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The Channel

A Renaissance Services SAOG Group Newsletter

volume 2 issue 4

H1 2011 Results

www.renaissance-oman.com

Renaissance Services SAOG issues its quarterly statement for the half-year from Chairman, Mr. Samir Fancy. Also Inside:

PDO Managing Director visits PAC Marmul Petroleum Development Oman top management tour the company’s Marmul PAC facilities.

Renaissance Day advert CSG HSE statistics Progress book launched

HSE first: training new recruits in UAE RFMS successfully mobilizes and traines over 300 staff in support of new contracts.

H2 Outlook Future outlook forecasts for the company’s three core businesses: Topaz Marine, Topaz Engineering, and Contract Services Group.

The Channel is a digital bi-monthly internal newsletter produced by Renaissance Services which aims to reach every employee in each country of our worldwide operations. Please do forward this to your fellow team members and thank you!

Purity…Devotion…Compassion…Kinship… May the spirit of Eid be with you always! Click on the following link to view Renaissance’s Eid al Fitr greeting: http://www.nibblesoman.com/greeting/Eidgreerting2011.htm


Financial News

Renaissance discloses financial results for the 2011 half-year

from left: Mr. Samir Fancy, Chairman of Renaissance, and Mr. Ali bin Hassan Sulaiman, Director of Renaissance

Renaissance Services disclosed its financial results and Chairman’s Report for the half-year period of 2011. The company achieved a 12.7% increase in revenue totaling approximately Rial 133 million (US$ 345 million) with the Marine Group accounting for Rial 54.5 million (US$ 141.6 million), Contract Services Group accounting for Rial 43.9 million (US$ 114 million), and Engineering Group accounting for Rial 35.7 million (US$ 92.7 million). Fundamental strengths of the company’s businesses were intact despite significant challenges faced in the period. Obstacles tackled included losses in the Engineering business, unusual low utilisation of four major vessels in Q1 2011 (Q1) in the Marine business, and increased employment costs in the Contract Services business due to a national paradigm shift in terms and conditions of employment in Oman. The Contract Services Group (CSG) has invested heavily in an accelerated Omanisation programme over and above its ongoing national workforce development programme, at the same time improving terms and

Renaissance hosts stakeholder conference Renaissance Services invited its shareholders, investors and all stakeholders of the public interest to a conference with the company's management. The open question and answer session addressed and responded to questions regarding the half-year 2011 results, statements made in the Chairman's Report, and the present operational and financial performance of the company and its subsidiaries. A copy of the conference is available on the Renaissance company website: http://www.renaissance-oman.com/enGB/Media_Center/Downloads.aspx

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conditions for Omani employees. While CSG increased overall revenue by Rial 7 million (US$ 18.2 million), operating profit of the group declined by Rial 2.9 million (US$ 7.5 million), however the cost increases will be gradually mitigated. The half-year report focused on explaining the current challenges and assured shareholders that all problems are under control and that the company would soon be back on a path of progress more commonly associated with Renaissance. The company reported that it had uncovered breaches of ethical conduct at an international Topaz subsidiary while potential one-off negative impact issues in Topaz Engineering included a potential cost to the company’s withdrawal from a loss-making MOBY boat yard operation venture in Kazakhstan. Stephen Thomas, CEO of Renaissance, has taken direct responsibility as interim Topaz CEO in addition to his Renaissance group-wide responsibilities, effectively taking over direct management of Topaz, as distinct from its previous holding company oversight role. A new Topaz structure creating clear organizational demarcation between Topaz Marine and Topaz Engineering as separate independent businesses, the former a pure OSV (Offshore Support Vessel) business and the later a pure OFS (Oil Field Service) business, boosts the possibility for the Topaz Marine business to be ready first for listing on the London FTSE. The company remains positive about the market fundamentals of the oil and gas industry in which it operates. “We can see ourselves emerging from this wiser and leaner, ready to seize upon the opportunities that lie ahead,” said Samir Fancy, Renaissance Chairman. “We are getting back to business as usual, determined to reassert the reputation for success and growth that is the tradition and track record associated with Renaissance.”


H2 Outlook

Outlook for Marine: Topaz Marine performed positively but still below the level expected for the investments in additional vessels, also impacted by exceptionally low utilisation of vessels in Q1, however independent market analysts confirms day rates and utilisation are improving in H2 and shall remain strong in 2012. There remains opportunity for further growth in the company’s existing markets of the Caspian and

MENA, while developing a growing profitable presence in West Africa. In June 2011, Topaz Marine was awarded long-term vessel contracts totaling approximately Rial 61.5 million (US$ 160 million) with clients Saudi Aramco and ABB Engineering, and current vessel utilization rates are above 90%.

Outlook for Engineering: The Engineering business has been restructured into two divisions in place of the previous four: Topaz Fabrication & Construction and Topaz Maintenance Services have combined as Oil & Gas Engineering; and Topaz Marine Repair and Topaz Ship Building have combined as Marine Engineering. There is an urgent increased focus on competitive tendering and winning. Several new small to medium Engineering projects have been won totaling US$ 22 million, including the US$ 9 million ENOC shutdown for later this year. The sales pipeline is good with very positive prospects on some large opportunities that could significantly improve outlook and backlog for 2012.

Outlook for Contract Services: The slow build-up in the new oilfield accommodation facilities at Marmul and Bahja in Oman is now over and the facilities are finally reaching anticipated levels of utilisation. In addition, some new contract gains, and investment in extending other oilfield facilities, will bring further performance improvement in H2. Also in June of 2011, the Contract Services division was awarded new contracts by Oman’s Ministry of Health Hospitals. The contract award signifies a notable achievement for CSG as the largest award from the Ministry of Health during the past two decades and extends the company’s leadership in the Omani market. The company has invested heavily in an accelerated Omanisation programme over and above its ongoing national workforce development programme.

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Feature Story

RFMS hires and trains 300 employees for new contracts Renaissance Facilities Management Services LLC (RFMS), Renaissance Services’ contract services subsidiary in Abu Dhabi, has successfully mobilized and trained over 300 staff in support of new contracts awarded by the Abu Dhabi Health Authority earlier in the year. The contract award represented a strategic breakthrough for the company’s Contract Services Group which entered the UAE market in 2010. RFMS won this contract against local and international competition contending for the government contract covering all SEHA hospitals in the eastern region of Abu Dhabi: Tawam Hospital, managed by John Hopkins International, Al Ain Hospital, managed by Vienna Medical

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University, and Al Waqan Hospital. RFMS have recruited approximately 300 new staff required for the contract and have doubled training efforts to ensure the client’s requirements are met and exceeded at the service level through various Health, Safety and Environment (HSE) training programmes. “The client wanted to ensure that anybody at the hospital whether employee, contractor or sub-contractor, should be able to do certain fundamental things for them to be able to look after their patients,” explains Susan Fisher, Training & Development Manager of Contract Services Group (CSG). “So for example if there is a hazardous spill, then we know what to do, and we’re working as a team.” Following a company induction session where employees were introduced to the company and its


Feature Story

RFMS hires and trains 300 employees for new contracts (continued) core values system, the trainees went on to complete a grueling HSE training programme consisting of risk and disaster management, fire and safety management, infection control, 3-step for medical emergency, body mechanic (manual handling), and hazardous material management. Fisher then guided trainees with hands-on practical training sessions that covered areas of service and food safety, including health and safety at the workplace, infection control, cleaning, waiter and customer service. Supporting Fisher were Athula Galagod, Food Safety Officer at CSG, and Mohan Shetty, QA Officer at CSG. “Operationally it was a challenge since it was a new project and staff was working quite long hours, sometimes training late night or very early morning hours

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just to meet the needs of the client, but our trainees were very happy because they enjoyed the training and tools that we used,� added Athula Galagod. The scope of work of the contracts covers the provision of full catering services to the three hospitals, including the operation of a total of 11 cafeterias at the hospitals, as well as hospitality and recreation management services to the Tawam Hospital.


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Listening Dear Colleagues, Covey writes well about empathic listening, but I am also very fond of this little story from an old edition of HBR, which takes the concept of really listening to a whole new level. Enjoy. Stephen R. Thomas OBE CEO Back in the third century A.D., the King Ts’ao sent his son, Prince T’ai, to the temple to study under the great master Pan Ku. Because Prince T’ai was to succeed his father as king, Pan Ku was to teach the boy the basics of being a good ruler. When the prince arrived at the temple, the master sent him alone to the Ming-Li Forest. After one year, the prince was to return to the temple to describe the sound of the forest. When Prince T’ai returned, Pan Ku asked the boy to describe all that he could hear. “Master,” replied the prince, “I could hear the cuckoos sing, the leaves rustle, the hummingbirds hum, the crickets chirp, the grass blow, the bees buzz, and the wind whisper and holler.” When the prince had finished, the master told him to go back to the forest to listen to what more he could hear. The prince was puzzled by the master’s request. Had he not discerned every sound already?

When Prince Ta’i returned to the temple, the master asked him what more he had heard. “Master,” responded the prince reverently, “when I listened most closely, I could hear the unheard–the sound of flowers opening, the sound of the sun warming the earth, and the sound of the grass drinking the morning dew.” The master nodded approvingly. “To hear the unheard,” remarked Pan Ku, “is a necessary discipline to be a good ruler. For only when a ruler has learned to listen closely to the people’s hearts, hearing their feelings uncommunicated, pains unexpressed, and complaints not spoken of, can he hope to inspire confidence in his people, understand when something is wrong, and meet the true needs of his citizens. The demise of states comes when leaders listen only to superficial words and do not penetrate deeply into the souls of the people to hear their true opinions, feelings, and desires.” Havard Business Review, July/August 1992

For days and nights on end, the young prince sat alone in the forest listening. But he heard no sounds other than those he had already heard. Then one morning, as the prince sat silently beneath the trees, he started to discern faint sounds unlike those he had ever heard before. The more acutely he listened, the clearer the sounds became. A feeling of enlightenment enveloped the boy. “These must be the sounds the master wished me to discern,” he reflected.

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PDO Managing Director visits PAC Marmul Each of us, as safety leaders, should focus on behaviours and attitudes through leadership, communication, competence and systems, the contractual framework and consequence management. This was reinforced at a guided tour of Renaissance’s Marmul PAC facilities to Petroleum Development Oman (PDO) directors including Raoul Restucci, Managing Director of PDO. Marmul recently celebrated one year with no Lost Time Incident (LTI) since the launch of the camp in 2010. The Marmul site facilities includes 512 rooms designed to house 1,000 employees, as well as administration buildings, state-of-the-art kitchens, bakery and dining facilities, laundry services, function rooms, meeting rooms, auditorium, swimming pool, gymnasium and all types of indoor and outdoor sport courts, a fully equipped 24-hour clinic, plus auditorium and library.

CSG Corporate HSE Statistics

PDO directors and Contract Services Group managers at PAC Marmul

June

July

2010

2011

2010

2011

Number of Employees

6,291

7,167

5,949

7,184

Number of Man Hours

1,950,210

Number of LTI Number of KMS Driven

0 1,052,368

2,221,770 1,781,100 0 852,528

0 601,912

2,155,200 1 849,845

Progress 2011-2012 on stands United Media Services has published the 17th edition of its annual bilingual publication Progress 2011-2012 saluting His Majesty Sultan Qaboos Bin Said on the occasion of the 41st anniversary of Oman’s Blessed Renaissance. Progress takes an in-depth look at the various sectors that have contributed to the Sultanate’s development and modernisation. The annual country book stands out for its analysis of various economic sectors covered in dedicated chapters highlighting the strides taken by the Sultanate. The opening article examines how Vision 2020 has become the country’s blueprint for creating a more self-sustaining, oil independent economy on a par with the rest of the world in all sectors of economy, commerce and trade. Other articles focus on the latest developments, key financial indicators and the future roadmap. Progress is the first annual country book that is available in a digital version on www.progressoman.com. The digital version offers readers online access to a more comprehen-

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sive range of articles than the print edition. It will serve as a one stop reference point for people seeking information on Oman’s remarkable journey over the last 41 years.


Renaissance Whale and Dolphin Project Convention measures are a top priority on Oman’s agenda, including monitoring the interaction and threats to large whales from shipping traffic and bycatch. With Renaissance’s financial support to a team of international marine experts, cutting-edge scientific research is being conducted on Oman’s whale and dolphin populations that will assist decision makers in the Ministry of Fisheries, Ministry of Environment and Climate Affairs and other governmental bodies plan a healthy balance between marine life and economic development, and to design effective conservation strategies to ensure the survival of species under threat of extinction. Since joining in 1980, Oman is the only International Whaling Commission (IWC) member country in the Arabian peninsula and is one of the very few countries that has an on-going research programme in the entire northern Indian Ocean. Oman was represented at the Commission Meeting by the IWC Commissioner in Oman. As a result of the recent findings from the Renaissance Whale and Dolphin Project on the unique and isolated population of the Arabian Sea Humpback Whale, Marine Expert Robert Baldwin was specifically requested by the IWC Secretariat to attend this year’s Scientific Committee meeting where he presented the most recent information on the Arabian Sea Humpback Whale, the Bryde’s, Blue and Sperm Whale, as well as several dolphin species.

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Ambitious steps are also being taken towards the development of a regional Conservation Management Plan (CMP) focusing on the Arabian Sea Humpback Whale population which will involve local entities as well as governments of the range states within the Arabian Sea region of Oman, including Yemen, UAE, Iran, India, Pakistan, and Sri Lanka. “Ultimately, the management of large whale stocks is part of a process of sustainable management of our seas and coasts, not just for the benefit of whales, but also for the benefit of people, particularly the large numbers of people in the region who rely on the sea's resources for their livelihood” said Baldwin, who is also the Marine Programme Manager at the Environment Society of Oman. The Renaissance Whale and Dolphin Project is deploying a variety of methods to learn more about the distribution, abundance, habitat use, population characteristics, and potential threats to these marine species throughout the Sultanate of Oman. Not only will this wealth of scientific information help to preserve the unique whale species, but it will also materialize into guidelines for eco-tourism and other economic verticals, and be documented for Oman’s future marine studies and museums. The company’s Renaissance Day advert (below) featured the RWDP, published in Progress 2011 in English and Arabic.


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