Maritime Reporter, August, 2006

<BODY> <div> 26 Maritime Reporter & Engineering News will facilitate continued growth for our Asia-Pacific business. MR: What do you consider the top priorities for your company in the coming 12 to 24 months? Crager: • Deepwater field development and marine pipeline projects Arctic projects LNG projects Deepwater hybrid risers FPSO, FSO, FLNG, FSRU Long-distance subsea tie-backs High-pressure/high-temperature (HP/HT) projects MR: What is your outlook for the business in 2006 and beyond? Crager: Barring an unforeseen shock, we envision sustained demand that will put continuing pressure on increased production of oil and gas. The upside may be limited by the industry operating at nearly full capacity. That is, the industry has only so may drill rigs, installation vessels, reservoir engineers and technical staff to progress develop- ments. These industry constraints will dampen significant year-on-year growth in the numbers of offshore projects. The cost of technical personnel will rise as competition increases between opera- tors, contractors and equipment suppli- ers for scarce resources. National oil companies also are demanding increas- ing levels of local content, causing diffi- culties in staffing major projects in remote locations. Rising costs for raw materials and equipment will further impact development of projects. Also note: projects that were marginal at $30 oil are likely to remain marginal at $50 oil due to cost increases. High political risk in some oil and gas provinces, including parts of the Middle East and West Africa, will continue to cause operators to balance their portfo- lios and investments, driving develop- ment activity toward locations-such as the U.S. Gulf of Mexico-that enjoy more predictable and acceptable political and fiscal risks. While perhaps located in increasingly challenging frontiers-such as the off- shore arctic and deeper waters-and more expensive to develop, operators likely will pursue exploration and develop- ment in regions less impacted by politi- cal unrest. MR: What markets do you see as being lucrative in the coming years? Which segments do you see on the decline? Crager: Potential growth areas: Construction vessels capable of multi- tasking in deepwater, including laying large-diameter pipelines efficiently and installing deepwater templates, moor- ings, risers and other equipment Multifunction construction vessel for the arctic environment Multipurpose vessel for subsea tie- back installations FPSOs in GOM Floating LNG and floating storage and regasification units Potential decline areas: Areas with high risks because of polit- ical, economic and cultural unrest MR: What do you consider to be the biggest challenges to your company's success? Crager: Shortage of skilled personnel Globalization; i.e., the ability to out- source project scope and resource shar- ing Local content requirements of NOCs and alliances with indigenous contrac- tors Commoditization of "highly" special- ized services and operator expectations for low-cost solutions Jones Act for offshore Alaskan arctic vessels and GOM shuttle vessels Offshore arctic design and construc- tion technology advancement to miti- gate high investment costs Limited visa quotas limiting move- ment of skilled engineers. ��"�O�N�N�I�E��,�A�N�E �%�L�K��'�R�O�V�E��6�I�L�L�A�G�E��)�,�� &�O�R��M�O�R�E��I�N�F�O�R�M�A�T�I�O�N��C�A�L�L�� 2 �O�R��&�A�X�� W�W�W��A�M�E�R�I�C��C�O�M Shipbuilding Technology Bruce Crager, CEO, Intec Engineering Bruce Crager is chief executive officer of INTEC Engineering. He joined the company on Feb. 14 this year, bringing more than 30 years of management and executive experience in the oil and gas industry. Eager to further INTEC's global growth in deepwater, subsea and arctic areas, he advis- es that the company continues to be on the forefront of technology and technology development. "INTEC's technology leadership continues to flourish, with the offshore industry relying on INTEC to create value, particularly in the offshore frontier, so that projects may go forward," said Crager. With expertise in serving both international operators and suppliers, Crager has focused his career on leading teams and companies in the evaluation and selection of field development solutions. His forte includes floating production systems and subsea production initiatives. Crager was president of ABB Offshore Systems Inc. from September 2001 through March 2004. At ABB, Crager was responsible for all company activities, including profit and loss, company growth, strategic planning and coordination with other ABB divisions. Annual revenues were $135m. ABB OSI provided project management services and subsea equipment under EPC-engi- neering, procurement and construction-contracts with values as high as $200m. Crager previously served as president of Smit-Oceaneering Cable Systems in 2001 and as senior vice president of Oceaneering International Inc., with responsibilities for mobile offshore produc- tion systems, from 1988 through 2001. Crager reports that one of his most-revered projects is Oceaneering's early 1990s installation of the "Ocean Producer" floating production/storage and offloading (FPSO) system, which is still operating offshore Angola. "At 50 ft. of water offshore Gabon, the 'Ocean Producer' was the shallowest water installation of any FPSO to that date. Designing for this limited water depth was a real challenge, especially because this project was Oceaneering's first FPSO conversion, installation and operation," said Crager. In terms of technology innovations, Crager led a team at Hughes Offshore that developed the Placid Oil production system installed in the Garden Banks area of deepwater Gulf of Mexico. Installed in the mid-1980s, he reports that the system remains one of industry's significant step- ping stones for water depth, number of wells and a large template design. "The Placid subsea system accommodated 24 wells with satellite trees in water depths exceeding 2,200 ft.," said Crager. Crager was part of a team that developed a production riser patent when bidding on the Placid Green Canyon free-standing production riser. He also co-authored and holds additional patents for an arctic offshore platform; a split-stack blowout prevention system; and an integral buoyant riser. Previous to Oceaneering, Crager held several senior positions related to worldwide marketing and the manufacture of subsea products, with experience including offshore drilling and the consulting and management of offshore operations worldwide. Crager holds a Bachelor's of Science degree in Ocean Engineering from Texas A&M University at College Station and a master's degree in business administration from the University of Houston. MR AUGUST2006 #4 (25-32).qxd 8/2/2006 5:35 PM Page 26 </div> <span id="lblContents"></span> <br /> <br /> <a href="http://www.digitalwavepublishing.com/" title="Digital Magazine">Digital Wave Publishing</a> </BODY>