1. INTRODUCTION

The Board of Directors of RANHILL (the “Board”) is pleased to announce that by a Contract of Award dated 14 April 2023 (“Contract”) from Servizi Energia Italia S.p.A. (Registration No. 03843840272), a wholly-owned subsidiary of  Saipem S.p.A. of Italy ("Saipem") to Perunding Ranhill Worley Sdn Bhd (Registration no. 198501009895 (142346-P)) ("PRW"), PRW was awarded a contract to perform Detailed Engineering Design for two compression complexes associated with the North Field Production Sustainability (“NFPS”) Offshore Compression Complexes Project (the “Project”).

PRW is principally involved in the provision of engineering and design services of oil and gas facilities. Through a Service Agreement dated 12 July 2002 between PRW and Ranhill Worley Sdn Bhd (“Ranhill Worley”), as amended by a supplemental agreement dated 7 August 2003 and addendum no. 1 dated 10 March 2020, the parties agreed for the exclusive appointment by PRW of Ranhill Worley to perform services in respect of all projects awarded to PRW by its client in Malaysia which include but not limited to the provision of design and engineering technical services and knowhow. Ranhill Worley, a subsidiary of Ranhill, also holds a 49.0% equity interest in PRW.

The Contract for the Project which was received by PRW on 14 April 2023 is for a Contract value of approximately United States Dollar: Fifty Million only (USD50.0 million) (Ringgit Malaysia: Two Hundred and Ten Million only (RM210.0 million)). PRW subsequently obtained the approval to release the announcement regarding this award from Saipem on 25 April 2023.

Pursuant to the Service Agreement entered into between PRW and Ranhill Worley, the scope of works under the Contract for this Project will be undertaken by Ranhill Worley.

Tan Sri Hamdan Mohamad is a director and substantial shareholder in PRW. Tan Sri Hamdan Mohamad is also the Chairman and Chief Executive of Ranhill and a substantial shareholder of Ranhill.

The provision of engineering services by Ranhill Worley to PRW for the Project is a recurrent related party transaction (“RRPT”) which is in the ordinary course of business and are on terms not more favourable to Tan Sri Hamdan Mohamad, the related party concerned, than those generally available to the public.

Ranhill had obtained the renewal of its shareholders’ mandate for the above RRPT at its eighth (8th) Annual General Meeting held on 2 June 2022.  Details of the above RRPT are contained in Ranhill’s circular to shareholders dated 29 April 2022.

2. INFORMATION ON THE PROJECT

The Qatar North Field is the world’s largest natural gas field. The NFPS contract awarded to Saipem encompasses the engineering, procurement, fabrication and installation of two offshore natural gas compression complexes aimed at sustaining the production of the North Field, including two of the largest fixed steel jacket compression platforms ever built, flare platforms, interconnecting bridges, living quarters and interface modules.

The activities awarded to PRW are expected to be completed by third quarter ("Q3") of 2024.

3. FINANCIAL EFFECTS OF THE PROJECT

The Project is expected to contribute positively to the revenue and earnings of Ranhill for the financial years ending 31 December 2023 and 2024.

4. RISK FACTORS

Risk for the Project work includes typical risks associated with performance of engineering services which are the normal course of Ranhill Worley business, such risks will be adequately addressed and mitigated by Ranhill Worley through its existing standard operating procedures and processes.

Ranhill Worley having been involved in this Energy, Chemical and Resource sector in partnership with Worley Limited (“Worley”) over the past 25 years, will utilise its capabilities and experience in ensuring that all risks will be properly identified, assessed, addressed and mitigated.

5. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS

Save for the above disclosure on Tan Sri Hamdan Mohamad, none of the Directors and/or major shareholders of Ranhill and Group and/or persons connected to them, have any interest, direct or indirect, in the Project.

6. STATEMENT BY DIRECTORS

This award of Detailed Engineering Design for NFPS Offshore Compression Complexes Project, being a mega project is a testimony of clients’ trust in Ranhill Worley, Kuala Lumpur office as one of Worley’s global centers of excellence in delivering offshore mega projects.

Ranhill Worley’s Kuala Lumpur office is one of Worley’s global centre of excellence in delivering offshore mega projects. With over 25 years of track records, Ranhill Worley has delivered many innovative designs and records breaking, amongst others, the first float over of Heavy Deck in Mumbai High with harsh offshore environment and float over of Mega Deck of over 30,000 tonnes in China offshore.

Previously, Ranhill Worley was awarded the detailed design of topsides of the new P-82 floating production, storage, and offloading (“FPSO”) vessel for Petrobras Brazil, one of the largest vessels deployed in the Buzios field and also Kasawari carbon capture and storage (“CCS”) platform in Malaysia, world’s largest offshore carbon capture and storage.

Ranhill Worley combines proven engineering design methods with latest in digitalization, knowledge of remote operations and emissions capture and reduction technology.  This includes implementation of Digital Twin, designing to addressing hazardous contaminants such as H2S and CO2 and selecting optimal technology to reduce flaring and emissions.  Our experienced and diverse workforce brings this all together for our customers, driven by a common purpose of delivering a more sustainable world.

The Board having taken into consideration all aspects of the Project and is of the opinion that the Project is in the best interest of Ranhill Group.

This announcement is dated 25 April 2023.