No. 2 juni / June 2010

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2 No. 2 juni / June 2010,1+28' 67$$762/,(1,(8:6 9VI\\Z[OLPKIL^LaLUPUIVLRQHHY :VSPKP[`7YV]LUPU 0U[LYUH[PVUHSLSLUPUNLULUSVRHSLVISPNH[PLSLUPUN 0U[LYUH[PVUHS-PUHUJPUNHUK3VJHS)VUK3VHU 0U]LZ[LLYKLYZIL[YLRRLUIPQ]LYKLYLNYVLP 8 O 22 mei werden twee financiële mijlpalen Op bereikt: overdracht van het proces-verbaal van de obligatielening en ondertekening van financieringsarrangementen met Credit Suisse en ING Bank. 22 May marked two financial milestones: handing over of the official report regarding the bond loan, and signing of financing arrangements with Credit Suisse and the ING Bank as well. 0U]VS]L0U]LZ[VYZPU-\Y[OLY.YV^[O *HKLH\]VVY5H[PVUHSL)SVLKIHUR (7LZLU[MVY[OL5H[PVUHS)SVVK)HUR 4LLYZWLJPHSPZ[PZJORHKLYTL[THZ[LYVWSLPKPUNWL[YVSL\TNLVSVNPL 4VYL:WLJPHSPZ[*HKYL[OYV\NO4HZ[LYZ+LNYLL7L[YVSLT.LVSVN` +YPLKPTLUZPVUHHSVWKLIL\YZ +H[0UK\Z[Y`-HPY TLLYLSLR[YPJP[LP[ 4VYL,SLJ[YPJP[`,7* JVU[YHJ[[VLNLRLUKHHU:HPWLT,7**VU[YHJ[(^HYKLK[V:HPWLT +LKLY[PNLYZ 6SK 2PYZ[LU5PL\^LUKHTPUZ[HY[ISVRRLU]VVY]VSNLUKLZWYPU[ 2PYZ[LU5PL\^LUKHT:L[MVY[OL5L_[:WYPU[ 0LKLYLLUOLLM[YLJO[VWYLJO[ 14 O k dit jaar kon de samenleving tijdens de Ook Made in Suriname Beurs van 28 april tot en met 3 mei kennis maken met de verschillende activiteiten van Staatsolie. This year visitors to the Made in Suriname Industry Fair were once again introduced to several Staatsolie s operations.,]ly`ivk`+lzly]lz3lnhs9pno[z ;\SSV^6PSVVRPUVMMZOVYL:\YPUHTL ;\SSV^6PS[V6WLYH[LPU6MMZOVYL:\YPUHTL 6SPL^LL[QLZ 6PS.HZ5L^Z 1\IPSHYPZZLU 1\IPSHYPHUZ 5PL\^L4LKL^LYRLYZ 5L^,TWSV`LLZ 7LYZVUHSPH 7LYZVUULS5L^Z 0U4LTVYPHT 16 De elektriciteitscentrale van Staatsolie Power Company Suriname (SPCS) produceert binnenkort twee keer zoveel elektriciteit. Staatsolie Power Company Suriname (SPCS) will soon produce twice as much energy as now. 0U4LTVYPHT Redactie/Editorial Staff Widjai Jungerman Kailash Bisessar Sherida Asinga Vertaling/Translation Iwan Olivieira Medewerkers aan deze editie/ Contributors to this edition PZ-HRM Astra Slooten Ank Kuipers (Eindredactie/Editor) Martin Redjodikromo Vormgeving en druk/design and print Art Sabina Design & Printing N.V. Omslag/Cover Staatsolie-obligatielening/ Bond Loan Staatsolie Foto/Photo: Sherida Asinga Bronvermelding verplicht bij overname / Copyrights reserved Uitgave/Publication Staatsolie Maatschappij Suriname N.V. Dr. Ir. H.S.Adhinstraat 21, Flora, POB 4069 Paramaribo, Suriname Telephone: Fax: Website: mailstaatsolie@staatsolie.com

3 Foto / Photo: Ranu Abhelakh BEWEZEN IN BOEKJAAR 2009 In het boekjaar 2009 heeft Staatsolie haar robuustheid bewezen door ondanks de economische wereldrecessie goed te presteren. De bruto-omzet bedroeg US$ 425 miljoen en de winst vóór belastingen was US$ 181 miljoen. De jaarrekening werd goedgekeurd op de Algemene Vergadering van Aandeelhouders (AVA) op 8 april. Tekst / Text: Astra Slooten 3

4 4 Solidity Proven in 2009 Staatsolie has proven its solidity in the 2009 fiscal year by an excellent performance despite the global economic recession. The company grossed US$ 425 million, with a US$ 181 gross profit. The annual statement of account was approved of by the General Shareholders Meeting (AVA) on 8 April last. Sole shareholder, the Republic of Suriname, was represented by Natural Resources Minister Gregory Rusland. In addition to the Board of Supervisory Commissioners and the Board of Executive Directors, division managers were also present at the shareholders meeting. The Minister and the Board of Supervisory Commissioners were quite content with Staatsolie s performance in the They both praised the Staatsolie management and staff for its remarkable efforts and loyalty. The 2009 fiscal year saw the implementation of significant provisions for further development of Staatsolie Compared to 2008 the 2009 turnover and returns have dropped, due mainly to the lower oil prices as a result of the global economic crisis. Saramacca Crude averaged US$ per barrel in 2008, but in 2009 the price dropped to US$ The exchequer received US$ 124 million for 2009, US$ 58 of which was dividend and US$ 66 million several taxes. The average oil production of 16,055 barrels a day resulted in a year production of 5.86 million barrels. The refinery produced a total of 2.74 million barrels of several products. Investments in 2009 were at US$ 135 million, US$ 58 million of which was invested in exploration and production development, while US$ 44 million were used for several down stream projects including the Refinery Expansion Project. An investment of US$ 33 million went to several diversification projects. The Staatsolie Business Plan was further developed in Oil exploration was also continued. By the end of 2009 the recoverable onshore reserves were estimated at 79 million barrels. Staatsolie aims at the addition of another 64 million barrels to the reserves by the end of The 2010 exploration and investment budget is estimated at US$ 330 million. This is US$120 million over the 2009 figure. Staatsolie will draw the financial means from its own resources. Social involvement was demonstrated by support for several projects in the field of education, sports, environment, social services, art and culture. US$ 500,000 went to support several projects. The support for sustainable projects was left to the discretion of the Staatsolie Foundation for Community Development, which started its activities in the latter half of 2009 with a US$ 1 million budget. In addition the Staatsolie Sports Fund spent US$ 900,000.

5 INTERNATIONALE LENINGEN en LOKALE OBLIGATIELENING Staatsolie heeft US$ 1 miljard nodig voor de uitvoering van haar investeringsprogramma Meer dan tweederde deel, US$ 680 miljoen, wordt uit eigen middelen gefinancierd. Een bedrag van US$ 320 miljoen wordt extern gefinancierd door de lokale, regionale en internationale markt. Tekst / Text: Martin Redjodikromo Foto s / Photos: CCTV 45 5

6 The Investment Program International Financing and Local Bond Loan Staatsolie needs US$ 1 billion to carry out its investment program. More than two thirds, US$ 680 million, will be drawn from Staatsolie s own resources. The local, regional and international financial markets will provide the remaining US$ 320 million. A large part of the investment budget is intended for the refinery expansion project. This expansion will free Suriname from obligatory diesel and gasoline imports. Additionally it will reinforce the national energy supply. A locally issued bond loan yielded US$ 55.1 million. Credit Suisse and the ING Bank will internationally arrange for a US$ 275 million loan. These two financial institutions are experts in the field of energy financing. The final contract must be ready by the end of July. Challenges Financial director Iwan Kortram says there were big challenges for successful completion of external financing. To guarantee effective implementation, a financing policy and strategy were determined. A special requirement was Staatsolie s position as state-owned company and Suriname s non-investment grade rating. In the course of the financing process, we were confronted with the increased risk sentiment among banks when financing in upcoming markets. The aftermath of the global financial crisis and the global recession were tangibly present. However, Staatsolie s solid financial position and its reputable name made a favorable impression. International financing is not new to Staatsolie. In 1985 the company secured its first US$ 2.5 million loan. Ten years later, 45 million was borrowed from ABN-AMRO and EFAG to finance the construction of the existing refinery. A government guaran- 6 The Investment Program US$ 575 million of the US$ 1 billion will be invested in the refinery expansion project. The expansion will increase the processing capacity from 7,000 to 15,000 barrels a day. End products, among others gasoline and diesel, will get a value hike of 65 percent. US$ 310 million will be invested for sustainable consolidation of the oil production at 16,000 barrels a day. US$ 10 million is allocated for the development of renewables. This project comprises the production of bio fuel (ethanol) from sugar cane. Expansion of the generating capacity of Staatsolie s electricity company will consume US$ 20 million. The generating capacity will be expanded from 14 to 28 megawatt. US$ 85 million will be spent on exploration.

7 Subscription for the bond loan was accessible at several local banks. Deposits had to be made at the bank where the subscription was applied. Subscriptions totaled US$ 57.2 million, but after the 14 May deadline had expired US$ 55.1 million had been deposited. The following chart shows the deposits at the local banks. tee was issued to facilitate the loan. In 2009 we used the financial reputability of our company, says Managing Director Marc Waaldijk. The developments that have taken place in the past 15 years are remarkable. Waaldijk emphasized Staatsolie s debt-free position since Transparency In its financing policy and financing strategy Staatsolie aspires entering into a financing contract with a number of solid banks, says Kortram, some of which would then become our regular bankers. This is a very important element, since implementation of Staatsolie s long term plan, Vision 2020, will increase the need for financing. Staatsolie preferred a loan guaranteed by two financial institutions with ample experience in the field of energy financing and the participation of solid banks. In this phase financing through the international capital market or multilateral financial institutions was not a priority. The financing policy did not call for possibilities such as project financing or financing through credit mediators. Staatsolie carried out the negotiations on its own, while the consultants had a mere advisory role. Kortram explains that transparency was an integral part of the process due to the magnitude of the loans and their subsequent interest. Guarantee Agnes Moensi-Sokowikromo, deputy director Finance, says that it is the first time in 30 years that Staatsolie turned to the external credit market and beyond Suriname for a loan of such a magnitude. International banks use ratios to determine whether we will be able to pay back the loan. An impartial investigation into Staatsolie s financial processes revealed that the company is amply able to pay back the investment. We are solid enough to pay back all debts and other expenses in US dollars, guarantees Moensi. This comprises all existing payments to suppliers of goods and services as well as the new loans. For the new loans a repayment period of five years has been determined. In the past five years Staatsolie raked in a gross profit of more than US$ 1 billion. The expected gross profit for the next five years is US$ 1.5 billion. Moensi s calculations are based on prospective oil prices, predicted by PIRA, an internationally renowned consultancy firm specialized in gathering, analyzing and interpreting data regarding the oil and energy market. Moensie states that Staatsolie s predictions are quite conservative, since the company deducts 15 percent from PIRA s predictions. 2,200 Bondholders The objective of the bond loan was to secure part of the financial means for the investment program. A bond is a promissory note issued by a company or institution to secure a loan. The bond loan was issued for US$ 15 million, with the provision that any exceeding amount would be accepted. After the deposits were made for the subscriptions on 14 May the total amount was US$ 55.1 million. Some 2,200 prospective bondholders subscribed to the loan. The Surinaamsche Bank (DSB Bank) arranged the bond loan. Bonds were issued in denominations of US$ 100 notes and multiple derivatives up to a maximum of US$ 100,000 notes. The duration of the loan is five years starting 14 May, The bonds pay seven percent interest a year, payable twice a year on 14 November and 14 May. The bonds are redeemable on 14 May

8 Investeerders betrekken bij verdere groei 8 Op 22 mei werden twee financiële mijlpalen bereikt. Op die dag is niet alleen het procesverbaal van de obligatielening van US$ 55,1 miljoen aan Staatsolie overgedragen door arrangeur DSB Bank, maar werden ook financieringsarrangementen ondertekend met Credit Suisse en ING Bank voor een lening van US$ 275 miljoen. Tekst / Text: Martin Redjodikromo Foto s / Photos: Ranu Abhelakh

9 Involve Investors in Further Growth 22 May marked two financial milestones. Not only did arranger De Surinaamsche Bank (DSB) hand over the official report regarding the US$ 55.1 million bond loan to Staatsolie, but the financing contracts for a US$ 275 million loan were signed with Credit Suisse and the ING Bank as well. Sigmund Proeve, DSB s CEO, symbolically handed over the US$ 55.1 million check to Staatsolie Managing Director, Marc Waaldijk. It is Staatsolie s first bond loan. Waaldijk explained that it is the company s intention to involve Surinamese investors and institutes in Staatsolie s further growth. We are quite pleased that the bond loan has yielded much more than we had expected, said Waaldijk. He extended his gratitude to all subscribers for their confidence in Staatsolie. The company s national and international reputation has received a boost. Waaldijk also said that Staatsolie is engaging into a relationship with two large external banks in order to forge sustainable business partner relations. These are necessary requirements for the rapid growth of all the stakeholders and the Surinamese community. We need not only look at the figures, said Finance Director Iwan Kortram, but also what man has developed at Staatsolie. Kortram emphasized that a special Staatsolie team was commissioned for this loan. Staatsolie could easily have brought in outside experts, but it decided use its own for the Loan Documentation and International Project Financing team. This creates involvement, solidarity and team effort. For the next development phase Suriname will have to rely on market conformity financing, for which requirements are higher. It is therefore of the utmost importance to field qualified negotiating teams. Natural Resources Minister, Gregory Rusland, represented the sole shareholder, the State of Suriname. He considers his policy towards the company a significant factor for securing external financing. This confirms that we have pursued a sound policy. There is room for improvement and further approach. The minister explained that ample safeguards have been included to guarantee payback of the loan to Credit Suise and the ING Bank. A dividend policy has been drafted which runs until It stipulates that Staatsolie only has to pay a 9

10 fixed percentage of the net returns in dividend to the state. The company will then be able to commit to its repayment obligations. Minister Rusland expects the next government to honor this agreement. 10 Credit Suise representative, Isander Santiago, is pleased with Staatsolie s degree of independence from the shareholder. This is the sort of company that can bring change to a society. We feel impelled to help push the further growth of Staatsolie. Credit Suise has not only assessed the company s financial position, but the macro-economic rating of Suriname as well. Marc Sizou da Silva of the ING Bank stated that the solid and excellently managed company and the potential growth of the industry have been the parameters for granting Staatsolie the loan. It s a pleasure to support such a company because we would like to see our relationship expand. US$ 57.2 million was subscribed for the bond loan. Between 3 and 14 May US$ 55.1 million was deposited. Some subscribers failed to make the deposits, while the DSB Bank did not award a few of the subscriptions after imposing strict rules. Critics say that the exchange rate took flight due to the bond loan, but Proeve denied such claims stating that most of the deposits were transfers. He explained that the exchange rate would have been affected by an SRD loan (SRD = Surinamese currency), because then Staatsolie would have to buy its dollars from the local market to finance its imports.

11 CADEAU VOOR NATIONALE BLOEDBANK Staatsolie draagt US$ 2 miljoen bij aan de financiering van het project Nieuwbouw en Renovatie Nationale Bloedbank. A Present for the National Blood Bank Staatsolie has donated US$ 2 million for the Building and Renovation National Blood bank project. Tekst / Text: Kailash Bisessar Foto / Photo: Collectie Surinaamse Rode Kruis On 13 December 2010 Staatsolie will celebrate its 30th anniversary. The donation to the Blood bank is a present to the Surinamese society to commemorate this event. Staatsolie s managing director Marc Waaldijk announced the donation at the celebration of the 70th anniversary of the Suriname Red Cross on June 20. Waaldijk emphasized that Staatsolie is eager to help, because safe donor blood must be available for every Surinamese citizen. The project comprises a new building, renovation of the old building that formerly housed the Blood Bank and the purchase and installation of new equipment. After completion of the project the National Blood Bank will be able to optimize the supply of high-quality blood derivatives that meet international standards. Several units of donor blood are needed every day in Surinamese hospitals. Having safe blood at their disposal could make a decisive difference. The National Blood bank is the only producer and supplier of blood and derivatives in Suriname. Blood derivatives are made from blood, which is frequently freely and voluntarily supplied by donors. Staatsolie and the National Blood bank have a longstanding relationship. In 2000, at Staatsolie s 20th anniversary, the Blood Bank received a donation in the form of equipment. Staatsolie staff has been donating blood for years now. At frequent intervals the Blood Bank visits several Staatsolie locations for a blood drive. 11

12 MEER SPECIALISTISCH KADER MET MASTEROPLEIDING PETROLEUMGEOLOGIE Staatsolie heeft nog meer specialistische kennis nodig op het gebied van geologie en petroleum om haar strategische doelstellingen te realiseren. Daarom financiert zij de tweejarige masteropleiding Petroleumgeologie die wordt verzorgd door de Anton de Kom Universiteit van Suriname. More Specialist Cadre Through Masters Degree Petrolem Geology Staatsolie needs more specialists in the field of geology and petroleum in order to realize its strategic goals. The company therefore finances the two-year masters course in Petroleum Geology at the Anton de Kom University. The masters course started in February this year with twelve students, ten of which are employed by Staatsolie. The complexity of geology and production characteristics of oil reservoirs compellingly dictates a further specialization of these employees in petroleum geology. Internal company training and foreign courses have provided the necessary extension of knowledge. The masters course now offers the possibility to enhance the expertise at home. 12 Tekst / Text: Martin Redjodikromo Unique The masters course is unique in the world, says professor Theo Wong, one of the two coordinators of the course. The curriculum we ve compiled isn t taught at any other university in the world, but there might be common grounds with other courses. Ewald Poetisi the other coordinator of the Technological Faculty, hopes to attract international attention. We aim at having students from the region and Latin America here. The masters course Petroleum Geology is a joint project of the Minerals Production discipline at the Technological Faculty and Staatsolie, the Technical University Delft, the Vrije Universiteit Amsterdam, the University of Utrecht, the Dutch Institute for Applied Geo Sciences TNO. Studying and a Full Time Job Classes will be taught by teachers from the foreign institutes. Surinamese counterparts in every subject will further supervise the students. Theory classes will take approximately a year and a half, after which the students have six months to work on their thesis. Rakesh Ramdajal is one of these students. Combining the intensive study with his full time job as Production Geologist at Staatsolie is not easy. Classes are from 8 am till 4 pm. I use the weekends to do those things I don t have time for when I m attending classes. He does not have much time for private or family matters. After classes he has to attend to urgent job issues at once. But Rakesh has one goal in mind: his Master degree. In foreign job ads a masters degree is a requirement for a position as Junior Geologist. Applying the newly gained knowledge at once is also a plus. Accreditation Staatsolie applies international standards in not only its production operations and administrative processes, but in training its staff as well. The process for accreditation has already been set in. Consultant Diny Peters

13 Foto / Photo: Kailash Bisessar explains that this course meets international requirements and is certified. In May, last, she held a presentation on accreditation for Staatsolie experts and the coordinators of the course. The masters degree in Petroleum Geology might be the first Surinamese course to receive accreditation. The main objectives of accreditation are to improve the quality of higher education and to guarantee regional and international comparability of courses in higher education. Accreditation takes away every doubt about disparity in meeting minimal requirements. One of the advantages is that graduates can easily study for their PhD at another (foreign) university. This certification will be awarded by the National Institute for Accreditation (NOVA) and will be in line with guidelines set by the Nederlands-Vlaams Accreditatie Orgaan Dutch Accreditation Institute (NVAO). Peters guarantees that the course will be accredited before August next year. She is certain because all preparations are already in place. 13

14 op de beurs Tekst / Text: Astra Slooten Foto s / Photos Ranu Abhelakh Levensechte foto s, pijpleidingen die uit de grond komen aan de ene kant en even verder weer verdwijnen. Of plaatjes van werknemers, die wel echt lijken. Ook dit jaar kon de samenleving tijdens de Made in Suriname Beurs van 28 april tot en met 3 mei kennis maken met de verschillende activiteiten van Staatsolie. 3D at Industry Fair Life-like pictures of pipelines that appear out of the ground only to disappear in the gound again at a distance. Or vivid pictures of emloyees. This year visitors to the Made in Suriname Industry Fair were once again introduced to several Staatsolie s operations. 14 The Staatsolie booth was furnished with large three dimensional (3D) wall pictures. Brayen Liendie, who works with the Staatsolie power company, supplied the necessary information and was more than willing to give a tour. He answered many questions on how the power company functions. For other Staatsolie operations the visitors could turn to staff from those fields. Some of the visitors were so impressed by what they were presented that they quietly informed when they could apply for a job. A Staatsolie brochure was available for the visitors and they could participate in a quiz with handsome prizes, including a BlackBerry smart phone, a digital photo camera and an ipod. With the prospect of winning those prizes it was no wonder that visitors swarmed the booth to take part in the quiz. There

15 was a rush on give-aways including pens, pencils, satchels and mugs. It was quite a sight at the fair. Almost every visitor had a yellow Staatsolie bag on the back. Glenn Sairras, Director Production & Development paid a complementary visit. He stated that Staatsolie should continue its presence on the annual fair. Sairras was quite content with Staatsolie s performance at the fair, particularly with the graphic material and the manner in which the staff interacted with visitors. 15

16 100% meer ELEKTRICITEIT De elektriciteitscentrale van Staatsolie Power Company Suriname (SPCS) produceert binnenkort twee keer zoveel stroom; de opwekkingscapaciteit wordt verhoogd van 14 naar 28 MW. Tekst / Text: Sherida Asinga Foto s / Photos: Collectie SPCS

17 100% More Electricity Staatsolie Power Company Suriname (SPCS) will soon produce twice as much energy as now; its generating capacity will be boosted from 14 to 28 MW. The deafening sound in the engine room makes talking impossible. Ear protection is an obligatory requirement. Two brand new engines will generate the extra electrical energy soon. Outside the power station crews, some of which on raised platforms, are busy putting the final touch to the preparations Equipment The planning called for completion of the expansion within six months after signing the contract for delivery of the machines. In September 2009 quotations were requested from MAN, Wärtsilä and Caterpillar for diesel generators and other equipment. SPCS and Caterpilar signed an agreement in November 2009 for delivery of two diesel engines and generators including all accessories. Each of the engines has a capacity of 7 megawatt and can operate on regular or heavy fuel oil. This expansion will not require steam power pairing like in phase 1. We won t be generating steam for the refinery, says Eddy Fränkel, Project Manager SPCS Phase II. The new refinery will have an abundance of excess steam, so it will be self sufficient. Challenge SPCS had it own staff on the expansion project. The mechanical and electrical installations were done by local contractors. Caterpillar technicians did the starting up. It was quite a challenge to have the several contractors do the job. We had to take into consideration the short time span and the contractors individual capacities, says Fränkel. Caterpillar deliveries were in three stages. Pending arrival of the equipment, the pipelines and cable work were installed. Fränkel: It was just a matter of connecting upon arrival. Construction of the pipelines consumed most of the time. Fränkel: The installations have been completed. The final test will be by the end of June and we are eagerly looking forward to the result! More expansions Fränkel has been with the power station since its establishment. He explains that SPCS could not utilize its full potential in the starting-up phase because there was a very limited outlet for the energy. That has changed now. Fränkel knows for a fact that the demand for electrical energy is rising and this will surely necessitate more expansions. However, I m content with the power station s performance, given the circumstances, and I m also pleased with the employees performance and development. They are able to operate and maintain the station and can repair outages on their own. In January 2010 Fränkel passed the torch to Arnie Kleiboer, the new Operations Manager at SPCS. Fränkel is now the new Manager Hydro with the Business Development directorate. He will develop the TapaJai Hydro Power Project. 17

18 EPC-contract toegekend aan SAIPEM Het Italiaanse bedrijf Saipem verzorgt het detailontwerp, de aankoop van materialen en de constructie van het nieuwe deel van de raffinaderij. Het contract voor de constructiefase van het Raffinaderij Expansie Project (REP) is op 4 juni 2010 getekend. Tekst / Text: Sherida Asinga The Staatsolie Refinery Expansion Project EPC Contract Awarded to Saipem The Italian Firm Saipem has been awarded the detail engineering, the procurement of equipment and the construction (EPC)of the new installations of the refinery. The contract covering the construction phase of the Refinery Expansion Project (REP) was signed on 4 June With the signing the seven-year preparatory phase, with its various studies and design phases, was completed. Seven years seem to be a magical number, said Managing Director Marc Waaldijk at the signing ceremony. It took us seven years to build the existing refinery. The same circumstances have surfaced. A definite choice regarding the end products had to be made. Furthermore there have to be ample oil reserves and a constant daily production of 16,000 barrels a day to justify the expansion. Financing the project also required thorough study of several scenarios. Waaldijk reminded his audience that at the construction of the first phase every obstacle was taken and he promised that the same holds good for now. He is convinced that the company has found a good contractor in Saipem and that Staatsolie has the right team for the job. It is a good start, but we are just at the beginning. Let s make it work! Ettore Maria Magnani, Saipem s Vice President Onshore Bid Management, said the project was quite a challenge for his company. Agreement On 22 February 2010 four candidates, selected out of a group of 75, submitted their bids. Tom Ketele, REP Project A few statistical facts In the past few years much work has been done to get the Refinery Expansion Project off the ground. The facts are there. 18 years of preparing the contract team members have worked on the contract file-cases in which the contract and FED documents have been stored the number of pages in these file-cases kilograms, the weight of these file-cases the number of work hours spent on preparing the contract

19 The Refinery Expansion Project is one of the concrete objectives of the Strategic Plan. The REP must result in: doubling the processing capacity of the refinery to 15,000 barrels a day; producing high quality end products including diesel and gasoline for the local market; increasing Staatsolie and government revenues. The new refinery must be completed as planned in 2013, producing gasoline, fuel oil, asphalt bitumen and premium diesel for the local market as well as sulphuric acid for the export. The diesel surplus will also be exported. Manager, explains how intensive this process was. We had to get through it all within three weeks. In order to assess the bids effectively the project team was split into groups and put to the task. The assessment took place in a highly secured room, accessible only to project team members. After thorough assessment of the commercial, technical and legal aspects, Saipem was profiled as the best candidate for the job. Negotiations started on 26 April and parties reached an agreement on 15 May. In the negotiations Staatsolie focused much on the positive effects of this project for the Surinamese economy, the employment aspect and involvement of Surinamese businesses in the construction phase. Engineering Three-year EPC-contract worth US$ 500 million. The signing of the contract marks the start of the engineering phase or EPC. This phase covers the detail design, the procurement of new equipment and the construction. In the EPC the contractor carries out the project for an agreed sum, just like when a contractor is building a house for an owner. In Saipem S.p.A is a subsidiary of the Italian energy multinational Eni S.p.A. The company is known as one of the biggest and best contractors in the international oil and gas industry. With an annual US$ 14 billion turnover the company is market leader in the field of engineering, procurement, project management and construction works in the oil and gas industry. Saipem has operations in West and North Africa, Central and South-East Asia, and the Middle East. It employs more than 35,000 people. December 2009 the final pre-design phase was completed, yielding the basic design. In the EPC phase this design is detailed into construction blueprints. A REP delegation will soon leave for Italy to watch from close by how the detail design comes about. Ketele is quite content with the progress so far. We ve completed a tough course. We ve made an evaluation after every phase and then decided on what we wanted, how we wanted it and when we were going to do it in the next phase. We had the mental process covered at the start of every phase. Organization In the time ahead, the project team will have to strengthen its organizational structure in order to be prepared for the next phase. Currently the project team has 25 members, but this will have to be expanded. An HRM specialist has been hired for effective and efficient manning of the team. Ben Nuboer, Director Refining & Marketing, will be assigned full time to the project for 18 months starting 1 July. Ketele praises the work done so far by the team members. They are highly motivated, doing more than is required from them and I think that it is this attitude that has yielded the success so far. 19

20 DE DERTIGERS INZET IS VANZELFSPREKEND, HET HOORT ERBIJ Op 13 december 2010 bestaat Staatsolie 30 jaar. In deze rubriek worden de schijnwerpers gericht op 30-jarige medewerkers. Zij gaan in op voor Staatsolie typerende begrippen, daarbij een parallel trekkend met hun eigen leven. On 13 December 2010 Staatsolie will celebrate its 30th anniversary. In this feature article the lime light is on 30-year-old employees. They discuss typically Staatsolie issues drawing a line to their own lives. Efforts Are Obvious; They Are Part of the Process Reena Rambaran Mishre-Ramdin en Robert Rodgers hebben twee getallen gemeen. Dertig voor hun leeftijd en acht voor de tijd dat ze bij Staatsolie werken. Reena acht jaren en Robert acht maanden. Zij praten over inzet, inspiratie, deskundigheid en betrokkenheid. Tekst / Text: Kailash Bisessar Reena Rambaran Mishre-Ramdin and Robert Rodgers have two numbers in common: they are both thirty years old and they are both tied to an eight for the time employed by the company Reena eight years and Robert eight months. They discuss efforts, inspiration, expertise and involvement. Effort Staatsolie requires clear-cut objectives, says Reena, and every individual works towards realizing the big goal. Rookie Robert is filled with awe for the efforts made at Staatsolie since its establishment. The pioneers have pushed through and haven t given up. Robert understands that there will be no achievements without efforts. He studied Offshore Engineering at TU Delft (The Netherlands). Efforts were compulsory; it wasn t a choice. Reena: The work environment at Staatsolie inspires people to work. Every employee has his or her own motivation, but I think that the urge to advance is a great incentive. Reena started eight years ago as Administrative Assistant at the Finance Administration. She continued studying and now holds the position of General Ledger Assistant II at the General Ledger department. You see people around you studying further and advancing. Naturally you don t want to leg behind. Efforts are obvious; they are part of the process, says Robert. Everybody has a share in the process. There are numerous examples every day at Drilling, where he works as a Drilling Engineer. Working in shifts year after year is quite arduous and it requires a great deal of effort, or better yet enthusiasm, says Robert, revealing his awe for the drilling crews working in shifts. Inspiration Reena and Robert are both inspired by Staatsolie s history. Robert: When I was a student I met Eddie Jharap and Marny Daal (former Managing Director and now Manager Petroleum Contracts respectively ed. staff) at a conference. We started talking and they invited me over to their table. And there I was with the Staatsolie Managing Director and one of its managers. It was a great honor. It was really inspiring the respect they showed me and to hear them discussing Staatsolie and Suriname. Staatsolie is an inspiring company, argues Reena. Just look at our history: we have gone from zero to greatness. Despite the lack of resources and the set backs, we have made a dream come true. Reena is convinced that the present generation, will, inspired by the pioneers, be able to further materialize that dream. 20 Expertise Staatsolie aspires to have the right expertise available. This is not only realized by hiring experts, but also by training its staff. Staatsolie can field excellently trained and devoted experts,