Business Overview

6. INFORMATION ON OUR GROUP 6. INFORMATION ON OUR GROUP 6.1 History and background 6.1.1 SKPB We were set up as a special purpose company to facilitate the Merger. On Completion Date, the SapuraCrest Business and the Kencana Petroleum Business have been merged under our Company. We were incorporated in Malaysia under the Act on 30 June 2011 as a private limited company under the name of Integral Key Sdn Bhd. On 20 September 2011, we were converted into a public limited company and assumed the name of Integral Key Berhad. On 19 December 2011, we changed our name to Sapura-Kencana Petroleum Berhad and subsequently on 5 April 2012, assumed our present name. Our enlarged Group which consists of the SapuraCrest Business and the Kencana Petroleum Business, is an integrated services provider covering the O&G value chain with full-fledged EPCIC capabilities with presence in Malaysia and various regions including Asia, Australasia, Middle East, Europe, Americas and Africa, and services spread out across the O&G value chain specifically in the areas of development and production, drilling, EPCIC, marine services, and operations and maintenance. 6.1.2 SapuraCrest SapuraCrest was incorporated in Malaysia under the Act as a private limited company under the name of TH Loy Industries (M) Sdn Bhd on 3 March 1979. SapuraCrest was then in the business of manufacturing consumer electronics and electrical goods. It changed its name to TH Loy Industries (M) Berhad on 5 March 1992 upon its conversion to a public limited company, and was officially listed on the Second Board of Bursa Securities on 15 October 1992. Following the sale of its manufacturing business, SapuraCrest subsequently changed its name to Crest Petroleum Bhd on 4 July 1995 and assumed its current name of SapuraCrest Petroleum Berhad on 9 August 2004. SapuraCrest transferred its entire issued and paid-up ordinary share capital and outstanding warrants from the Second Board to the Main Board (now known as the Main Market) of Bursa Securities on 21 February 2006. SapuraCrest is expected to be delisted from the Main Market of Bursa Securities on the same day of our Listing. Prior to Completion, the principal activities of SapuraCrest was investment holding and provision of management services to its subsidiaries, while its subsidiaries were mainly involved in IPF, offshore O&G drilling, marine services, operations and maintenance, and development and production of petroleum resources. Please refer to Section 7.1 of this Prospectus for the description of the businesses above.
6.1.3 Kencana Petroleum Kencana Petroleum was incorporated in Malaysia on 28 September 2004 under the Act as a private limited company under the name of Radiant Horizon Sdn Bhd. On 12 August 2005, it changed its name to Kencana Petroleum Sdn Bhd. On 14 September 2005, Kencana Petroleum was converted to a public limited company and assumed its current name. Kencana Petroleum was listed on the Main Market of Bursa Securities on 15 December 2006. Kencana Petroleum is expected to be delisted from the Main Market of Bursa Securities on the same day of our Listing. 6. INFORMATION ON OUR GROUP (cont’d) Prior to Completion, Kencana Petroleum was an investment holding company and its subsidiaries were mainly involved in providing EPCIC services for onshore and offshore production facilities, modules and process skid systems, marine engineering, HUC services, provision of offshore drilling and offshore support vessels services, development and production of petroleum resources and provision of subsea services, all within the O&G industry. Please refer to Section 7.1 of this Prospectus for the description of the businesses above.
6.1.4 Share capital and changes in share capital As at the date of this Prospectus, our authorised share capital is RM10,000,000,000 comprising 10,000,000,000 Shares and our issued and paid-up share capital is RM5,004,366, 198 comprising 5,004,366,198 Shares. The changes in our issued and paid-up share capital since our incorporation are as follows: Date of No. of our Cumulative issued and allotment Shares allotted Par value Consideration paid-up share capital RM RM 30 June 2011 2 1.00 Subscribers’ shares 2 15 May 2012 5,004,366,196 1.00 Issued as part of the 5,004,366,198 Consideration (The rest of this page has been intentionally left blank) I Company No. 950894-T I 6. INFORMATION ON OUR GROUP (cont’d)

 

6.2 Subsidiaries, associate companies and jointly-controlled entities The details of our subsidiaries, associate companies and jointly-controlled entities as at the LPD (assuming the Merger was completed) are set out in the table below: Date and place Total issued and Authorised share Equity interest Name of company of incorporation paid-up share capital capital held Principal activities % Subsidiaries of our Company SapuraCrest (45631-0) 03.03.1979/ RMOAO RM6,OOO,000,OOO 100 Ceased operations Malaysia Kencana Petroleum (667490-M) 28.09.2004/ RMO.20 RM6,000,OOO,OOO 100 Ceased operations Malaysia Aurabayu Sdn Bhd (820643-P) 06.06.2008/ RM2 RM100,OOO 100 Special purpose vehicle for the Ijarah Malaysia facilities SapuraCrest Deepwater Pte Ltd (36026) 29.10.2004/ US012,OOO US012,000 100 Chartering and hiring out of barges Bermuda TLGSB (170424-M) 06.05.1988/ RM2,500,003 RM3,OOO,001 100 Provision of offshore geotechnical and Malaysia geophysical services SESB (234834-M) 26.02.1992/ RM3,OOO,OOO RM3,OOO,OOO 100 Investment holding, provision of operation Malaysia and maintenance services, provision of management services and lease financing Petcon (43911-U) 21.12.1978/ RM4,OOO,OOO RM4,OOO,OOO 100 License holder for drilling of offshore Malaysia oilwells SCVSB (149133-0) 31.12.1985/ RM5.500,OOO RM10,OOO,OOO 100 Investment holding Malaysia 35
I Company No. 950894-T I
6. INFORMATION ON OUR GROUP (cont’d) Date and place Total issued and Authorised share Equity interest Name of company  of incorporation  paid-up share capital  capital  held %  Principal activities  Subsidiaries ofour Company (cont’d)  Crest Hidayat (L) Ltd (LL03353)  19.07.20021 Federal Territory of Labuan, Malaysia  USD300,000  N/A”  100  Dormant  Sasaran Perdana Sdn Bhd (296011-H)  16.04.19941 Malaysia  RM1,OOO,000  RM10,000,000  100  Dormant  SapuraCrest Dana SPV Pte Ltd (LL04453)  05.10.20041 Federal Territory of Labuan, Malaysia  USD100  N/A”  100  Chartering and hiring out of barges  Probadi Sdn Bhd (211140-X)  15.01.19911 Malaysia  RM86,400,000  RM109,OOO,000  100  Investment holding  Bayu Padu Sdn Bhd (693856-V)  06.06.20051 Malaysia  RM2  RM100,OOO  100  Special purpose vehicle for the Istisna’ bonds, Murabahah commercial papers and Murabahah medium term notes  Nautical Essence Sdn Bhd (707574-K)  24.08.20051 Malaysia  RM2  RM100,000  100  Investment holding  TLOSB (198612-P)  30.05.19901 Malaysia  RM2,500,001  RM2,500,001  100  Installation of offshore platforms and marine pipelines  CMESB (138225-K)  10.04.19851 Malaysia  RM10,800,000  RM25,000,000  100  Rental of equipment and provision of engineering services  Geomark Sdn Bhd (824694-H)  09.07.20081 Malaysia  RM2  RM100,000  100  Investment holding  SEV (925915-T)  17.12.20101 Malaysia  RM1,000,000  36  RM1,000,000  100  Development and production of petroleum resources and investment In related assets
I Company No. 950894-T I

6. INFORMATION ON OUR GROUP (cont’d) Date and place Total issued and Authorised share Equity interest Name of company  of incorporation  paid-up share capital  capital  held %  Principal activities  Subsidiaries of our Company (cont’d)  Sapura Petroleum Sdn Bhd (formerly known as Energy Way Sdn Bhd) (894036-X)  18.03.20101 Malaysia  RM2  RM100,OOO  100  Investment holding  Momentum Energy Sdn Bhd (946938-M)  31.05.20111 Malaysia  RM2  RM100,OOO  100  Investment holding  KHL (83307-K)  9.04.19821 Malaysia  RM100,OOO,OOO  RM100,000,000  100  Integrated engineering and fabrication of O&G production facilities and drilling rigs  KBW (348735-P)  28.06.1995/ Malaysia  RM5,000,000  RM5,000,000  100  EPCC, design and engineering and project management  KPV (787379-0)  5.09.2007/ Malaysia  RM10,000,OOO  RM25,000,000  100  Investment holding  KPW (485768-A)  14.06.1999/ Malaysia  RM5,000,000  RM5,000,000  100  Offshore and onshore construction support services, HUC, maintenance and de­commissioning services  KTC (10439-V)  29.01.1971/ Malaysia  RM10,000,000  RM200,OOO,000  100  Engineering, fabrication and construction works  KESB (918154-H)  13.10.20101 Malaysia  RM5,000,OOO  RM5,000,000  100  Development and production of petroleum resources  AME (176294-K)  28.11.1988/ Malaysia  RM18,700,000  RM25,000,000  100  Provision of offshore diving and underwater related services for inspection, repair and maintenance of structures, pipelines and risers for the construction of underwater facilities for the O&G industry  37
I Company No. 950894-T
6. INFORMATION ON OUR GROUP (cont’d) Name of company  Date and place of incorporation  Total issued and paid-up share capital  Authorised share capital  Equity interest held %  Principal activities  Subsidiaries of Probadi Sdn Shd  Tioman (26745-H)  12.03.19761 Malaysia  RM350,000  RM500,000  51  Managing rigs involved in drilling offshore oilwells under contracts  Varia Perdana Sdn Bhd (204711-K)  24.09.19901 Malaysia  RM34,000,002  RM40,800,002  51  Drilling of offshore oilwells under contracts and managing of rigs chartered out as bareboats  CTR (LL04002)  12.11.20031 Federal Territory of Labuan, Malaysia  USD100,000  N/A”  51  Leasing of vessels/barges  Subsidiaries of TLOSS  TMTPL (ACN 086 117 660)  02.02.19991 Australia  AUD100  NIA”  94  Development of marine technology and marine chartering, specialising on ROVs  Excersize Pty Ltd (ACN 117452623)  06.12.20051 Australia  AUD1  NIA”  94  Owner and operator of ROVs for the offshore O&G industries  Babalon Pty Ltd (ACN 117 549 541)  13.12.20051 Australia  AUD1  N/A”  94  Owner and operator of ROVs for the offshore O&G industries  Seabras Sapura Participayoes SA (333.0029908-4)  19.07.20111 Brazil  BRL27,059,175  N/A”  100  Investment holding  Seabras Sapura Holdco Ltd (46037)  01.1220111 Bermuda  USD100  USD100  100  Investment holding  Sapura Navegayao Marrtima SA (333.0029906-8)  27.07.20111 Brazil  BRL54,154,875′  N/A”  100  Own, operate, manage, charter and hire vessel and carryon other offshore related services and business activities  38
I Company No. 950894-T I
6. INFORMATION ON OUR GROUP (cont’d)
I Company No. 950894-T I

6. INFORMATION ON OUR GROUP (cont’d) Date and place Total issued and Authorised share Equity interest Name of company of incorporation paid.up share capital capital held Principal activities % Subsidiaries of SESB (cont’d) Sarku 2000 Sdn Bhd (483181-P) 10.05.1999/ RM100 RM100,000 100 Dormant Malaysia Sarku Samudera Sdn Bhd (514315-A) 15.05.2000/ RM500,OOO RM500,000 100 Dormant Malaysia Sarku Sambang Sdn Bhd (267252-M) 17.06.1993/ RM2 RM100,000 100 Dormant Malaysia Sarku Semantan Sdn Bhd (208433-X) 23.11.1990/ RM100 RM25,000 100 Special purpose vehicle to facilitate Malaysia financial facilities transactions Sarku Utama Sdn Bhd (483169-W) 10.05.1999/ RM100 RM100,000 100 Dormant Malaysia Sarku Vessels Pte Ltd (LL04140) 16.03.2004/ USD20,000 N/At’ 100 Leasing of barges, vessels and operational Federal Territory equipment of Labuan, Malaysia Prominent Energy Sdn Bhd (701334-T) 30.06.2005/ RM2 RM100,000 100 Leasing of barges, vessels and operational Malaysia equipment Subsidiaries of Sapura Petroleum Sdn Bhd (formerlY known as En~rav Way Sdn Bhd) Nautical Bay Pte Ltd (201 012904H)  17.06.2010/ Singapore  SGD2  N/At’  100  Provision of man power and procurement services  Nautical Power Pte Ltd (201012921C)  17.06.2010/ Singapore  SGD2  N/At’  100  Investment holding  Subsidiaries of Momentum Energy Sdn Bhd  Sapura Australia (ACN 153397374)  26.09.2011/ Australia  AUD1  N/At’  100  Investment Holding  41
I Company No. 950894-T
6. INFORMATION ON OUR GROUP (cont’d) Date and place Total issued and Authorised share Equity interest Name of company  of incorporation  paid-up share capital  capital  held %  Principal activities  Subsidiaries of Momentum Energy Sdn Bhd (cont’dJ  SapuraClough Offshore pty Ltd (formerly known as SC Offshore Pty Ltd) (ACN 153 658532)  10.10.20111 Australia  AUD1  N/N  100  Investment Holding  Peritus UK (7111769)  23.12.2009/ England and Wales  GBP1000  N/A*  51  Provision of advanced subsea, pipeline and floating systems engineering and project management services to offshore projects  Peritus Australia (ACN 141 233061)  21.12.2009/ Australia  AUD1000  N/N  51  Provision of advanced subsea, pipeline and floating systems engineering and project management services to offshore projects  SapuraClough USA (4704788)  30.06.2009/ USA  USD11,017,200  100 shares of USDO.01 each  100  Investment holding  SPAPL (ACN 152 511 021)  05.08.2011/ Australia  AUD1  N/N  100  Investment holding  SapuraClough Java (199707775H)  13.11.1997/ Singapore  SGD500,OOO  N/N  100  Chartering of ships, barges and boats with crew (freight) and ship management services  Sapura REM Clough (ACN 125200820)  02.05.2007/ Australia  AUD2  N/N  100  The owner of marine assets such as SDS, ROVs and others, as well as a charterer of the Normand Clough vessel  SC Projects Australia pty Ltd (ACN 152 687 860)  16.08.2011/ Australia  AUD2  N/AA  100  Partner in an unincorporated joint venture providing engineering and project management services to the O&G industry  SC Projects pty Ltd (ACN 153 397 365)  26.09.2011/ Australia  AUD1  N/N  100  Investment Holding  42
I Company No. 950894-T I 6. INFORMATION ON OUR GROUP (cont’d) Date and place Total issued and Authorised share Equity interest Name of company  of incorporation  paid-up share capital  capital  held %  Principal activities  Subsidiaries of Momentum Energy Sdn Bhd (cont’d)  OFI (07071491 )  07.07.20001 USA  N/A(a)  N/A(aJ  70  Provision of subsea and project management services associated with the installation and operation of sub-sea O&G field  Peritus US (801214784)  07.01.20101 USA  USD1,000  USD100,OOO  51  Provision of advanced subsea, pipeline and floating systems engineering and project management services to offshore projects  SapuraClough Singapore (200516881 C)  06.12.20051 Singapore  SGD2  N/At’  100  Chartering of ships, barges and boats with crew (freight)  SapuraHelix (ACN 142 038 784)  15.02.20101 Australia  AUD100  N/A”  50  Subsea services and ancillary activities  Subsidiaries of KHL  Kencana Marine Sdn Bhd (543161-W)  28.03.20011 Malaysia  RM1,000,OOO  RM1,OOO,OOO  100  Operation and management of fabrication yard  Kencana Metering Sdn Bhd (543106-M)  28.03.20011 Malaysia  RM250,000  RM500,000  100  Dormant  Kencana Infrastructure Sdn Bhd (594894-P)  7.10.20021 Malaysia  RM1,OOO,OOO  RM1,000,OOO  100  Specialised fabrication and infrastructure construction  Kencana Steelworks Sdn Bhd (700394-X)  16.06.20051 Malaysia  RM1,OOO  RM100,OOO  70  Dormant  Subsidiaries of KPV  KMD (789765-P)  26.09.20071 Malaysia  RM1,000,000  RM1,000,000  100  Offshore drilling and drilling related services in the O&G industry  43
[Company No. 950894-T I 6. INFORMATION ON OUR GROUP (cont’d) Name of company  Date and place of incorporation  Total issued and paid-up share capital  Authorised share capital  Equity interest held %  Principal activities  Subsidiaries of KPV (cani’d)  KMR Labuan (LL07061)  11.05.2009/ Federal Territory of Labuan, Malaysia  USD68,000,000  N/A”  100  Leasing activities  KMR1 (200719465W)  19.10.2007/ Singapore  USD2,000,000  N/A”  100  Dormant  Kencana Marine Rig 2 (Labuan) Pte Ltd (LL08343)  18.07.2011/ Federal Territory of Labuan, Malaysia  USD1  N/At’  100  Dormant  Kencana Marine Rig 3 (Labuan) Pte Ltd (LL08341 )  18.07.2011/ Federal Territory of Labuan, Malaysia  USD1  N/A”  100  Dormant  Kencana Nautilus Sdn Bhd (882459-A)  11.12.2009/ Malaysia  RM100,000  RM100,000  100  Provision of marine transportation and support services  Subsidiaries of KTC  Kencana Torsco Overseas Sdn Bhd (27950-W)  12.08.1976/ Malaysia  RM120,002  RM500,000  100  Provision of engineering, fabrication and construction works  Kencana Torsco Assets Sdn Bhd (137082-P)  20.03.1985/ Malaysia  RM2  RM100,000  100  Property investment  Kencana Torsco (Hong Kong) Private Limited (1591650)  21.04.2011/ Hong Kong  HKD50,000(b)  HKD100,000  100  Onshore steel fabrication and construction  King Hang Engineering Company Limited (701563)  19.01.2000/ Hong Kong  HKD5,750,000  HKD5,750,000  60  Steel fabrication and erection  44
[Company No. 950894-T I 6. INFORMATION ON OUR GROUP (cont’d) Date and place Total issued and Authorised share Equity interest Name of company  of incorporation  paid-up share capital  capital  held %  Principal activities  Subsidiary of King Hang Engineering Company Limited  Dong Guan Hang Hoi Steel Structure Company Limited (441900400085228)  11.10.2005/ PRC  USD1,050,000  USD1,050,000 (registered capital)  100  Steel fabrication and erection  Subsidiaries of Kencana Nautilus Sdn Bhd  Gemia (Labuan) Pte Ltd (LL07505)  12.02.2010/ Federal Territory of Labuan, Malaysia  RM32,700  N/AA  100  Owner and operator of an offshore support vessel  Teras-Kencana Ventures Sdn Bhd (806114­M)  12.02.2008/ Malaysia  282,000 ordinary shares 5,646,000 preference shares  4,000,000 ordinary shares 6,000,000 preference shares  67  Owner and operator of an offshore support vessel  Redang (Labuan) Pte Ltd (LL08066)  31.01.2011/ Federal Territory of Labuan, Malaysia  USD1  N/N  100  Vessel owner and to conduct vessel leasing business  Dhow Offshore Sdn Bhd (838160-H)  11.11.2008/ Malaysia  RM100,000  RM100,000  100  Service provider for offshore support vessel  Badang (Labuan) Pte Ltd (LL08747)  16.02.2012/ Federal Territory of Labuan, Malaysia  USD1  N/N  100  Vessel owner and to conduct vessel leasing business  Subsidiaries of AME  AME Marine Services Sdn Bhd (644333-U)  03.03.2004/ Malaysia  RM1,000  RM100,000  100  Provision of vessel related management services  45
[company No. 950894-T 6. INFORMATION ON OUR GROUP (cont’d) Date and place Total issued and Authorised share Equity interest Name of company  of incorporation  paid-up share capital  capital  held %  Principal activities  Subsidiaries of AME (cont’d)  Allied Support Corporation (LL 06534)  28.05.2008/ Federal Territory of Labuan, Malaysia  USD1  N/A”  100  Vessel owner and letting of its dynamic positioning vessels and related equipment  MHSB (513376-M)  4.05.2000/ Malaysia  RM250,000  RM500,000  100  Dormant  AME Corporation (LL 08213)  28.04.2011/ Federal Territory of Labuan, Malaysia  USD1  N/A”  100  Provision of offshore diving and underwater related services for inspection, repair and maintenance of structures, pipelines and risers and for the construction of underwater facilities for the O&G industry overseas  AME Robotics Corporation (LL08672)  10.01.2012/ Federal Territory of Labuan, Malaysia  USD1  N/A”  100  Leasing of ROV  Allied Marine & Equipment (Thailand) Ltd (0105555037057)  8.03.2012/ Thailand  2,000,000 Baht  N/A”  100  Provision of offshore diving and underwater related services for inspection, repair and maintenance of structures, pipelines and risers for the construction of underwater facilities for the O&G industry  Associate companies of our Company  GSB (191013-A)  16.12.1989/ Malaysia  RM5,000,000  RM5,000,000  30  Provision for wireline, production testing and associated services for O&G companies  46
I Company No. 950894-T I 6. INFORMATION ON OUR GROUP (cant’d) Name of company  Date and place of incorporation  Total issued and paid-up share capital  Authorised share capital  Equity interest held %  Principal activities  Associate companies of our Company (cont’d)  Subang Properties Sdn Bhd (121182-K)  07.06.1984/ Malaysia  RM184,253  RM40,000,000  36.2  Dormant  LSE (71 0954-H)  26.09.2005/ Malaysia  RM50,000,000  RM50,000,000  50  Shipbuilding, ship repair, naval craft maintenance and O&G fabrication  Associate companies of KBW  Best Wide Engineering (M) Sdn Bhd (319161-X)  07.10.1994/ Malaysia  RM1,000,000  RM1,000,000  30  Provision of design and engineering services  Matrix Maintenance Sdn Bhd (525537-V)  08.09.2000/ Malaysia  RM300,000  RM500,000  30  Provision of valve testing and maintenance services  Associate companies of KPV and SEV  Berantai Floating Production Limited (LLOB133)  11.3.2011/ Federal Territory of Labuan, Malaysia  USD350,000  N/N  (C)49  Ownership and provision of bareboat charter of FPSO  Jointly-controlled entities of our Company  BTL Sdn Bhd (18090B-X)  12.04.1989/ Malaysia  RM30,000  RM250,000  50  Under members’ voluntary liquidation  Uzmal Oil Inc (1210)  06.09.1994/ Uzbekistan  USD2,000,000  N/N  50  Oilfield production  SapuraAcergy (708868-K)  07.09.2005/ Malaysia  RM3,600,000  RM100,000,000  50  Managing and operating of vessel and provision of offshore related works  47
I Company No. 950894-T 6. INFORMATION ON OUR GROUP (cont’d) Name of company  Date and place of incorporation  Total issued and paid-up share capital  Authorised share capital  Equity interest held %  Principal activities  Jointly-controlled entities of our Company fcont’dJ  SapuraAcergy Assets Pte Ltd (LL05212)  15.02.2006/ Federal Territory of Labuan, Malaysia  USD22,000,000  N/AA  50  Leasing of vessel and operational equipment  SapuraAcergy (Australia) Pty Ltd (ACN 141 920005)  08.02.2010/ Australia  AUD200,000  N/AA  50  Managing and operating of vessel and provision of offshore related works  Offshore International FZC (1746)  23.09.2007/ United Arab Emirates  UAE Dhs.250,000  UAE Dhs.250,000  40  Under members’ voluntary liquidation  Quippo Prakash Pte Ltd (200808322H)  29.04.2008/ Singapore  SGD100,000  N/AA  26  Vessel owner  L&T Sapura Shipping Pvt Ltd (U611 00TN201 OPTC077217)  02.09.2010/ India  INR1,588,530,830  INR1,800,000,000  40  Vessel owner  L&T Sapura Offshore Pvt Ltd (U11200TN2010PTC077214)  02.09.2010/ India  INR100,000  INR225,000,000  40  Provision of engineering and installation services  SapuraCrest Qatar (47032)  01.09.2010/ Qatar  Riya1700,000  N/AA  49  Dormant  Jointly-controlled entities of KBW  Bestwide MCCS Sdn Bhd (448031-H)  25.09.1997/ Malaysia  RM100,000  RM100,000  50  Undertaking of engineering contracts and provision of related consultancy services
48 I Company No. 950894-T 6. INFORMATION ON OUR GROUP (cant/d) Notes: 50% which is held in trust for Seadrill pending formalisation of a shareholders’ agreement pursuant to the joint-venture between SapuraCrest and Seadrill to jointly participate in the contracts which is awarded to TLOSB by Petroleo Brasileiro SA and in relation to the building, construction and operations of 3 units ofpipe laying support vessels. A No authorised share capital for companies incorporated in the Federal Territory of Labuan, Australia, England and Wales, Brazil, Singapore, Uzbekistan, Qatar and Thailand. (a) Not applicable as OFI is a limited liability company and accordingly, no issued and paid-up share capital.
(b) HKD1.00 paid and HKD49,999 allotted but unpaid.
(e) KPV and SEV each holds 24.5% equity interest in Berantai Floating Production Limited.

(The rest of this page has been intentionally left blank) 49 ~mpany No. 950894-T 7. BUSINESS OVERVIEW 7.1 BUSINESS OVERVIEW OF OUR GROUP We are a proven integrated services provider covering the O&G value chain with full-fledged EPCIC capabilities with presence in Malaysia and various regions including Asia, Australasia, Middle East, Europe, Americas and Africa. A diagrammatical illustration of our activities in the O&G value chain is set out below:
Drilling • Development • Offshore drilling production andof i…’·~.I.·
services petroleum resources
I
il J j
Operations &Marine services maintenanceIPFI HUC Installation of offshore • Maintenance and platforms, marine • Provision of refurbishment of pipelines and facilities subsea services, offshore diving and industrial gas including deepwater underwater related turbines projects and heavy
services, including structure installation ROVs • Repair and refurbishment of• Installation of SURF S8M and valves specialised • Provision of • HUC

geotechnical and geophysical• De-commissioning
services and removal of production facilities
• Provision or offshore’facillties • maintenance

50
7. BUSINESS OF OUR GROUP (cont’d) The key revenue contributors to our Group are EPCIC and drilling activities. Details of our Group’s activities across the O&G value chain are follows: 7.1.1 Development and production of petroleum resources Our development and production activities involve the provision of field development plans, development, execution and completion of the field development for O&G production. Following the completion of the field development, we operate and maintain the field. Our diverse experiences and key assets available to apply our competencies and experience have won us the first domestic marginal field RSC by PETRONAS whereby we jointly develop and operate the field with PED on behalf of PETRONAS and provide the FPSO vessel which is jointly owned by PED and us. We are able to expand our role within the O&G value chain by participating in field development and operation. The RSC is to carry out the development and production of petroleum resources from Berantai, a marginal field off Terengganu, for a period of 8 years. The RSC was awarded on 31 January 2011 to a consortium comprising PED (50%­interest) and our subsidiaries, namely SEV (25%-interest) and KESB (25%-interest). With the Clough Business Acquisition, we acquired Peritus Group and OFI which provides advanced subsea and floating systems engineering and project management services and field development to offshore O&G projects across the globe. Field development consists of identifying and defining, as a system, all components required for successfully developing and operating offshore O&G fields. It is a multi­disciplinary task, requiring both technical and commercial skills, including subsurface, drilling, facilities, project, operations and commercial competences. Field development activities can occur early in support of O&G companies’ exploration efforts. In such cases development scenarios and costs are generated to support economic assessment of license bids or farm-in opportunities. More typically, field development begins following exploration success when O&G companies commence the assess phase of project development which, if successful, continues through to the define phase and Final Investment Decision (“FlO”). In some cases field development addresses brown-field redevelopment opportunities. Our field development planning capabilities encompass: • Pre-exploration quick field development concept selection and cost estimating in support of exploration or farm-in valuation and economic assessment;
• Post discovery, multi-disciplinary development concept selection and cost estimating including economic trade off evaluations to suit needs whether it is an early production scenario, a full field development, or a brown-field re­development;
• Managing all front-end activities including coordination of multiple disciplines, cost estimating, and “total field development” if required, from concept through FID, including all aspects of assess and define phases of field development;
• Provision and coordination of SURF and floating systems technical disciplines as well as of third party sub-surface, drilling, process facilities, operations, commercial, HSE and regulatory approval consultants;

51 7. BUSINESS OF OUR GROUP (conf’d) • Provision of or contribution to operators’ field development project teams. In addition to field development planning, with the Clough Business Acquisition, we also provide engineering and project management services across all phases of project development. Other scope of services includes: • Systems engineering;
• Technology management;
• Project management;
• Procurement and construction management;
• Start-up and commissioning;
• Integrity management; and
• Health, safety, environment and quality

7.1.2 Drilling services Our drilling activities involve operating rigs for drilling of offshore wells. The activities focus on development drilling which involves the drilling of production wells from existing drilling platforms. Offshore drilling is generally carried out using mobile drilling unit. Our Group’s mobile drilling unit consist of 6 units of SETRs namely, our wholly-owned rig KM-1, and T-3, T-6, T-9, T-10 and Teknik Berkat via a joint-venture partnership with Seadrill Group. o We are currently building 2 more units of SETRs. SETRs are more suitable for development drilling and are usually contracted on a long term basis. The drilling rigs are specially designed as a cost-efficient and flexible drilling system for development scenarios involving multiple well slot fixed offshore platforms whereby the rig moves from platform to platform using its own DES which is lifted by its own crane. All our drilling rigs are contracted on long term contract save for Teknik Berkat whose contract has expired in April 2012. As at the LPD, we are in the midst of sourcing for a new contract for Teknik Berkat. (The rest of this page has been intentionally left blank) 7. BUSINESS OF OUR GROUP (cont’d) Details of the 6 drilling rigs are as follows: Rig Specification Current use KM-1  Design Year Country of registration Classification Water depth  T-3  Design Year Country of registration Classification Water depth  T-6  Design Year Country of registration Classification Water depth  T-9  Design Year Country of registration Classification Water depth  T-10  Design Year Country of registration Classification Water depth  Teknik Berkat  Design Year Country of registration Classification Water depth  Note:  II
SETR 2010 Malaysia ABS + A1 Barge 11.88 metres -243.84 metres SETR 1980, modified in 2001 Panama ABS + A1 Barge 10 metres -122 metres SETR 1982, modified in 2000 Panama ABS + A1 Barge 10 metres -122 metres SETR 2003 Panama  ABS + A1 Barge 9 metres -2,000 prelaid mooring  metres  with  SETR 2007 Panama  ABS + A1 Barge 9 metres -2,000 prelaid mooring  metres  with  SETR
1990, modified in 2005 Panama ABS + A1 Barge 10 metres -152 metres KM-1 is currently contracted to PCSB from September 2010 to August 2015, with an option to extend the term for up to another 5 years. T-3 is currently contracted to Seadrill Group which is ultimately serving PTI Exploration & Production Public Company Limited, from February 2005 to June 2012 pursuant to a long term contract. T-6 is currently contracted by CHOCSB and Carigali-PTIEPI from December 2010 to April 2013, with an option for 2 extensions of 3 months each. We received a letter of award for T-9 from PCSB to commence operations from April 2012 to March 2013, with an option to extend for another 12 months. T-10 is currently contracted to Seadrill Group which is ultimately serving Chevron Thailand Exploration & Production from January 2011 to January 2013. Teknik Berkat was previously contracted to PCSB from April 2008 to April 201211• As at the LPD, we are in the midst ofsourcing for a new contract for Teknik Berkat. 7. BUSINESS OF OUR GROUP (cont’d) We maXimise the utilisation of our drilling rigs by extending contracts with our customers as well as actively sourcing for new contracts locally and globally.
T-3, an SETR performing drilling works at an offshore platform (The offshore platform illustrated in the picture does not belong to us). 7.1.3 EPCIC We have an integrated in-house capability to undertake the full spectrum of the EPCIC business. Our EPCIC activities comprise the following: (i) EPC, which includes:
• Engineering, procurement, fabrication and pre-commissioning of offshore and onshore production facilities, modules and process skid systems;
• Engineering, procurement, fabrication and pre-commissioning of subsea systems including seabed structures (PLEMs, PLETs, manifolds, etc);
• Construction, conversion and refurbishment of vessels, rigs and barges; and
• Other fabrication works,

 

(ii) IPF/HUC, which includes:
• Installation of offshore platforms, marine pipelines and facilities;
• Installation of SURF;
• FEED, subsea pipeline design including risers, SCRs, control system, umbilicals, subsea trees and subsea related installation;
• HUC; and
• Decommissioning.

 

54 7. BUSINESS OF OUR GROUP (cont’d) 7.1.3.1
EPC Our EPC activities include the provIsIon of engineering, procurement, construction and pre-commissioning services involved in the construction of facilities for the offshore and onshore O&G industry. We provide a full range of construction and engineering services, from detailed engineering, design, procurement to construction and pre-commissioning. We also focus on the fabrication, building and upgrading of rigs, vessels, jackets, Topsides and other O&G facilities. Most of our contracts are EPCC, EPCIC or variations of these structures. Engineering works carried out by us include initial conceptualisation, process simulations, studies, development and analysis to optimise solutions, computer run-through and 3-dimensional modelling, and undertaking multi-discipline detailed engineering designs. We are able to apply a wide range of engineering skills to meet our customers’ needs, including process, mechanical, piping, electrical, instrumentation, pipeline, marine, subsea and civil/structural works. With the Clough Business Acquisition, we acquired Peritus Group and OFI which has the capability to provide subsea and floating systems engineering services encompassing conceptual, FEED and detailed design for projects including in deepwater and difficult environments. Our fabrication division provides all kinds of fabrication activities, including construction of offshore platforms, onshore plants/facilities and/or ocean going vessels, modules, Topside, jacket and process skid systems utilising in-house design. We are also able to fabricate both onshore and offshore production facilities at our Lumut Fabrication Yard, which is located 3 kilometres from the open seas of the Straits of Malacca and our Labuan Shipyard, which is located within the port of Victoria Harbour, Labuan with deepwater access. (i) Lumut Fabrication Yard Our Lumut Fabrication Yard occupies a total area of 240 acres (including rented yard space of 20 acres) and has an estimated capacity of 90,000 mt per annum. It has covered fabrication workshops with an area of 85,600 square metres that allow 24-hours fabrication activities in all weather conditions. The facilities that we enjoy from the major facilities and infrastructure at our Lumut Fabrication Yard include: • Large covered workshop with headroom of up to 35 metres and overhead crane capacity of up to 50 tonne to enable construction oJ large structures in all weather conditions;
• A 633 metres water front with several load out jetties including a jetty that has a capacity of up to 30,000 mt, which enables us to handle the load out of large and complex offshore structures onto transport vessels;
• Crawler, rough terrain, mobile and gantry cranes capacity ranging from 25 tonnes to 600 tonnes; and
• Low tide quayside water depth of approximately 9 metres to 12 metres below the lowest astronomical tide enabling docking of large vessels.

55 7. BUSINESS OF OUR GROUP (cont’d) (ii) • The yard space, geographical diversity and raw material arrangement at our Lumut Fabrication Yard enables us to take on various steel fabrication works for O&G and general industries, as well as specialty engineering in aviation structures. Labuan Shipyard Our main operations are located in the Federal Territory of Labuan. In terms of accessibility, Labuan is strategically located within international, shipping and air routes between the Indian and Pacific Ocean. Sea transport and import/export of goods are well served by the Labuan Liberty Port, one of the deepwater ports in the East Malaysia region. Over the years, Labuan Shipyard has built-up track record for building innovative, quality products for sea transportation as well as for the O&G and energy industries To-date, Labuan Shipyard has built a wide range of vessels with increasing sophistication and complexity from fishing trawlers to chemical and clean product tankers. These include MV Bunga Semarak and MV Bunga Santian and a 97-metre SETR. Labuan Shipyard has also serviced small coastal craft, cargo ships, naval/fast patrol craft, yachts, tugs, landing craft, ferries, floating docks, log carriers and coastal tankers. It also caters to the repairs and maintenance needs of the Royal Malaysian Navy especially those vessels stationed in East Malaysia, ranging from small assault craft to the latest new generation offshore patrol vessels. Labuan Shipyard has also constructed a broad spectrum of offshore structures and platforms including modules, module frames, topsides/decks and facilities, liVing quarters, helidecks, flare-booms and bridges. Among Labuan Shipyard’s major accomplishments were the Lawit-A Project (5 Modules and MSF totalling some 10,000 tonnes) and the Kinabalu-A Project (KNDP-A Integrated Deck weighing 3,400 tonnes). In addition to the above, Labuan Shipyard has successfully completed the repairs and refurbishments of the following: • SBM;
• Drill barge “lie de Sein”;
• Mobile offshore accommodation module “Safe Marina”;
• Jack-up rig “Key Singapore” for Sante Fe Braun; and
• Drill barge “Grand Large”.

7. BUSINESS OF OUR GROUP (cont’d) Details of the products produced and services provided by us under the EPC activity are as follows: (a) Engineering, procurement, fabrication and pre-commissioning of offshore production facilities We are involved in the engineering and fabrication of offshore platforms, including Topsides and jackets. We undertake all engineering and fabrication works for offshore platforms utilising mostly in-house resources. We are also responsible for full system integration of the completed offshore production platform, whereby all the separate systems are installed on the platform, including those fabricated by third parties, hooked-up and commissioned. Topside modules and jackets (including (i) jacket and substructures and (ii) jacket with either Topsides or modules) are fabricated then typically fitted with equipment and brought as close as possible to full operational status at our Lumut Fabrication Yard and Labuan Shipyard. This is to minimise the amount of on-site equipment installation required, as well as to facilitate testing and corrective action should any of these systems fail to function as per their specifications. We fabricate jacket, which is made up of three to eight main legs, connected to each other by bracings. All elements are tubular unlike onshore lattice structures which are usually made from angular profiles. A jacket used to an offshore platform or the like comprises at least one vertical column member, laterally and vertically spaced guide sleeves for piles to be driven into the sea floor and lateral bracing connecting the guide sleeves to the column member.. The jacket may be installed with the piles prepositioned extending through the guide sleeves and temporarily secured thereto until the jacket and pile assembly is in position on the sea floor and ready for pile driving. The vertical column member may receive a pile which may include a well casing. A method of installation for the jacket may include drilling a well through the column member after installation of the jacket and securement to the sea floor by the piles which extend through the gUide sleeves. On an offshore platform, Topside refers to the surface hardware installed, Le. the upper part of a ship’s side, above the waterline. This includes the oil production plant, the accommodation block and the drilling rig. They are often modular in design and so can be changed out if necessary allowing expensive platforms to be more readily updated with newer technology. We are also involved in the pre-commissioning of equipment and electrical systems of the topsides at the yard prior to the loadouts. We have the yard space and resources required to undertake simultaneously fabrication of Topsides, modules and their accompanying jackets. 7. BUSINESS OF OUR GROUP (cont’d) (b)
(c)
(d)

Engineering and fabrication of onshore production facilities Onshore production facilities refer to a broad range of onshore facilities including storage and transportation facilities. The facilities engineered, designed and fabricated by us include pressure vessels, skid and module, building and infrastructure, onshore plant, steel fabrication, shell and tube heat exchanger, storage tank, process piping, metering system, compression equipment related to pipeline hydrocarbon transmission and pumping system. We also design, install, test and commission the instruments, controls, electrical and telecommunications systems for a complete plant. Construction, conversion and refurbishment of vessels, rigs and barges We have expertise in designing and fabricating vessels, rigs and barges. We had successfully completed, among others, the construction of SETR, pipe-lay barge and the refurbishment and conversion of an offshore drilling rig into a MOPU. KM-1, which is a SETR, was built at our Lumut Fabrication Yard. We are also currently building another 2 SETRs at our Lumut Fabrication Yard. The pipelay barge that was constructed at our Lumut Fabrication Yard was a maritime vessel used for the installation of subsea pipelines. To carry out this installation work, a typical pipelaying vessel carries a stinger arid equipment to lay pipe. For the MOPU, we have had refurbished and converted a jack-up rig into a mobile production platform that can be moved from one location to another. MOPU enables faster field development. Other fabrication works We also undertake the fabrication of equipment used for the O&G industry as follows: (i) Modules A module may be engineered and fabricated independently from the rest of the offshore platform, with the condition that the module can ultimately be physically and functionally integrated with the rest of the offshore platform. Conceptually, a module is similar to a process skid system, with the exception that a module is much larger and more complex. 7. BUSINESS OF OUR GROUP (cont’d) (ii) Some of the modules fabricated by our Group include, among others, the following: Modules Description Gas compression To compress gas on offshore production modules facilities. Carbon dioxide To reduce high carbon dioxide content removal modules from natural gas to comply with gas sales specification. Glycol dehydration To reduce water content from natural gas modules to overcome corrosion and hydrate problems. Water injection To treat water via filtration and de-aeration modules to ensure its suitability for injection into the reservoir. Process skid system A process skid system incorporates all of the PiPing, electrical, control and instrumentation systems, and other systems that are required for it to function. Process skid systems may be integrated into a larger facility, or used on a stand-alone basis. The process skid systems fabricated by us include, among others, the following: Process skid system Description
Fuel gas skids Conditions gas to be suitable for use as fuel gas for gas turbines or gas engines. Instrument gas skids Conditions gas to be suitable for use as instrument gas, typically on un-manned platforms where compressed air is not available. Chemical injection Stores and pumps chemicals for various skids uses such as, corrosion inhibition, pour point depression, preventing formation of emulsion and foam, etc. Produced water Treatment of produced water to reduce oil handling skids content so that the produced water may be disposed direct to sea. Metering skids To obtain measurement and to record the flow rate of fluids, such as crude oil, gas and condensates. De-sanding skids To remove sand, solids and other impurities produced during the extraction of crude oil from underground reserves. Air compression skids Installed for purposes of producing compressed air. 7. BUSINESS OF OUR GROUP (cont’d) (iii) Marine terminals and Turrets We have the capability to carry out engineering, procurement and construction of marine terminals (loading buoys) and Turrets. Turrets are floating structures used with FPSOs to attach production and export risers to the unit, allowing the risers to remain connected when the unit moves. Some Turrets are internal to the unit while others are external. (iv) Subsea structures We carry out engineering, procurement and construction of subsea manifolds and structures for deepwater operations, and additionally such equipment as PLETs and SLEDs, which are components used to connect subsea production facilities and transport the product to a collecting platform or FPSO. Manifold systems fabricated by us typically fulfils the following functions: (a) Gather production or distribute water or gas from or to multiple production, water, or gas injection wells;
(b) Direct flow of fluids through manifold headers;
(c) Contain one or more headers;
(d) Allow isolation of individual well slots from header;
(e) Incorporate flowline connections between manifolds and appropriate flowlines and/or test lines; and
(f) Allow continuity of pigging of flowline system.

(v) Specialised fabrication We also utilise our engineering, design and fabrication capabilities to undertake specialised fabrication structures for non-O&G industries such as steel bridges, water supply, building, wharfs and roof structures. 7. BUSINESS OF OUR GROUP (cont’d) Among the notable EPC projects completed by our Group (including associate companies and jointly-controlled entities) in the past 3 years are as follows: Year 2008-2009 2010 2009-2010 2007-2009 2008-2010 2008-2010 2008-2010 2009 2009 2010 2010-2011 Project F28DR-A Topside and CPDR-A Topside PM329 East Piatu Development Project KM-1 drilling rig JDA Block B-17 Field Development Project: EPCC of LQ deck and jacket, CFP and tripod and 3 bridges Tangga Barat Cluster Development Project Kinabalu Development Project Dulang Compressed Gas Capacity Enhancement Project 030 and Dana Wellhead Support Frame (“WHSF”) and 035 Deck Extension and PLEM for 01 Cluster Development Project Serampang-A (“SEPA”) Production Topsides Facilities for Phase 1 SK­309/311 Sarawak Gas Development Project GSPC DDW-1 Project Deen Dayal West Field Development Project Brief description of work Fabrication of F28DR-A Topside and CPDR-A Topside Procurement and construction of wellhead platform Topside, central processing platform Topside, living quarter and bridge Design, construction and completion of SETR EPCC of LQ Deck and jacket, CFP and tripod and 3 bridges Procurement and construction of Tangga Barat Cluster Development Project Procurement and construction of Kinabalu Drilling Platform Procurement and construction of Dulang Compressed Gas Capacity Enhancement Project (DULANG) Procurement and construction of WHSF, deck extension and PLEM Procurement and construction of Topside Fabrication, load-out and sea­fastening of a 6-legged jacket and piles Fabrication, loadout and seafastening of a 6-legged jacket Customer SSB Newfield KMR Labuan Carigali-PTTEPI Operating Company Sdn Bhd PCSB PCSB PCSB PCPP Murphy Sarawak Larsen & Toubro Larsen & Toubro 7. BUSINESS OF OUR GROUP (cont’d) The current ongoing notable EPC projects of our Group (including associate companies and jointly-controlled entities) as at the LPD include the following: Year 2010-2012 2011-2012 2011-2013 2010-2012 2009-2012 2011-2012 2011-2012 2011-2015 2011-2012 2011-2012 2012-2013 2012 Project F13 and E8 WHP (wellhead platform) and gas compression module Gorgon LNG Jetty and Marine Structures Project, Barrow Island EPC of compressor module (2 nos) PM329 East Piatu development Project Brownfield Projects Wellhead platform, jacket, EPC of Berantai Field Development Project Kebabangan substructure Wheatstone Project LNG Plant Facility Sarawak SK309/311 SPSA Development Project Sarawak SK309/311 SPSA Development Project Tapis re-development Project West Desaru MOPU Facility Brief description of work Supply, fabricate, test, pre­commissioning, loadout and sea­fastening of E8K and F13K compression module Fabrication of Gorgon LNG jetty and marine structures EPC of AMPA 9 compressor module Procurement and construction for jackets of PM329 East Piatu Provision of construction services for brownfield projects EPCC of wellhead platform and the Angsi Field tie-in at the Andr-A Platform  for  Berantai  Field  Development  Project,  Block  PM309
Fabrication of KBB substructures Fabrication and assembly of components for an LNG plant EPC of Patricia Satellite Substructure and Serendah Wellhead Template EPC of Serendah-PA (SN-PA) and Serendah Accommodation (SN-M) substructures and topsides facilities Procurement, fabrication, testing, loadout and tie-down of Tapis-R Jacket, Piles and Appurtenances Upgrade and refurbishment of West Desaru MOPU Facility Customer SSB Saipem SA An international O&G company Newfield EMEPMI PED KPOC Bechtel International Inc Murphy Sarawak Murphy Sarawak EMEPMI Petrofac E&C 7. BUSINESS OF OUR GROUP (cont’d) 7.1.3.2 IPF/HUC Our offshore installation and HUC activities include the provIsion of transportation and installation of pipelines and structures (both deep and shallow water projects) for the O&G industry as well as HUC of platforms. We are an IPF service provider with an established presence in Malaysia and the region since 1989 as a major O&G service provider in this area. The IPF activities commence when the pipelines and structures are transported from the pipe coating yard and fabrication yard respectively to the offshore location where the installation and pre-commissioning activities are carried out. Subsequently, various facilities such as piping, hydraulic and compressed air lines, electrical and electronic cables will be hooked-up. The system will then be commissioned thereafter. To address the specific needs of our customers, we also provide specialised services that include project management, project material procurement and workpacking. Our wide range of available resources allows us to tailor and customise our project teams based on customers’ requirements. (a) Installation of offshore platforms, marine pipelines and facilities including deepwater projects and heavy structure installation The operation of our offshore installation activities are supported by our experienced personnel who provide a range of experience and skills in our integrated services. In addition, we also have our own fleet of derrick lay barges, diVing support vessels, engineering work barges and construction equipment to meet our customer’s requirements. In particular, we own Sapura 3000 via a joint venture, to enable us to undertake deepwater projects. We are also currently building 2 additional deepwater capable derrick lay vessels to further enhance our capacity and capability. Our offshore installation activities also expand into both regional and global markets. We have formed partnerships and strategic alliances with international partners such as Seadrill Group, Subsea 7 and Larsen & Toubro to jointly undertake projects abroad. Through the joint venture partnerships with our international partners, we have the opportunity to expand our deepwater capability, expand our regional presence and enhance our human capital. Via these joint ventures, we also own 2 other derrick lay barges, namely LTS 3000 and OP 2000. We also focus in building on the strength and depth of our deepwater capabilities via our partnership with Subsea 7, which is a major global player in seabed-to-surface engineering construction and services, to take advantage of the growth of the deepwater construction market throughout the Asia Pacific region. Through this joint venture, one of our subsidiaries has secured the first 2 deepwater projects in Malaysia, which are the Kikeh and Gumusut Kakap deepwater development projects. We also strive to enhance our deepwater capabilities through investments in strategic deepwater capable assets and by expanding into new markets across the region and penetrating into Latin America and North American market. 63 7. BUSINESS OF OUR GROUP (coni’d) We also have the capability to carry out heavy structure installations by jackets launch and f1oatover. In 2011, we executed a Mumbai High North Redevelopment Project in India involving launch and installation of Mumbai High North jacket with structural weight of approximately 13,380 mt. In 2004, we completed a project for ConocoPhillips Pty Ltd in Bayu Undan field, Timor Sea involving the installations of two Topsides (11,500 mt and 15,000 mt) by f1oatover method. Among the notable offshore installation projects completed by our Group (including associate companies and jointly-controlled entities) Year 2010 -2011 2010-2011 2011 2010 2010 2009 2009 in the past 3 years are as follows: Project Brief description of work Belanak CALM Buoy Recovery LufengWell Decommissioning Project Huizhou Field Phase 2 Salvage Provision of construction works of 4 wellheads platforms for Mumbai High North Re-development Project in Mumbai High North Field Ujung Pangkah Development Offshore Phase II (central processing platform and accommodation utilities processing) Devil Creek Development Project Transportation and installation of platforms, bridges and EPCIC of inter­field pipelines for JDA Block B-17 Field Development Project 64
Involved venting, flushing and isolating the buoy system before disconnecting and recovering the buoy and floating hoses  Involved the utilisation Normand Clough to plug abandon 5 subsea wells  and  of  Involves  complete  salvage  of  a
typhoon-damaged FPSO subsea system and installation of a new turret loading buoy and associated risers, mid water arches, anchors, mooring chains and wire segments Transportation and installation of platforms and facilities Installation of central processing platform and 4-legged jacket Transportation and installation of offshore facilities Transportation and installation of platforms, bridges and inter-field pipelines Customer S8M IMODCO Inc Well OpsSEA Pty Ltd COOEC Subsea Technology Co Ltd Larsen & Toubro/Oil and Natural Gas Corp Ltd HESS (Indonesia Pangkah) Ltd Apache Energy Limited Carigali-PTrEPI 7. BUSINESS OF OUR GROUP (cont’d) Year 2007-2009 2007-2009 2011 2009 2009 2008 -2010 Project Transportation and installation of facilities (extension) Kikeh gas pipeline system for Kikeh development Yetagun Project Neptune LNG Deepwater Port Terminal Montara Development Project Wild Well Control (Normand Clough charter) Brief description of work Transportation and installation of structures and pipeline Transportation and installation of structures and pipeline Provision of transportation and installation of offshore facilities Installation of 2 Submerged Turret Loading (STL) buoys, the associated gas risers, umbilicals, suction anchors, mooring chains and wire segments Transportation and installation of the 750 tonne Montara Wellhead Platform deck, 285 tonne mooring buoy with 9 associated mooring legs, approximately 26km of infield pipelines and the 100 tonne Swift subsea manifold Provided subsea intervention services for Wild Well’s offshore platform decommissioning and subsea construction works as well as completing salvage works for Wild Well’s parent company Superior Energy Services (The rest of this page has been intentionally left blank) 65
Customer PCSB Murphy Sarawak PC Myanmar (Hong Kong) Limited Advance Production & Loading Pte Ltd PHEP Australasia (Ashmore Chartier) Ply Ltd Apache Limited 7. BUSINESS OF OUR GROUP (cont’d) The current ongoing notable offshore installation projects of our Group (including associate companies and jointly-controlled entities)
as at the LPD include the following:  Year  Project  Brief description of work  Customer  2012  BC Petroleum Project  Transportation and installation of Guyed Caisson Platforms for Balai, Bentara, Spaoh and West Acis Fields  BC Petroleum Sdn Bhd  2011-2012  Montara Development Project  Provision of offshore transportation and construction activities  PTTEP Australasia (Ashmore Cartier) pty Ltd  2010-2012  Integrated transportation and installation of offshore facilities  Transportation and installation of pipelines, structures and facilities  PCSBI SSBI SSPCL! Newfieldl Murphy Sarawak/ NOEMU EMEPMII Talisman Malaysia Limitedl Petrofac (Malaysia­PM304) Limitedl PETRONAS Carigali/PCPP I KPOC  2011-2012  Pipelines, structures and FPSO installation for Berantai Field Development Project, Block PM309  Provision of transportation and installation of pipelines, structures and facilities including FPSO  PED  2009-2013  Gumusut-Kakap Deepwater Project  Provision and performance of project management. procurement. engineering, transportation and installation services and works  SSPC  2011-2012  Bumi-B and Cakerawala-D Wellhead Platforms and Pipelines Project  Provision of offshore installation and transportation services  Carigali Hess Operating CompanySdn Bhd  2011-2012  Lan Do Block 06.1 Phase III  Provision of Subsea Installation Services  TNK Vietnam BV  2010 -2012  Domgas Contract  Installation and construction of upstream facilities at the Gorgon Upstream Project Australia, in particular the Domgas pipeline  Chevron Australia pty Ltd  66
7. BUSINESS OF OUR GROUP (cont’d) Vessel Sapura 3000 LTS 3000 QP2000 Java Constructor” Clough Challenge” (b) Our key assets in the IPF division are as follows: Specification Category DP Class 2 self propelled heavy lift pipe laying vessel  Country of registration  Bahamas  Year built  2008  Category  Heavy lift pipe-lay vessel  Country of registration  India  Year built  2010  Category  Denick lay barge  Country of registration  Panama  Year built  2009  Category  General  purpose  construction  support  barge  Country of registration  Panama  Year built  1982 (2009 upgraded)  Category  Shallow water lay barge  Country of registration  Australia  Year built  1996  Note:
Acquired following the completion of the Clough Business Acquisition. We are presently building 3 pipe-lay support vessels with a laying capability of up to 2,500 meters water depth which are expected to be delivered in 2014. In addition, 2 DP heavy lift and pipe-lay vessels are being constructed to further increase the capacity and capability of this division. One of these vessels is expected to be delivered in the fourth quarter of 2013 whilst the other vessel is expected to be delivered in 2014 and are primarily targeted for the international market. Installation of SURF With the Clough Business Acquisition, we acquired the capability and market penetration in the SURF market. This will enable us to address the high end area in both shallow and deepwater construction works. Among the areas covered under the SURF include: (i) Subsea structures/manifoldslriser/bases/protection structures;
(ii) Spools and tie-in systems;

(iii) FPSO or TLP moorings installation and hook-up; (iv) Full subsea field installations including all the above;
(v) Inspection, repair, maintenance and light construction; and

(Vi) Umbilicals, risers, flowlines, TLP and SCR. 67 7. BUSINESS OF OUR GROUP (cani’d) (e) Year 2010 2008-2010 2007-2010* 2005-2010 Dedicated design engineering services are provided via affiliated companies, OFI and Peritus Group. OFI is a subsea specialist based in Houston that has subsea capabilities that cover structural and metallurgical engineering, design, FEED, installation and project management services. Peritus Group provides advanced subsea and floating systems engineering and project management services to offshore projects globally, with a particular focus on deepwater and difficult environmental or operating conditions. Peritus Group works on a network of regional engineering centres in Perth, Houston and London, which enable specialised skills, knowledge and expertise to be shared globally. HUe Following the engineering and fabrication work for offshore platforms, all the separate systems installed on the platform are hooked up and commissioned at customer’s site. Hue activities involve the interconnecting and interfacing of systems such as structures, modules and equipment, and commissioning of these systems including inspection and testing, and ensuring all the systems are operating effectively, efficiently, and safely on the platform. Our Hue activities include the provision of HUe services, project management, procurement services, construction support, manpower, construction equipment, tools and consumables for both greenfield and brownfield services projects. To address the specific needs of our customers, we also provide specialised services that include project management, project material procurement and workpacking. Our wide range of available resources including marine vessels and our ability to leverage on our other divisions allows us to tailor and customise project solutions based on our customers’ requirements. Among the notable HUe projects completed by our Group (including associate companies and jointly-controlled entities) in the past 3 years are as follows: Project  Brief description of work  Customer  Provision of HUC of 10″ x 20.754Km Pipeline PL 347 From BEP-A to BKP-A  PL 347 HUC for 10″ x 20.754 KM Pipeline  PCSB  North Belut Project HUC of wellhead platforms  HUC of North Belut wellhead platforms offshore Indonesia  ConocoPhillips Indonesia Inc Ltd  Provision of HUC of PCSB facilities for year 2007 -2010*  HUC for Kanowit CPP (KAKG-A) Platform (Kumang Cluster Development Project -Phase 1)  PCSB  Provision of integrated topside major maintenance services  Provision of construction crew and equipment, project management team, workscoping personnel procurement  EMEPMI
7. BUSINESS OF OUR GROUP (cont’d) Year  Project  Brief description of work  Customer  2010  Phase 1 Development of JDA Block B-17  Procurement, onshore prefabrication, offshore installation, and commissioning of wells tie-ins under batch 2 HUC Campaign on JKA, MDA, MOB and MDC wellhead platforms  Carigali-PTIEPI  2011  FSO Cendor RLE Phase II  FSO cendor repair and life extension Phase II  FPSO Ventures Sdn Bhd (MISC Berhad)f Petrofac Malaysia Ltd  2007-201011  Provision of HUC of PCSB facilities for year 2007 -2010*  HUC for Sumandak non associated gas development project  PCSB  2007-201011  Provision of HUC of PCSB facilities for year 2007 -2010*  HUC for Samarang (Phase 1 ­Accelerated Infill Drilling) redevelopment project  PCSB  2011  Provision of procurement, construction and commissioning of Topside and pipeline for PM318 Puteri Restoration Project  Site visit workscoping, workpack preparation, procurement, onshore pre-fabrication and offshore HUC of the Puteri Platform Topside Facility restoration and modification -to restore the platform back to the operational condition  Newfield  2011-2012  Provision of EPCC of Sepat Early Production System (GPS) Project  Sepat MOPU HUC Project  Petrofac E&C  Notes:  This project is under an umbrella contract. The duration of the project was extended to end of 2011 due to additional works requested by the customer.  #  This project is under an umbrella contract. The duration of the project has been extended to 2012 due to additional works requested by the customer.  The current ongoing notable HUC projects of our Group (including associate companies and jointly-controlled entities) as at the LPD include the following:  Year  Project  Brief Description of Work  Customer  2009-2012  Brownfield construction services  Provision of offshore construction services, HUC work orders, skilled manpower and other services  EMEPMI  2008-2012  Provision of HUC and major maintenance services contract  Provision of HUC and major maintenance services, work Package B  SSBfSSPCL  69
7. BUSINESS OF OUR GROUP (cont’d) Year Project Brief Description of Work Customer 2011-2012 FSO Gendor RLE FSO Gendor Repair and Life FPSO Ventures Phase III Extension Phase III Sdn Bhd (MISG Berhad)/ Petrofac Malaysia Ltd 2011-2012 Berantai Field Angsi (AN DR-A) drilling riser PED Development platform host tie-in for Project 2012-2013 HUG of D21 and Supply, delivery, installation and lEV Engineering Host Tie-In for D35 commissioning of Refurbished Sdn Bhd Wellhead Platform, Pipeline and Host Tie In for D21 Project 2012 Kebabangan The provision of welding crew for GOM Resources Northern Hub integrated transportation and Sdn Bhd Development installation of offshore facilities Project 2012-2013 Engagement of Procurement, construction and Malaysia LND Electrical & commissioning of MLNG Dua New Dua Sdn Bhd Instrument Incinerator at Bintulu, Sarawak Subcontractor Package (d) Decommissioning and removal of production facilities Our decommissioning and removal of production facilities activities comprises flushing the system of O&G residue, dismantling, removing and transporting Topsides and jackets to locations specified by our customers. In 2009, our jointly-controlled entity SapuraAcergy was awarded a RM220.0 million contract by Nippon Steel Engineering Co. Ltd to carry out the Iwaki Platform Decommissioning Project offshore Japan. The decommissioning project works included the removal of heavy lift Topsides, the upper section of the jacket and a section of the gas export pipeline using the Sapura 3000. 7.1.4 Marine services Our marine services activities primarily comprise of the subsea services and diving services, geotechnical and geophysical services, offshore platform maintenance services as well as offshore support vessels. 7.1.4.1 Subsea services, offshore diving and underwater related services Our subsea services and diving services activities include installation of subsea components and inspection of subsea facilities. The work involves air and saturated diving activities as well as unmanned ROVs. Our capabilities include, among others, the follOWing: Construction, installation of structures and subsea pipelines; Major inspection, repair and maintenance of subsea facilities; Installations, repair and inspection of export/import facilities; 70 7. BUSINESS OF OUR GROUP (cont’d) Underwater inspection and repair of floating systems including FSOs and FPSOs; Shallow and deepwater ROVs services; and All other underwater services related to the offshore industry. We own and operate the resources and assets required to execute such work including DP diving support vessels, SDS and ROVs. Such services require qualification and certification of our diving equipment and specially trained skilled manpower. All the diving equipments are maintained and certified according to the best industry practices and requirements. Our key assets in the subsea services division are 6 vessels detailed as follows: Vessel  Specification  Allied Achiever  Category Country of registration Year built  DP Class 2 diving support and ROV vessel Malaysia 2001  Allied Centurion  Category Country of registration Year built  DP Class 2 diving support and ROV vessel Malaysia Original-1966 (rebuilt 1999)  Allied Conquests  Category Country of registration Year built  DP Class 2 diving support and ROV vessel Malaysia 2006  Allied Jane  Category Country of registration Year built  DP Class 2 diving support and ROV vessel Malaysia 2010  Sarku Clementine  Category Country of registration Year built  DP Class 2 diving and ROV support vessel Malaysia 1997  Sarku Sambang  Category Country of registration Year built  Air diving and ROV support vessel Malaysia 1975 (converted in 1999/2000 to  diving
support! survey vessel) Please refer to Section 2 of Appendix II of this Prospectus for further information on our subsea services division’s vessels. 7. BUSINESS OF OUR GROUP (coni’d) 7.1.4.2 Geotechnical and geophysical services Our geotechnical and related services provide information to our clients on the soil properties at the seabed which can be used during engineering foundation design and operational consideration. This is done by drilling and taking soil samples as well as by using the results of cone penetration test to determine soil properties such as soil type, tip resistance, pore pressure and soil friction. The geophysical and related services provide information on the seabed profile and contours safe navigation and facilitate construction work. It also provides information on the condition below the seabed. This is done by sending acoustic signals to the seabed and measuring the reflections. We own and operate 4 specially designed geotechnical and geophysical vessels to execute these services. Details of the geophysical vessels are as follows: Vessel Specification Teknik Category Geotechnical survey vessel Samudra Country of registration Malaysia Year built 1975, converted in 1984 and 1989 TeknikWira Category Geotechnical survey vessel Country of registration Malaysia Year built 2010 Teknik Category Geophysical survey Perdana Country of registration Panama Year built 1973, refitted in 2000 with transducer Teknik Category Geophysical survey Putra Country of registration Panama Year built 1980, refitted in 1995 with survey equipment Please refer to Section 2 of Appendix II of this Prospectus for further information on our specially designed geotechnical and geophysical vessels. 7.1.4.3 Offshore platform maintenance Our offshore platform maintenance services provide periodic and also ad hoc maintenance, upgrading and refurbishment services on existing platforms. This includes addition or replacement of equipment, structure, piping and other appurtenance. It also includes general maintenance such as stripping and re-painting of Topside facilities and sub-structures. To perform this work, we own and operate 3 engineering work barges and 3 work boats. 7. BUSINESS OF OUR GROUP (cont’d) Details of our work barges and work boats are as follows: Vessel Specification KPV Category Accommodation work boat Redang Country of registration Malaysia Year built 2010 Sarku 300 Category Accommodation work barge Country of registration Panama Year built 2007/2008 Sarku 2000 Category Accommodation work barge Country of registration Malaysia Year built 1991 Sarku Category Accommodation work barge Samudera Country of registration Malaysia Year built 1983 Sarku Category Accommodation work boat Santubong Country of registration Malaysia Year built 1979 Sarku Category Accommodation work boat Semantan Country of registration Malaysia Year built 1974 Please refer to Section 2 of Appendix II of this Prospectus for further information on our work barges and work boats. 7.1.4.4 Offshore support vessels We own, operate and charter vessels to provide support for exploration, development and production activities in the offshore O&G industry. The vessels are chartered to external parties on a time charter basis, either on a long-term charter or spot charter or used to primarily support other divisions. We own 2 AHTS (1 with DP capability and 1 which is DP enabled) and 2 AHTs. These vessels are used to support our HUC, brownfield services as well as drilling operations and are also chartered to third parties from time to time to maximise utilisation of the vessels. Vessel Specification Gemia Category AHTS Year 2009 Country of registration Malaysia Horsepower 8,080 BHP Bollard Pull 101 mt KPV Kapas Category AHTS Year 2009 Country of registration Malaysia Horsepower 5,220 BHP Bollard Pull 73 mt
Teknik Category AHT Alpha Year 1998 Country of registration Malaysia Horsepower 4,000 BHP Bollard Pull 55 mt 73 7. BUSINESS OF OUR GROUP (cont’d) Vessel  Specification  Teknik Beta  Category Year Country of registration Horsepower Bollard Pull  AHT 1999 Malaysia 4,000 BHP 53 mt  Please  refer  to  Section  2 of  Appendix  II  of  this  Prospectus  for  further
information on our AHTS and AHTs. The table below provides the current ongoing notable marine services projects undertaken by our Group (including associate companies and jointly­controlled entities) as at the LPD include the following: Year Project Brief description of work Customer 2009-2012 Provision of Various offshore subsea services AnO&G underwater works company inspection and maintenance services 2009-2014 Underwater works Provision of ROVs and tooling on Chevron in Australia board Atwood Osprey Australia Ply Ltd 2010-2014 Underwater works Provision of ROVs onboard the ConocoPhiJlips in Australia Ocean Legend Australia Pty Ltd 7.1.5 Operations and maintenance We provide maintenance and refurbishment of industrial gas turbines under the licence of General Electric Oil & Gas. A dedicated General Electric Oil & Gas approved service centre has been set up to prOVide these services for Malaysia and South East Asia. In addition, we also repair and refurbish S8M and valves. We provide S8M maintenance comprising overhaul of the swivel assemblies and related components and testings. We also have yard facilities, experienced and skilled personnel and track record which make us the leader in S8M maintenance in Malaysia. For valve maintenance, we have a workshop facility in Kemaman, Terengganu which carries out maintenance and overhaul of valves mainly for storage facilities, refinery and petrochemical plants. 7.1.6 Other business activities Apart from the business activities above, we also have the following non-core business activities: • Supply, installation, commissioning and maintenance of point of sale system for petrol station and asset management services for offshore installation; and
• Supply, installation, commissioning and maintenance of offshore communication system.

74 7. BUSINESS OF OUR GROUP (cont’d) 7.2 Our competitive strengths and advantages Our competitive strengths and advantages include the following: 7.2.1 We are an integrated services provider covering the O&G value chain with full­fledged EPCIC capabilities Our service offerings spread out across the O&G value chain specifically in the areas of development and production, drilling, EPCIC, marine services and operation and maintenance. Combining our multi-discipline engineering capabilities together with our expertise in other areas such as development and production, drilling, EPCIC, marine services, and operation and maintenance, our Group’s integrated solution will create a significant competitive advantage that few service providers are able to emulate. This will provide our Group with a stronger platform to compete and secure larger and more complex projects in Malaysia as well as global markets. In short, we are an integrated O&G service provider that will be able to bid for and secure larger and more complex EPCIC projects, both globally and locally. 7.2.2 We have a large asset base to support our businesses We have a large asset base ranging from our own fabrication yards to an extensive range of derrick lay vessels, SETRs, diving vessels, accommodation work barges, AHTS, AHTs, survey vessels, ROVs and other marine support vessels which are capable of supporting our business and operations and will give us an edge in securing new contracts. Our Lumut Fabrication Yard and our Labuan Shipyard reduce the uncertainty of relying on third-party outsourcing contractors for fabrication-related activities, internalise costs and give our Group the capacity and flexibility to better serve our customers. This is also crucial to our customers as it is significantly more convenient from the aspects of administration, project management and logistics. In addition to our Lumut Fabrication Yard and our Labuan Shipyard, with a wide range of marine assets available, we are able to deploy and mobilise such assets to provide our customers with a wide range of offshore services in the O&G industry. We will also continuously look for opportunities to grow our fleet of marine assets in order to strengthen our position as a major global O&G player. With a larger and diversified asset base and larger combined balance sheet, we are in a better position to tender for larger and more complex projects, including projects to develop and operate marginal fields. 7.2.3 We have international partnerships to support our businesses We have various partnerships with international O&G players such as Seadrill Group, Subsea 7, PED, Larsen & Toubro and General Electric Oil & Gas as well as business collaborations on project basis with international O&G service companies such as Saipem group of companies and Leighton International Limited group of companies. Through the long term partnerships and business collaborations that have been established with our international partners, we will be able to gain global market access, technology and production know-how as well as the right equipment and the right people to deliver and to satisfy our customer’s requirements in a timely and consistent manner. We will continue to work with our partners to exchange ideas, expand into new markets, collaborate on research and development and share best practices and know-how as part of our on-going efforts to continuously enhance our operations and reputation. 7. BUSINESS OF OUR GROUP (cont’d) 7.2.4 We have an established track record and financial strength We have established ourselves as a reliable global integrated O&G service provider as evidenced by our experience and track record. This is demonstrated through the delivery and completion of major projects which include the approximately USD60miliion Iwaki Platform Decommissioning Project offshore Japan, being the heaviest decommissioning project executed by our Group with total facilities removed in excess of 20,000 mt, the approximately USD170 million Devil Creek Development Project for the transportation and installation of offshore facilities in Australia and the USD875 million Gumusut Deepwater Project in offshore Malaysia. We have extensive track record of executing work in the global markets. We are amongst the largest service providers within the O&G industry and are a formidable contender to other global O&G service providers. We are well poised to improve our position as a global player as we have the financial strength and the capabilities to compete with larger international O&G players for larger contracts with increasing complexity in the global O&G industry. Large contracts typically require scale, breadth of specialist skills and financial strength to be successfully delivered. In addition, in view that the O&G industry is highly capital intensive, we are in a better position when bidding for new contracts and will have increased chances for being selected as the main contractor which commands better margins for work done compared to work done as a sub-contractor, based on our financial strength. 7.2.5 We have experienced management and skilled technical team We have in-depth knowledge and experience in the O&G industry. Some of the key operating personnel have experience in the O&G industry both locally and overseas and have worked with international O&G companies. In addition, we have a team of skilled engineers and skilled technical personnel who are able to perform the work required in the O&G field. The dedication and expertise of the senior management team and key technical personnel will playa significant role in the success and growth of our Group. Our management will also focus on achieVing high operating efficiency and returns for our Group. 7.2.6 We have quality control and safety track record We have established good reputation among our customers for quality service, maintaining high safety standards and adherence to stringent international standards. As part of our Group’s emphasis on quality of products and services and safety track record, our Group has received, among others, accreditations such as ISO 9001 :2008, ISO 9001 :2000 and ISO 14001 :2004. We have an experienced quality control and assurance team that ensures product quality conforms to customer specifications, as well as external quality and safety standards and requirements. 7. BUSINESS OF OUR GROUP (cont’d) 7.2.7 We have scale-driven cost efficiencies The scale of our business allows us to achieve better cost efficiencies. Scale-driven cost efficiencies are expected to be contributed from procurement optimisation and end-to-end operational harmonisation. There will be optimisation of procurement costs via the adoption of relevant best practices, centre-led procurement and consolidating purchases of materials and services. By doing so, we expect to have increased bargaining power and will therefore be able to source our supplies, whether for materials or for services at competitive prices. Improvements in operational efficiencies via the harmonisation of operations and adoption of relevant best practices of both Kencana Petroleum Group and SapuraCrest Group through better schedule control, improvements in project management practices and tighter coordination of resources across the end-to-end activities, will result in better cost visibility and improved cost efficiencies. 7.3 Prospects The fol/owing has been prepared by ISL, the independent market research consultant for inclusion in this Prospectus: The O&G industry is one of the most important mainstays for today’s increasingly globalised economy. It provides the energy required for manufacturing and industry, the petrol required for transportation and trading, the packaging and plastics which enable products to come to market in good order whilst also providing the fuel for heating and cooling our homes and offices. Indeed, hydrocarbons are of pivotal importance in the modern world, and they pervade all levels of the global economy. Today the offshore industry is an increasingly important part of global O&G production. Indeed, as onshore production has levelled-out, and in some cases declined, it has been new offshore developments that have sustained the level of production required to meet increasing global demand for O&G. However, like the onshore industry, the offshore industry is also maturing and ISL has observed a marked decline in the number of large shallow water discoveries in recent years. As this process of maturing continues, an increasing proportion of exploration and production (“E&P”) activity will continue to take place in deeper waters, more remote locations and increasingly harsh climates. For many oil companies, these ‘frontier’ plays form the cornerstone of their offshore operations as the era of ‘easy oil’. where elephant field discoveries in shallow waters, come to a close. For the international large oil companies which typically cover the upstream and downstream O&G value chain, the importance of deepwater frontiers is compounded by their technical competitive advantage in these difficult operational environments, and the continued nationalisation of traditional onshore and shallow water reserves. Today, as demand for O&G strengthens and onshore oil production growth struggles to keep pace, the macro environment for the continued development and evolution of the offshore industry remains positive. ISL forecasts total offshore Capex to increase from an estimated USD336 billion between 2006 and 2010 to nearly USD500 billion between 2011 and 2015. This rise in Capex is not only driven by the increasingly sophisticated nature of offshore projects but also by the growing number of field developments. Indeed, between 2011 and 2015, ISL forecasts that a total 1,310 offshore fields will be bought into production, representing an increase of 43% over the previous five-year period. For our Group’s target markets consisting of Malaysia, Regional (Asia), Neighbouring (Australasia & the Middle East), Brazil and the North American markets following the completion of the merger of SapuraCrest and Kencana Petroleum, ISL forecasts a total offshore infrastructure Capex of USD298 billion over the next five years -representing a market growth of over 42% compared to the previous five year period.
7. BUSINESS OF OUR GROUP (cont’d) IIIM1’llaysia ~Regjona’i :-\Neighhouring _Brazil mNorth ,America 7D,DDO E6{),{){JO § 5{),o>oo i:~:~,:I:~~ () 20,000 10,000 o
2006 21Hl7 2{)OB 2D09 2{)1i} 2011 2012 20B 2014 2{)15 Yearof Spend Figure 1.1: Total offshore Oil and Gas infrastructure Capex by region, 2006­2015 [Source: ISL] ReJibnal 21% Local Market -Malaysia: Much like the wider global market. ISL expects growth within our Group’s local geographical area. During the next five years, total offshore infrastructure Capex in Malaysia is forecast to increase from USD11.6 billion (2006­2010) to nearly USD20 billion (2011-2015). This growth in Capex is being driven by a significant increase in the number of fields being brought into production. Indeed, over the next five years ISL forecasts a total of 73 project developments, representing a 121 % increase compared to the previous five year period. At the same time field developments are becoming increasingly complex as operators explore and develop deepwater reserves with projects such as Gumusut Kakap and Kikeh being key drivers of this trend. Within Malaysia, ISL continues to see the importance of the steady guiding hand of the Malaysian government and PETRONAS. who are looking to develop domestic O&G reserves with as much participation from local companies as possible. Initiatives such as the PETRONAS licenses for services such as fabrication, should mean that a handful of Malaysian based companies have maximum exposure to the Capex that ISL forecasts to be invested. Regional Market -Asia: The level of offshore Capex in the Asia region (not including Malaysia) is expected to peak in the short-term at an estimated USD16 billion during 2012. Thereafter the level of spending is expected to remain relatively steady with an annual average Capex of USD14.6 billion between 2012 and 2015. If this level of spending is realised over the next five years the market would have increased by 52% compared to the previous five year period. One of the real growth opportunities in the Asia region lies within the development of the subsea production market. Indeed, though growing from a relatively limited base, subsea spending is forecast to increase dramatically in Asia with annual demand expected to peak during 2013. 78 7. BUSINESS OF OUR GROUP (cont’d) Neighbouring Market -Middle East & Caspian Sea and Australasia: The Australasian offshore O&G industry primarily comprises projects and prospects based off”thecoast ofWesternAustraliaand the NorthernTerritory. Overthe nextfiveyears, total offshore field development Capex is forecast to increase from an estimated USD3.6 billion in 2011 to USD9.7 billion by 2015. The majority of Australasian Capex is expected to be directed towards projects in water depths of less than 500 metres. However, in the longer term, Australia is expected to have significant deepwater potential, with activity expected to peak in 2015 at almost USD2.1 billion. The second neighbouring market, the Middle East, is very much a traditional shallow water region that is characterised by large reserve discoveries in benign operating environments. ISL forecasts regional Capex to remain at a high but steady level within the Middle East over the next five years. Indeed, Capex is expected to increase from USD7.7 billion in 2011 to USD10 billion in 2012, where it is expected to remain at this level through to 2015. Given the traditional nature of field developments in the Persian Gulf and Caspian Sea, ISL will see a much higher Capex on fixed platforms and shallow water pipelines rather than the SURF and floating platform markets. Brazil: Driven by the prolific deepwater frontiers and pre-salt plays, Brazil’s offshore market has entered a significant and prolonged growth phase. Total infrastructure Capex is now expected to increase year-on-year from a base of USD10.3 billion in 2011 to USD13.7 billion by 2015. The Brazilian deepwater market is forecast to account for nearly 90% of national offshore Capex, with a high proportion of this investment directed towards floating production systems and all the ancillary equipment required for such projects. North America: Despite enduring a difficult three years due to the combined impacts of global economic recession, the Macondo disaster, and a period of depressed gas prices, the North American market, dominated by the Gulf of Mexico (“GoM”), still holds considerable potential for offshore E&P activity. However, this growth is forecast to become increasingly focused on deeper waters. Overall, North American offshore Capex is forecasted to increase from USD9 billion in 2011 to over USD12.5 billion by 2015. Deepwater (more than 500 metres) activity is expected to account for over 76% of total North American offshore infrastructure investment to 2015, with pipelines, subsea equipment, and floating platforms forecasted to assume 94% of this spending. (Source: ISL) 7. BUSINESS OF OUR GROUP (cont’d) 7.4 Future plans and business strategies of our Group Given the trends and prospects of the global offshore industry as set out in Section 7.3 above, moving forward, as a proven integrated services provider covering the O&G value chain with full-fledged EPCIC capabilities with presence in Malaysia and various regions including Asia, Australasia, Middle East, Europe, Americas and Africa, our Group’s services will be spread out across the O&G value chain specifically in the areas of development and production, drilling, EPCIC, marine services, and operations and maintenance. Premised on the key synergies identified, we intend to leverage on these to grow our businesses to realise their full potential. The intended future plans and strategies of our Group include the following: 7.4.1 Value of the Merger The Merger will allow us to generate value in 5 key ways: (i) Securing turnkey EPCIC projects As the Merger results in our Group becoming an integrated services provider covering the O&G value chain with full-fledged EPCIC capabilities with a larger combined balance sheet and a larger and diversified asset base, we intend to leverage on this to position ourselves as a one-stop centre for our EPCIC customers. In view that our Group can provide the entire end-to-end EPCIC activity, our Group will have better cost visibility and scheduling control. This translates into a competitive edge for us when bidding for a project. We will therefore leverage on the expertise and capabilities within our Group to bid for and secure larger and more complex EPCIC projects, both globally and locally. (ii) Cross-selling We intend to leverage on marketing channels, customer relationship management and integrated business development practices to cross-sell our enlarged Group service offerings to our existing customers as well as to new customers of our Group. Our Group’s cross-selling strategies entail the introduction of non-common customers of the existing SapuraCrest Group and Kencana Petroleum Group to each other. By doing so, we hope to benefit by penetrating into geographical markets of both SapuraCrest Group and Kencana Petroleum Group. Our Group’s cross-selling strategy will also complement our strategy of securing turnkey EPCIC projects or at least capturing a larger portion of any relevant project available in the market. (iii) Procurement optimisation We would have greater procurement needs due to the pooling of SapuraCrest Group’s and Kencana Petroleum Group’s required purchases. We intend to leverage on the higher procurement requirement by optimising procurement functions via the adoption of relevant best practices, centre-led procurement and consolidating purchases of materials and services. By doing so, we expect to have increased bargaining power and will therefore be able to source our supplies, whether for materials or for services at competitive prices. 7. BUSINESS OF OUR GROUP (cont’d) (iv) End-to-end operational harmonisation
We intend to improve our operational efficiencies via the harmonisation of operations and adoption of relevant best practices of both SapuraCrest Group and Kencana Petroleum Group across our Group’s value chain. The strategies in achieving operational efficiencies include, among others, better schedule control, improvements in project management practices and tighter coordination of resources across the end-to-end activities through, among others, in-house conceptual detailed design, which can result in better cost visibility and improve cost efficiencies.
(v) Growth in new businesses and/or markets capitalising on larger combined balance sheet

With a larger combined balance sheet, we intend to expand into new businesses .and/or markets by acquiring or expanding into suitable or complementary businesses. At this juncture, we have yet to finalise our plans and will continuously explore growth opportunities. Some areas of potential expansion include field development, strategic acquisition of complementary business, acquisition of key operational assets and regional diversification through setting up of operating units overseas. Markets which our Group could penetrate into, includes Latin America and North America. 7.4.2 Synergies expected from the Merger Our Company, assisted by an external consultant, has identified key synergies which are expected to be derived from the Merger along with the plan to capture these synergies, which are subject to further refinement. The potential areas of synergies can be divided into two main areas as follows: (i) Revenue synergies
(a) Securing turnkey EPCIC projects: As a proven integrated services provider covering the O&G value chain with fUll-fledged EPCIC capabilities with larger combined balance sheet and a larger and diversified asset base, our Group expects to be in a position to bid for and secure larger and more complex EPCIC projects, both globally and locally, which would allow us to capture higher margins.
(b) Cross-selling: Potential to grow the businesses of our Group by leveraging on customer relationship management and integrated business development practices which enables cross-selling opportunities within our Group’s enlarged service offerings to our existing customers and new customers of our Group. This is expected to result in higher revenue capture.

 

(ii) Cost synergies

(a) Procurement optimisation: Enables the optimisation of procurement costs via the adoption of relevant best practices of both SapuraCrest Group and Kencana Petroleum Group and consolidation of purchases of materials and services, which enables our Group to source for materials and services at competitive prices. This is expected to result in cost savings thus enabling enhancement of our Group’s profit margins. 81 7. BUSINESS OF OUR GROUP (cont’d) (b) End-to-end operational harmonisation: Enhancement of profit margins by improving operational efficiencies via the harmonisation of end-to-end operations and adoption of relevant best practices of both SapuraCrest Group and Kencana Petroleum Group across our Group’s value chain. The improvements in operational practices such as project management via tighter coordination of resources across the end-to-end activities and more accurate and rigorous cost estimations enabled by end-to-end control of EPCIC activities, is expected to reduce operational costs and therefore, enhance our Group’s profit margins. The process to realise the operational synergies is expected to involve a 3-phase approach. The initial phase of the journey will be focused on business integration and early gains from revenue growth and cost synergies and will involve the operational restructuring of the new organisation, management team as well as the formulation and establishment of revised key performance indicators. The second phase will involve the transformation and growth of our Group’s business, and capturing revenue and cost synergies. This phase is planned to include the initiation of the business transformation to enable synergies to be captured. During this phase, it is the objective of our Group to maximise the potential benefits from the cost synergies as well as capturing a majority of the revenue synergies. The final phase will be focused on sustaining the results of our Group post-merger and capturing full potential growth of our Group from the synergies. This phase is expected to include steps towards sustaining the operational improvements of the core business. The 3-phase journey is an ongoing process and the expected timeframe for completion cannot be definitely ascertained. This is because the growth arising from the business operations of our Group and the synergies to be realised will collectively be integrated into our Group’s budget, operating plans and key performance indicators. As such, these will be collectively reflected in the performance of our Group and will not only be an ongoing exercise but will also not be possible to accurately distinguish from each other. In parallel with this integration exercise, with a view towards capturing the operation cost and revenue synergies, our Group will continuously look into strategic growth opportunities by capitalising on our larger combined balance sheet by acquiring or expanding into complementary businesses and/or new markets. 7. BUSINESS OF OUR GROUP (cont’d) 7.5 Business activities process flow 7.5.1 Development and production The major process flow for our development and production activity is as follows:
Project planning Project planning involves the provision of field evaluation and field development plans (“FDP”) for the O&G production and operations. We conduct preliminary subsurface and surface evaluation for negotiation and/or the bid submission for the field. Once we are awarded with a project for development of field or area, we then conduct detailed subsurface and surface evaluations to incorporate the services, assets and solutions into an FOP. The FOP is a live document which will be updated periodically depending on the progression of the field development. Resources preparation Resources preparation includes the employment of personnel with the relevant experience to meet our field development’s needs, including ultimate customers’ requirements, engaging personnel with skills and experience in subsurface, drilling, field economics, production planning, operations and maintenance, and surface technical which involves production process, mechanical, piping, electrical, instrumentation and civil/structural works. It also involves sourcing production fixed and/or floating assets required for the project, such platforms and pipelines, MOPUs, FPSOs lifeboats, FSOs and etc.  the as  relevant offshore  FEED
FEED is the upfront conceptual facility design engineering activity which includes the engineering, design and other activities for an engineering project. It starts from the project brief and works through to the visualisation, conceptualisation and definition stages. It involves translating the field development requirements and the ultimate requirements of our customers into a working design that will form the basis of design in the detailed design stage. The basis of design shall include the FEED document and the FOP. Detailed designs After the completion of FEED, we then provide detail facilities, construction and fabrication designs. The design and engineering services which we provide will cover the entire O&G field development Iifecycle. 7. BUSINESS OF OUR GROUP (cont’d) Fabrication The fabrication stage begins with the procurement of materials required for the fabrication/construction of components, such as platforms, modules, jacket, pipelines and structures required for our customer’s project. We have the capability to undertake fabrication works at our Lumut Fabrication Yard and Labuan Shipyard. Installation, HUe and drilling The components which have been fabricated are then transported to the offshore location where installation and pre-commissioning activities will be carried-out. Various facilities such as piping, hydraulic and compressed air lines, electrical and electronic cables will be hooked-up. Upon completion of the HUC, development drilling which involves the drilling of production wells from existing platforms is carried out. Production The field or the ultimate offshore structure of our customer will commence production after the facilities are handed over to the production operations team (which is also known as the asset team) of the field or our ultimate customer, upon completion of the installation, drilling and HUC works. Operations and maintenance Depending on the terms of the award granted to us, maintenance of the offshore structure may be provided by us or carried-out by the asset team. We are able to provide periodic and ad hoc maintenance, upgrading and refurbishment services. Please refer to Section 7.1 .4.3 of this Prospectus for further details. 7.5.2 Drilling The major process flow for our drilling activity is as follows:

Drilling major process flow Project planning Project planning includes the planning on employment of rig personnel, training program, preparation of required/contractual documentation and maintenance program to ensure efficient operation of our rig. Resources preparation Resources preparation includes the employment of rig personnel and the necessary resources (support services) in stages, depending on the criticality of the required position for required training and rig familiarisation program. 7. BUSINESS OF OUR GROUP (cont’d) Documentation and manuals preparation The necessary documents required on board vessel during a project such as emergency response plan, health and safety plan and equipment manuals are prepared accordingly. Rig inspection and acceptance Our customer and/or their appointed third party auditor will conduct detailed equipment inspection at the yard for the purpose of rig acceptance. Any non­conformity during the audit shall be closed before the commencement of the contract or at later date mutually agreed with the customers. Mobilisation Our operation team will ensure that the rig is fully and properly equipped with all the necessary drilling and associated equipment, spare parts, materials, consumables and other supplies required to support and perform the drilling services. When all the equipment (inclusive of customised equipment) as per our contract with our customer) are installed and secured onboard of the rig, the rig will be towed from the mobilisation site. Drilling operation Our rig will carry out all the operations required to drill, test, workover, complete, and either suspend/abandon wells or perform repair operations to the well at locations/platforms designated by our customers and in accordance with the detailed drilling programs furnished by our customers or carry out other operations as may be required by our customers. As for the record and· monitoring purpose, the Offshore Installation Manager (“OIM”) on duty will prepare and forward to the onshore based rig manager and operation team the International Association of Drilling Contractors Daily Drilling Report on the drilling progress and related info e.g. stock movement, safety records, weather and Personnel on Board (“POB”). The report will comprise the progress and activity for the past 24 hours with cut off time at 6.00 am. The OIM will also update the onshore based team on daily basis through teleconferencing. Our onshore based operation team will monitor, act and provide support to the operation team when necessary. Our onshore based rig manager and operation engineer will also attend daily morning meeting with our customers and third party contractors to update and discuss the drilling progress and related activities in the past 24 hours. Completion of drilling services The completion of our drilling services is achieved when our customer certifies that the contractual scope of works has been completed. Our operation team will then prepare and transfer any equipment and supplies belonging to our customers and third party onto their supplied vessel(s) at the demobilisation site or at any mutually agreed location. 7. BUSINESS OF OUR GROUP (cont’d) Demobilisation Upon completion of a projecUcontract, our rig will be towed to and moored at an agreed location. All invoices and related documentation will be prepared within an agreed timeframe with our customer’s project team in order to make claim for any outstanding payment and demobilisation fee. Depending on our contract with our customer, we may also execute the “Contract Closure Letter and Certificate” as per the format provided in the contract with certain customers. 7.5.3 EPCIC The major process flow for our EPCIC activity is as follows: Project  Engineering  Procurement  Construction,  Execution  Design  and  Fabrication and  Planning  Subcontracting  Pre­ «  Commissioning
Installation  Commissioning  Handover  Quality  Assurancel  Quality Control  «.  I}ii j«.«

EPCIC major process flow Project execution planning After a project is awarded, our project manager develops a project costing and project execution plan that includes plans for risk management, resource management, schedule management, procurement and subcontracting, scope management and quality management. Engineering design When project design is part of the project award, our design department or an external design consultant produces the appropriate engineering and design documents based on the specifications and requirements of our customer. For more complex projects, our engineering department may collaborate with an external design house that has a proprietary design for the project. Our engineering department reviews and verifies the design documents and the verified design is re-produced as an “issue-for­construction” drawing which is utilised for procurement and construction activities. For procurement purposes, a “material take-off’ list is produced based on the issue-for­construction drawing. Procurement and subcontracting After the requisition details are produced, the procurement and subcontracting department commences sourcing activities based on the procurement plan. These sourcing activities include enquiry, technical and commercial bid evaluation, contracting and the issuance of purchase orders, tracking and expediting, and delivery and inspection. Materials delivered to our warehouse are inspected and verified by the warehouse department, the quality control department and the project management team. 7. BUSINESS OF OUR GROUP (cont’d) Construction, fabrication and pre-commissioning After the delivery and acceptance of the materials at the warehouse, the project management team commences construction and fabrication activities. These activities typically include welding, painting, non-destructive testing, hydro-testing, cleaning and flushing, heat treatment, reinstatement test and equipment installation. The testing we perform is recorded and jointly verified by representatives from our project management teams and our customer. A representative from our quality assurance department is also at the site to monitor and ensure quality compliance in accordance with the project’s quality management plan. Pre-commissioning activities focus on sub-system and system operations, including how various pieces of equipment interact with each other. These activities typically include instrument loop checks, panel function tests, energising electrical equipment and specialist equipment hydraulic systems, flushing and running motors and piping reinstatement leak tests. Installation Offshore structures and topsides will be offioaded onto barges or specialised transport vessels, sea-fastened, transported and subsequently installed on site. The necessary marine spread required for the towing and installation activities includes AHT vessel, supply vessels and heavy lift barges. Commissioning Commissioning activities are done by the hook-up team, either onshore or offshore, in the presence of the project owner or operator. These activities are normally performed after structures and equipment have been installed and pre-commissioned for production use. These activities are intended to verify the functionality of the equipment and its integration with other systems and facilities, and to ensure that the equipment operates in accordance with project requirements. Commissioning activities are not always required by our customers. Handover Once all systems are commissioned, if required, and accepted by the project owner or operator, the project management team finalises all project documents and acceptance certificates for the hand-over process. Quality assurance/quality control Our quality assurance/ quality control department operates as an independent unit to ensure the quality of work performed. The work of the quality assurance/quality control department runs in parallel with all stages of the project execution process. For construction work, that portion of the project is considered complete when clearance from the quality assurance/quality control department is obtained. In addition, documentation of quality assurance/quality control is required for mechanical acceptance by our customer. 7. BUSINESS OF OUR GROUP (cont’d) 7.5.4 Marine services The major process flow for our marine services activity is as follows:

Project planning Project planning includes the planning of project, reviewing the necessary documentation and ensuring sufficient information is available for the project. A crewing executive will be appointed to ensure that all marine crews comply with the requirement of the charterer as well as the Malaysia Marine Department. Additional documentation requirement by our customers such as crew matrix, offshore safety passport and medical reports will be prepared. Scheduling and resources preparation A project schedule will be developed for the project by building a time based schedule of events. The project schedule will cover the duration of works as specified in the contract or work order. At this stage, we will also start getting the necessary resources for our project based on the project requirement. A part of the scheduling, we will take into consideration the cost effective approach or logistically determine the best route to complete the defined scope of work. Our project team will plan the number of personnel reqUired for a project. Our master of the vessel will prepare the Passage Planning to mobilisation point as per sailing instruction given by our Operation Manager/Superintendant. A shipping agent will also be appointed at the project base location. We also carry out marine vessel suitability survey inspection on board by our customer and Operation Department to close all punchlist according to contract obligation. Documentation and manuals preparation A few necessary documents are required to be on board the vessel during a project such as work pack, emergency response plan, health and safety plan, diving and ROV manuals, and some other documents as references such as International Marine Contractors Association (“IMeA”) guidelines and U.S. Navy (“USN”) Diving Manuals will be prepared. Equipment audit Third party auditor will ensure that all the equipments conform to our customer’s or IMCA requirement as stated in the contract. Any non-conformity during the audit shall be determined and resolved before a project commences. 7. BUSINESS OF OUR GROUP (cont’d) Mobilisation During this mobilisation, our customer’s representatives will ensure that all the equipments are working in good condition before they proceed to the work site. This is to ensure that all the necessary job requirements will take place as planned at the work site. Project execution Our operations superintendent will update our project manager on the, inter alia, project progress status, technical issues, safety issues and problems, via daily operations report signed by our customers. Our project manager will monitor the progress of work on a daily basis to ensure our project progresses smoothly with reference to the daily operations reporUdaily time sheet. Our vessel will carry out the contractual role such as anchor handling, running supplies, transfer personnel etc according to our customer’s contractual planning and operation. The master of the vessel will send the Vessel Daily Report and People On Board Report to our customers and our operation team for record and monitoring purposes. Plan maintenance schedule will be monitored and programmed such as to avoid any downtime and planned accordingly so that it will not interrupt our customer’s planning for the vessel function. Marine crew rotation plan will be monitored to ensure proper movement for the marine crew onboard. If any changeover of marine crew is required, our crewing executive will send the crew matrix to our customers for approval. Our operation team will monitor the daily activities of the vessel, track the vessel movement, procure and supply request for spares, consumables and provide technical support to the engineers team onboard. Our operation team also maintains communication with our customers and handle complaint on vessel activities (if any). Completion of work scope Where the agreed scope of work has been completed, our customer’s representative may sign a certificate of completion or acknowledge completion on the daily operations report. Once this is agreed, our operations superintendent will prepare for demobilisation and departure from the work/job location. Our operations superintendent will keep all parties concerned informed of the vessel and/or personnel movements. As part of the completion, certain documents may have to be produced such as the technical reports and as-built drawings. Completion of project and review Upon completion of a project, our project manager will carry out a review and submit the final report to our customer. The purpose of this review is to highlight the project performance, technical matters, and information such as non-conformity reports from our customer or incident reports. Our customer will be given the customer satisfaction survey form to measure their level of satisfaction with our performance. Where necessary, a written review may be produced by our project manager, which shall be filed in the project file. 7. BUSINESS OF OUR GROUP (cont’d) 7.5.5 Operations and maintenance The major process flow for our operations and maintenance activity is as follows:

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Operations and maintenance services major process flow Project planning Project planning includes the planning of the operation and maintenance works to be carried out including reviewing the necessary documentation and ensuring sufficient information is available for the operation and maintenance works. Our project manager will then set up a project team and prepare a project organisation chart or matrix. Scheduling and resources preparation A project schedule will be developed for the operation and maintenance services which we provide. The project schedule will include the allocation of our yard space for the operation and maintenance services (if the maintenance works are to be carried out at our yard), engagement of the necessary equipment and personnel required for the project. The schedule will also include the shut-down timing, if required, of the facilities to be worked on. Documentation and manuals preparation The necessary documents and manuals are prepared to set the policy and regulations to be complied with by our project team when providing operation and maintenance services at our customer’s offshore sites. This also include the detailed work procedures in executing the work. Removal of defective components Our project team will visit the offshore site and commence the removal of the defective components from the offshore structures. Repair of defective components The defective components which are removed from the offshore sites are repaired and refurbished either at the offshore site or our yard. We conduct certain overhaul work and assembly of related components and testings at this stage. Reinstallation of repaired components Defective components which have been repaired and refurbished are transported to the offshore site for reinstallation. 7. BUSINESS OF OUR GROUP (cont’d) Commissioning Once the reinstallation is completed, the project will be handed over to our customer for re­commissioning. 7.6 Types, sources and availability of resources Our resources include both financial and non-financial resources and are as set out below: 7.6.1 Financial We are able to source required financing from various sources such as internally generated cash, borrowings from financial institutions and/or from the capital markets. 7.6.2 Non-financial (a) Suppliers We have a large base of third party suppliers which provide us major equipments such as support vessels and marine equipments, services such as catering and specialised engineering services, sub-contract works, direct labour and project materials and equipments. We are generally not dependent on anyone major supplier and generally engage different suppliers who are able to offer the most competitive terms and highest quality material and services. (b) Working capacity We are dependent on the availability of rigs and vessels to enable us to perform our work under contracts awarded by our customers. While our Group owns rigs and vessels, in the event our rigs and vessels are deployed for other projects or in the event we do not own a particular rig or vessel suited for a particular project, we may be required to charter such rigs and/or vessels from other third parties in order to complete the projects awarded to us. For the fabrication activities, we are dependent on the availability of yard space. While our Group owns Lumut Fabrication Yard and Labuan Shipyard, in the event our yard space is not sufficient to cater to the demand, we may be required to rent additional yard space. (c) Workers Our business is also dependent on the availability of skilled workers with specialised skills, particularly in design and engineering, project management, construction and quality and safety assurance. While we maintain a certain number of skilled workers within our Group, we typically recruit suitable workers in the jurisdiction which our projects are situated to complement our workforce. We also hire foreign labour from other countries, for example Indonesia, India, Thailand and PRC in the event of labour shortage. 7. BUSINESS OF OUR GROUP (cont’d) 7.7 Technology used and processes We employ various engineering disciplines and technologies in our activities. 7.7.1 Installation engineering Installation engineering consists mainly of pipeline and offshore structure installation. With the Clough Business Acquisition, we have also acquired knowledge and engineering skills in offshore installation of SURF and floating systems. These skills will be particularly relevant as enablers to the development of marginal field projects, deepwater, enhanced oil recovery or technically challenging projects. 7.7.2 Pipeline engineering Pipeline engineering is a discipline specialising in pipeline design, construction, operation, inspection, and integrity management, with the purpose of providing safe, reliable transportation of oil and natural gas while realising economic savings. Pipeline engineering techniques have advanced significantly over the last three decades as developments have migrated into deeper water and more hostile environments. Our personnel have significant experience in conventional and unconventional pipeline and flowline system engineering. While proven design methodology may be applied in conventional pipeline projects to achieve fit for purpose solutions, advanced engineering techniques and innovative designs are required for systems in more challenging conditions, including deep and ultra-deep water, high pressure high temperature fluids and arctic conditions. Our pipeline and flowline engineering capabilities include: • Conventional and limit state design practices, such as Det Norske Veritas and American Petroleum Institute;
• Advanced pipeline engineering, including lateral buckling, dynamic stability, free-spanning, seismic and various strain-based assessments;
• Route survey and geo-hazard assessment covering route selection in extreme terrains, together with intervention strategy planning and implementation;
• Landfall design including trenching, tunnelling, directional drilling pull ashore I pull offshore engineering;
• Concept studies, FEED, detailed design, procurement support, tendering support, fabrication and construction management and supervision;
• Pigging, testing, pre-commissioning and commissioning; and
• Operation and inspection, maintenance and repair (IMR) strategy development and implementation.

Computer programs are used to create 2 dimensional and 3 dimensional models, proprietary and non-proprietary analysis software which is designed specifically for modelling and structural analysis of nonlinear problems encountered in the installation and operation of offshore pipelines. 7. BUSINESS OF OUR GROUP (cont’d) 7.7.3 Subsea systems engineering A systems engineering approach is adopted to field developments by utilising holistic, state of the art design methods and proven designs for fabrication and construction. This approach enables innovative design solutions to be developed for challenging environments, including deep water and difficult operating conditions such as high pressure and high temperature fluids. Our subsea system engineering capabilities include: • Field architecture development and cost estimating;
• Field operability through flow assurance evaluations;
• Reliability, availability and maintainability assessments;
• Evaluation/selection of subsea hardware and control system to suit life cycle requirements;
• Design of subsea manifold, connection and tie-in systems;
• Development of tendering strategies and managing the bidding process for the selection of suitable fabrication and construction / installation contractors; and
• Management and supervision of fabrication and construction phases of field development projects, including factory acceptance tests (FAT), system integration tests (SIT), offshore installation, testing and commissioning.

7.7.4 Riser engineering Our capabilities include all kinds of static and dynamic risers from concept evaluation, through detailed engineering, to fabrication/installation engineering, management and supervision. We also focus on dynamic risers in deep to ultra-deep water depths with challenging seabed and current conditions. We provide all phases of engineering services for the following dynamic riser types: • SCR, ranging from small diameter flowlines to large diameter export pipeline risers;
• Freestanding riser towers/bundles;
• Hybrid risers;
• Flexjoint, stress joint, keel joint, J or I tube and buoyancy tanks;
• Flexible risers; and
• Novel riser concept development and material selection. Our marine riser engineering capabilities include:

• Through life cycle engineering -appraise, select, define, execute, operation support, decommission;
• Dynamic, floating and seabed founded riser base spools design;

93 7. BUSINESS OF OUR GROUP (coni’d) -Static, quasi-static, dynamic (time and frequency domain) based analysis; -Clashing, interference and interaction analysis; -Material selection, fatigue evaluation, and safety factor calibration analysis; -Component design using advanced mechanics solutions, such as finite element methods and/or testing with statistical simulations, including test program design, implementation, management and supervision; -Development and implementation of inspection, maintenance and repair strategies; and -Interface engineering and management. 7.7.5 Floating systems Field development projects in deeper waters call for novel marine structures such as semi-submersibles, SPARs, TLPs and FPSOs. The complexity of these floating systems together with their interfaces with topsides equipment, production and export risers cannot be overlooked. We are well equipped to handle the design of these struCtures from concept study to commissioning, including project management and ship yard supervision. Our floating systems engineering capabilities encompass: -Concept selection including economic trade off evaluations to suit field development needs whether it is an early production scenario or full field development approach; -Specialty design activities such as structural design, hull design, mooring analysis, interface design and riser design; and -Project management including tendering strategy development, technical specification preparation, tender evaluation and site support. 7.7.6 Flow assurance For many field developments and challenging export system projects, flow assurance is one of the first and most crucial activities to be undertaken. We have in-depth knowledge and extensive experience in dealing with the most complex flow assurance problems. Our flow assurance capabilities include: -System design including networking and thermal-hydraulic simulation to assess layout feasibility; -Thermal/hydraulic analysis of individual pipeline systems and networks, both steady state and transient; -Product chemistry related issues such as scaling, waxing and asphalting; -Hydrate prediction, inhibition, and remediation; -Modeling chemical distribution systems; 94 7. BUSiNESS OF OUR GROUP (cont’d) • Product flow related issues such as slugging prediction, slug catcher sizing and slug catcher design;
• System operability design including simulations for turn down conditions, planned start-up shut down, emergency shutdown and other unplanned scenarios; and
• Preparation of operating and maintenance manual.

7.7.7 Field Development Field development consists of identifying and defining, as a system, all components required for successfully developing and operating offshore 0&8 fields. It is a multi­disciplinary task, requiring both technical and commercial skills, including subsurface, drilling, facilities, project, operations and commercial competences. Field development activities can occur early in support of 0&8 companies’ exploration efforts. In such cases development scenarios and costs are generated to support economic assessment of license bids or farm-in opportunities. More typically, field development begins following exploration success when 0&8 companies commence the assess phase of project development which, if successful, continues through to the define phase and FlO. In some cases field development addresses brown-field redevelopment opportunities. Our field development capabilities encompass: • Pre-exploration quick field development concept selection and cost estimating in support of exploration or farm-in valuation and economic assessment;
• Post discovery, multi-disciplinary development concept selection and cost estimating inclUding economic trade off evaluations to suit needs whether it is an early production scenario, a full field development, or a brown-field re­development;
• Managing all front-end activities including coordination of multiple disciplines, cost estimating, and “total field development” if required, from concept through FlO, inclUding all aspects of Assess and Define phases of Field Development;
• Provision and coordination of SURF and marine technical disciplines as well as of third party sub-surface, drilling, process facilities, operations, commercial, HSE and regulatory approval consultants; and
• Provision of or contribution to operators’ field development project teams.

7.7.8· Specialist Engineering Advanced Mechanics A major skill set of our engineering resources is a strong advanced engineering capability to handle many difficult and unusual situations and components. These scenarios usually call for analyses using first principles and/or highly complex analysis tools such as finite element methods and stochastic processes. 95 7. BUSINESS OF OUR GROUP (cont’d) Our capabilities in Advanced Mechanics include: • Structural analysis using first principles with closed formed solutions and/or model/prototype testing;
• Two and three dimensional overall and component level modelling using proprietary finite element modelling programs, such as ANSYS and ABAQUS; and
• Risk and reliability based engineering for safety factor calibrations.

Integrity Management Our engineering services extend well beyond the construction phase into system operations. These include operating manual preparation, inspection, maintenance and repair (IMR), strategy planning and implementation. We use risk methods to ensure IMR regimes are set with the optimal cost effective system performance reliability. Our capabilities in Integrity Management include: • Overall asset management planning and management, such as annual inspection planning and management, preparation of standard maintenance manual and specification of data management system;
• System and equipment reliability assessment;
• Engineering assessment in critical situation such as emergency shutdown scenario planning, drop object assessment and leaks;
• Emergency repair system evaluation, design and project management; and
• Use of Advanced Engineering techniques to assess critical unforeseen situations.

Materials and Corrosion Materials engineering is key to field developments. We specialise in materials selection, corrosion assessment and management, welding engineering and non­destructive examination (“NDE”). With the ever challenging deepwater, ultra-deepwater and harsh environments, Peritus Group recognise the need for advanced materials selection, corrosion, welding and NDE technologies in readiness for these complex projects with associated complex materials issues. Materials are being tested to their limits with high pressure high temperature fields, including high H2S and C02 conditions. Our expertise in Materials and Corrosion include: • Internal/ external corrosion;
• Materials selection;
• Chemical Inhibitor selection and testing;
• Welding and NDE during fabrication, installation and operation;

96 7. BUSINESS OF OUR GROUP (cont’d) • Failure probabilities, failure modes and failure consequences for human health, environment and safety;
• Fatigue and engineering criticality assessment;
• NDE of components during fabrication and operation; and
• Corrosion monitoring.

7.7.9 Structural engineering Installation of marine/offshore structures requires detailed engineering and planning from the beginning, while in the execution phase, sophisticated installation equipment such as crane/heavy lift work barge/vessel, ROV, survey system and diving system are required. During the analysis stage, there are specialised engineering softwares commonly used in offshore structural engineering, such as the SACS, NASTRAN and MOSES. SACS and NASTRAN are finite element analysis programs used to predict how a real structure would function under expected operational conditions. MOSES, on the other hand, is an approach to program evolution, based on representation-building and probabilistic modelling. These softwares ensure the quality and performance of the designs before such designs are being put into production. 7.7.10 Mechanical engineering Mechanical engineering is the application of physical principles to the creation of useful structures, devices, objects and machines. Mechanical engineers use principles such as heat, force, and the conservation of mass and energy to analyse static and dynamic physical systems, in contributing to the design of things such as structures, equipment and machinery, and other objects. The use of computers and specialized engineering software are now common in mechanical engineering. The following types of computer programs are currently commonly used in mechanical engineering: • CAD;
• CAM;
• FEA;
• computational fluid dynamics (“CFD”); and
• PDMS

PDMS and CAD programs also permit the creation of solid-state models, which may then be subjected to FEA and/or CFD modelling to predict how a real structure would function under expected operational conditions. Designs may be refined or modified based on the results of the modelling. As computer simulations are carried out without the need to construct actual physical models, computer simulation is likely to be cheaper and less time consuming compared to traditional testing. 7. BUSINESS OF OUR GROUP (cont’d) 7.7.11 Welding technologies Welding is a fabrication process that joins materials, usually metals or thermoplastics, by causing coalescence. Welding is often done by melting the workpieces and adding a filler material to form a pool of molten material that cools to become a strong joint. Sometimes pressure is also used in conjunction with heat, or by itself, to produce the weld. We currently utilise shielded metal arc welding, gas tungsten arc welding, flux cored arc welding, submerged arc welding, and oxyacetylene welding in fabrication. 7.7.12 Non-destructive testing technologies Once the fabrication of a structure is completed, it has to undergo rigorous weld inspection and testing to determine the integrity of the structure to ensure that there is no fracture or weakness in the welding. This is a critical component of quality assurance, ensuring the safety and integrity of the structure. Defects in welding do occur sometimes. Some of the non-destructive testing techniques employed by our Group are the conventional radiography technology (Gamma ray, X-ray and magnetic particle inspection) and ultrasonic weld inspection technology. 7.7.13 Other technologies (i) Carbon Dioxide Membrane Filtration is used to remove carbon dioxide gas from natural gas pumped from hydrocarbon wells.
(ii) De-sanding and De-oiling:
(a) De-sanding refers to the removal of sand from crude oil produced at the wellhead. The removal of these solid contaminants is necessary, as their presence can have negative impacts on downstream equipment; and
(b) De-oiling refers to the separation of liquid hydrocarbons from produced water.

 

(iii) De-sanding and de-oiling are carried out in equipment known as “hydrocyclones”, which utilises centrifugal force to physically separate sand and water from liquid hydrocarbons. (iv) Corrosion Prevention Engineering is used to prevent or minimiSe the deterioration of useful properties of a material due to reactions with its environment, e.g. weakening of iron or steel due to the formation of iron oxides or rusting. 7. BUSINESS OF OUR GROUP (cont’d) 7.8 Research and development Currently, our subsidiary TMTPL has a team of approximately 35 personnel to undertake the design and development of ROVs in Perth, Australia. The research and development activities which we undertake include the design and building of control systems of the ROV, integrating various parts and systems of the ROV to suit the requirements of our customer’s project and designing components with deepwater capabilities for ROVs. Save as aforementioned, we do not have any other formal research and development facilities and system in place for the past 3 financial years. TMTPL’s research and development expenditures for the past 3 years(1) are as follows: RM (2)% of revenue Year ended 2009 4,298,108 8.5 Year ended 2010 7,271,415 9.6 Year ended 2011 11,544,891 15.3 Notes: (1) The research and development expenditures for the year ended 2012 is pending detailed assessment to determine the cost associated with the research and development activities. (2) Based on the revenue of TMTPL. 7.9 Quality assurance As the O&G industry is a highly regulated industry, we place emphasis on quality and adhere to stringent quality standards. 7.9.1 Quality management We adopt the following approaches to ensure that the completed projects meet our customers’ quality requirements: (i) engaging competent project management team to manage the awarded contract and deploy sufficient skilled and semi-skilled workforce to carry out the works;
(ii) establishing mandatory and non-mandatory project specific plans and procedures in order to gain confidence from our customers that their requirements will be fulfilled;

(iii) engaging competent quality control team to ensure all of the project requirements are fulfilled; (iv) setting up individual project key performance index to measure the achievements which are reported in the monthly project management coordination meeting;
(v) planning and conducting project internal quality audit to ensure project quality management systems are adequately implemented and maintained at all levels and functions;
(vi) compilation and handover of project final documentations to customers on time and in accordance with contract requirements; and

7. BUSINESS OF OUR GROUP (cont’d) (vii) conducting customer satisfaction survey after project completion. As part of our Group’s emphasis on quality, we have also adhered to internationally recognised standards and safety standards and our subsidiaries have received the ISO 9001 :2000 and 9001 :2008 accreditations as follows: Authority/  Issuance  Certification  year/Expiry  body  Company/Development  year  Type of certification  Bureau Veritas  AME  2012/2015  Recertification for the ISO  Certification  9001 :2008 for the quality  management system in  provision of underwater  services including  inspection, repair and  maintenance using divers  and/or ROV for the O&G  industry  Bureau Veritas  AME  2012/2015  Recertification for the ISO  Certification  14001 :2004 for the  environmental management  system in provision of  underwater services  including inspection, repair  and maintenance using  divers and/or ROV for the  O&G industry  Bureau Veritas  AME  2012/2015  Recertification for the  Certification  OHSAS 18001:2007 for the  occupational health and  safety assessment series in  provision of underwater  services including  inspection, repair and  maintenance using divers  and/or ROV for the O&G  industry  ABS Quality  SapuraAcergy  2011/2014  Received ISO 9001:2008  Evaluations  accreditation for the quality  management system in  engineering, project  management, offshore  transportation, installation  and decommissioning of  deep and shallow water  pipelines and structures,  including heavy lifting,  subsea construction and  onshore construction  support operations
7. BUSINESS OF OUR GROUP (cont’d) Authority/  Issuance  Certification  year/Expiry  body  CompanylDevelopment  year  Type of certification  Moody  KBW  2010/2013  Received ISO 9001:2008  International  accreditation for the quality  Certification  management system in  (Malaysia) Sdn  professional engineering  Bhd  services, consultancy,  engineering design and  project management for the  O&G, petrochemical and  allied industries  2004*  Received ISO 9001:2000  accreditation  Lloyd’s Register  KHL  2010/2012  Received ISO 9001 :2008 for  Quality  the quality management  Assurance Ltd  system in engineering,  procurement, fabrication,  load-out, HUC of O&G  offshore and onshore  facilities  2003*  Received ISO 9001:2000  accreditation  SIRIMQAS  KTC  2010/2012  Received ISO 9001: 2008  International  accreditation for the quality  management system in  design, development and  manufacture of storage  tanks, unfired pressure  vessels, silo, pipe spools  and general structure  1995*  Received ISO 9001:2000  accreditation  Bureau Veritas  TLOSB  2009/2012  Received ISO 9001:2008  Certification  accreditation for the quality  Malaysia  management system  adopted in transportation .  and installation of offshore  pipelines and facilities  Det Norske  1) TL Geohydrographics  2012/2015  Received ISO 9001:2008  Veritas  Sdn Bhd  accreditation for the quality  Certification  2) TL Geohydrographics  management system  Singapore  pte Ltd  adopted in the provision of  3) TL Geohydrographics  hydrographic and  pty Ltd  geophysical survey  services, offshore survey  construction support  including underwater survey  inspection services
7. BUSINESS OF OUR GROUP (cont’d) Authority/ Issuance Certification year/Expiry body Company/Development year Type of certification Bureau Veritas SESSB 2004/2013 Received ISO 9001 :2008 Certification accreditation for the quality Malaysia management system adopted in the provision of offshore hook-up, pre­commissioning, construction and maintenance services and onshore fabrication, construction and maintenance services Bureau Veritas SESSB 2010/2013 Received ISO 9001 :2008 Certification accreditation for the quality Malaysia management system adopted in the provision of offshore hook-up, pre­commissioning, construction and maintenance services and onshore fabrication, construction and maintenance services Note: No expiry date stated. 7.10 HSSE policy HSSE continues to be the focus in our daily operations. Recognising that safe operational controls and environment preservation controls are integral to our continued success, we take every effort to ensure that excellent HSSE practices are inculcated among our employees and contractors. The safety of our people, sub-contractors, customers and the communities within which we operate is continuously upheld and that we operate in a responsible and an environmentally friendly manner. Our operations are also in compliance with international HSSE standards and requirements. Workplace health, safety and security are of paramount importance to our Group and we are committed to conducting our operations in ways that safeguard all employees, subcontractors, visitors to our sites and the community in the area that we work. We have established and implemented a comprehensive HSSE management system (“HSSE-MS”) across our Group. This system complies with the OHSAS 18001 standards which essentially help us manage the HSSE risks to a minimum. We regularly carry out checks, improvement activities as well as conduct exercises and audit at our offices and offshore worksites to improve our HSSE performance standards. In our daily operations, we place high emphasis on safety, strict compliance to our HSSE standards to address, monitor, manage and minimise risk at the work place. We also have a consequence management programme in place to ensure compliance with the policy and to address instances of non-compliance. Additionally, we have in place a management system which sets out various HSSE policies which include, amongst others, the following: (a) Establishment of HSSE communication and consultation The establishment of a HSSE counselling unit to improve communication and to provide a more personal guidance to frontline staff who are exposed to higher risk in their daily activities. 7. BUSINESS OF OUR GROUP (cont’d) (b) Establishment of CEO HSSE suggestion and communication box and e-mail Confidential suggestions boxes are placed at various sites and office locations to enable all staff especially frontline crew to provide feedback on HSSE performance and issues. A dedicated CEO email address has also been established to ensure that staff can communicate directly with the CEO so that HSSE issues can be addressed promptly. (c) Marine contractors HSSE management workshop Special workshops are conducted with senior management of marine subcontractors as part of our efforts to improve our subcontractors’ HSSE performance. Our drilling operations division also won the Bronze Award for 2010/2011 from PCSB for HSSE performance excellence. (d) Sub-contractor HSSE inspection and audit Our sub-contractors are audited on a monthly basis. If anything is amiss, we will issue a corrective-preventive action request and the responsible party will have to respond within 3 working days. A stringent pre-qualification process ensures only competent sub-contractors are hired. (e) Quarterly HSSE campaigns Workplace HSSE awareness campaigns are held to enable us to analyse accident causation trending and focus on any areas that require attention. Various programmes are implemented in conjunction with the quarterly campaigns to increase safety awareness. (f) Quarterly emergency drill exercise These quarterly drills involving scenarios such as medical emergencies. rescues at height and fire evacuation, ensure all workers are prepared for emergencies. The drills also test the effectiveness of our emergency response capabilities. (g) HSSE task force This task force comprises teams with different expertise brought together to identify hazards, assess risk and apply controls. (h) Unsafe condition unsafe act (“UCUA”) reporting and trending analysis A UCUA card is made available so that anyone can report unsafe conditions and acts. The cards are reviewed by the respective HSSE officers and trending is plotted to ascertain weaknesses. This helps HSSE officers to focus on key areas where additional controls are required. (i) Noise monitoring and controls We conduct annual noise exposure tests in various zones of the workplace to help us identify areas that require hearing protection controls. Hearing conservation program and training are periodically conducted to inculcate awareness among employees and sub-contractors. 7. BUSINESS OF OUR GROUP (cont’d) We will continue to be guided by our goals to achieve excellent HSSE performance standards wherever we operate and remain proactive and committed in ensuring our HSSE achievements remain among the best in the industry. Hearing conservation program and training are periodically conducted to inculcate awareness among employees and sub­contractors. We are also committed to operating in a responsible and environmentally friendly manner in compliance with local and international environmental best practices and legislation. Our certification for the ISO 14001 :2004 Environmental Management System (“EMS”) demonstrates how serious we are about protecting the environment. To date, our green initiatives have included energy conservation activities, water sampling for wastewater and effluents discharge as well as oil spill containment at our maintenance workshops and mobile work zones. We have also constructed bund walls for oil, paint and chemical storage facilities and waste storage facilities, as well as put in place filtration and dust collectors for all auto blast machines to eliminate the release of contaminated particles. With regard to scheduled wastes, we have an effective segregation, storage and disposal system in place. Disposal of scheduled wastes is done in accordance with legislative requirements while licensed contractors undertake all collection and disposal activities. Our conservation efforts have resulted in cost savings on energy, water consumption and paper, in addition to providing us better controls over the management of chemicals and other hazardous materials. To date, we have also successfully reduced waste and carbon emissions. We are the first O&G company in the state of Perak to engage the National Landscape Department and the local council in a tree planting programme, and are among the few O&G companies that support the Sustainability Development Initiative through our EMS. In addition to the tree planting programme, we have organised environmental programmes/events such as “Beach Clean-Up 2009” and “Beach Clean-Up 2010” to gather volunteers to clean-up Tanjung Bidara beach, Melaka in 2009 and Kundur beach at Tanjung Kling, Melaka in 2010. In 2011, we have also organised the “Tree Planting Day 2011” to gather volunteers to plant 30 seedlings of the Macaranga species at the Forest Research Institute Malaysia. In recognition of our efforts in implementing and maintaining high HSSE performance standards, we have received the following awards and recognitions from our customers: Customer I  Issuance year I  Certification body  Company  Validity period  Type of certification  Petrofac (Malaysia- KHL  2012  Achievement  of  400,000  PM304) Limited  manhours  without  loss  time  injury 1st HSE day for EPC of  WHP (wellhead platform)  for  Cendor Phase 2 Development  Project Block PM-304  PCSB  KHL  2011  Gold  award  for  best  improvement  in  HSE  performance  category  in  recognition of achievement in  HSE management  PCPP  KHL  2011  HSE appreciation day  FMC Technologies  KHL  2011  Appreciation for completion of  Shell  Gumusut-Kakap  manifold project
7. BUSINESS OF OUR GROUP (cont’d) 7. BUSINESS OF OUR GROUP (cont’d) Customer /  Issuance year /  Certification body  Company  Validity period  Type of certification  SSB  KHL  2011  Safety award on the  achievement of 470,000  manhours loss time injury free  345 goal zero days for F13K  compression module and E­ 11 P-B tie-in modifications  SSB  KHL  2011  Safety award on the  achievement of 390,000  manhours loss time injury free  155 goal zero days for E8K  compression module project  ABS Quality Evaluations  SapuraAcergy  2011  Received OHSAS  18001:2007 for the health and  safety system applicable to  engineering, project  management, offshore  transportation, installation and  decommissioning of deep and  shallow water pipelines and  structures, including heavy  lifting, subsea construction  and onshore construction  support operations  ABS Quality Evaluations  SapuraAcergy  2011  Received ISO 14001 :2004  accreditation for the  environment management  system in engineering, project  management, offshore  transportation, installation and  decommissioning of deed and  shallow water pipelines and  structures, including heavy  lifting, subsea construction  and onshore construction  support operations  PCSB  TLOSB  2011  PCSB division development,  health, safety and  environment conference and  annual award for PCSB DO  contractors health, safety and  environment performance for  year 2010/2011  PCSB  TLOSB  2010  HSE award in recognition of  excellent performance and  contribution in year 2009  SSB  KHL  2010  Award on the achievement of  500,000 manhours worked  loss time injury free with 406  goal zero days for CPDR-A  Topside
Customer I Certification body SSB Newfield CHOCSB Bureau Veritas Certification PCSB IPLOCA Carigali-PTrEPI PETRONAS PCSB Newfield Company KHL KHL AME AME AME TLOSB TLOSB
TLOSB
KHL
KHL
Issuance year I Validity period
2010 2010 2010 2010 2009/2010 2009 2009 2009 2009 2009 Type of certification Award on the achievement of 350,000 manhours worked loss time injury free with 133 goal zero day for F28DR-A Topside Excellent HSE ahead of schedule completion award for Jacket and TQPside for West Belumut Safety award for excellence (SAF.E) silver category for one year without any recordable incidents ISO 14001:2004 Environmental Management System Certificate of Appreciation for hosting a PCSB Construction Engineering Contractor’s HSE Workshop 2008 IPLOCA health and safety award (runner-up) Health, safety and environment excellence in achieving 1 million manhours without lost time injury from 5 November 2007 to 27 June 2009 PETRONAS Group health, safety and environment and sustainable development awards for year 2008/2009­contractor category (major­health) HSE award on achievement of 500,000 man-hours without lost time  injury  on  TBDR-A,  KNJT-C  and  DL-CGCE  Projects
Safety achievement award for achieving 200,000 manhours with zero lost time injury for provision of procurement and construction of Jacket and Topside West Belumut Wellhead Platform 7. BUSINESS OF OUR GROUP (coni’d) Customer I Certification body PCPP Murphy Sarawak PCSB PCSB Murphy Sarawak Carigali-PTIEPI Bureau Veritas Certification Bureau Veritas Certification CHOCSB CHOCSB Company KHL KHL KHL TLGSB KHL KHL AME AME KHL KHL Issuance year I Validity period
2009 2009 2009 2008 2008 2008 2008 2008 2007 2007 Type of certification Management appreciation on successful completion of 030 topside jacket, deck extension and achievement of 250,000 manhours without lost time injury and ‘zero total recordable case frequency’ Appreciation plaque on successful completion of golok central production platform (GOPA) and Golok Barat Production Platform (GOPB) with 1,000,000 manhours worked without loss time injury HSE award on achievement of 1,000,000 man-hours without lost time injury on TBOR-A, KN.IT-C and DL­CGCE Projects Recognition of excellent performance for zero TRCF in executing PCSB projects Certificate of appreciation on successful completion of 500,000 manhours without lost time injury at the topsides fabrication yard for the Azurite floating, drilling, production, storage and offloading (“FDPSO”) Conversion Project 2008 Carigali-PTIEPI HSE excellence award OHSAS 18001 :2007 Occupational, Health and Safety Assessment Series ISO 9001 :2008 Quality Management System Safety achievement award on achievement of 1 million manhours with zero lost time injury on EPCIC for Bumi, Bulan and Suriya Gas Field Safety achievement award on achievement of 2 million manhours with zero lost time injury on EPCIC for Bumi, Bulan and Suriya Gas Field 7. BUSINESS OF OUR GROUP (cont’d) Customer I Certification body  Company  Issuance year I Validity period  Type of certification  CHOCSB  KHL  2007  Safety achievement award on achievement of 3 million manhours with zero lost time injury on EPCIC for Bumi, Bulan and Suriya Gas Field  SSB and PCSB  KHL  2007  HSE award for achievement of 358,000 manhours for E11 Hub Phase 2 Project without lost time incident  SSB and PCSB  KHL  2007  HSE award on completion of Substructure for Phase 2 Project  successful SCDR-A E11 Hub  PCSB  AME  2007  PCSB Health, Safety & Environment Award in year 2007, for recognition in Excellent Performance. Award was presented by PCSB Management for Zero TRCF in executing PCSB project  PCSB  TLOSB  2006  PETRONAS Group health, safety and environment award for year 2006/2007 contractor category (major) gold award  Shell Exploration and Production Asia Pacific  TLOSB  2006  Recognition for achieving level 3.3 in the SMEP minimum health management system (“MHMS”) implementation  PETRONAS  TLOSB  2006  Health, safety and environment award for year 2005/2006 (major contractor category) project merit award (in recognition for improvement in health, safety and environment performance through effective implementation of health, safety and environment management system)  IPLOCA  TLOSB  2005  Offshore safety award in 2005 for outstanding safety performance  Brunei Shell Petroleum Company Sendiian Berhad (“BSP”)  TLOSB  2005  Recognition for the continued efforts and contribution in achieving the best historical safety performance for BSP in 2005
7. BUSINESS OF OUR GROUP (cont’d) Customer I Certification body TOS Energy Malaysia Sdn Bhd Shell Exploration & Production IADC L1yod’s Register Quality Assurance, Kuala Lumpur, SSESB and SSB NOEML and MSESB PGB and Peremba Construction Esso Production Malaysia Inc and SSESB NOEML and MSESB Company KHL SESB Petcon KHL KHL
KHL
KHL
KHL
KHL
Issuance year I Validity period
2005 2003 2003 2003 2002 2002 2001 to 2002 2001 2001 Type of certification Certificate of recognition for achieving  1,000,000  man­ hours  without  lost  time  incident
Achievement of level 3 SMEP -health safety environment management system assessment Safety awards for no loss time injury in 7 years Received ISO 9001 :2000 accreditation. Certificate of appreciation acknowledging contribution to achievement of 500,000 man­hours without lost time incident for B11DR-A(E11 R­B)/ JNDRA Project Recognition for achieving a low repair rate of 0.20% during the fabrication of Helang Central Platform ­Load Out Support Frame Safety award on achieving 350,000 man-hours without lost time injuries in relation to the Port Dickson Lateral Looping Pipeline Project Certificate of appreciation for top 4 desired outcomes for Larut Jacket Project -HSE, quality, cost and on schedule. Certificate of appreciation on successful implementation of HSE programmes compliance to HSE and quality requirements and contributed towards improvement of HSE in relation to the Helang Central Platform Substructure and Integrated Topsides and Fabrication Project 7. BUSINESS OF OUR GROUP (cont’d) Customer I Certification body  Company  Issuance year I Validity period  Type of certification  SSESB  KHL  2001  Zero loss time injury project performance certificate awarded in recognition commendable safety performance for the Larut “A” Jacket Project which achieved a total 430,031 man-hours without lost time injuries  Optimal  KHL  2001  Safety award for achieving 15,000,000 man-hours without lost time accident on Optimal’s project  Optimal  KHL  2001  Safety award for achieving 10,000,000 man-hours without a lost time accident on Optimal’s project  Linde AG & Samsung Engineering Company Ltd  KHL  2001  Safety award for achieving 10,000,000 man-hours without lost time accident on the Malaysia Olefins Project  PGB and Peremba Construction  KHL  2000 to 2001  Certificate of appreciation in recognition of the achievement of 75,000 man­hours worked without lost time injuries in relation to the Tronoh Lateral Pipeline Project.  PCSB  KHL  2000  Certificate of appreciation for achieving 100,000 man-hours worked without lost time injuries  Kuantan Terminals Sdn Bhd and Dialog Holdings Sdn Bhd  KHL  2000  Certificate of recognition for achieving 1.5 million man­hours without lost time incident in relation to the Kuantan Common Piperack Facility and Propylene Tank and Ancillary Facilities Project  Chiyoda Malaysia Sdn Bhd and Titan Petrochemicals (M) Sdn Bhd  KHL  2000  Certificate of recognition on the acknowledgement of the successful Piping and Structure Works Project within the specified schedule and specifications, and meeting Chiyoda and the customer’s safety and quality standards
7. BUSINESS OF OUR GROUP (cont’d) Customer J Issuance year J Certification body Company Validity period Type of certification SSB and MSESB KHL 2000 Safety award on achieving 150,000 HSE man-hours without lost time injury in relation to the F6K-A Substructure Project IPLOCA TLOSB 1999 Offshore Safety Award for 1999 -outstanding safety performance 7.11 Key licences, permits, brand names, patents and franchises which are material to our Group Please refer to Appendix I for further details of the key licences, permits, brand names, patents and franchises which are material to our Group. 7.12 Properties, plants and equipments Please refer to Appendix” for further details of the summary of landed properties, vessels and other equipments of our Group. 7.13 Dependency on any contract or arrangements As at the LPD, there are no material contracts, agreements or arrangements which had been entered into by us which we are highly dependent on. 7.14 Sales and marketing plans Our sales and marketing strategies include the follOWing: (i) Building up and maintaining networks with our customers and other O&G industry players With the Merger, we will enjoy a larger base of clientele comprising the customers of SapuraCrest Group and Kencana Petroleum Group. We will maintain our relationships with these customers by communicating with them to understand their future plans and business developments and for them to understand how we are able to assist them with our product and service offering. By doing so, our marketing team will be able to identify suitable projects to bid for including cross selling our products and services to the customers of both SapuraCrest Group and Kencana Petroleum Group since we are an integrated services provider covering the O&G value chain with full-fledged EPCIC capabilities subsequent to the Merger. In addition, we also build up and maintain relationships with other players within the O&G industry and will bid for their projects should the right opportunity arise. (ii) Create greater visibility and awareness of our products and services to our customers and other players within the O&G industry In order to create greater visibility and awareness of our products and services to our customers and other players within the O&G industry, we participate in various regional and international conferences, seminars, trade fairs and exhibitions related to the O&G industry as part of our public relations and branding efforts. Some examples of the exhibitions which we have participated in include the Asian Oil, Gas and Petrochemical Engineering Exhibition (“OGA”) which is held every 2 years. We will also participate in the World Gas Conference in 2012. 7. BUSINESS OF OUR GROUP (cont’d) In addition, upon achieving key milestones such as the completion of significant projects of our domestic and international customers. we ensure that sufficient market awareness is created via media coverage, news articles, our own website, O&G magazines and journals and other write-ups pertaining to our latest achievements and developments of our Group’s engineering expertise and experience. This will help us gain greater visibility in both the local and international fronts, and create positive enquiries and referrals from the O&G industry. (iii) Understanding the latest development in the O&G industry We have an experienced marketing team which studies the O&G industry trends and developments and communicate with local and international O&G industry players to understand their business plans and look into various potential areas which require products and/or services we are able to offer. This enables our marketing team to assess and capitalise on industry trends and opportunities to enable our marketing efforts and business strategies to be focused in the right direction. The gathering of market intelligence is also important in order for us to maintain our competitiveness within the O&G industry by keeping abreast of new processes and technological developments, constantly upgrading the technologies and skills adopted by us and/or developing new technologies and skills (where possible). We also source for joint venture partners and have in the past entered into joint ventures with, among others, technology partners from all over the world who are in possession of newer or more advanced technologies and skills in order to meet the requirements of certain new projects we intend to bid for. Joint ventures with reputable partners enable us to capitalise on the strength, reputation and capabilities of our joint venture partners to secure such projects. In addition, transfer of technologies and skills which our Group do not already have is also common during such joint ventures. (The rest of this page has been intentionally left blank) 7. BUSINESS OF OUR GROUP (cont’d) 7.15 Major suppliers The major suppliers of SapuraCrest Group and Kencana Petroleum Group are as follows: SapuraCrest Group The top 10 suppliers of SapuraCrest Group for each of the last 3 years ended 31 January 2012 are as follows:  Suppliers  Year ended 31 January 2010 2011 2012 —-­RM million
A company based in Malaysia with at least 5 years relationship with SapuraCrest Group which provides charter of vessels services A company based in Malaysia with at least 10 years relationship with SapuraCrest Group which provides fuel services A company based in Labuan with at least 5 years relationship with SapuraCrest Group which provides charter of vessels services A company based in Singapore with at least 10 years relationship with SapuraCrest Group which provides manpower supply services A company based in Malaysia with at least 10 years relationship with SapuraCrest Group which provides charter hire services A company based in Indonesia with at least 10 years relationship with SapuraCrest Group which provides equipment rental and manpower supply services A company based in Malaysia with at least 6 years relationship with SapuraCrest Group which provides pre-commissioning works services A company based in Singapore with at least 10 years relationship with SapuraCrest Group which provides drydocking services A company based in Singapore with at least 10 years relationship with SapuraCrest Group which provides equipment rental and manpower services A company based in Malaysia with at least 5 years relationship with SapuraCrest Group which provides charter of vessels services A company based in Malaysia with at least 4 years relationship with SapuraCrest Group which provides charter of vessels services A company based in Malaysia with at least 2 years relationship with SapuraCrest Group which provides charter of vessels services 113 99 129 98 148 72 131 77 22 22 17 * 84 73 63 53 27 155 9 168 49 34 64 69 33 32 * 62 * * 7. BUSINESS OF OUR GROUP (cont’d) Year ended 31 January 2010 2011 2012 —–RM millionSuppliers A company based in Malaysia with at least 5 years 10 relationship with SapuraCrest Group which provides charter of vessels services A company based in Malaysia with at least 10 years 42 relationship with SapuraCrest Group which provides charter of vessels services A company based in Malaysia with at least 2 years 40 relationship with SapuraCrest Group which provides fuel services A company based in Singapore with at least 8 years 38 relationship with SapuraCrest Group which provides charter of vessels services A company based in Malaysia with at least 1 years 33 relationship with SapuraCrest Group which provides logistics services Total  815  691  447  Note:  Not a top 10 supplier of SapuraCrest Group for that financial year.
SapuraCrest Group was not dependent on any top 10 supplier during the last 3 financial years ended 31 January 2012. Kencana Petroleum Group The top 10 suppliers of Kencana Petroleum Group for each of the last 3 financial years ended 31 July 2011 and 6 months period ended 31 January 2012 are as follo~s: 6 months period Year ended 31 July ended 31 January 2009 2010 2011 2012 Suppliers RM million A company based in the U.S. with at least 4 years relationship with Kencana Petroleum Group which provides supply of equipment services  37  A company based in Malaysia with at least 5 years relationship with Kencana Petroleum Group which provides offshore installation services  30  A company based in Thailand with at least 4 years relationship with Kencana Petroleum Group which provides offshore installation related services  23  A company based in the U.S. with at least 4 years relationship with Kencana Petroleum Group which provides supply of equipment services  23  114
7. BUSINESS OF OUR GROUP (cont’d) 6 months  Year ended 31 July 2009 2010 —­ 2011  period ended 31 January 2012  Suppliers  RM million
A company based in Singapore with at least 5 years relationship with Kencana Petroleum Group which provides fabrication services A company based in Malaysia with at least 5 years relationship with Kencana Petroleum Group which provides supply of project materials services A company based in Malaysia with at least 5 years relationship with Kencana Petroleum Group which provides supply of project materials services A company based in Malaysia with at least 3 years relationship with Kencana Petroleum Group which provides supply of project materials services A company based in Malaysia with at least 5 years relationship with Kencaria Petroleum Group which provides supply of equipment services A company based in Malaysia with at least 5 years relationship with Kencana Petroleum Group which provides supply of project materials services A company based in Malaysia with at least 2 years relationship with Kencana Petroleum Group which provides offshore installation services A company based in Malaysia with at least 10 years relationship with Kencana Petroleum Group which provides vessels supply services A company based in Malaysia with at least 2 years relationship with Kencana Petroleum Group which provides supply of workboat services A company based in Malaysia with at least 5 years relationship with Kencana Petroleum Group which provides scaffolding, insulation, fire proofing, blasting and painting services A company based in Malaysia with at least 3 years relationship with Kencana Petroleum Group which provides supply of equipment services A company based in Malaysia with at least 5 years relationship with Kencana Petroleum Group which provides fabrication services A company based in Malaysia with at least 2 years . relationship with Kencana Petroleum Group which provides vessels supply services 22  14  20  10  10  18  17  30  17  16  14  12  44  19  18  16  13  30  8  11  9  16  9
7. BUSINESS OF OUR GROUP (cont’d) Suppliers A company based in Malaysia with at least 3 years relationship with Kencana Petroleum Group which provides supply and servicing of heating, ventilation and air conditioning related services A company based in Malaysia with at least 5 years relationship with Kencana Petroleum Group which provides blasting services A company based in Malaysia with at least 5 years relationship with Kencana Petroleum Group which provides supply of equipment services A company based in Malaysia with at least 5 years relationship with Kencana Petroleum Group which provides supply of project materials services A company based in the United Arab Emirates with at least 1 year relationship with Kencana Petroleum Group which provides offshore installation services A company based in Malaysia with at least 5 years relationship with Kencana Petroleum Group which provides vessels supply services A company based in Malaysia with at least 2 years relationship with Kencana Petroleum Group which provides supply of project materials services A company based in Malaysia with at least 2 years relationship with Kencana P-etroleum Group which supplies man-power for vessels A company based in Malaysia with at least 3 year relationship with Kencana Petroleum Group which provides vessels supply services A company based in Malaysia with at least 1 year relationship with Kencana Petroleum Group which provides supply of project materials services A company based in Singapore with at least 2 years relationship with Kencana Petroleum Group which provides supply of project materials services A company based in Malaysia with at least 5 years relationship with Kencana Petroleum Group which provides technical services A company based in Malaysia with at least 4 years relationship with Kencana Petroleum Group which provides supply of project materials services Total Year ended 31 July 2009 2010 2011 RM million * 15  6 months period ended 31 January 2012  12  12  *  10  *  11  10  10  9  9  8  8  8
220 159 168 88 7. BUSINESS OF OUR GROUP (cont’d) Note: Not a top 10 supplier of Kencana Petroleum Group for that financial year/financial period. Kencana Petroleum Group was not dependent on any top 10 supplier during the last 3 financial years ended 31 July 2011 and 6 months period ended 31 January 2012. After the Merger, the major suppliers of SapuraCrest Group and Kencana Petroleum Group will be the suppliers of SKPB Group. (The rest of this page has been intentionally left blank) I Company No. 950894-T 7. BUSINESS OF OUR GROUP (cont’d) 7.16 Major customers The major customers of SapuraCrest Group and Kencana Petroleum Group are as follows: SapuraCrest Group The major customers that have contributed 10% or more of the revenue of SapuraCrest Group for the last 3 financial years ended 31 January 2012 are as follows: No. of years of  Year ended 31 January  relationship as at 31  2010  2011  2012  Customer  NaturelType of service  January 2012  RM million  %  RM million  %  RM million  %
PCSS  Transportation and installation of offshore facilities and drilling of offshore oilwells  At least 10 years  1,649  50.62  1,081  34.00  332  12.98  SSS/SSPCL  Transportation and installation of offshore facilities, drilling of offshore oi/wells, HUC and major Topside maintenance  At least 10 years  *  *  845  26.56  892  34.90  EMEPMI  Drilling of offshore oi/wells  At least 5 years  *  *  343  10.77  *  *  Newfield Total  Transportation and installation of offshore facilities  At least 3 years  * 1,649  * 50.62  * 2,269  * 71.33  327 1,551  12.80 60.68  Note:
Not a major customer contributing 10% or more of the revenue of SapuraCrest Group for that financial year. Save for PCSB and SSB/SSPCL, SapuraCrest Group was not dependent on any single customer which contributed 10% or more of its revenue during the last 2 financial years ended 31 January 2010 and 2011. SapuraCrest Group was not dependent on any single customer which contributed 10% or more of its revenue during the financial year ended 31 January 2012. 118 I Company No. 950894-T I 7. BUSINESS OF OUR GROUP (cani’d) Kencana Petroleum Group The major customers that have contributed 10% or more of the revenue of Kencana Petroleum Group for the last 3 financial years ended 31 July 2011 and the 6 months period ended 31 January 2012 are as follows: NaturelType of  No. of years of relationship as at 31 January  2009  Year ended 31 July 2010  2011  6 months period ended 31 January 2012  Customer  service  2012  RM million  %  RM million  %  RM million  %  RM million  %
PCSB Provision of EPCC At least 15 years 265 23.20 300 27.52 348 23.32 264 23.66 services such as Topside, jacket and compression modules, HUC of platform, drilling services and other services Sunpower Provision of At least 2 years 121 11.09 Malaysia su perstructu re Exploration and service Production Sdn Bhd PCPP Provision of EPCC 3 years 120 11.00 services such as wellhead support frame KMR1# Rig construction . 3 years 164 14.35 (relationship ceased in 2010) Murphy Provision of EPCC At least 4 years , 156 13.68 * Sarawak services such as production platform and Topside 119 I Company No. 950894-T 7. BUSINESS OF OUR GROUP (cont’d) Nature/Type of  No. of years of relationship as at 31 January  2009  Year ended 31 July 2010  2011  6 months period ended 31 January 2012  Customer  service  2012  RM million  %  RM million  %  RM million  %  RM million  %  Newfield  Provision of EPCC  At least 3 years  *  283  18.99  118  10.55  services, such as  jacket and  fabrication of  Topside  SSB  Fabrication of  At least 5 years  *  *  *  126  11.27  compression  module  Total  585  51.23  541  49.61  631  42.31  508  45.48  Notes:
Not a major customer contributing 10% or more of the revenue of Kencana Petroleum Group for that financial year! period. # Prior to August 2010, Kencana Petroleum owned 25% equity stake in KMR1 (formerly known as Mermaid Kencana Rig 1 Pte Ltd). KMR1 became Kencana Petroleum’s wholly-owned subsidiary in August 2010 when Kencana Petroleum’s wholly-owned subsidiary, KPV, acquired the remaining equity interest in KMR1. Kencana Petroleum Group was not dependent on any single customer which contributed 10% or more of its revenue during the last 3 financial years ended 31 July 2011 and 6 months period ended 31 January 2012. After the Merger, the major customers of SapuraCrest Group and Kencana Petroleum Group will be the customers of SKPB Group. Please refer to Section 5.2.12 for further details on the risk of our dependency on a limited number of major customers. 120 7. BUSINESS OF OUR GROUP (cont’d) 7.17 Seasonality Generally, our business is not affected by seasonality as contracts may be awarded to us at any time of the year. However, the implementation of our offshore projects could be affected by adverse weather conditions, such as monsoon/hurricane seasons. 7.18 Interruption in business in the past 12 months We have not experienced any major business interruptions which had a significant effect on our operations during the past 12 months. 7.19 Employees The total workforce of SapuraCrest Group for the past 3 financial years ended 31 January 2012 and as at the LPD and Kencana Petroleum Group for the past 3 financial years ended 31 July 2011 and as at the LPD are as follows: SapuraCrest Group Asat Asat Asat 31 January 31 January 31 January Category 2010 2011 2012 As at the LPD Senior Management* 11 15 23 24 Management 214 206 223 233 Engineers 346 390 494 522 Executive 401 389 405 424 Technical 204 214 239 249 Clerical 265 286 306 313 General worker 75 79 77 79 Marine crew 1,310 1,087 1,009 1,157 Total 2,826 2,666 2,776 3,001 Note: * Senior general manager and above. 7. BUSINESS OF OUR GROUP (cont’d) Kencana Petroleum Group Asat Asat Asat Category 31 July 2009 31 July 2010 31 July 2011 As at the LPD Senior Management(l) 34 47 39 45 Management 148 173 157 185 Engineers 165 227 276 343 Executive 333 418 483 479 Technical 1,516 1,358 2,056 2,205 Clerical 288 323 426 364 General worker 453 419 610 656 Marine crew 59 78 Total 2,937 2,965 4,106 4,355 Note: (r) General manager and above. The change in the number of employees of Kencana Petroleum Group from the year ended 31 July 2010 to year ended 31 July 2011 was attributable to the following: (i) higher amount of projects being awarded during the year ended 31 July 2011 ;
(ii) commencement of drilling operations in September 2010;

(iii) acquisition of AME group of companies and companies in Hong Kong and PRC; and (iv) incorporation of KESS for the development and production of petroleum resources of Serantai field. As at the LPD, SapuraCrest Group and Kencana Petroleum Group have employees in the following countries respectively: No. of employees Country Malaysia Australia Singapore PRC U.S. Hong Kong U.K. Total  SapuraCrest Group 2,706 157 65 54 19 3,001  Kencana Petroleum Group 4,308 33 14 4,355  122
7. BUSINESS OF OUR GROUP (cont’d) As at the LPD, the total number of employees of SapuraCrest Group and Kencana Petroleum Group who are recruited on contractual and/or temporary basis are as follows: Category  SapuraCrest Group  Kencana Petroleum Group  Senior Management  5  Management  54  14  Engineers  136  55  Executive  93  138  Technical  92  1,818  Clerical  93  113  General worker  32  489  Marine crew  1,146  45  Total  1,651  2,672
On Completion, the employees of both the SapuraCrest Group and the Kencana Petroleum Group became the employees of our enlarged Group. Our management believes that good human resource management is critical to our business and that a dedicated, well-trained and efficient workforce is essential for our success. Our management enjoys good working relationships with our employees and none of our employees belong to any union. As at the LPD, we have not been involved in any material industrial disputes with any of our employees. As we believe that our employees are assets to our Group, we invest in our employees by providing continuous employee training and development opportunities as well as exposing them to a variety of diverse projects and, technologies in order to broaden our employees’ technical expertise and knowledge on their job. It is our policy to assist our employees to improve their skills, knowledge and awareness to develop their technical and professional abilities to the maximum of their potential through regular in-house and external training courses. As demand for highly skilled personnel is relatively high in the O&G industry, our development programmes focus on enhancing, nurturing and ensuring the continuity of the reservoir of knowledge which has been gained over the years through substantial exposure to the whole spectrum of O&G projects which we have undertaken. We also establish and promote performance-based culture and reward system to retain our employees who possess the experience, knowledge and/or technical skills. The training and development programmes offered by our Group reflect our commitment to building an ongoing organisational culture and improving our workforce’s capability. We believe in continually building our knowledge and skills to become a resilient and competitive O&G player locally and globally. Our training and development programmes encompass the following: (i) Industry required training covering areas such as global maritime distress safety system, offshore lifeboat coxswain, first aid/fire fighting, damaged control team/advanced fire fighting, advanced rotating equipment certification, international course for hydrography and welding inspector certification;
(ii) Safety training covering areas such as fall protection awareness, confined space awareness and rescue, hydrogen sulphide awareness, first aid/cardiopulmonary resuscitation/ automated external defibrillator, basic offshore sea survival and emergency and helicopter underwater escape training with self breathing apparatus;

7. BUSINESS OF OUR GROUP (cont’d) (iii) Project management training which provides a structured and customised program to suit our current and future business needs and to develop highly competent and professional project management team; (iv) HSSE related and competency training which places high emphasis on HSSE compliance to ensure that safety procedures are strictly adhered to. These programmes are generally in-house programmes and trainings conducted for our crews by our customers, statutory bodies and other HSSE training providers in Malaysia;
(v) Soft skills and leadership competencies for our employees of all levels by offering a structured program for non executives and unlimited soft skills and leadership program to executives and managers to enhance our workforce’s interpersonal, leadership and business mindset;
(vi) Teambuilding and motivational program to build successful work team within department, divisions or subsidiaries of our Group as well as with our customers;

(vii) Workforce attachment and exchange program offering real business exposure to our employees to enhance their technical skills and proficiency; (viii) Management associate and engineering associate programme to nurture young and high potential leaders. This is one of the programmes to attract, develop and retain future leaders of our Group; and (ix) In-house training covering other areas such as permit to work, quality management system, lockoutltagout, manual handling and hand trailing technique, hazardous communication, electrical safety awareness, offshore rig and safety orientation with iob description, watch out, hands and fingers, generic iob safety awareness, contract administration, procurement and logistics activities as well as other specialised technical programmes. We consistently review and enhance our training and development policies and guidelines to support our business strategies. Our quality management system on the provision of the human resource services which include training and development procedures have been certified and awarded ISO 9001 :2008 in recognition for their high quality. Besides providing trainings and development programmes, we also strive to enhance our workforce’s knowledge and technical skills by making arrangements for our employees to participate in attachment and exchange programmes with our partners and customers. In addition, we also encourage our employees to participate in local and international seminars and conferences as a means to keep our workforce abreast of industry developments and trends as well as to provide networking opportunities with industry counterparts and O&G players. We also collaborate with PETRONAS to train and develop local talent to serve the O&G industry. The collaboration includes joint research and development, staff attachment opportunities, information-sharing session and chair sponsorship. It also covers student internship, adjunct lecturer programme, supervision of postgraduate students and technical trainees and the setting up of a learning facility. Programmes and activities will be conducted at PETRONAS’ learning institutions including PETRONAS Management Training Centre, University Teknologi PETRONAS, Institut Teknologi Petroleum PETRONAS and Akademi Laut Malaysia. The trained O&G talents will be recruited by us in the future, where suitable.

 

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