Aker Kvaerner, Inc. CII Benchmarking and Metrics Aker Kvaerner Data Name of presenter: M. Coy Campbell, P.E. Date: 10 June 03

June 2003 Aker Kvaerner Page 2 Benchmarking and Use of CII Data Presentation Agenda Overview of Aker Kvaerner Participation Review of Some of our Performance Data Our Interpretations  Usefulness of CII Database  Cause & Effect –Best Practice vs. Performance  Input Quality Control of Projects

June 2003 Aker Kvaerner Page 3 CII Performance Metrics Performance Metrics Cost Schedule Safety Changes Rework CII Best Practice Use:  Safety (Zero Accidents)  Team Building  Constructability  Pre-Project Planning  Design/Information Technology  Project Change Management  Materials Management  Planning for Start-up  Quality Management  Strategic Alliances

June 2003 Aker Kvaerner Page 4 AK Submitted Projects 1997: H Evalca (add-on) 1998: H Methanex (addition) H Agrevo (BW) (grass roots) H Akzo Nobel (grass roots) H Air Products (addition) H BASF-2EHA (BW) (addition) H Arco EB-1 (modernization) H TransCanada (addition) 1999: H Bayer TDI (add-on) 2000: H Bayer PU (grass roots) H Bayer Chlor-Alkali (grass roots) 2001: H Lyondell Polyols (add-on) H Conoco Syria (grass roots) H Distrigas (add-on) 2002: H Optimal H BP GTL H Dow Freeport H Chevron Sanha Red Projects submitted by NJ office

June 2003 Aker Kvaerner Page 5 AK Implementation of CII Best Practices Use Comparatively Good In Safety Upward trending in Teambuilding & Change Management saw decrease in most Best Practice Implementation What was the effect on Performance?

June 2003 Aker Kvaerner Page 6 Project Budget Factor = Actual Total Project Cost Initial Predicted Project Cost + Approved Changes Project Schedule Factor = Actual Total Project Duration Initial Predicted Project Duration + Approved Changes Quick Review “Degradation” in Performance in Significant change in schedule factor in 2001 AK Performance - Project Budget and Schedule

June 2003 Aker Kvaerner Page 7 AK Performance – Analysis of Budget/Schedule Factor - Individual Projects TIME B’water Further Investigation Two projects real outliers H96232 entered in 2000 H entered in 2001

June 2003 Aker Kvaerner Page 8 AK Performance - Project Cost Growth vs. Competition Project Cost Growth Factor = Actual Project Cost - Initial Predicted Project Cost Initial Predicted Project Cost Quick Conclusion  Consistent Investigation on 2000 & 2001  Outliers adversely impacted result  Small sample size in 2000 (2 projects) & 2001 (3 projects) 1st 2nd 3rd 4th QuartileFactor

June 2003 Aker Kvaerner Page 9 Cost Growth Factor - Individual Projects TIME Three Projects adversely affect outcome for Cost Growth

June 2003 Aker Kvaerner Page 10 AK Performance - Recordable Incident Rate Recordable Incident Rate = Total Recordable Cases x 200,000 Total Craft Workhours Review – Relatively Good performance until st 2nd 3rd 4th Quartile RIR

June 2003 Aker Kvaerner Page 11 Interpretations of Benchmarking Database Use Best Practice Implementation “score” corresponds with the company quartile performance Limited number of projects in the database skews data – outliers have too great effect  Our outlier was a project for a client that performs Capital Projects infrequently (and not a member of CII). Very poor project definition. Some “good” projects looked bad by analysis  Of course, varying definition of successful projects AK investigated process for inputting projects and found very inconsistent – again skewing our outputs  Previously - Project questionnaires filled by project teams  Now – filled out by trained Benchmark Associate

June 2003 Aker Kvaerner Page 12 Recommendations & Conclusions Ensure Consistency of project input.  Use your trained Benchmarking Associate Add Filtering Mechanism to the database “queries”.  Sometimes Outliers need to be seen but not heard The more projects entered, the better the trend analysis (Statistics 101!) The database is consistent in its evaluation (Best Practice Implementation vs. company Quartile) But….Trend analysis of Best Practice Implementation & a successful project really is a soft, interpretive process