Petrofac Annual report and accounts 2007 Petrofac Services Limited [Our values are the 117 Jermyn Street London SW1Y 6HH United Kingdom foundation of our success. T +44 20 7811 4900 F +44 20 7811 4901 They are central to the way www.petrofac.com we operate and underpin Delivering our rapid growth.] value[s] By delivering on those values, we will continue to provide value to our stakeholders. 1 Financial highlights 58 Directors’ remuneration report 2 Delivering values 66 Independent auditors’ report 10 Integrating services 67 Consolidated income statement 12 Chairman’s statement 68 Consolidated balance sheet 14 Interview with the Group 69 Consolidated cash flow statement Chief Executive 70 Consolidated statement of 18 Operating review changes in equity 38 Financial review 71 Notes to the consolidated 42 Corporate social responsibility financial statements 48 Board of Directors 107 Other financial information Annual report 50 Senior management team 108 Shareholder information and accounts 2007 53 Corporate governance report Matrouh School, Egypt Petrofac Annual report and accounts 2007 At a glance Designed and produced by ConranDesignGroup +44 (0)20 7566 4600. Photography by Sam Robinson. Printed in the UK by MPG impressions, Environmental Management System ISO 14001 certified and Forest Stewardship Council (FSC) chain of custody Petrofac has a proven track record in We operate in four key geographic Through our divisions, we design, build, certified. helping companies and governments areas – the UK Continental Shelf, operate and manage oil & gas facilities, This report is printed utilising vegetable based inks on Revive Special Silk 75 which is produced with 50% de-inked post-consumer waste, 25% unprinted exploit oil & gas resources worldwide. Middle East and Africa, Commonwealth train personnel and – where our expertise pre-consumer waste and 25% virgin fibre and Revive 100 uncoated which is manufactured from 100% post consumer reclaimed material. All pulps used Over the last five years, our workforce of Independent States and Asia Pacific – can leverage our skills in alignment with are Elemental Chlorine Free (ECF) and the manufacturing mill is accredited has increased from 1,000 to more than with support through 24 offices our customers – we develop and co-invest with the ISO 14001 standard for environmental management. Revive 75 9,500 and our revenues have grown at worldwide, including key centres in in projects. At all times and in every aspect Special Silk is a Carbon Neutral product. 40% compound per annum. Aberdeen, Sharjah, Woking, Mumbai of our work, we maintain an unyielding and Chennai. commitment to health and safety. Three divisions, one standard Cert no. SGS-COC-003115 Engineering & Construction Locations Key achievements during the year Percentage of group revenue ■ The successful completion and delivery of a new gas plant 58% This division carries out conceptual design, front end engineering in the Kauther field in north Oman +31% and design (FEED) and construction of oil & gas plants and ■ Securing repeat business at Karachaganak in Kazakhstan; associated infrastructure. Experienced in both greenfield and completion of the fourth gas train is scheduled for 2009 Revenue US$1,415m brownfield developments, our planning and project teams develop ■ Achieving good progress on two new gas trains at the 2006: US$1,081m solutions that help maximise the lifetime value of oil & gas assets – Salam gas plant for Khalda Petroleum Company in Egypt on time, on budget and across the world. (see page 32 for details) ■ A significant increase in valuable consultancy work, handled Our expertise is broad and includes oil & gas gathering, processing through our office in Woking, UK and transportation facilities. We thrive on challenges and have a ■ Award of US$600 million lump-sum EPC contract for In Salah long record of delivering innovative solutions however demanding Gas in Algeria the project or site conditions. Operations Services Locations Key achievements during the year Percentage of group revenue ■ The successful transition of the Dubai Petroleum offshore assets to 37% Our Operations Services division supports customers through two the new contract under which we provide operational management +25% separate business streams. services as service operator ■ Contract extensions for GNPOC in Sudan and for Maersk in the Revenue Petrofac Facilities Management provides comprehensive UK North Sea US$911m 2006: US$729m operational support for oil & gas assets. Within Facilities ■ Developing a long-term relationship with BP in the Gulf of Mexico to Management, our operations management teams deliver a total support the development of their training and competency function outsourcing capability which takes full responsibility for managing ■ Completion of Brownfield retrofits in the Greater Kittiwake area for a customer’s asset. Our integrated resources businesss enables Venture Production and the WaGE project for Talisman customers to choose from our wide portfolio of support services ■ The continuing success of our Emergency Response Service while retaining ultimate responsibility for the asset. Facilities Centre in Aberdeen. 20 customers and over 70 facilities now rely Management also includes a significant brownfield engineering on our support to provide an integrated response in the event of capability together with a range of specialist consultancy services. an incident on or offshore ■ Provision of a training management solutions contract for Petrofac Training helps customers optimise their people’s Petroleum Development Oman (PDO) in support of Engineering & expertise and reduce risk through competency-based training Constuction execution on Harweel contract in Oman (see page 34 in safety and operational disciplines. We also offer a range of for details) managed solutions in the areas of training administration and management, in emergency response and crisis management, and provide training consultancy in all of these areas. Energy Developments Locations Key achievements during the year Percentage of group revenue ■ Successfully negotiating the contract for the Northern Producer 5% Energy Developments provides the platform through which we floating production facility for the Don Area development in the +114% partner with customers by developing and co-investing in upstream UK North Sea and submission of final field development plans and energy infrastructure projects where we can deploy our wider ■ Completing the acquisition of a 45% interest in the Chergui gas Revenue group’s operations and engineering skills. plant in Tunisia (see page 30 for details) US$133m 2006: US$62m ■ Exceeding expectations for operations in the Cendor field, offshore With an experienced team of asset managers and commercial Malaysia, where we have a 30% stake. Cendor recorded 98% specialists, backed by strong financial resources, we work production uptime during 2007 and a year of safe operation alongside our customers to develop solutions which enhance project viability, better manage project risks and improve alignment. 1 Petrofac Annual report and accounts 2007 Financial highlights [Our values are the Financial highlights foundation of our success. Revenue Backlog US$2,440m US$4,441m They are central to the way 2006: US$1,864m +31% 2006: US$4,173m +6% we operate and underpin EBITDA Earnings per share (diluted) US$301.3m 54.1 cents per share our rapid growth.] 2006: US$198.3m +52% 2006: 34.9 cents per share +55% By delivering on those values, Net profit Return on US$188.7m capital employed we will continue to provide 2006: US$120.3m +57% 2006: 45.7% 47.3% value to our stakeholders. Five year summary1 2007 2006 2005 2004 2003 Information not subject to audit Restated Restated Restated Revenues2 2,440,251 1,863,906 1,485,472 951,530 628,702 EBITDA2 301,259 198,349 115,634 96,065 48,075 Profit for the year2,3 188,716 120,332 75,397 46,083 38,359 Diluted earnings per share (cents)2 54.14 34.87 22.41 11.93 8.94 Total assets 1,748,007 1,401,847 986,650 729,357 527,088 Total equity 486,004 324,904 195,127 138,558 109,394 Average number of employees2 9,027 7,482 6,598 5,284 3,330 Backlog (US$ millions) 4,441 4,173 3,244 1,740 1,097 1 In US$’000 unless otherwise stated. 2 On continuing operations. 3 Attributable to Petrofac Limited shareholders. Revenue EBITDA Profit EPS (diluted) Backlog US$ millions US$ millions US$ millions cents per share US$ millions 2,440 301.3 188.7 54.14 4,441 1 Financial highlights 58 Directors’ remuneration report 4,173 2 Delivering values 66 Independent auditors’ report 10 Integrating services 67 Consolidated income statement 1,864 3,244 12 Chairman’s statement 68 Consolidated balance sheet 198.3 34.87 120.3 14 Interview with the Group 69 Consolidated cash flow statement 1,485 Chief Executive 70 Consolidated statement of 18 Operating review changes in equity 22.41 75.4 1,740 38 Financial review 71 Notes to the consolidated 952 115.6 42 Corporate social responsibility financial statements 96.1 48 Board of Directors 107 Other financial information 629 46.1 1,097 11.93 50 Senior management team 108 Shareholder information 38.4 8.94 53 Corporate governance report 48.1 2006 2006 2003 2004 2005 2007 2003 2004 2005 2007 2003 2004 2005 2007 2003 2004 2005 2007 2003 2004 2005 2007 2006 2006 2006 2 3 Petrofac Annual report Petrofac Annual report and accounts 2007 and accounts 2007 Delivering values [Living values], delivering value Customers, employees, communities safe and shareholders all demand and [ ] expect Petrofac to deliver, whether in terms of service, financial performance or cultural sensitivity. Through our five core values, we focus relentlessly on delivering those results. Being safe underpins everything we do. We have a duty of care to our people and to the communities in which we are present; a duty we take with the utmost seriousness. Our people are ethical. We have firm principles and will not tolerate anything less than the highest standards of behaviour.