1. PROJECT EXPERIENCE FROM RUSSIA Benedikt Henriksen Lillestrøm, 7 October 2004

2. Date: 2004-10-07 Page: 2 SUPPLIER DEVELOPMENT PROJECT IN NORTH WEST RUSSIA Background: Result of Joint Declaration by President Putin and Prime Minister Bondevik, November 2002 Hydro’s engagement in the Shtokman gas field project in the Barents Sea Goal :  To map current status of supplier industry  To motivate supplier industry for development  To assist supplier industry to cover the identified gaps Project partners:  Gazprom,Rosneft and Sevmorneftegaz  Arkhangelsk and Murmansk administrations  Barents secretariate  Finnmark county administration  Innovation Norway  Sør Varanger commune

3. Date: 2004-10-07 Page: 3 HYDRO’S OIL & GAS ACTIVITIES IN NORTH WEST RUSSIA

4. Date: 2004-10-07 Page: 4 CHALLENGES ROGALAND REGION: POPULATION: ~0,4 mill ppl NUMBER OF SUPPLIERS: ~500 EMPLOYEES: 38 000 ppl ARKH. & MURM. REGIONS: POPULATION: ~3 mill ppl NUMBER OF SUPPLIERS: < 20 NORWAY LOCAL QUALIFIED SUPPLIERS: >950 COMPANIES DIRECTLY EMPLOYED - 60 000 PEOPLE RELATED SECTORS – 225 000 EMPL. TURNOVER (LOCAL SUPPLIES) ~$8 bln /yr

5. Date: 2004-10-07 Page: 5 SURVEY ANALYSISFEEDBACKINITIATIVES SUPPLIER DEVELOPMENT PROGRAM PHASE I ”SURVEY” PHASE II ”FEEDBACK & INITIATVES” PHASE III ”IMPLEMENTATION” PROJECT OVERVIEW ARKHANGELSK AND MURMANSK 51 COMPANIES DETAILED QUESTIONNAIRE MAY- AUGUST 2003 ARKHANGELSK AND MURMANSK 51 COMPANIES DETAILED QUESTIONNAIRE MAY- AUGUST 2003

6. Date: 2004-10-07 Page: 6 SURVEY ANALYSIS FEEDBACKINITIATIVES SUPPLIER DEVELOPMENT PROGRAM PHASE I ”SURVEY” PHASE II ”FEEDBACK & INITIATVES” PHASE III ”IMPLEMENTATION” PROJECT OVERVIEW PRODUCTS & SERVICES QA & HSE FINANCIALS REFERENCES ESTABLISHMENT OF PILOT DATABASE SEPTEMBER-NOVEMBER 2003 PRODUCTS & SERVICES QA & HSE FINANCIALS REFERENCES ESTABLISHMENT OF PILOT DATABASE SEPTEMBER-NOVEMBER 2003

7. Date: 2004-10-07 Page: 7 SURVEY ANALYSIS FEEDBACK INITIATIVES SUPPLIER DEVELOPMENT PROGRAM PHASE I ”SURVEY” PHASE II ”FEEDBACK & INITIATVES” PHASE III ”IMPLEMENTATION” PROJECT OVERVIEW WRITTEN INFORMATION TO SUPPLIERS 2 DAYS’ CONFERENCES IN ARKHANGELSK AND MURMANSK DISCUSSIONS OF FINDINGS WITH COMPANIES MARCH - APRIL 2004 WRITTEN INFORMATION TO SUPPLIERS 2 DAYS’ CONFERENCES IN ARKHANGELSK AND MURMANSK DISCUSSIONS OF FINDINGS WITH COMPANIES MARCH - APRIL 2004

8. Date: 2004-10-07 Page: 8 SURVEY ANALYSISFEEDBACK INITIATIVES SUPPLIER DEVELOPMENT PROGRAM PHASE I ”SURVEY” PHASE II ”FEEDBACK & INITIATVES” PHASE III ”IMPLEMENTATION” PARTNER SEARCH IN COOPERATION WITH INTSOK PROMOTION OF QUALIFICATION SYSTEM SUB-CONTRACTOR COMPETENCE DEVELOPMENT ”ONE-TO-ONE” MEETINGS WITH SELECTED COMPANIES APRIL-DECEMBER 2004 PARTNER SEARCH IN COOPERATION WITH INTSOK PROMOTION OF QUALIFICATION SYSTEM SUB-CONTRACTOR COMPETENCE DEVELOPMENT ”ONE-TO-ONE” MEETINGS WITH SELECTED COMPANIES APRIL-DECEMBER 2004 PROJECT OVERVIEW

9. Date: 2004-10-07 Page: 9 SURVEY ANALYSISFEEDBACK INITIATIVES SUPPLIER DEVELOPMENT PROGRAM PHASE I ”SURVEY” PHASE II ”FEEDBACK & INITIATVES” PHASE III ”IMPLEMENTATION” PROJECT OVERVIEW PHASE III MIGHT BE A SUBJECT FOR COOPERATION WITH GAZPROM AND OTHER PARTNERS

10. Date: 2004-10-07 Page: 10 SURVEY ANALYSIS FEEDBACK INITIATIVES SUPPLIER DEVELOPMENT PROGRAM PHASE I ”SURVEY” PHASE II ”FEEDBACK & INITIATVES” PHASE III ”IMPLEMENTATION” PROJECT OVERVIEW 1. ESTABLISHMENT OF JOINT QUALIFICATION SYSTEM 2. ESTABLISHMENT OF REGIONAL SUPPLIER DEVELOPMENT CENTER COMPETENCE INCREASING PARTNER SEARCH NETWORKING 1. ESTABLISHMENT OF JOINT QUALIFICATION SYSTEM 2. ESTABLISHMENT OF REGIONAL SUPPLIER DEVELOPMENT CENTER COMPETENCE INCREASING PARTNER SEARCH NETWORKING

11. Date: 2004-10-07 Page: 11 EXPERIENCE ”Experience is the name everyone gives to their mistakes” Oscar Wilde

12. Date: 2004-10-07 Page: 12 ЭТО ТРУДНО... IT’S NOT THAT EASY …

13. Date: 2004-10-07 Page: 13 BUT THE UPSIDE IS HIGH …

14. Date: 2004-10-07 Page: 14 NORWEGIAN EXPERTISE IS IN DEMAND – MAKE YOUR MOVE EXPERIENCE 1.

15. Date: 2004-10-07 Page: 15 WESTERN TECHNOLOGY IS A KEY TO ECONOMIC VIABILITY LACK OF SERVICE INFRASTRUCTURE LACK OF LOCAL SUPPLIERS AND COMMON STANDARDS HUGE INDUSTRIAL POTENTIAL AND GOOD ”MATCH” UNIQUE OPPORTUNITIES FOR NORWEGIAN INDUSTRY

16. Date: 2004-10-07 Page: 16 UNDERSTAND THE DIFFERENCE EXPERIENCE 2.

17. Date: 2004-10-07 Page: 17 RUSSIANORWAY MASCULINEFEMININE DECISIONCOMPROMISE ”ALL FOR ONE””ONE FOR ALL” SURVIVAL CREATIVITYSOCIAL SECURITY

18. Date: 2004-10-07 Page: 18 EXPERIENCE 3. DO YOUR HOMEWORK PROPERLY

19. Date: 2004-10-07 Page: 19 YOU HAVE JUST 10 MIN. TO EXPLAIN NATURE OF YOUR BUSINESS YOUR OBJECTIVES YOUR PROPOSAL VALUES FOR COUNTERPART …AND BE UNDERSTOOD!

20. Date: 2004-10-07 Page: 20 EXPERIENCE 4. BE PREPARED TO SPECIAL WORKING CONDITIONS

21. Date: 2004-10-07 Page: 21 ”It’s often hard to understand where the government ends and business begins, where business ends and the government begins”, Vladimir Putin

22. Date: 2004-10-07 Page: 22 RUSSIANS ARE CHALLENGING PARTNERS EXPERIENCE 5.

23. Date: 2004-10-07 Page: 23 INITIALLY OPEN AND FRIENDLY DIRECT IN EXPRESSIONS PERSONAL RELATIONSHIP ORIENTED DON’T LIKE TO BE TAUGHT BY FOREIGNERS

24. Date: 2004-10-07 Page: 24 PRESENCE IS A ”MUST EXPERIENCE 6.

25. Date: 2004-10-07 Page: 25 THANK YOU !