Today’s Vision – Tomorrow’s Reality? Session Presenter Bill Hall Managing Director, Mega Projects WorleyParsons SESSION 1

Agenda  Many challenges today  Commodity pricing – fundamental shifts  Equipment and labor costs  Project execution impacts  Strategies to meet the challenges

Significant Challenges: Today and Tomorrow  Annual Engineering Graduates in 2006 USA 60,000 China 200,000  Average USA “Professional Workforce” Age in ECC industries Over 50 years old  And many more issues But even more critical: What is happening in overseas markets?

Commodity Pricing - Fundamental Shifts

Global Metals Outlook

14Mta

Fundamental Pricing Shift

Steel Prices to Surge “There is a strong view within the Chinese industry that miners will achieve the 85 percent increase, exceeding a 65 percent rise already agreed with a key Brazilian miner.” The Australian Financial Review April 2008

Equipment and Labor Costs

Equipment Costs Rise

Labor Costs Rise : 3% YOY increase : 4% YOY increase

Project Execution Impacts

Project Delays

Increasing Risk

Increasing Development Time

Increasing Engineering Backlogs

Strategies to Meet the Challenges

Strategies  HSE performance  Workshare  Accepting increased responsibility  Partnering  Early engagement  New technologies

Strategies  HSE performance

Strategies  HSE performance  Workshare

Strategies  HSE performance  Workshare  Accepting increased responsibility

Strategies  HSE performance  Workshare  Accepting increased responsibility  Partnering

Strategies  HSE performance  Workshare  Accepting increased responsibility  Partnering  Early engagement

Strategies  HSE performance  Workshare  Accepting increased responsibility  Partnering  Early engagement  New technologies