Who We Are Maintenance and Operations Contractor

Who We Are

Maintenance and Operations Contractor for the Department of • Energy Strategic Petroleum Reserve

Partnership Preeminent market leaders committed to the stewardship of a national asset

What We Do

SPR Mission • Maintain Ability To Respond To An Emergency Within 13 Days • Maintain Current Crude Oil Inventory Of 688 million barrels (mmb) Inside 62 Storage Caverns, And The Existing Storage Capacity Of 727 mmb • Be Prepared To carry out obligations under the international energy program

LOUISIANA TEXAS HOUSTON BEAUMONT PORT ARTHUR TEXAS CITY BIG HILL LAKE CHARLES MISSISSIPPI SPR WAREHOUSE (Stennis) BATON ROUGE BAYOU CHOCTAW WEST HACKBERRY SPR NEW ORLEANS BRYAN MOUND Gulf of Mexico SPR STORAGE FACILITY SPR WAREHOUSE (Stennis) CITIES

Storage Sites West Hackberry Big Hill Bayou Choctaw Bryan Mound

Special Initiatives Environmental, Safety & Health Charter Member National Environmental Achievement Track Open Only To Organizations With Strong Compliance Record ISO 14001 Environmental Management System 1 st US Bulk Petroleum Storage Entity Certified Voluntary Protection Programs (VPP) Achieved STAR Status Rating From Occupational Safety And Health Administration (OSHA)

Award Winning Program The SPR through DOE and Dyn. Mc. Dermott has won numerous awards in the area of quality management, environmental protection, and safety. Recent awards include: • 2005 Malcolm Baldrige National Quality Award • Louisiana Dept. of Economic Development Lantern Award • Three-time winner of the Louisiana Performance Excellence Award • Texas Quality Award – Big Hill • LA Quality Foundation Award for Environmental Management – NO, WH, BC • White House Closing the Circle Award • Clean Texas-Cleaner World National Leader – BH and BM first recipients in state • DOE Pollution Prevention Award for receiving Positive EMS Return • Texas GLO OSPRA Award – Big Hill • APEX and Communicator Award – ESPRIT Newsletter • Three Semi-Finalist in ASQ International Team Competition • DOE and OSHA VPP Star Award – Big Hill, West Hackberry and Bryan Mound

Core Values Mission Readiness Responsible Stewardship Partnership Customer Satisfaction Social Responsibility Employee Development & Diversity

The Quality Journey

The Journey’s Road Map Demonstrated Performance 2008 2005 2003 Integrated Performance Improvement Culture § Six Sigma Institutionalized, LEAN 6 s § pb. Views, Performance Systems, ISO § § 9001, Charter Teams Integrated Malcolm Baldrige Award Recipient International Status PI Teams Performance Improvement Culture § Transitioned CQI to ICPI, Benchmarking Initiatives § ISO 9001: 2000 Registered, PI & Six Sigma Teams § Strategic Planning, Six Sigma Adoption, Best Practices § Malcolm Baldrige Award Application process Continuous Quality Improvement 1996 1993 § § § Embraced Malcolm Baldrige Criteria (internal) QI Story and Process Management Teams Deming Influence Transition from TQI Approach TQM Theory Use of leading edge performance enhancement tools creates an empowered workforce that improves performance through best practices application

Values-Based leadership

Planning for the Unexpected

Planning to Succeed • • Create a “mindfulness” of the unexpected Plan for contingency and disruption Develop mitigating actions & responses Design redundancy in communications Exercise response plans & actions Correct exercise deficiencies Implement continuous improvement cycles Use 3 rd party feedback

What We Faced Hurricane “Katrina” August 29, 2005 Hurricane “Rita” September 24, 2005 “For those who need to see to believe”

TEXAS HOUSTON LOUISIANA BEAUMONT PORT ARTHUR TEXAS CITY BIG HILL LAKE CHARLES MISSISSIPPI BATON ROUGE BAYOU CHOCTAW WEST HACKBERRY SPR WAREHOUSE (Stennis) SPR NEW ORLEANS BRYAN MOUND RITA 9 -24 -05 SPR STORAGE FACILITY SPR WAREHOUSE (Stennis) CITIES Gulf of Mexico KATRINA 8 -29 -05

Hurricanes Katrina / Rita Timeline • Monday, 6/13/05 Annual hurricane preparedness exercise • Tuesday, 8/23/05 Katrina enters US Gulf – project forecasts landfall in Florida Panhandle • Friday, 8/26/06 Westward shift predicted, possible strike to New Orleans SPR Emergency Management team meets. ALERT levels increased. • Saturday, 8/27/06 Advanced communications/EOC deployed to prearranged lodging at Beaumont, TX. Elmwood office, Stennis warehouse, Bayou Choctaw CLOSED • Sunday, 8/28/05 EMT convenes in Beaumont, TX. ICS established. Normal DOE/DM management structure suspended. • *Monday, 8/29/05 Katrina makes landfall – Stennis team rides out storm in warehouse – major damage to New Orleans, Elmwood Complex uninhabitable

Hurricanes Katrina / Rita Timeline (continued) • Tuesday, 8/30/05 • • • Wednesday, 8/31/05 Thursday, 9/1/05 Saturday, 9/3/05 Sunday, 9/4/05 Thursday, 9/8/05 Thursday, 9/13/05 *Monday, 9/19/05 Wednesday, 9/21/05 Thursday, 9/22/05 *Saturday, 9/24/05 New Orleans re-entry team completes damage assessment Secretary of Energy directs “Emergency Oil Exchange” DM Data Systems sets computer network at BC DOE satellite system deployed at BC Emergency exchange oil flows President orders drawdown Secretary Bodman visits BC, presents Gold Medal Rita enters Gulf of Mexico SPR EOC moves from Beaumont to Baton Rouge WH, BH and BM evacuated Rita makes landfall

Hurricanes Katrina / Rita Timeline (continued) • Sunday, 9/25/05 • Monday, 9/26/05 • Monday, 10/3/05 • Monday, 10/10/05 • Wednesday, 10/12/05 BM re-entry – no damage BH re-entry – minimal damage WH re-entry – considerable damage. Re-entry team remains and sets up on site PMO operational in New Orleans WH operations begins drawdown Malcolm Baldrige examiners arrive Normal operations resume

Katrina Hwy. 23

Katrina

Katrina Buras Water Tower

Katrina Bootheville-Venice High School

Katrina Bootheville High School

Menhaden Boats on Hwy 23 at the foot of the Empire High Rise Bridge Katrina

W. Pointe-a-la-Hache Katrina

3 rd Party Results President Bush said, “This year’s recipients have demonstrated the principled leadership, strong character, and commitment to economic growth that are associated with this award’s namesake, and each serves as a model for other organizations in its field. ” Louisiana Congressional Delegation said, “Through your demonstration of hard work, determination, commitment, sacrifice, and innovation, you serve as a testament to the strength of our citizens. Your efforts will advance hope across our region which has suffered unprecedented loss and devastation, and will make us stronger in facing the challenges that lie ahead. ” DOE Secretary Bodman said, “This honor will come as no surprise to those who are familiar with Dyn. Mc. Dermott and their work to support our nation’s energy security. Their heroic performance to move crude oil to the market in response to the devastation of Hurricanes Katrina and Rita – even while their own employees faced losses and displacement from their homes – was truly inspiring. ”

3 rd Party Results DOE Secretary Bodman said, “It is especially commendable that you encouraged the Baldrige examiners not to postpone their site visit during this time and gave them an opportunity to see the emergency response process being executed. The Department of Energy recognizes the prestige of the Malcolm Baldrige National Quality Award and takes great pride in your achievement, and I thank you for your dedication and effort. ” LA Governor Blanco said, “It is with great pride that I congratulate the first Louisiana-based organization to attain the honor represented by this prestigious award in receiving the nation’s highest Presidential honor for quality and organizational performance excellence. ” LA DED Secretary Olivier said, “Dyn. Mc. Dermott has achieved what many companies aspire to, but never come close to reaching, by receiving one of the most rigorous quality accolades in the world – the Malcolm Baldrige National Quality Award. ”

Planning to Succeed Pays Off