DEFINITIVELY KEPPEL - Keppel Offshore & Marine

 
DEFINITIVELY KEPPEL - Keppel Offshore & Marine
KEPPEL
                              DEFINITIVELY

REPORT TO STAKEHOLDERS 2011
DEFINITIVELY KEPPEL - Keppel Offshore & Marine
OUR VISION IS TO BE THE
PROVIDER OF CHOICE AND
PARTNER FOR SOLUTIONS
IN THE GLOBAL OFFSHORE
AND MARINE INDUSTRY.                                     1

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

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

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

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

0.24                                                 74                                      2

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

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

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

Key Figures 2011
                                                                                                 1
DEFINITIVELY KEPPEL - Keppel Offshore & Marine
CHAIRMAN’S
STATEMENT

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

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

DEAR STAKEHOLDERS,                             vessels. This surpassed the previous         the year. On 3 June 2011, Brazilian
While 2011 was an eventful year, the           high of $7.4 billion of new orders           President Dilma Rousseff witnessed the
fundamentals of the offshore and               achieved in 2007. As at end-2011,            christening of the Floating Production
marine industry remained intact. The           our net order book stood at $9.4 billion,    Unit (FPU) P-56, which is the first
global energy sector continued with            with deliveries extending to 2015.           semisubmersible to be completely built
investments despite macro headwinds                                                         in Brazil by Keppel. Measuring 125m
like the Eurozone debt crisis, economic        Financially, Keppel O&M recorded             long, 110m wide and 137m high and
uncertainties in the US and concerns of a      revenues of $5.7 billion with a net profit    with a displacement of 50,000 tonnes,
China with a moderated pace of growth.         of $1.1 billion, and raised Economic         P-56 is the world’s largest FPU. The
                                               Value Added by 5% to $992 million.           project achieved nine million man hours
The resilience of the offshore and marine                                                   without lost-time incidents. This
industry is due to two key factors. Firstly,   RELIABLE EXECUTION                           accomplishment has further fortified
the Macondo incident in the Gulf of            In 2011, a total of 41 major projects        the position of our BrasFELS yard as the
Mexico in April 2010 continues to cast its     were successfully delivered, backed          leading offshore yard in Latin America.
influence, sharpening the focus of the oil      by enhanced productivity, meticulous
and gas industry on safety and quality.        project management and the                   In Singapore, Keppel FELS completed
This has caused owners to relook at their      commitment of our project teams.             a rig which has been chartered by
aging fleets of rigs and vessels. Secondly,                                                  Petrobras for six years to support
unrest in the Middle East region and           Of these, the Offshore Division delivered    exploration and production (E&P)
natural disasters around the world             eight newbuild rigs, comprising three        activities in offshore Brazil. Alpha
sustained an elevated oil price which          jackups, three semisubmersibles, and         Star, the second of two DSSTM38
averaged US$95 per barrel for the year.        two drilling tenders, together with          semisubmersibles, was delivered to
As a result, strong interest was ignited       one rig completion and one drillship         Brazilian company Queiroz Galvão Óleo
in new rigs, most notably in the first half     upgrade. Our Marine and Specialised          e Gás, four months ahead of schedule
of 2011.                                       Shipbuilding Divisions converted and         and with zero lost time incidents. In
                                               upgraded seven FPSO/FSO units and            recognition of our execution excellence,
At Keppel Offshore & Marine                    delivered 11 vessels, as well as an          QGOG awarded Keppel FELS a bonus
(Keppel O&M), we benefited from this            outfitting job for a drillship, among other   of US$8 million.
trend and achieved healthy performance         repair jobs.
in 2011, with a record $10 billion worth                                                    These two deliveries in 2011 added to
of contracts secured for 24 jackups,           We are particularly proud of some of         our track record for Brazil, and we are
three semisubmersibles, six                    the significant projects which were           poised to deliver and contribute towards
conversion jobs and 17 specialised             completed and delivered during               Brazil’s aggressive E&P programme.

Chairman’s Statement
                                                                                                                                  3
DEFINITIVELY KEPPEL - Keppel Offshore & Marine
CHAIRMAN’S STATEMENT

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

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

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

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

Chairman’s Statement
                                                                                                    5
DEFINITIVELY KEPPEL - Keppel Offshore & Marine
CHAIRMAN’S STATEMENT

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

10,000                                                                                                                              1,100

8,000                                                                                                                                 880

6,000                                                                                                                                 660

4,000                                                                                                                                 440

2,000                                                                                                                                 220

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

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

10-Year Growth of our Global Workforce

35,000

28,000

21,000

14,000

7,000

0
                          2002        2003        2004       2005        2006        2007        2008       2009        2010         2011

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

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

Chairman’s Statement
                                                                                                                                 7
DEFINITIVELY KEPPEL - Keppel Offshore & Marine
INTERVIEW WITH
CEO AND COO

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

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

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

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

Interview with CEO and COO
                                                                                                                                9
INTERVIEW WITH CEO AND COO

In the Floating Production market,
industry experts say that the world          1                                                                                             2

will need more than 100 such units,
equivalent to a value of US$45 billion,
in the next four years. Barclays Capital
expects an FPSO upcycle that could
double the current worldwide fleet
beginning in late 2012 or 2013.
Brazil will require a majority of the
vessels in the floating production
sector in the coming years. For
example, Petrobras expects installation
of 54 new production systems over
the next 10 years. OGX says it will
require 19 FPSOs for their fields.

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

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

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

  1

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

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

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

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

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

Interview with CEO and COO
                                                                                                                                 13
GROUP FINANCIAL
HIGHLIGHTS

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

Represented by:

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

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

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

Net current assets                    496,513           689,052

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

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

                                      Keppel Offshore & Marine Ltd
14                                     Report to Stakeholders 2011
2011         2010   Change
                                                                                         S$’000       S$’000       %
Consolidated Profit & Loss Account
for the financial year ended 31 December 2011
Revenue                                                                              5,705,966    5,577,010       +2

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

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

Keppel Offshore & Marine achieved         The Group’s return on equity (before
another outstanding set of results in     exceptional items) was slightly lower
2011. Revenue increased by 2% to          at 61%, while Economic Value Added of
$5.7 billion due to higher workload,      $992.5 million was $45.4 million higher
as revenue recognition commenced on       than that of the previous year.
some of the orders secured since the
last quarter of 2010. The completion      The Group delivered 8 rigs, 7 FPSO/FSO
of jobs secured prior to 2010 with        conversions, 11 specialised vessels and
higher margins and greater operating      25 other major projects in 2011. The
efficiencies contributed to a higher       total value of contracts secured for the
operating profit of $1,398 million,        year was $10.0 billion, and the Group
17% above that of 2010. Net interest      ended the year with a net orderbook of
income was lower at $51.5 million.        $9.4 billion, with deliveries extending
Contributions from associates of          to 2015.
$44.3 million was 9% lower. Profit after
tax was up 10% to $1,187.1 million,
while profit before exceptional items
increased by 8% to $1,143.7 million.
Exceptional items of $45.0 million were
related to impairment of assets.

Group Financial Highlights
                                                                                                                15
GROUP AT A GLANCE

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

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

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

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

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

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

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

Group at a Glance
                                                                                                                      17
BOARD OF DIRECTORS

CHOO CHIAU BENG                TONG CHONG HEONG                        CHOW YEW YUEN

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

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

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

Board of Directors
                                                                                             19
BOARD OF DIRECTORS

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

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

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

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

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

Board of Directors
                                                                                         21
KEY PERSONNEL

OFFSHORE & MARINE

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

                                                8
                   6           7
                                                                  4              9               10

          1

                                            3
                                                                                 5
                           2

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

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

3.   JEFFERY CHOW
     GENERAL MANAGER
     (LEGAL)

                                 6            7
                                                          8
                         5
                4
                                                                   3

                             1
                                                      2

Key Personnel
                                                                                               23
KEY PERSONNEL

KEPPEL FELS

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

3.   DAVID LEE
     FINANCIAL CONTROLLER

         1
                             3
                                       4
                 2                                      5
                                                                                7
                                                               6

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

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

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

                                                                   6
                                                                                      8
                    2             4                      5                                            9

                                                                            7
1
                              3

    Key Personnel
                                                                                                     25
KEY PERSONNEL

KEPPEL SINGMARINE

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

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

3.   HOE ENG HOCK
     EXECUTIVE DIRECTOR

                                                                5            6

      1                                                                                      7
                                           4
                   2
                              3

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

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

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

 1
                          4
                2
                                  5

                    3                                                              10
                                                       9

                                                                           7

                                                                                              8
                                                               6

Key Personnel
                                                                                                   27
KEY PERSONNEL

OVERSEAS MANAGERS

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

                                                                               KEPPEL SUBIC SHIPYARD, INC

     1                            4
                                  3                                        5

     2                            4                                        6

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

     1                           3                                          5

     2                           4                                          6

Key Personnel
                                                                                                   29
KEY PERSONNEL

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

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

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

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

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

                                                                       SHIPBUILDING & MARINE
                                                                       ENGINEERING EMPLOYEES UNION
                                                                       WONG WENG ONG
                                                                       President

                                                                       MAH CHEONG FATT
                                                                       Executive Secretary

                                                                       GOH SOR IMM
                                                                       Deputy Executive Secretary

Key Personnel
                                                                                                     31
SPECIAL FEATURE

                                                                                 SAFETY IS
                                                                                 EVERYONE’S
                                                                                 BUSINESS

                                                                                 Our safety journey is a
                                                                                 continuous one. With
                                                                                 strong commitment from
                                                                                 management and ownership
                                                                                 from every Keppelite
                                                                                 towards safety, we can
                                                                                 achieve our vision of creating
                                                                                 an incident-free workplace.
                  Keppel Offshore & Marine Ltd   Special Feature
32                 Report to Stakeholders 2011   Safety is Everyone’s Business                                    33
SPECIAL FEATURE

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

In 2011, we invested over $16 million        0                                                                                                      0
on safety infrastructure as well as skills                              2007           2008             2009          2010           2011
and knowledge development.

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

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

Special Feature
Safety is Everyone’s Business                                                                                                       35
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