Project Risk Management for Cyprus

1. Project Risk Management for Cyprus Right from the Start Paul.T. Nicholson@marsh.com Managing Director Marsh Energy Practice; London Nicosia 28th March 2014

2. Marsh is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE:MMC), which has over 54,000 employees worldwide and approximately $12 billion in annual revenue. Marsh & McLennan Companies Marsh & McLennan Companies Marsh A global leader in insurance broking and risk management. Guy Carpenter A global leader in providing risk and reinsurance intermediary services. Mercer A global leader in talent, health, retirement, and investment consulting. Oliver Wyman A global leader in management consulting. NERA Economic Consulting Competition, regulation, public policy, finance, and litigation 2

3. The Benefits of Risk Management – Right from the Start • Risk Management • The protection of: • Assets. • Revenue. • Liability to others. • Broadest analysis • Minimum cost • Benefits to Cyprus • World-class HSE for all future facilities. • Cyprus’ balance sheet is protected by risk transfer. • The people of Cyprus will see the benefits of best in class risk mitigation and impact on your beautiful island home.

4. LNG Projects – Best Risk Management Practice from Day 1

5. Project Risk Management A sequence of project phase activities to assist Cyprus based projects manage risk exposures ‘right from the start’in order to: • Attract finance. • Minimize insurance costs and cost of risk over project life cycles. • Enhance HSE quality at the earliest possible and most cost effective stage. • Seek to satisfy all project stakeholders’ interests.

6. Project Risk Management - The Process 1A Project Risk Register Feasibility Study 1B Design Phase Risk Review Contractual Risk Review and Insurance Specification 2 Preliminary Design 3 1A Insurance Broking Services 4 Ongoing Risk and Insurance Services EPC Contractor Selection 1B Pre-Start Up Loss Control Review 5 2 Detailed Design Procurement 3 3 Construction 4 5 Commissioning 4 Operation 4 0 6 10 18 20 42 48 Typical Schedule (months)

7. 9 8 7 6 5 4 3 2 1 2 1 3 4 5 6 7 8 9 Project Risk Registers (Risk Action) - Planning for Cyprus 1A A Brand Catastrophic Risk - High Risk - High Risk – Very High B Budgeting and Forecasting Q C Business Portfolio G D Change Readiness A C R M D J Major L E Communications H F P O F Competencies/Skills K Risk – Moderate to High Risk – Moderate to High Risk - High G Competitor B I H Customer Needs Moderate I Efficiency E J Hiring/Retention K Investment Evaluation Risk – Low Risk – Low to Moderate Risk – Low to Moderate Minor L Product Life Cycle N M Resource Allocation N Mergers & Acquisitions O Succession Planning Insignificant P Business Interruption Remote Unlikely Medium Likely Expected

8. Design Phase – Ranking of Risk Quality 1B • Risk ranking: • Achieves project due-diligence and differentiation. • Best in class risk mitigation. • Widest insurance coverage to protect Cypriot interests. 4 – excellent 3 – good 2 – average 1 - basic 0 - poor

9. Ensure the Ultimate Risk Never Happens! Before After

10. Marsh Cyprus - Services and Solutions Risk Transfer and InsuranceBroking RiskConsulting Risk Management Services and Solutions Serving: Claims Management Services Property Risks Multinational organisations Large national firms Small and medium enterprises PoliticalRisks Environmental Risk Associations and affinity groups Private clients Public entities Professional Liability TradeCredit Risk EmploymentPracticesLiability