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Kuwait Oil Company A Subsidiary of Kuwait Petroleum Corporation

“ Doing Business with Kuwait Oil Company”. Kuwait Oil Company A Subsidiary of Kuwait Petroleum Corporation. www.kockw.com. Lafayette, Louisiana. Agenda. KOC Strategy Drilling Activities KOC’s Portfolio of Major Projects for Int’l. Contractors Business Opportunities. www.kockw.com.

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Kuwait Oil Company A Subsidiary of Kuwait Petroleum Corporation

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  1. “Doing Business with Kuwait Oil Company” Kuwait Oil CompanyA Subsidiary of Kuwait Petroleum Corporation www.kockw.com Lafayette, Louisiana

  2. Agenda KOC Strategy Drilling Activities KOC’s Portfolio of Major Projects for Int’l. Contractors Business Opportunities www.kockw.com

  3. KOC Strategy www.kockw.com

  4. Kuwait Oil Company Kuwait National Petroleum Co. Oil Development Co. Petrochemical Industries Co. Oil Sector Services Co. Kuwait Oil Tankers Co. Kuwait Gulf Oil Co. Kuwait Petroleum International Kuwait Aviation Fueling Co. Kuwait Foreign Petroleum Co. www.kockw.com KPC Companies

  5. Mission • To explore, develop and produce to marketable quality the hydrocarbon resources in the State of Kuwait. • To safeguard our people and the environment. • To conduct our business in accordance with government policy, good reservoir management practice and by using the most efficient and economic means available. www.kockw.com

  6. Vision • Achieve a leading global position in Upstream Oil & Gas as an integrated, value- driven enterprise, by: • Maximizing the strategic value from oil • Realizing the potential of gas • Growing reserves for a sustainable future • Being an employer of choice • Realizing value from technology • Strengthening our commitment to HSSE • Striving for excellence in performance, and • Contributing to the Enterprise and State. www.kockw.com

  7. Key Feature of our Strategy • Achieve the following production targets • 3.0 MMBOPD by 2010 • 3.5 MMBOPD by 2015 • 4.0 MMBOPD by 2020 and maintain it until 2030 • Develop Heavy Oil • Produce 600 MMSCFPD of free gas by 2010/2011 and increase to 1,000 MMSCFPD by 2015 • Pursue aggressive exploration program including the offshore. www.kockw.com

  8. Challenges • Developing high pressure high temperature complex gas reservoirs • Develop heavy oil to reach 450 MBOPD by 2030 • Skilled and Experienced Manpower • Water Management • Technology • Environmental issues

  9. 2 - Drilling Activities www.kockw.com

  10. www.kockw.com 220 225

  11. www.kockw.com 924 884 764 668 589 266 128 87

  12. www.kockw.com 73 74 71 68 66 43 36 27 22 12

  13. www.kockw.com

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  15. 3 - KOC’s Portfolio of Major Projects for Int’l. Contractors www.kockw.com

  16. Major Infrastructure Projects (coming 2 years) • The projects are classified as: • 1. Pipeline projects (3 Nos.) • 2. Gas projects (2 Nos.) • 2. Injection projects (3 Nos.) • 3. Safety & Instrumentations (4 Nos.) • 4. Electrical projects (3 Nos.) www.kockw.com

  17. New Gas Oil Pumping Station at MAA with Pipelines from MAA to Azzour and Shuaiba Power Stations • Tender issue – Sep-09 • Install New Gas Oil Pumping Station with VSD & install a new Gas Oil Pipeline 1x18” from Al-Ahmadi Refinery to south Kuwait Shuaiba Power Station (5 Km) with metering station. Also, installation of 2X40” Fuel Gas Lines (65km each) from MAA to Azzour Power Station. EF/1760 FUTURE PROJECTS (Cont’d.) Pipeline Projects (1/2) www.kockw.com

  18. FUTURE PROJECTS (Cont’d.) Pipeline Projects (2/2) www.kockw.com

  19. Construction of a New BS 132 & enhancement at BS-131 NK • Tender issue – Apr-09 (Under Evaluation) • Provision of a new grass root gas Booster Station, BS132 in North Kuwait. BS132 will have a single train of 250MMSCFD capacity, including LP1, LP2 and HP compressors followed by gas dehydration. Each compressor will have its own gas turbine driver. The new BS132 is designed to operate in parallel with existing gas booster station BS131, taking suction from the NK LP gas network from GC’s 15, 23, 25 & 24 at approximately 10psig and discharging into the existing export system at approximately 925psig. • The enhancements of existing BS131 to include new LP and HP inlet separators, control and instrumentation upgrades (including cross communication with BS132) and provision of new HP and LP flare knock out drums and flare stacks. • New tank vapour centrifugal compressor at each of the existing gathering centres GC15, GC23 and GC25. • 14 new pipelines to interconnect between GCs and Booster station ( 8” to 48”) 10km in length. EF/1719 FUTURE PROJECTS (Cont’d.) Gas Projects (1/2) www.kockw.com

  20. EF/1718 • New Booster Station BS-171 – WK • Tender issue – Aug-09 • The project scope shall consist of Engineering, Procurement, Construction, Commissioning of a new grass root Booster Station (BS-171) in west Kuwait, will comprise three new identical two stage compressor trains (LP & HP), including gas & condensate dehydration trains. Each train shall be capable of processing 125 MMSCFD sour gas, from Gathering GC-17, GC-27, GC-28 and future GC-16. One TV compressor capacity 6 MMSCFD at GC-27. One TV compressor capacity 8 MMSCFD as spare, at GC-28. • The above includes significant quantity of inter-connecting pipelines including a manned Mid-Stream Slug Catcher facility. FUTURE PROJECTS (Cont’d.) Gas Projects (2/2) www.kockw.com

  21. FUTURE PROJECTS (Cont’d.) Injection Projects (1/3) www.kockw.com

  22. FUTURE PROJECTS (Cont’d.) Injection Projects (2/3) www.kockw.com

  23. FUTURE PROJECTS (Cont’d.) Injection Projects (3/3) www.kockw.com

  24. FUTURE PROJECTS (Cont’d.) Safety & Instrumentation Projects (1/2) EF/1700 • Integrated Security system in all KOC Facilities • Tender issue – Jul-09 • Installing Surveillance Systems, Access Control Systems and Intruder Detection Systems at (96) sites that includes Gathering Centers, Booster Stations and other facilities of the Company distributed across the Kuwait oil fields and can be considered a scheme of National scale. The integrated security system will provide monitoring and control functionality at (4) Regional Asset Security Centers and a Central KOC Security Center which shall be built as part of this project. The scope of work will include design, supply, installation, configuration and commissioning of a 1300KM Fiber Network that shall provide connectivity to over 2500 cameras, security management systems, alarm monitoring stations and access control systems. www.kockw.com

  25. FUTURE PROJECTS (Cont’d.) Electrical Projects (1/2) www.kockw.com

  26. FUTURE PROJECTS (Cont’d.) Electrical Projects (2/2) • The main objective of this project is the safe operation of the oil facilities demonstrated in reconstruction of a number of existing substations and control rooms in a way that would provide the necessary safety for personnel and equipment. This objective will be accomplished by the following: 1] Construct two story elevated, blast proof control rooms, and maintenance offices for 9 company oil/gas facilities (7GC's 1,3,6,7,8,20 & 21 & 2 Boosters stations). 2] Construct safe, elevated, centralized electrical Substations / switch rooms with advanced equipments at 19 locations through out SEK fields (14 Nos. SEK GC's and Booster Station 140 and 150, NTF,STF & M52).3] Power Distribution SCADA for SEK field including SCADA control room. EF/1600 • Enhancement to Substations and Control Rooms at SE&K GC’s, BS’s, NTF & STF and Replacement of M52 Substation at MAA • Tender issue – Apr-11 www.kockw.com

  27. 4 - Business Opportunities www.kockw.com

  28. Current Opportunities • KOC is responsible of major upstream operations in Kuwait. • KOC runs and maintains Ahmadi City. • KOC owns and manages Ahmadi Hospital (Southwell) • Current Live contracts exceed 600 # valued over 20 Billion US$ • Current tenders exceed 250 Nos. valued over 15 Billion US$ under different stages of bidding • KOC total staffing of 6,000 employees. • Works and Services are entirely outsourced. • KOC relies on reputable contractors and vendors to support its activities, objectives and long term strategies www.kockw.com

  29. Vendors/ Manufacturers • Selection of proven / reputed manufacturers • Products meeting specification, quality and delivery schedules. • Approved Vendors benefit from Direct / Indirect Procurement opportunities www.kockw.com

  30. Approved Categories • No. of Main Categories (125) • No. of Sub Categories (112) • Total No. of Approved Manufacturers (1606) • No. of Countries (48) • No. of Approved USA Manufacturers (237) www.kockw.com

  31. Minimum Requirements for Vendors Minimum Requirements: • Prequalification limited to manufacturers (not assembler/ system integrator) • Minimum 5 years of proven experience. • Own design, manufacturing & testing capabilities • Accreditations such as: ISO/ ASME/ API/ HSE/ NB & Type Test Report from Internationally recognized testing agencies like: KEMA / BSI etc. • Past experience with IOCs / ISPs for last 5 years. • Audited Financial Statements for 2 yrs in accordance with IFRS www.kockw.com

  32. PQ of Contractors, SPs & Consultants • KOC implements OPEN ONGOING prequalification • Quarterly monitoring of companies’ performance. • Annual verification of financial capabilities of approved companies • Poor performance of companies entail Q-listing. • Pre Qualification Types • PQ for existing categories of Works/ Services • PQ for Specific Projects (on case to case basis) • PQ for Companies Offering New Technologies www.kockw.com

  33. Categories for Int’l. Companies • Major EPC Contracts (> US$ 500 million) • Large EPC Contracts (US$ 200-500 million) • Medium EPC Contracts (US$ 50-200 million) • Small EPC Contracts (< US$ 50 million) • Construction of Mega Tanks • Offshore Support Services • Onshore Oil and Gas Pipeline Projects • General & Specialized Inspection Services • Surface Well Testing • Offshore Drilling Rig Services • Shallow, Medium and Deep Drilling Services • Full Maintenance Services of Production Facilities www.kockw.com

  34. Categories for Int’l. Companies (cont’d.) • Maintenance of Fire Fighting Systems • Slick Line Services • Dredging Works • Marine Operations Services • HSE Consultancy Services • Tubular Inspection & Internal Corrosion Services • Mud (Products, Engineering & Logging) Services • Rock Properties & Fluid Analysis Services • ESP, Ultrasonic ILI & Repair of Sub-sea Pipelines • Integrated Security Systems www.kockw.com

  35. e-Tendering Portal www.kockw.com • Establishment of KOC e-Tendering with support of Microsoft • Register and update profile online • View KOC Tenders and categories of works • Download Tenders and PQ Documents • Access to commercial documents • Security and Confidentiality • The Company encourages companies to get to know KOC and participate in its upcoming Tenders • KOC looks forward to international companies’ future presence and sharing of business opportunities in Kuwait www.kockw.com

  36. Enhancements to Contracts’ Terms & Conditions • KOC carried out series of improvements with respect to its manner of conducting business. • Enhancement of KOC’s Lump Sum Turnkey (LSTK) Model Contracts for Major Projects. • KOC witnessed increased participation of international EPC contractors in Company’s tenders. • The areas for improvement were identified jointly with International Contractors/ Consultants. • The Enhanced LSTK model contract introduced in 2006 • The feedback obtained has been extremely positive. • Benefits from increased participation encouraged KOC to pursue wider improvements in Terms & Conditions of Contracts. www.kockw.com

  37. Enhancements to LSTK Contract Model Summary of Enhancements: • Sharing of Bidding Fees • FEED Verification Pre/ Post Award of Contract • Improvement to Bank Guarantees/ Bonding requirement. • Enhanced Contractor’s Cash Flow • Non-incorporated Joint Ventures / Consortia • Limitation of Liability • Clear process for Variations • Performance/ Schedule Incentives • Currency & Commodity Price Fluctuations • Enhanced Claims Handling • Alternative Dispute Resolution General Improvements: • Re-allocation of risks to party best able to control that risk • Risks allocated in line with international norms • More ‘user-friendly’ structure, terminology and language • Better administration www.kockw.com

  38. Alternative Contracting Options • Most producers are under pressure to increase production. • Many international Contractors are unwilling to bid for projects on a lump-sum turn-key (“LSTK”) basis. • KOC has reacted to such market demands. • Two (2) phases for the development of the following Four (4) alternative EPC Model Contracts: • Phase (I): Re-measurable Model Completed • Cost Plus Model • Phase (II): Cost Plus Convertible Model • Cost Plus (FEED by Company) • Early Production Facilities Model • Two Envelope Bidding System www.kockw.com

  39. THANK YOU www.kockw.com

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