following: • an increased capacity in the chemicals and minerals industry via the acquisition of Toussaint & Richardson Pty Limited (now Worley Chemicals and Minerals Pty Limited) in 2000 and the acquisition of TYP Pty Limited during 2001; • the cycle of our Integrated Services Contracts has resulted in higher reimbursable costs compared to 2000; • an increase in activity in the oil and gas industry; and • revenue in 2000 was low due to a slow first six months when several major projects were delayed. Depreciation and amortisation expense increased during the year ended 30 June 2001. This was the first full year of goodwill amortisation associated with the acquisition of Worley Chemicals and Minerals Pty Limited. Plant and equipment purchased during the year increased mainly as a result of the information technology infrastructure upgrade. This increase resulted in a higher depreciation expense. Other expenses as a percentage of revenue decreased marginally over the previous year. The effective tax rate was down from 36.4% in 2000 to 34.5%. This decrease was in line with the reduction in the Australian Corporate tax rate from 36% to 34%. Excluding the impact of the provision for support to a related entity, the effective tax rate would have been 29.7%. This decrease on the previous year was largely due to the restatement of deferred tax balances to reflect the change in the Australian Corporate tax rate in 2002 to 30%. Net profit attributable to members of the Proforma Group increased by 64.9%. The increase in net profit was in line with the increase in revenue. Excluding the provision for support to a related entity, the net profit for the years ended 30 June 2001 and 30 June 2000 would have been $11,393,363 and $5,672,439 respectively. The adjusted net profit represents an increase of 100.9% over the previous year. CHANGES IN THE COMPOSITION OF ASSETS Total assets increased to $111,953,758 from $81,946,419. This was mainly due to an increase in trade receivables and accrued billings. The increase in trade receivables and accrued billings was due to the increase in activity during and, in particular, towards the end of the year. Turnover in June was the highest ever recorded by the Proforma Group. Plant and equipment purchased during the year totalled $6,030,996. As noted earlier, the increase in purchases was driven by the decision to upgrade information technology infrastructure. Investments in associates increased by $2,565,731. The strong performance of our Middle East joint ventures (Petrocon Arabia Co Ltd and Worley Qatar WLL) contributed to this increase. THE RELATIONSHIP BETWEEN DEBT AND EQUITY The gearing of the economic entity, calculated as total liabilities as a proportion of total assets was 68.2% (66.2% : 2000). CHANGES IN CASH FLOWS FROM OPERATING ACTIVITIES Net cash flows from operating activities fell from $10,465,501 the previous year to $4,410,409 in the current period. The reduction in cash from operating activities was due to the growth in revenue experienced during the period. Trade debtors and accrued billings increased by in excess of $20m over the previous year. As the main costs of the business are labour costs, the increase in debtors has a significant impact on cash flow.

| 39 NOTES TO THE CONCISE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2001

1 COMPILATION OF PROFORMA ACCOUNTS These proforma financial statements combine the results of the Pegged Corporate Structure (PCS) of Worley Limited and Worley Engineering Pty Limited with Worley Limited (Hong Kong). Under the PCS, Worley Limited and Worley Engineering Pty Limited entered a deed of arrangement. The PCS was approved by shareholders of Worley Limited and Worley Engineering Pty Limited on 31 March 1999. The “pegging” was effected by contractual arrangements between the companies and amendments to their constitutions. As a result, Worley Limited and Worley Engineering Pty Limited and their respective groups operate together as a single economic enterprise, with neither assuming a dominant role. The main features of the PCS are: • cross guarantees between the entities. This allows the assets of each entity to be available to meet the obligations of the other entity. • distributions per share are the same in both companies. A mechanism is in place that allows for proportional equalisation of net assets in the entities. • a common Board of Directors for each company. • each entity holds voting rights in the other entity. The PCS produces a financial report combining the two groups’ consolidated financial statements. This proforma financial report combines the PCS and the consolidated financial statements of Worley Limited (Hong Kong). 2 BASIS OF PREPARATION The Concise Financial Report has been prepared in accordance with the requirements of the Corporations Act 2001 and Accounting Standard AASB 1039: Concise Financial Reports. The accounting policies adopted are consistent with those of the previous year.

40 | NOTES TO THE CONCISE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2001

2001 2000 $$ 3 OPERATING PROFIT Operating profit before income tax has been determined after: (a) Charging as expense – Borrowing costs 1,685,626 717,557 – Finance lease charges 29,447 39,953 Movements in provisions Depreciation 3,033,291 2,291,423 Amortisation – Plant and equipment under finance leases 193,714 344,684 – Goodwill 1,202,865 411,100 – Deferred tender costs – 34,000 Employee entitlements 1,838,189 1,115,010 Net expense resulting from movement in provisions 6,268,059 4,196,217 Bad and doubtful debts 321,344 1,042,699 Net loss on sale of fixed assets 108,707 62,435 Provision for support of related entity 2,314,000 166,000 (b) Crediting as income Proceeds on disposal of plant and equipment 74,025 183,802 Interest revenue 1,161,803 576,056 Sales revenue 278,807,609 186,325,664 280,043,437 187,085,522

4 DIVIDENDS Dividends paid during the year: Date of Amount Franked Percentage Type Payment $ Tax Rate Franked Interim ($5.84 per share) (2000 $5.84) 21 Aug 00 1,043,104 34% 100% Final ($5.84 per share) (2000 $5.84) 26 Feb 01 1,043,104 34% 100% 2,086,208

| 41 NOTES TO THE CONCISE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2001

2001 2000 $$ 5 CONTRIBUTED EQUITY Issued and paid up capital: Ordinary shares fully paid – Worley Limited 1,618,370 1,618,370 – Worley Engineering Pty Limited 6,599,266 6,599,266 – Worley Limited (Hong Kong) 297,128 297,128 8,514,764 8,514,764

Worley Limited has issued capital of 57,490 fully paid ordinary shares. Worley Engineering Pty Limited has issued capital of 121,252 fully paid ordinary shares. Worley Limited (Hong Kong) has issued capital of 180,000 fully paid ordinary shares.

6 DETAILS OF INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD Details of investments in associates are as follows: Balance Ownership Interest Carrying Value

Name Note Date 2001 2000 2001 2000 %%$$

Burns & Roe Worley Pty Limited (1) 30 Jun 50 50 2,970,906 2,626,226 I&E Systems Pty Limited (2) 30 Jun 50 50 554,708 693,935 Transfield Worley Limited (3) 31 Mar 50 50 422,460 393,713 Petrocon Arabia Co Ltd (3) 31 Dec 50 50 3,397,048 1,670,598 Worley Qatar WLL (3) 30 Jun 40 – 397,694 – Damit Worley Engineering Sdn Bhd (3) 30 Jun 50 50 (236,125) (168,335) Perunding Ranhill Worley Sdn Bhd (3) 30 Jun 50 50 389,925 227,931 Ranhill Worley Engineering Sdn Bhd (3) 30 Jun 40 40 528,183 415,000 Atria Pty Limited (4) 30 Jun 40 40 – – 8,424,799 5,859,068

(1) operates in the water and power industry (2) operates in the technology industry (3) operates in the oil and gas industry (4) operates in the human resources industry 2001 2000 $$

7 RETAINED PROFITS Balance at the beginning of the year 17,755,484 14,249,045 Net profit attributable to members of the Proforma Group 9,079,363 5,506,439 Dividends paid 2,086,208 2,000,000 Balance at the end of year 24,748,639 17,755,484

42 | NOTES TO THE CONCISE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2001

2001 2000 $$ 8 RECONCILIATION OF CASH FOR CASH FLOW PURPOSES For the purposes of the statement of cash flows, cash includes cash on hand and at bank and short-term deposits at call, net of outstanding bank overdrafts. Cash at the end of the financial year as shown in the statements of cash flows is reconciled to the statement of financial position as follows: Cash assets 8,114,857 9,564,110 Bank overdrafts (6,947,773) (873,118) 1,167,084 8,690,992

Australia United States

2001 2000 2001 2000 $$$$ 9 SEGMENT INFORMATION (a) Geographical segments Revenue outside the Proforma Group 252,210,187 173,648,883 13,415,992 4,590,923 Segment results 12,271,225 9,357,415 175,486 (1,131,818) Segment assets 88,796,360 68,906,986 5,555,205 3,634,938

Asia Other

2001 2000 2001 2000 $$$ $ Revenue outside the Proforma Group 13,255,455 8,095,100 1,161,803 750,616 Segment results 1,997,435 510,129 374,924 247,439 Segment assets 16,340,373 8,179,440 1,261,820 1,225,055

Proforma Group

2001 2000 $$ Revenue outside the Proforma Group 280,043,437 187,085,522 Segment results 14,819,070 8,983,165 Segment assets 111,953,758 81,946,419

(b) Industry segments The Proforma Group operates in the consulting engineering and project management sectors. The Proforma Group also operates in technology development, project development and asset management sectors via incorporated joint ventures which are equity accounted in accordance with AASB 1016, Accounting for Investments in Associates.

| 43 INDEPENDENT AUDIT REPORT – CONCISE COMBINED FINANCIAL REPORT

To the members of the Worley Proforma Group (consisting of the Worley Limited and Worley Engineering Pty Limited Pegged Corporate Structure and Worley Limited (Hong Kong)). Scope We have audited the concise combined financial report of the Worley Proforma Group for the financial year ended 30 June 2001 as set out on pages 34 to 43 in order to express an opinion on it to the members of the entities comprising the Proforma Group. The Directors of the entities of the Proforma Group are responsible for the concise combined financial report. Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance whether the concise financial report is free of material misstatement. We have performed an independent audit of the full financial report of Worley Limited and Worley Engineering Pty Limited. The full financial reports of Worley Limited (Hong Kong) have been subject to an independent audit by a member firm of Ernst & Young International. None of these audit reports was subject to any qualification. Our procedures in respect of the audit of the concise combined financial report included testing that the information in the concise financial report is consistent with the full financial reports and examination, on a test basis, of evidence supporting the amounts, discussion and analysis, and other disclosures which were not directly derived from the full financial report. These procedures have been undertaken to form an opinion whether, in all material respects, the concise financial reports is presented fairly in accordance with Accounting Standard AASB 1039 “Concise Financial Reports” applicable in Australia. The audit opinion expressed in this report has been formed on the above basis. Audit Opinion In our opinion, the concise financial report of the Proforma Group complies with Accounting Standard AASB 1039 “Concise Financial Reports”.

ERNST & YOUNG MICHAEL ELLIOTT PARTNER

SYDNEY DATE: 14 SEPTEMBER 2001

44 | DIRECTORY

REGISTERED OFFICE AND CORK KUALA LUMPUR SALE CORPORATE HEAD OFFICE North Esk Business Park Ranhill Worley Engineering Sdn Bhd 1 Platt Court Worley Dunkettle Co Cork Ireland Wisma Ranhill, No. 2-12 Wurruk VIC 3851 Level 7, 116 Miller Street Ph: 353 21 452 0100 Jalan Setiawangsa 10 PO Box 1239, Sale VIC 3850 North Sydney NSW 2060 Fax: 353 21 435 5533 Taman Setiawangsa 54200 Australia Kuala Lumpur Malaysia Ph: 61 3 5143 1355 PO Box 1812, North Sydney DOHAR NSW 2060, Australia Ph: 60 3 4253 5003 Fax: 61 3 5143 1353 2nd Floor Fax: 60 3 4253 5316 Ph: 61 2 8923 6866 Business Building ‘B’ Ring Road SINGAPORE Fax: 61 2 8923 6877 Near Jaidah Flyover KWINANA 491-B River Valley Road Dohar Qatar Unit 8, 14-16 Commodore Drive #09-01 Valley Point ABU DHABI PO Box 18130, Dohar Qatar Rockingham WA 6168 Singapore 248373 Al Buqubai Tower, Zayed Ph: 974 43 53 110 Australia Ph: 65 735 8444 The 1st Street, Office Floor Fax: 974 43 53 169 Ph: 61 8 9529 2999 Fax: 65 735 7444 Abu Dhabi UAE Fax: 61 8 9529 2900 Ph: 971 2 632 4144 DUBAI SINGLETON Fax: 971 2 631 3923 10F23 Lob 10, Jebel Ali Dubai UAE LONGFORD Unit 1, Rose Point Centre PO Box 16805, Jebel Ali Dubai UAE Longford Gas Plant (Esso) 17-19 Ryan Avenue ADELAIDE Courier to: Villa 81, Street 18B Garretts Road Singleton NSW 2330 25 Conyngham Street Jumeira 3, Dubai UAE Longford VIC 3851 Australia Glenside SA 5065 Ph: 971 4 394 6519 Australia Ph: 61 2 6571 2600 Australia Fax: 971 4 394 6480 Ph: 61 3 5149 6257 Fax: 61 2 6571 2606 Ph: 61 8 8130 6100 Fax: 61 3 5149 7694 Fax: 61 8 8130 6199 GLADSTONE SPOTSWOOD Level 1, 41 Tank Street MACKAY 208 Hall Street AL KHOBAR Gladstone QLD 4680 29 Peel Street Spotswood VIC 3015 4th Floor, Adil Khashoggi Building PO Box 5004, Gladstone Mackay QLD 4740 Australia Dhahran Road, Al Khobar QLD 4680, Australia Australia Ph: 61 3 9393 4200 PO Box 31699, Al Khobar, 31952 Ph: 61 7 4972 8299 Ph: 61 7 4953 2366 Fax: 61 3 9399 4650 Kingdom of Saudi Arabia Fax: 61 7 4976 9755 Fax: 61 7 4953 2377 Ph: 966 3 894 8700 TOWNSVILLE Fax: 966 3 898 7116 HOUSTON MELBOURNE Nadic House 13105 Northwest Freeway Level 17, 300 Flinders Street 3 Ramsay Street BANGKOK Suite 200 Melbourne VIC 3000 Garbutt, Townsville QLD 4810 333 LPN 1 Building Houston Texas 77040 USA Australia PO Box 5423, Mail Centre 20th Floor Unit B Soi Chaypuand Ph: 1 713 690 1131 Ph: 61 3 9205 0500 Townsville QLD 4810 Vibhavadi-Rangsit Road Fax: 1 713 690 1981 Fax: 61 3 9205 0505 Australia Ladyao Chatujakthe Ph: 61 7 4729 5501 Bangkok 10900 Thailand JAKARTA MURRARIE Fax: 61 7 4729 5508 Ph: 66 2 618 8101 PT Ceria Worley Level 6, 57 Miller Street Fax: 66 2 618 8109 Jalan Bendungan Hilir Raya G1/5 Murrarie QLD 4172 REPRESENTATIVE OFFICE: Jakarta 10210 Indonesia Australia NEW DELHI BEIJING Ph: 62 21 572 0239 Ph: 61 7 3890 6200 Trikausch House Room 29, 14th Floor, Tower A Fax: 62 21 570 3069 Fax: 61 7 3890 6290 M-26 Commercial Complex Greater Pacific Century Plaza Kailash Part 11 (Market) 2A Gong Ti Bei Lu KALGOORLIE NEW PLYMOUTH New Delhi 110048 India Chaoyang District Suite 2, 35 Brookman Street Level 5, State Insurance Building Ph: 91 11 641 7675 Beijing 10027 China Kalgoorlie WA 6430 25 Gill Street Fax: 91 11 647 1569 Ph: 86 10 6539 1091 Australia New Plymouth, New Zealand Fax: 86 10 6539 1060 Ph: 61 8 9026 2626 PO Box 705, New Plymouth AUDITORS Fax: 61 8 9026 2600 New Zealand Ernst & Young Chartered Accountants BRISBANE Ph: 64 6 759 6300 Level 2, 80 Albert Street BANKERS KARRATHA Fax: 64 6 759 6301 Brisbane QLD 4000 Suite 7, Savings House HSBC Bank Australia Limited PO Box 81, Albert Street 11 Hedland Place NEWCASTLE LEGAL ADVISERS Brisbane QLD 4002 Karratha WA 6714 21 Merewether Street Freehills Australia PO Box 713, Karratha Newcastle NSW 2300 Baker & McKenzie Ph: 61 7 3221 7444 WA 6714 Australia PO Box 814, Newcastle Fax: 61 7 3221 7791 Ph: 61 8 9144 1679 NSW 2300, Australia MARKETING Fax: 61 8 9144 2638 Ph: 61 2 4927 0666 Intersection BUNBURY Fax: 61 2 4927 0777 28-30 Wellington Street KUALA BELAIT DESIGN & PRODUCTION Bunbury WA 6230 Komplek Harapan F206-F212 PERTH walterwakefield.com.au PO Box 720, Bunbury Jalan Setia Di-Raja Level 16, QV1 Building WA 6230, Australia KA3131 Kuala Belait, 250 St George’s Terrace WEBSITE Ph: 61 8 9781 2400 Negara Brunei Darussalam Perth WA 6000 www.worley.com.au Fax: 61 8 9781 2401 PO Box 1692, KA1131 Australia Kuala Belait Ph: 61 8 9278 8111 Negara Brunei Darussalam Fax: 61 8 9278 8110 Ph: 673 334 1410 Fax: 673 333 0396