saipem oil gas - asia pacific

ASIA PACIFICSaipem Sustainability TalentC a s e s t u d y

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C a s e s t u d y

Asia PacificSaipem Sustainability Talent


3 SUSTAINABILITYSAIPEM

INDEX

INTRODUCTION 4

SAIPEM AT A GLANCE 7Saipem mission statement 7Saipem activities 8Saipem through the world 8Main Financial Results 9Saipem Human Resources 9

SAIPEM SUSTAINABILITY 10Sustainability organisation 11Methodology 12Saipem’s sustainability policy 13

ASIA PACIFIC OVERVIEW 14Countries in the Area 15People’s Republic of China 16Republic of Indonesia 17Republic of Malaysia 18Kingdom of Thailand 19

SAIPEM GROUP IN ASIA PACIFIC REGION 20Companies operating in the area 20Companies Organisation 21Projects in the Area 21

STAKEHOLDERS RELATIONS 24Matrix on Sustainable Impact 24Human Resources Strategy 25Clients Satisfaction 25Subcontractors and local partners 26

PERFORMANCE INDICATORS 28Saipem Asia Pacific Group QHSE Management System 28Saipem Asia Pacific Group QHSE Objectives and targets 2005 30

ENVIRONMENTAL INDICATORS 30Energy Consumption 30Water Consumption 31Waste generation 31Air Emissions 32

ECONOMIC INDICATORS 32Contribution to the Local Economy 32HSE Expenditures 33

SOCIAL INDICATORS 34Employees distribution 34Safety performance 35Training 36Health 36

GLOSSARY & KEY WORDS 37


This report is part of Saipem’s Sustainabilityprogramme for the years 2005-2007. After successfulpublication of case studies on Nigeria, Kazakhstan,Azerbaijan and Peru, Saipem has published newlocal reports illustrating its socio-economic andenvironmental performance in Angola, in the AsiaPacific Region and in the Sultanate of Oman.Thanks to this new effort the sustainability approach is extending its coverage in the Saipem world, involving more and more

people, projects and external environments.

4SUSTAINABILITYSAIPEM

INTRODUCTIONspm_sosten_L02_06_05_02 29-08-2006 18:03 Pagina 4

LETTER BY THE CHAIRMAN AND THE MANAGINGDIRECTOR OF SAIPEM S.P.A.The industrial development of the Saipem Group reflects that of the Oil and Gas industry itself inmany respects. This is especially true in frontier areas, where Saipem is committed not only toresolving technological challenges, but to contributing to social, cultural and environmentaldevelopment. This also responds to the input of a growing number of stakeholders, whose interestis not limited to strict economic or technological performance, but also in the concept of sustainabledevelopment in our business. As clearly reflected in our Mission Statement, globally, Saipem isadopting an approach that combines sustainable development with other business needs. Themethods are based on a simple but ambitious concept: embracing diversity; developing an ever-expanding, truly international organization comprising multi-local teams working together to achievepredetermined targets. The Sustainability Programme that Saipem started implementing in 2001 isthe result of thoughtful, comprehensive, internal assessment. The diversity of our projects and thespecificity of environments in which they are performed, are the reason for adopting a “LocalApproach to Sustainability”. Our path towards Sustainability has an over-riding objective: beneficialintegration of our activities within a local context, and leveraging the Company’s talents to createbetter opportunities for local communities. We need to evaluate and present our performance to dateto our stakeholders, and to improve it in future.

Pietro Franco TaliChairman & C.E.O.Hugh James O'DonnellManaging Director

LETTER BY THE CORPORATE QHSE MANAGER OFSAIPEM S.P.A.Saipem’s approach to sustainability initiatives management provides the annual commitment of externalcommunication so as to give a possibility to our stakeholders to examine closely Saipem reality. These casestudies belong to the commitment of transparency, clarity and assurability we took last year with all Saipemstakeholders, developing a specific disclosure of the way Saipem is working in the frontiers areas. The reportspublished last year on Saipem activity in Nigeria, Peru, Kazakhstan and Azerbaijan already achieved of spreadingout this commitment both at Saipem Corporate and at site level; both internally and externally; both through ourinitiatives and upon requests. We received interesting feedbacks from our readers and we tried to positivelyimplement all suggestions within these new case studies, that represent detailed analysis supported by greaterexperience and knowledge. The utilisation of the sustainability case studies in the contracting phase for the newprojects in the country suggests us to better point out the impacts Saipem has in the country on its economic,environmental and social development. The distribution to the local stakeholders, on the other hand, suggestedus to facilitate the comprehension of the contents translating it in the country mother tongue. We translated thePeru report in Spanish for our Peruvian stakeholders and we are going to do the same for these new casestudies. In particular the Angola case study will have a Portuguese version which is even nearer to our localreaders. We also asked a third part evaluation of the case studies. This measure was undertaken to identify thepoints to be improved successfully and strong points to be included also in these new publications. The reportingactivity of this year focused the attention on other three Countries where Saipem is operating and is contributingthrough its business to the local development: Angola, Asia Pacific Region and Oman. Angola represents forSaipem a great commitment for the future activities, all operations are growing especially in the offshore marketswhich involve increasingly more Saipem based locally companies and many of our vessels. Saipem considersthe Asia Pacific region as one of the most relevant fields in the world for the offshore projects in place and for thesupport activities developed for the Far East as for example for the Sakhalin Island. In Oman Saipem developedan interesting onshore project which characteristics and the commitment of the project staff gives us theopportunity to collect and issues their socio-economic and environmental experience in a published casestudy. Saipem external communication is expected to grow constantly supported by an accounting system ofthese data and information that will be more and more reliable. This represents another challenge not only formy staff but also for all Saipem world.

Sabatino De SanctisQHSE Senior Vice President5 SUSTAINABILITY

SAIPEM

Saipem Corporate Milan


LETTER BY THE GROUP RESIDENT AREA MANAGERAny possibility to understand the countries where we operate and to know better ourselves is animportant investment to assure many kinds of improvement. This is the value I gave to the analysisthat was carried out in order to prepare this report. We studied these countries from social, economicand environmental point of view and we tried to identify our points of strength and points ofweakness. To this purpose we deeply investigated Saipem approach and behaviour in terms of HSEmanagement, human resources strategy, business and operations management. I am convincedthat any “Sustainable Development” could only be effective when the growth is profitable to allParties involved, and when it is done in the respect of the people aspirations and in full respect ofour planet. With this spirit, and after having gathered all information subject of this study, our nextstep will be for us to determine how we can improve our management of operations and theintegration of our companies in the various countries under our Area with the aim of a sustainabledevelopment. The idea to share this experience with our stakeholders through the publication of thiscase study came out naturally. The analysis we developed embraced most of the countries involvedin our both onshore and offshore operations, mainly Malaysia, Indonesia, China, Thailand andAustralia. It is a very huge area with many different characteristics, social, cultural, political andreligious. This diversity is one of the challenging factors when operating in such a large region,which must be seen as a stimulating parameter from which, we should take advantage by enhancingsynergies and complementarities. We thought interesting to describe briefly our activities giving abetter idea of Saipem contribution in this part of the world. I hope this effort will be somehow usefulfor our clients in order to recognised Saipem attempt to contribute to the development and the careof the people and countries where we are operating. We will distribute this document to ouremployees, especially the local employees, in order to give them the possibility to be more andmore part of our Group and realize how Saipem is paying attention to grow in harmony with asustainable development.

Michel LainèGroup Resident Area Manager Asia Pacific



SAIPEM’S MISSION STATEMENT Pursuing the satisfaction of our clients in theenergy industry, we tackle each challenge withsafe, reliable and innovative solutions. We entrustour competent and multi-local teams to providesustainable development for our company and thecommunities in which we operate.Saipem is one of the leading companies in providing services to the Oil & Gas sector, mainly in offshore engineering and construction.

The Company invested heavily in the past years to reinforce its offshore fleet, both in offshore construction and in offshore drilling and

today Saipem's fleet is one of the most technically developed and efficient in the sector. With the acquisition of the French engineering

company Bouygues Offshore in May 2002, Saipem became a leading contractor in the field of complex EPIC projects (Engineering,

Procurement, Installation and Construction). This acquirement helped Saipem turn into a real global contractor, with significant local

presence in strategic and emerging areas, such as Western Africa, the former Soviet Union, Central and South East Asia, North Africa

and the Middle East.


SAIPEM ATA GLANCEspm_sosten_L02_06_05_02 29-08-2006 18:03 Pagina 7

SAIPEM ACTIVITIESSaipem Group consists of six worldwide business units. It provides EPIC services to the oil and gasindustry, with a particular focus on activities in remote areas, deepwater environments and gasrelated projects that allows the Group to enjoy a superior competitive positioning.• Offshore Construction: Saipem is the consolidated leader in offshore construction, with main

activities covering engineering, construction, and installation of platforms, subsea structures,floating production systems, and subsea pipelines. The most powerful asset in Saipem's fleet isSaipem 7000, a semi-submersible vessel capable of lifting structures of up to 14,000 tonsand laying pipelines in ultra deep waters. Other vessels include Castoro 6 and Semac 1, capable oflaying large diameter pipelines, Saibos FDS (Field Development Ship), a specialised vesselused for the development of deep water fields and Saipem 3000, a vessel capable of liftingstructures of up to 2,400 tons. The company's recent acquisitions further strengthened its engineeringand project management expertise.

• Drilling: Saipem's mobile offshore drilling fleet consists of one state-of-the-art drillship (Saipem10000), five semi-submersibles and four cantilevered jack-ups. Saipem drilling operations arecarried out on behalf of the major corporations in the oil and gas sector. Saipem owns 23 drilling rigsand 15 workover rigs capable of operating at depths ranging from 2,500 to 10,000 meters atelevated temperatures and in high pressure environments.

• Leased FPSO: Saipem entered this sector in 1996 as a new player offering a unique combination of thecapabilities of a major EPCI contractor with the worldwide presence of an Owner of first class drilling andconstruction vessels. Saipem's wholly owned fleet enables the company to provide a full range of installation,construction and transportation services suited to the most challenging floating system installations.

• Onshore Construction: Saipem is world leader in the onshore construction sector having laid morethan 60,000 km of pipelines over five continents and built some 100 oil refineries, petrochemicalplants, power plants, oil and water pumping stations and natural gas compression stations.The Company specialises in the laying of large diameter pipelines, above all in adverse climaticconditions and difficult to reach areas.

• Liquefied Natural Gas: Saipem entered this high-potential market by establishing a new group whichhas the necessary technological capabilities to construct LNG tanks and is experienced in the constructionof offshore and onshore LNG import and export terminals.

• Maintenance Modification and Operation: Saipem's presence in the last link of the value chain enables theCompany to offer end-to-end solutions to energy service providers. This kind of activity allows Saipem tostreamline processes, increase productivity and offer clients plans of continuous improvement.

SAIPEM THROUGH THE WORLDSaipem performs both onshore and offshore operations in a very large number of countriesthroughout the world. As a contracting company operating in the Oil&Gas sector, Saipem's worldwidepresence and the geographical distribution of its backlog are determined by where the Oil Companies'investments are in the world. At the end of 2005 the order backlog amounted to 5,513 millioneuros. Breakdown of activities by countries is as follows: 25% in West Africa, 14% Commonwealthof Independent States - ASIA, 12% Central and South America, about 8% in Far East, 8% MiddleEast, 8% Europe and 8% Commonwealth of Independent States - Europe.


Backlog by Geographic Area

West Africa 25,6%CIS - Asia 14,5%

Central - South America 12,2%Far east 8,5%

Europe 8,4%Middle east 8,3%

CIS - Europe 8,1%North Sea 5,7%

North Africa 5,7%

North America 2,2%

Italy 0,4%Other Asia 0,4%

Data updated at December 2005

Principal Operating Centers Offshore Offshore Drilling float. Prod. Lng & maritime works Engineering Centers Onshore Onshore Drilling Maintenance Modification and Operation (MMO) Yards/bases Other Offices/Activities


MAIN FINANCIAL RESULTS2002 2003 2004* 2005

Operating revenues 3,149 4,231 4,306 4,528

Production costs (2,637) (3,658) (3,706) (3,914)

Idle costs (48) (78) (81) (57)

Selling expenses (56) (66) (66) (62)

Research and development costs (6) (9) (9) (7)

General and administrative expenses (102) (115) (116) (120)

NET INCOME 191 196 235 255

OFFSHORE CONSTRUCTION 2002 2003 2004 2005

PIPELINES LAID (KM) 1,798 1,409 1,634 833

INSTALLATION (TONS) 55,960 118,211 172,664 134,602

OFFSHORE DRILLING 2002 2003 2004 2005

METRES DRILLED 124,761 128,839 130,420 113,786

ONSHORE CONSTRUCTION 2002 2003 2004 2005

PIPELINES LAID (KM) 687 612 465 1,005

INSTALLATION (TONS) 30,060 23,930 15,888 7,112

ONSHORE DRILLING 2002 2003 2004 2005

METRES DRILLED 348,040 385,976 455,413 547,953

*After FRS Reconciliation

SAIPEM'S HUMAN RESOURCESIn 2005 Saipem total staff was of 25446, about 3500 employees more than in 2004. Saipem'sinterest in the social development of the areas of operations was expressed in 2004 both throughthe internal management and commitment, both externally, in participatory actions with localcommunities. This implied the adoption of procedures for selection and management of employeeswhich can be adapted to the provisions and needs of the various reference countries. The LocalContent Policy requires the Local Content policy means that the relationship with local workers isdirectly developed, avoiding as much as possible the use of agencies; this meant a particularcommitment on the part of Saipem, both in terms of resources and responsibility, strongly supportedby the commitment of Top Management. One result of this approach can be seen in the significantnumber of nationalities (103 at December 2005) which makes up the Saipem staff worldwide.


Saipem Group Employees

1999 2000 2001 2002 2003 2004 2005

European Other Nationalities

0

5000

10000

15000

20000

25000

30000

Saipem Employees by Nationality

France

Nigeria Italy

Kazakhstan

Azerbaijan

IndiaRussia

PhilippinePeruAngola UK

Algeria

Saudi ArabiaCroatia

Indonesia

Malaysia

Venezu

elaNorway

Romania

United States

PortugalTurkey Spain

EgyptPoland

ThailandCongo

Other0

500

1000

1500

2000

2500

3000

3500

SS


For the second year Saipem decided to publish hissustainable approach through local case studies.Following the last year approach to focus on specificcountries of activity, this time the analysis has beencarried out on Asia Pacific region, Angola and Oman.These areas together with Nigeria, Peru, Azerbaijanand Kazakhstan already subject of the last year reports, are particularly important for Saipem and are countries in which some positive

contributions from a sustainable attitude have a particular value. Saipem has successfully continued the path toward a more conscious

approach and this second step enlarges the coverage of Saipem sustainability analysis including three other significant areas.

The analysis developed in order to produce the case studies is just the tip of the iceberg that is composed by a program of continual

improvement that involves the HSE management, the Human Resources and the procurement approach.


SAIPEMSUSTAINABILITYspm_sosten_L02_06_05_02 29-08-2006 18:04 Pagina 10

SUSTAINABILITY ORGANISATIONIn 2002, Saipem created a mission statement which emphasized the meaning of a proactiveapproach to sustainability, and set up a dedicated Corporate Sustainability Team with provenexperience. The team belongs to the Corporate QHSE Department, which has an establishedpresence within the Saipem Group organisation, and proposes, assesses and supports thegrowth of local level initiatives based on Saipem's mission. The team also set up theSustainability Network, which plays an essential role in sustainability management by bringingtogether different units that aid the development of socioeconomic initiatives with their owndistinctive competencies. Even corporate departments like the Human Resources andAdministration and Finance Department, have an important role in the Sustainability Network,along with Saipem Sustainability Facilitators who represent Saipem Sustainability Team in KeyAreas. Saipem has identified some geographical areas of business of key importance that varyalong with the evolution of the business activities throughout the world; this allows the Companyto rationalize the efforts related to the development of the Sustainability approach. In 2003, theSustainability Key Areas were: Algeria, Angola, Azerbaijan, Kazakhstan, Malaysia, Indonesia,Thailand, Nigeria, Peru, Venezuela, Russia, Saudi Arabia, Oman, and UAE (United ArabEmirates); they are still of interest in 2005. A Sustainability Facilitator selected by the SaipemGroup Resident Area Manager operates in each key area and is responsible for the co-ordinationof sustainability initiatives at local level. His main task is the promotion and the developing,with the involvement of the local senior management, of initiatives aimed at the increase anddevelopment of local content, at good relationships with the local stakeholders and at thesustainability accounting.


NigeriaPeruAlgeriaAngolaAzerbaijanKazakhstanRussiaSaudi Arabia, Oman, UAEMalaysia, Indonesia, Thailand

Sustainability Facilitators


METHODOLOGYThese case studies have been developed with a structure that include a general overview ofSaipem world, a general presentation of the most peculiar socio-economic and environmentalcharacteristic of the country in analysis. It follows the description of the Saipem operation in thearea, the presentation of the main stakeholders and the relative Saipem approach. The casestudy is then closed by an overview of the most important environmental, social and economicindicators of the analysed Country. The information contained in this report was collected bothat site and corporate level. The attempt was to follow the same information given in the pastreports and when possible to improve the detail of information and data, following also theindications of the third part involved in the evaluation of the previous case studies. The reporton Asia Pacific Area mainly refers to 2004 data, where possible also 2005 data are includedfor a more exhaustive presentation of the activities. The report considers the following Saipemrealities:COMPANY:• PT SAIPEM INDONESIA • Saipem (Malaysia) Sdn Bhd • Saipem Asia Sdn BhdBRANCH:• Saipem Asia Sdn Bhd, Thailand Branch• Saipem (Portugal) Commercio Maritimo s.u., Lda., Australia BranchYARD:• BATAMPROJECT:• EPIC LAMMA• BP Tangguh• Sakhalin Top Side• TTP Project• TTM• Peciko IV• Bayu Darwin• Bongkot• TLOASSETS:• Semac1• CASTORO 10• CASTORO 8• CASTORO 2

Data was collected from the following sources:• Accounting system for HSE data• Accounting system for the management of medical expenses• Financial Accounting system for the Group• Interviews and sustainability accounting system at local level



SAIPEM'S SUSTAINABILITY POLICYSaipem's Sustainability Policy was formalised in May 2003, reflecting the senior management'scommitment to attaining specific targets in terms of Saipem's approach.

“A network where everybody's commitment contributes to the common well-being”

Sustainability incorporates three principles that are of particular significance within Saipem:protection of environment, respect of social rights of employees and contribution to local economicdevelopment. Saipem is committed to promoting Sustainable Development in all facets of its globalactivities in a manner that is compatible with the socio-economic and environmental needs of itsClients. Saipem employees should have the opportunity to develop while working in an environmentthat is increasingly healthy and safe, whether on site or on board a vessel. Saipem's approach toCorporate Sustainability is based on the creation of long term shareholder value by contributing tothe development of the local communities where we operate. Saipem is committed to achievingsuch development through environmental protection, economic growth and social progress, attentionto local suppliers and professional training for local employees. This commitment is managedthrough these shared Sustainability Practices:• Conducting operations and relationships with integrity and honesty, valuing the richness of each

culture and respecting Human Rights;• Managing the Health, Safety and Environmental aspects in compliance with existing HSE Policy

and Principles;• Maintaining an open and transparent dialogue in decisions which affect stakeholders;• Researching the possible impacts of activities in host countries, both prior to and during, project

execution;• Monitoring social, economic and environmental performance with the aim of measuring Saipem's

impact so as to ensure compliance with legal requirements and best practice guidelines;• Establishing a reliable verification system for the performance of suppliers according to Sustainability

Principles;• Providing training to develop human capital and build competencies in the management of field

of Sustainable Development;• Implementing an effective and transparent Sustainability communication network within the Group.Saipem Sustainability Policy and Program will be constantly updated in order to achieve continuousimprovement. The Corporate Sustainability Team assures constant monitoring and co-ordination ofthis Policy. The implementation of this Policy is the responsibility of all Saipem Group employees.



The Asia Pacific region is spread over a largegeographic area of about 4,100,000 km2 whichincludes the East of India, south and south eastAsia, Sakhalin, Australasia and the pacific islandregion. The Asia Pacific region, home to 53% ofthe world's population and 20% of its land area(UN report, 2002). The Asia Pacific Region is a major contributor to world trade; more than one fifth of the entire world’s population

lives within the region, one quarter of the world’s gross national income is earned by regional members, 12 of the top container ports

in the world are located in the Asia Pacific Region and 3 of the 5 airports by cargo volume. Economic and population growth in Asia

Pacific have resulted in rapid increases in energy consumption in recent years. In 2002, South Asia accounted for approximately 4.1%

of world commercial energy consumption, up from 2.8% in 1991 (EIA, 2003). An important implication of rising energy demand in

South Asia is its impact on the region’s level of carbon emissions. As of 2002, South Asia accounted for 4.8% of global

carbon emissions (EIA, 2003).


ASIA PACIFICOVERVIEWspm_sosten_L02_06_05_02 29-08-2006 18:04 Pagina 14

COUNTRIES IN THE AREASaipem is active in the Asia Pacific area, with operations in Indonesia, Malaysia, Thailand, Australia, Chinaincluding Hong Kong. The following charts highlight the main economic, social and environmentalfeatures for each country, followed by a further analysis of the local oil and gas sector.

AUSTRALIA

THE COUNTRY IN BRIEF Social IndicatorsPopulation: 20,090,437 (July 2005 est.)Population growth rate: 0.87% (2005 est.)Life expectancy at birth: 80.39 years (2005 est.)Ethnic groups: Caucasian 92%, Asian 7%, aboriginal and other 1%Religions: Catholic 26.4%, Anglican 20.5%, other Christian 20.5%, Buddhist

1.9%, Muslim 1.5%, other 1.2%, unspecified 12.7%, none 15.3%(2001 Census)

Languages: English 79.1%, Chinese 2.1%, Italian 1.9%, other 11.1%, unspecified 5.8% (2001 Census)

Economic dataGross Domestic Product GDP $642.7 billion (2005 est.)GDP - per capita purchasing power parity - $32,000 (2005 est.)GDP - composition by sector agriculture: 3.4%, industry: 28.2% , services: 68.4% (2004 est.)Inflation rate (consumer prices): 2.7% (2005 est.)Labour force: 10.42 million (2005 est.)Unemployment rate: 5.2% (2005 est.)Industrial production growth rate: 1.6% (2005 est.)Environmental IndicatorsArea: total: 7,686,850 sq km

land: 7,617,930 sq kmwater: 68,920 sq km

Natural resources bauxite, coal, iron ore, copper, tin, gold, silver, uranium, nickel,tungsten, mineral sands, lead, zinc, diamonds, natural gas, petroleum

Land use: arable land: 11.32%, permanent crops: 7.23%, other: 81.45% (2001)Total energy consumption 5.59 quadrillion Btu (2002 est.)Energy-related carbon dioxide emissions 410.38 million metric tons (2002 est.)Fuel share of carbon dioxide emissions Coal (58.5%), Oil (29.2%), Natural Gas (12.2%) (2002 est.)Status in climate change negotiations Annex I country under the United Nations Framework Convention on

Climate Change (ratified December 30, 1992). Has signed, but notratified, the Kyoto Protocol (April 29, 1998).

Environment - international agreements party to: Antarctic-Environmental Protocol, Antarctic-Marine LivingResources, Antarctic Seals, Antarctic Treaty, Biodiversity, Climate Change,Desertification, Endangered Species, Environmental Modification,Hazardous Wastes, Law of the Sea, Marine Dumping,Marine LifeConservation, Ozone Layer Protection, Ship Pollution, Tropical Timber83, Tropical Timber 94, Wetlands, Whaling

Source CIA world factbook, 2005

OIL & GAS SECTOROIL U.M. 2001 2002 2003 2004Production Thousand barrels/ day 732 710 605 530Reserves Million barrels 2895 3500 3500 3500Consumption Thousand barrels/ day 883 881 875 893Pro Capita Consumption Barrels 16.50 1626 16.05 16.16Exports Thousand barrels/ day 521 474 395 NAImports Thousand barrels/ day 539 525 527 NANatural gas U.M. 2001 2002 2003 2004Production Billion cubic metres 33.56 34.97 36.38 38.58Reserves Billion cubic metres 3,530 3,550 3,930 3,930Consumption Billion cubic metres 23.82 23.77 25.10 26.10Pro Capita Consumption Cubic metres 1,227 1,209 1,260 1,294Exports Billion cubic metres 10.20 10.03 10.52 12.17Imports Billion cubic metres - - - -

Source Eni Oil&Gas review, 2005



PEOPLE’S REPUBLIC OF CHINA

THE COUNTRY IN BRIEF Social IndicatorsPopulation: 1,306,313,812 (July 2005 est.)Population growth rate: 0.58% (2005 est.)Life expectancy at birth: 72.27 years (2005 est.)Ethnic groups: Han Chinese 91.9%, Zhuang, Uygur, Hui, Yi, Tibetan, Miao,

Manchu, Mongol, Buyi, Korean, and other nationalities 8.1%Religions: Daoist (Taoist), Buddhist, Muslim 1%-2%, Christian 3%-4%

note: officially atheist (2002 est.)Languages: Standard Chinese or Mandarin (Putonghua, based on the Beijing

dialect), Yue (Cantonese), Wu (Shanghaiese), Minbei (Fuzhou), Minnan(Hokkien-Taiwanese), Xiang, Gan, Hakka dialects, minority languages

Economic IndicatorsGross Domestic Product GDP $8.158 trillion (2005 est.)GDP - per capita purchasing power parity - $6,200 (2005 est.)GDP - composition by sector agriculture: 14.4%, industry and construction: 53.1%,

services: 32.5% (2005 est.)Inflation rate (consumer prices): 1.9% (2005 est.)Labour force: 791.4 million (2005 est.)Unemployment rate: 4.2% official registered unemployment in urban areas in 2004; Industrial production growth rate: 27.7% (2005 est.)Environmental IndicatorsArea: total: 9,596,960 sq km


Natural resources coal, iron ore, petroleum, natural gas, mercury, tin, tungsten, antimony,manganese, molybdenum, vanadium, magnetite, aluminum, lead,zinc, uranium, hydropower potential (world's largest)

Land use: arable land: 15.4%, permanent crops: 1.25%, other: 83.35% (2001)Total energy consumption (2002E): 43.2 quadrillion BtuEnergy-related carbon dioxide emissions (2002E): 3,322.4 million metric tons of carbon dioxideFuel share of carbon dioxide emissions (2002E): Oil (20.2%), Natural Gas (2.1%), Coal (77.7%)Status in climate change negotiations Non-Annex I country under the United Nations Framework Convention

on Climate Change (ratified January 5th, 1993). Signatory to the KyotoProtocol (signed May 29th, 1998 - approved August 30, 2002).

Environment - international agreements party to: Antarctic-Environmental Protocol, Antarctic Treaty, Biodiversity,Climate Change, Climate Change-Kyoto Protocol, Desertification,Endangered Species, Hazardous Wastes, Law of the Sea, MarineDumping, Ozone Layer Protection, Ship Pollution, Tropical Timber83, Tropical Timber 94, Wetlands, Whaling


OIL & GAS SECTOROIL U.M. 2001 2002 2003 2004Production Thousand barrels/ day 3,297 3,390 3,409 3,492Reserves Million barrels 24000 24000 18250 18250Consumption Thousand barrels/ day 4,673 4,948 5,489 6,379Pro Capita Consumption Barrels 1.34 1.42 1.56 1.79Exports Thousand barrels/ day 381 413 446 NAImports Thousand barrels/ day 1,754 1,938 2,387 NANatural gas U.M. 2001 2002 2003 2004Production Billion cubic metres 33.70 36.29 38.91 44.59Reserves Billion cubic metres 1,515 1,560 2,600 2,600Consumption Billion cubic metres 30.64 32.57 34.85 NAPro Capita Consumption Cubic metres 24 25 27 NAExports Billion cubic metres - - - -Imports Billion cubic metres - - - -




REPUBLIC OF INDONESIA

THE COUNTRY IN BRIEF Social IndicatorsPopulation: 241,973,879 (July 2005 est.)Population growth rate: 1.45% (2005 est.)Life expectancy at birth: 69.57 years (2005 est.)Ethnic groups: Javanese 45%, Sundanese 14%, Madurese 7.5%, coastal

Malays 7.5%, other 26%Religions: Muslim 88%, Protestant 5%, Roman Catholic 3%, Hindu 2%,

Buddhist 1%, other 1% (1998)Languages: Bahasa Indonesia (official), English, Dutch, local dialects,

the most widely spoken of which is JavaneseEconomic indicatorsGross Domestic Product GDP $899 billion (2005 est.)GDP - per capita purchasing power parity - $3,700 (2005 est.)GDP - composition by sector agriculture: 15.1%, industry: 44.5%, services: 40.4% (2005 est.)Inflation rate (consumer prices): 9.3% (2005 est.)Labour force: 110.4 million (2005 est.)

Unemployment rate: 10% (2005 est.)Industrial production growth rate: 2.1% (2005 est.)Environmental IndicatorsArea: total: 1,919,440 sq km


Natural resources petroleum, tin, natural gas, nickel, timber, bauxite, copper, fertile soils, coal, gold, Silver

Land use: arable land: 11.32%, permanent crops: 7.23%, other: 81.45% (2001)Total energy consumption 4.45 quadrillion Btu* (2002est)Energy-related carbon dioxide emissions 299.8 million metric tons (2002est)Fuel share of carbon dioxide emissions Oil (52.8%), Natural Gas (25.8%), Coal (22.0%) (2002est)Status in climate change negotiations Non-Annex I country under the United Nations Framework Convention

on Climate Change (ratified August 23rd, 1994). Signatory to the KyotoProtocol (signed July 13th, 1998 - not yet ratified).

Environment - international agreements A party to Conventions on Biodiversity, Climate Change, EndangeredSpecies, Hazardous Wastes, Law of the Sea, Nuclear Test Ban, OzoneLayer Protection, Ship Pollution, Tropical Timber 83, Tropical Timber94 and Wetlands. Has signed, but not ratified, Desertification andMarine Life Conservation.


OIL & GAS SECTOROIL U.M. 2001 2002 2003 2004Production Thousand barrels/ day 1,384 1,304 1,200 1,143Reserves Million barrels 4,980 5,000 5,000 4,700Consumption Thousand barrels/ day 1,112 1,097 1,113 1,188Pro Capita Consumption Barrels 1.92 1.96 1.96 2,00Exports Thousand barrels/ day 782 744 664 NAImports Thousand barrels/ day 543 618 658 NANatural gas U.M. 2001 2002 2003 2004Production Billion cubic metres 69.70 75.51 79.64 80.20Reserves Billion cubic metres 3,790 3,800 3,825 3,735Consumption Billion cubic metres 37.25 38.15 38.48 NAPro Capita Consumption Cubic metres 178 180 179 NAExports Billion cubic metres 32.82 35.85 39.40 39.64Imports Billion cubic metres - - - -




REPUBLIC OF MALAYSIA

THE COUNTRY IN BRIEF Social IndicatorsPopulation: 23,953,136 (July 2005 est.)Population growth rate: 1.8% (2005 est.)Life expectancy at birth: 72.24 years (2005 est.)Ethnic groups: Malay and other indigenous 58%, Chinese 24%, Indian 8%,

others 10% (2000)Religions: Muslim, Buddhist, Daoist, Hindu, Christian, Sikh; note - in addition,

Shamanism is practiced in East MalaysiaLanguages: Bahasa Melayu (official), English, Chinese dialects, Tamil, Telugu,

Malayalam, Panjabi, ThaiEconomic indicatorsGross Domestic Product GDP $248 billion (2005 est.)

GDP - per capita purchasing power parity - $10,400 (2005 est.)GDP - composition by sector agriculture: 7.2%, industry: 33.3%, services: 59.5% (2005 est.)Inflation rate (consumer prices): 2.9% (2005 est.)Labour force: 10.67 million (2005 est.)Unemployment rate: 3.6% (2005 est.)Industrial production growth rate: 4.8% (2005 est.)Environmental IndicatorsArea: total: 329,750 sq km

land: 328,550 sq kmwater: 1,200 sq km

Natural resources tin, petroleum, timber, copper, iron ore, natural gas, bauxiteLand use: arable land: 5.48%, permanent crops: 17.61%, other: 76.91% (2001)Total energy consumption 2.3 quadrillion Btu* (2002est)Energy-related carbon dioxide emissions 140.6 million metric tons (2002est)Fuel share of carbon dioxide emissions Oil (49.0%), Natural Gas (39.2%), Coal (11.8%) (2002est)Status in climate change negotiations Non-Annex I country under the United Nations Framework Convention

on Climate Change (ratified July 13th, 1994 ). Ratified the KyotoProtocol on September 4, 2002 .

Environment - international agreements A party to Conventions on Biodiversity, Climate Change, Desertification,Endangered Species, Hazardous Wastes, Law of the Sea, Marine LifeConservation, Nuclear Test Ban, Ozone Layer Protection,Ship Pollution,Tropical Timber 83, Tropical Timber 94


OIL & GAS SECTOROIL U.M. 2001 2002 2003 2004Production Thousand barrels/ day 748 785 827 858Reserves Million barrels 3900 3000 3000 3000Consumption Thousand barrels/ day 488 493 503 529Pro Capita Consumption Barrels 7,48 7,39 7,38 7,61Exports Thousand barrels/ day 548 535 576 NAImports Thousand barrels/ day 324 293 319 NANatural gas U.M. 2001 2002 2003 2004Production Billion cubic metres 44.15 45.54 50.24 55.21Reserves Billion cubic metres 2337 2390 2478 2478Consumption Billion cubic metres 25.87 25.71 26.15 NAPro Capita Consumption Cubic metres 1,087 1,058 1,054 NAExports Billion cubic metres 21,17 20,46 24.97 29.23Imports Billion cubic metres - - - -




KINGDOM OF THAILAND

THE COUNTRY IN BRIEF Social IndicatorsPopulation: 65,444,371 (July 2005 est.)Population growth rate: 0.87% (2005 est.)Life expectancy at birth: 71.57 years (2005 est.)Ethnic groups: Thai 75%, Chinese 14%, other 11%Religions: Buddhism 95%, Muslim 3.8%, Christianity 0.5%, Hinduism 0.1%,

other 0.6%

Languages: Thai, English (secondary language of the elite), ethnic and regionaldialects

Economic dataGross Domestic Product GDP $545.8 billion (2005 est.)GDP - per capita purchasing power parity - $8,300 (2005 est.)GDP - composition by sector agriculture: 9.3%, industry: 45.1%, services: 45.6% (2005 est.)Inflation rate (consumer prices): 4.8% (2005 est.)Labour force: 35.36 million (2005 est.)

Unemployment rate: 1.4% (September 2005)Industrial production growth rate: 8.2% (2005 est.)Environmental IndicatorsArea: total: 514,440 sq km

land: 511,770 sq kmwater: 2,230 sq km

Natural resources tin, rubber, natural gas, tungsten, tantalum, timber, lead, fish, gypsum, lignite, fluorite, arable land

Land use: arable land: 29.36%, permanent crops: 6.46%, other: 64.18% (2001)Total energy consumption 3.1 quadrillion Btu* (2002est)Energy-related carbon dioxide emissions 188.6 million metric tons (2002est)Fuel share of carbon dioxide emissions Oil (55.9%), Natural Gas (24.7%), Coal (19.4%)Status in climate change negotiations Non-Annex I country under the United Nations Framework Convention

on Climate Change (ratified December 28th, 1994). Signatory to theKyoto Protocol (February 2nd, 1999 - not yet ratified)

Environment - international agreements A party to Conventions on Climate Change, Endangered Species,Hazardous Wastes, Marine Life Conservation, Nuclear Test Ban, OzoneLayer Protection, Tropical Timber 83 and Tropical Timber 94. Has signed,but not ratified, Biodiversity and Law of the Sea.


OIL & GAS SECTOROIL U.M. 2001 2002 2003 2004Production Thousand barrels/ day 123 139 169 255Reserves Million barrels 352 516 583 583Consumption Thousand barrels/ day 728 766 798 951Pro Capita Consumption Barrels 4,35 4,54 4,69 5,55Exports Thousand barrels/ day 143 157 158 NAImports Thousand barrels/ day 694 717 763 NANatural gas U.M. 2001 2002 2003 2004Production Billion cubic metres 19.62 20.56 22.42 23.45Reserves Billion cubic metres 360 378 385 385Consumption Billion cubic metres 26.12 28.00 31.18 NAPro Capita Consumption Cubic metres 427 454 503 NAExports Billion cubic metres - - - -Imports Billion cubic metres 5.04 6.39 7.09 7.50



SIR



COMPANIES OPERATING IN THE AREASaipem operates in the Asia Pacific region throughthe following Local Companies:PT Saipem Indonesia and PT Sofresid Engineeringlocated in Jakarta (Indonesia); Saipem MalaysiaSdn. Bhd. and Saipem Asia Sdn. Bhd. both locatedin Kuala Lumpur (Malaysia); Saipem Singapore,Saipem Asia Thailand Branch in Bangkok (Thailand) and Saipem SPCM Australia Branch in Perth. This case study focuses only on the

companies which have the most significant environmental, economic and social impacts on the community, mainly PT Saipem

Indonesia, PT Sofresid Engineering, Saipem Malaysia and Saipem Asia.

SAIPEM GROUPIN ASIA PACIFICREGION


COMPANIES ORGANIZATIONThe following chart represents the typical organization and structures of Saipem Group Companiesin Asia Pacific Region.

PROJECTS IN THE AREAThe activities for 2004 - 2005 mainly consisted in the following projects:

Projects completed in 2004• Woodside - TSEP: installation of a 42” diameter, 135km long trunkline in water depth of 120m in

connection with the trunklines system expansion programme. Parallel to an existing pipeline, thenew pipeline will run from the North Rankin Platform offshore the north western coast of WesternAustralia to the existing shore facilities on the Barrup peninsular near Dampier, Western Australia and will convey gas/condensate from the North West Shelf fields of North Rankin, Goodwyn, Wanaeand Cossak. The scope include the laying of the pipeline (135km offshore, including 6km inshallow water), dredging, backfilling, shore pull, crossing and precommissioning of the pipeline. Thepipelaying was carried out by the laybarge Semac 1 while the shore pull and the shallow waterpipelaying was performed by laybarge Castoro 2.

• Clough - Yolla: installation of a 14”, 147km long offshore pipeline in connection with the BassGas Project for the development of the Yolla field in the Bass Strait, offshore Victoria. The scope ofwork included: Installation engineering, Pre-lay and post-lay survey, Transportation of coated pipe,Installation of 14” 12/12.7mm WT, 147km offshore pipeline, Pre-commissioning of the pipeline.The installation of the pipeline was performed by the laybarge Semac 1.

• Minerva: subsea development of the Minerva Field in the Bass Strait, offshore Victoria. Saipemundertook the project in Joint Venture with McConnell Dowell and was responsible for the EPIC ofoffshore flowline, chemical injection lines and hydraulic umbilical and control system whileMcConnell Dowell was responsible for the onshore gas plant. The installation of the flowlines,lines and umbilical was performed by the laybarge Semac 1.

• TOTAL - PCK SR / EPSC 1: replacement of one portion of the two trunklines laid during phase 1 ofthe Peciko Development. The portions to be replaced consisted of approximately 12 km of 24"lines from the platform MWP-A and MWP-B to a mid point along the lines respectively.

Projects signed in 2003 - 2004• PTT TTP Offshore Platform – EPCI for Jacket, Tripods, Bridges and Platform. EPCI of 8 legs jacket

offshore structure with 4 Modules Deck Platform and 1 Living Quarter, Appurtenances, Accommodations,Pedestrian & Flare Tripods, Pedestrian & Flare Bridges and all related equipment facilities andsystem at Erawan gas field area adjacent to the existing Erawan Riser Platform and ErawanCompression Platform.

• HEC / Lamma: Lamma Power Station Extension on the reclaimed land south of the existingLamma Power Station, Hong Kong. EPCI of 92 km 20” pipeline “Mainline” from Shenzhen

Managing Director

Administration, Finance and Control

(AFC)

Human Resources and Information

Technology (HRIT)

Quality, Health, Safety and Environment

(QHSE)

Procurement and Logistics

(PROC)

Assets (ASST)

Estimating and Proposals (ESTP)

Commercial(COMM)

OffshoreOperations



in China to Lamma Island in Hong Kong with 1x12” tee, 0.7 km pipeline “Future line” from LammaIsland to sub sea termination, 18 cable crossings on mainline, Pre-trenching & backfilling of shoreapproaches at Lamma (0.6 km) and Shenzhen (2.34 km), Post-trenching of entire remainingmainline, Rock dumping of 13 km offshore at Lamma navigation channel and at crossings,Natural backfill for rest of mainline, Anchor model tests to finalise required rock berm at Lamma& Shenzhen approaches, and Lamma channel, Pre-commissioning of both pipelines, andCommissioning assistance of mainline.

• Sakhalin II Pipelines Project on behalf of Sakhalin Energy Investment Company Ltd. (SEIC),comprising engineering, procurement, installation and construction of a pipeline system connectingthe Lunskoye and Pitun-Astkhskoye platforms to the island of Sakhalin; the onshore approachwas completed in 2004 by utilising the derrick lay barge Castoro II;

• the Sakhalin II Topsides project on behalf of Samsung Heavy Industries, comprising the transportand installation of topsides for the Lunskoye and Piltun-Astkhskoye B platforms, the latter beingthe largest platform ever installed with the float-over method

Projects completed in 2005• Conoco Phillips – Bayu Undan: gas export to shore at Wickham Point on the Middle Arm Peninsula

near Darwin, Australia via a 502.3 km submarine pipeline. The Gas Export Pipeline feeds gasinto a LNG facility which receives, meters and regulates the arrival pressure of the gas.The Multiplex - Saipem Joint Venture was responsible for the installation and pre-commissioning of the Construction 26” gas export pipeline.

• Shell Serawak: Provide Heavy Lifting Barge (Castoro-8) and associated equipment for installationof A Jacket & Platform, location around 100km offshore North of Miri, East Malaysia. ProvideProject Management with respect to the Castoro-8 vessel. Review of Installation EngineeringProcedures. Provide the Castoro-8 vessel for Charter by TLO Snd Bhd, inclusive: Marine crew,permanent onboard equipment, NDT equipment & personnel, ROV, upending clamp and vessel’s consumables.

• Dong Fang & Lu Feng: Provide Heavy Lifting Barge (Castoro-8) complete with Marine / Operationalcrews and an AHT 8000 BHP for the installation of Dong Fang WHPA (1300 MT) / WHPB (1300MT) Jackets / CEP slug catcher. Lu Feng LF13-1 Module, and pipelaying of a 12km, infieldpipeline from LF13-1 to LF13-2 Platforms (Pipe in pipe OD 16” and ID 12” ). Installation Engineeringrequired to verify and/or study the installation requirement for C-8. PMT inclusive of Logistic &Procurement, QHSE Project Control. Supply of HLB Castoro-8 and one AHT 8000 BHP, associatedequipment for installation works, marine crew, riggers, catering and installation supervision.

• TOTAL - Peciko 4 / Phase 2: Peciko field is located offshore at about 25 kilometers of the Senipahterminal. PCK4/EPSC2 consists of two new platforms SWP-E and K including MP and HP facilitiesand associated risers. EPCI of two jackets, one TDD (127.5 MT), two decks, one boat landing,Vent Boom, one Trunkline from Senipah to SWP-E (24” OD, 24.1 km), three 20” OD HP/MPsealines 15.1 km, two 24” HP/MP sealines. One 20" oily water disposal pipeline from Senipahterminal including the diffuser. Modification of existing platforms MWP-A,B & C and SWP-G toaccommodate bipression facilities and the new trunkline/sealine system. All necessary risers,piping, fittings, valves, instruments and pig receiver/ launcher for the following identified futurepipelines.

• PTT E&P - Bongkot Platform & Pipelines: The Bongkot Field is located in the Gulf of Thailand,150 km off the eastern coast of Thailand, 180 km North East of the town of Songkhla. WaterDepth ranges from 70 to 80 meters. LOT 1: Sour Process Platform SPP and Bridges: Saipem wasresponsible for transportation and installation of the LOT. Hook-up and pre-commissioning waspart of SMOE Scope of Work. LOT 2: Sealines WP9 to WP13 and WP13 to SPP: The full LOT wasSAIPEM Scope of Work. This included design, procurement, fabrication and installation of bothpipelines. Transportation and Installation of the new flare boom on WP9 platform including theremoval of the old one. LOT 3: Existing Platform Modifications: Design, procurement, fabrication,transportation and installation of the new 20” Riser on WP9 platform.

• ERHA, YOHO: completion of the hull fabrication in a Singaporean shipyard, as part of the EPICtype project Erha, on behalf of Exxon Mobil, involving the engineering, procurement, construction,transport and commissioning of an FPSO installation on the Erha field in Nigeria.

Projects signed in 2005• THAI Oil: New Offshore Crude Oil Unloading Facility Project – EPCI of : Pipeline dia. 52” x 1” WT,

X65, sour service, length of 14.4 km with concrete coating of 6” x 12 km and 5” on shoreapproach segment.

• WEIZHOU & Bajiaoting Pipelines: Provide Castoro-10 complete with Marine / Operational crewsand an AHT 8000 BHP for the pipelaying works of 9km 6” OD pipeline 5.6km 6” OD pipelineand 18.3km 12” OD pipeline. The optional Bajiaoting Project covers the installation of 2 lines of8” OD pipeline at 7km each.

• BP Berau / Tangguh Platforms & Pipelines: The Tangguh Gas Production Facilities Project islocated in the “bird head” area of Papua, 3000 km from Jakarta. EPCI of 2 wellhead platformsand pipelines: Clad pipelines (2 nos.) and Submarine Cables (3 nos.) 19km offshore (+7km for




Sinter cable) & 1 km onshore. Platforms and Onshore site Facilities: 2 nos. Wellhead, 6 legsjackets (1600 MT) and 1800 MT Topsides.

Offshore Construction fleet operating in Asia PacificSaipem 3000 Mono hull derrick pipelay ship capable of laying rigid and flexible pipes in

deep waters and lifting structures of up to 2,000 tonsCastoro II Derrick lay barge capable of laying pipe of up to 60’’ diameter and lifting

structures of up to 1,000 tonsCastoro Otto Mono-hull derrick pipelay ship capable of laying pipes of up to 60’’

diameter and lifting structures of up to 2,200 tonsCastoro 10 Trench barge capable of burying pipes of up to 60’’ diameter and laying

pipes in shallow watersSemac I Semi submersible pipelay vessel capable of laying large diameter pipes in

deep watersS-45 heavy load transportation barge

THE TANGGUH PROJECTIn March 2005 Saipem won two offshore contracts in Indonesia. They cover engineering,procurement, fabrication and installation of two platforms and two pipelines for the Tangguh LiquefiedNatural Gas (LNG) project, in the Berau Bay area, Papua, about 3,000 kilometres east of Jakarta.The two 20 kilometres pipelines will connect the platforms to the LNG shore facilities. Installationand laying activities are scheduled to be completed in mid 2007. The contracts have been awardedby BP Berau Ltd, operator of the Tangguh LNG Project as a PSC contractor to the Indonesian oil andgas regulatory body, BPMIGAS and are the first major EPIC awards for the region. The Tangguhproject takes place in Papua, the easternmost province of Indonesia, and is based on gas reservesidentified in several fields: Vorwata, Wiriagar Deep, Roabiba, Ofaweri, Wos and Ubadari. Provencombined reserves of the fields are approximately 14.4 trillion cubic feet (tcf) of gas. The projectdevelopment will consist of two normally unmanned offshore gas platforms and pipelines, a gasliquefaction plant initially consisting of two liquefaction trains with combined capacity of 7 milliontonnes LNG per annum (mtpa), jetties and marine facilities. Moreover, the Tangguh Project intendsto adopt high standards in socially and environmentally responsible resource development. Theproject area (Berau-Bintuni Bay) is an area of high biodiversity, high endemism and distinctiveindigenous cultures. With multiple partners, Tangguh is pursuing a progressive approach to mitigateits social and environmental impacts while promoting conservation and catalyzing sustainabledevelopment. BP Berau Ltd issued a document regarding the environmental performance standardsthat all the EPC contractors like Saipem should conform to with the purpose of achieving BP’s goalof no damage to the environment. It covers all the processes necessary in the carrying out of theproject and for each it underlines the environmental aspects involved, pointing out the potential risksand impacts. Attention is paid also to the social implication of the activities, in order to respect andpromote the safety of the local people and preserve their habits and lifestyles.



STAKEHOLDERSRELATIONS

MATRIX ON SUSTAINABLE IMPACT

CLIENTS

EMPLOYEES

LOCAL SUBCONTRACTOR & PARTNERS

Environmental impact > Using of natural resources > Air emissions > Noise and dust > Waste production

Social Impact > Increased professionalism & Know how > Development of new business

Direct economic Impact > Wages> Local purchasing> Local Partnership

Indirect Economic Impact> Growing of the local market> Oil&Gas know how

SAIPEM OPERATIONS IN ASIA PACIFIC:

PT Saipem Indonesia PT Sofresid Engineering Saipem Malaysia Sdn. Bhd. Saipem Asia Sdn. Bhd. Saipem Singapore Thailand Branch Australia Branch

Client’s requirements> Sustainability commitment> Time & Cost observance> HSE Performance & Targets

Subcontractor’s requirements Growing Sustainability

Saipem Policy Client satisfaction

Saipem Policy Local Purchasing

> Moral integrity > Equity HSE commitment

> Local Content Training> Medical Allowance and treatment



HUMAN RESOURCES STRATEGY It is Saipem strategy to create and grow local and international resources through our activitiesworldwide. This policy has two compatible objectives: first to develop human strengths with aSaipem Group spirit on whom we can count and rely, second to create the bases for a SustainableSocial development. This latter is achieved by offering carrier plans and opportunities enabling theemployees to enrich their knowledge and better manage their family life. Saipem local employeescontracts are under the rules of the countries in which Saipem is having activities. Equal treatmentand opportunities, are a must and Saipem is paying a lot of attention to give same fair chances toall employees without any discrimination whatsoever. Transparency is also the main criteria adoptedin the recruitment phase and in the definition of contract with workers. Saipem employees workinghours and public holidays are defined by the laws of each country. As per laws every employee receives: a. Occupational safety and health protection; In order to protect the safety of worker and to realize

optimal productivity, an occupational health and safety scheme is implemented and will bedescribed in the appropriate paragraphs.

b. Protection against immorality and indecency.c. Treatment that shows respect to human dignity and religious values.d. A security induction when joining the CompanyThe Saipem wage policy includes the following principles: a. Minimum wages;b. Overtime pay;c. Medical Insurance for employees and their familiesd. Travelling allowancee. Maternity leaveSaipem recruits his employees through the common instruments available as announcements in thelocal market or curriculum vitae received. Saipem does not employ children and is respectful of theHuman Rights. Saipem companies in the south east area employed in 2005 about 580 spread allaround the Area Onshore. In addition some 400 people were employed on our fleet offshore. About50% of employees are considered local employees of the countries where they are working. PTSaipem Indonesia together with Pt Sofresid have the largest number of employees that is about500, 75% of them Indonesian. Within the local employees working onshore 6% are workers, 88%staff and 6% managers of different aspects of projects. Local managers are about 27% of the totalof the managers in the companies considered. Most of companies employees (about 68%) areunder 40 years old and has a relatively short history in the company. Due to the quite recentpresence of Saipem in Indonesia, 92% of the employees has less then 5 years of seniority in thecompany and about 30% has less then 1 year of seniority. Saipem activity In the area has beencharacterised by a lot of offshore activities for which again local and international resources havebeen given a lot of opportunities. Local workers represent an important part of the crew particularlyon Castoro 10 where locals are about 26%. Saipem employees receive in the South east area, likein all Saipem sites, specific training on technical issues and on HSE. This has a particular meaningfor local employees that can improve their professionalism and skills. During 2004, in all operationsin the area about 17,000 hours of HSE training have been developed, of which 83% on safetyissues, 11% on environment and 6% on health. Most of this HSE training (87%) has beendeveloped on board of the Saipem vessels operating in the area while the professional training hasbeen organised mainly onshore in Indonesia. Saipem employees in the area of interest are not, forthe moment, organised in trade unions.



CLIENTS SATISFACTIONPT Saipem Indonesia certificated its quality system in 2003 according to the ISO9000 standard.The management system has been always characterised by a special care in the relation with theclients through a well organised system of measurement and monitoring of the customerssatisfaction. This is carried out through the use of customer satisfaction survey at commercial phaseand offshore operations. The analysis of the result of the result of the clients’ consultation throughthe costumer satisfaction provide interesting information and input to the senior management withthe target of continued improvement of the quality of the projects developed. Saipem operations inAsia Pacific are developed for either local public companies or private international Oil&Gascompanies and most of the time acting as an EPCI contractor. However in certain cases Saipemcan also be working for clients who are indeed Oil and Gas Contractors like Saipem. In this lattercases Saipem is mainly acting as a simple installation contractor. The list of main Saipem Companies clients is presented below:In Indonesia:• Total, Gunanusa, Conoco Phillips, BPIn Australia:• Woodside• Conoco Phillips• Clough• BHP BillitonIn Thailand• TTM Ltd – Trans Thai Malaysia • PTT E&P – Public Company Limited• PTT Ltd• Thai Oil LtdIn China & Honk Hong• COOEC - China Offshore Oil Engineering Co• HECIn Malaysia• TLO

In most of the cases, clients are responsible to establish and keep the relationship with the localauthorities and the local communities. Usually International Oil & Gas Companies are dealingdirectly with local structures. In order to become a stakeholder of a Oil & Gas reservoir, to get allpermits and right of ways, to construct the project and eventually operate in the country, it’s requesteda lot of involvement and deals between the O&G Companies and local Authorities and Communities.So since the very beginning privilege talks and relationships are established at Client’s level. In allprojects the relationships with local communities or authorities are particularly important for asmooth performance of the operations. This is now the case for the Tangguh project where asdescribed above the Client BP Indonesia has developed a specific program for the local communitiesrequiring the contractors to follow the same. Nevertheless in some cases the relationships with localcommunities are left under the Contractors responsibilities. This was the case for the previousprojects in Thailand and for all the projects in Australia where Saipem had to coordinate and manageall so called “Industrial Relations”.

SUBCONTRACTORS AND LOCAL PARTNERSWhenever it is possible and besides the local communities relationships as described aboveSaipem always tries to promote the local services and the local industry, by giving opportunities toinside country vendors, suppliers and local fabricators. All main Saipem subcontractors arerequested to follows specific requirements and questionnaire and specific audit are useful instrumentnot only for control but also for improvement especially for the local suppliers and subcontractors.This audit activity is also a good instrument to avoid the involvement of subcontractors that can beresponsible of a not clear behaviour in term of human rights and children labor. Saipem oftendecided to totally subcontract to local companies the development of specific activities. Saipemrepresents for some local companies the only clients and they are organized in a way to fully satisfySaipem expectation in term of quality, HSE and social management. The list of 100% localsubcontractors with the relative activities is presented below.



PIList of 100% Local Subcontractor

IndonesiaSubcontractor Type of SubcontractorPT. Gunanusa Utama Fabricators. Cilegon. Fabrication, Construction, Loadout & Seafastening

of Jackets & Platforms.PT. Ninda Pratama, Batam Installation Aids, Logistics basePT. Bredero Shaw, Batam Line pipe & Bends Coating works.PT. Noble Denton Utama Marine Surveyor ServicesPT. NACAP Indonesia HDD Offshore & Onshore Pipelay worksPT. Penkonindo (Van Oord) Rock Dumping worksPT. KBR / Granherne Pty. Ltd. HSE EngineeringPT. Eskimo Wieraperdana HVAC PackagePT. Transtel Engineering Telecommunication worksPT. Fugro Indonesia. Pre-engineering SurveyorPIH Indonesia Field Joint Coating ServicesPT. Wide & PIN Independent Inspection ServicesCitra Panji Manunggal, Balikpapan Onshore ConstructionH & H, Balikpapan Fabrication ServicesPT. Inamco Field Joint Coating Services

MalaysiaSubcontractor Type of SubcontractorMPE Lindung Sdn Bhd. Anode Supplier.Allied Marine & Equipment Sdn Bhd. Diving

SingaporeSubcontractor Type of SubcontractorBredero Shaw (Singapore) Pte Ltd. Line pipe & Bends Coating, Anode Installation.Offshore Joint Services (OJS). Field Joint Coating Services.Eastern Navigation Pte Ltd. Line pipe Transportation.Sonsub International Pty Ltd. ROV ServicesNoble Denton Singapore Pte Ltd. Marine Survey Services.SMOE Construction



SAIPEM ASIA PACIFIC GROUP QHSE MANAGEMENT SYSTEMThe international approach and the complexitywhich characterize Saipem’s activities have ledthe Company to the development of an efficientmanagement system. Saipem Quality, Health,Safety and Environment Management System isstructured on three levels to assure a consistentperformance level throughout all the Company’s operations:

• Corporate Level, which defines policies, guidelines and standards for all Saipem Operating Companies;

• Operating Company Level, which defines policies, goals, procedures and work instructions to be adopted in each Operating Company;

• Project Level, which defines specific plans and procedures for each project.

PERFORMANCEINDICATORS



The System operates in compliance with both Local legislation and Clients requirements. Itseffectiveness is guaranteed by the data acquisition and the performance monitoring systemimplemented by the Corporate Departments. The QHSE MS has reached a high level ofimplementation across the Company, because all the employees are involved in a communicationand training process which aims at enhancing their QHSE awareness. PT Saipem Indonesia achievedthe certification of its quality and environmental management system according to the internationalstandard ISO9000 in the 2003 and ISO14001 in the 2004. PT Saipem certified also its safetysystem according to the OHSAS 18001:1999 standard in the 2004. The management systems arealso supported by the implementation of different policies as:• PT Saipem Indonesia Quality Policy• PT Saipem Indonesia HSE Policy• PT Saipem Indonesia Environmental Policy• PT Saipem Indonesia Alcohol and Substance Abuse Policy• PT Saipem Indonesia Emergency and Crisis Policy• PT Saipem Indonesia Smoke Free Policy

CORPORATE

PoliciesGuidelinesProceduresStandards

COMPANY

PoliciesManuals

ProceduresWork Instructions

PROJECT

PoliciesPlans

ProceduresSchedules

The levels of the Qhse Management System


SAIPEM ASIA PACIFIC GROUP QHSE OBJECTIVESAND TARGETS 2005Core Process ObjectivesMaintenance and Implementation Continue certification to ISO 9001:2000 Quality Management Systemof Company Quality and HSEManagement Systems

Continue certification to ISO 14001:2004 (Upgrading) Environmental Management System and OHSAS 18001:1999 Occupational Health& Safety Management SystemIntegration of Quality Management System of Saipem Indonesiaand Sofresid Engineering

Continual Improvement Improvement of Management system within APAC RegionPromoting awareness towards the implementation of the Quality and HSE Management Systems within the Company Ensuring Company Management system document structure comply with corporate document system structure and ManagementEnsuring the requirements of Company are clearly defined to Projects inorder to prevent disconnection/disjoint of management systems betweenCompany and Projects

Audits Ensuring consistent implementation of the Internal System Audits Ensuring consistent implementation of the APAC Regional System Audits

Safety quantitative targets Achieve LTIFR target (<1.0) of APAC via HSE Proactive IndicatorsHealth targets Assess, monitor and safeguard employees’ health through Health

Performance Indicators implementation.

ENVIRONMENTAL INDICATORSThe accounting of the environmental data took into consideration activities related to themanagement of the offices Saipem has in the Asia Pacific Region and operations related tothe vessels working in the area. The environmental impacts of offices are mainly related tothe energy consumption and are not considered relevant in a general evaluation of projectsenvironmental impacts. Most significant environmental aspects are related to the vesselsoperations in term of energy consumption and waste produced. Environmental data are notcomparable within different years because in Asia Pacific Region each year is characterisedby different projects developed by different vessels.

ENERGY CONSUMPTIONThe energy consumption of the offices located in Jakarta, Kuala Lampur and Perth wasabout 150 tep of electric energy in 2004. More important are the energy consumption of thevessels that are considered in this analysis. The total energy consumed in 2004 was about24,200 tep, 50.7% of which consumed as diesel, 49% as fuel oil with a low sulphurconcentration and 0.2% of electric energy self generated by the vessels.

2004 Energy consumption - Assets

Electric Energy 0,2%

LSC Fuel oil%

Diesel 50,7%




WATER CONSUMPTIONAlso concerning water, the consumption related to the activity onshore is just for office useof service water that in 2004 was about 3,200 m3. All vessels operating in the areaconsumed in 2004 about 1million of m3 of water, this data includes also water from seaand not desalinated for use as ballast water that is discharged after the use. For this reasonit is better to say that the water consumption of the vessels is about 76,500 m3 in 2004.

WASTE GENERATIONJakarta and Kuala Lampur offices generated in 2004 about 2.15 tons of non hazardous waste,most of which composed by paper and plastic. All Saipem vessels operating in the areaproduced about 1,850 tons of non hazardous waste and 7,150 of hazardous waste. Concerningnon hazardous waste most of them are non ferrous metal refuses (20%), ferrous metal refuses(18%), cooking organic waste (17%) and other non hazardous waste of different type. Thehazardous waste from Saipem are generated by vessels in the offshore operation and are mainlyoily water (94%) small percentage of oil filters and exhausted oil from engines. The total amountof hazardous waste in 2004 is about 7,160 tons.

2004 Water Consumption - Assets

Non Desalinated Sea Water 93%

Service Water 1%

Desalinated Sea Water 6%

Oil Filters 3%Oily Water 94%

Exhausted oil from engines 1%Other 2%

2004 - Hazardous waste Vessels2004 Non Hazardous waste Vessels

Ferrous metal refuses / waste 18%Non-ferrous metal refuses / waste 20%Paper and cardboard 2%

Wood 3%

Plastic 8% Other non-hazardouswaste18%Absorbent waste 1%

Vessels hold cleaningwaste 1%Mixed urban waste 11%

Used tires 1%

Cooking organicwaste 17%

2004 Non hazardous waste - Offices

Paper and cardboard 84%Paper and cardboard 84%Plastic 9%Printers Toner 7%


AIR EMISSIONSSaipem operation is characterized by a small impact due to air emissions because the only emissiongenerated by Saipem activities are linked to the combustion of oil products. Data on CO, NOx andSO2 are presented in the following graph and generally less then 1,000 tons in one year. Regardingthe Green Houses Gases (GHG), in 2004 the emission of CO2 was about 78,000 tons; this data,as the other presented in this paragraph are calculated on the basis of energy consumption, throughthe formula available from the most recent literature. Again the emission considered are producedby Saipem vessels, emissions from Saipem activities within Jakarta and Kuala Lampur office arenot considered because very small.

ECONOMIC INDICATORSThe evaluation of the economic impacts of the Saipem companies operating in the Asia Pacificregion takes into consideration the local charge Saipem incurs in the development of its activities.Another aspect considered in this evaluation is related to the HSE expenditures.

CONTRIBUTION TO THE LOCAL ECONOMYSaipem can contribute to the country development in term of economic impact, mainly through theexpenditures that are paid locally. This means the acquisition of goods and materials from localsupplier and subcontractors and the payment of local employees. The following graphs presentlocal expenditures for the Saipem companies operating in the Asia Pacific Region. In all thecompanies the biggest value of local cost are related to the work that means the monthly salaryand all related contribution for local staff. Materials and services are the other cost elements thatcharacterised the local cost in the Saipem companies. Other costs are also relevant as percentageof the total and they include cash expenditure difficult to describe separately (Other 19%).

CO NOx SO2

2004 Air emission Vessels

Ton

0

200

400

600

800

1000

1200

2004 Local cost distribution - Saipem Asia-Pacific

Raw Materials 1%

Materials 19%

Work 54%

Other 19%

Services 7%

Expenditures for works

Local costs 75%Non local costs 25%

Expenditures for materials





The following graphs compare the expenditures Saipem had in the Asia Pacific Region with theothers costs paid outside the region. Local costs represent 75% of the expenditures Saipemcompanies had for work related issues. 50% of the costs for materials are local costs and 14% ofthe expenditures for services are local.

HSE EXPEDITURESSaipem HSE management requires investments and current expenditures that represent anotherimportant indicator of the sustainability attitude. Main safety and environmental expenses are relatedto the vessels operating in the Asia Pacific region, in particular in 2004 main safety expenditureswere related to the PPE (Personal Protective Equipment)that represent the 67% of the total and tothe safety training as the 12% of the total. Regarding the safety investments, the more relevantvalue is connected to the fire fighting systems that are the 67% of the total. Saipem vessels involvedin 2004 operation in the area totally spent for safety about 522,000 US$.

Regarding the environmental expenditures, in 2004 mainly were related to the management ofwater discharge (62%) that is a peculiar problem for the offshore operations by vessels. Anothersignificant voice is the management of the supplying water that represent the 37%, finally the thirdvoice of cost is the management and disposal of waste. Waste and water also determine the mainenvironmental investments on board of Saipem vessels; especially the supplying vessels treatmentplants represent almost the totally amount of the environmental investment for the 2004 that wasabout 230,000 US$.

2004 Safety Investments - Vessels

Fire fighting systems 67%Rescue & evacuation systems 14%Advertising signs & posters 11%Plants' Safety Improvements 8%

2004 Safety Current Expenditures - Vessels

Personal Protective Equipment 67%Safety Training 12%Safety equipment:gas detention 10%Periodic Maintenance & Control 3%

Safety equipment: other 3%

Safety equipment:Advertising signs & posters 2%Safety equipment:Ergonomic equipment 1%

Safety equipment:Fire fighting equipment 1%

Other current expenditures 1%

2004 Environmental Investments - Vessels

Supplying water treatment plants 92%Waste treatment and disposal plants 7%

Wastewater treatment plants 1%

2004 Environmental Expenditures - Vessels

Water discharge management 67%Supplying water treatment and management 37%

Waste management and disposal 1%

Expenditures for services



SOCIAL INDICATORS

EMPLOYEES DISTRIBUTIONSaipem is working to increase in each country of operations the percentage of local workers andtheir possibility to increase professionalism in the Oil & Gas sector. In order to represent this effort,the following graphs show the employees distribution in the offices located in Jakarta, Kuala Lampur,Perth, Bangkok and Singapore: 75% of employees in Saipem offices are locals. PT SaipemIndonesia has the biggest total number of employees that in 2005 were 284, 62% of themIndonesian, PT. Sofresid Eng. also has a large number of employees, 218 at December 2005 ofwhich 92% locals. Saipem Malaysia has 23 employees all locals and Saipem Asia has 33employees, 14 of which locals. PT Saipem Indonesia was characterized by an important increasein the number of employees involved between 2003 and 2005; in 2003 the workforce was of 109employees compared to the 281 of the 2004 and the 284 of the 2005. A large number of localemployees has a high position within the company; in all companies, 27% of the managers arelocals. In particular Saipem Malaysia has four managers all locals while PT Sofresid has apercentage of local manager that is about 39%.

The total staff in Saipem companies is characterised by mainly by people between 31 and 40 yearsold (48%); 16% are employees quite young between 26 and 30 years old and 13% are theworkers between 41 and 45 years old. The large percentage of Saipem companies employees hasa quite short seniority in the companies at local level; between 1 and 5 years. The reason of thisresults is to be found in the short story that characterised Saipem companies in the Region. Dataregarding Saipem vessels need to be considered separately due to the peculiarity of the operationsthat are managed on board. About 10% of the crews of the vessels operating in the area are localemployees. This percentage is particularly important for Castoro 10 where local employees representthe 26%. The average age of personnel on board is between 30 to 40 years old. While the higherpercentage of the crew has between 6 to 10 years of seniority.

Employees Distribution - Onshore

Internationals 25%

Local Employees 75%

Local employees distribution by role

Workers 6%

Managers 6%

Staff 88%

Employees distribution by age

<25 26-30 31-35 36-40 41-45 54-55 47-50 >560%

5%

10%

15%

20%

25%

Employees distribution by seniority

<1 1-5 6-10 11-20 >210%

10%

20%

30%

40%

50%

60%

70%

80%

Employees distribution by age - vessels

<25 26-30 31-35 36-40 41-45 51-55>5646-500%

5%

10%

15%

20%

25%

Employees distribution by seniority

<1 1-5 6-10 11-20 >210%

5%

10%

15%

20%

25%

30%

35%

40%




SAFETY PERFORMANCESaipem has in its core values for all operations the zero incident targets. This means an intenseeffort in organising a management system that can support the achievement of this objective. Main2005 results are presented in the APAC (Asia Pacific) pyramid where performance indicators andproactive indicators are included. This scheme of safety and quality results is monthly presented tothe top management for information and following actions. In 2005, regarding injury incidents, 3lost time injuries were registered, one by the APAC Offshore Business Unit, one by subcontractorsand one within Asset and Maintenance operations. 8 Restricted work Case were registered, 11medical treatment case and 49 first aid cases. Non injury incidents are also included in the APACpyramid as the proactive indicators achieved by the Saipem companies operations.

No. of Pro-Active Indicator: Jan-Dec1) HSE Training Hours 28766 2) HSE Management Visits 2823) Tool Box Talk 83814) Job safety Analysis 2945) HSE Meeting 18266) HSE Inspection 15737) SHOC Report 4192

Safety performance 2005 - Projects

PECIK

O VI

EPIC

LAMMA

PTT (

TTM)

Bong

kot

BAYU

DAR

WIN

BP Ta

nggu

hTT

PTL

O

WM

H

FR

Worked Manhours Frequency Rate

0

300,000

600,000

900,000

1,200,000

1,500,000

0

0.2

0.4

0.6

0.8

1.0

Fatality0

3

8

11

49

0

0

0

1

110

Lost Time Injury

Restricted Work Case

Medical Treatment Case

First Aid Case

Environmental Incident

Non Conformity Notified by Client

Authority or Third Parties Notification

Non Conformity to Supplier/Subcontractor

Nearmiss (Personnel Injury)

APAC QHSE Performance Indicator - summary for 2005


TRAININGTraining is very important in the management of Saipem business. Both HSE training andprofessional training is essential in order to achieve and keep a good performance and to assure acontinual improvement of Saipem management. During 2004, in all operations in the area about17,000 hours of HSE training have been developed, of which 83% on safety issues, 11% onenvironment and 6% on health. Most of this HSE training (87%) has been developed on board ofthe Saipem vessels operating in the area while the professional training has been organised mainlyonshore in Indonesia. In 2005 HSE training hours were even more than in the previous year,registering about 26,766 hours.

HEALTHSaipem has in its policy a special care in the assurance of the health of his employees. In AsiaPacific area, as in most of Saipem operations around the world, the health department is active toassure the good conditions of its employees with internal doctors and nurses and an internalmanagement of the emergencies. The health care also involves Saipem subcontractors that aresubjected to Saipem medical department periodic audits. The objectives of these audits are theevaluation of sites and local medical structures that includes: Medical facilities, Medical staff,Policies, Medicines and equipment, Health management (hygiene inspections, medical check-up,etc). Audits also considers the local medical structures as the hospital capability in handlingemergencies, medical specialities and availability of equipment. The medical staff is also undertakento develop health risk assessment, that includes the evaluation of the biological hazards, infectiouscontamination of the food, sexually transmitted diseases hazard, psychological hazards, chemicalhazard etc. In 2005 a vaccination campaign has been carried out within Saipem employees. Saipemwas offering the influenza vaccination to everybody, but, of course it was not compulsory. Theresults are: 213 Nationals (Indonesia) vaccinated; 73 expatriated vaccinated.

Safety performance 2005 - Assets

SEMAC

1

CAST

ORO 10

CAST

ORO 8

CAST

ORO 2

WM

H

FR

Worked Manhours Frequency Rate

0

200,000

400,000

600,000

800,000

1,000,000

0.0

0.5

1.0

1.5

2.0

2.5

2004 HSE Training

Environment 11%

Health 6%

Safety 83%




GLOSSARY & KEY WORDS• Bbl/d: Barrel(s) per day. 1 barrel (bbl) of petroleum or related products = 42 gallons.• Bcf: The abbreviation for billion cubic feet.• Brundtland Commission: The United Nations World Commission on Environment and Development,

published a report entitled Our Common Future in 1987 that defined the concept of sustainabledevelopment. The report was the basis for the Rio Earth Summit in 1992.

• BTu: The British thermal unit. It is the amount of energy required to raise the temperature of 1pound of water by 1 degree Fahrenheit when the water is at 39.2 degrees Fahrenheit.

• CO2 eq: Carbon Dioxide Equivalent. A metric measure used to compare the emissions of variousgreenhouse gases based upon their global warming potential (GWP).

• EC: European Commission. In July 2001, the Commission presented a Green Paper “Promotinga European Framework for Corporate Social Responsibility”. The aims of this document were firstly,to launch a debate about the concept of corporate social responsibility (CSR) and secondly, toidentify how to build a partnership for the development of a European framework for the promotionof CSR. The consultation process on the Green Paper has supported Community action in the fieldof CSR. In the Communication “Corporate Social Responsibility: A business contribution to SustainableDevelopment” (2002), which constitutes a follow-up to the Green paper, the Commission presentsan EU strategy to promote CSR. The Communication is addressed to the European institutions,Member States, Social Partners as well as business and consumer associations, individualenterprises and other concerned parties, as the European strategy to promote CSR can onlybe further developed and implemented through their joint efforts. The Commission invites enterprisesand their stakeholders as well as Social Partners in candidate countries to join this initiative.

• EPC: Engineering, Procurement and Construction;• EPIC: Engineering, Procurement, Installation and Construction.• FPSO: Floating, Production, Storage and Offloading System• GDP: Gross Domestic Product. The total value of goods and services produced by labor and property.• Global Reporting Initiative: The Global Reporting Initiative is a private initiative started in 1997

by the Boston-based coalition for Environmentally Responsible economies (CERES) and theUnited Nations Environment Program. In 2000, the GRI published voluntary SustainabilityReporting Guidelines. The GRI has worked in co-operation with the United Nation EnvironmentProgramme and the Global Compact.

• IMF: International Monetary Fund.• Industrial production growth rate: gives the annual percentage increase in industrial production

(includes manufacturing, mining, and construction).• Inflation rate (consumer prices): provides the annual percent change in consumer prices

compared with the previous years.• Lost Time Injury (LTI): A LTI is any work-related injury which renders the injured person temporarily

unable to perform any regular Job or Restricted Work on any day/shift after the day on which theinjury occurred. In this case “any day” includes rest day, weekend day, holiday. The day of theAccident is not counted when calculating Lost Workdays. Fatalities and Permanent Total Disabilitiesare included in the calculation of the total the number of the Lost Time Injuries.

• Lost Time Injury Frequency Rate (LTIFR)• Mmst: The abbreviation for million short tons (A unit of weight equal to 2,000 pounds)• OECD: The Organisation for Economic Co-operation and Development (OECD) groups 30 member

countries sharing a commitment to democratic government and the market economy. With activerelationships with some 70 other countries, NGOs and civil society, it has a global reach. Bestknown for its publications and statistics, its work covers economic and social issues frommacroeconomics to trade, education, development and science and innovation. The OECD producesinternationally agreed instruments, decisions and recommendations to promote rules of the gamein areas where multilateral agreement is necessary for individual countries to make progress in aglobal economy. In 2000, OECD produced the OECD Guidelines for Multinational Enterprises. TheGuidelines are recommendations on responsible business conduct addressed by governments tomultinational enterprises operating in or from the 30 adhering countries.

• Tcf: The abbreviation for trillion cubic feet.• Total Recordable Frequency Rate (TFR)• TOE: Tonne of oil equivalent.• WBCSD: World Business Council for Sustainable Development.

N°. LTI x 1,000,000LTIFR=Total WorkedManHours

N°. LTI + Work RestrictedCases + MedicalTreatment x 1,000,000TRF=Total WorkedManHours


A Joint Stock Company with Registered Officein San Donato Milanese (MI), Italy

Fully paid-up Share Capital Euro 440,958,400Fiscal Code and Milan Companies’ Register

No. 00825790157Other offices:

Cortemaggiore (PC) - Via Enrico Mattei, 20

Saipem S.P.A.Contact us: QHSE Dept.- Sustainability Team

Daniela Mauri [email protected] Tel. +390252044452Fax. +390252034617via Martiri di Cefalonia, 6720097 San Donato Milanese (MI)


Società per AzioniVia Martiri di Cefalonia, 6720097 San Donato Milanese (Mi)Tel +39 02520.1Fax +39 02520.44667www.saipem.eni.it

spm_sosten_C02_06_03_09 29-08-2006 18:01 Pagina 2

saipem oil gas - asia pacific

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