##### Table of Contents



As filed with the Securities and Exchange
Commission on June 29, 2004




---




SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549





FORM 20-F


|  |  |                                                                                                                                               |  | 
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|  |  | (Mark One)                                                                                                                                    |  | 
|o |  | REGISTRATION STATEMENT PURSUANT TO
    SECTION 12(B) OR (G) OF
    THE SECURITIES EXCHANGE ACT OF 1934                                        |  | 
| 
|x |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
    OF
    THE SECURITIES EXCHANGE ACT OF 1934
    For the fiscal year ended: December 31, 2003 |  | 
|o |  | TRANSITION REPORT PURSUANT TO SECTION 13
    OR 15(D) OF
    THE SECURITIES EXCHANGE ACT OF 1934
    Commission file number 1-15234           |  | 

TECHNIP


(Exact name of Registrant as specified in its
charter)


|                                                                      |  |                                                          
|--------------------------------------------------------------------- |  | ---------------------------------------------------------
|Not applicable(Translation of
    Registrants
    name into English) |  | France(Jurisdiction of incorporation
    or organization)

6-8 allée de lArche, Faubourg
de lArche, Zac Danton


92400 Courbevoie, France


(telephone: 011-33-1 4778-2121)


(Address of principal executive
offices)


Securities registered or to be registered
pursuant to Section 12(b) of the Act.

|                                                                                    |  |                                           
|----------------------------------------------------------------------------------- |  | ------------------------------------------
|Title of each class:                                                                |  | Name of each exchange on which registered:
|                                                                                    |  |                                           
|American Depositary Shares, each representing
    one-fourth of one Ordinary Share* |  | New York Stock Exchange                   
|Ordinary Shares                                                                     |  | New York Stock Exchange                   



---



|  |                                                                                                                                                                                                                  
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Listed, not for trading or quotation purposes,
    but only in connection with the registration of the American
    Depositary Shares pursuant to the requirements of the Securities
    and Exchange Commission.

Securities registered or to be registered
pursuant to Section 12(g) of the Act.

None

Securities for which there is a reporting
obligation pursuant to Section 15(d) of the Act.

None

Indicate
the number of outstanding shares of each of the issuers
classes of capital or common stock as of the close of the period
covered by the annual report:

Ordinary
Shares, nominal value
3.05 per share:
23,738,331

Indicate
by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

Yes x                      No o


Indicate
by check mark which financial statement item the Registrant has
elected to follow.

Item 17 o                  Item 18 x




---






---










TABLE OF CONTENTS

|                                     |  |                                                                                  |     |      |     | 
|------------------------------------ |  | -------------------------------------------------------------------------------- | --- | ---- | --- | 
|                                     |  |                                                                                  |     | Page |    
|                                     |  |                                                                                  |     |      |    
|PART I                               |  |                                                                                  | 5   |     
|Item 1.                              |  | Identity of Directors,
    Senior Management and Advisers                        |     |      | 5   | 
|Item 2.                              |  | Offer Statistics and
    Expected Timetable                                      |     |      | 5   | 
|Item 3.                              |  | Key Information                                                                  |     |      | 5   | 
|Item 4.                              |  | Information on Technip                                                           |     |      | 13  | 
|Item 5.                              |  | Operating and Financial
    Review and Prospects                                 |     |      | 46  | 
|Item 6.                              |  | Directors, Senior Management
    and Employees                                   |     |      | 72  | 
|Item 7.                              |  | Major Shareholders and
    Related Party Transactions                            |     |      | 81  | 
|Item 8.                              |  | Financial Information                                                            |     |      | 82  | 
|Item 9.                              |  | The Offer and Listing                                                            |     |      | 85  | 
|Item 10.                             |  | Additional Information                                                           |     |      | 88  | 
|Item 11.                             |  | Quantitative and Qualitative
    Disclosures About Market Risk                   |     |      | 121 | 
|Item 12.                             |  | Description of Securities to
    be registered                                   |     |      | 124 | 
|PART II                              |  |                                                                                  | 125 |     
|Item 13.                             |  | Defaults, Dividend
    Arrearages and Delinquencies                              |     |      | 125 | 
|Item 14.                             |  | Material Modifications to
    the Rights of Security Holders and Use of Proceeds |     |      | 125 | 
|Item 15.                             |  | Controls and Procedures                                                          |     |      | 125 | 
|Item 16.                             |  | [Reserved]                                                                       |     |      | 125 | 
|Item 16A.                            |  | Audit Committee Financial
    Expert                                             |     |      | 125 | 
|Item 16B.                            |  | Code of Ethics                                                                   |     |      | 125 | 
|Item 16C.                            |  | Principal Accountant Fees
    and Services                                       |     |      | 125 | 
|Item 16D.                            |  | Exemptions from the Listing
    Standards for Audit Committees                   |     |      | 127 | 
|Item 16E.                            |  | Purchases of Equity
    Securities                                               |     |      | 127 | 
|PART III                             |  |                                                                                  | 128 |     
|Item 17.                             |  | Financial Statements                                                             |     |      | 128 | 
|Item 18.                             |  | Financial Statements                                                             |     |      | 128 | 
|Item 19.                             |  | Exhibits                                                                         |     |      | 128 | 
|ARTICLES OF ASSOCIATION             
|CERTIFICATION OF CEO                
|CERTIFICATION OF CFO                
|CERTIFICATION OF CEO                
|CONSENT OF BARBIER FRINAULT & AUTRES



2



---



##### Table of Contents



PRESENTATION OF INFORMATION

In this annual report, all references herein to
U.S. dollars, dollars,
cents or U.S.$ are to the currency of
the United States; references to France are to the
French Republic; references to French francs,
francs or FF are to the currency of
France prior to January 1, 1999 and references to
euro or
 are
to the currency of the European Monetary Union including France.

Various amounts and percentages in this annual
report have been rounded and, accordingly, may not total.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS

This annual report contains both historical and
forward-looking statements. All statements other than statements
of historical fact are, or may be deemed to be, forward-looking
statements, or statements of future expectations, including,
without limitation, certain statements made in the sections
entitled Item 3. Key Information  Risk
Factors, Item 4. Information on Technip
and Item 5. Operating and Financial Review and
Prospects. These forward-looking statements are not based
on historical facts, but rather reflect our current expectations
concerning future results and events and generally may be
identified by the use of forward-looking words such as
believe, aim, expect,
anticipate, intend, foresee,
likely, should, planned,
may, estimates, potential or
other similar words. Similarly, statements that describe our
objectives, plans or goals are or may be forward-looking
statements.

These forward-looking statements involve known
and unknown risks, uncertainties and other factors that may
cause our actual results, performance or achievements to differ
materially from the anticipated results, performance or
achievements expressed or implied by these forward-looking
statements. You should review carefully all information,
including the financial statements and the notes to the
financial statements, included in this annual report. Risks that
could cause actual results to differ materially from the results
anticipated in the forward-looking statements include, among
other things:



| |   |                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------
| |  | our ability to successfully execute large
    integrated services contracts, and construction and project
    risks generally;
|
| |  | the level of production-related capital
    expenditure in the oil and gas industry as well as other
    industries;          
|
| |  | interest rate fluctuations;                                                                                                   
|
| |  | currency fluctuations;                                                                                                        
|
| |  | the timing of development of energy resources;                                                                                
|
| |  | armed conflict or political instability in the
    Arabic-Persian Gulf or other regions;                                      
|
| |  | the strength of competition;                                                                                                  
|
| |  | control of costs and expenses;                                                                                                
|
| |  | the reduced availability of government-sponsored
    export financing;                                                        
|
| |  | the timing and success of anticipated integration
    synergies; and                                                          
|
| |  | stability in developing countries.                                                                                            

The risk factors described beginning on
page 8 could affect our future results, causing these
results to differ materially from those expressed in our
forward-looking statements. These factors are not necessarily
all of the important factors that could cause our actual results
to differ materially from those expressed in any of our
forward-looking statements. Other unknown or unpredictable
factors also could have material adverse effects on our future
results. The forward-looking statements included in this annual
report are made only as of the date of this annual report. We
cannot assure you that projected results or events will be
achieved.

All subsequent written and oral forward-looking
statements attributable to us or any person acting on our behalf
are qualified by the cautionary statements in this section.

3



---



##### Table of Contents



Readers are urged to carefully review and
consider the various disclosures made by us that attempt to
advise interested parties of the factors affecting our business,
including the disclosures made under the captions
Item 3. Key Information  Risk
Factors, Item 4. Information on Technip
and Item 5. Operating and Financial Review and
Prospects in this annual report, as well as our other
periodic reports on Form 6-K submitted to the Securities
and Exchange Commission.

Unless otherwise stated or the context otherwise
requires, references to we, us,
our, Group, Company and
similar references refer to Technip. References to
EU refer to the European Union and references to
U.S. refer to the United States of America.

4



---



##### Table of Contents






PART I



Item 1.     Identity
of Directors, Senior Management and Advisers

Not applicable.




Item 2.     Offer
Statistics and Expected Timetable

Not applicable.




Item 3.     Key
Information

Selected Financial Data

We publish our consolidated financial statements
in euro. However, our financial statements for 1999, 2000 and
2001 were originally prepared in French francs, and have been
translated into euro for purposes of this document at the rate
of FF 6.55957 =
1.00, the
applicable legal rate of conversion established on
January 1, 1999. For additional information regarding the
euro and the French franc, see  Exchange Rate
Information below. Unless otherwise stated, the
translations of euros into U.S. dollars have been made at
the rate of U.S.$1.2217 per
1.00, the noon
buying rate in New York City for cable transfers in euro as
certified for customs purposes by the Federal Reserve Bank of
New York (the Noon Buying Rate) on May 28,
2004. See  Exchange Rate Information
below for information regarding the euro and French
franc/U.S. dollar exchange rates from 1999 to the present.

Unless otherwise indicated, we have prepared the
financial information contained in this annual report in
accordance with French generally accepted accounting principles
(French GAAP), which differ in certain significant
respects from U.S. GAAP. See Notes 30 through 32 to
our audited consolidated financial statements for the years
ended December 31, 2001, 2002 and 2003 (the
Consolidated Financial Statements) included
elsewhere in this Form 20-F for a description of the
principal differences between French GAAP and U.S. GAAP, as
they relate to us and our consolidated subsidiaries, and a
reconciliation to U.S. GAAP of net income and
shareholders equity.

The tables below present selected consolidated
financial data for the Group for the five-year period ended
December 31, 2003. Such data with respect to the years
ended December 31, 2001, 2002 and 2003 have been extracted
or derived from the Consolidated Financial Statements of the
Group, and are qualified by reference to, and should be read in
conjunction with, the Consolidated Financial Statements and the
Notes thereto and Item 5. Operating and Financial
Review and Prospects included elsewhere in this annual
report. The Consolidated Financial Statements have been audited
by Barbier Frinault & Autres  Ernst & Young,
independent auditors, as indicated in their report thereon,
which also appears in this annual report.

|                       |  |                                          |         |   |      |  |         |      |  |  |         |   |  |      |         |  |   |  |         |  |  |  |         | 
|---------------------- |  | ---------------------------------------- | ------- | - | ---- |  | ------- | ---- |  |  | ------- | - |  | ---- | ------- |  | - |  | ------- |  |  |  | ------- | 
|                       |  |                                         
|                       |  | Year ended December 31,                  |        
|                       |  |                                          |        
|                       |  |                                          |         |  
|                       |  | 2003                                     |         |   |     
|                       |  |                                          |         |   | 2002 |  |         | 2001 |  |  | 2000    |   |  | 1999 |        
|                       |  | U.S.$(1)                                 |         |   |     |  |         |     |  |  |        |   |  |     |         |  |  | 
|                       |  |                                          |         |   |      |  |         |      |  |  |         |   |  |      |         |  |   | 
|                       |  |                                         
|                       |  | (amounts in millions, except share data) |        
|INCOME STATEMENT DATA: |  |                                          |         |   |      |  |         |      |  |  |         |   |  |      |         |  |   |  |         |  |  |  |         | 
|French GAAP            |  |                                          |         |   |      |  |         |      |  |  |         |   |  |      |         |  |   |  |         |  |  |  |         | 
|Net sales              |  |                                          | 5,755.6 |   |      |  | 4,711.1 |      |  |  | 4,452.3 |   |  |      | 3,546.0 |  |   |  | 2,972.0 |  |  |  | 2,782.2 | 
|Operating expenses     |  |                                          | 5,477.5 |   |      |  | 4,483.5 |      |  |  | 4,247.7 |   |  |      | 3,311.2 |  |   |  | 2,789.4 |  |  |  | 2,621.2 | 
|Operating income       |  |                                          | 278.1   |   |      |  | 227.6   |      |  |  | 204.6   |   |  |      | 234.8   |  |   |  | 182.6   |  |  |  | 161.0   | 
|Net income (loss)      |  |                                          | (24.1   | ) |      |  | (19.7   | )    |  |  | (29.4   | ) |  |      | 108.1   |  |   |  | 214.2   |  |  |  | 172.6   | 
|U.S. GAAP              |  |                                          |         |   |      |  |         |      |  |  |         |   |  |      |         |  |   |  |         |  |  |  |         | 
|Net sales              |  |                                          | 5,706.9 |   |      |  | 4,671.3 |      |  |  | 4,432.0 |   |  |      | 3,547.3 |  |   |  | 2,989.5 |  |  |  | 2,783.7 | 
|Operating income       |  |                                          | 236.5   |   |      |  | 193.6   |      |  |  | 177.1   |   |  |      | 198.7   |  |   |  | 151.7   |  |  |  | 150.9   | 
|Net income             |  |                                          | 85.0    |   |      |  | 69.6    |      |  |  | 83.3    |   |  |      | 114.8   |  |   |  | 164.9   |  |  |  | 109.6   | 

5



---



##### Table of Contents



|                                         |  |                                          |          |   |      |  |          |      |  |  |          |   |  |      |          |   |   |  |         |   |  |  |         |  
|---------------------------------------- |  | ---------------------------------------- | -------- | - | ---- |  | -------- | ---- |  |  | -------- | - |  | ---- | -------- | - | - |  | ------- | - |  |  | ------- | -
|                                         |  |                                         
|                                         |  | Year ended December 31,                  |         
|                                         |  |                                          |         
|                                         |  |                                          |          |  
|                                         |  | 2003                                     |          |   |     
|                                         |  |                                          |          |   | 2002 |  |          | 2001 |  |  | 2000     |   |  | 1999 |         
|                                         |  | U.S.$(1)                                 |          |   |     |  |          |     |  |  |         |   |  |     |          |   |  | 
|                                         |  |                                          |          |   |      |  |          |      |  |  |          |   |  |      |          |   |   | 
|                                         |  |                                         
|                                         |  | (amounts in millions, except share data) |         
|Per Share Data:                          |  |                                          |          |   |      |  |          |      |  |  |          |   |  |      |          |   |   |  |         |   |  |  |         |  
|French GAAP                              |  |                                          |          |   |      |  |          |      |  |  |          |   |  |      |          |   |   |  |         |   |  |  |         |  
|Non-Diluted earnings (loss) per share    |  |                                          | (1.0     | ) |      |  | (0.84    | )    |  |  | (1.1     | ) |  |      | 4.45     |   |   |  | 13.90   |   |  |  | 10.95   |  
|Diluted earnings (loss) per share        |  |                                          |         |   |      |  |         |      |  |  |         |   |  |      | 4.26     |   |   |  | 12.85   |   |  |  | 10.75   |  
|Non-Diluted number of shares (thousands) |  |                                          | 23,432   |   |      |  | 23,432   |      |  |  | 26,794   |   |  |      | 24,242   |   |   |  | 15,412  |   |  |  | 15,759  |  
|Diluted number of shares (thousands)(2)  |  |                                          | 29,302   |   |      |  | 29,302   |      |  |  | 28,386   |   |  |      | 25,388   |   |   |  | 16,665  |   |  |  | 16,051  |  
|Dividend paid per share                  |  |                                          | 4.03     |   |      |  | 3.30     |      |  |  | 3.30     |   |  |      | 3.30     |   |   |  | 3.30    |   |  |  | 3.00    |  
|U.S. GAAP                                |  |                                          |          |   |      |  |          |      |  |  |          |   |  |      |          |   |   |  |         |   |  |  |         |  
|Basic earnings per share                 |  |                                          | 3.63     |   |      |  | 2.97     |      |  |  | 3.23     |   |  |      | 6.85     |   |   |  | 10.84   |   |  |  | 7.12    |  
|Diluted earnings per share               |  |                                          | 3.08     |   |      |  | 2.52     |      |  |  | 2.75     |   |  |      | 6.77     |   |   |  | 10.73   |   |  |  | 7.10    |  
|Basic number of shares (thousands)       |  |                                          | 23,432   |   |      |  | 23,432   |      |  |  | 25,823   |   |  |      | 16,770   |   |   |  | 15,210  |   |  |  | 15,387  |  
|Diluted number of shares (thousands)(2)  |  |                                          | 27,641   |   |      |  | 27,641   |      |  |  | 30,325   |   |  |      | 16,962   |   |   |  | 15,374  |   |  |  | 15,446  |  
|OTHER FINANCIAL DATA:                    |  |                                          |          |   |      |  |          |      |  |  |          |   |  |      |          |   |   |  |         |   |  |  |         |  
|French GAAP                              |  |                                          |          |   |      |  |          |      |  |  |          |   |  |      |          |   |   |  |         |   |  |  |         |  
|Purchase of fixed assets                 |  |                                          | 153.9    |   |      |  | 126.0    |      |  |  | 126.2    |   |  |      | 2,670.5  |   |   |  | 702.2   |   |  |  | 109.8   |  
|Depreciation and amortization            |  |                                          | 282.9    |   |      |  | 231.6    |      |  |  | 260.8    |   |  |      | 110.9    |   |   |  | 43.0    |   |  |  | 31.8    |  
|BALANCE SHEET DATA:                      |  |                                          |          |   |      |  |          |      |  |  |          |   |  |      |          |   |   |  |         |   |  |  |         |  
|French GAAP                              |  |                                          |          |   |      |  |          |      |  |  |          |   |  |      |          |   |   |  |         |   |  |  |         |  
|Cash and cash equivalents                |  |                                          | 1,090.2  |   |      |  | 892.4    |      |  |  | 741.1    |   |  |      | 763.4    |   |   |  | 563.1   |   |  |  | 1,019.4 |  
|Working capital requirement              |  |                                          | (1,193.8 | ) |      |  | (977.2   | )    |  |  | (879.2   | ) |  |      | (695.7   | ) |   |  | (648.0  | ) |  |  | (830.9  | )
|Non-current assets, net                  |  |                                          | 3,965.6  |   |      |  | 3,246.0  |      |  |  | 3,518.2  |   |  |      | 3,806.8  |   |   |  | 1,050.7 |   |  |  | 431.8   |  
|Total assets                             |  |                                          | 14,670.3 |   |      |  | 12,008.1 |      |  |  | 10,606.0 |   |  |      | 12,117.7 |   |   |  | 6,906.6 |   |  |  | 6,205.0 |  
|Convertible bonds redemption premium     |  |                                          | 103.2    |   |      |  | 84.5     |      |  |  | 90.4     |   |  |      |         |   |   |  |        |   |  |  |        |  
|Total short-term debt                    |  |                                          | 276.5    |   |      |  | 226.3    |      |  |  | 297.0    |   |  |      | 456.7    |   |   |  | 191.2   |   |  |  | 15.0    |  
|Total long-term debt                     |  |                                          | 1,103.4  |   |      |  | 903.2    |      |  |  | 950.1    |   |  |      | 1,182.2  |   |   |  | 4.8     |   |  |  | 6.8     |  
|Shareholders equity                     |  |                                          | 2,367.7  |   |      |  | 1,938.0  |      |  |  | 2,026.3  |   |  |      | 2,214.2  |   |   |  | 766.4   |   |  |  | 596.2   |  
|Minority interests                       |  |                                          | 11.2     |   |      |  | 9.2      |      |  |  | 16.3     |   |  |      | 21.4     |   |   |  | 3.4     |   |  |  | 2.3     |  
|U.S. GAAP                                |  |                                          |          |   |      |  |          |      |  |  |          |   |  |      |          |   |   |  |         |   |  |  |         |  
|Total long-term debt                     |  |                                          | 1,103.4  |   |      |  | 903.2    |      |  |  | 950.1    |   |  |      | 1,182.2  |   |   |  | 4.8     |   |  |  | 6.8     |  
|Total assets                             |  |                                          | 7,386.3  |   |      |  | 6,045.9  |      |  |  | 5,972.9  |   |  |      | 7,672.4  |   |   |  | 2,451.8 |   |  |  | 2,304.8 |  
|Shareholders equity                     |  |                                          | 2,644.1  |   |      |  | 2,164.3  |      |  |  | 2,108.5  |   |  |      | 2,228.3  |   |   |  | 764.9   |   |  |  | 639.6   |  



---



|    |                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Translated solely for convenience into dollars at
    the Noon Buying Rate on May 28, 2004 of U.S.$1.2217 per
    1.00 for the
    year ending December 31, 2003.
|   
|(2) | Diluted number of shares for 2001 excludes
    1,847,376 shares held by our subsidiary ISIS, which we
    cancelled subsequent to our merger with ISIS in 2002.   

Exchange Rate Information

The following table sets forth, for the periods
and dates indicated, certain information concerning the Noon
Buying Rate in New York City for cable transfers for foreign
currencies as certified for customs purposes by the Federal
Reserve Bank of New York expressed in French francs per
U.S.$1.00 or U.S. dollars per
1.00, as the
case may be. Since January 1, 1999, the euro has
substituted the French franc as the lawful currency of France.
These rates are provided solely for the convenience of the
reader and are not the rates we used in the preparation of our
Consolidated Financial Statements included elsewhere in this
annual report. We use the rate published by the Banque de
France for our internal financial reporting and for the
presentation of certain U.S. dollar/ French franc and
U.S. dollar/euro translations set forth herein (see
 Selected Financial Data). No
representation is made that French francs or euro could have
been, or could be, converted into U.S. dollars at these
rates or any

6



---



##### Table of Contents



other rate. January 15, 1999 was the last
day that the Federal Reserve Bank of New York published Noon
Buying Rates for French francs.


|                                  |  |                             |         |  |                        |  |         |      |  |             |          |  |         |          |          |  |         |       |      |      |  |       |      |  |  |       |      |  |  |       |      | 
|--------------------------------- |  | --------------------------- | ------- |  | ---------------------- |  | ------- | ---- |  | ----------- | -------- |  | ------- | -------- | -------- |  | ------- | ----- | ---- | ---- |  | ----- | ---- |  |  | ----- | ---- |  |  | ----- | ---- | 
|                                  |  |                             |         | 
|                                  |  | French francs per U.S.$1.00 |         |  | U.S. dollars per 1.00 | 
|                                  |  |                             |         |  |                        | 
|                                  |  | Year/period                 |         |  | Average                |  |         |      |  | Year/period |          |  | Average |          |          | 
|                                  |  | end rate                    |         |  | Rate(1)                |  |         | High |  |             | Low      |  |         | end rate |          |  | Rate(1) |       |      | High |  |       | Low  | 
|                                  |  |                             |         |  |                        |  |         |      |  |             |          |  |         |          |          |  |         |       |      |      |  |       |      | 
|Yearly amounts                    |  |                             |         |  |                        |  |         |      |  |             |          |  |         |          |          |  |         |       |      |      |  |       |      |  |  |       |      |  |  |       |      | 
|1999(2)                           |  |                             | FF 6.51 |  |                        |  | FF 6.20 |      |  |             | FF  6.54 |  |         |          | FF  5.55 |  |         | U.S.$ | 1.01 |      |  | U.S.$ | 1.06 |  |  | U.S.$ | 1.18 |  |  | U.S.$ | 1.00 | 
|2000                              |  |                             |        |  |                        |  |        |      |  |             |         |  |         |          |         |  |         |       | 0.94 |      |  |       | 0.92 |  |  |       | 1.03 |  |  |       | 0.83 | 
|2001                              |  |                             |        |  |                        |  |        |      |  |             |         |  |         |          |         |  |         |       | 0.89 |      |  |       | 0.89 |  |  |       | 0.95 |  |  |       | 0.84 | 
|2002                              |  |                             |        |  |                        |  |        |      |  |             |         |  |         |          |         |  |         |       | 1.05 |      |  |       | 0.95 |  |  |       | 1.05 |  |  |       | 0.86 | 
|2003                              |  |                             |        |  |                        |  |        |      |  |             |         |  |         |          |         |  |         |       | 1.26 |      |  |       | 1.14 |  |  |       | 1.26 |  |  |       | 1.04 | 
|Monthly amounts                   |  |                             |         |  |                        |  |         |      |  |             |          |  |         |          |          |  |         |       |      |      |  |       |      |  |  |       |      |  |  |       |      | 
|December 2003                     |  |                             |        |  |                        |  |        |      |  |             |         |  |         |          |         |  |         |       | 1.26 |      |  |       | 1.23 |  |  |       | 1.26 |  |  |       | 1.20 | 
|January 2004                      |  |                             |        |  |                        |  |        |      |  |             |         |  |         |          |         |  |         |       | 1.25 |      |  |       | 1.26 |  |  |       | 1.29 |  |  |       | 1.24 | 
|February 2004                     |  |                             |        |  |                        |  |        |      |  |             |         |  |         |          |         |  |         |       | 1.24 |      |  |       | 1.26 |  |  |       | 1.28 |  |  |       | 1.24 | 
|March 2004                        |  |                             |        |  |                        |  |        |      |  |             |         |  |         |          |         |  |         |       | 1.23 |      |  |       | 1.23 |  |  |       | 1.24 |  |  |       | 1.21 | 
|April 2004                        |  |                             |        |  |                        |  |        |      |  |             |         |  |         |          |         |  |         |       | 1.20 |      |  |       | 1.20 |  |  |       | 1.24 |  |  |       | 1.18 | 
|May 2004                          |  |                             |        |  |                        |  |        |      |  |             |         |  |         |          |         |  |         |       | 1.22 |      |  |       | 1.20 |  |  |       | 1.22 |  |  |       | 1.18 | 
|June 2004 (through June 18, 2004) |  |                             |        |  |                        |  |        |      |  |             |         |  |         |          |         |  |         |       | 1.21 |      |  |       | 1.21 |  |  |       | 1.23 |  |  |       | 1.20 | 






|    |                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------
|(1) | The average of the Noon Buying Rates on the last
    business day of each month during the relevant period.                          
|   
|(2) | January 15, 1999 was the last day that the
    Federal Reserve Bank of New York published Noon Buying Rates for
    the French franc.

Fluctuations in the exchange rate between the
euro and the U.S. dollar will affect the U.S. dollar
equivalent of the euro-denominated prices of our shares and, as
a result, will affect the market price of our ADSs in the United
States. In addition, exchange rate fluctuations will affect the
U.S. dollar pay out relating to any cash dividends received
by holders of our ADSs.

For a discussion of the impact of exchange rate
fluctuations on our results of operations, see
Item 5. Operating and Financial Review and
Prospects  Liquidity and Capital Resources.

Dividends

We paid dividends for the five years ended
December 31, 2003 as follows:

|     |  |                 |      |  |                  |            |        |       |        |           |  |  |      |  |  |  |      | 
|---- |  | --------------- | ---- |  | ---------------- | ---------- | ------ | ----- | ------ | --------- |  |  | ---- |  |  |  | ---- | 
|     |  | Distribution    |      |  | Number of shares |            |        |       |        |           | 
|Year |  | (in  millions) |      |  | at December 31,  |            | (in ) |       |        |           |  | 
|     |  |                 |      |  |                  |            |        |       |        |           |  | 
|     |  |                 |      |  |                  |            |        |       |        | Total     | 
|     |  |                 |      |  |                  |            |        |       |        | gross     | 
|     |  |                 |      |  |                  |            |        |       |        | dividend  | 
|     |  |                 |      |  |                  |            |        |       |        | per share | 
|     |  |                 |      |  |                  |            |        |       |        |           | 
|     |  |                 |      |  |                  |            |        | Avoir |        |           | 
|     |  |                 |      |  |                  | Net        |        |       | Fiscal |           |  | 
|     |  |                 |      |  |                  | dividend   |        |       | per    |           |  | 
|     |  |                 |      |  |                  |            |        |       | share  |           |  | 
|     |  |                 |      |  |                  |            |        |       |        |           | 
|     |  |                 |      |  |                  |            |        | )     |       
|     |  |                 |      |  |                  |            |        | (in  |       
|     |  |                 |      |  |                  |            |        |       |       
|2003 |  |                 | 79.4 |  |                  | 23,738.331 |        |       | 3.30   |           |  |  | 1.65 |  |  |  | 4,95 | 
|2002 |  |                 | 77.3 |  |                  | 23,408,004 |        |       | 3.30   |           |  |  | 1.65 |  |  |  | 4.95 | 
|2001 |  |                 | 86.1 |  |                  | 26,713,448 |        |       | 3.30   |           |  |  | 1.65 |  |  |  | 4.95 | 
|2000 |  |                 | 50.9 |  |                  | 16,029,305 |        |       | 3.30   |           |  |  | 1.65 |  |  |  | 4.95 | 
|1999 |  |                 | 45.9 |  |                  | 15,758,537 |        |       | 3.00   |           |  |  | 1.50 |  |  |  | 4.50 | 

7



---



##### Table of Contents



Risk Factors

In addition to the other information contained
in this annual report, you should consider carefully the risks
described below. The risks described below are not the only ones
we face. Additional risks not currently known to us, or that we
currently deem immaterial, may also impair our business
operations. Our business, financial condition or results of
operations could be materially adversely affected by any of
these risks.

Risks Related to Our Operations

We may fail to successfully execute large
integrated services contracts, which could inhibit our
margins

Our recent experience indicates that clients,
particularly in the offshore sector, are increasingly
consolidating the development of large sites into fewer, and
hence larger and more technically complex, turnkey projects and
increasingly awarding the entire contract to a single project
contractor. This trend has led us to bid for and win larger and
more highly integrated projects. Competitors may, whether
through consolidation or growth, present more credible
integrated solutions than we do, causing us to win fewer
tenders. If we do not succeed in being awarded the contracts for
these projects, we could fail to increase, or even maintain, our
volume of projects, net sales and net income.

Execution of integrated projects that we succeed
in obtaining presents risks. Larger average contract sizes may
tend to concentrate our portfolio on fewer contracts, increasing
the potential volatility of our results and exposure to
individual contract risks. Managing large-scale integrated
projects may also increase the potential size of cost overruns
and negatively affect our operating margins. Additionally, while
in the past we selectively bid on only those contracts related
to the portions of a site which we believed had the best
potential for high margins, large-scale integrated projects may
cause us to assume potentially lower margin portions of a site
as well.

We are contractually exposed to significant
construction risks that could cause us to incur
losses

We derived approximately 83% of our 2003 net
sales from lump-sum turnkey contracts. We expect that turnkey
contracts will continue to account for a similar portion of our
net sales. Under these contracts, we agree for a fixed price to
design, build and install completed facilities which are
delivered in a ready to operate condition. The actual expense to
us of executing a lump-sum turnkey contract may vary
substantially from the assumptions underlying our bid for
several reasons, including:



| |   |                                                                             
| | - | ----------------------------------------------------------------------------
| |  | unanticipated increases in the cost of equipment,
    materials or manpower;
|
| |  | unforeseen construction conditions creating
    unanticipated costs;        
|
| |  | delays caused by local weather conditions; and                              
|
| |  | suppliers or subcontractors failure
    to perform.                       

Under a lump-sum turnkey contract, however, we
are generally unable to increase our price to reflect these
factors, which are difficult to predict at the time of bidding.
For these reasons, it is not possible for us to reliably
estimate with complete certainty our final costs or margins on a
contract at the time of bidding or during the early phases of
its execution. If our actual expenses were to increase for these
or any other reasons, we could recognize reduced margins or even
incur a loss on the contract.

Losses on one or more large contracts could
reduce our net income or cause us to incur a loss

Our five largest contracts, all of which are
turnkey contracts, represented 30% of our backlog at
December 31, 2003, compared to 34% of our backlog at
December 31, 2002 and 26% of our backlog at
December 31, 2001. Although we are more highly diversified
following our acquisition of Coflexip, our contract portfolio
will continue to be relatively concentrated and the combined
businesses expected increased success in bidding for large
integrated turnkey contracts is expected to contribute to
continued concentration. If we do not achieve our expected
margins or suffer losses on one or more of these large
contracts, this could reduce our net income or cause us to incur
a loss.

8



---



##### Table of Contents



Because most of our sales are to companies
in the hydrocarbon/ petrochemical industry, a reduction in
production-related capital spending in that industry could cause
our projects to be postponed or cancelled and constrain our
ability to grow or maintain profits

Demand for our services depends on the
hydrocarbon/ petrochemical industrys capital expenditures
for development of fields, refining of oil and gas and
production of their derivatives. Net sales derived from this
industry accounted for approximately 91.9% of our sales in 2003,
93.3% of our net sales in 2002 and 86.7% of our net sales in
2001. We estimate that the hydrocarbon/ petrochemical industry
will continue to account for a substantial majority of our net
sales in the coming years. The prices of oil and gas on the
world markets are a significant influence on the hydrocarbon/
petrochemical industrys capital expenditures. In the
upstream segment of the industry, sustained reductions in oil
and gas prices may reduce our upstream clients financial
incentives to invest in new developments, with high-cost
offshore developments and onshore gas-related projects generally
being the most severely affected. In the downstream segment of
the industry, sustained increases in oil and gas prices put
downward pressure on consumer demand for products derived from
oil and gas, including gasoline, chemicals, synthetic fabrics
and plastics. Any resulting reduction or slowing of demand
reduces our downstream clients financial incentives to
invest in additional production capacity. In both the upstream
and downstream segments, sustained volatility of oil and gas
prices can also cause capital expenditures to be postponed or
cancelled.

The hydrocarbon/ petrochemical industrys
capital expenditures are also influenced by the following
factors:



| |   |                                                                       
| | - | ----------------------------------------------------------------------
| |  | the rate of discovery and development of new oil
    and gas reserves;
|
| |  | global demand for energy;                                             
|
| |  | global demand for petrochemicals and fertilizers;                     
|
| |  | local and international political and economic
    conditions; and    
|
| |  | trends in environmental legislation.                                  

A reduction of capital investment in the
hydrocarbon/ petrochemical industry due to any of these factors
or for any other reason could constrain our ability to grow, or
even maintain, profits.

Interest rate movements or a decline in our
cash balances could reduce our net income

Our financial results are sensitive to changes in
interest rates. Income from investments in short-term money
market instruments represents a portion of our net income. This
source of income is affected by movements in interest rates, our
own cash balances, as well as by cash balances on contracts
resulting from down payments and progress payments from clients.
We negotiate the level of down payments and progress payments
with our clients on a contract-by-contract basis. Lower
prevailing interest rates, a decline in our cash balances, or a
reduction in cash balances on our contracts could reduce our net
income despite positively impacting our interest expense. Higher
prevailing interest rates will raise our cost of borrowing under
our financing debt carrying variable rates, notably our
financial debt related to the financing of the Technip-Coflexip
business combination, and could result in lower net income
despite positively impacting our interest income.

Because we make sales and incur expenses in
multiple currencies, exchange rate movements may cause us to
incur losses

Significant portions of our sales and expenses
are denominated in currencies other than the euro, most
significantly the U.S. dollar and the British pound
sterling. To the extent that our expenditures and revenues are
not denominated in the same currency, exchange rate fluctuations
could cause our costs to grow larger than our revenues on a
given contract. Although we closely follow our exposure to
non-euro currencies on a contract-by-contract basis and enter
into hedging transactions in an attempt to reduce the risks of
currency fluctuations, these activities are not always
sufficient to protect us against incurring potentially large
losses if currencies were to fluctuate significantly.

9



---



##### Table of Contents



One or more of our contracts for projects
in Iran may be subject to U.S. sanctions, which could limit
our ability to obtain credit from U.S. financial
institutions and restrict our ability to make sales in the
United States, potentially increasing our cost of borrowing and
reducing our business opportunities

As a foreign multinational corporation with
operations throughout the world, we engage in activities in and
with countries prohibited under U.S. law to
U.S. citizens and persons subject to U.S. laws,
including, in some cases, foreign persons and corporations.
Under the U.S. Iran and Libya Sanctions Act of 1996, as
amended in August 2001 (ILSA), the
U.S. government may impose sanctions on companies that make
statutorily defined investments in the petroleum industry in
Iran. ILSA originally also applied to Libya. Recently, however,
the president of the United States has made a determination
that effectively suspends the application of ILSA with respect
to Libya. As amended, ILSA requires the president of the
United States to impose two or more of certain enumerated
sanctions on any person or company, regardless of nationality,
that makes investments in Iran of U.S.$20 million or more
which directly contribute to the enhancement of Irans
ability to develop its petroleum industries. We are engaged in
activities in Iran, consisting principally of turnkey project
management services. Our net sales in Iran during the year ended
December 31, 2003 amounted to
185 million
(approximately U.S.$209 million). At December 31,
2003, we had backlog amounting to approximately
307 million
(approximately U.S.$375 million) in Iran. If the
U.S. government were to determine that some or all of our
activities in Iran are investments as statutorily defined by
ILSA, ILSA grants the president of the United States discretion
in determining which sanctions to apply, which can include
restricting our ability to obtain credit from
U.S. financial institutions or support from the
U.S. Export-Import Bank, or restricting our ability to make
sales in the United States, potentially increasing our cost of
borrowing and reducing our business opportunities. For a more
detailed discussion of our operations in Iran and of
U.S. and international sanctions, see Item 4.
Information on Technip  Geographical and Segment
Breakdown of Net Sales and Backlog.

Risks Related to the Engineering and
Construction Industry

Intensified price pressure by our
competitors could reduce the volume of contracts meeting our
potential margin criteria and negatively affect our net
income

Most of our contracts are obtained through a
competitive bidding process, which is standard in the
engineering and construction services industry. We compete
primarily against major U.S., European and East Asian
engineering and construction companies. While service quality,
technological capacity and performance and personnel, as well as
reputation and experience, are strongly considered in client
decisions, price is the major factor in most tender awards. In
the past, our industry has been frequently subject to intense
price competition. If price competition were to intensify in the
future, the number of tenders meeting our criteria for high
potential margins could decline, and our volume and net income
could grow more slowly or decrease as our fixed costs increased
in proportion to our revenues.

Because a large number of oil and gas
projects are found in developing countries, political and social
instability in these countries could cause projects to be
cancelled, postponed or subject to delays, which could increase
our costs and reduce our future growth
opportunities

Much of our business involves projects in
developing or less developed countries that are experiencing or
may experience political and social instability. For the year
ended December 31, 2003, a majority of our net sales came
from projects located in developing countries. Unanticipated
political events or social disturbances in developing or less
developed countries could cause a material decrease in our
profitability. For example, the Gulf War in 1990 and 1991
disrupted some of our projects. We cannot exclude that the
current armed conflict in the Middle East will not delay or
otherwise negatively affect our backlog and future business
prospects in this region and elsewhere. Our Sincor refinery
project in Venezuela has been affected by general political and
social unrest in that country, which delayed our reaching
several intermediate project milestones in 2000 and led us to
constitute contract-specific reserves, which negatively affected
our refining segments operating income for the year. In
response to these risks, we have adopted a policy of maximizing
our insurance coverage by using government-sponsored and private
export credit and insurance agencies and by matching our work
progress and outlays to cash advances on all contracts. However,
in the event of national or regional political instability,
these insurance policies may be inadequate to prevent us from
taking a loss on contracts in progress, which could reduce our
net

10



---



##### Table of Contents



income or cause us to incur a loss. Political
instability may also result in fewer new project tenders meeting
our criteria. For these reasons, political instability in
developing countries could increase our costs and reduce our
future growth opportunities.


Reduced availability of
government-sponsored export financing could increase project
costs to our clients and lead to fewer new projects and reduce
our growth opportunities

We rely, to some extent, on government-sponsored
or private export credit and insurance agencies, such as the
French COFACE, the Italian SACE, the Dutch NCM, the Spanish
CESCE and the U.S. Export-Import Bank, to assist our
clients to obtain financing for some major contracts. If this
financing assistance were reduced from current levels, our
clients might choose to undertake fewer projects. A reduction in
the number of new contract tenders for this reason would reduce
our growth opportunities.

Our operations may cause substantial harm
to persons and property, which could hurt our reputation and, to
the extent they are not covered contractually or by insurance,
could cause us to incur substantial costs

Our operations are subject to the usual hazards
inherent in providing engineering and construction services for
the hydrocarbon/ petrochemicals industry, such as the risk of
equipment failure, work accidents, fire or explosion. These
hazards can cause personal injury and loss of life, business
interruptions, property and equipment damage, pollution and
environmental damage. We may be subject to claims as a result of
these hazards. We may also be subject to claims resulting from
the subsequent operations of facilities we have delivered. Our
policy of covering these risks through contractual limitations
of liability and indemnities and through insurance may not
always be effective. In some of the jurisdictions in which we
operate, environmental and workers compensation liability
may be assigned to us as a matter of law. Clients and
subcontractors may not have adequate financial resources to meet
their indemnity obligations to us. Losses may derive from risks
not addressed in our indemnity agreements or insurance policies,
or it may no longer be possible to obtain adequate insurance
against some risks on commercially reasonable terms. Failure to
effectively cover ourselves against engineering and construction
industry risks for any of these reasons could expose us to
substantial costs and potentially lead to material losses.
Additionally, the occurrence of any of these risks could hurt
our reputation.

Operations in facilities we have
constructed or are constructing may cause the discharge of
hazardous substances, which could result in significant
environmental remediation costs and cause us to incur a
substantial loss

We operate in a number of different jurisdictions
that have various types of governmental laws and regulations
relating to the discharge of oil or hazardous substances and the
protection of the environment. Pursuant to these laws and
regulations, we could be held liable for remediation of some
types of pollution, including the release of oil, hazardous
substances and debris from production, refining or industrial
facilities, as well as other assets owned or operated by either
our customers or our sub-contractors. Environmental remediation
costs could be significant and cause us to incur a substantial
loss.

The changes in the environmental regulations or
the interpretation or enforcement thereof could result in
increased costs and liabilities. For instance, the
implementation of the European Directive of April 21, 2004
with regard to the prevention and remedying of environmental
damage could increase our potential environmental liability.

Risks Related to Our Shares and American
Depositary Shares (ADS)

The market value of our shares or American
depositary shares could decline if one of our major shareholders
sold a substantial number of our shares

As of February 29, 2004, our two largest
shareholders, Institut Français du Pétrole
(IFP) and Gaz de France, owned in the aggregate,
approximately 13.9% of our outstanding share capital and
approximately 23.6% of our voting rights. In addition, Total
owns approximately 2.1% of our share capital and approximately
2.6% of our voting rights. See Item 7. Major
Shareholders and Related Party Transactions. Sales of a
substantial number of our shares or American depositary shares
in the public markets, or the perception that sales of a

11



---



##### Table of Contents



substantial number of our shares or American
depositary shares could occur, could exert downward pressure on
the prevailing market prices for our shares and American
depositary shares, causing them to decline.


Fluctuations in the exchange rate between
the U.S. dollar and the euro may reduce the
U.S. dollar market value of our American depositary shares
as well as the U.S. dollar value of any dividends we
pay

We will pay any cash dividends in euro, and, as a
result, exchange rate movements will affect the U.S. dollar
value of these dividends as well as any other U.S. dollar
distributions paid to you by the depositary if you hold our
American depositary shares. Exchange rate movements will also
affect the market value of our American depositary shares, which
could alter their value to you.

Double voting rights of our shares and
change of control provisions in our agreements may limit our
shareholders opportunities to be offered a premium price
for our shares by a potential acquiror

Under our current articles of association
(statuts), our shareholders who hold their shares in the
same name in registered form for at least two years have the
right to two votes for every share thus held. As a result, new
purchasers of our shares qualify to obtain double voting rights
only after holding our shares in the same name in registered
form for two years. See Item 9. The Offer and
Listing and Item 10. Additional
Information  Shareholders Meetings and Voting
Rights  Double Voting Rights. As of
December 31, 2003, 4,247,404 of our shares carried double
voting rights, representing approximately 17.89% of our
outstanding share capital and approximately 30.50% of our voting
rights. On April 29, 2004, our shareholders authorized our
board of directors to effect a substantial capital increase in
the event of a tender offer for our share capital. We are also a
party to a number of joint ventures, concessions, license
arrangements and other agreements that contain change of control
provisions. The double voting rights, capital-increase
authorization and change of control provisions may make it
difficult or undesirable for a potential acquiror to acquire a
substantial percentage of our voting rights, and may therefore
provide a defense against hostile takeovers or, more generally,
may delay and impede a change in control in which our
shareholders might receive a premium above the then-current
market price for our shares held by them.

If you hold our American depositary shares
rather than our shares, you will not be able to exercise all the
rights our articles of association (statuts) provide to holders
of our shares

If you hold our American depositary shares, you
will not be able to qualify for double voting rights, and
because of the additional time and administrative steps required
to instruct the depositary on how to vote deposited shares held
for you if you hold ADSs rather than shares, there may be
instances where you will not be able to successfully exercise
the voting rights related to your ADSs. In addition, it may also
be more difficult for you to exercise your other rights as a
shareholder if you hold our American depositary shares than it
would be if you held our shares. For example, if we offer new
shares and you have the right to subscribe for a portion of
them, the depositary is allowed, at its discretion, to sell, for
your benefit, the right to subscribe for new shares, instead of
making it available to you. For a detailed description of your
rights as a holder of our American depositary shares, you should
read Item 10. Additional Information 
Description of Our American Depositary Shares.

12



---



##### Table of Contents






Item 4.     Information
on Technip

Overview of Our Business

We are a leading worldwide provider of
engineering, technologies and construction services for the oil
and gas, petrochemical and other industries. In 2003, we were
among the worlds top five full-service engineering and
construction groups in the field of oil and gas (hydrocarbons)
and petrochemicals based on our annual net sales of
4.7 billion
(source: Engineering News Records, August 2003).

Our core business activity is in the hydrocarbon/
petrochemical industry and covers offshore and onshore field
development, gas processing and liquefaction, refining, onshore
pipelines and petrochemicals. We are one of the most highly
integrated groups providing engineering, technologies and
construction services to the hydrocarbon/ petrochemical industry
worldwide, and backed by extensive industrial assets, we are
particularly well positioned in the offshore/ deepwater area.

We are also actively developing activities in
non-hydrocarbon/ petrochemical sectors such as fertilizers,
chemicals, life sciences, power generation and other
growth-market industries.

With 46 years of experience in the design
and construction of large industrial facilities, a wide range of
state-of-the-art technologies and operational bases spread over
the five continents, we are able to manage all aspects of major
projects, from front-end engineering design to turnkey delivery.
Turnkey projects, under which we design and deliver a
ready-to-use facility to our client for a lump-sum
price, accounted for a substantial majority of our 2003 net
sales. We execute turnkey projects involving industrial
infrastructure as varied as onshore and offshore production and
storage facilities, oil refineries and petrochemical plants. In
addition to our turnkey activities, we manufacture highly
specialized equipment and provide engineering, consulting and
other services.

We generated more than 82.7% of our net sales in
markets outside the European Union in 2003. Our main engineering
and business centers outside of France are located in Italy,
Malaysia, Germany, the United Kingdom, Norway, Finland, the
United States, The Netherlands, Brazil, Abu Dhabi, China,
India and Australia. Our manufacturing plants (flexible
pipelines, umbilicals, robotics) and construction yards are
located in France, Brazil, the United Kingdom, Norway, the
United States, Finland, Nigeria and Angola. Our staff numbers
approximately 19,000 full time employees based in over 52
countries and we run a world class fleet of 14 offshore
construction vessels.

Through our business combination with Coflexip in
October 2001, we have become a world leader in the design and
construction of offshore oil and gas projects. We are capable of
executing turnkey projects including integrated engineering,
design, manufacture, procurement and construction services, on
projects involving offshore platforms and the provision and
laying of underwater pipelines.

At the same time, we are a leader in the
relatively mature onshore sector, consisting of both oil and gas
development projects and hydrocarbon processing projects,
including gas treatment units, refineries and petrochemical
plants. We expanded the size and geographic scope of our onshore
activities in 1999 through the acquisition of the engineering
activities of the Mannesmann group.

We believe our operations benefit from
substantial competitive strengths. Our reputation as a turnkey
project manager and our access to key technologies are
competitive advantages for securing competitive tenders. We also
believe that our execution model for turnkey contracts benefits
from our cost control and risk management expertise as well as
our experience as contract manager. However, because of the
substantial business risks inherent to the turnkey contracts
into which we enter, it is not possible for us to predict the
margins of our current and future business.

During our 46 years of operations, we have
designed and supervised the construction of over two thousand
facilities in more than 115 countries. Our roster of clients
includes industry leaders such as Exxon Mobil, Chevron Philipps,
Shell, Total, Dow Chemicals, BASF, and numerous national energy
companies including Petrobras, Qatar Petroleum, ADNOC and PDVSA.
We have been publicly traded in France on the Premier
Marché of Euronext Paris since 1994 and on the New York
Stock Exchange since 2001, and are fully committed to providing
state-of-the-art engineering services while increasing
shareholder value.

13



---



##### Table of Contents



The Industry in Which We Operate

We derived 91.9% of our net sales in 2003 from
goods and services provided to the hydrocarbon/ petrochemical
industry. We are active both in the Offshore segment of this
industry, which consists of the engineering and construction of
facilities for the production of oil and gas from offshore
fields, and in the Onshore segment, through the engineering and
construction of gas treatment units, oil refineries and chemical
plants. Demand for our services in this industry depends
principally on the rate of new capital spending on production
and processing facilities.

We expect strong growth in capital spending on
hydrocarbon field development (referred to as
upstream activities in our industry) particularly on
deepwater projects (depths of 500 meters or more). We have a
complete portfolio of technologies to allow our clients to
develop deepwater oil and gas reserves while minimizing their
costs. Notable among these are our floating offshore platforms,
including the EDP (Extendable Draft Platform) and the SPAR
especially designed for our clients deepwater projects.

We also supply and install undersea pipeline and
equipment for the development of fields at depths of up to 2,500
meters. See  Offshore Branch  Subsea
Oilfield Services (SURF). While offshore production of oil
and gas remains more costly than onshore production in the more
competitive regions such as the Middle East, we believe that the
development of deepwater reserves is an essential contribution
to the world supply of oil and gas. We believe that the
extension of upstream activities to deepwater fields presents an
opportunity to those firms capable of providing innovative
engineering solutions and management skills.

New capital spending on onshore activities will
principally be driven by population growth and economic
development, notably in Asia. The development of substantial gas
deposits should lead to new investment throughout the upstream
and downstream sectors of the gas industry, particularly in the
Middle East. We expect new environmental legislation affecting
member countries of the OECD (Organization for Economic
Cooperation and Development) to lead to significant revamping of
existing gasoline refineries. Additionally, global refining
capacity is relatively tight compared to current demand,
potentially leading to new investment in countries with growing
demand.

Our activities have developed in three principal
industrial branches (Offshore, Onshore/ Downstream and
Industries), with the following contributions to net sales in
2003 and backlog at December 31, 2003:



|                       |                         
|---------------------- | ------------------------
|(SALES 2002 PIE CHART) | (BACKLOG 2002 PIE CHART)



| |                                                        
| | -------------------------------------------------------
| | Offshore: Net Sales of
    2,209.7 million
    in 2003

We are a provider of integrated design,
engineering, manufacture and construction services including
fixed platforms, floaters, and subsea flowlines, as well as
project management and maintenance operations. The Groups
broad offering of engineering and installation services allows
us to undertake offshore field development projects with a
larger scope on an integrated basis worldwide. We are a world
leader in the engineering and installation of subsea development
systems, consisting of rigid or flexible risers and flowlines
that carry crude oil and/or gas from the seabed to the surface.
In connection with these activities, we perform repair and
maintenance

14



---



##### Table of Contents



services for subsea installations and equipment.
We are also a world leader in the design and manufacture of
flexible pipe and control umbilicals.




| |                                                                   
| | ------------------------------------------------------------------
| | Onshore/ Downstream: Net Sales of
    2,119.0 million
    in 2003

Since our founding in 1958, we have participated
in over 2000 onshore/ downstream projects throughout the world.
We have also designed and built 27 complete refineries and
extended and modernized 170 existing plants. Together, we have
worked on more than 600 individual refinery units and more than
100 gas processing units, including the worlds largest
sulfur recovery complex, as well as nine fully integrated
petrochemical complexes and over 330 units producing basic
chemicals and derivatives and over 200 fertilizer production
units.



| |                                                        
| | -------------------------------------------------------
| | Industries: Net Sales of
    382.4 million
    in 2003

We also offer our project management and
engineering services to a diverse array of clients unrelated to
the hydrocarbons industry. Past projects have included fine
chemicals and pharmaceuticals facilities, chemicals, fertilizers
and agro-industrial plants, power generation plants, cement
plants, metallurgical facilities, amusement parks and data
processing centers, as well as numerous projects in buildings
and infrastructures.



| |         
| | --------
| | Strategy

Our overall strategy can be summarized as follows:



| |   |                                                                                                                                                                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | in a stable market experiencing historically high
    levels, to make 2004 a year in which to confirm our Offshore
    branchs market position, consolidating its presence in
    western Africa and reinforcing its business in the Brazilian
    market;
|
| |  | to actively participate in natural gas markets,
    which are experiencing strong growth, particularly in the Middle
    East, on treatment, gas separation, liquefied natural gas (LNG)
    and gas-to-liquids (GTL) projects;                            
|
| |  | to continue renovating refineries to meet
    environmental standards, notably in Europe, and to execute new
    refinery construction projects in Asia and the Middle East;                                                                               
|
| |  | to follow the evolution of the petrochemical
    cycle, which should see a recovery in investments in 2004; and                                                                                                                                            
|
| |  | to maintain a 50/50 split in revenues between our
    Offshore branch on the one hand and our Onshore/ Downstream and
    Industries branches on the other.                                                                                                

Having consolidated and integrated the
acquisitions made over the past five years (Mannesmann, Aker
Deepwater, Coflexip) in 2003, we returned to the path of
profitable growth, which should allow us to create sustainable
shareholder value.

In less than two years, we have undergone a
profound transformation, the highlights of which can be
summarized as follows:



| |   |                                                                                                                                                                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Our backlog at the end of 2003 was nearly 50%
    higher than the combined backlog of Technip and Coflexip at the
    end of 2001;                                                                                                                                                               
|
| |  | We successfully achieved the strategic goal which
    lay behind the Coflexip acquisition, to become one of the top
    world players in the field of offshore oil and gas developments.
    In the Offshore branch, our backlog increased by more than 60%
    in 2003 alone;                   
|
| |  | We successfully positioned ourselves on targeted
    future growth markets in West Africa and the Caspian Sea for
    offshore projects as well as in ethylene and gas-to-liquids
    technologies for our onshore activities;                                                                   
|
| |  | We reduced our net debt by close to 75% over the
    last two years due to cash flow from operations, sale of
    non-core assets and a strict policy of monitoring new capital
    spending. Our net gearing ratio at the end of 2003 fell to a
    very comfortable level of 12% of equity; and

15



---



##### Table of Contents





| |   |                                                                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Lastly, despite the fall of the U.S. dollar,
    geopolitical crises in various countries and the uncertainties
    inherent in the management of lump sum turnkey contracts, we
    nonetheless managed to improve our profitability in 2003.

We are also committed to sustainable development
and have been long before it became a fashionable topic. We have
a proven record of paying particularly close attention to the
potential environmental impacts of the design and construction
of our projects. In 2003, we adhered to the United Nations
Global Compact, which unites member companies around nine
essential principles relating to human rights, labor and the
environment. Our ambition is to more completely integrate social
and environmental values throughout our activities.

Today, we have teams recognized for their
professional excellence, a high backlog and a solid positioning
on expanding markets. These assets should allow us to continue
the growth in our activities and revenues, and thereby to meet
the expectations of our shareholders.



| |                                      
| | -------------------------------------
| | Strategic Investments in
    Coflexip

Our combination with Coflexip, executed during
2001, allowed us to become an integrated world leader with
critical mass in each of our core businesses. The combination
also allowed our new Group to significantly increase operability
and extend our industrial offerings, clients and geographic
reach.

Recent Major Acquisitions and
Disposals

Our policy for external growth is to undertake
selective acquisitions to expand the range of projects
accessible to us, either by obtaining key technologies we do not
already possess or by gaining new client relationships. It has
not been our policy to use acquisitions simply to acquire market
share that we could reasonably acquire with existing resources
through organic growth.

UTC Acquisition.In 2001, we acquired the privately
owned UTC Projetos e Consultoría Ltda, a leading Brazilian
engineering and construction company in the upstream sector,
based in Rio de Janeiro. This acquisition was another building
block in the implementation of our offshore growth strategy.

Acquisition of the Deepwater Division of
Aker Maritime.In January 2001,
Coflexip acquired the Deepwater Division from Aker Maritime. The
Deepwater Division was composed of a number of companies
specialized in the engineering and manufacture of floating
production systems for subsea and deepwater field developments.
The terms of this agreement are described in more detail in
Item 10. Additional Information  Material
Contracts. The Deepwater Division has its principal places
of operation in the United States, the United Kingdom and
Finland. It also operates in Nigeria, the Caspian Sea and
Australia.

Nargan.In
April 2002, we acquired a 20% interest in Nargan, an Iranian
engineering company.

Angoflex.In
July 2002, we entered into a partnership agreement with Sonangol
to prepare the constitution of a jointly owned subsidiary,
Angoflex Limitada, for the manufacture of umbilicals at the
Sonamet facility located at Lobito, Angola.

Merger with ISIS.In June 2002, our shareholders
approved a merger with our subsidiary ISIS. Prior to the merger,
we held a 99.05% interest acquired as a result of a public
exchange offer in June 2001 to acquire control of Coflexip, in
which ISIS held a substantial interest. The merger was
registered with the Commission des opérations de
bourse under visa no. E 02-104.

Disposal.In
January 2003, our former headquarters, located at La
Défense (near Paris, France) were sold.

Merger with Coflexip.In July 2003, within the context
of the reorganization of the French subsidiaries of the Group,
the shareholders of Technip and Coflexip approved the merger of
Coflexip into Technip which already held more than 98% of
Coflexips capital following the public offerings launched
in July 2001. The shareholders of Coflexip received nine Technip
shares for eight Coflexip shares. This merger was registered
with the Commission des opérations de bourse under
visa no. E 03-105.

16



---



##### Table of Contents



Branches of Activity

We design and construct industrial and service
facilities for a large number of industries, with a particular
emphasis on the hydrocarbon/ petrochemical industry. Net sales
derived from the hydrocarbon/ petrochemical industry accounted
for approximately 91.9% of our total net sales in 2003, compared
to 93.3% of our total net sales in 2002 and 86.7% of our net
sales in 2001. Within the hydrocarbon/ petrochemical industry,
we manage our activities through two branches: Offshore and
Onshore/ Downstream. A third branch of activity consists of
engineering and project management services for diverse
industries unrelated to hydrocarbon/ petrochemicals. In each of
these branches we have developed specific engineering and
technological capabilities. Our basic project management model
summarized below, however, applies to all of them.

Our role on a project is to act as general
contractor. We provide engineering design, equipment
procurement and construction management services. However, with
limited exceptions, we do not consider ourselves to be a
construction or manufacturing firm. Construction work is
generally sub-contracted to specialized firms, while equipment
is typically acquired through competitive bidding processes. Our
employees are principally involved in design work, procurement
of equipment and supervision of construction. In most cases, we
manage the project for our client from the drawing board to the
delivery of an operational facility, frequently also helping to
arrange financing. In other cases, our scope of work is limited
to the provision of engineering services corresponding to
specific client needs. A detailed discussion of our turnkey
contract project management, as well as our services and
manufacturing operations is found at
 Description of Our Operations, below,
following  Geographical and Segment Breakdown
of Net Sales and Backlog.

Offshore Branch

In 2003, we generated net sales of
2,209.7 million,
or 46.9% of our total net sales, from Offshore activities as
compared to
2,125.0 million,
or 47.7% of total net sales, in 2002 and
722.0 million,
or 20.4%, in 2001. At December 31, 2003, our Offshore
branch represented approximately 40.3% of our total backlog.

We provide integrated design, engineering,
manufacturing and construction services in the offshore oil and
gas sector. We are capable of executing integrated offshore
projects, covering the engineering and execution of both the
surface and subsea parts of a project and a wide range of
services. Our capabilities encompass the design and manufacture
of platforms, either fixed or floating, the design, procurement
and installation of subsea umbilical risers, equipment,
pipelines and flowlines. Those capabilities are complemented and
fully integrated through advanced global project management
skills. Our expertise is well recognized in the field of
offshore operations where we propose innovative solutions based
on proprietary designs and products such as floating facilities,
flexible pipe, umbilicals and robotics. Those solutions are
supported by a fleet of 14 pipelay and construction vessels.
These subsea activities accounted for 63.6% of our Offshore
segment backlog at December 31, 2003 (or
1,840.0 million).

Due to our acquisition in 2001 of Aker
Maritimes Deepwater Division, we have technology and
expertise in surface platform design and construction such as
our SPAR floating platform for deepwater exploration, and we
have reinforced our expertise in process and naval architecture.
Our floaters activities accounted for 36.4% of our Offshore
segment backlog at December 31, 2003 (or
1,054.9 million).

Early in the field development process, we
provide conceptual engineering services. These engineering
services include screening of solutions at the conceptual stage
based on economical valuation and risk management techniques,
field architecture and front-end engineering studies. Our
ability to offer these engineering services is an additional
competitive advantage in turnkey project tenders.



| |                                    
| | -----------------------------------
| | Subsea Oilfield Services
    (SURF)

The engineering, manufacture and installation of
the equipment connecting subsea wells to the surface platform
are frequently referred to as SURF activities, which
stands for subsea umbilicals, risers and flowlines.
SURF activities have historically been at the core of our
Offshore activities. As an alternative to placing the wellheads
on a surface facility, subsea developments use wellheads placed
directly on the seabed and connected to platform-based surface
facilities through flexible or rigid subsea pipelines. These
wellheads are

17



---



##### Table of Contents



remotely controlled from the surface through
umbilicals (underwater conduits that carry hydraulic or
electrical power, data signals and well service fluids). We
offer the turnkey delivery of SURF systems, involving our
oversight of suppliers and subcontractors and including our own
submarine services such as pipe laying, subsea construction, and
the manufacture and supply of critical equipment, including
umbilicals and flexible pipe. Our clients seek to develop fields
in increasingly deep waters, requiring constantly evolving
engineering and technology. We help our clients to expand the
range of economically viable production, as demonstrated by our
contract to install pipes in Angola at record depths.


To support our installation of SURF systems, we
maintain one of the worlds most advanced fleets of subsea
pipelay and construction vessels. In addition, some governmental
regulations (such as in the North Sea) may require burial of
subsea pipeline beneath the ocean floor and therefore we also
provide trenching services to our clients. Our subsea
installation and maintenance activities frequently require us to
use divers or remotely operated vehicles (ROVs)
deployed from construction vessels. Our launch of the pipe
laying vessel CSO Deep Blue in 2001 has contributed to
growth in our pipelay capabilities in the deepwater environments
of the Gulf of Mexico and West Africa. For a description of our
fleet of construction vessels, see  Property, Plant
and Equipment  Marine Service Vessels. In
addition to the engineering and installation of new systems, our
SURF activities also encompass inspection, maintenance and
repair of existing subsea infrastructure.

Subsea oil field services are highly specialized.
While no company participates in all segments of the subsea
oilfield services industry, a number of companies, including the
Group, provide a broad range of the industrys products or
services. See  Project Tenders and
Competition.



| |                   
| | ------------------
| | Surface Facilities

We design and construct fixed and floating
drilling, production, processing, and living quarter platforms
for the development of offshore and deepwater oil and gas
fields. In addition to more traditional approaches, we offer
proprietary technological solutions such as SPAR and EDP
platforms (floating platforms), self-installing fixed platforms
(TPG 500) and floater installation methods (UNIDECK), which
do not require the use of costly installation equipment such as
heavy lift barges.

Fixed Platforms.The TPG 500 is a self-installing
high-capacity fixed platform which is constructed, equipped and
tested onshore and then towed to site. Once on site, the
platforms legs are jacked down to the seabed up to 150
meters deep and the hull is subsequently raised into its final
position. Under favorable conditions, start-up of operations can
commence as early as five days after the TPG 500 arrives on
site. Although the TPG 500 is a fixed and not floating
structure, the installation can be reversed and the platform
re-installed at a new site. Unlike our TPG 500, the typical
fixed platform involves substantial offshore construction and
commissioning, and significant removal costs.

Floating and Semi-submersible Platforms.The SPAR is a floating deepwater
drilling and production platform, based on a technology
co-developed and jointly owned by Aker Deepwater Division and J.
Ray McDermott. The structure comprises a hull with a circular
cross-section that sits vertically in the water and is supported
by buoyancy chambers at the top and stabilized by a midsection
structure hanging from the hard tanks. If necessary, stability
may be supplemented by solid ballasts placed in compartments at
the keel. The vessel is held in place by a taut catenary mooring
system, providing lateral station keeping. The SPAR platform
uses dry-tree technology, where the wellhead
equipment is located on the platform rather than on the seabed.

Our SPAR platforms constitute an important
component of our business strategy for floating production
platforms. In addition to our SPAR platforms, we have also
developed the Extendable Draft Platform, EDP, a self-installing
high-capacity semi-submersible platform for depths up to 1,000
meters, suitable for use in West Africa, the Gulf of Mexico,
Brazil and deeper North Sea fields. We are evaluating the EDP
concept as a technical solution for a West African deepwater
offshore development.



| |                        
| | -----------------------
| | Industry Considerations

We believe that the market for the development of
offshore fields, particularly in deepwater (depths exceeding 500
meters) will experience significant growth in the next several
years, and are focusing on the

18



---



##### Table of Contents



regions of West Africa, the Gulf of Mexico,
Brazil and South East Asia. The commercial successes in 2003 of
such projects as the Dalia SURF, FPSO or the Simian Sapphire
demonstrate the success of our strategy to provide integrated
services, pursued since our acquisition of Coflexip. The
complementarity of the assets and the competencies in the
Offshore branch have allowed us to offer integrated solutions to
clients who can now depend on one project contractor to carry
out all aspects of offshore development.




| |                 
| | ----------------
| | Segment Strategy

Our Offshore segment strategy aims to:



| |   |                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------
| |  | defend our leadership position in the SURF sector;                                                                                       
|
| |  | benefit from the anticipated upswing in Brazil,
    especially in flexible pipe deliveries; and                                          
|
| |  | enhance our position in the area of floating
    platforms, following the major successes of Dalia (Angola) and
    P52 (Brazil) in 2003.

Onshore/ Downstream Branch

In 2003, we generated net sales of
2,119.0 million,
or 44.9% of our total net sales, from our Onshore/Downstream
branch as compared to
1,938.6 million,
or 43.5% of total net sales, in 2002 and
2,352.0 million,
or 66.3%, in 2001. At December 31, 2003, our Onshore/
Downstream branch accounted for approximately 54.4% of our total
backlog.

Onshore activities include both upstream
activities, such as the production and transport of oil and gas
on land, gas treatment plants, and downstream activities, such
as oil refineries and petrochemical and fertilizer plants. Our
activities in this branch consist mainly of the design and
implementation of production, refining and treatment units. We
also design and build related utilities and offsite facilities
such as hydrogen production units and storage facilities.

Onshore Field Development.We design and construct all types
of development facilities for onshore oil and gas fields, from
wellheads to process facilities and export systems. In addition
to new onshore field development projects, we have historically
carried out substantial work on the revamping of existing
facilities, notably through the modernization of their
production equipment and control systems as well as bringing
them in line with environmental standards.

Pipelines.Since 1960, we have completed more
than 140 onshore pipeline projects in over 40 countries,
amounting to an aggregate length of 18,000 km of pipeline. We
build pipeline systems principally for natural gas, crude oil
and oil products, water, liquid sulphur and slurry. Through our
subsidiary Technip Germany, we are one of the most experienced
pipeline builders in the world and have completed projects in
the most severe environments, including desert, tundra, mountain
and swamp. We have also entered into a joint venture, MERP B.V.
with Maats B.V. of the Netherlands, for the rental of pipeline
construction equipment. MERPs rental fleet is one of the
largest in the world.

Natural Gas Treatment and Liquefaction.We are a global sales leader in
the engineering and construction of infrastructure for the
natural gas industry, with over forty years of experience in the
engineering of innovative solutions for our clients. An early
pioneer in the field of natural gas liquefaction with the
construction of the first high-capacity liquefaction facility at
Arzew, Algeria in the early 1960s, we continue to be a global
leader in natural gas engineering services, notably due to
recently developed technologies derived from our Cryomax®
technology (using cold temperatures to separate gases).

We possess significant experience, and have
access to the relevant technologies under license in all major
methods of natural gas treatment. We also have an in-house
cryogenic technology, Cryomax®. We are specialized in the
extraction of sulphur from natural gas, and lead the industry in
terms of installed capacity, including 10 gas treatment plants
with capacities of over 400 million cubic meters each and
the worlds largest sulfur recovery facility. Additionally,
through our Cryomax® technology, we are specialists in the
highly efficient recovery of C2 and C3 hydrocarbons from natural
gas and the refinery of gases.

19



---



##### Table of Contents



Refineries.Each refinery is uniquely
configurated to process crude oil, natural gas and other raw
materials into a determined range of products and by-products.
Since our founding in 1958, we have designed and built more than
27 grassroots refineries, of which three have been built since
1995, and carried out major expansions or revamping of over 170
existing plants. Together, these projects represent more than
600 individual oil refining units delivered in over 40 countries
for national oil companies and the worlds major private
oil companies. Our systems control engineering capabilities
together with proprietary technologies, including the
progressive crude oil distillation patents we own jointly with
Total, are key strategic assets in winning refinery tenders. We
believe our progressive crude distillation technology has
several advantages over traditional refining methods,
positioning us to meet increasingly stringent environmental
standards, notably through:



| |   |                                                                                           
| | - | ------------------------------------------------------------------------------------------
| |  | reduced energy consumption, in part through
    reliance on steam by-products of refining;
|
| |  | improved separation of the hydrocarbon components
    of crude oil;                       
|
| |  | flexibility to produce new gasoline formulations;
    and                                 
|
| |  | low pollution.                                                                            

We are a leader in the design and construction of
hydrogen and synthetic gas production units and sulfur recovery
units. Hydrogen and synthetic gas are used to distill and
process refinery products and petrochemicals. Since 1992 we have
participated in a global alliance with Air Products &
Chemicals for the supply of high-purity hydrogen to the refining
industry. High-purity hydrogen is critical for reducing the
sulfur content in diesel and gasoline thus meeting stringent
environmental standards. Since our founding, we have been
involved in the construction of over 200 of these units
worldwide for the refining and related industries. Natural gas
deposits generally have an undesirably high sulfur content which
must be recovered as part of processing. Based on publicly
available information, we have built approximately 30% of the
worlds installed sulfur recovery capacity.

Petrochemicals.In the field of petrochemicals, we
have completed ten turnkey contracts for major fully integrated
petrochemical complexes. We have also designed and built a large
number of individual petrochemical units, including 30 steam
cracking units, over 120 aromatics units, over 100 intermediate
product units and 130 polymer units, including 62 polyolefins
units.

We are a global leader in the construction of
both polyethylene units and polypropylene units in terms of the
number of the plants we have constructed. We believe that we
have designed and built 14% and 8%, respectively, of the
worlds current production capacities of polyethylene and
polypropylene. Our competitive position in the field of
petrochemicals was greatly enhanced in 1999 with our acquisition
of KTI from the Mannesmann group. KTI (through the companies now
known as Technip USA, Technip Benelux and Technip KT India) had
been a frequent joint venture partner of ours since 1978,
especially in projects related to ethylene production which
combined our respective technologies in ethylene cracking
furnaces and cryogenic gas.

Industry
Considerations

We believe that the gas market will develop in an
environment of moderate economic growth. The growth in raw
material energy consumption of 1.8% per year is slower than
economic growth. However, the progression of global demand for
natural gas is estimated by the International Energy Agency to
be 2.7% per year for the next two decades.

Growth in the global demand for natural gas is
linked to its qualities which are adapted to the new concerns
for environmentally friendly products. Growth is mainly led by
the use of gas for electricity generation and will lead to the
construction of new gas treatment and liquefaction capacities,
as well as gas pipelines. We believe that over the next few
years, the development of GTL technology will become important
as it will allow the on-site conversion of gas reserves to high
quality fuels.

In a number of countries, new environmental
regulations will require the revamping of existing refinery
infrastructure, particularly over the period from 2004 to 2005
when these regulations will become more restrictive and from
2005 with the implementation of the Kyoto Protocol to reduce
hydrocarbon emissions.

20



---



##### Table of Contents



The petrochemical industry should enter into an
upswing in its cycle of activity, following weak demand for its
main products, coinciding with the entry into service of new
production capacities. Europes share of petrochemical
expenditures should decline relative to that of Asia, in
particular China, due to increasing growth in the region, and to
that of the Middle East, which having inexpensive raw materials,
is particularly competitive in the export market.

Segment
Strategy

Our strategy for growth in the Onshore/
Downstream segment centers on the following objectives:



| |   |                                                                                                                                                                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | capture expected growth in demand for gas
    projects to enhance our current leadership in the treatment,
    separation and liquefaction of gas, and to develop our position
    in GTL projects, for example, the project we are currently
    developing in Qatar; and
|
| |  | emphasize refining and petrochemical projects
    with a high value-added component tied to their technological
    content as well as their status as large turnkey contracts.                                                                                           

Industries Branch

We offer engineering and construction services to
other industries. Among the projects we have completed, we count
fine chemicals and pharmaceuticals facilities, chemicals,
fertilizers and agro-industrial plants, power generation plants,
cement plants, metallurgical facilities, amusement parks and
data processing centers, as well as numerous projects in
buildings and infrastructures. Activity in the Industries branch
is based on contracts, which, on the average, have a shorter
life cycle than contracts in the hydrocarbons/ petrochemicals
field. These are sometimes turnkey contracts, but more often
they are service contracts through which the Group sells its
clients engineering man hours.

In 2003, our Industries branch represented 8% of
the Groups revenues.

In 2003, we generated net sales of
382.4 million,
or 8.1% of our total net sales, from the Industries branch
compared to
388.7 million,
or 8.7% of total net sales, in 2002 and
472.0 million,
or 13.3% of total net sales, in 2001. At December 31, 2003,
the Industries branch represented approximately 5.3% of our
total backlog.

Life Sciences.We have successfully completed
more than 160 projects in the pharmaceuticals, cosmetics,
veterinary and agro-industrial segments. These projects include
research centers, quality control laboratories, pilot units and
production facilities for fine chemicals, intermediates and
finished products. In October 2003, we were awarded a contract
by Novo Nordisk for the expansion of its cartridge and injection
pen production plant at Chartres, France.

Chemicals.We
are one of the worlds leading groups in the design and
construction of chemical production plants using internationally
recognized state-of-the-art patented technologies. We have
designed and built more than 400 units in the three main sectors
of fertilizers, chlorine and chlorinated derivatives, and
agrochemicals. Due to numerous technological alliance agreements
signed with major internationally recognized groups, we have
reinforced our ability to provide engineering services and to
manage these projects. These alliances give the Group access to
the most recently developed technologies in this sector.

Power Generation.We are present on the market for
power plants mainly through our affiliates in France, Italy and
Germany. Our expertise has been recognized through numerous
projects in Europe and the Middle East. In January 2004, we won
a turnkey contract worth more than
300 million
(with our share representing 30%) from Energia
Molise S.p.A. for the construction of an 800 MW
combined cycle power generation plant at Termoli in Italy.

Metals.We
are one of the most respected groups in terms of the supply of
solvent extraction systems for the production of non-ferrous
metals. The Group offers its proprietary solvent extraction
technology based on our patented mixer-settlers. We have
designed and built more than 40 plants based on this technology
for the extraction and/or purification of metals such as copper,
nickel/ cobalt, uranium, etc. In addition, we have
recently won a contract for the revamping and expansion of an
alumina production plant in Venezuela, thus strengthening our
position as a leader in this field of activity.

21



---



##### Table of Contents



Aeronautics and Space Industries.We have successfully completed
several projects for the aeronautic and space industries:
industrial buildings, assembly hangars, assembly workshops, as
well as production units for components and fuel materials.
Outstanding references include: a booster plant for
Ariane 5 at Kourou for the CNES and the European Space
Agency, as well as several test benches and wind tunnels for
various industrial clients.

Cement.Our
cement division designs and constructs cement plants. We also
carry out major plant expansions and modernization programs for
existing units throughout the world. Our patented technologies
and optimized processes give us an important competitive edge.
The main projects carried out by the Group include several
grassroots plants as well as more than 50 plant expansions and
modernizations.

Industrial Buildings and Infrastructures.Working in partnership with major
architectural firms, we carry out projects for industrial and
service buildings featuring a strong architectural image. Major
references in this sector include the French National Library,
Disneyland Paris, Renaults Technocenter, the 7000-seat
Zenith theater in Rouen and Jussieu University in Paris. We also
provide services for hospital projects, urban tramways,
headquarter buildings and upscale shopping malls. In 2004, at
Toulouse, the final assembly hangar for the gigantic Airbus
A380  for which we, as leader of a consortium,
provided project management and engineering services 
was inaugurated. This reference has already paved the way for
our involvement in maintenance centers for the A380 in Dubai and
Montreal.



| |                        
| | -----------------------
| | Industry Considerations

While energy prices influence economic activities
overall, the industries identified above are not necessarily
subject to the same cycles as the hydrocarbon/ petrochemicals
industry. This allows us to diversify our exposure to the
hydrocarbon/ petrochemical sector.



| |                 
| | ----------------
| | Segment Strategy

Our strategy for growth in this segment consists
of increasing our sales more rapidly than the sales for the
Group as a whole, by mobilizing our technical know-how in the
management of projects in fields such as life sciences,
metallurgy, power generation and architectural engineering.

Geographical and Segment Breakdown of Net
Sales and Backlog

Net Sales By
Segment of Activity

We carry out our engineering and construction
activities in three segments. The following table sets forth our
consolidated net sales broken down by segment for the years
ended December 31, 2003, 2002 and 2001.

|                           |  |                         |         |  |            |  |         |              |  |  |            |  |  |  |         | 
|-------------------------- |  | ----------------------- | ------- |  | ---------- |  | ------- | ------------ |  |  | ---------- |  |  |  | ------- | 
|                           |  |                        
|                           |  | Year Ended December 31, |        
|                           |  |                         |        
|                           |  | 2003                    |         |  | 2002       |  |         | 2001         |  |  | 2001       | 
|                           |  | Historical              |         |  | Historical |  |         | Pro forma(1) |  |  | Historical | 
|                           |  |                         |         |  |            |  |         |              |  |  |            | 
|                           |  |                        
|                           |  | (in  millions)         |        
|Offshore Branch            |  |                         | 2,209.7 |  |            |  | 2,125.0 |              |  |  | 2,126.0    |  |  |  | 722.0   | 
|Onshore/ Downstream Branch |  |                         | 2,119.0 |  |            |  | 1,938.6 |              |  |  | 2,352.0    |  |  |  | 2,352.0 | 
|Industries Branch          |  |                         | 382.4   |  |            |  | 388.7   |              |  |  | 472.0      |  |  |  | 472.0   | 
|                           |  |                         |         |  |            |  |         |              |  |  |            | 
|Total                      |  |                         | 4,711.1 |  |            |  | 4,452.3 |              |  |  | 4,950.0    |  |  |  | 3,546.0 | 
|                           |  |                         |         |  |            |  |         |              |  |  |            | 



---



|    |                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Unaudited. The proforma net sales is calculated
    based on the assumption that the acquisition of Coflexip was
    made on January 1, 2001.

22



---



##### Table of Contents





| |                             
| | ----------------------------
| | Net Sales By Geographic Zone

We carry out our engineering and construction
activities worldwide. The following table sets forth our
consolidated net sales by geographic zone for the years ended
December 31, 2003, 2002 and 2001.

|                            |  |                         |         |  |            |  |         |              |  |  |            |  |  |  |         | 
|--------------------------- |  | ----------------------- | ------- |  | ---------- |  | ------- | ------------ |  |  | ---------- |  |  |  | ------- | 
|                            |  |                        
|                            |  | Year Ended December 31, |        
|                            |  |                         |        
|                            |  | 2003                    |         |  | 2002       |  |         | 2001         |  |  | 2001       | 
|                            |  | Historical              |         |  | Historical |  |         | Pro forma(1) |  |  | Historical | 
|                            |  |                         |         |  |            |  |         |              |  |  |            | 
|                            |  |                        
|                            |  | (in  millions)         |        
|Europe/ Russia/Central Asia |  |                         | 1,138.2 |  |            |  | 1,196.6 |              |  |  | 1,497.0    |  |  |  | 942.0   | 
|Africa/ Middle East         |  |                         | 2,150.3 |  |            |  | 1,482.0 |              |  |  | 1,305.0    |  |  |  | 1,209.0 | 
|Americas                    |  |                         | 1,078.1 |  |            |  | 1,328.5 |              |  |  | 1,541.0    |  |  |  | 835.0   | 
|Asia Pacific                |  |                         | 344.5   |  |            |  | 445.2   |              |  |  | 607.0      |  |  |  | 560.0   | 
|                            |  |                         |         |  |            |  |         |              |  |  |            | 
|Total                       |  |                         | 4,711.1 |  |            |  | 4,452.3 |              |  |  | 4,950.0    |  |  |  | 3,546.0 | 
|                            |  |                         |         |  |            |  |         |              |  |  |            | 



---



|    |                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Unaudited. The pro forma net sales is calculated
    based on the assumption that the acquisition of Coflexip was
    made on January 1, 2001.



| |                                      
| | -------------------------------------
| | Special Geographic
    Considerations

A substantial part of our project backlog is in
the Persian Gulf region, although we have no backlog in Iraq.
While to date, we do not believe that our business has been
materially affected by the armed conflict in Iraq since 2003, we
cannot predict the effect that the current conflict will have on
future investments in this region or on our ability to complete
our backlog under the terms initially contracted. We have taken
additional measures to ensure the safety of our staff working in
this region, including reducing the number of expatriated
employees.

In Venezuela, Petroleos de Venezuela SA and the
construction industry in Venezuela have experienced labor unrest
in recent months, including work slowdowns which may affect the
milestone dates of our current or future projects in that
country.

As a non-U.S. company, we may do business in
countries that are not generally accessible to our
U.S. peer companies. Companies making statutorily-defined
investments in the petroleum industry in Iran may be
sanctioned by the U.S. government under the U.S. Iran
and Libya Sanctions Act of 1996, as amended in August 2001
(ILSA). ILSA originally also applied to Libya.
Recently, however, the president of the United States has made a
determination that effectively suspends the application of ILSA
with respect to Libya.

ILSA defines the term investment to
include a range of contractual arrangements, but it also
expressly excludes the entry into, performance, or
financing of a contract to sell or purchase goods, services, or
technology. We do not believe that the services we provide
in Iran meet the statutory requirements of an
investment as defined by ILSA.

Under ILSA, the president of the United States
has the authority to grant waivers under certain circumstances,
including those in the national interest of the United States.
The United States government reached an understanding with the
European Union in 1997, whereby the United States committed to
work with the EU toward granting EU member states and companies
waivers under ILSA. However, we cannot predict future
interpretations by, or the implementation policy of, the
U.S. government with respect to ILSA.

In addition, under U.S. executive orders and
regulations, U.S. origin goods, technology and services may
not be exported or reexported to Iran. Any person involved in
any prohibited export or reexport may be placed on the
U.S. Commerce Departments Denied Persons
List, as well as incurring other administrative and/or
criminal penalties.



| |                                   
| | ----------------------------------
| | Backlog By Segment of
    Activity

Backlog consists of the uncompleted portion of
contracts in force, which we define as signed contracts for
which all pre-conditions to entry into force (such as proof of
financing) have been met. Contracts in the Offshore

23



---



##### Table of Contents



and Industry branches tend to enter backlog
almost immediately, while in the Onshore/ Downstream segment,
because of the larger contract size and more complicated
financing arrangements, it is not unusual for several months to
pass before a signed contract can be entered into backlog. Our
backlog does not include contracts which we have signed but
which do not meet these criteria. Our backlog includes only our
proportionate share of joint venture contracts. To the extent
work on these contracts advances, they are progressively removed
from backlog. The following table sets forth our consolidated
backlog by branch of activity at December 31, 2003, 2002
and 2001. Backlog is not an audited measure.


|                           |  |                 |      |  |      |  |      |      |  |  |      | 
|-------------------------- |  | --------------- | ---- |  | ---- |  | ---- | ---- |  |  | ---- | 
|                           |  |                
|                           |  | At December 31, |     
|                           |  |                 |     
|                           |  | 2003            |      |  | 2002 |  |      | 2001 | 
|                           |  |                 |      |  |      |  |      |      | 
|                           |  |                
|                           |  | (in  millions) |     
|Offshore Branch            |  |                 | 2.90 |  |      |  | 1.76 |      |  |  | 2.14 | 
|Onshore/ Downstream Branch |  |                 | 3.90 |  |      |  | 3.63 |      |  |  | 2.50 | 
|Industries Branch          |  |                 | 0.38 |  |      |  | 0.39 |      |  |  | 0.29 | 
|                           |  |                 |      |  |      |  |      |      | 
|Total                      |  |                 | 7.18 |  |      |  | 5.78 |      |  |  | 4.93 | 
|                           |  |                 |      |  |      |  |      |      | 

Broken down by geographic zone, 58% of our
backlog at December 31, 2003, was attributed to Africa and
the Middle East, 14.3% in the Americas, 20.6% in Europe, Russia
and Central Asia and 7.1% in Asia Pacific.

At December 31, 2003, our five largest
contracts accounted for approximately 30% of our total backlog,
representing
2.12 billion,
mainly due to the increased number of contracts in our portfolio
and to the combination with Coflexip, as compared to
approximately 34% at the end of 2002 and 26% at the end of 2001.

Description of Our Operations

Contract
Project Management

Our project contractor activities expose us
contractually to significant construction and cash flow risks.
To meet these risks, we have developed stringent risk controls,
including selectivity as to the projects we bid on, and
implemented a disciplined management of cash flows, both on a
contract-by-contract and on a global basis. We believe that our
past ability to manage these risks has been a key factor in our
ability to successfully provide turnkey solutions for our
clients.



| |                 
| | ----------------
| | Turnkey Projects

Our clients are generally not specialized in
construction and are primarily interested in obtaining the
timely delivery of a completed and operational industrial
complex without significant involvement on their part. Turnkey
projects allow our clients to achieve this result by delegating
to the turnkey contractor the responsibility for designing and
executing major facilities of an industrial complex within an
agreed budget and timetable. An increasing number of companies
offering turnkey services competing for one project have become
involved in the offshore production area where the unit size of
contracts has grown significantly. The 1995 NKossa field
development project in Congos territorial waters, for
example, generated 50 separate turnkey contracts for a total of
U.S.$1.7 billion. In recent tenders, particularly in
offshore developments, it has become common for a major site to
be divided into only a handful of projects or even to be awarded
in its entirety to a single project contractor.

As the contractor of a turnkey project, we are
responsible for all aspects of the project. We start with the
design of the facility, then procure all equipment and oversee
all stages of construction. We complete our engagement by
delivery of the facility to our client in a ready to
use state. We usually guarantee completion by a scheduled
acceptance date and/or achievement of some acceptance and
performance testing levels. The client usually retains
responsibility for obtaining all necessary construction and
operating permits and for operating the facility after delivery.

Substantially all of our turnkey projects are
under lump-sum contracts that fix an all inclusive
lump-sum price for the project. Lump-sum contracts have several
advantages for our clients: the delivery price is known in
advance, cost overruns are absorbed by the project contractors
and the typical penalty structure encourages timely

24



---



##### Table of Contents



delivery. From our point of view, while lump-sum
contracts entail business and financial risks, notably by
requiring us to absorb some of the cost overruns, they also
allow us to appropriate any of the three types of cost savings
which we generate during the life of the project: technical
studies, the procurement of equipment and the management of
worksites. Because of these business and financial risks, we
cannot generally estimate the margins of our lump-sum turnkey
contracts accurately until a substantial portion of the work has
been completed.




| |                                
| | -------------------------------
| | Cost Plus Fee
    Contracting

Another type of contractual arrangement common in
our industry is cost plus fee contracting, or
service contract. Under cost plus fee contracts, the project
contractor passes the design, equipment and construction costs
on to the customer after adding a predetermined percentage
profit margin. Contrary to turnkey projects, the equipment,
materials and construction are not paid for through a lump sum
fee, but are directly ordered and paid for by the client. While
cost plus fee contracts often contain performance bonuses and
penalties, much of the bid negotiation is focused on the
percentage profit margin, with relatively little reward to the
contractor for efficient project management and relatively
little guarantee for its client against cost overruns. The
current international market for engineering and construction
services primarily involves lump-sum turnkey contracts due to
the requirements of financial institutions. Cost plus fee
contracts remain common in the United States and some European
countries.



| |                           
| | --------------------------
| | Cooperative Joint Ventures

Typically, we bid for projects as the sole
general contractor of the project. As sole general contractor,
we have full responsibility vis-à-vis the customer
for all aspects of the project, including the selection and
supervision of sub-contractors. For some larger or more
technical projects, we participate (often as the general
contractor of the projects) in single-project joint ventures
with other contracting, engineering and construction companies
to share risks and combine financial, technical and other
resources. In connection with our contractual arrangements, we
are generally required to provide to the customer or the
participating parties in a consortium or single-project joint
venture with a bank guarantee for the performance of our
obligations and liabilities under the contract. In 2003,
approximately 14.2% of our sales were generated from joint
venture projects. Recent joint venture projects that we have
participated in include the Cakerawala offshore gas development
project, through a consortium including Technip Malaysia (with a
35% stake in the consortium), Saipem (with a 13% stake in the
consortium) and Samsung (with a 52% stake in the consortium),
and the OGD II gas treatment complex, through an equally-owned
joint venture with Bechtel. In both cases, we were the leader of
the joint ventures.



| |                              
| | -----------------------------
| | Single-Project Joint Ventures

In a single-project joint venture, we incorporate
a single purpose partnership vehicle with one or more other
companies to perform the contract and each member of the joint
venture shares the risks and revenues of the project, according
to a pre-determined percentage. Joint ventures often impose
joint and several liabilities on the partners, under which we
could become liable for a failure to perform on the part of our
joint venture partners. These single-purpose joint ventures last
only as long as the construction project, which is frequently
longer than one year on major construction projects.
Construction joint ventures undertaken to complete a specific
project are liquidated when the project is completed.



| |          
| | ---------
| | Alliances

Additionally, we occasionally form alliances with
our oil and gas customers whereby we are able to share a portion
of the risk and reward of a project. Similar to a traditional
turnkey contract, an alliance contract will set a target price
for the project. However, we share any savings below, or cost
overruns above, the target price with our customer. Alliances
often allow us to streamline the project by working on an
integrated basis with our customer. In addition, alliances allow
us to strengthen our customer relationships, be involved in a
project at an earlier stage and participate in technological
choices. Over the last three years, we have participated in
several alliance contracts with European oil and gas companies.

25



---



##### Table of Contents





| |                                   
| | ----------------------------------
| | Execution of a Turnkey
    Project

As turnkey project contractor, we coordinate the
principal functions in the engineering and construction process:



|                                                  |  |                                                                                                                                                                                                               
|------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Financial Engineering                             |  | Our teams assist clients in obtaining external
    project finance before work commences.                                                                                                                     
|                                                 
|Engineering Design                                |  | Our engineering services draw on our internal
    engineering staff and our selected technologies to design the
    facility.                                                                                 
|                                                 
|Procurement                                       |  | Our project teams source equipment from outside
    manufacturers through competitive bidding.                                                                                                                
|                                                 
|Construction                                      |  | Our project teams select and oversee outside
    construction companies.                                                                                                                                      
|                                                 
|Commissioning, Start-up and Performance
    Tests |  | Our commissioning/ start-up service verifies the
    readiness of the facility and starts operations. Once start-up
    and performance tests are successfully completed, our role in
    the project is over.

As a general rule of thumb, engineering design
services for a typical turnkey project account for approximately
10% to 20% of a projects total contract value. Equipment
accounts for approximately 40% to 50% of a projects total
contract value. Construction accounts for substantially all of
the remaining 40%, with start-up not representing a material
percentage. Financing costs are borne directly by the client and
are not included when calculating the contracts value.
While financing and start-up services do not have large
independent economic value relative to the rest of the project,
these services are generally highly valued by potential clients
and facilitate obtaining contract awards. In addition, because
we do not consider a contract to be unconditional until
financing has been arranged, facilitation of financing is
important for our project schedules and the commencement of
execution.



| |                      
| | ---------------------
| | Financial Engineering

Through our financial engineering teams located
in Paris, Rome, Kuala Lumpur, Houston, Düsseldorf, The
Hague, Aberdeen and Rio de Janeiro, we help our clients to
arrange financing, by seeking out and negotiating financing
under the most appropriate structure for each project. We
promote a broad range of financing instruments:



| |   |                                                                     
| | - | --------------------------------------------------------------------
| |  | export credits from multiple national
    export-import authorities;
|
| |  | co-financing with multinational financing
    institutions;         
|
| |  | structured trade finance;                                           
|
| |  | international commercial credit;                                    
|
| |  | local funding; and                                                  
|
| |  | letters of credit.                                                  

Our active involvement in the financial
engineering of the project is essential on many fronts. The
presence of a well-regarded project contractor adds credibility
to the project for financial institutions. Our financial
engineering team is experienced in matching projects to
appropriate financing structures. Finally, our project
management teams are experienced at planning our procurement and
sub-contracting around the national content requirements of
national export-import authorities. As a matter of policy,
however, we do not ourselves participate in arrangements which
would require us to make an investment in the financing of the
project.

26



---



##### Table of Contents



Examples of recently arranged client finance
include:

Chile:U.S.$26 million for a hydrogen unit (commercial bank loan);

Oman:U.S.$536 million for a nitrogen fertilizer plant (export
credit guaranteed by Coface and Sace, with a standby letter of
credit);

Brazil:65 million
for the supply and laying of flexible pipe for an offshore field
(Coface export credit);

Turkmenistan:U.S.$446 million for a cracking unit and a lube oil plant
(combination of commercial loans and multi-source export credits
guaranteed by Hermès, Coface, Office Nationale du Ducroire,
Turkish Eximbank and Malaysian Eximbank), and
112 million
for a diesel treatment unit (guaranteed by Hermès);

Czech Republic:DEM 35 million for the revamping of an ethylene plant for
CHEMOPETROL (corporate loan from Kreditanstalt für
Wiederaufbau (KfW));

Uzbekistan:U.S.$300 million for the construction of a refinery at
Bukhara (combination of multi-source export credits guaranteed
by Coface, the Export Import Bank of the United States, Japan
EXIM and a private bank letter of credit);

Egypt:U.S.$1 billion for the construction of a refinery in
Alexandria (confirmation of letters of credit and financing
granted by European Investment Bank (EIB));

Malaysia:Financing
of a U.S.$140 million polyethylene unit contract (Coface
and Hermès export credits and a commercial loan); and

Iran:112 million
for the construction of a polyethylene plant in a petrochemical
complex (guaranteed by Coface, Hermès and OeKB);
480 million
for the construction of two polyethylene plants in two
petrochemical complexes (guaranteed by Coface, Sace, Cesce and
NCM);
100 million
for the construction of a polyethylene plant (guaranteed by
Coface).

We do not include signed contracts in our backlog
until financing has been arranged.



| |                   
| | ------------------
| | Engineering Design

Prior to the erection of an industrial plant,
engineering studies are needed involving numerous engineering
specialties including process design, systems control, pressure
vessels, rotating equipment, instrumentation, electrical
facilities, computing, piping, civil works, cost control and
scheduling. Throughout the project, and prior to authorization
for delivery, quality control and testing of operability is
carried out. All these activities are provided by and fully
managed within Technip.

Engineering studies generally progress
sequentially through the following three phases:

Basic engineering design.In the first phase, the
facilitys layout is planned, both in conceptual terms such
as traffic flows and industrial processes, and in physical terms
such as placement of equipment and piping. One of the
fundamental goals of this phase is the preparation of a basic
engineering design package containing all data needed by a
competent contractor to perform the detailed engineering. It is
also at this phase that our engineers define the facilitys
main equipment, together with its systems control and safety
devices.

Front-end engineering design.During this phase, our engineers
develop detailed site plans, including the main piping,
instrument, electrical and civil works layouts. One of the
fundamental goals of this phase is the definition of
specifications for the main equipment, allowing our project
managers to proceed with procurement. The development of deep
and ultra deepwater fields depends on innovative technical
developments in the design of the flowlines and risers to
connect subsea wellheads to surface facilities and requires
extensive front end engineering and design work. In March 1999,
we launched a Deepwater Field Development Division to provide
conceptual and front-end engineering and design services to our
clients well in advance of procurement and installation
contracts. We believe that our involvement at an early stage in
a project allows us to provide optimized subsea solutions based
on our engineering and installation expertise. This is
particularly important with respect to the development of
deepwater and ultra deepwater fields, which require innovative
technical developments in the design of the flowlines and risers
to connect subsea wellheads to surface facilities.

27



---



##### Table of Contents



Detailed engineering.During this phase, engineering studies
and architectural plans are finalized for construction. All
remaining studies are performed before construction of the
plant. Our engineers also participate in the purchasing of
equipment, and cost and schedule control. The fundamental goal
of this phase is to allow construction to commence.



| |            
| | -----------
| | Procurement

Once our engineering work has advanced to a stage
where our specific equipment needs are known, typically several
months into the life of the project, we generally order our
equipment rapidly both to ensure its availability when required
under the project schedule and to minimize the time over which
equipment price levels might depart from those assumed in our
tender bid. With the limited exceptions of flexible pipe and
umbilicals where we have industry-leading products, we are not
involved in the manufacture of equipment. We source our
equipment from a large number of independent suppliers. Our
engineers do, however, establish the equipment specifications
corresponding to the needs of a given project.

Procurement of equipment from external suppliers
typically comprises approximately half of a projects cost.
In each of our contracts, competitive bidding by reliable
suppliers is an important factor in cost containment. Our
historical ability to procure equipment from suppliers in a
quality-conscious but cost-contained manner has been a key to
our success with lump-sum turnkey contracts. We continue to
apply our procurement policy, except for products containing
flexible pipes, in which we believe we are the global leader and
therefore possess the most advanced products.

We have established a global procurement network
to organize the supply of the appropriate equipment at a
competitive cost and in conformity with industry best practices
for international bidding. The procurement network is composed
of 10 regional procurement centers located throughout the world,
each of which uses a common set of tools and procedures. The
global procurement networks staff of over 500 employees
has an average professional experience of more than
20 years in fields relevant to our activities. The global
procurement network names a single project procurement manager
for each project under our management. All regional centers
support the project procurement manager by verifying the
qualifications of local suppliers, and by providing inspection,
shipping and logistics services for goods located in their zone.
We believe that the geographic proximity of these centers to
suppliers and sub-contractors enables us to carry out more
effective quality controls and to identify technological
innovations and industry developments earlier than might
otherwise be the case.

We have started to carry out a growing part of
our equipment procurement over a proprietary
business-to-business Internet system. Conducting our equipment
tenders over this electronic system reduces transaction costs
and delays through the rapid diffusion of tender materials and
the ability to receive a standardized electronic response, among
other factors. The new system helps increase competition among
our suppliers by providing accessibility to potential suppliers
no matter where they are located. Use of Internet technologies
should also allow our separate geographic purchasing centers to
better coordinate procurement and benefit from economies of
scale. The system handles tendering and auctions of products and
services. We are phasing in a full-scale Internet-based
purchasing system, or e-procurement, for all aspects
of material and equipment sourcing and delivery, including calls
for bids, clarification of tender specifications, submission of
bids, bid analysis and finally either bid negotiation or an
auction process. In addition to these tasks, our final
procurement system will also handle tasks such as estimate
requests, equipment design, delivery logistics, and invoicing.
We anticipate that once our e-procurement system is fully
operational, approximately 20% of our procurement will continue
to be handled through traditional channels, because the
e-procurement channel is not optimally suited for dealing with
suppliers having no viable competitor or with orders for some
large highly customized equipment.

By deploying our e-procurement system and
entering into master agreements with strategic suppliers, we aim
to reduce processing costs by approximately 20% and potentially
reduce the purchase price of equipment by 5%. Use of this
purchasing system by offshore projects increased significantly
in 2003.

We believe that the volume of purchases that has
transited through our Internet purchasing system amounts to
approximately
1 billion.
This system thus allows us to procure materials at a better
cost, taking into account in particular, the effects of exchange
rates. The portion of procurement from the U.S. dollar zone
amounted to

28



---



##### Table of Contents



approximately 43% in 2003, as compared to 27% in
2000. We believe that approximately
30 million
in savings was generated due to this purchasing system.




| |             
| | ------------
| | Construction

Field construction typically commences one year
after the design process has been launched. Before we begin the
construction of a facility, we make sure that basic design
aspects are finalized, and that a substantial portion of the
equipment has been ordered and is available.

We are not a construction company. Our role in
the projects we handle is to organize and supervise the
construction. We generally aim to sub-contract our construction
work to specialized construction companies, with the limited
exceptions of pipe laying (including trenching) and installation
of FSPOs in offshore projects, where we have developed highly
specialized capabilities complementary to our general
operations. Our construction sub-contractors are selected
through a competitive bidding process which, in addition to
price, takes into account the experience and historical
reliability of the bidder.

While all companies in the engineering and
construction industry rely on sub-contracting to some extent,
most of our international competitors rely heavily on their own
construction units. We believe that maintaining our focus on the
management of the construction process, rather than carrying out
the construction ourselves, benefits our projects in several
ways:



| |   |                                                                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | systematic recourse to competitive bidding
    contributes to cost containment, allowing us to submit
    competitive project bids with acceptable opportunities for
    achieving high operating margins;
|
| |  | our freedom to sub-contract to a large pool of
    construction companies allows us to select the firms with the
    most relevant technical expertise for a given project;                               
|
| |  | in periods in which we require fewer construction
    services, we do not carry the related overhead and payroll costs
    of an internal unit; and                                                       
|
| |  | we believe that we are on average able to produce
    higher operating margins from management of construction than
    from the construction work we subcontract to others.                              



| |                         
| | ------------------------
| | Commissioning & Start-Up

Prior to delivery, our commissioning &
start-up division conducts field testing to ensure that the
facility is not just operational, but that it meets our
clients exact contractual specifications as well as
national regulations and our own construction standards. To the
extent a facility relies on licensed technology, the licensor
will participate in its commissioning and start-up. During the
pre-commissioning and commissioning phases, we subject each
piece of equipment to simulated operating conditions. During the
start-up phase, we commence actual operation of the facility. In
the offshore branch, a competitive advantage is our ability to
conduct a substantial portion of the commissioning services
onshore at lower costs than would be incurred providing such
services in the open seas. Where our contribution to a project
consists of an engineering, procurement, construction and
installation (known as EPCI contracts) of the subsea portion, we
do not provide commissioning or start-up services to the client.



| |                                                     
| | ----------------------------------------------------
| | Special Challenges of Turnkey Project
    Management



| |                
| | ---------------
| | Risk Management

Turnkey projects are subject to special risks,
including unforeseen conditions encountered during construction
and the impact of inflation or interest rate movements on costs
and financing requirements of clients. Changes in political and
legal circumstances in foreign countries represent an additional
risk, particularly since contracts for major projects are
performed over an extended period of time.

29



---



##### Table of Contents



In order to protect ourselves from the risks
described above, we pursue a strategy of risk management based
principally on the following elements:



| |   |                                                                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | selecting projects carefully; this generally
    entails rejecting an opportunity to bid on a project which we do
    not believe will offer us profit opportunities adequate to cover
    risk;  
|
| |  | ensuring adequate technical capacity to meet
    contract obligations; this includes rejecting opportunities to
    bid on projects outside our core competencies;                                
|
| |  | using our global scale to diversify counterparty,
    country and industry risk;                                                                                                                  
|
| |  | participating in joint ventures to spread risk
    over more partners and more projects;                                                                                                          
|
| |  | estimating and controlling costs in reliance on
    our extensive experience in procuring equipment, materials and
    services, particularly for turnkey projects, and analyzing cost
    trends;
|
| |  | commencing activities only after a projects
    financing and government authorizations have been secured;                                                                                       
|
| |  | ordering equipment rapidly and in the currency of
    our project receivables; this limits price-level and exchange
    rate risk;                                                                
|
| |  | selecting appropriate sub-contractors based on
    technical abilities and financial strength;                                                                                                    
|
| |  | effective negotiation of contract terms and
    conditions including payment, change in laws, change orders,
    force majeure, etc., to minimize contract and financial
    risks;               
|
| |  | using experienced project managers;                                                                                                                                                               
|
| |  | conducting regular project reviews by senior
    management together with project management; and                                                                                                 
|
| |  | obtaining appropriate insurance.                                                                                                                                                                  

In order to further reduce the above risks, our
policy is to contractually exclude consequential damages, limit
liquidated damages for late completion, unsuccessful performance
tests and defective or non-conforming work. In line with
practice in our industry, our contracts generally limit our
maximum aggregate liability to a range of 5% to 20% of the
contract price, depending on the nature of the contract, and
allow for price adjustments in the event of changes in law that
affect the project. For some risks, notably environmental
hazards, we may remain a potentially responsible party by
operation of law in some jurisdictions. We also seek that our
clients and subcontractors subscribe to adequate insurance
directly or try to obtain indemnity agreements, whenever
possible, from our customers, sub-contractors and joint venture
partners requiring these persons to indemnify us against the
risk of some claims relating to injury to our employees, damage
to our property and consequential damages.



| |               
| | --------------
| | Business Risks

In addition to the technical expertise needed to
design and supervise all aspects of the project, a lump-sum
turnkey contract generally requires significant management
skills. We determine the price and delivery dates which we
include in our project bids after conducting an in-depth
proposal study including cost estimates and financial risk
analysis.

If we manage the project so that delivery is
timely and our sourcing of sub-contractors and equipment is on
or under budget, lump-sum turnkey projects can bring in
significantly higher margins. Conversely, if we do not deliver a
project on time, we are generally subject to the payment of
liquidated damages to our client. If we are not able to complete
a project at the cost estimated in our bid, we will record lower
operating margins or even a loss. If the delay or change in
costs is imputable to a change in the clients orders,
however, then the client will generally incur the extra costs.

Under turnkey contracts, therefore, we carry
particular risks, such as unanticipated increases in the cost of
equipment, materials or manpower due to inflation or unforeseen
events, delays caused by local weather conditions and
suppliers and sub-contractors failure to perform. In
addition, we generally bear the risk of delays caused by
unexpected conditions or events, subject to the protection of
standard force majeure provisions. Other factors that may
add to an individual projects risks include the novelty of
the technologies used, the experience

30



---



##### Table of Contents



of our equipment vendors and construction
subcontractors in similar projects, the scheduling needs of the
client and the projects location in a developing country.
The management of a turnkey contract through a joint-venture
structure and the complexity of our relationships with
subcontractors although diversifying our risk exposure also may
in some cases increase the projects risk of delay or cost
overruns. Because our turnkey contracts typically run over
several years and their risks are based on factors (such as
geological conditions, labor availability during the
construction phase or performance of new designs) which are not
necessarily known at the time of bidding or even before
substantial procurement and engineering work has been completed,
it is difficult to predict these risks and assess their
potential effect on contract costs and margins when we submit
bids or during the early phases of a project. See Note 1(d)
to our Consolidated Financial Statements included in this annual
report.


In addition to the considerations covered by the
factors described above, our failure to meet any schedule or
performance requirements under our contract may negatively
impact our project profit margins due to contractual liquidated
damages payments. Often, however, after negotiation with the
client after closure of the contract, we have not been made to
make these damages payments. Historically, however, we have a
strong record in meeting the completion and delivery deadlines
of our turnkey projects.

After delivery of a completed, operational
facility we continue to bear the risk of claims for damages
arising under our contractual guarantees, the scope of which
varies by project. Bank guarantees may be between 10% and 20% of
the contract price, reduced after delivery for equipment
warranty and are irrevocable and binding until expiration of the
guarantee period. The guarantee period typically runs for 12 to
24 months from our clients acceptance of the facility.



| |                
| | ---------------
| | Cash Flow Risks

Lump-sum turnkey contracts also require us to
manage cash flow risks. Under these contracts, we are obliged to
make large expenditures to execute a project. Our basic goal for
each project is to ensure that, at any point in time, the sum of
client payments received (plus any interest thereon) exceeds the
sum total of our project disbursements to date plus payables due
before the next progress payment is expected. To achieve this
goal, we negotiate our project down-payment and progress
payments in amounts and at times corresponding to expenditures.
Additionally, our project managers do not authorize procurement
or other outlays for which the cost has not been covered.

Before we commence the design process or incur
any project management expense, our client must make a
down-payment to us typically representing 5% to 10% of the
contract price and provide proof of firm financing for the rest.
Over the life of the contract, our client continues to pay us
installments on the contract price, typically in progress
payments or upon our achieving agreed objective milestones such
as, for example, the completion of the projects
engineering drawings or the delivery of equipment to the site.

Because costs may significantly exceed our
estimates or because delays in achieving milestones may cause
our vendor payables to come due before the next progress payment
is received, our disbursements may occasionally exceed client
payments received (plus any interest thereon). Because
substantially all of our projects are in positive cash positions
and because cash shortfalls on individual projects are
relatively infrequent and short-lived, we believe that we have
sufficient funds to bridge any shortfalls which may foreseeably
arise on individual projects.



| |                       
| | ----------------------
| | Foreign Exchange Risks

For each project, we cover our exposure to
exchange rate risks first, through the fact that most of our
contracts are multi-currency contracts, and second, through
systematic coverage for the rest of the risks. For 2003, losses
in connection with the effects of exchange rates represented
approximately 0.1% of the Groups consolidated sales.



| |                              
| | -----------------------------
| | Engineering Service Contracts

In addition to carrying out turnkey projects, we
also provide independent engineering services. Service contracts
collectively accounted for approximately 8.4% of our net sales
in 2003 and 4.6% of backlog at

31



---



##### Table of Contents



December 31, 2003. While we bill these
services on an hourly, a cost plus fee basis or a fixed price,
we aim to only accept projects meeting the same profitability
criteria as in turnkey project management and have historically
achieved comparable margins.


Occasionally, service contracts can be quite
substantial. On the Girassol project in 1998 and 1999, for
example, we provided Bouygues Offshore with over
200,000 hours of sub-contracted engineering services.
Additionally, these projects frequently call upon us to provide
challenging work for our engineering staff. From a marketing
perspective, service contracts also allow us to establish a
relationship with potential future clients and, in the case of
project feasibility studies, to become involved at an early
stage in turnkey projects for which we may later submit bids. In
particular, we believe that the provision of front-end
engineering services to such groups as Exxon Mobil,
Williams and Total through our specialized subsidiaries Genesis
and RJ Brown Deepwater is a competitive advantage in our
bidding for offshore oil and gas development projects.



| |                                           
| | ------------------------------------------
| | Installation and Other Subsea
    Services

Our personnel carries out a range of services in
the Offshore segment, principally focused on the subsea
installation of pipeline and the maintenance of existing subsea
systems.

Rigid Pipelay.We install rigid steel pipe
applying the reel method from aboard our two pipelay ships: the
CSO Apache and CSO Deep Blue. In addition, we
perform related construction services using our fleet of diving
support vessels. See  Property, Plant and
Equipment  Marine Service Vessels. All the
pipelines laid by our pipelay vessels are rigid, reeled
pipelines, assembled at one of our spoolbases, located in
Scotland, Norway and the United States. Onshore spoolbases
permit us to complete the manufacture process onshore and in
advance of installation, at lower cost, whereas part of this
process is typically completed offshore in conventional
pipelaying operations. Work occurs in a more stable, controlled
and safer work environment, prior to the pipe being taken
offshore.

Our reel method capability for rigid pipe laying
provides a significant potential cost advantage because of its
faster installation rates and reduced labor expense compared to
the conventional pipelay methods. Our pipelay vessels can
install pipelines at rates of approximately 1,000 meters
per hour. Their superior installation speed as compared to
traditional pipelaying allows faster completion of a project
with less exposure to costly weather delays.

The CSO Deep Blue is outfitted with twin
2,500 ton reels for rigid pipelay down to 2,500 meters
water depth and supplemented with an optional J-Lay system for
large diameter pipelines and riser installations. The CSO
Apache has successfully laid pipeline at depths in excess of
1,000 meters.

Flexible Pipelay and Umbilicals.We install flexible pipe and
umbilicals using dedicated dynamically positioned marine service
vessels (DP Vessels). See  Property, Plant
and Equipment  Marine Service Vessels. Our new
deepwater pipelay vessel, the CSO Deep Blue, is able to
lay both flexible and rigid pipe at a water depth of 2,500
meters and began its first job in summer 2001 in the Gulf of
Mexico. We recently converted the CSO Constructor by
increasing her launch and beam such that she can carry out full
flexible pipe-laying operations in water depths down to
1,500 meters and carry 4,000 tons of flexible pipes or
umbilicals. Each marine service vessel can be fitted with either
VLS (vertical laying systems) or any other specialized flexible
pipe laying equipment that enables us to track the laying
routes, approach close to surface platforms and lay pipe
accurately. We believe that our fleet and unrivalled
installation experience provide us with a competitive advantage
in the installation of flexible pipe. Furthermore, our diving
support vessels are also used to install flexible pipe on some
projects where volumes are necessarily more modest. See
 Property, Plant and Equipment 
Marine Service Vessels.

Trenching Services.As part of our flexible and rigid
pipelaying activities, we provide trenching services in regions
where pipe is required to be buried. Trenching is performed most
often in the North Sea as a result of local regulations. Since
1981 we have developed a number of technologies for the
trenching of pipelines, including remotely operated jetting,
cutting and plowing systems, which are used extensively in
accordance with the varying water depths and soil conditions
experienced in offshore developments.

32



---



##### Table of Contents



Other Installation Services.We install floating production and
storage systems. These systems, which are often reusable, are
either tanker based or semi-submersible based and are connected
to subsea oil and gas production systems where traditional fixed
platforms would not be economical or appropriate. We also
install hardware packages such as control umbilicals, wellhead
control pods, manifolds and protection structures, risers and
spoolpieces.

Inspection, Repair and Maintenance.We provide customers with subsea
inspection, repair and maintenance services for existing
platforms, pipelines and subsea equipment. Demand for these
services arises from ongoing maintenance needs, insurance
requirements and safety and environmental considerations. We
perform these services principally in the North Sea, a harsh,
deepwater, highly regulated environment providing steady demand
for inspection, repair and maintenance services.

Inspection is conducted by direct manned
intervention or ROVs or a combination of both techniques. In
performing such inspections, repair and maintenance services,
the Group uses inspection technologies including ultrasonic,
eddy current and magnetic particle inspection that examine the
structural integrity of subsea facilities.

We believe that the application to the
inspection, repair and maintenance market of the same project
management standards that we use in our subsea contracting has
provided our customers with a superior level of service. For
example, the use of diving support vessels with simultaneous
twin bell saturation diving, multiple air diving stations and
ROVs to perform inspection, repair and maintenance services has
generated significant productivity improvements. In addition,
our use of high speed computers for data gathering and analysis,
coupled with satellite communications, has improved the quality
and efficiency of these services. Because inspection, repair and
maintenance operations generally offer flexibility in scheduling
and completion times, we can often redeploy diving support
vessels involved in these operations to subsea contracting
projects and reschedule the inspection, repair and maintenance
services. This flexibility enables us to maintain a relatively
high level of diving support vessels utilization while remaining
responsive to customer needs.



| |                         
| | ------------------------
| | Manufacturing and Supply

We manufacture a limited amount of highly
specialized equipment for our own use and supply to third
parties. All our manufacturing and supply activities are
accounted for as part of our Offshore branch, and consist
principally of flexible pipe, drilling and refining application
pipes (known as DRAPs), umbilicals and robotics as
well as our manufacture of SPAR platforms. All of our products
are designed and manufactured to meet a particular
customers order. As a result, we generally carry a
relatively small inventory. Our principal manufacturing sites
are located in France, Brazil, Finland, the United States and
the United Kingdom. Our construction yards are located in
Finland and in the United States.

Flexible Pipe.We are the world leader in the
manufacture of offshore flexible pipe, with an estimated market
share of 53% on the basis of 2003 production volumes. Flexible
pipe is primarily used as an alternative to rigid steel pipe for
the offshore transportation of oil and gas. Composed of layers
of steel wires and thermoplastic sheaths, flexible pipe can be
engineered to withstand a more corrosive environment to improve
its fatigue behavior in dynamic environments and to provide
greater insulation than conventional rigid steel pipe while
remaining flexible. These qualities, combined with generally
lower installation, maintenance and removal costs compared to
rigid steel pipe, make flexible pipe particularly suitable for
certain offshore situations such as deepwater, rugged ocean
floors and small, dispersed fields of hydrocarbons.

Drilling and Refining Applications Pipes.We manufacture and sell DRAPs,
which are small-diameter, short-section flexible lines that are
used in the drilling and refining industries. DRAPs are produced
using technology and materials similar to those used in the
manufacture of flexible pipe. In refining operations, DRAPs are
used to drain rainwater from floating roof storage tanks and to
disperse anti-incendiary foams. In drilling operations, DRAPs
are used to carry drilling muds and acids, and, in the event of
a well blowout, to inject heavy drilling mud at extremely high
pressures in order to suppress and control the blowout.

Umbilicals.We are a world leading
manufacturer of control/ chemical injection umbilicals
(underwater conduits that carry hydraulic/ electrical power,
data signals and/or well service fluids for the operation and
control of subsea installations) which link subsea wells to
fixed or floating production facilities under particularly

33



---



##### Table of Contents



difficult conditions. Our principal manufacturing
activities are conducted in Newcastle in the United Kingdom, and
in Houston, Texas, through our subsidiary Duco. Umbilicals are
often manufactured using technology similar to that used in
manufacturing flexible pipes. In July 2002, we signed a
partnership agreement with Sonangol to establish a joint
subsidiary, Angoflex Limitada, for the manufacture of umbilicals
on the logistical base of Sonamet, located in Lobito, Angola.
This plant has been operational since mid-2003.


Robotics.We
engineer and manufacture remote intervention products through
our robotics subsidiary, Perry Slingsby Systems, located in
Florida and in the United Kingdom. Perry Slingsby Systems has
recently introduced two new product lines to the deep ocean
seafloor market, principally for the trenching and burial of
telecommunications cables.

SPAR Manufacture.We design and manufacture floating
platform hulls, such as SPAR hulls for the deepwater. Hulls are
typically manufactured in several pieces by our Finnish
subsidiary Mäntyluoto Works, which employs approximately
650 persons at its plant near Pori, Finland. The pieces are then
transported to our shipyard located in Corpus Christi, Texas,
where the main sections are joined afloat and welded together to
form the complete hull. While the hull is being assembled, our
subsidiaries Gulf Marine Fabricators, Inc. and Technip Offshore,
Inc. manufacture and preinstall, respectively, the riser system
and mooring lines. We are typically responsible for the
engineering, procurement, manufacture and delivery of the
complete hull, moorings and riser system.

The decision to purchase these structures is time
consuming and often costly for oil and gas companies. Typically,
the decision cycle takes at least 12-18 months for
companies to gather and analyze data, then model the risk and
uncertainty of the site in order to purchase the most useful
production system. Production would normally start approximately
six months after the hull is upended.

Project Tenders and Competition

Most of our contracts are obtained through a
competitive bidding process which is standard for the
construction and engineering industries. In selecting
engineering and construction management companies for major
projects, clients generally limit the tender to contractors they
have pre-qualified based on technical criteria. In the case of
cost plus fee contracts, it is common for clients to initially
approach one company with which they have worked in the past. In
tenders for lump-sum contracts the tender process is generally
open to competing bids from the start. In either case, the price
competitiveness of the bid is the most important single
selection criterion. Other important factors include the
bidders technological capacity and performance, health,
safety and environmental protection record, service quality, as
well as reputation, experience and customer relations.
Technological capacity is especially important for tenders in
the upstream segment, and particularly for offshore
developments, with each bidder potentially proposing entirely
different technological solutions to the project. Until the
final selection, negotiations continue with the client on
matters such as specific design and performance parameters, the
construction schedule and financial and other contractual terms
and conditions.

Projects in developing countries are generally
more price sensitive than projects elsewhere and, reflecting the
strong preference of the financial institutions typically
providing credit, are mainly for lump-sum bids. Frequently,
competition for projects in developing countries also depends on
the bidders ability to assist the client in obtaining
financing, including multi-source solutions through national and
international development banks and agencies. It is not unusual
for access to local financing to require undertaking the project
through a local subsidiary or with a local joint venture partner.

Our Business and Project Units are in charge of
our marketing and commercial activities. The same Business and
Project Unit will subsequently be responsible for the execution
of its contracts up to reception and acceptance by the client.
In this way, the area managers are fully responsible for the
management of their group for the overall operations in their
regions. Our decentralized structure fits with the global
extension of the Group and it allows for decisions on major
contracts to be taken by the top management of the Group which
are above specific thresholds according to the related Business
and Project Unit concerned.

Because of the high cost and management resources
required in preparing a bid on a large turnkey contract, we only
bid on selected projects. Each project is analyzed, with no
exception. Before bidding, we estimate the

34



---



##### Table of Contents



costs and analyze the financial and legal aspects
of the project. Each bid must be authorized by management by an
Authorization to Tender or ATT. Once the
bid has been submitted, the costs and financial and legal
analyses are updated. The contract cannot be entered into and
the project cannot be accepted without an Authorization to
Commit or ATC.


As a result of our selective bid policy, in the
period from 1995 to 2003, we experienced an average worldwide
success rate of 25% to 30% in winning tenders on which we bid.
We cannot predict with any degree of certainty the frequency,
timing or location of new contract awards.

We compete with a large number of equally
powerful companies. We are one of the most integrated companies
in our area. We believe that customers preferences in the
offshore area lean increasingly toward integrated companies
capable of taking complete charge of the development of a field.
There is a greater number of competitors in the downstream
segment, of which a significant number are integrated companies.



| |         
| | --------
| | Offshore

Surface Facilities.Our principal competitors in the
design and construction of surface facilities for the offshore
oil and gas industry include J. Ray McDermott (with whom we
hold the exclusive rights to the SPAR platform), Halliburton,
Saipem, Kvaerner and ABB.

Subsea Services.Our principal competitors in
providing subsea contracting services include Stolt Offshore,
Saipem and Subsea 7 (subsidiary of Halliburton and the
Norwegian company DSND).

Design and Manufacturing of Flexible Pipe.We are a world leader in the
design and manufacture of flexible pipes for offshore
installations. Our main competitors in the field of flowline and
riser applications are Wellstream Company and NKT Flexible, a
company 51% owned by NKT Holding and 49% by Stolt Offshore. In
the field of DRAPs, Taurus Hungarian Rubber Works is our primary
competitor.

Umbilicals.In the market for umbilical
manufacturing, our major competitors are Multiflex, a subsidiary
of Oceaneering International, Nexans and Kvaerner Oil Products.

Robotics.We
compete with a limited number of specialized ROV and subsea
robotic equipment manufacturers, including Soil Machine Dynamics
Ltd., and a number of smaller companies that produce low volumes
of ROVs, trenchers and the like. In addition, we face
competition from major ROV contractors who also build and
refurbish vehicles for their in-house use.



| |                    
| | -------------------
| | Onshore/ Downstream

Our main competitors are U.S. companies such
as Halliburton (including Kellog Brown & Root),
Bechtel, Fluor Daniel, Jacobs, Foster Wheeler, McDermott and
Washington Group, and Japanese companies such as JGC, Chiyoda
and Toyo, European companies such as Saipem, Stolt Offshore, ABB
Lummus, Snamprogetti, Lurgi, Linde and Krupp Uhde and Korean
companies such as Lucky Goldstar, Samsung, Hyundai and Daewoo.
In addition, engineering companies and local construction
companies are present in developing countries, as competitors or
as partners in joint ventures and often benefit from national
preference considerations. In the future, these companies may
establish a capacity and credibility that will allow them to
compete on an international level.

Technology

To support our engineering and industrial
activities, we hold a large number of patents, trademarks,
software copyrights and other intellectual property, including
intellectual and industrial property held under license from
third parties. We have approximately 3,000 patents in force in
more than 30 countries, particularly in the subsea and
offshore areas (rigid or flexible subsea pipelines, umbilicals,
robotics, riser systems, platforms, floaters and topsides) as
well as in cryogenics, cement, hydrometallurgy and production of
ethylene and hydrogen. A limited number of these patents are
held in common with IFP and other industrial partners. Our broad
portfolio of licensed and proprietary technology is a strategic
asset in winning and implementing projects.

35



---



##### Table of Contents



Research and Development

Research and development is a key to our
continued success in engineering and construction, and is
particularly critical to offshore systems. Our research and
development activities have concentrated primarily on the
development of our EDP platform deep draft semi-submersible
production drilling platform for deep and ultra deepwater, the
improvement of the performance of our products and services and
on developing further applications of our flexible and reeled
pipe technology, especially in ultra deepwater (over 1,000
meters). Recent successes include the development of the CSO
Deep Blue pipelay vessel and our SPAR platform, including
the recent Cell SPAR model. We pursue a three-pronged approach
to acquiring new technologies relevant to our operations:
internal acquisition through research and development, external
growth through the acquisition of specialized companies or mixed
internal/ external development through research alliances.

Our internally-financed research and development
expenses for 2003, 2002 and 2001 were
33.3 million,
37.4 million
and
18.3 million,
respectively. A large part of our research and development
activities are attributed to specific projects, and therefore
not included in these amounts.

Our research and development activities employ
approximately 250 persons and are focused on anticipating future
client needs and making us more competitive. We are actively
undertaking development and engineering programs in a number of
advanced technical areas related to deepwater oil and gas
production as well as shallow water field development (including
new drilling platforms and floating production units as well as
piping capable of transporting heavy crude or liquefied natural
gas in the low-temperature, high-stress deepwater environment).
The principal research centers of the Group are in Paris and Le
Trait, in France, Aberdeen in the United Kingdom, and Houston in
the United States. We also use external research and development
to develop strategic technological alliances with potential
clients in particular industries in order to facilitate
commercial development in those industries.



| |                     
| | --------------------
| | Technology Alliances

We participate in technology alliances in our
Onshore/ Downstream branch, notably with BP Chemicals in the
area of PTA, polyethylene and polypropylene, with Dow Chemicals
in the area of ethylene furnaces and with Air Products in the
area of hydrogen production units. In the Offshore branch, we
conduct research jointly with IFP, particularly in the field of
deepwater offshore oil and gas production.



| |             
| | ------------
| | Acquisitions

We also occasionally obtain access to important
technologies through the acquisition of the businesses that
developed them. For example, through our acquisitions of the KTI
businesses since renamed Technip Benelux, Technip USA and
Technip KT India, we have gained advanced capabilities and
proprietary technologies in the ethylene sector, described
elsewhere in this prospectus. Coflexips acquisition of the
Deepwater Division of Aker Maritime ASA gives us access to the
SPAR portfolio of technologies for offshore floaters.

Human Resources

Our key resource is our 19,000 employees in over
52 countries. Approximately 60% of our employees are design
engineers or project management personnel with university
degrees. The skills and diversity of our human resources gives
us the flexibility to best adapt to the needs of our clients by
organizing our employees into multicultural and mobile teams. We
are dedicated to the development of the expertise and know-how
of our employees. The main missions of our human resources
policies are to recruit the talent which the Group needs, to
facilitate their integration, to encourage the development of
their skills in order to accompany the growth in our operations,
to organize their geographic and professional mobility and to
pursue and enrich social dialogue.



| |                                          
| | -----------------------------------------
| | Motivation Through Employee
    Ownership

Employee shareholding plans and the enlargement
of stock option plans have contributed to the involvement of our
employees in the life and the success of the Group. To the best
of our knowledge, as of December 31, 2003, employees of the
new Group held shares representing 2.6% of our share capital. Of
this amount,

36



---



##### Table of Contents



approximately 1.75% were held in custody through
an administered employee share plan of the type defined at
Article 225-102(3) of the French Commercial Code.


The year 2003 was marked by the December launch
of a new capital increase reserved for employees and authorized
by the Shareholders Meeting of July 11, 2003. This
operation, which offered a classic formula and a
so-called leveraged formula, targeted some 12,000
Group employees in France and other countries. Over 20%
subscribed to new shares.



| |                                                        
| | -------------------------------------------------------
| | Expansion and Internationalization of Our
    Workforce

Thanks to the diversity of our activities and the
large number of locations from which we operate, we offer our
employees significant mobility, both geographically and
professionally. Our employees benefit from opportunities to vary
and enrich their career paths within our structure, and to grow
through multicultural work experiences. For the Group, the
internal mobility we offer our employees is also a means to
circulate best practices and know-how, develop skills and
professional flexibility and create a deep pool of management
talent. We encourage this mutually beneficial internal mobility
through an intranet Technip Mobility site to
advertise positions available for internal transfers both
locally and abroad and through a program of support services for
expatriated employees. As a result, over 700 of our employees
are working outside of their country of origin.

Our 19,000 employees had the following geographic
distribution at the end of 2002: 55% in Europe (17% in France,
13% in the United Kingdom, 9% in Italy and 16% in the rest of
Europe); 29% in the Americas (including 19% in the United
States); 12% in the Asia-Pacific region; and 4% in the rest of
the world.

The following tables show our year-end number of
employees for the three years ended December 31, 2003, 2002
and 2001 in terms of their function and in terms of their
geographic location:

|               |  |                         |        |  |      |  |        |      |  |  |        | 
|-------------- |  | ----------------------- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|               |  |                        
|               |  | Year ended December 31, |       
|               |  |                         |       
|               |  | 2003                    |        |  | 2002 |  |        | 2001 | 
|               |  |                         |        |  |      |  |        |      | 
|Employees      |  |                         | 15,400 |  |      |  | 15,000 |      |  |  | 14,900 | 
|External staff |  |                         | 3,600  |  |      |  | 4,000  |      |  |  | 3,100  | 
|               |  |                         |        |  |      |  |        |      | 
|Total          |  |                         | 19,000 |  |      |  | 19,000 |      |  |  | 18,000 | 
|               |  |                         |        |  |      |  |        |      | 

|                                |  |                         |        |  |      |  |        |      |  |  |        | 
|------------------------------- |  | ----------------------- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                                |  |                        
|                                |  | Year ended December 31, |       
|                                |  |                         |       
|                                |  | 2003                    |        |  | 2002 |  |        | 2001 | 
|                                |  |                         |        |  |      |  |        |      | 
|Europe and Russia/ Central Asia |  |                         | 10,450 |  |      |  | 11,134 |      |  |  | 10,961 | 
|Middle East/Africa              |  |                         | 850    |  |      |  | 855    |      |  |  | 837    | 
|Asia/Pacific                    |  |                         | 2,280  |  |      |  | 1,995  |      |  |  | 1,630  | 
|Americas                        |  |                         | 5,420  |  |      |  | 5,016  |      |  |  | 2,545  | 
|Other(1)                        |  |                         |       |  |      |  |       |      |  |  | 2,027  | 
|                                |  |                         |        |  |      |  |        |      | 
|Total                           |  |                         | 19,000 |  |      |  | 19,000 |      |  |  | 18,000 | 
|                                |  |                         |        |  |      |  |        |      | 






|    |                                                                                                                                                                             
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Starting in 2002, we have eliminated the
    other category through adjustment of the scope of
    the remaining geographic zones. Prior years have not been
    restated.



| |                   
| | ------------------
| | Employee Relations

In recent years we have experienced neither
significant strikes nor work stoppages by our employees. We
believe that we maintain good relationships with our employees
and their unions. In particular, we have developed a structured
incentive program, including stock options for senior management
and bonus plans for all employees, and dedicated significant
resources to training programs worldwide. We believe that our
employee turnover rate is low compared to the engineering and
construction industry as a whole, particularly with respect to
the United States of America and the United Kingdom. We do not
currently believe that the business combination and related
integration efforts have had a significant negative effect on
our relationship with our employees.

37



---



##### Table of Contents



Membership of our employees in trade unions
varies from country to country and we have entered into a
variety of collective bargaining agreements. As of
December 31, 2003, approximately 17% of our employees were
in France where national legislation requires the application of
a 35-hour workweek. Four of the five principal French labor
unions, as well as an internal labor union, are represented at
our units in France. As required by French law, our management
holds periodic workers committee meetings with a
delegation of union representatives. Our management also holds
other periodic consultations with employee representatives. In
Italy, approximately 25% of our employees belongs to one of
three national trade unions grouped under the umbrella
organization RSU. In Germany, a similar percentage of our
employees belongs to the national trade union IG Metall. Our
employees are in the process of organizing a European
Workers Committee.

Property, Plant and Equipment

Our principal facilities consist, not taking into
account our vessels, of office space at our headquarters and our
regional Business and Production Units. At December 31,
2003, we owned our office space in Rome, Italy and Lyon, France,
as well as an industrial plant in Le Trait, France. With our
teams in the Paris region spread out over four sites, we sold
our headquarters to allow ourselves to centralize
2,600 employees of our Paris operations in one rented
building in early 2003. We also lease the remainder of our
office space. We own or lease construction yards and
manufacturing facilities in connection with our Deepwater
Divisions surface facilities operations and our
manufacture of flexible pipe and other subsea products. We
believe that our property is adapted to our needs. Our property,
plant and equipment were recorded in the consolidated accounts
of the Company for
738.5 million
at December 31, 2003 of which land and buildings accounted
for
114.5 million.
Our fleet of offshore construction vessels, described below,
accounted for
403 million
at that date.

38



---



##### Table of Contents





| |                     
| | --------------------
| | Principal Properties

At December 31, 2003, we owned or held under
long-term leases the real property described below:

|                             |  |                                 |  |              
|---------------------------- |  | ------------------------------- |  | -------------
|Location                     |  | Function                        |  | Status       
|                             |  |                                 |  |              
|Paris-La Défense, France     |  | Group HQ                        |  | Leased       
|Boulogne-Billancourt, France |  | Offices                         |  | Leased       
|Le Trait, France             |  | Manufacturing and Offices       |  | Owned        
|Lyon, France                 |  | Offices                         |  | Owned        
|Aix-en-Provence, France      |  | Offices                         |  | Co-owned     
|Rome, Italy                  |  | Offices                         |  | Owned        
|The Hague, The Netherlands   |  | Offices                         |  | Leased       
|Düsseldorf, Germany          |  | Offices                         |  | Leased       
|Kuala Lumpur, Malaysia       |  | Offices                         |  | Leased       
|Abu Dhabi, U.A.E             |  | Offices                         |  | Leased       
|Vitoria, Brazil              |  | Manufacturing and Offices       |  | Leased/ Owned
|Rio de Janeiro, Brazil       |  | Offices                         |  | Owned        
|Caracas, Venezuela           |  | Offices                         |  | Co-owned     
|Saint Petersburg, Russia     |  | Offices                         |  | Leased       
|New Delhi, India             |  | Offices                         |  | Leased       
|Fremantle, Australia         |  | Manufacturing and Offices       |  | Leased/ Owned
|Perth, Australia             |  | Offices                         |  | Leased       
|Newcastle, UK                |  | Duco plant and Offices          |  | Leased/ Owned
|Aberdeen, UK                 |  | Manufacturing and Offices       |  | Owned        
|Tyne & Wear, UK              |  | Manufacturing and Offices       |  | Owned        
|Pori, Finland                |  | Land, Manufacturing and Offices |  | Owned        
|Channelview, Texas(1)        |  | Land and Manufacturing          |  | Owned        
|San Dimas, California        |  | Offices                         |  | Leased       
|Mobile, Alabama              |  | Land                            |  | Leased       
|Houston, Texas               |  | Offices                         |  | Leased       
|Jupiter, Florida             |  | Land, Manufacturing and Offices |  | Leased/ Owned
|Amelia, Louisiana            |  | Assembly Yard and Offices       |  | Leased       
|York (Kirkbymoorside), UK    |  | Manufacturing and Offices       |  | Leased       
|Fourchon, Louisiana          |  | Offshore Base                   |  | Leased       
|Port Harcourt, Nigeria       |  | Assembly Yard and Offices       |  | Leased       



---



|    |                                                                     
|--- | --------------------------------------------------------------------
|(1) | Owned subject to an encumbrance (i.e.,
    lien on tangible assets).

None of the real property that is leased belongs
to an executive of the Group.

In 2003, we sold our headquarters building and
moved the related offices into leased space in Paris-La
Défense, France. At December 31, 2003, we also leased
regional and representative offices in: London, England; Perth,
Australia; Mumbai and Calcutta, India; Singapore; Rio de
Janeiro, Brazil; Oslo and Stavanger, Norway; and Houston, Texas.
In addition, we lease industrial space in Evanton, Scotland and
Orkanger, Norway to accommodate our spoolbase facilities.

We believe that our facilities are suitable for
our needs and are well maintained. Operations at all
manufacturing facilities are conducted five to seven days a week.

39



---



##### Table of Contents





| |                       
| | ----------------------
| | Marine Service Vessels

We operate 14 pipelaying and diving support
vessels, including three leased vessels, as shown in the
following table. We also operate a fleet of work class and
observation class ROVs, together with a range of trenching and
tooling assets. The following table presents information on our
fleet at December 31, 2003:

|                    |  |          |     |  |                          |                                            |        |  |     | 
|------------------- |  | -------- | --- |  | ------------------------ | ------------------------------------------ | ------ |  | --- | 
|                    |  | Overall  |     |  |                          |                                            |       
|                    |  | Length   |     |  | Maximum Lifting Capacity |                                            | Diving | 
|Name                |  | (meters) |     |  | (metric tons)            |                                            | System | 
|                    |  |          |     |  |                          |                                            |        | 
|Sunrise 2000        |  |          | 132 |  |                          | 120 (3 cranes)                             |        |  | No  | 
|CSO Deep Blue       |  |          | 192 |  |                          | 400 (3 cranes)                             |        |  | No  | 
|CSO Apache          |  |          | 123 |  |                          | 85 (3 cranes)                              |        |  | No  | 
|CSO Wellservicer(1) |  |          | 111 |  |                          | 130 (2 cranes)                             |        |  | Yes | 
|CSO Constructor     |  |          | 127 |  |                          | 115 (3 cranes) + 100 (A-Frame)             |        |  | No  | 
|CSO Orelia          |  |          | 119 |  |                          | 200 (2 cranes)                             |        |  | Yes | 
|CSO Alliance        |  |          | 78  |  |                          | 140 (3 cranes)                             |        |  | Yes | 
|CSO Venturer        |  |          | 129 |  |                          | 225 (2 cranes)                             |        |  | Yes | 
|CSO Marianos        |  |          | 90  |  |                          | 65 (2 cranes)                              |        |  | Yes | 
|CSO DeepPioneer(1)  |  |          | 156 |  |                          | 150 (2 cranes)                             |        |  | No  | 
|Normand Pioneer(1)  |  |          | 95  |  |                          | 150 (A-Frame)                              |        |  | No  | 
|PS1                 |  |          | 76  |  |                          | 30 (1 crane) + 15 (1 crane)                |        |  | Yes | 
|PS2                 |  |          | 93  |  |                          | 50 (1 crane) + 30 (1 crane) + 15 (1 crane) |        |  | Yes | 
|PS3                 |  |          | 93  |  |                          | 50 (1 crane) + 5 (1 crane)                 |        |  | Yes | 



---



|    |                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------
|(1) | These vessels are under long-term leases. The
    other vessels are owned by the companies of the Group.

In 2003, the program to revamp our fleet was
pursued with success, with the end of work on the
CSO Wellservicer which increased its operational
length of life by ten years, and with the end of the
installation of the J-Lay system on the CSO Deep
Blue. In addition, the operational capacity of the
CSO DeepPioneer was modified to conform to our
standards. Within the context of the refocusing of our
operations on our core activities, the leasing contracts for the
MV Dove and the Seabulk Nevada were terminated.

Raw Materials and Suppliers

The projects we manage as well as our own
operations require various raw materials, parts and components.
There are multiple suppliers for all of the raw materials, parts
and components we require and we have never experienced a
material supply interruption.

Our principal raw material requirements for
manufacturing flexible pipe include stainless steel strips,
carbon steel wires and a variety of specialized plastics. We
purchase stainless steel and carbon steel from major European
suppliers at prices that are renegotiated each year and that
apply to all our factories. Most of the raw materials used by
our Brazilian plant are purchased from local suppliers. We
purchase most of the steel wire used in flexible pipe and
umbilical manufacturing from top-tier companies such as Atofina,
Ugine, Outokumpo, Trefileurope, Sandvik, Cimaf, Belgo Mineira
(Bekaert Group) and Acesita (Arcelor Group) pursuant to
fixed-price supply contracts renewable at the end of each year.

We maintain stable relationships with our
principal suppliers and have not experienced difficulty
obtaining adequate quantities of high quality raw materials to
meet our manufacturing requirements. We continually attempt to
develop alternate sources of supply for most of our strategic
raw materials.

The increase in commodity prices, especially pig
iron and nickel, during the third quarter of 2003 and first part
of 2004, have affected some of the purchase contracts made for
steel wires and stainless steel. As another consequence of the
unstable situation on the raw material market, the validity of
offers for steel equipment and components (line pipe) was
reduced, but we did not experience shortages and delays in the
deliveries of strategic materials.

40



---



##### Table of Contents



Dependence

We use, on a project-by-project basis, the
patents we hold primarily in the areas of offshore construction
and ethylene plants.

Petrochemical operations usually depend on the
implementation of licenses belonging to third parties (such as
UOP, BP, Axens and Chevron Phillips). Their implementation
depends on the nature of the project and the fees are passed on
to the customers.

We are not dependent on any suppliers due to our
policy of procurement through international tenders.

In the same way, our large base of customers
means that we are not dependent on any one individual customer.
Over the course of the last three years, our principal customers
(representing over 5% of consolidated sales) were as follows:

|                                                                    |  |                         |         |   |      |  |         |      |  |  |         |  
|------------------------------------------------------------------- |  | ----------------------- | ------- | - | ---- |  | ------- | ---- |  |  | ------- | -
|                                                                    |  |                        
|                                                                    |  | Year ended December 31, |        
|                                                                    |  |                         |        
|                                                                    |  | 2003                    |         |   | 2002 |  |         | 2001 | 
|                                                                    |  |                         |         |   |      |  |         |      | 
|Net sales                                                           |  |                         | 4,711.1 |   |      |  | 4,452.3 |      |  |  | 3,546.0 |  
|Principal customers with the following
    percentages of net sales |  |                         |         |   |      |  |         |      |  |  |         |  
|Customer A                                                          |  |                         | 7.2     | % |      |  | 8.3     | %    |  |  | 5.8     | %
|Customer B                                                          |  |                         |        |   |      |  | 5.6     | %    |  |  |        |  
|Customer C                                                          |  |                         | 9.1     | % |      |  | 5.0     | %    |  |  |        |  
|Customer D                                                          |  |                         |        |   |      |  |        |      |  |  | 8.0     | %
|Customer E                                                          |  |                         |        |   |      |  |        |      |  |  | 6.3     | %
|Customer F                                                          |  |                         |        |   |      |  |        |      |  |  |        |  
|Customer G                                                          |  |                         | 7.9     | % |      |  |        |      |  |  |        |  

Pledged Assets

At February 29, 2004, none of our material
assets were pledged.

Insurance Coverage

We obtain appropriate and specialized insurance
to cover construction and financing risks for each project,
umbrella professional liability insurance program for the Group,
and generally maintain comprehensive insurance covering our
assets and operations at levels which we believe to be
appropriate. In the course of 2003, we established a reinsurance
captive company which will contribute to our global approach of
risks and related costs management. Loss or damage to our
products during installation is generally covered by
builders all risks insurance that, in general,
is either re-invoiced or maintained directly by the customer.

We maintain protection and indemnity insurance
with respect to all of our vessels. We carry hull and machinery
insurance for our vessels covering total loss and significant
repairs, including certain mechanical breakdowns. The total loss
coverage under these policies is generally in an amount equal to
the vessels appraised value. We also maintain insurance
policies against certain liabilities arising from defective
products or faulty installation. Among other types of insurance,
we additionally maintain business interruption insurance for
each of our manufacturing units in the Offshore branch.

We do not anticipate difficulty in maintaining
adequate levels of insurance. However, terms of insurance
coverage have become more restrictive and costly since 2001 and
we can give no assurance that insurance coverage or contractual
indemnities will be adequate in all circumstances or against all
hazards, or that we will be able to maintain adequate insurance
coverage in the future at commercially reasonable rates or on
acceptable terms. In regards to the permanent insurance policies
for 2002 and 2003, the cost of insurance represented 1% of
revenues with an increase of 28% in 2002 and 11% in 2003.

41



---



##### Table of Contents



Environmental Matters and Other Governmental
Regulations

Industrial
Risks Related to Environmental and Health and Safety
Matters

From time to time and to varying extents,
political developments and national and local laws and
regulations pertaining to offshore oil and gas operators affect
our operations. In particular, price controls, taxes and other
laws relating to the oil and gas industry and the environment
and changes in laws and regulations relating to such matters may
affect oil and gas production operations. Such developments may
directly or indirectly affect us. Laws or regulations in some
countries may require us to obtain licenses or permits in order
to bid on contracts or otherwise conduct its operations. Some
countries may require that we enter into a joint venture, agency
or similar business arrangement with local individuals or
businesses in order to conduct business in those countries. At
present, we are not operating in any country in which a license
or permit to bid on contracts is required. In the past, we have
entered into joint ventures with local individuals or companies
in order to bid as a local company where we felt this would be
advantageous, but not because we were compelled to do so by law.

Our operations are subject to a broad range of
extensive and evolving environmental regulations in each of the
jurisdictions in which we operate. Local, national and
international laws and regulations concerning land use, air
emissions, discharges to waters, the generation, storage,
handling, transportation and disposal of hazardous materials
and/or wastes, the remediation of ground and water
contamination, and the protection of the environment also govern
our activities. In addition, in some jurisdictions, our
manufacturing activities may be subject to the prior granting of
environmental licenses or permits or to prior notification.

We use a wide variety of products and substances
in our operations, some of which are potentially hazardous to
health and the environment. With the exception of products
arising from the commissioning process associated with the final
delivery of chemical and refinery plants, we do not manufacture
or transport hazardous products. Wherever practicable, bulk
quantities of chemicals, paints, fuel oils, diesel, petrol, and
similar materials are limited to the minimum amount sufficient
to support the immediate needs of the operation so as to reduce
the scope of any accidental discharge. We handle the by-products
of manufacturing to minimize environmental impact and dispose of
them in accordance with applicable legislation. We could be
subject to the future European Regulations concerning the
Registration, Evaluation, Authorization and Registration of
Chemicals (REACH), a draft form of which was adopted by the
European Commission on October 29, 2003, and which is
currently under review by the European Parliament and Council.

The hydrocarbons carried by vessels in our fleet
are principally the supplies necessary to provide power,
propulsion and support ancillary machinery. All of our vessels
fully comply with International Maritime Organization codes
regarding prevention of pollution and they conduct regular
drills in emergency procedures with the equipment held onboard.
As far as is possible, we segregate waste streams produced
onboard for disposal. Where we send material ashore for
disposal, authorized/ licensed contractors are used.

Our operations are also subject to numerous other
government regulations, including those relating to the
construction and equipping of offshore platforms and other
offshore installations, marine vessel safety, currency
conversions and repatriation, taxation of foreign earnings and
earnings of expatriate personnel and use of local employees and
suppliers.

The maritime laws and the diving and health and
safety regulations of the jurisdictions in which we operate
govern our operations in these areas. In the North Sea, these
regulations govern working hours and a specified working
environment for divers, as well as standards for diving
procedures, equipment and diver health. The North Sea standards
are the most stringent worldwide and form the basis around which
are our diving operations are conducted worldwide. In the
absence of any specific regulation in other geographic
locations, our Offshore branch adheres to its internal standards
which meet those set by the International Marine Contractors
Association and the International Maritime Organization.

In several of the countries in which we conduct
our operations, notably Malaysia, China, Angola, Nigeria and
Venezuela we are required to obtain special permits to operate.
We believe that we are in compliance with all material
environmental and other government regulations relating to our
operations.

42



---



##### Table of Contents



A number of our sites, including Technip France,
Technip Offshore UK Aberdeen, Flexi France Le Trait, Technip
Oceania Perth, Duco Ltd Newcastle, BrasFlexiBras, Gulf Marine
Fabricators USA, Technip Italy, Technip Malaysia and PSS Inc,
USA are certified to the ISO 14001 Standard for
Environmental Management Systems (or national equivalent
standard). We continue to work towards a goal of all entities of
the Group complying with ISO 14001. All vessels in our
offshore fleet comply with the International Maritime
Organization International Safety Management (ISM) Code. Vessels
managed by our Aberdeen office (all but the three SEAMEC
vessels: PSI, PS2 and PS3) comply with the Det Norske Veritas
SEP (Safety and Environmental Protection) Class.

We have made investments in plant and equipment
to reduce consumption of raw materials used in manufacturing and
construction processes, as well as to recycle waste materials
and minimize the impact of discharges to land, air or water.

As an organization with a strong focus on
risk-management, we are committed to delivering a safe workplace
for employees, customers, visitors and local communities. Our
2003 HSE performance was not quite as good as 2002 but with zero
fatalities and our Lost Time Injury Frequency / 200,000hrs
remains among the best in our industrial sector. Continuing to
strive for an accident-free worksite we are steadily introducing
OHSAS 18001:1999, a standard for Occupational Health and Safety
Management Systems.

We maintain what we consider to be adequate
pollution insurance coverage for sudden and accidental
pollution, emanating from our own products and vessel fleet.

The changes in the regulations applicable to our
activities, or the interpretation or enforcement thereof, could
result in increased costs and liabilities. For example, the
implementation of the future European Regulations concerning the
Registration, Evaluation, Authorization and Registration of
Chemicals (REACH) could cause us to incur significant additional
costs. Because we do not know when and in what form this
potential new regulation may be interpreted, we are not able to
assess what the compliance costs might be.

The European Directive of April 21, 2004 on
environmental liability with regard to the prevention and
remedying of environmental damage may also increase our
potential environmental liability.

Although compliance with various governmental
laws and regulations has not in the past resulted in a material
adverse effect on our historical financial condition or results
of operations, no assurance can be given that compliance with
such laws or regulations will not have a material impact on our
business in the future.



| |                                                 
| | ------------------------------------------------
| | Legal Risks Related to Environmental
    Matters

We are subject to national and international
agreements and conventions which impose liability for
environmental damage arising from fuel spills from plants, oil
platforms, pipelines, storage tanks or vessels operated by us or
our subcontractors for which the Group maintains adequate
insurance. Our operations are subject to the usual hazards
inherent in providing engineering and construction services for
the hydrocarbon/ petrochemicals industry, such as the risk of
equipment failure, work accidents, fire or explosion. These
hazards can cause personal injury and loss of life, business
interruptions, property and equipment damage, pollution and
environmental damage. We may be subject to claims as a result of
these hazards. We may also be subject to claims resulting from
the subsequent operations of facilities we have designed and/or
delivered. Our policy of covering these risks through
contractual limitations of liability and indemnities and through
insurance may not always be effective. In some of the
jurisdictions in which we operate, environmental and
workers compensation liability may be assigned to us as a
matter of law. Clients and subcontractors may not have adequate
financial resources to meet their indemnity obligations to us.
Losses may derive from risks not addressed in our indemnity
agreements or insurance policies, or it may no longer be
possible to obtain adequate insurance against some risks on
commercially reasonable terms. Failure to effectively cover
ourselves against engineering and construction industry risks
for any of these reasons could expose us to substantial costs
and potentially lead to material losses. Additionally, the
occurrence of any of these risks could hurt our reputation.

We operate in a number of different jurisdictions
that have various types of governmental laws and regulations
relating to the holding, the discharge and the release of oil,
wastes or hazardous substances and to the protection of the
environment. Pursuant to these laws and regulations, we could be
held liable for remediation of

43



---



##### Table of Contents



some types of pollution, including the release of
oil, hazardous substances and debris or wastes from production,
refining or industrial facilities, as well as other assets we
own or operate or which are owned or operated by either our
customers or our sub-contractors. Environmental remediation
costs could be significant and cause us to incur a substantial
loss.


We could potentially be held liable for releases
of fuel oil, hazardous materials and wastes from offshore oil
platforms, pipelines, storage tanks and other installations that
we have engineered, constructed or installed, or are in the
process of so doing. For these projects, we seek to negotiate
our contracts to include a cap for potential environmental
damages and we require indemnity agreements from our customers
and sub-contractors requiring these persons to indemnify us up
to an agreed amount for some claims and liabilities relating to
environmental damage.

In 2003, we joined the Global Compact program
launched by the United Nations. At the same time, and within the
framework of our business activities, we underscored our
determination to contribute to the quest for concrete answers to
todays pressing issues of sustainable development,
corporate social and civic responsibility, and globalization.

The Groups commitment to sustainable
development is an integral part of its strategic orientation and
a cornerstone of its corporate mission for the years to come. It
expresses itself in the company values, giving them substance
with the aim of promoting them within our sphere of influence.

Corporate History

Technip was incorporated under French law in 1958
by IFP to develop expertise in engineering and construction
services. IFP remains a major shareholder, holding 6.70% of our
share capital as of December 31, 2003, representing 11.43%
of our voting rights. Our other major shareholders, Total which,
as of December 31, 2003, owned 3.30% of our share capital,
representing 4.54% of our voting rights and Gaz de France which,
as of December 31, 2003, owned 7.15% of our share capital,
representing 12.20% of our voting rights, acquired their
original holdings in Technip in 1965 and 1984, respectively.

In 1994, we became a publicly traded company in
France when our shareholders conducted a French retail and
international institutional offering of our shares. In 1999, we
carried out a corporate restructuring which transformed us into
a pure holding company through the transfer of all of our
engineering and construction operations to Technip France, a
wholly owned subsidiary. In October 2001, we acquired directly
and indirectly 98.36% of the share capital of the offshore
engineering and construction group Coflexip. See
 Recent Major Acquisitions and
Disposals  Merger with Coflexip. At the same
time, we listed American depositary shares on the New York Stock
Exchange under the symbol TKP. In July 2003, Coflexip (of which
we held 98.36%) was merged with Technip.

As described elsewhere in this report, we
acquired additional significant new subsidiaries through the
engineering activities of the Mannesmann group in 1999. In 2001,
prior to our business combination, Coflexip acquired the
businesses making up the Deepwater Division in a trade sale from
Aker Maritime ASA. Today, 136 wholly owned subsidiaries and
82 other subsidiaries and affiliates in some 24 countries
make up the Technip Group. Our registered and executive offices
are located at 6-8 Allée de lArche, Faubourg de
lArche  ZAC Danton, 92400 Courbevoie, France
(telephone: (011-33-1) 47 78 21 21). Our agent
for service of process in the United States is CT Corporation
System, 111 Eighth Avenue, New York, NY, 10011, and
the telephone number is (+1-212) 894 85 00.

We are organized as a société
anonyme under French law. Under our articles of association
(statuts), our corporate existence expires on
April 20, 2057. The duration of our corporate existence
may, however, be extended by our shareholders at an
extraordinary shareholders meeting.

44



---



##### Table of Contents



We are a multinational group of companies. We
own, directly or indirectly, 100% of most of our significant
operating subsidiaries shares and voting rights, which
have their own organization and management bodies, and are
operated independently in compliance with the laws of their
country of incorporation. For a list of our main consolidated
subsidiaries, see Note 29 to our Consolidated Financial
Statements.

Organizational Chart

LOGO

45



---



##### Table of Contents






Item 5.     Operating
and Financial Review and Prospects

Overview

The following discussion is based on
information derived from our Consolidated Financial Statements.
Our consolidated financial statements have been prepared in
accordance with French GAAP, which differ in certain significant
respects from U.S. GAAP. In addition, this discussion
contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from
those anticipated in these forward-looking statements as a
result of certain factors, including those set forth under
Cautionary Note Regarding Forward-Looking Statements
and Item 3. Key Information  Risk
Factors and elsewhere in this document. You should read
the following discussion together with our Consolidated
Financial Statements included in this annual report.



| |        
| | -------
| | General

Taken as a whole, our operations are not seasonal
because of our geographic diversity of operations and mix of
upstream and downstream projects. Individual contracts, however,
may be subject to seasonality, primarily due to the effect of
weather conditions on construction activity, particularly in the
North Sea. In addition, our upstream oil and gas activity is
typically characterized as a cyclical industry. To date,
however, our business in this sector has shown relatively steady
growth, regardless of the external economic conditions.



| |                                      
| | -------------------------------------
| | Changes in Scope of
    Consolidation

We have made significant acquisitions and
disposals, which are material to your understanding of our
financial condition and results of operations. We describe below
the principal changes in our scope of consolidation occurring
between January 1, 2001 and December 31, 2003.

Technip-Coflexip is now called
Technip since Technip-Coflexip and Coflexip legally
merged in July 2003.



| |                     
| | --------------------
| | Coflexip Acquisition

Year
2003:

The merger with Coflexip resulted in a share
capital increase of
1.0 million,
a paid-in-surplus of
48.5 million
arising from the repurchase of Coflexips minority
interests and additional goodwill of
35.2 million.

During the first half of 2003, Coflexip and Aker
Maritime settled their dispute regarding the purchase price of
Aker Maritimes Deepwater Division. Aker Maritime agreed to
a purchase price reduction of
40.7 million,
leading us to decrease goodwill recorded in our accounts by an
equivalent amount.

46



---



##### Table of Contents



Set forth below is a reconciliation of our
goodwill, after adjusting for the merger with Coflexip and the
Aker Maritime purchase price reduction:

|                                                                                                    |              |  |  |                      |   |  |         |        |  
|--------------------------------------------------------------------------------------------------- | ------------ |  |  | -------------------- | - |  | ------- | ------ | -
|                                                                                                    |              |  |  | (In millions of EUR) |  
|                                                                                                    |              |  |  |                      |  
|Creation of 5,504,436 Technip shares
    (147.99 a share)                                          |              |  |  |                      |   |  | 814.6   |       
|Cash paid for 5,000,000 Coflexip shares
    (199 a share)                                          |              |  |  |                      |   |  | 995.0   |       
|Net purchase costs                                                                                  |              |  |  |                      |   |  | 28.7    |       
|                                                                                                    |              |  |  |                      |   | 
|Purchase price for 52.47% in
    Coflexip                                                           |              |  |  |                      |   |  | 1,838.3 |       
|Coflexip net equity as of September 30, 2001
    (52.47%)                                           |              |  |  |                      |   |  | (421.4  | )     
|                                                                                                    |              |  |  |                      |   | 
|Step-up for 52.47% in Coflexip                                                                      |              |  |  |                      |   |  | 1,416.9 |       
|Step-up for 16.63% in Coflexip via ISIS                                                             |              |  |  |                      |   |  | 253.1   |       
|                                                                                                    |              |  |  |                      |   | 
|Step-up for 69.1% in Coflexip                                                                       |              |  |  |                      |   |  | 1,670.0 |       
|Release of net goodwill recognized by Coflexip
    (foreign exchange effect included)               |              |  |  |                      |   |  | 503.5   |       
|Preliminary Allocation to identified assets:                                                        |              |  |  |                      |   |  |         |       
|                                                                                                    | Vessels      |  |  | (106.4               | ) |  |         |        |  
|                                                                                                    | Buildings    |  |  | (24.2                | ) |  |         |        |  
|                                                                                                    | Patents      |  |  | (59.4                | ) |  |         | (125.5 | )
|                                                                                                    | Deferred tax |  |  | 64.5                 |   |  |         |        |  
|                                                                                                    |              |  |  |                      |   | 
|Goodwill determined at the date of acquisition
    (gross)                                          |              |  |  |                      |   |  | 2,048.0 |       
|                                                                                                    |              |  |  |                      |   | 
|Adjustment on Coflexip shares from ISIS (after
    merger)                                          |              |  |  |                      |   |  | 5.5     |       
|Gain on sales of CSO assets                                                                         |              |  |  |                      |   |  | (48.3   | )     
|Depreciation of American deferred tax assets                                                        |              |  |  |                      |   |  | 13.8    |       
|Provisions for transfers                                                                            |              |  |  |                      |   |  | 32.1    |       
|Provisions and miscellaneous charges                                                                |              |  |  |                      |   |  | 48.0    |       
|                                                                                                    |              |  |  |                      |   | 
|Goodwill 2002 after adjustments
    (gross)                                                         |              |  |  |                      |   |  | 2,099.1 |       
|                                                                                                    |              |  |  |                      |   | 
|Aker Deepwater Division price reduction                                                             |              |  |  |                      |   |  | (40.7   | )     
|Capital increase following the repurchase of
    minority interests for the Technip/Coflexip merger |              |  |  |                      |   |  | 49.5    |       
|Book value of minority interests repurchased                                                        |              |  |  |                      |   |  | (14.3   | )     
|Other                                                                                               |              |  |  |                      |   |  | (1.0    | )     
|                                                                                                    |              |  |  |                      |   | 
|Goodwill 2003 after adjustments
    (gross)                                                         |              |  |  |                      |   |  | 2,092.6 |       
|                                                                                                    |              |  |  |                      |   | 

Thus, Coflexips total goodwill after the
purchase of the two installments in 2000 and 2001 and after the
adjustments made in 2002 and 2003 can be analyzed as follows:

|                                                                                                                                |  |                      |         |  
|------------------------------------------------------------------------------------------------------------------------------- |  | -------------------- | ------- | -
|                                                                                                                                |  | (In millions of EUR) |        
|                                                                                                                                |  |                      |        
|Goodwill on the purchase of 29.4% of Coflexip
    shares (April 2000)                                                           |  |                      | 447.5   |  
|Goodwill on the purchase of 69.1% of Coflexip
    shares (October 2001) after Aker price reduction                              |  |                      | 2,057.4 |  
|Goodwill on the Technip / Coflexip merger (July
    2003)                                                                       |  |                      | 35.2    |  
|Accumulated amortization as of December 31,
    2003                                                                            |  |                      | (269.8  | )
|                                                                                                                                |  |                      |        
|Goodwill after adjustments (net)                                                                                                |  |                      | 2,270.3 |  
|Goodwill has been allocated in its entirety to
    Offshore segment which is further allocated to the following
    activities: |  |                      |         |  
|Goodwill, net related to the Floaters
    activity                                                                            |  |                      | 322.6   |  
|Goodwill, net related to the SURF
    activity                                                                                |  |                      | 1,947.7 |  

The two amounts of goodwill resulting from the
allocation to the two main business activities of Coflexip were
the subject of an impairment test according to the method of
cash flows converted to a current value (see

47



---



##### Table of Contents



Note 1(g) to our Consolidated Financial
Statements). As of December 31, 2003, the goodwill book
value was confirmed by the impairment test.




| |          
| | ---------
| | Year 2002

Merger with ISIS:The year 2002 was marked by the merger
of Technip and ISIS in June. Following the merger, ISIS brought
to Technip its securities portfolio including the shares of
Technip (cancelled), Coflexip, Compagnie Générale de
Géophysique (exchanged for Technip shares, then cancelled),
as well as Novasep and Géoservices shares (sold).

Coflexip goodwill adjustment:The goodwill resulting from the
acquisition of the 69.1% interest in Coflexip in 2001 (see
before) has been adjusted in 2002 in order to take into account
the consolidated gains on sales that took place in the Coflexip
scope during the year 2002. Other adjustments have also affected
the goodwill and those presented above. In addition, the
residual goodwill of Coflexip, resulting from the two stages of
the acquisition remaining after allocation to identified assets
and liabilities has been allocated to two business lines of the
Offshore operational segments: the first concerns the floaters
and floaters facilities sector and relates mainly to the Aker
Maritime division acquired by Coflexip in 2001; the second
concerns the SURF activity and corresponds to the main activity
of Coflexip before the acquisition of Aker.



| |          
| | ---------
| | Year 2001

Exchange offers:On
October 11, 2001, we completed two simultaneous exchange
offers which resulted in our holding 98.36% of the share capital
and 98.54% of the voting rights of Coflexip and 99.05% of the
share capital and voting rights of ISIS. We consolidated the
results of both of these companies into our consolidated
financial results starting on October 1, 2001. Prior to
October 1, 2001, we accounted for Coflexip using the equity
method to reflect the 29.4% minority interest we held in that
company prior to the completion of the Coflexip exchange offer.
Prior to the ISIS exchange offer, we had no financial interest
in ISIS.

In Note 2 to our Consolidated Financial
Statements, we present pro forma financial information
indicating our financial results as if our acquisition of
Coflexip, both directly through the Coflexip tender offer and
indirectly through the ISIS tender offer, had taken place on
January 1, 2001. In accordance with French GAAP, our
audited historical financial statements included in this annual
report reflect this acquisition as of October 1, 2001, and
therefore do not describe a full 12 months of combined
results. We caution you, however, that the pro forma
financial information is not a substitute for our audited
historical Consolidated Financial Statements and do not
necessarily show what our combined results would have been had
our acquisition of Coflexip in fact taken place on
January 1, 2001. Because our audited consolidated balance
sheet as of December 31, 2001 already reflects the full
consolidation of Coflexip, we have not prepared a pro forma
balance sheet.



| |                                            
| | -------------------------------------------
| | Other Changes in Scope of
    Consolidation



| |          
| | ---------
| | Year 2003

Additional participation in SEAMEC:During 2003, the Group raised its
stake in SEAMEC (India) to 78.2% following our purchase of an
additional 20% stake.



| |          
| | ---------
| | Year 2002

Disposal of minority stake in Ipedex and
non-strategic assets of Coflexip:In
2002, we sold our minority stake of 46% in Ipedex, which we
accounted for under the equity method in 2001. In 2002 Coflexip
disposed of non-strategic assets, including the subsidiaries
McNulty Offshore Ltd and Captain Frank McNulty & Sons
Ltd (construction site in the United Kingdom), as well as
the activities and resources related to the Well
operations segment (including the Seawell vessel). The
former Coflexip head office (building located at Porte Maillot)
was also sold.

48



---



##### Table of Contents





| |          
| | ---------
| | Year 2001

Acquisition of UTC:In October 2001, we finalized the
acquisition (100%) of the privately owned UTC Projetos e
Consultoría SA. We acquired this Brazilian engineering and
construction company to develop its activities in the upstream
sector, especially in deep water field development.



| |                             
| | ----------------------------
| | Critical Accounting Policies

Our significant accounting policies are more
fully described in Note 1 to our Consolidated Financial
Statements. However, certain of our accounting policies are
particularly important to your understanding of our financial
position and results of operations. Because the application of
these policies requires the exercise of significant judgment by
us, their application is subject to an inherent degree of
uncertainty. We believe the following critical accounting
policies require our more significant judgments and affect
estimates used in the preparation of our Consolidated Financial
Statements.



| |                             
| | ----------------------------
| | Revenue and Cost Recognition

Because most of our sales are generated under
long-term contracts, the performance of which generally exceeds
two fiscal years, the manner in which we recognize revenues and
costs on these contracts is material to your understanding of
our financial condition and results of operations.

Backlog represents the total amount of revenues
we expect to recognize in the future as a result of performing
work under signed contracts on which we have received a down
payment and for which our client has arranged financing, where
applicable. Typically, on multi-annual contracts, no more than
approximately 20% of the revenue from a new contract is
recognized within the first year from the date of the order
intake of that contract. Consequently, the amount of revenue
recognized during the fiscal year in which order intake occurs
depends not only on the size of a contract but also on how late
in the fiscal year the order intake occurred in order for earned
income to be generated prior to the end of the fiscal year. The
majority of our revenue is generated by two- to three-year
contracts, with earned revenue recognized according to the
percentage of completion of the various items of the contract.

Our revenue recognition accounting policy is
based on the percentage-of-completion method on a
contract-by-contract basis, except for some non-significant
contracts for which revenue is recognized when the service has
been rendered. Use of the percentage-of-completion method
requires us to make estimates of our future gross margin under
the related contract. We estimate the future gross margin based
on a combination of factors, including our experience in the
businesses and in the geographical region in which we operate,
and market condition in that region. From the signing of
lump-sum turnkey long-term contracts to the completion of early
phases such as engineering design, confirmation of significant
orders and assurance that field conditions are satisfactory, it
is necessary to firmly assess identified risks and to estimate
with sufficient precision the total future costs as well as the
expected timetable. As a result, we recognize the related
positive gross margin when the projected gross margin can be
estimated more precisely, contract by contract.

In accordance with our procedures, throughout the
lives of our long-term contracts we review and periodically
revise their gross margins.



| |                                                              
| | -------------------------------------------------------------
| | Goodwill Amortization and Impairment of
    Long-Lived Assets

Under French GAAP, we amortize goodwill on a
straight-line basis over future periods of benefit, as estimated
by management, which may range from five to 25 years. We
select the period of benefit based on the strategic significance
of the asset acquired. Under US GAAP, we applied
SFAS 142, Goodwill and Other Intangible Assets as of
January 2002. As a result, we ceased amortizing goodwill.

Under French and US GAAP, we assess the
impairment of identifiable intangibles, long-lived assets and
goodwill and enterprise level goodwill whenever events or
changes in circumstances indicate that the carrying

49



---



##### Table of Contents



value may not be recoverable. Factors we consider
important that could trigger an impairment review include the
following:




| |   |                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------
| |  | significant under-performance relative to
    expected historical or projected future operating results;             
|
| |  | significant changes in the manner of our use of
    the acquired assets or the strategy for our overall business; and
|
| |  | significant negative industry or economic trends.                                                                    

When we determine that the carrying value of
intangibles, long-lived assets and goodwill may not be
recoverable based upon the existence of one or more of the above
indicators of impairment, we compare for each group of assets
their carrying value with its estimated realizable value based
upon our expectations of future economic and operating
conditions. While we believe that the assumptions used in
determining fair value are appropriate, they are subject to
judgement. Should this comparison indicate that an asset is
impaired, the write-down recognized is equivalent to the
difference between the carrying value and the estimated
realizable value. The criteria used to perform annual impairment
tests of goodwill are described in Note 1(g) to the
Consolidated Financial Statements.



| |               
| | --------------
| | Deferred Taxes

As part of the process of preparing our
consolidated financial statements, we are required to estimate
our income taxes in each of the jurisdictions in which we
operate. This process involves our estimating our actual current
tax exposure together with assessing deferred tax assets and
liabilities based on the differences between the financial
statement carrying amounts and the tax bases of assets and
liabilities. We regularly review our deferred tax assets for
recoverability and establish a valuation allowance based on
historical taxable income, projected future taxable income, and
the expected timing of the reversals of existing temporary
differences. If we continue to operate at a loss or are unable
to generate sufficient future taxable income, or if there is a
material change in the actual effective tax rates or time period
within which the underlying temporary differences become taxable
or deductible, we could be required to establish a valuation
allowance against all or a significant portion of our deferred
tax assets resulting in a substantial increase in our effective
tax rate and a material adverse impact on our operating results.



| |                                                            
| | -----------------------------------------------------------
| | Principal Differences Between
    U.S. GAAP and French GAAP

For a summary of differences between the French
GAAP and U.S. GAAP, see Note 30 to our Consolidated
Financial Statements.

Under French GAAP, some General and
Administrative costs are recorded as contract costs and
accumulated in contracts-in-progress as described in
Note 1(k). Under U.S. GAAP, General and Administrative
costs not directly related to contracts are to be recorded when
expensed. As a result, revenue and gross margin recorded on
contracts are different under French GAAP and U.S. GAAP.

Under French GAAP, we capitalize contract bid
costs directly attributable to a future contract, the signature
of which can be reasonably expected. We transfer these deferred
costs to the contract costs once the contract is obtained or, if
not obtained at year-end, we depreciate them according to the
probability of success assessed for each outstanding offer.
Under U.S. GAAP, these costs are expensed as incurred.

Under French GAAP, we accrue pension and other
post-employment benefits in accordance with the practices
prevailing in the country of employment. For the purpose of our
U.S. GAAP reconciliation, we have harmonized valuation
methods and assumptions and recognized the plans as if we had
consistently applied U.S. GAAP. The unfounded liabilities
for 2003 amount to
128 million.

Under French GAAP, we record common shares issued
upon the exercise of options granted to employees and directors
as an increase in share capital at the exercise price on the
exercise date. We hold treasury shares to

50



---



##### Table of Contents



settle qualified employee deferred stock purchase
plans, and, in accordance with French GAAP, do not record
compensation expense on stock-based employee plans. Under
U.S. GAAP, APB Opinion No. 25 defines conditions to
classify plans such as compensatory or non-compensatory. If a
plan is deemed to be compensatory, APB Opinion No. 25
requires that compensation arising from the plans be measured
based on the intrinsic value of the shares granted or sold to
employees. For fixed plans, the compensation expense is
calculated as the difference between the fair value of the share
at the grant date and the employee exercise price. Compensation
expense for compensatory stock-based employee plans is
recognized over the vesting period.


Under French GAAP, we record foreign currency
transactions on long-term contracts at the contract exchange
rate established under the foreign exchange instruments into
which we enter. Under U.S. GAAP, we record foreign currency
transactions at the spot rate except for that portion of the
transaction, which is hedged with a financial instrument, which
we record at the hedged rate.

Under French GAAP, we translate monetary assets
and liabilities denominated in a foreign currency into euro at
year-end, except for contracts-in-progress and
progress payments on contracts accounts. We record
the resulting exchange gains and losses in our income statement.
We record a reserve for unrealized exchange losses, except if
related to a hedged transaction denominated as a hedge. Under
U.S. GAAP, we include in net income exchange gains or
losses resulting from the adjustment of balances denominated in
a foreign currency, except if related to a contract designated
as a hedge. Since January 1, 2001, we record all exchange
gains and losses in our net income in accordance with Statement
of Financial Accounting Standards No. 133 (SFAS
No. 133).

Under French GAAP, we do not record the fair
values of the derivatives instruments related to future
transactions on our contracts. Under U.S. GAAP we are
required to record every derivative instrument (including
certain derivative instruments embedded in other contracts) in
accordance with SFAS No. 133 in our balance sheet, either
as an asset or liability measured at its fair value. We report
the changes in these fair values either in shareholders
equity if specific hedging criteria are met or in the income
statement. Special accounting for qualifying hedges allows a
derivative instruments gains and losses to offset related
results on the hedged item in the income statement, to the
extent effective, and requires that a company must formally
document, designate, and assess the effectiveness of
transactions that receive hedge accounting.

Under French GAAP, goodwill is amortized over a
period ranging from five to 25 years, depending on the
activity of the business acquired. Under U.S. GAAP,
goodwill resulting from business combinations initiated after
July 1, 2001 is no longer amortized. Additionally, with the
adoption of SFAS 142 on January 1, 2002, goodwill from
previous acquisitions is also no longer amortized.

After acquiring the 29.7% interest in Coflexip in
2001, we were unable to perform a complete valuation of the
assets and liabilities acquired. Accordingly, we could not
precisely identify the difference between the cost of our
investment in Coflexip and the net assets acquired, and
therefore elected under French GAAP to amortize the goodwill
over a 20 year period based on an overall analysis of
goodwill components at the date of acquisition. We recognized
the subsequent gain reported by Coflexip on the sale of Cal Dive
securities as a separate non-operating line as described in
Note 2(b) to our Consolidated Financial Statements. For
U.S. GAAP purposes, we reduced our share of the gain
recorded by Coflexip on its disposal of Cal Dive securities. The
amount recognized under U.S. GAAP was the difference
between the selling price and the fair value of the Cal Dive
securities at the date of the acquisition of the 29.7% interest
in Coflexip. Goodwill amortization was reduced accordingly.

On March 1, 2003, Technip commenced an
operating lease agreement for the Adria Tower in
La Défense for twelve years. Based upon the terms
of the lease agreement, there was a free rent period through
until December 31, 2003. All rental payments subsequent to
the free rent period are to be paid according to a contractual
table. Under French GAAP, the rental expense related to this
agreement is recognized based upon the contractual table. As
such, no rental expense was recorded in our consolidated
statements of operations for the year ended December 31,
2003 for this lease. Under U.S. GAAP, the Company
recognizes the related rental expense on a straight-line basis
and records the difference between the amounts charged to
expense and the rent paid as deferred rent.

51



---



##### Table of Contents





| |                                              
| | ---------------------------------------------
| | Recently Issued Accounting
    Pronouncements

In January 2003, Financial Accounting Standards
Board (FASB) issued FASB Interpretation No. 46,
Consolidation of Variable Interest Entities, an
Interpretation of Accounting Research Bulletin (ARB)
No. 51. This interpretation provides guidance on how to
apply the controlling financial interest criteria in ARB 51
to variable interest entities. Given the Interpretations
complexity, the FASB issued several FASB Staff Positions (FSPs)
throughout 2003 to clarify the Boards intent on certain of
the Interpretations provisions, and in December 2003, the
Board revised the Interpretation (FIN 46-R) to address
certain technical corrections and to clarify many of the
implementation issues that had arisen. Variable interest
entities (VIEs) include many entities that have previously been
referred to as special-purpose entities (SPEs), but also may
include many other entities not previously thought of as SPEs. A
variable interest entity is an entity that either does not have
equity investors with voting rights or has equity investors that
do not provide sufficient financial resources for the entity to
support its activities. Interpretation 46 requires a company to
consolidate a variable interest entity if the company is subject
to a majority of the risk of loss from the variable interest
entitys activities or is entitled to receive a majority of
the entitys residual returns or both. The application of
this interpretation is required at December 31, 2003 for
entities created after February 1, 2003 and at
December 31, 2004 for other entities. The adoption of this
Interpretation for entities created after February 1, 2003
did not have an impact on our results of operations, financial
position or cash flows. We are still assessing the impact of
this Interpretation on our results of operations, financial
position and cash flows for entities created before
February 1, 2003.

In November 2002, the Emerging Issues Task Force
of the Financial Accounting Standards Board issued Emerging
Issues Task Force No. 00-21 (EITF 00-21), Accounting
for Revenue Arrangements with Multiple Deliverables, which was
amended in January 2003 and requires that (a) revenue
should be recognized separately for separate units of accounting
in multiple deliverables arrangements, (b) revenue for a
separate unit of accounting should be recognized only when the
arrangement consideration is reliably measurable and the
earnings process is substantially complete, and
(c) consideration should be allocated among the separate
units of accounting based on their relative fair value.
EITF 00-21 is applicable to transactions entered into in
fiscal periods beginning after June 15, 2003. We are
currently assessing the impact on our financial position,
results of operations and cash-flows of the adoption of
EITF 00-21.

Within the framework of the European Unions
adoption of international accounting standards, all European
companies listed on regulated exchanges must prepare as from
January 1, 2005 their consolidated financial statements in
accordance with IFRS standards. Currently, all of the IFRS
accounting standards have not been finalized, nor is it clear
whether all such standards will have been released and endorsed
by the European Commission by the 2005 deadline. The eventual
transition from French GAAP to IFRS will be made in compliance
with IFRS 1, First-Time Adoption of IFRS, which provides
guidance on retroactive application and outlines certain
exemptions and exceptions.

Based on proposed SEC regulations regarding the
applicable periods to be presented under a comprehensive set of
generally accepted accounting principles, we currently
anticipate adopting January 1, 2004 as our transition date
to International Financial Reporting Standards (or
IFRS), and thus to present restated 2004 and 2005
IFRS financial statements in our annual report on Form 20-F
for the year ending December 31, 2005. However, based on
currently applicable SEC regulations (for which the foregoing
proposal would amend), we would be required to adopt
January 1, 2003 as our transition date.

In the meantime, we will continue to use French
GAAP for our primary financial statements. We are currently
assessing the impact, which could be significant, that the
application of IFRS will have on our consolidated financial
statements. Once all IFRS have been issued and endorsed by the
European Commission and the transition date to IFRS is
definitive, we will disclose as soon as practicable the impact.
Upon adoption of IFRS, we will disclose in our primary financial
statements a reconciliation between French GAAP and IFRS
(including narrative and net income and shareholders
equity reconciliation for the applicable periods presented), as
well as additional reconciliation disclosures between IFRS and
U.S. GAAP.

52



---



##### Table of Contents





| |                  
| | -----------------
| | Segment Reporting

The objective of SFAS No. 131,
Disclosures about Segments of an Enterprise and Related
Information is to provide users of financial statements
information about the different types of business activities in
which a company engages and the different economic environments
in which it operates. Subsequent to our business combination
with Coflexip, our management has structured our operations into
three branches that we utilize as reporting segments. These
branches are the Offshore sector, which comprises the offshore
business units of Technip and substantially all of the
operations of Coflexip, the Onshore/ downstream sectors, which
comprises the Technip hydrocarbons activities not accounted for
in the offshore sector, and the Industries sector, which
comprises our activities outside the hydrocarbons industry.



| |                 
| | ----------------
| | Foreign Currency

We operate under long-term contracts that are
frequently denominated in currencies other than our functional
currency, the euro. As of December 31, 2003, revenues from
contracts denominated in non-euro currencies were approximately
70% of our total net sales, of which more than 70% were
denominated in U.S. dollars. Approximately 37% of our
operating expenses during this period were denominated in
U.S. dollars and significant amounts were also denominated
in Japanese yen, British pound sterling, Malaysian Ringitt,
Brazilian Real and Norwegian Crown. For a detailed description
of our exposure to foreign currencies and currency hedging
instruments, see Item 11. Qualitative and
Quantitative Disclosures About Market Risk.

Our policy is to naturally hedge a substantial
portion of our contracts by matching the currency of our own
equipment purchases and subcontractor payments to the currency
in which we will ourselves receive payment. Subsequently, we
manage our foreign currency exposure on the portion of
anticipated foreign currency cash flows that is not naturally
hedged by entering into standard financial instruments such as
forward exchange contracts or options. We do not enter into
financial instruments for trading or speculative purposes.

Foreign currency exposure.During the bid period, our currency
exposure derives from the fact that exchange rate movements
between the date as of which we calculate our projected costs
and resulting bid and the date on which the contract is awarded
could negatively affect our expected margins. We manage our
currency risk exposure, primarily, by submitting multicurrency
bids matched to the expected currency of expense and
secondarily, to the extent necessary, by insurance contracts
and, to a limited extent, options.

Foreign currency transactions.Foreign currency transactions are
translated into euro at the rate of exchange applicable at the
transaction date, except for those related to long-term
contracts which are translated using the contract rate based on
foreign currency hedging. At year end, monetary assets and
liabilities denominated in foreign currencies are translated
into euros at the exchange rate prevailing at that date except
for contracts-in-progress accounts and progress payments
received from long-term contract customers which are recorded at
the contract rate. The resulting exchange gains or losses are
recorded in the income statement.

Outlook for 2004

The 2003 business development plan announced last
year was composed of the following elements:



| |   |                                                                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | centralization of our Paris-based staff,
    previously located in four locations;                                                                                                                                                     
|
| |  | increased cost efficiency and development of
    cost-saving synergies, particularly in the areas of procurement,
    information technology and overhead expenses;                                                                    
|
| |  | a second round of disposals of non-strategic
    assets;                                                                                                                                                                               
|
| |  | the merger of Coflexip S.A. into Technip-Coflexip
    S.A. to eliminate the costs related to the separate listing of
    Coflexip in France and to permit the streamlining of operations
    both at headquarters and subsidiaries; and
|
| |  | the simplification of our governance structure
    through the adoption of a classic board of directors
    in place of our previous two-tiered board structure.                                                                     

53



---



##### Table of Contents



This plan was implemented during 2003. Proceeds
from disposal of assets reached
105 million.
During the course of 2003, the Group increased its backlog from
5,776 million
to
7,180 million.
This increase is essentially due to the growth in project
development in Offshore, notably in Africa, Brazil and in the
Caspian Sea. The Offshore branchs share of Group backlog
increased from 30.5% at December 31, 2002 to 40.3% at
December 31, 2003.

Thanks to the size and quality of our backlog,
based on an unchanged scope of consolidation, budgetary currency
exchange rates
(1 = U.S.$1.20)
and a 37% tax rate, we have announced our objective to reach the
following annual targets for 2004 compared to our results in
2003 under French GAAP:



| |   |                                                                              
| | - | -----------------------------------------------------------------------------
| |  | an annual net sales increase of 9%;                                          
|
| |  | an annual increase in operating income of 13%;                               
|
| |  | an annual increase in net income before goodwill
    amortization of 35%; and
|
| |  | to keep our gearing ratio below 20%.                                         

Nonetheless, no assurances can be given that we
will achieve our objectives and targets, which are not
statements of historical fact, and are based on
managements current views and assumptions and involve
known and unknown risks and uncertainties that could cause
actual results, performance or events to differ materially from
those anticipated. See Cautionary Note Regarding Forward
Looking Statements and Item 3. Key
Information  Risk Factors.

Recent Developments

On May 27, 2004, we announced the following
results for the three-month period ended March 31, 2004:



| |   |                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 6,451 million
    in backlog for the period ended March 31, 2004, an increase
    of 5.9% over the
    6,091 million
    recorded for the period ended March 31, 2003;               
|
| |  | 1,250 million
    in net sales, an increase of 13.7% compared to the first quarter
    of 2003 where we recorded
    1,099 million
    in net sales;                                 
|
| |  | net income of
    (3.3) million
    in net income (loss), a 5.7% improvement over the
    (3.5) million
    loss recorded in the first quarter of 2003;                              
|
| |  | net income before non-operating items and
    goodwill amortization of
    26.6 million,
    a 37.8% improvement over the
    19.3 million
    recorded in the first quarter of 2003;
|
| |  | fully diluted earnings per share of
    0.97 per share,
    an improvement of 22.8% compared to the
    0.79 per share
    recorded in the first quarter of 2003; and                
|
| |  | fully diluted earnings per ADS of U.S.$0.30 per
    share, a 25% increase from the U.S.$0.24 per ADS recorded in the
    first quarter of 2003.                                        

Corporate Financing.As disclosed in more details in the paragraph Material
Contracts, the Company has signed on April 29, 2004 a
five-year
850 million
bank revolving credit facility and issued on May 26, 2004 a
seven-year
650 million
eurobond.

Repurchase by the Group of its own
shares.Subsequent to shares
repurchased in January and February 2004, as disclosed in
Note 28(b) to the December 31, 2003 Consolidated
Financial Statements. Technip further repurchased to-date
149,109 of its own shares within the share repurchase program.
Beneficiaries of the 1999 Stock Option Plan exercised 230,595
stock purchase options prior to April 30, 2004 (the 1999
Stock Option Plan maturity date).

54



---



##### Table of Contents



Results of Operations for the Year Ended
December 31, 2003,

Compared to the Year Ended December 31,
2002




| |          
| | ---------
| | Net Sales

In 2003, we had consolidated net sales of
4,711.1 million,
an increase of 5.8% from net sales of
4,452.3 million
in 2002. Our net sales are largely comprised by net sales of our
two largest divisions, our Onshore branch and our Offshore
branch. In the Onshore branch in 2003, among the largest
contributors to net sales, due to the size and status of
progress on these contracts, were Takreer, Nigeria Trains IV and
V, Qatif, Omifco and 10th complex. In the Offshore branch in
2003, the SURF activity represented 59% of our net sales while
our Floaters activity represented 41%.

Backlog.We define
backlog as the remaining portion of ongoing contracts sale
price to be recognized in the future. Our backlog was
7,180.4 million
at December 31, 2003, increasing from
5,776.1 million
at December 31, 2002.

By business segment, at December 31, 2003,
approximately 40.3% of our backlog was in the Offshore segment,
54.4% was in the Onshore/ Downstream segment and the remainder
was in our Industries segment. Contract intake in 2003 was
driven in the Offshore sector principally by integrated projects
in Africa (SURF and Floaters), in North Sea and in Brazil. In
the Onshore/ Downstream sector, backlog was driven principally
by petrochemical, gas and other projects in the Africa/ Middle
East region, which accounted for 61% of segment backlog as of
December 31, 2003. Backlog in the Industries sector at
December 31, 2003 consisted principally of several service
and construction contracts for the pharmaceutical, chemical,
electricity and metal industries.

Net sales by
segment.Our Offshore segment
accounted for
2,209.7 million
or 46.9% of total revenues in 2003 compared to
2,125.0 million,
or 47.8% in 2002. Major contributors to our 2003 revenues were
our SURF business, which accounted for 59% of segment revenues
of December 31, 2003 and our Floaters business, which
accounted for a further 41% of Offshore segment revenues.

Our Onshore/ Downstream segment, which is
comprised of activities related to production, refining and
petrochemicals, accounted for
2,119.0 million
or 45% of total revenues in 2003, compared to
1,938.6 million,
or 43.5% in 2002, an increase in net sales of 9.3%. The major
factors contributing to the increase in sales in this segment
were due to contracts put in force in 2002 with the early
engineering phases where we tend not to recognize substantial
revenues compared to the later phases in which equipment
procurement and construction work have taken place in 2003 and
project milestones have been met. See Item 4.
Information on Technip  Description of Our
Operations  Execution of a Turnkey Contract.
The major contributors are Takreer, Nigeria trains IV and V,
Qatif, Omifco and 10th Complex.

Our Industry segment accounted for net sales of
382.4 million
or 8.1% of total net revenues in 2003, as compared to
388.7 million,
or 8.7% of total net revenues, in 2002. Sales in 2003 derived
from contracts in the pharmaceutical industry (MSD, Solvay and
Aventis), the chemical industry (BASF in Germany and Sabic Acid
Acetic in Saudi Arabia) as well as contracts for the
construction of treatment units of ores (Bauxilum in Venezuela)
and construction of electricity generation plants in Germany
(Bochum), an Airbus 380 assembly site in France and several
contracts for the cement, metals and aerospace industries.

Net sales by geographic
area.During 2003, our operations in
Europe and Russia/ Central Asia generated
1,138.2 million
in sales, or 24.2% of total revenues, compared to
1,196.6 million
in sales, or 26.9% of total revenues in 2002. The principal
contributors to sales in this region in 2003 were in the
Offshore segment, Braemar (MARATHON), Clapham (PETROCANADA),
Seven Heads (RAMCO ENERGY), Fram West (NORSK HYDRO) and
Ringhorne Jurassic (EXXON MOBIL). Additionally, sales recorded
from engineering activities in this region include Anvers Prime
G (TOTAL), PPF6 (DSM) and AG/ H2 plant (OMV).

Sales generated from our activities in Africa/
Middle East during 2003 amounted to
2,150.3 million,
or 45.6% of total revenues, compared to
1,482.0 million
or 33.3% of total 2002 revenues. The principal offshore
contracts contributing to sales in this region in 2003 were East
Area (EXXON MOBIL), and Amenam (TOTAL) in Nigeria, EPS Zafiro
(EXXON MOBIL) in Equatorial Guinea and EPS Xikomba (EXXON MOBIL)
in Angola.

55



---



##### Table of Contents



Our principal Onshore/ Downstream contracts in
this region were Nigeria trains IV and V, Omifco in Oman, Qatif
in Saudi Arabia, Takreer in United Arabian Emirates and the 9th
and 10th complex of Ethylene in Iran.


Our operations in Asia Pacific generated sales of
344.5 million
in 2003, or 7.3% of total revenues, a decrease from
445.2 million,
or 10% of total revenues in 2002. Our principal contributors to
Offshore segment sales in 2003 in this region were TSEP
(WOODSIDE) in Australia and Conoco B (CONOCO PHILIPS) in
Indonesia. In the Onshore/ Downstream segment, the principal
contributors to sales were petrochemical projects in China,
Taiwan and Vietnam.

Sales generated from our activities in the
Americas decreased significantly during 2003 and amounted to
1,078.1 million,
or 22.9% of total revenues, compared to
1,328.5 million,
or 29.8% of total revenues, in 2002. Sales in this region are
particularly tied to our Offshore operations in Brazil and the
Gulf of Mexico, with notably contracts for the engineering and
construction of SPAR production platforms for Gunisson (KERR
MCGEE), Mad Dog (BP), Holstein (BP) as well as the integrated
turnkey projects Nakika (SHELL), Bidao (PETROBRAS) and
Huskywhite Rose (HUSKY) in Canada. In the Onshore/ Downstream
branch, sales in 2003 reflected the substantial progress on the
Syncrude and Cryogenic gas plant projects in North America.



| |              
| | -------------
| | Cost of Sales

Our cost of sales was
3,990.6 million
in 2003, compared to
3,754.8 million
in 2002. The major component was payroll, study costs, and
external costs such as equipment purchases and construction
subcontracting. The increase in our costs was principally linked
to our overall level of activity. The Onshore/ Downstream
segment and the Offshore segment each accounted respectively for
about 46.9% and 44.0% of this amount
(1,875.0 million
and
1,756.7 million,
respectively) increasing from 9.2% and 4.0% in 2002.



| |                                      
| | -------------------------------------
| | Research and Development
    Expenses

Research and development expenses amounted to
33.3 million
in 2003 compared to
37.4 million
in 2002. This decrease results from the synergies following the
Coflexip acquisition.



| |                                                 
| | ------------------------------------------------
| | Selling, General and Administrative
    Expenses

Our selling, general and administrative expenses
during 2003 were
341.7 million
(or 7.2% of net sales) compared to
312.5 million
(or 7.0% of net sales) incurred in 2002.

56



---



##### Table of Contents





| |       
| | ------
| | EBITDA

The primary operating performance measure for our
business segments is earnings (loss) before accounting
depreciation and amortization (EBITDA). EBITDA corresponds to
operating income before depreciation and amortization, a line
item on the face of our consolidated statement of operations
included in the Consolidated Financial Statements. We believe
that EBITDA is useful to investors and management to demonstrate
the operational profitability of our segments by excluding
interest and taxes, which are generally accounted for across the
entire company on a consolidated basis.

|                                                                           |  |                     |        |   |      |  |        |      |  |  |       |  
|-------------------------------------------------------------------------- |  | ------------------- | ------ | - | ---- |  | ------ | ---- |  |  | ----- | -
|                                                                           |  | 2003                |        |   | 2002 |  |        | 2001 | 
|                                                                           |  |                     |        |   |      |  |        |      | 
|                                                                           |  |                    
|                                                                           |  | (in million of EUR) |       
|EBITDA                                                                     |  |                     |        |   |      |  |        |      |  |  |       |  
| Offshore                                                                 |  |                     | 242.7  |   |      |  | 250.1  |      |  |  | 86.3  |  
| Onshore/ Downstream                                                      |  |                     | 100.4  |   |      |  | 85.3   |      |  |  | 189.0 |  
| Industries                                                               |  |                     | 2.4    |   |      |  | 12.2   |      |  |  | 9.1   |  
|                                                                           |  |                     |        |   |      |  |        |      | 
|Total                                                                      |  |                     | 345.5  |   |      |  | 347.6  |      |  |  | 284.4 |  
|Less:                                                                      |  |                     |        |   |      |  |        |      |  |  |       |  
|Depreciation and amortization other than goodwill                          |  |                     | (117.9 | ) |      |  | (143.0 | )    |  |  | (49.6 | )
|Subtotal:                                                                  |  |                     |        |   |      |  |        |      |  |  |       |  
|Operating Income                                                           |  |                     | 227.6  |   |      |  | 204.6  |      |  |  | 234.8 |  
|Less:                                                                      |  |                     |        |   |      |  |        |      |  |  |       |  
|Financial result                                                           |  |                     | (44.3  | ) |      |  | (66.9  | )    |  |  | (6.5  | )
|Less:                                                                      |  |                     |        |   |      |  |        |      |  |  |       |  
|Income tax                                                                 |  |                     | (82.0  | ) |      |  | (46.3  | )    |  |  | (65.5 | )
|Non Operating loss, Income of equity affiliates
    and Minority Interests |  |                     | (7.3   | ) |      |  | (3.0   | )    |  |  | 6.6   |  
|Less:                                                                      |  |                     |        |   |      |  |        |      |  |  |       |  
|Goodwill Amortization                                                      |  |                     | (113.7 | ) |      |  | (117.8 | )    |  |  | (61.3 | )
|Net Income                                                                 |  |                     | (19.7  | ) |      |  | (29.4  | )    |  |  | 108.1 |  

Our earnings before interest, tax, depreciation
and amortization (EBITDA) amounted to
345.5 million
in 2003 compared to
347.6 million
in 2002.

EBITDA by segment.Below we present EBITDA and EBITDA margins by business segment
for 2003 and 2002. We have defined segment EBITDA margins as
segment EBITDA divided by segment net sales.

Our Offshore segment generated EBITDA of
242.7 million,
with a segment EBITDA margin of 11.0% in 2003, improved from
segment EBITDA of
250.1 million,
with a segment EBITDA margin of 11.8% in 2002.

Our Onshore/ Downstream segment generated EBITDA
of
100.4 million,
with a segment EBITDA margin of 4.7% in 2003, compared to
segment EBITDA income of
85.3 million,
with a segment EBITDA margin of 4.4% in 2002. This slight
increase is explained on the one hand by the completion of
several major projects on favorable terms in 2003, which allowed
us to recognize strong margins and write back project-specific
risk and technical provisions, and on the other hand by
reduction of the selling and administrative costs.

Our Industry segment contributed EBITDA of
2.4 million
with a segment EBITDA margin of 0.6% in 2003, as compared to
segment EBITDA of
12.2 million
with a segment EBITDA margin of 3.1% in 2002, a decrease in
segment EBITDA of 80% due to losses recognized on former
contracts.

57



---



##### Table of Contents



EBITDA by geographic
zone.Below we present EBITDA and
EBITDA margins by geographic zone for 2003, 2002 and 2001. We
have defined EBITDA margins as EBITDA divided by segment net
sales for a given zone.

|                                                                          |  |                     |        |   |      |  |        |      |  |  |       |  
|------------------------------------------------------------------------- |  | ------------------- | ------ | - | ---- |  | ------ | ---- |  |  | ----- | -
|                                                                          |  | 2003                |        |   | 2002 |  |        | 2001 | 
|                                                                          |  |                     |        |   |      |  |        |      | 
|                                                                          |  |                    
|                                                                          |  | (in million of EUR) |       
|EBITDA                                                                    |  |                     |        |   |      |  |        |      |  |  |       |  
| Europe and Russia/ Central Asia                                         |  |                     | 118.9  |   |      |  | 148.4  |      |  |  | 73.2  |  
| Africa/ Middle East                                                     |  |                     | 144.3  |   |      |  | 102.9  |      |  |  | 74.8  |  
| Asia Pacific                                                            |  |                     | 23.2   |   |      |  | 22.1   |      |  |  | 72.2  |  
| Americas                                                                |  |                     | 59.1   |   |      |  | 74.2   |      |  |  | 64.2  |  
|                                                                          |  |                     |        |   |      |  |        |      | 
|Total                                                                     |  |                     | 345.5  |   |      |  | 347.6  |      |  |  | 284.4 |  
|Less:                                                                     |  |                     |        |   |      |  |        |      |  |  |       |  
|Depreciation and amortization other than goodwill                         |  |                     | (117.9 | ) |      |  | (143.0 | )    |  |  | (49.6 | )
|Subtotal:                                                                 |  |                     |        |   |      |  |        |      |  |  |       |  
|Operating Income                                                          |  |                     | 227.6  |   |      |  | 204.6  |      |  |  | 234.8 |  
|Less:                                                                     |  |                     |        |   |      |  |        |      |  |  |       |  
|Financial result                                                          |  |                     | (44.3  | ) |      |  | (66.9  | )    |  |  | (6.5  | )
|Less:                                                                     |  |                     |        |   |      |  |        |      |  |  |       |  
|Income tax                                                                |  |                     | (82.0  | ) |      |  | (46.3  | )    |  |  | (65.5 | )
|Non Operating loss, Income of equity affiliates
    and Minority Interest |  |                     | (7.3   | ) |      |  | (3.0   | )    |  |  | 6.6   |  
|Less:                                                                     |  |                     |        |   |      |  |        |      |  |  |       |  
|Goodwill Amortization                                                     |  |                     | (113.7 | ) |      |  | (117.8 | )    |  |  | (61.3 | )
|Net Income                                                                |  |                     | (19.7  | ) |      |  | (29.4  | )    |  |  | 108.1 |  

In Europe and Russia/ Central Asia, we generated
EBITDA of
118.9 million
in 2003 (10.4% EBITDA margin) compared to
148.4 million
(12.4%) in the previous year. The Offshore segment has performed
well in the North Sea region. The Onshore/ Downstream segment
contribution comes from the projects with DSM, BP and HDT in
Turkmenistan.

In Africa/ Middle East, we generated EBITDA of
144.3 million
in 2003 (6.7% EBITDA margin) compared to
102.9 million
(6.9%) in the previous year. This increase reflects notably the
EPS Zafiro (Exxon Mobil) in Equatorial Guinea, Eps Zikomba
(Exxon Mobil) in Angola and AMP1 (Total) in Nigeria, for the
Offshore segment. The Onshore/ Downstream segment contribution
to the EBITDA of the region reflects in large part the contracts
realized in Nigeria, Iran, Oman, Saudi Arabia, Abu Dhabi and
Emirates.

In Asia Pacific, we generated EBITDA of
23.2 million
in 2003 (6.7% EBITDA margin) compared to
22.1 million
(5.0%) in the previous year. The situation in this region
reflects in large part the status of progress on the following
contracts: PTA, Phu-my, BP Secco and SMPO Nanhai.

In the Americas, we generated EBITDA of
59.1 million
in 2003 (5.5% EBITDA margin) compared to
74.2 million
(5.6%) in the previous year. This evolution in EBITDA reflects
the low level of utilization of our Corpus Christi yard and
operational difficulties on a SURF project based in Gulf of
Mexico.



| |                 
| | ----------------
| | Operating Income

Depreciation and amortization other than
goodwill.Charges for depreciation of
assets during 2003 amounted to
117.9 million,
compared to
143.0 million
in 2002. In 2003, the decrease mainly results from the change in
the vessels estimated life on the basis of an independent
experts report. The impact amounts to
(8.9) million
in 2003.

Operating income amounted to
227.6 million
in 2003 compared to
204.6 million
in 2002, an increase of 11.2%. The operating margin (operating
income taken as a percent of net sales) increased from 4.6% in
2002 to 4.8% in 2003, primarily as a result of the increase in
the Offshore segment operating margin.

58



---



##### Table of Contents





| |                 
| | ----------------
| | Financial result

We had a net financial loss of
44.3 million
in 2003 compared to
66.9 million
in 2002. This line item does not include financial revenue on
positive cash balances of individual contracts, which we account
for under net sales. In 2003 and 2002, financial revenues from
these sources contributed
9.9 million
and
13.6 million,
respectively, to our net sales. In 2003 we incurred
25.8 million
in financial expenses related to our OCEANE bonds including
16.1 million
as redemption premium amortization. Other factors contributing
to this net financial loss were financial expenses of
7.6 million
in connection with short-term notes, and exchange-rate related
losses of
2.9 million.



| |                            
| | ---------------------------
| | Income of Equity Affiliates

We had income from equity affiliates of
1.1 million
in 2003 compared to no equity in income from unconsolidated
affiliates in 2002. The 2003 income from equity affiliates of
1.1 million
essentially results from Nargan.



| |                   
| | ------------------
| | Non-operating Loss

We recorded a non-operating loss of
7.6 million
compared to a non-operating loss
6.9 million
in 2002. In 2003, this item consists of restructuring costs in
Finland for an amount of
4.4 million
and in Germany for an amount of
2.7 million.
This item includes also a
3.5 million
net gain on the former headquarters building sale and a
(1.5) million
loss resulting from the disposal of Unirig Pty Ltd. shares.

The non-operating loss in 2002 was primarily
derived from restructuring costs of
7.0 million
and exceptional losses of
8.7 million
related to non recurring losses occurred on former contracts,
offset by
6.2 million
in tax credits awarded by the Italian tax authorities and gains
on asset sales of
5.6 million
related to our disposal of shares of Ipedex and Rintekno.



| |           
| | ----------
| | Income Tax

Our income tax for 2003 amounted to
82.0 million,
for a profit before tax and before goodwill amortization of
176 million,
compared to an income tax of
46.3 million
in 2002. Compared to the generally applicable French corporate
income tax rate of 35.43% for 2003 and 2002, our effective
income tax rate amounted to 44.29% in 2003 and 33.53% in 2002.
This increase results mainly from our decision not to recognize
further deferred tax assets in view of the operational losses
recorded in the United States in 2002 and 2003.



| |                   
| | ------------------
| | Minority Interests

Minority interests in our earnings amounted to
(0.8) million
compared to
3.9 million
in 2002. Minority interests in 2002 were principally
attributable to our Indian subsidiary SEAMEC. In 2003, the Group
raised its stake in SEAMEC (India) to 78.2% following a 20%
purchase of interests.



| |                      
| | ---------------------
| | Goodwill amortization

Goodwill amortization amounts to
113.7 million
in 2003 compared to
117.8 million
in 2002. This decrease mainly comes from the purchase price
reduction in connection with the acquisition of Aker Maritime
Deepwater Division granted in 2003.



| |                  
| | -----------------
| | Net Income (loss)

Our consolidated net loss for 2003 was
19.7 million
compared to
29.4 million
in 2002.

Net income before non-operating items and
goodwill amortization upon acquisition represents a profit of
101.6 million
compared to
95.3 million
in 2002. On this basis, earning before non-operating items and
goodwill amortization per diluted share amounted to
3.98 in 2003
compared to 3.91
in 2002. The diluted per share results are affected by the
issuance of exchangeable/ convertible bonds (OCEANE) in January
2002. The

59



---



##### Table of Contents



calculation of diluted per share information
assumes the restatement of convertible bonds redemption premium
amortization and related financial costs after tax.


Results of Operations for the Year Ended
December 31, 2002, 
 Compared to the Year Ended December 31, 2001



| |          
| | ---------
| | Net Sales

Our consolidated net sales for the fiscal year
2002 amounted to
4,452.3 million.
This was an increase of 25.6% from net sales in 2001 of
3,546.0 million
and is largely due to our acquisition of Coflexip, the results
of which have been consolidated since October 1, 2001. In
addition, our sales growth was negatively affected by a decrease
of approximately 15.3% for our businesses other than Coflexip.
On a pro forma basis reflecting our business combination, as of
January 1, 2001, our 2002 net sales decreased 10.0% from
pro forma net sales of
4,949.8 million
in 2001, mainly as a result of decreased onshore revenues
recorded in 2002 and the disposal of several non-strategic
activities. Among the largest contributors to net sales in 2002,
as a result of the size and status of progress on these
contracts, were for the Onshore branch, Haradh Gas Plant in
Saudi Arabia (SAUDI ARAMCO), PTA & FEL in Taiwan (BP),
Fujairah Water & Power in the United Arab Emirates, and for
the Offshore branch, Devil Tower (WILLIAMS), Holstein (BP AMOCO)
and Gunnison (KERR MC GEE) all in the United States.

Backlog.Backlog was
5,776.1 million
at December 31, 2002, increased from
4,926 million
at December 31, 2001. Backlog figures at December 31,
2001 include the full backlog of Coflexip at that date. During
2002, there was noticeable backlog growth in the Onshore/
Downstream segment in particular.

By business segment, at December 31, 2002,
approximately 30.5% of our backlog was in the Offshore segment,
62.8% was in the Onshore/ Downstream segment and the remainder
was in our Industries segment. Contract intake in 2002 was
driven in the Offshore sector principally by SPAR production
platforms, integrated deepwater projects in the Gulf of Mexico
and integrated projects in Africa, the North Sea and Brazil. In
the Onshore/ Downstream sector, backlog was driven principally
by petrochemical, gas and other projects in the Africa/ Middle
East region, which accounted for 64% of segment backlog as of
December 31, 2002. At the same date, approximately 15% of
Onshore/ Downstream backlog was in Europe and Russia/ Central
Asia, principally in Italy, Germany, The Netherlands and
Turkmenistan, 12% in the Asia Pacific region with important
contracts in Vietnam, China and Taiwan, and 9% in the Americas
consisting of numerous service contracts and the near-completed
La Isla project in Curaçao. Backlog in the Industries
sector at December 31, 2002 consisted principally of a
chlorine plant in Germany, an acetic acid plant in Saudi Arabia,
an installation related to Ariane V in French Guyana, several
service contracts for pharmaceutical plants and contracts for
the construction of office and industrial space including for
the municipal authorities of Nice, France.

Backlog at December 31, 2002 does not
include the order intake of several contracts which have been
signed, but for which financing had not yet been confirmed by
the client. As a result, our order intake not yet booked as
backlog as of December 31, 2002, amounted to approximately
0.4 billion,
compared to approximately
1.5 billion
at December 31, 2001 and
0.7 billion
at December 31, 2000.

Net sales by
segment.Our Offshore segment
accounted for
2,125.0 million
or 47.8% of total sales in 2002 compared to
722.0 million,
or 20.4% in 2001. The significant increase in net sales was
mainly attributable to our consolidation of Coflexip as of
October 1, 2001. Substantially all revenues of Coflexip are
included in our Offshore segment. Major contributors to our 2002
revenues were our SURF and SPAR businesses in North America, two
significant turn-key contracts relating to a platform in Nigeria
and for development platforms for the Cakerawala fields in
Malaysia, as well as strong activity levels in the North Sea.

Our Onshore/ Downstream segment, which is
comprised of activities related to production, refining and
petrochemicals, accounted for
1,938.6 million
or 43.5% of total revenues in 2002, compared to
2,352.0 million,
or 66.3% in 2001, a decline in net sales of 17.6%. The major
factors contributing to the decrease in sales in this segment
were unusually low backlog levels at the beginning of 2002 as a
result of our delivery of several major turnkey contracts prior
to year end 2001 combined with slow order intake in the first
quarter of 2002. Additionally, the decrease was impacted by a
mix of projects-in-course mainly comprised of those in the early

60



---



##### Table of Contents



engineering phases where we tend not to recognize
substantial revenues compared to the later phases in which
equipment procurement and construction work are taking place and
project milestones are being met. See Item 4.
Information on Technip  Description of Our
Operations  Execution of a Turnkey Contract.


Our Industry segment contributed sales of
388.7 million
or 8.7% of total revenues in 2002 as compared to
472 million,
or 13.3% of total revenues, in 2001, a decrease in net sales of
17.6%, reflecting the particularly high level of sales recorded
in 2001 as a result of the completion of several large turnkey
contracts. Sales in 2002 derived from contracts in the
pharmaceutical industry (MSD, Aventis Pasteur), the chemical and
metals industry (Goro Nickel in New Caledonia, Copebras in
Brazil, Kemapco in Jordan) as well as contracts for the
construction of electricity generation plants in Germany, an
Airbus 380 assembly site in France and several contracts for the
cement industry.

Net sales by geographic
area.During 2002, our operations in
Europe and Russia/ Central Asia generated
1,196.6 million
in sales, or 26.9% of total revenues, compared to
942.0 million
in sales, or 26.6% of total revenues in 2001, an increase of
27.0%, reflecting primarily the consolidation of Coflexips
North Sea and other European revenues for the full fiscal year
2002. The principal contributors to sales in this region in 2002
were Hutton and MacLure (KERR MCGEE), Juno (BG) and Fram West
(NORSK HYDRO). Additionally, sales recorded from engineering
activities in this region progressed significantly notably due
to the River Fields Development project (BP).

Sales generated from our activities in Africa/
Middle East during 2002 amounted to
1,482.0 million,
or 33.3% of total revenues, an increase of 22.6% from reported
revenues in 2001 of
1,209.0 million
or 34.1% of total 2001 revenues. The principal offshore
contracts contributing to sales in this region in 2002 were
Amenam (TFE) and Abo (AGIP) in Nigeria, Sable (BLUEWATER) in
South Africa, and EPS Zafiro (EXXON MOBIL) in Equatorial Guinea.
Our principal Onshore/ Downstream contracts in this region were
Nigeria train III (in the process of being delivered) and trains
IV and V which were commenced in the first quarter of the year,
Haradh Gas Plant and Haradh Pipe in Saudi Arabia, Fujairah Water
and Power in the UAE, and ethylene complex in Iran, as well as
the Qchem contract in Qatar which is in the process of being
delivered.

Our operations in Asia Pacific generated sales of
445.2 million
in 2002, or 10.0% of total revenues, a decrease from
560.0 million,
or 15.8% of total revenues in 2001. The decrease in 2002 is
principally the result of the delay in the signature and
commencement of several Onshore/ Downstream contracts. Our
principal contributors to Offshore segment sales in 2002 in this
region were the Cakerawala (CTOC) project in Malaysia, the Lan
Tay (BP) project in Vietnam and the Laminaria Phase II
(WOODSIDE) project in Australia. In the Onshore/ Downstream
segment, the principal contributors to sales were petrochemical
projects in China, Taiwan and Vietnam.

Sales generated from our activities in the
Americas increased significantly during 2002 and amounted to
1,328.5 million,
or 29.8% of total revenues, compared to
835.0 million,
or 23.5% of total revenues, in 2001. Sales in this region are
particularly tied to our Offshore operations in Brazil and the
Gulf of Mexico, with notably contracts for the engineering and
construction of SPAR production platforms for Vastar Horn
Mountain (BP), Gunisson (KERR MCGEE), Holstein (BP) as well as
the integrated turnkey projects Devils Tower (WILLIAMS),
Nakika (SHELL), Falcon (MARINER/ PIONEER) and Bidao (PETROBRAS).
In the Onshore/ Downstream branch, sales in 2002 reflected the
substantial progress on the La Isla refinery in Curaçao
during this period, as well as the Syncrude, HDPE and American
Acryl projects in North America.



| |              
| | -------------
| | Cost of Sales

Our cost of sales was
3,754.8 million
in 2002, compared to
3,094.3 million
in 2001. The major component was payroll, study costs, and
external costs such as equipment purchases and construction
subcontracting. The increase in our costs was principally linked
to our overall level of activity. The Onshore/ Downstream
segment and the Offshore segment each accounted for about 45.5%
of this amount
(1,725.9 million
and
1,715.5 million,
respectively).

61



---



##### Table of Contents





| |                                      
| | -------------------------------------
| | Research and Development
    Expenses

These amounts also include research and
development costs which amounted to
37.4 million
in 2002 compared to
18.3 million
in 2001. The increase between the two periods is primarily due
to the consolidation of Coflexip research and development
expenses for the full year 2002 compared to only three months in
2001.



| |                                                 
| | ------------------------------------------------
| | Selling, General and Administrative
    Expenses

Our selling, general and administrative expenses
during 2002 were
312.5 million
(or 7% of net sales) compared to
149.0 million
(or 4.2% of net sales) incurred in 2001. The increase between
the two periods is primarily due to the consolidation of
Coflexip selling, general and administrative expenses for the
full year 2002 compared to only three months in 2001.



| |       
| | ------
| | EBITDA

The primary operating performance measure for our
business segments is earnings (loss) before accounting for
depreciation of assets, amortization of goodwill, interest, and
income taxes (EBITDA). We believe that EBITDA is useful to
investors and management to demonstrate the operational
profitability of our segments by excluding interest and taxes,
which are generally accounted for across the entire company on a
consolidated basis.

Our earnings before interest, tax, depreciation
and amortization (EBITDA) amounted to
347.6 million
in 2002 compared to
284.4 million
in 2001. The growth in EBITDA resulted from the contribution of
Coflexip as a consolidated entity for the full year 2002
(amounting to
234.1 million
in 2002), offset in part by a reduction of nearly half in the
EBITDA contribution from Onshore/ Downstream and Industrial
activities in the same period.

In 2001 the results of the Deepwater Division
were impacted not only by the non-recurring loss of
27.3 million
incurred on a drilling rig repair contract undertaken by
Coflexip, but also by the delay of several deepwater field
development projects in the Gulf of Mexico and the relatively
low average levels of capacity utilization at its yards in
Newcastle and Corpus Christi.

EBITDA by segment.Below we present EBITDA and EBITDA margins by business segment
for 2002 and 2001. We have defined segment EBITDA margins as
segment EBITDA divided by segment net sales.

Our Offshore segment generated EBITDA of
250.1 million,
with a segment EBITDA margin of 11.8% in 2002, improved from
segment EBITDA of
86.3 million,
with a segment EBITDA margin of 11.9% in 2001. The principal
sources of EBITDA for this segment in 2002 was the consolidation
of Coflexip for the full year for an EBITDA contribution of
234.1 million,
or 94% of the segments EBITDA for the year. The main
driver of EBITDA in 2002 were contracts in the Europe and
Russia/ Central Asia zone.

Our Onshore/ Downstream segment generated EBITDA
of
85.3 million,
with a segment EBITDA margin of 4.4% in 2002, compared to
segment EBITDA income of
189.0 million,
with a segment EBITDA margin of 8.0% in 2001, a decrease in
segment EBITDA of more than half. This substantial drop is
explained on the one hand by the completion of several major
projects on favorable terms in 2001, which allowed us to
recognize strong margins and write back project-specific risk
and technical provisions, and on the other hand by the timing of
our significant order intake in 2002 which did not in many cases
allow for substantial progress to be made during that year. As a
result, our mix of projects-in-course in 2002 was weighted in
favor of projects in the early engineering phases where we tend
not to recognize substantial margins compared to the later
phases in which equipment procurement and construction work are
taking place and project milestones are being met. See
Item 4. Information on Technip 
Description of Our Operations  Execution of a Turnkey
Contract.

Our Industry segment contributed EBITDA of
12.2 million
with a segment EBITDA margin of 3.1% in 2002, as compared to
segment EBITDA of
9.1 million
with a segment EBITDA margin of 1.9% in 2001, an increase in
segment EBITDA of 34%. A major contributing factor to the
increase in segment EBITDA and margin was the difficulty
encountered in 2001 on a turnkey contract in Senegal, compared
to strong results in 2002 driven by our RWE Niederaussem
contract in Germany, ARAMCO contract in Saudi Arabia and
Copebras contact in Brazil.

62



---



##### Table of Contents



EBITDA by geographic
zone.Below we present EBITDA and
EBITDA margins by geographic zone for 2002 and 2001. We have
defined EBITDA margins as EBITDA divided by segment net sales
for a given zone.

In Europe and Russia/ Central Asia, we generated
EBITDA of
148.4 million
in 2002 (11.5% EBITDA margin) compared to
73.2 million
(7.8%) in the preceding year. The increase was due to the
consolidation for the full year in 2002 of Coflexips
activities in this region, including notably in the North Sea,
compared to the consolidation for three months in 2001.

In Africa/ Middle East, we generated EBITDA of
102.9 million
in 2002 (6.9% EBITDA margin) compared to
74.8 million
(6.2%) in the preceding year. This increase reflects notably the
Fujairah, Haradh and Egyptian Naphta contracts in the Middle
East and our Nigeria contracts in Africa.

In Asia Pacific, we generated EBITDA of
22.1 million
in 2002 (5% EBITDA margin) compared to
72.2 million
(12.9%) in the preceding year. The decrease in EBITDA and EBITDA
margin in this region reflects in large part the status of
progress on our PTA and Phu-my contracts.

In the Americas, we generated EBITDA of
74.2 million
in 2002 (5.6% EBITDA margin) compared to
64.2 million
(7.7%) in the preceding year. This growth in EBITDA reflects the
consolidation of Coflexip and its substantial operations in the
Gulf of Mexico and Brazil for the full year 2002 as well as our
La Isla contract in Curaçao, partly offset by the low level
of utilization of our Corpus Christi yard and operational
difficulties at a Coflexip subsidiary based in Houston.



| |                 
| | ----------------
| | Operating Income

Depreciation.Charges for depreciation of assets during 2002 amounted to
143.0 million,
compared to
49.6 million
in 2001. The increase is mainly due to additional depreciation
on the assets acquired from Coflexip in October 2001. Coflexip,
and our Offshore segment generally, generate more significant
depreciation charges than our other business segments because of
their heavy capital investments in construction vessels.

Operating income amounted to
204.6 million
in 2002, compared to
234.8 million
the previous year, a decrease of 13%. The operating margin
(operating income taken as a percent of net sales) declined to
4.6% in 2002 from 6.6% in 2001, primarily as a result of the
decline in the Offshore segment operating margin to 0.5% and the
decline in the operating margin of our other activities to
approximately 3% in 2002. Offshores operating margins were
negatively affected in 2002 by our inability to execute
contracts with CSO Deep Blue during its extensive
outfitting during that year as well as underutilization of our
construction yards. Margins in the rest of the business
reflected the large number of major contracts in the early
phases during which we do not typically recognize strong margins.



| |                 
| | ----------------
| | Financial Result

We had a net financial loss (excluding financial
income on contract installment payments, which we record under
net sales) of
66.9 million
in 2002 compared to
6.5 million
in 2001. The principal factor contributing to this loss was our
higher average debt level in 2002 due primarily to the financing
of the cash portion of our acquisition of Coflexip through
borrowing in late 2001, which we refinanced through the issuance
of OCEANE bonds in January 2002. In 2002 we incurred
27.3 million
in financial expense related to our OCEANE bonds including a
16.9 million
as redemption premium amortization. Other factors contributing
to this net financial loss were financial expense of
10.8 million
in connection with short-term notes, and exchange rate related
losses of
12.9 million
relating to Coflexip. This line item does not include financial
revenue on positive cash balances of individual contracts, which
we account for under net sales. In 2002 and 2001 financial
revenues from these sources contributed
14.0 million
and
17.0 million,
respectively, to our net sales.



| |                            
| | ---------------------------
| | Income of Equity Affiliates

We had no income from equity affiliates in 2002
compared to
15.6 million
in 2001. The change reflects principally the full consolidation
of Coflexip and the disposal of a number of non-strategic
minority holdings. The principal equity affiliates contributing
income to this item in 2001 were Coflexip with a contribution of
14.4 million
in 2001 and Ipedex, a subsidiary which provides maintenance and
operations for oil and gas

63



---



##### Table of Contents



companies. Coflexip was accounted for under the
equity method from April 2000 until September 30, 2001. In
the beginning of October 1, 2001 we consolidated its
operations following the successful completion of the Coflexip
and ISIS exchange offers. We sold our 46% interest in Ipedex in
a management buy-out in 2002.




| |                   
| | ------------------
| | Non-operating Loss

We recorded a non-operating loss of
6.9 million
in 2002 compared to a non-operating loss in 2001 of
6.6 million.
In 2001 our non-operating loss was primarily the result of the
dilution of our interest in Coflexip prior to the business
combination as well as restructuring charges related to EHR GmbH
and other expenses. Coflexip did not contribute to our
non-operating loss of 2001. The non-operating loss in 2002 was
primarily derived from restructuring costs of
7.0 million
and exceptional losses of
8.7 million
related to non recurring losses occurred on former contracts,
offset by
6.2 million
in tax credits awarded by the Italian tax authorities and gains
on asset sales of
5.6 million
related to our disposal of shares of Ipedex and Rintekno.



| |           
| | ----------
| | Income Tax

Our income tax for 2002 amounted to
46.3 million,
compared to
65.5 million
in 2001. Compared to the generally applicable French corporate
income tax rate of 35.43% for 2002 and 36.66% for 2001, our
effective income tax rate amounted to 33.53% in 2002 and 30.36%
in 2001.



| |                   
| | ------------------
| | Minority Interests

Minority interests in our earnings amounted to
3.9 million
in 2002 compared to
2.4 million
in 2001. Minority interests in 2002 were principally
attributable to our Indian subsidiary SEAMEC.

Goodwill amortization amounted to
117.8 million
in 2002 compared to
61.3 million
in 2001. This increase comes from the fact that goodwill
resulting from the Coflexip and ISIS acquisitions was amortized
over a three-month period in 2001 (since October 1, 2001).
In 2002, this goodwill was amortized over the full twelve-month
period.

As a result of the reduced expectations of future
cash flows from the Deepwater Division, Coflexip had recorded in
2001 an amortization charge of
142.6 million
relating to the Deepwater Division acquisition goodwill carried
on its balance sheet. This charge did not have a negative effect
on our consolidated results for the year.



| |                  
| | -----------------
| | Net Income (loss)

Our consolidated net loss for 2002 was
29.4 million,
compared to net income of
108.1 million
in 2001.

Net income before non-operating items and
amortization of goodwill upon acquisition represents a profit of
95.3 million
in 2002 compared to a profit of
176.0 million
in 2001, or a decrease of 45.9%. On this basis, earning before
non-operating items and goodwill amortization per diluted share
in 2002 amounted to
3.91 in 2002
compared to 6.93
in 2001. The diluted per share results in 2002 are affected by
the issuance of exchangeable/ convertible bonds (OCEANE) in
January 2002. The calculation of diluted per share information
assumes the restatement of convertible bonds redemption premium
amortization and the related financial costs after tax. 2002
diluted per share information does not take into account options
in our 2003 plan which were not attributed at December 31,
2002.

Cash Flows



| |                      
| | ---------------------
| | 2003 compared to 2002

Cash flow from operating
activities.We recorded positive cash
flow from operating activities of
348.7 million
in 2003 compared to positive cash flow from operating activities
in 2002 of
432.8 million.

In 2003, amortization and depreciation of
tangible and intangible assets (including goodwill) totaled
231.6 million,
compared to
260.8 million
in 2002. The decrease in amortization and depreciation is mainly
due to the changes in the scope of consolidation, to the change
in the vessels estimated life on the basis of an

64



---



##### Table of Contents



independent experts report, and to a lesser
extent due to decreased amortization of goodwill resulting from
acquisitions. Additionally, amortization of the redemption
premium related to the OCEANE bonds amounted to
16.1 million
in 2003 compared to
16.9 million
in 2002.


Cash flow from operating activities deducts
income of equity affiliates (net of dividends) from net income,
which was
(1.1) million
in 2003 compared to zero in 2002. Cash flow from operating
activities also deducts gain on disposal of fixed and financial
assets, which was a loss of
0.3 million
in 2003 compared to a gain of
10.7 million
in 2002. In 2003, the loss comes from the disposal of Unirig Pty
Ltd. shares less the net gain on the building sale. The
principal source of gain upon disposal in 2002 was the sale of
shares in Ipedex and Rintekno.

Net changes in operating assets and liabilities
had a positive impact of
119.4 million
compared to
192.9 million
in 2002 on the Group cash.

Cash flow from investing
activities.Net cash provided from
investing activities was
11.0 million
compared to
18.7 million
in 2002. Total capital expenditures on intangible assets,
property, plant and equipment, and cash paid for acquired
businesses were
126.0 million
in 2003, compared to
126.2 million
in 2002.

Proceeds from the disposal of fixed assets and
investments amounted to
106.7 million
in 2003 compared to
143.2 million
in 2002. These amounts in 2003 represented the CB3 building sale
for
100 million
and the disposal of Unirig Pty Ltd. shares. Proceeds were in
2002 derived mainly from the disposal of Coflexips former
headquarter facilities, the sale of the Well Operations
activities and the disposal of our shares of Novasep as part of
the ISIS merger. Moreover, during the first half-year, Coflexip
and Aker Maritime reached an agreement regarding the purchase
price adjustment mechanisms stipulated in the contract following
the acquisition of Aker Maritimes Deepwater Division
leading to a
38.2 million
purchase price reduction (corresponding to the amount received
in 2003 on a total of
40.7 million
granted). This reduction leads to a decrease in the goodwill
recorded in the accounts.

Cash increase from changes in scope of
consolidation represents the cash balances of companies acquired
or disposed of, measured as of the date of acquisition or
disposal and was an increase of
7.9 million
in 2003 compared to a decrease of
1.7 million
in 2002. In 2003, this amount represents the cash from the
disposal of Unirig Pty Ltd and the 20% interests purchased by
the Group in order to raise its stake in SEAMEC (India).

Cash flow from financing
activities.Net cash used in financing
activities totaled
169.8 million
in 2003 compared to
436.1 million
used by financing activities in 2002. In 2003, this amount
related primarily to the redemption of convertible bonds for an
amount of
49.8 million
and a lesser use of short-term commercial paper. Other financing
activities using cash in 2003 were our payment of a dividend
amounting to
77.3 million
and
6.5 million
in treasury share buy backs.



| |                      
| | ---------------------
| | 2002 compared to 2001

Cash flow from operating
activities.We recorded positive cash
flow from operating activities of
432.8 million
in 2002 compared to positive cash flow from operating activities
in 2001 of
112.0 million.

In 2002, amortization and depreciation of
tangible and intangible assets (including goodwill) totaled
260.8 million,
compared to
110.9 million
in 2001. The increase in amortization and depreciation is mainly
due to the increased amortization of tangible assets (pipelaying
vessels, plants and facilities) in the fourth quarter of 2001
and full year 2002 due to the full consolidation of Coflexip
after the takeover bid, and to a lesser extent due to increased
amortization of goodwill resulting from acquisitions.
Additionally, amortization of the reimbursement premium related
to the OCEANE bonds amounted to
16.9 million
in 2002.

Cash flow from operating activities deducts
income of equity affiliates (net of dividends) from net income,
which was zero in 2002 compared to a deduction of
7.5 million
in 2001. The change in 2002 is almost entirely due to the full
consolidation of Coflexip in 2002 versus equity method for the
first three quarters in 2001. Cash flow from operating
activities also deducts gain on disposal of fixed and financial
assets, which was
10.7 million
in 2002 and
2.8 million
in 2001. The principal source of gain upon disposal in 2002 was
the sale of shares in Ipedex and Rintekno.

65



---



##### Table of Contents



Net changes in operating assets and liabilities
had a positive impact of
192.9 million
in 2002 compared to a negative impact of
(101.2) million
in 2001. This is due to significant progress payments on
starting contracts.

Cash flow from investing
activities.Net cash from investing
activities was
18.7 million
in 2002 compared to
(660.3) million
used in 2001. Total capital expenditures on intangible assets,
property, plant and equipment, and cash paid for acquired
businesses were
1,106.9 million
in 2001, compared to
126.2 million
in 2002. The significant item in 2001 was the acquisition of
5,000,000 shares of Coflexip for cash in October 2001 (total
consideration of
1,040 million
and related expenses of
45 million)
in the context of the business combination.

Proceeds from the disposal of fixed assets and
investments amounted to
143.2 million
in 2002 compared to
213.8 million
in 2001. Proceeds were in 2002 derived mainly from the disposal
of Coflexips former headquarter facilities, the sale of
the Well Operations activities and the disposal of our shares of
Novasep as part of the ISIS merger. The principal contribution
in 2001 was the sale of substantially all of ISISs assets
(other than shares of Coflexip, Compagnie Générale de
Géophysique and us) to IFP for total consideration of
205 million
subsequent to our acquisition of ISIS in October 2001 through an
exchange offer conducted in the context of the business
combination.

Cash increase from changes in scope of
consolidation represents the cash balances of companies acquired
or disposed of, measured as of the date of acquisition or
disposal and was
1.7 million
in 2002 and
232.8 million
in 2001. These amounts in 2001 represented cash acquired through
the business combination in the amount of
241.5 million,
partially offset by
(12.3) million
deconsolidated upon our disposal of our subsidiary Chemoprojekt.

Cash flow from financing
activities.Net cash used in financing
activities totaled
436.1 million
in 2002 compared to
763.4 million
provided by financing activities in 2001. In 2002, this amount
related primarily to the reimbursement of
944 million
of the financing in Coflexip acquisition partially offset by our
OCEANE bond issue which provided cash of
793.5 million.
Other financing activities using cash in 2002 were our payment
of a dividend amounting to
79.7 million
and
45.7 million
in treasury share buy backs.

Liquidity and Capital Resources

Our main needs for capital are the funding of
ongoing operations, capital expenditures, and acquisitions. We
have financed our needs with cash flow from operations,
borrowings under bank facilities and our offerings of senior
notes. We believe that net cash provided by operating
activities, the additional financial resources generated by the
issuance of our senior notes and available borrowing under bank
facilities will be sufficient to meet our liquidity needs for
the foreseeable future.

We estimate capital expenditures for our fiscal
year 2004 will approximate
131 million.
Our budgeted investments will be principally
110 million
to 112 million in the Offshore Segment. Capital
expenditures amounted to
122.7 million
in 2003, compared to a budgeted
122 million
for the year.

66



---



##### Table of Contents



We define our working capital requirements as
indicated in the table below. Our definition of working capital
requirements may not be comparable to the definition of working
capital requirements employed by other companies.

|                                        |  |                      |          |   |      |  |          |      |  |  |          |  
|--------------------------------------- |  | -------------------- | -------- | - | ---- |  | -------- | ---- |  |  | -------- | -
|                                        |  |                     
|                                        |  | December 31,         |         
|                                        |  |                      |         
|                                        |  | 2003                 |          |   | 2002 |  |          | 2001 | 
|                                        |  |                      |          |   |      |  |          |      | 
|                                        |  |                     
|                                        |  | (in millions of EUR) |         
|Contracts-in-progress                   |  |                      | 6,368.2  |   |      |  | 4,896.2  |      |  |  | 6,313.6  |  
|Inventories and deferred bid costs, net |  |                      | 73.6     |   |      |  | 80.8     |      |  |  | 111.9    |  
|Advances to suppliers                   |  |                      | 244.6    |   |      |  | 122.5    |      |  |  | 98.0     |  
|Accounts and notes receivables, net     |  |                      | 755.6    |   |      |  | 725.6    |      |  |  | 605.9    |  
|Other current assets, net               |  |                      | 427.7    |   |      |  | 521.6    |      |  |  | 418.1    |  
|Less:                                   |  |                      |          |   |      |  |          |      |  |  |          |  
|Retirement indemnities                  |  |                      | (89.3    | ) |      |  | (86.3    | )    |  |  | (80.1    | )
|Accrued liabilities                     |  |                      | (234.8   | ) |      |  | (242.5   | )    |  |  | (257.5   | )
|Progress payments on contracts          |  |                      | (7,047.8 | ) |      |  | (5,420.2 | )    |  |  | (6,472.5 | )
|Accounts and notes payable              |  |                      | (783.1   | ) |      |  | (720.8   | )    |  |  | (770.8   | )
|Other creditors                         |  |                      | (691.9   | ) |      |  | (756.1   | )    |  |  | (662.3   | )
|                                        |  |                      |          |   |      |  |          |      | 
|Working capital requirements            |  |                      | (977.2   | ) |      |  | (879.2   | )    |  |  | (695.7   | )
|                                        |  |                      |          |   |      |  |          |      | 

Our working capital requirement at
December 31, 2003 was
(977.2) million,
compared with
(879.2) million
at December 31, 2002 and
(695.7) at
December 31, 2001. The increase in working capital
requirements from 2001 to 2003 was primarily due to increased
overall activity levels and resulting operating cash flows. Our
capital expenditures and cash paid for acquired businesses in
2003 was
126.0 million
compared with
126.2 million
in 2002 and
1,106.9 million
in 2001. The increase in 2001 was primarily due to the cash
payment to Coflexip shareholders in the tender offer. In 2002,
disposals of
143.2 million
helped to offset expenditures and concerned principally Coflexip
assets (Wellops, McNulty and former headquarters). In 2003,
disposal of assets amounted to
106.4 million,
and include
100 million
on our former headquarters building sale.

Net cash flow from operating activities was
348.7 million
in 2003 compared to
432.8 million
in 2002 and
112.0 million
in 2001. See  Cash Flows above. Our cash
and cash equivalents increased by
151.3 million
to
892.4 million
from
741.1 million
at the end of 2002 and
763.4 million
at the end of 2001. See  Cash Flows,
above. Our cash in-hand and access to other sources of funds is
sufficient to meet our anticipated operating and capital
expenditure requirements.

Contracts-in-progress, which represents the
aggregate value of all our work-to-date recorded under current
contracts (including turnkey and cost plus service contracts)
and includes all invoiced equipment, supply and labor costs as
well as a share of the estimated final contract margin,
increased to
6,368.2 million
at December 31, 2003 from
4,896.2 million
at December 31, 2002 and slightly higher than the
6,313.6 million
recorded at December 31, 2001. Contracts-in-progress
include mainly turnkey or similar contract. These contracts are
funded by partial payments invoiced to the customers. At
December 31, 2003, progress payments received on ongoing
projects amounted to
7,047.8 compared
to
5,420.2 million
at December 31, 2002 and
6,472.5 million
at December 31, 2001.

Our inventories and deferred bid costs at
December 31, 2003 amounted to
73.6 million
compared to
80.8 million
at December 31, 2002 and
111.9 million
at December 31, 2001. Inventories and deferred bid costs
reflect principally
(67.0 million
in 2003) the flexible piping and other manufacturing activities
of our Offshore segment.

Shareholders equity at December 31,
2003, before distribution of dividends related to the profit for
the year, was
1,938.0 million,
compared to
2,026.3 million,
at December 31, 2002. In total, our management believes
that shareholders equity is adequate to finance our fixed
assets and provides a sound financial basis for the Group.

67



---



##### Table of Contents



Our total accrued liabilities and retirement
indemnities amounted to
324.1 million
at December 31, 2003,
328.8 million
at December 31, 2002, and
338.6 million
at December 31, 2001, and provide coverage for contract
risks, risks associated with litigation, pension costs and
general business risks.

At December 31, 2003, the Group had unused
and confirmed multicurrency credit lines of approximately
931 million
(excluding a
200 million
credit facility which purpose is restricted to refinance some of
the outstanding debt). Approximately
547 million
of this amount is available beyond December 31, 2004. At
year-end 2003, we had outstanding commercial paper (one to
three month maturity) in a principal amount of
205 million
under a program registered with the French Central
Bank and authorized in a maximum amount of
600 million.
We believe that these, together with cash on hand and marketable
securities, provide us with adequate operating liquidity. On
April 29, 2004 Technip raised a
850 million
new bank revolving facility with a five year facility to
replace two of the authorized unused and confirmed credit lines.
As a result, the Group had unused and confirmed multicurrency
credit lines of approximately
1,068 million,
of which approximately
734 million
is available beyond December 31, 2004.

On May 19, 2004, Technip launched the issue
of a
650 million
seven year bond maturing on May 26, 2011 with a 4.625%
interest rate. The bond issue purpose is for general corporate
needs with a view to reinforcing the Groups financial
structure without waiting for the January 1, 2007 maturity
of its outstanding convertible bond by taking advantage of the
historically low long-term interest rate environment.

At December 31, 2003, our non-current assets
amounted to
3,246.0 million,
including fixed assets of
738.5 million,
consisting principally of our construction fleet
(403.0 million)
and property used for office space and production. At
December 31, 2002, non-current assets amounted to
3,518.2 million.
Our fixed assets amounted to
861.1 million
at that date and consisted principally of our construction fleet
(429.4 million)
and property used for office space and production. See
Item 4. Information on Technip  Property,
Plant and Equipment.

At December 31, 2003 our total financial
debt amounted to
1,129.5 million,
of which the current portion totaled
226.3 million.
This financial debt amount does not include
84.5 million
in reserves for the redemption premium of our convertible bonds
described below. The current portion of our financial debt is
composed of
205 million
of commercial paper, the current portion of other long-term debt
of
5.7 million,
and
8.4 million
in overdrafts and short-term lines of credit and accrued
interest on convertible bonds of
7.2 million.
As of December 31, 2003, our long-term financial debt
amounted to
903.2 million,
and is comprised principally of our convertible bonds of
715.5 million
(after repurchase in 2002 and 2003), as well as
U.S.$141 million outstanding amount of the credit facility,
obtained for the Aker Maritime Deepwater Division acquisition
and the U.S.$87 million outstanding debt used for the
financing of some of the convertible bond repurchase. For
additional information regarding our convertible bonds see
Note 22(a) to our Consolidated Financial Statements and
Exhibit 10.1 hereto. Approximately 80% of our long-term
debt is denominated in euro, with the remainder principally in
U.S. dollars.

At December 31, 2002 our total financial
debt amounted to
1,247.1 million,
of which the current portion totaled
297.0 million.
This financial debt amount did not include
90.4 million
in reserves for the redemption premium of our convertible bonds
described below. The current portion of our financial debt is
composed of
276 million
of commercial paper, the current portion long-term debt for
13.1 million,
and
7.9 million
in overdrafts and short-term lines of credit. Our long-term
financial debt reflects the refinanced portion of significant
financial debt that we incurred in connection with the Coflexip
exchange offer and the ISIS exchange offer,
U.S.$174 million in debt incurred in connection with the
acquisition of the Deepwater Division, as well as a
U.S.$13.7 million loan taken out in connection with the
Sunrise project. In the first quarter of 2002, we reimbursed
778.9 million
of the principal amount of the acquisition financing using the
net proceeds of bonds convertible into new shares and/or
exchangeable for existing shares aggregate principal amount at
issuance of our exchangeable/ convertible bonds was
793.5 million,
which carries a 1% coupon and has a 3.25% yield to maturity on
January 1, 2007, assuming no conversion or exchange.

At December 31, 2001, our financial debt
amounted to
1,638.9 million,
of which
456.7 million
was short-term borrowings to optimize our treasury management.
184.5 million
of these short-term borrowings were in the form of a revolving
program of commercial paper having a maturity of less than three
months. An additional

68



---



##### Table of Contents



222.5 million
consisted of the current portion of long-term debt incurred in
various of our past acquisitions. Refundable advances
represented substantially all of our remaining financial debt at
that date. Most of our financial debt at this date was
denominated in euro or in euro-zone currencies, although
approximately 26.4% of our financial debt was denominated in
U.S. dollars reflecting Coflexips financing of the
acquisition of the Deepwater Division from Aker Maritime. The
non-current portion of our long-term debt totaled
1,182.2 million
as of December 31, 2001.


Contractual Obligations and Other
Commitments

A review of our debt and equity should consider
contractual obligations and commitments both reflected directly
on our balance sheet and those that are not. These amounts
together with our balance sheet debt are summarized as of
December 31, 2003, in the table below.

|                        |  |                        |       |  |                 |  |       |           |  |  |            |  |  |  |       | 
|----------------------- |  | ---------------------- | ----- |  | --------------- |  | ----- | --------- |  |  | ---------- |  |  |  | ----- | 
|                        |  |                        |       | 
|                        |  | Balance as of year end |       |  | Payments due in | 
|                        |  |                        |       |  |                 | 
|Contractual obligations |  | 2003                   |       |  | 2004            |  |       | 2005-2007 |  |  | After 2007 | 
|                        |  |                        |       |  |                 |  |       |           |  |  |            | 
|                        |  |                       
|                        |  | (in millions of EUR)   |      
|Short Term Debt         |  |                        | 226.3 |  |                 |  | 226.3 |           |  |  |           |  |  |  |      | 
|Long-term Debt          |  |                        | 903.2 |  |                 |  |      |           |  |  | 899.6      |  |  |  | 3.6   | 
|Operating Leases        |  |                        | 398.2 |  |                 |  | 48.5  |           |  |  | 132.2      |  |  |  | 217.4 | 
|Capital Leases          |  |                        | 2.6   |  |                 |  | 1.6   |           |  |  | 1.0        |  |  |  |      | 
|Purchase Obligations(1) |  |                        |      |  |                 |  |      |           |  |  |           |  |  |  |      | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The purchase obligations disclosed above do not
    include purchase obligations that we enter into with our vendors
    in the normal course of our contracts that support existing
    contracting arrangements with its customers. Purchase
    obligations with our vendors can span several years depending on
    the duration of the projects. In general, the costs associated
    with the purchase obligations are expensed as the revenue is
    earned on the related projects.

|                                                              |  |               |          | 
|------------------------------------------------------------- |  | ------------- | -------- | 
|                                                              |  | Balance as of |         
|Other Commitments                                             |  | year end 2003 |         
|                                                              |  |               |         
|Buy currency, sell national currency (forwards
    and swaps) |  |               | 504.4*   | 
|Sell currency, buy national currency (forwards
    and swaps) |  |               | 1,404.3* | 
|Sell/Buy foreign currencies                                   |  |               | 299.0*   | 





| |   |               
| | - | --------------
| | * | Nominal value.

Off-Balance Sheet Financing
Arrangements

In addition to the above-referenced contractual
obligations, we have additional contractual and other
commitments not necessarily reflected on our consolidated
balance sheet, which are summarized in the table below as of
December 31, 2003.

|                                  |  |                      |          |  |          |  |         |             |  |  |            |  |  |  |         | 
|--------------------------------- |  | -------------------- | -------- |  | -------- |  | ------- | ----------- |  |  | ---------- |  |  |  | ------- | 
|                                  |  |                      |          | 
|                                  |  | Total as of year end |          |  | Payments | 
|                                  |  |                      |          |  |          | 
|                                  |  | 2003                 |          |  | 2004     |  |         | 2005  2007 |  |  | After 2007 | 
|                                  |  |                      |          |  |          |  |         |             |  |  |            | 
|Foreign exchange rate instruments |  |                      | 2,205.7  |  |          |  | 1,856.5 |             |  |  | 349.2      |  |  |  |        | 
|Interest rate instruments         |  |                      | 180.5    |  |          |  | 94.2    |             |  |  | 86.3       |  |  |  |        | 
|Parent company guarantees         |  |                      | 10,729.4 |  |          |  | 5,925.7 |             |  |  | 2,114.3    |  |  |  | 2,689.4 | 
|Others commitments given          |  |                      | 1,609.7  |  |          |  | 523.5   |             |  |  | 659.7      |  |  |  | 426.6   | 
|Total commitments given           |  |                      | 12,339.1 |  |          |  | 6,449.2 |             |  |  | 2,774.0    |  |  |  | 3,116.0 | 
|Total commitments received        |  |                      | 592.5    |  |          |  | 199.2   |             |  |  | 288.9      |  |  |  | 104.4   | 

69



---



##### Table of Contents



Guarantees Related to Contracts

Guarantees related to contracts are mainly made
up of performance bonds, which are usually not for the full
amount of the maximum theoretical contractual liability but are
subject to individual negotiation. Performance bonds would
usually be released partially upon delivery of the contract
(provisional acceptance by the customer), the remainder being
released at the final acceptance by the customer.

When circumstances arise that result in the
threat of calling a bond, then we seek to negotiate acceptable
alternative arrangements. Bonds are typically called when there
is no other remedy acceptable to our customer. Our experience to
date has been that bonds are very rarely called. In general, we
establish provisions to cover any anticipated loss that could
arise from our contractual obligations.

Parent Guarantees to Clients

Parent guarantees are given in the normal course
of the Groups businesses by Technip Holding, Technip
Offshore International, Technip Offshore UK Holding Ltd or
Technip Coflexip USA Holding Inc to customers to cover the good
performance of a contract awarded to one of our subsidiaries.
They would be usually released at the end of the contract.

Other Material Financial Elements

Policies of the Organization of Petroleum
Exporting Countries (OPEC) could affect our operations or the
investments by our shareholders. Petroleum industry operations
and profitability are influenced by many factors some of which
our clients cannot control. Prices for crude oil and natural
gas, petroleum products and petrochemicals are determined by
supply and demand for these commodities. OPEC member countries
are typically the worlds swing producers of crude oil, and
their production levels are a major factor in determining
worldwide supply. For example, OPECs implementation of
production cutbacks to eliminate excess supply of crude oil for
world markets results in price increases of crude oil.

For information on how ILSA may affect our
operations or the investments by our shareholders, please see
Item 4. Information on Technip 
Geographical and Segment Breakdown of Net Sales and
Backlog  Special Geographic Considerations.

Transition to International Financial
Reporting Standards (IFRS)

Within the framework of the European Unions
adoption of international accounting standards, all European
companies listed on regulated exchanges must prepare as from
January 1, 2005 their consolidated financial statements in
accordance with IFRS standards. Currently, all of the IFRS
accounting standards have not been finalized, nor is it clear
whether all such standards will have been released and endorsed
by the European Commission by the 2005 deadline. The eventual
transition from French GAAP to IFRS will be made in compliance
with IFRS 1, First-Time Adoption of IFRS, which provides
guidance on retroactive application and outlines certain
exemptions and exceptions.

In order to meet the implementation timeframes in
the best possible conditions, we have taken a certain number of
steps whose main characteristics are presented below.

A preliminary stage of analysis of IFRS
standards was initiated in 2003 and its conclusion allowed
us to identify the main differences between French GAAP that we
currently apply and IFRS standards. A summary of the work done
during this preliminary stage was submitted to the audit
committee of our board of directors on December 16, 2003.

The timetable to implement the IFRS standards
during 2004 and 2005 is as follows:



| |                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | From January to May 2004, our management will
    resolve upon accounting policies in accordance with IFRS
    standards and will conduct simulations to evaluate the impact on
    our accounts as of December 31, 2003 prepared according to
    French GAAP.

70



---



##### Table of Contents





| |                                                                                                                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In 2004, the finance departments of our Group
    will prepare two sets of quarterly accounts according to French
    GAAP and IFRS standards (not for publication) to allow for us to
    publish comparative quarterly accounts in 2005.
|
| | At the close of the 2004 financial year, we will
    be prepared to present our consolidated financial statements,
    including notes thereto, in our annual report according to both
    standards (French GAAP and IFRS).              
|
| | The first quarter results for 2005 will be
    prepared and published according to the new standards in May
    2005 and compared to the first quarter results for 2004 restated
    pursuant to IFRS norms.                              

The main differences already identified between
IFRS standards and currently applicable French GAAP accounting
policies are listed below:



| |                                                       
| | ------------------------------------------------------
| | Presentation of consolidated financial
    statements:



| |   |                                                                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Statement of operations: Omission of
    depreciation and amortization other than goodwill
    line item.                                                                   
|
| |  | Reflecting in our balance sheet the gradual
    payments of our customers offset by the amounts due pursuant to
    each stage of the contract (contracts-in-progress).       
|
| |  | Presentation of main segment analyses within each
    Branch (Offshore Surf, Offshore Floaters, Onshore Downstream,
    Industries and Corporate).                            
|
| |  | Presentation of a secondary segment analysis by
    geographic zone (Europe-Russia-Central Asia; Africa-Middle East;
    Asia-Pacific; the Americas and Seas for the Vessels).



| |                                                           
| | ----------------------------------------------------------
| | Main impacts on the consolidated financial
    statements:



| |   |                                                                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Goodwill:the
    depreciation of goodwill is likely to be omitted with the
    adoption of the IFRS standards (IFRS 3). According to IAS 36,
    this will be replaced by impairment tests for assets and
    goodwill.
|
| |  | OCEANEs: accounting for the issuance of bonds
    known as OCEANEs by separately accounting for the
    debt component and the shareholders
    equity component retrospectively.                                 
|
| |  | Transactions in foreign currencies: accounting
    for spot transactions and accounting for hedging instruments in
    the balance sheet.                                                                              

The application of IAS 19 on retirement
provisions and related benefits will have a material impact on
equity at the time of the adoption of IFRS standards.

71



---



##### Table of Contents






Item 6.     Directors,
Senior Management and Employees

For all of the year ended December 31, 2002,
our corporate management structure, consistent with our
incorporation as a French société anonyme à
directoire et conseil de surveillance, was comprised of a
supervisory board elected by our shareholders and a management
board elected by the members of our supervisory board. On
April 11, 2003, at an extraordinary general meeting, our
shareholders resolved to amend our corporate articles of
association (statuts) to change our corporate form to a
société anonyme à conseil
dadministration. As a result of this amendment, a
single unified board of directors replaced our supervisory and
management boards as of that date. References in this report to
our board of directors are to the body that was instituted on
April 11, 2003, and references to our supervisory board and
management board are to our corporate governance bodies before
that date.

Directors and Officers



| |                       
| | ----------------------
| | Our Board of Directors

In accordance with French law governing a
société anonyme, a form of limited liability
company, the Companys affairs are managed by its board of
directors, or conseil dadministration, and by its
Chairman and Chief Executive Officer, who has full executive
authority to manage the affairs of the Company, subject to the
prior authorization of the board of directors or of the
Companys shareholders for certain decisions specified by
law.

Under French company law, the board of directors
may elect one person to assume the position of Chairman and
Chief Executive Officer or split these functions between two
different persons (either the Chairman of the Board or another
natural person bearing the title of Chief Executive Officer or
Directeur Général). The Companys articles
of association, or statuts, were modified at the
Extraordinary Shareholders Meeting of April 11, 2003
to provide for such a choice. According to the Companys
statuts, the choice is made by the board of directors
deciding with a majority of all members. The board of directors
has decided not to split these two functions, which are
currently performed by the same person. For further information
on the powers of our board of directors, see Item 10.
Additional Information  Articles of Association
(Statuts)  Directors.

The majority of the 11 members of our board are
independent directors under the recommendations on corporate
governance contained in the report of the AFEP-MEDEF issued in
October 2003 (the AFEP-MEDEF report), summarizing
the principles set forth in the Bouton report issued in
September 2002, and in the previous 1995 and 1999 Viénot
reports. Four of our 11 members of our board are of a
nationality other than French. The definition of
independence in the AFEP-MEDEF report differs from
standards applicable for U.S. companies listed on the NYSE.
Other corporate governance standards and practices differ in
France than those practiced by U.S. companies listed on the
NYSE. The members of our board are:

|                          |  |             |      |  |                   |                       |                   |                                                                                                                                                                                                                                                                                                                                             
|------------------------- |  | ----------- | ---- |  | ----------------- | --------------------- | ----------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                          |  | Initial     |      |  | Responsibility on |                       |                  
|Name, Age, Citizenship(1) |  | Appointment |      |  | Board             |                       | Outside Positions
|                          |  |             |      |  |                   |                       |                  
|Daniel Valot (59)         |  |             | 1999 |  |                   | Chairman of the Board |                   | Chairman of Technip Far East (Malaysia), Chairman
    of the Board of Directors of Technip Italy, Vice-Chairman of
    Technip Americas Corp., Permanent representative of Technip on
    the Board of Technip France, Director of Compagnie
    Générale de Géophysique and Director of the
    Institut Français du Pétrole (IFP) and SCOR
|                         
|Olivier Appert (55)       |  |             | 2003 |  |                   | Director              |                   | President of the Institut Français du
    Pétrole (IFP), Director of Compagnie Générale de
    Géophysique and the Institut de Physique du Globe de Paris                                                                                                                                                                                   

72



---



##### Table of Contents



|                           |                  |             |      |  |                   |          |                   |                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                       
|-------------------------- | ---------------- | ----------- | ---- |  | ----------------- | -------- | ----------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------
|                           |                  | Initial     |      |  | Responsibility on |          |                  
|Name, Age, Citizenship(1)  |                  | Appointment |      |  | Board             |          | Outside Positions
|                           |                  |             |      |  |                   |          |                  
|Roger Cairns (61)          |                  |             | 2001 |  |                   | Director |                   | Chairman & CEO of Cedar International plc                                                                                                                                                                                                                                                                                                                                                                                            
|                           | (United Kingdom) |             |      |  |                   |          |                   |                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                       
|                          
|Miguel Caparros (60)       |                  |             | 1995 |  |                   | Director |                   | Director of C4W (Spain)                                                                                                                                                                                                                                                                                                                                                                                                              
|                          
|Jacques Deyirmendjian (60) |                  |             | 2001 |  |                   | Director |                   | Chairman of the Board of Directors of GDF
    International, Director of the Institut du Pétrole (IFP),
    Member of the Supervisory Board of GASAG (Germany), Member of
    the Supervisory Board of SPP (Slovakia) and Director of Fingaz
    (Switzerland)                                                                                                                                                                       
|                          
|Jean-Pierre Lamoure (55)   |                  |             | 1998 |  |                   | Director |                   | Director of the Institut Français du
    Pétrole (IFP), Chairman of the Board of Directors of Psila
    and Soletanche-Bachy Enterprises, Bachy Soletanche Holdings Ltd,
    Chairman of the Supervisory Board of Atlantic SFDT SA, Member of
    the Management Board of SEDECO SA and Fortis Banque France,
    Director and Vice Chairman of the National Federation of Public
    Works and Managing Director of Compagnie du Sol
|                          
|Daniel Lebègue (61)        |                  |             | 2003 |  |                   | Director |                   | Director of Gaz de France, Thales, Alcatel and
    SCOR, Supervisory Board member of Areva and Co-Chair of Eurofi                                                                                                                                                                                                                                                                                                                    
|                          
|Roger Milgrim (67)         |                  |             | 2001 |  |                   | Director |                   | Partner of Paul, Hastings, Janofsky &                                                                                                                                                                                                                                                                                                                                                                                                
|                           | (United States)  |             |      |  |                   |          |                   |                                                                                                                                                                                                                                                                                                                                                                                                                                       | Walker LLP, Member of the Board of Advisors of
    Unistates and Director of the Fulbright Association
|Rolf-Erik Rolfsen (63)     |                  |             | 2001 |  |                   | Director |                   | Director of Gaz de France Norge AS                                                                                                                                                                                                                                                                                                                                                                                                   
|                           | (Norway)         |             |      |  |                   |          |                   |                                                                                                                                                                                                                                                                                                                                                                                                                                       | and Petroleum GeoServices A.S.A                                                                       
|                          
|Pierre Vaillaud (69)       |                  |             | 1992 |  |                   | Director |                   | Director of Total, Member of the Supervisory
    Board of Oddo Pinatton and Member of the Supervisory Board of
    Cegelec                                                                                                                                                                                                                                                                                                           
|                          
|Bruno Weymuller (55)       |                  |             | 1995 |  |                   | Director |                   | Executive Vice President and President of
    Strategy and Risk Assessment of Total, Director of Elf
    Aquitaine, Sanofi-Synthelabo and Total E.P. France                                                                                                                                                                                                                                                                          



---



|    |                                                                      
|--- | ---------------------------------------------------------------------
|(1) | Unless noted otherwise, our board members are
    citizens of France.

Our board of directors met seven times since
April 11, 2003 (when the Companys change of corporate
form became effective).

73



---



##### Table of Contents





| |                                          
| | -----------------------------------------
| | Biographies of Our Board of
    Directors

Daniel Valot.Mr. Valot is Chairman of the Board of Directors of Technip.
In addition to being the Chief Executive Officer of Technip, he
is the Chairman of Technip Italy, Technip Far East (Malaysia)
and Vice-Chairman of Technip Americas and serves on the boards
of directors of Technip France, CGG, SCOR and IFP. Prior to
joining Technip in 1999, Mr. Valot was President of
TotalFina Exploration and Production. He joined the Total Group
in 1981 where he also held the posts of Deputy Finance Manager
of Total, Finance Manager of the Total Chemical Division and
Chairman and Chief Executive Officer of Total Petroleum North
America. Mr. Valot is a graduate of the Institut
dEtudes Politiques de Paris (Paris Institute of
Political Science) and the Ecole Nationale
dAdministration (National School of Administration).

Pierre Vaillaud.Mr. Vaillaud retired in 2000. He is the former Chairman and
Chief Executive Officer of Technip, which he led from 1992 to
1999, and Elf Aquitaine, which he led from 1999 to 2000. He also
serves on the Boards of Cegelec and Oddo Pinatton.

Miguel Caparros.Mr. Caparros is retired. He has served as director at
Technip since 1995. He is also a director at C4W and an
independent scholar of the Institut de Paléontologie
Humaine (Institute of Human Paleontology) From 1992 to 1998,
Mr. Caparros was an Advisory Director to Morgan Stanley.
Mr. Carparros is a graduate of the Ecole des Hautes
Etudes Commerciales in France.

Jean-Pierre Lamoure.Mr. Lamoure is the President and Chief Executive Officer of
the Group Solétanche, which he has led since 1989. He is
Chairman of the Supervisory Board of Atlantic SFDT and
Vice-Chairman of the Fédération Nationale des
Travaux Publics (National Federation of Public Works) as
well as Managing Director of Compagnie du Sol. He also
serves on the Board of Directors of IFP, SEDECO and Fortis
Banque France and different subsidiaries of Group Soletanche.
Mr. Lamoure is a graduate of the Ecole Polytechnique
and the Ecole des Mines of France.

Roger M. Milgrim.Mr. Milgrim is currently a Senior Partner of Paul,
Hastings, Janofsky & Walker LLP, member of the Board of
Advisors of Unistates and has just retired as a director of the
Fulbright Association. Mr. Milgrim has authored two major
legal treatises and serves in various charitable functions.

Rolf-Erik Rolfsen.Mr. Rolfsen is currently a director of Gaz de France Norge
AS and Petroleum Geoservices A.S.A. He is President of the
Industrial Foundation Committee for the Norwegian University of
Polytechnic.

Bruno Weymuller.Mr. Weymuller is Executive Vice President of Total, and
President of Strategy and Risk Assessment. Prior to his current
position, he served as the Chief Financial Officer of Elf
Aquitaine. He is also on the Board of Sanofi-Synthelabo, Elf
Aquitaine and Total E.P. France. Mr. Weymuller is a
graduate of Ecole Polytechnique and the Ecole des
Mines de Paris and holds a Masters degree from the
Massachusetts Institute of Technology.

Jacques
Deyirmendjian.Mr. Deyirmendjian
has been appointed on the recommendation of Gaz de France where
he serves as Managing Director serving from June 2000 through
December 2001 as its representative but since December 2001 on
an individual basis. In 1989, he joined the International
Division as Vice-President, and the next year was appointed
Executive Vice-President with responsibility for natural gas
supplies to the French market and the international development
of Gaz de France. In 1996, he was appointed Senior Executive
General Representative of Gaz de France. In 2000, he was
appointed Managing Director, with responsibility for
international affairs and industrial partnerships. He is also on
the Board of GASAG and SPP as well as director of IFP and
Fingaz. Mr. Deyirmendjian is a graduate of the Ecole
Polytechnique and the Ecole Nationale
dAdministration (National School of Administration).

Roger Cairns.Mr. Cairns is currently Chairman & CEO of Cedar
International Plc. He serves as Senior Technical Adviser of
Enhanced Recovery System. Mr. Cairns is a member of the
Council of Institute of Petroleum and is Chairman of the
Institute of Petroleum Discussions Group (Energy, Economics and
Environment Committee).

Daniel Lebègue.Mr Lebègue is a director of Gaz de France, Thales, Alcatel
and SCOR and a member of the supervisory board of Areva. He also
chairs the Governing Board of the Institut dEtudes
Politiques de Lyon

74



---



##### Table of Contents



(Lyon Institute of Political Science) and serves
as president of the Institut du Développement Durable et
des Relations Internationales (Institute of Sustainable
Development and International Relations) and as co-chair of
Eurofi. Mr. Lebègue is a graduate of the Institut
dEtudes Politiques de Lyon and the Ecole Nationale
dAdministration (National School of Administration).


Olivier Appert.Mr. Appert is president of the
French Petroleum Institute (IFP) and a director of Compagnie
Générale de Géophysique and the Institut
de Physique du Globe de Paris (Paris Geophysical Institute).



| |                                                                 
| | ----------------------------------------------------------------
| | Audit, Nominations and Remuneration, and
    Strategy Committees

Our board of directors has established three
committees: the audit committee, the nomination and remuneration
committee and the strategy committee.

Audit committee.Our
audit committee is comprised of Messrs. Lebègue
(Chair), Caparros, Milgrim and Vaillaud, a majority of which are
independent as such term is defined under the
AFEP-MEDEF report, which may differ from standards applicable to
U.S. companies listed on the NYSE. The audit committee
presents its report and recommendations to our board of
directors, and prior to April 11, 2003, to our supervisory
board. Since April 11, 2003 (when the Companys change
of corporate form became effective), the audit committee met
four times, in the presence of all of its members. Our audit
committee is responsible for:



| |   |                                                                                                                                                                                                                                                                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | recommending the appointment of the statutory
    auditors and their remuneration and ensuring their independence;                                                                                                                                                                                                                                                                       
|
| |  | recommending rules for the statutory auditors
    regarding procedures for responsibilities other than the
    auditing of the accounts in order to guarantee the independence
    of the auditing provided by the statutory auditors in accordance
    with rules, regulations and recommendations applicable to
    Technip and to ensure that they are applied correctly;             
|
| |  | giving prior authorization to the statutory
    auditors for all proceedings regarding responsibilities other
    than auditing in accordance with the conditions described below;                                                                                                                                                                                                       
|
| |  | analyzing the assumptions used in the closing of
    the accounts, review the Companys accounts and the annual
    and interim consolidated accounts prior to the board of
    directors review by remaining informed of the
    Companys financial situation, liquidity and commitments;                                                                                             
|
| |  | evaluating the internal audit procedures as well
    as any other adopted measures in order to correct any
    significant problems in the internal audit;                                                                                                                                                                                                                               
|
| |  | reviewing the annual programs of responsibilities
    of the internal and external auditors;                                                                                                                                                                                                                                                                                             
|
| |  | evaluating the relevance of the risk analysis
    procedures;                                                                                                                                                                                                                                                                                                                            
|
| |  | evaluating the relevance of the adopted
    accounting principles and methods in conjunction with the
    statutory auditors;                                                                                                                                                                                                                                                            
|
| |  | consulting the Chairman and Chief Financial
    Officer of Technip, between the end of the financial year and
    the date on which the committee decides on the draft of the
    annual accounts, on the relevance of the adopted accounting
    principles and methods, the efficiency of the control procedures
    for accounting and any other relevant matters;                    
|
| |  | reviewing the conditions under which derivative
    products are used;                                                                                                                                                                                                                                                                                                                   
|
| |  | remaining informed of significant legal
    proceedings;                                                                                                                                                                                                                                                                                                                                 
|
| |  | reviewing the applicable procedures regarding the
    receipt, conservation and treatment of claims related to
    accounting and internal accounting control, matters related to
    the auditing of accounts as well as documents sent by employees
    on an anonymous and confidential basis which would bring into
    question the accounting practices or auditing procedures; and
|
| |  | in a general manner, advising and providing all
    appropriate recommendations on the above issues.                                                                                                                                                                                                                                                                                     

75



---



##### Table of Contents



During 2003, the audit committee examined:



| |   |                                                         
| | - | --------------------------------------------------------
| |  | our unaudited interim results;                          
|
| |  | the proposed merger and absorption of Coflexip;         
|
| |  | major contracts;                                        
|
| |  | treasury projections;                                   
|
| |  | the share capital increase reserved for employees;      
|
| |  | the impact of proposed new accounting standards;
    and
|
| |  | credit ratings.                                         

In addition, in accordance with AMF and SEC
rules, the audit committee adopted a pre-approval policy for the
engagements of our statutory auditors.

Nominations and remuneration
committee.Our nominations and
remuneration committee is comprised of Messrs. Weymuller
(Chair), Rolfsen and Lamoure, a majority of which are
independent as such term is defined under the
AFEP-MEDEF report, which may differ from standards applicable to
U.S. companies listed on the NYSE. The nominations and
remuneration committee presents its report to the board of
directors. The nominations and remuneration committee is
responsible for:



| |   |                                                                                                                                                                                                                                                                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | recommending to the board of directors the
    appointment of Directors, the Chairman, the Chief Executive
    Officer and Deputy Executive Directors, as necessary, and
    prepare the Companys corporate governance rules; and                                                                                                                                        
|
| |  | reviewing the policies related to the
    remuneration of managers introduced within the Group and the
    remuneration of members of the general management, proposing the
    remuneration of the Chairman, the Chief Executive Officer and
    the Deputy Executive Directors, as necessary, and prepare any
    reports that the Company must present on these issues.

Our nominations and remuneration committee met
twice in 2003 in the presence of all of its members. During
2003, the nominations and remuneration committee:



| |   |                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------
| |  | adopted a charter;                                                                                                                          
|
| |  | studied senior management compensation practices
    of Technip and its peer companies;                                                     
|
| |  | determined the remuneration of our Chairman and
    Chief Executive Officer and studied compensation of other senior
    executive officers;
|
| |  | recommended criteria for determination of
    variable portions of remuneration for 2004;                                                   
|
| |  | recommended attribution of remainder of
    tranche B of our stock option plan (authorized by our
    shareholders on June 20, 2002); and   
|
| |  | studied, on a preliminary basis, legislative
    developments in the area of retirement plans.                                              

During its meeting on February 23, 2004 our
nominations and remuneration committee evaluated the
independence of our board of directors.

First, the committee noted essential
characteristics for membership on our board:



| |   |                                                                                     
| | - | ------------------------------------------------------------------------------------
| |  | knowledge and understanding of our company and
    its industry and environment; and
|
| |  | active participation on the board of directors
    and committees.                  

In addition, the committee noted the importance
of having directors with a variety of complementary competencies
and professional experiences.

The committee then proceeded to evaluate the
independence criteria of members of our board of
directors as such term is defined in the AFEP-MEDEF report,
which may differ from standards applicable to

76



---



##### Table of Contents



U.S. companies listed on the NYSE, and
determined that Messrs. Cairns, Caparros, Lamoure,
Lebègue, Milgrim and Rolfsen are independent.


The committee presented its conclusions to our
board of directors at its meeting on February 29, 2004,
which adopted them.

Strategy committee.Our strategy committee is comprised of
Messrs. Deyirmendjian (Chair), Cairns, Appert and Vaillaud.
The strategy committee presents its report to our board of
directors. The strategy committee is responsible for reviewing:



| |   |                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | our global strategy as proposed by the Chairman
    of our board;                                                                                           
|
| |  | the annual investment budget of our Group;                                                                                                                  
|
| |  | any major acquisition or asset purchase
    (including associated investments) or disposals; and                                                            
|
| |  | any transaction, outside the normal course of
    business, that involves a high degree of risk for the Group as
    proposed by the Chairman of our boards.

Our Strategy Committee met twice in 2003 since
April 11, 2003 in the presence of its members and those of
senior management, and examined our strategy, Mission and
Vision Statement, the budget for 2004 and the three year
plan. It also reviewed disposals in progress.



| |                                   
| | ----------------------------------
| | Executive Management
    Committee

Our executive management committee is comprised
of Daniel Valot (Chairman and Chief Executive Officer), Daniel
Burlin (Chief Executive Officer of the Onshore/ Downstream
branch), Anne Decressac (Senior Executive Vice President, Human
Resources and Communication), Jean Deseilligny (Senior Executive
Vice President, Business and Operations of the
Onshore-Downstream branch), Olivier Dubois (Chief Financial
Officer) and Ivan Replumaz (Chief Executive Officer of the
Offshore branch).



| |             
| | ------------
| | Compensation

The aggregate amount of compensation that we paid
to members of our board of directors, not including the
Chairman, for services in all capacities in the year ended
December 31, 2003 was approximately
135,875. During
that year, our board of directors determined the compensation of
the Chairman of the board of directors. An aggregate amount of
135,875 in
jetons de présence (directors
fees) were granted to the members of our board of directors for
2003 with the exception of the Chairman of our board of
directors, who, at his own request, did not receive any
directors fees. The fixed portion of compensation that we
paid to the Chairman of the board of directors was
465,000 for
2003, while the variable portion of compensation paid in 2003 in
respect of 2002 was
310,180.
Mr. Valot also benefits from use of a company car valued at
3,660 per year.
Mr. Valot did not receive any options in 2003 nor did
Mr. Valot exercise any options during 2003. The
compensation of our officers and key personnel was reviewed by
the compensation committee of our board of directors. The global
aggregate amount of compensation paid, directly or indirectly by
Technip and all Group companies for all of its principal
executives (the 26 members of our Executive Management Committee
and Branch Committees) was
6.3 million
in 2003. The variable portion was approximately 20% of this
amount.

77



---



##### Table of Contents



The following table sets forth the total amounts
of compensation paid by us to our board of directors and the
amount of options granted by us to our board of directors for
fiscal year 2003:

|                                          |  |              |         | 
|----------------------------------------- |  | ------------ | ------- | 
|                                          |  | Amount of    |        
|Members of the Board of Directors in 2003 |  | Compensation |        
|                                          |  |              |        
|D. Valot                                  |  |             | 778,840 | 
|O. Appert                                 |  |             | 11,500  | 
|R. Cairns                                 |  |             | 14,250  | 
|M. Caparros                               |  |             | 15,375  | 
|J. Deyirmendjian                          |  |             | 11,500  | 
|J.P. Lamoure                              |  |             | 11,000  | 
|D. Lebègue                                |  |             | 12,500  | 
|R. Milgrim                                |  |             | 21,000  | 
|R.E. Rolfsen                              |  |             | 14,250  | 
|P. Vaillaud                               |  |             | 13,500  | 
|B. Weymuller                              |  |             | 11,000  | 

Share Ownership

No member of our board of directors, nor these
persons as a group, is the beneficial owner of more than 1% of
our voting power. The aggregate share ownership of the members
of our board of directors, as a group, representing
11 persons as of May 31, 2004 is 1,324 (0.006%)
Technip shares.

Options

As of April 30, 2004, a total of 1,663,165
options to purchase new or existing shares were outstanding
(1,928,120 at December 31, 2003), of which 60,000 were held
by members of our board of directors with the remainder held by
our employees or executives. None of the individual members of
our board of directors or our senior management owns options
that would, taking into account their current shareholding,
entitle them to own more than 1% of our outstanding shares.

78



---



##### Table of Contents



The following table sets out certain information
relating to the various Technip option plans as of
December 31, 2003.

|                                                                                                       |  |                |               |  |              |           |               |          |  |           |               |     |           |              |               |           |              |  |               |  |  |  |               | 
|------------------------------------------------------------------------------------------------------ |  | -------------- | ------------- |  | ------------ | --------- | ------------- | -------- |  | --------- | ------------- | --- | --------- | ------------ | ------------- | --------- | ------------ |  | ------------- |  |  |  | ------------- | 
|                                                                                                       |  |                |               | 
|                                                                                                       |  | 1999/2001 Plan |               |  | 2002 Plan    |          
|                                                                                                       |  |                |               |  |              |          
|                                                                                                       |  |                |               |  |              | Tranche B |              
|                                                                                                       |  | 1999 tranche   |               |  |              |           | 2000 tranche  |          |  | Tranche A |               |     | Tranche B |              |               | Remainder |             
|                                                                                                       |  | Purchase       |               |  | Subscription |           |               | Purchase |  |           | Subscription  |     |           | Subscription |               |           | Subscription | 
|                                                                                                       |  | Options        |               |  | Options      |           |               | Options  |  |           | Options       |     |           | Options      |               |           | Options      | 
|                                                                                                       |  |                |               |  |              |           |               |          |  |           |               |     |           |              |               |           |              | 
|Date of shareholders meeting                                                                          |  |                | Apr. 30, 1999 |  |              |           | Apr. 28, 2000 |          |  |           | Apr. 28, 2000 |     |           |              | Apr. 24, 2001 |           |              |  | June 20, 2002 |  |  |  | June 20, 2002 | 
|Date of board resolution                                                                               |  |                | Apr. 30, 1999 |  |              |           | Dec. 14, 2000 |          |  |           | Dec. 14, 2000 |     |           |              | Dec. 9, 2002  |           |              |  | Dec. 9, 2002  |  |  |  | May 21, 2003  | 
|Number of options authorized(2)                                                                        |  |                | 2% of capital |  |              |           | 1% of capital |          |  |           | 1% of capital |     |           |              | 1% of capital |           |              |  | 2% of capital |  |  |  | 5,240 shares  | 
|Number of options allocated                                                                            |  |                | 315,520       |  |              |           | 493,028       | (1)      |  |           | 139,576       | (1) |           |              | 234,080       |           |              |  | 462,920       |  |  |  | 5,200         | 
|Total number of shares available for
    subscription/ purchase(3):                                    |  |                | 2,853.200     |  |              |           | 4,486,788,878 |          |  |           | 139,576       |     |           |              | 211,990       |           |              |  | 458,520       |  |  |  | 5,200         | 
|Of which: Number of shares available to directors
    and senior management for subscription/ purchase |  |                | 94,700        |  |              |           | 120,800       | (1)      |  |           | 120,800       | (1) |           |              | 29,000        |           |              |  | 139,000       |  |  |  | 0             | 
|Of which: Number of directors and senior
    management concerned                                      |  |                | 16            |  |              |           | 17            |          |  |           | 17            |     |           |              | 4             |           |              |  | 16            |  |  |  | 0             | 
|Vesting date for exercise of options(4)                                                                |  |                | May 1, 2002   |  |              |           | Dec. 15, 2003 |          |  |           | Dec. 15, 2003 |     |           |              | Dec. 10, 2005 |           |              |  | Dec. 10, 2005 |  |  |  | May 22, 2006  | 
|Expiration date(5)(6)                                                                                  |  |                | Apr. 30, 2004 |  |              |           | Dec. 14, 2008 |          |  |           | Dec. 14, 2008 |     |           |              | Dec. 9, 2008  |           |              |  | Dec. 9, 2008  |  |  |  | May 21, 2009  | 
|Subscription/ purchase price per Share                                                                 |  |                | 95.94        |  |              |           | 143.24       |          |  |           | 143.24       |     |           |              | 71.95        |           |              |  | 71.95        |  |  |  | 73.98        | 
|Number of shares subscribed/ purchased at 12/31/03                                                     |  |                | 27,400        |  |              |           | 0             |          |  |           | 0             |     |           |              | 0             |           |              |  | 0             |  |  |  | 0             | 
|Shares remaining available for subscription/
    exercise at 12/31/03                                  |  |                | 257,920       |  |              |           | 448,678       |          |  |           | 139,576       |     |           |              | 211,990       |           |              |  | 458,520       |  |  |  | 5,200         | 
|Number of holders per Tranche                                                                          |  |                | 250           |  |              |           | 1,100         | (7)      |  |           | 1,100         | (7) |           |              | 400           |           |              |  | 850           |  |  |  | 7             | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The options granted as part of this 1999-2001
    plan, tranche 2000, relate to a maximum of 632,604 shares.
    The rules for this tranche state that a maximum of 139,576 share
    purchase options will be granted first. Therefore, the initial
    exercises of options will be for the transfer of 139,576 shares
    held by us and the remaining 493,028 options will be considered
    as share subscription options.
|   
|(2) | The number of options authorized was determined
    as a percentage of our share capital as of the date the board of
    directors exercised the authorization.                                                                                                                                                                                                                                                                
|   
|(3) | The number of shares available for subscription
    is less than the number of options allocated due to the
    departure of the employee holding them.                                                                                                                                                                                                                                                                        
|   
|(4) | The options for each tranche have different
    vesting dates. In each case, the date indicated is that of the
    first day of vesting for the shares issued with respect to the
    relevant tranche.                                                                                                                                                                                                                        
|   
|(5) | The options for each tranche have different
    expiration dates. In each case, the date indicated is that of
    the day of expiration for the shares issued with respect to the
    relevant tranche.                                                                                                                                                                                                                        
|   
|(6) | All the plans are subject to certain restrictions
    limiting the exercise of options in the event of the
    employees or directors departure from Technip.
    Holders of options may not exercise their options immediately
    following their allocation. The options may be exercised only
    three years following the date of grant of the options for a
    period of two, three or five years after the grant.   
|   
|(7) | This number includes holders of share
    subscription and share purchase options for tranche 2000 of
    the 1999-2001 Plan.                                                                                                                                                                                                                                                                                                  

Further to the merger of Coflexip into Technip,
our General Shareholders Meeting authorized, on
July 11, 2003, the takeover of any commitments by Coflexip
resulting from stock options granted to Coflexip employees and
corporate officers and to employees of affiliated companies.
Shares obtained by exercising stock-options after the merger
shall be our shares instead of and in place of Coflexip shares.
Given the merger exchange ratio
(i.e., 9 Technip shares for every
8 Coflexip shares), the new bases for exercising stock
purchase and subscription

79



---



##### Table of Contents



options granted by Coflexip have been calculated,
for each of the options granted and not yet exercised at the
date of the merger, in order to reflect the exchange ratio. The
following table sets out information relating to stock purchase
and subscription option plans previously granted by Coflexip, as
of December 31, 2003.


|                                                                      |  |              |               |  |              |  |              |              |  |  |               |  |  |             |               |  |  |  |               | 
|--------------------------------------------------------------------- |  | ------------ | ------------- |  | ------------ |  | ------------ | ------------ |  |  | ------------- |  |  | ----------- | ------------- |  |  |  | ------------- | 
|                                                                      |  | CSO Plan 9.2 |               |  | CSO Plan 9.3 |  |              | CSO Plan 10  |  |  | CSO Plan 11   |  |  | CSO Plan 11 |              
|                                                                      |  | Subscription |               |  | Subscription |  |              | Subscription |  |  | Subscription  |  |  | Purchase    |              
|                                                                      |  | Options      |               |  | Options      |  |              | Options      |  |  | Options       |  |  | Options     |              
|                                                                      |  |              |               |  |              |  |              |              |  |  |               |  |  |             |              
|Date of shareholders meeting(1)                                      |  |              | May 21, 1996  |  |              |  | May 21, 1996 |              |  |  | Jun. 2, 1999  |  |  |             | May 30, 2000  |  |  |  | May 30, 2000  | 
|Date of Board resolution(2)                                           |  |              | Mar. 24, 1997 |  |              |  | May 18, 1998 |              |  |  | Dec. 14, 1999 |  |  |             | Mar. 20, 2001 |  |  |  | Mar. 20, 2001 | 
|Number of options allocated                                           |  |              | 200.000       |  |              |  | 123.400      |              |  |  | 127.386       |  |  |             | 180.000       |  |  |  | 34.415        | 
|Total number of shares available for
    subscription/ purchase       |  |              | 166.613       |  |              |  | 98.200       |              |  |  | 107.536       |  |  |             | 144.000       |  |  |  | 34.415        | 
|Vesting date for exercise of options                                  |  |              | Jun. 7, 1999  |  |              |  | Jun. 7, 2000 |              |  |  | Dec. 15, 2001 |  |  |             | Mar. 21, 2003 |  |  |  | Mar. 21, 2003 | 
|Expiration Date                                                       |  |              | Jun. 6, 2007  |  |              |  | Jun. 6, 2008 |              |  |  | Dec. 14, 2009 |  |  |             | Mar. 20, 2011 |  |  |  | Mar. 20, 2011 | 
|Subscription/ purchase price per share(3)                             |  |              | 42,09        |  |              |  | 109,96      |              |  |  | 68,10        |  |  |             | 137,13       |  |  |  | 137,13       | 
|Number of shares subscribed/ purchased at 12/31/03                    |  |              | 127.926       |  |              |  | 450          |              |  |  | 16.152        |  |  |             | 0             |  |  |  | 0             | 
|Shares remaining available for subscription/
    purchase at 12/31/03 |  |              | 38.687        |  |              |  | 97.750       |              |  |  | 91.384        |  |  |             | 144.000       |  |  |  | 34.415        | 
|Number of holders per tranche                                         |  |              | 89            |  |              |  | 50           |              |  |  | 100           |  |  |             | 144           |  |  |  | 144           | 



---



|    |                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------
|(1) | Date of the Coflexip shareholders meeting
    which has authorized the Coflexip shares subscription/ purchase
    option plan.        
|   
|(2) | Date Coflexip Board of Directors which has
    allocated the option plans.                                                             
|   
|(3) | New subscription/ purchase price according to the
    shares exchange ratio determined for the merger of Coflexip into
    our company.

Company
Savings Plan.Our Combined
Shareholders Meeting held on July 11, 2003, granted
our board of directors the authorization to issue an additional
3% of share capital in one or several steps, over a maximum
period of 26 months. These shares are to be paid solely
with cash. Our employees may purchase these shares solely
through our statutory company savings plan.

Employees

For information regarding our employees, see
Item 4. Information on Technip  Human
Resources.

80



---



##### Table of Contents






Item 7.     Major
Shareholders and Related Party Transactions

Major Shareholders

The following table sets forth, to the best of
our knowledge, certain information with respect to the
beneficial ownership of shares and voting rights by our
principal shareholders, as of February 29, 2004. To the
best of our knowledge there are no other shareholders whose
beneficial ownership represents 5% or more of our share capital
or voting rights other than those listed below. The shareholders
listed below do not possess voting rights that differ from any
other shareholder, except to the extent they have held our
shares in registered form for two or more years so as to benefit
from the double-voting rights provided by our articles of
association. See Item 10. Additional
Information  Articles of Association
(Statuts) and  Shareholders
Meetings and Voting Rights  Double Voting
Rights.

The following table sets forth certain
information regarding the ownership of Technips
outstanding shares and American depositary shares as of
February 29, 2004.

|                |  |                         |            |        |             |  |         |        |  |  |         | 
|--------------- |  | ----------------------- | ---------- | ------ | ----------- |  | ------- | ------ |  |  | ------- | 
|                |  |                        
|                |  | As of February 29, 2004 |           
|                |  |                         |           
|                |  |                         |            | % of   |             |  | % of    |       
|                |  |                         |            | Shares |             |  | Voting  |       
|Shareholder     |  | Shares                  |            |        | Outstanding |  |         | Rights | 
|                |  |                         |            |        |             |  |         |        | 
|IFP             |  |                         | 1,591,553  |        |             |  | 6.70%   |        |  |  | 11.40%  | 
|Gaz de France   |  |                         | 1,698,114  |        |             |  | 7.15%   |        |  |  | 12.20%  | 
|Total Group     |  |                         | 482,531    |        |             |  | 2.05%   |        |  |  | 2.60%   | 
|Employees       |  |                         | 614,573    |        |             |  | 2.60%   |        |  |  | 3.80%   | 
|Treasury shares |  |                         | 413,901    |        |             |  | 1.70%   |        |  |  | 0%      | 
|Other           |  |                         | 18,937,659 |        |             |  | 79.80%  |        |  |  | 69.90%  | 
|                |  |                         |            |        |             |  |         |        | 
|Total           |  |                         | 23,324,430 |        |             |  | 100.00% |        |  |  | 100.00% | 
|                |  |                         |            |        |             |  |         |        | 



| |                                     
| | ------------------------------------
| | Shares Held in the United
    States

On December 31, 2003, 2,146,000 of our ADSs
were issued and outstanding (approximately 9% of our issued and
outstanding share capital) and held of record by eight record
holders, six of which are listed addresses in the United States.
We were informed that on January 15, 2004, there were
812 beneficial holders of our ADRs.

Related Party Transactions

In the context of the business combination of
Technip and Coflexip, we entered into a memorandum of
understanding with ISIS (the major shareholder of Coflexip) and
ISISs former controlling shareholder, IFP. On
November 7, 2001, IFP and ISIS finalized their commitments
pursuant to which ISIS would exchange its 1,436,622 shares of
Compagnie Générale de Géophysique for 511,253
shares of Technip-Coflexip held by IFP. This exchange has since
been carried out. For a description of the Memorandum of
Understanding, see Item 10. Additional
Information  Material Contracts  The
Memorandum of Understanding, below.

We have, from time to time and in the normal
course of our business, entered into intra-group arrangements
with our subsidiaries and affiliated companies, regarding,
generally, sales and purchases of products and the provision of
corporate services financed by management fee agreements,
including treasury and financing services (including financial
guarantees) and research and development activities.

In 1974, Coflexip signed a licensing contract
with IFP, which as a result of the business combination holds
approximately 6.70% of our shares. This contract stipulates that
Coflexip has the right to use certain IFP technologies and
know-how held by IFP in exchange for the payment of royalties.
The agreement was assigned by Coflexip to Technip France in July
2003 and terminated by mutual consent with effect from
December 31, 2003. In 2003, royalties to IFP under this
contract amounted to
3.045 million.

At December 31, 2003, we had no outstanding
loans to directors or senior management.

81



---



##### Table of Contents



The U.S. GAAP definition of related parties is
more extensive than in French GAAP. The Group designs and
manufactures installations for the TOTAL Group pursuant to
contracts entered into at an arms-length basis.

Sales to the TOTAL Group amounted to
87.8 million
in 2003. As of December 31, 2003, the TOTAL Group owed
16.3 million
to the Group.




Item 8.     Financial
Information

Consolidated Statements and Other Financial
Information

See Item 18. Financial
Statements, for a list of the financial statements filed
with this annual report.

Dividend Policy

We may declare dividends upon the recommendation
of our board of directors, and approval of our shareholders at
their annual general meeting. Under French company law, our
right to pay dividends is limited in specific circumstances. For
a description of these restrictions, see the section entitled
Item 10. Additional
Information  Articles of Association
(Statuts)  Changes in our Share
Capital  Dividends. Our commitment to the
creation of shareholder value includes specific attention to the
amount and regularity of dividend distributions. We aim to
maintain a stable dividend per share.

The table below sets forth for the years
indicated the amount of dividends we paid per share not
including the French avoir fiscal (before deduction of
applicable French withholding tax), the amount of dividends paid
per share, including the French avoir fiscal (before
deduction of applicable French withholding tax), net income per
share and the pay-out ratio. These amounts (other than net
income per ordinary share) have been translated in each case
into U.S. dollars, for your convenience, at the rate
indicated. An annual dividend is paid in each year in respect of
the prior year.

For fiscal year 2003, our shareholders have
approved the payment of a dividend of
3.30 per share
(4.95 including
the French avoir fiscal). The following table sets forth
the total dividends paid per share and per ADS for each year
indicated, with and without the French avoir fiscal and
before deduction of any French withholding tax.

|                 |  |            |      |           |           |   |          |       |           |           |           |  |  |  |      | 
|---------------- |  | ---------- | ---- | --------- | --------- | - | -------- | ----- | --------- | --------- | --------- |  |  |  | ---- | 
|                 |  |            |      | Dividend  |           |   |          |       | Dividend  |          
|                 |  |            |      | per ADS   |           |   |          |       | per Share |          
|                 |  |            |      | Including |           |   | Dividend |       |           | Including |          
|Year to which    |  | Dividend   |      |           | Avoir     |   |          | per   |           |           | Avoir     | 
|Dividend Related |  | per ADS(1) |      |           | fiscal(1) |   |          | Share |           |           | fiscal(1) | 
|                 |  |            |      |           |           |   |          |       |           |           |           | 
|                 |  |            |      |           |           |  |          |       |          |          
|                 |  |            |      | U.S.$     |           |   |          |       |          
|                 |  | U.$       |      |           | %         |   |          |       |           |          
|1999             |  |            |     |           |           |   |         |       |           |           | 3.00      |  |  |  | 4.50 | 
|2000             |  |            |     |           |           |   |         |       |           |           | 3.30      |  |  |  | 4.95 | 
|2001             |  |            | 0.74 |           |           |   | 1.10     |       |           |           | 3.30      |  |  |  | 4.95 | 
|2002             |  |            | 0.90 |           |           |   | 1.35     |       |           |           | 3.30      |  |  |  | 4.95 | 
|2003             |  |            | 1.01 |           |           |   | 1.51     |       |           |           | 3.30      |  |  |  | 4.95 | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Each American depository share represents
    one-fourth an ordinary share. Translated solely for convenience
    into U.S. dollars at the noon buying rate applicable on the
    dividend payment date, with the euro amount translated from the
    French franc amount at the conversion rate of
    1.00 = FRF
    6.55957 set on January 1, 1999. This does not mean that we
    actually converted these amounts into U.S. dollars at that
    rate and you should not assume that they could have been
    converted at that or any other rate. We have applied the avoir
    fiscal rate for physical persons based on fully diluted share
    capital.

Under French law and our articles of association
(statuts), our unconsolidated statutory net income in
each fiscal year, as increased or reduced, as the case may be,
by any profit or loss that we carried forward from prior years,
less any contributions to legal reserves, is available for
distribution to our shareholders as dividends, subject to other
applicable requirements of French law and our articles of
association (statuts).

82



---



##### Table of Contents



Pursuant to our articles of association
(statuts), our shareholders may determine at an ordinary
meeting the portion, if any, of dividends that each shareholder
may elect to receive in shares. For dividends distributed in
respect of the years 1991 through 1995, each of our shareholders
was given the option of receiving dividends in the form of cash
or shares. Our board of directors does not currently intend to
recommend a stock dividend in the near future.

Dividends paid to holders of shares or ADSs who
are not residents of France generally will be subject to French
withholding tax at a rate of 25%. Under the Treaty between
France and the United States for Avoidance of Double Taxation
and the Prevention of Fiscal Evasion with respect to Taxes on
Income and Capital signed on August 31, 1994, and subject
to certain procedures and exceptions, such withholding tax may
be reduced to 15% for holders who are resident of the United
States. French residents are generally entitled to a tax credit
known as the avoir fiscal, the amount of which depends of
the recipient of the dividends. Under certain tax treaties
entered into between France and other countries, including the
United States, such avoir fiscal may, in certain
circumstances, be paid, net of withholding tax, to non-French
residents. The French Budget Law for 2004 includes a reform of
the French tax treatment of distributions and dividends paid by
French companies to residents of France which directly affects
non-residents of France. See Item 10. Additional
Information  Taxation  French
Taxation  Taxation of Dividends and
Item 10. Additional Information 
Taxation  Taxation of U.S. Investors 
Taxation of Dividends.

Dividends paid to holders of ADSs are converted
from euro to dollars and subjected to a charge by the depositary
for any expenses incurred by the depositary in such conversion.

Information on Legal or Arbitration
Proceedings

We are involved in various routine legal or
arbitration proceedings incidental to the ordinary course of our
business. We believe that the outcome of all pending legal
proceedings, whether individually or in the aggregate, will not
have a material adverse effect on our consolidated financial
condition or results of operations, and have not had any such
impact in recent years. According to French accounting
standards, when risks incurred and exposure cost can be
reasonably quantified, provisions for risks and costs are taken.
Below we describe our principal currently pending legal
proceedings.

In 2001, Coflexip notified Aker Maritime, that
under the price adjustment provisions of the Share Purchase
Agreement dated October 27, 2000, it was entitled to a
U.S.$136.7 million reduction in the purchase price of the
Deepwater Division. In 2003, Technip Offshore UK Ltd and Aker
Maritime settled their dispute related to the Deepwater Division
purchase price. Under the agreement, Aker Maritime consented to
a purchase price reduction of
40.7 million.
The amount of the purchase price reduction has been recorded as
a deduction of the goodwill related to the acquisition of the
Aker Deepwater Company in our Consolidated Financial Statements.

On December 21, 2001, ITP SA 
InTerPipe (ITP) filed a complaint with the
Tribunal de Commerce de Versailles against Coflexip,
Technip Offshore UK Ltd (formerly Coflexip Stena Offshore
Limited) and Technip Offshore International (former Coflexip
Stena Offshore International) seeking damages based on alleged
breaches of several confidentiality agreements entered into
between 1993 and 1998 related principally to the ETAP contract
for Shell and the preparation of the Girassol bid for Elf.
Further to the partial contribution of assets from Coflexip to
Technip Offshore International and from Technip Offshore
International to Technip France and the merger of Coflexip into
Technip in July 2003, Technip France is now substituted for
Coflexip and Technip Offshore International and is also
substituted to Technip Offshore UK. The litigation is now held
by the Tribunal de Commerce de Paris. In addition, ITP
brought an action in Edinburgh, Scotland against Technip
Offshore UK Ltd seeking £2.5 million in damages for
infringement of a patent related to pipe-in-pipe
technologies. On September 4th, 2003 the Court in Edinburgh
decided that Technip Offshore UK Ltd had infringed ITPs
patent. Technip Offshore UK Ltd filed an appeal on
October 9, 2003 against the decision of the Court of
Edinburgh. The European Patent Office declared the disputed
patent invalid in February 2004.

We believe that ITPs allegations are
unfounded and that our exposure is not material.

In May 2001, Mannesmann Seifert/ Energie, a
German subsidiary of Technip, initiated arbitration proceedings
against Siemens claiming a price adjustment of
36 million.
The claim related to a significant increase in the

83



---



##### Table of Contents



scope of services rendered in completion of a
1998 construction contract valued at
22 million
for high-pressure connection piping at the Peterhead electrical
power plant built by Siemens for Scottish Electric. In 2003,
Mannesmann Seiffert/ Energie and Siemens settled their dispute.


In February 2003, Technip, through its subsidiary
Coflexip Stena Offshore Mauritius Limited, acquired an
additional holding of 20% of the share capital of its listed
Indian subsidiary, South East Marine Engineering and
Construction Ltd (SEAMEC) in a public offer imposed by the
Securities and Exchange Board of India (SEBI) in conformity with
Indian securities regulation, with regard to the change of
control of Seamec following the change in control of Coflexip
after the exchange/cash public offering launched by Technip in
July 2001.

Minority shareholders of Seamec filed an appeal
before the Securities Appellate Tribunal (S.A.T.) who ordered
Technip on October 27, 2003 to pay the sellers a supplement
calculated on the share price of Seamec in April 2000, based on
an alleged change of control of Coflexip and as a consequence of
an alleged change of control of Seamec in April 2000, at the
time of the acquisition by Technip of the holding of Stena
Offshore International BV of 29.68% of the share capital of
Coflexip.

Technip filed an appeal with the Supreme Court of
India which granted on January 9, 2004, a stay of execution
of the S.A.T. judgment, subject to the posting of bonds in the
form of bank guarantees until a judgment on the merits. A bank
guarantee of Indian Rupees 2.25 billion, approximately
40 million,
for the principal amount was issued on February 16, 2004
and a bank guarantee of Indian Rupees 225 million,
approximately
4 million,
for the interest was issued on April 1st, 2004.

According to the Group financial statements, the
litigation provisions are included under Contract
risks and Other costs in Note 21 to the
Consolidated Financial Statements.

The provisions for contract risks include, in
particular, the provisions for contractual relations with
clients during or at the time of completion of a contract,
whilst the provisions for other costs concern administrative and
financial risks.

Significant Changes

For information on our unaudited sales for the
three month period ended March 31, 2004, see
Item 5. Operating and Financial Review and
Prospects  Recent Developments.

84



---



##### Table of Contents






Item 9.     The
Offer and Listing

In November 2003, the Autorité des
marchés financiers (the AMF) was created, a
new entity resulting from the merger of the Commission des
opérations de bourse (the COB), the
Conseil des marchés financiers (the CMF)
and the Conseil de discipline de la gestion
financière (the CDGF). The AMF, an
independent governmental authority, is in charge of the
protection of investors, investors information and
proper running of the securities markets. Until the adoption and
publication of the AMFs General Regulation, however, the
regulations, instructions and recommendations of the COB and the
CMF remain applicable.

Price History of Shares

The table below sets forth the reported high and
low sales prices for the shares reported by Euronext Paris and
for the ADSs on the New York Stock Exchange for the periods
indicated.

|                                       |  |                      |        |               |             |  |        |      |  |  |       |  |  |  |       | 
|-------------------------------------- |  | -------------------- | ------ | ------------- | ----------- |  | ------ | ---- |  |  | ----- |  |  |  | ----- | 
|                                       |  |                      |        |               |             | 
|                                       |  |                      |        | Price Per ADS |            
|                                       |  | Price per Share in  |        |               | in U.S.$(1) | 
|                                       |  |                      |        |               |             | 
|Calendar Period                        |  | High                 |        |               | Low         |  |        | High |  |  | Low   | 
|                                       |  |                      |        |               |             |  |        |      |  |  |       | 
|1999                                   |  |                      | 114.10 |               |             |  | 72.10  |      |  |  |      |  |  |  |      | 
|2000                                   |  |                      | 161.00 |               |             |  | 100.60 |      |  |  |       |  |  |  |       | 
|2001                                   |  |                      | 185.00 |               |             |  | 111.00 |      |  |  | 33.60 |  |  |  | 28.40 | 
|First Quarter                          |  |                      | 164.40 |               |             |  | 133.00 |      |  |  |      |  |  |  |      | 
|Second Quarter                         |  |                      | 185.00 |               |             |  | 151.50 |      |  |  |      |  |  |  |      | 
|Third Quarter                          |  |                      | 165.00 |               |             |  | 111.00 |      |  |  |      |  |  |  |      | 
|Fourth Quarter(2)                      |  |                      | 150.00 |               |             |  | 123.90 |      |  |  | 33.60 |  |  |  | 28.40 | 
|2002                                   |  |                      |        |               |             |  |        |      |  |  |       |  |  |  |       | 
|First Quarter                          |  |                      | 157.90 |               |             |  | 132.60 |      |  |  | 35.20 |  |  |  | 29.00 | 
|Second Quarter                         |  |                      | 162.30 |               |             |  | 106.40 |      |  |  | 34.80 |  |  |  | 26.00 | 
|Third Quarter                          |  |                      | 107.50 |               |             |  | 65.50  |      |  |  | 26.00 |  |  |  | 16.35 | 
|Fourth Quarter                         |  |                      | 79.85  |               |             |  | 51.00  |      |  |  | 20.20 |  |  |  | 12.34 | 
|2003                                   |  |                      |        |               |             |  |        |      |  |  |       |  |  |  |       | 
|First Quarter                          |  |                      | 70.00  |               |             |  | 51.85  |      |  |  | 18.55 |  |  |  | 14.32 | 
|Second Quarter                         |  |                      | 83.50  |               |             |  | 64.25  |      |  |  | 24.92 |  |  |  | 17.35 | 
|Third Quarter                          |  |                      | 89.55  |               |             |  | 73.50  |      |  |  | 25.60 |  |  |  | 21.10 | 
|Fourth Quarter                         |  |                      | 91.90  |               |             |  | 82.90  |      |  |  | 27.88 |  |  |  | 24.30 | 
|2004                                   |  |                      |        |               |             |  |        |      |  |  |       |  |  |  |       | 
|First Quarter                          |  |                      | 115.80 |               |             |  | 81.50  |      |  |  | 36.07 |  |  |  | 26.36 | 
|Second Quarter (through June 18, 2004) |  |                      | 116.00 |               |             |  | 104.00 |      |  |  | 35.29 |  |  |  | 30.42 | 
|Monthly amounts                        |  |                      |        |               |             |  |        |      |  |  |       |  |  |  |       | 
|December 2003                          |  |                      | 91.90  |               |             |  | 83.55  |      |  |  | 27.88 |  |  |  | 26.43 | 
|January 2004                           |  |                      | 98.45  |               |             |  | 81.50  |      |  |  | 31.19 |  |  |  | 26.36 | 
|February 2004                          |  |                      | 113.00 |               |             |  | 97.05  |      |  |  | 35.00 |  |  |  | 30.63 | 
|March 2004                             |  |                      | 115.80 |               |             |  | 104.00 |      |  |  | 36.07 |  |  |  | 32.10 | 
|April 2004                             |  |                      | 116.00 |               |             |  | 108.60 |      |  |  | 35.29 |  |  |  | 32.51 | 
|May 2004                               |  |                      | 114.90 |               |             |  | 104.00 |      |  |  | 35.00 |  |  |  | 30.42 | 
|June 2004 (through June 18, 2004)      |  |                      | 113.90 |               |             |  | 106.50 |      |  |  | 34.67 |  |  |  | 32.30 | 



---

Source: Dow Jones & Reuters



|    |                                                                                     
|--- | ------------------------------------------------------------------------------------
|(1) | Each American Depositary Share represents
    one-quarter of an ordinary share.     
|   
|(2) | Technip shares began trading on the New York
    Stock Exchange on October 19, 2001.

85



---



##### Table of Contents



On June 18, 2004, the last reported sales
price of our shares on Euronext Paris was
113.50 per share
and the last reported sales price of our ADSs on the New York
Stock Exchange was U.S.$34.54 per ADS.

Plan of Distribution

Not applicable.

Nature of Trading Market

Euronext
Paris

On September 22, 2000, upon successful
completion of an exchange offer, the ParisBourseSBF S.A. or the
SBF, the Amsterdam Exchanges and the Brussels Stock
Exchanges merged to create Euronext, the first pan-European
exchange. Through the exchange offer, all the shareholders of
SBF, the Brussels Stock Exchanges and the Amsterdam Exchanges
contributed their shares to Euronext N.V., a Dutch holding
company. Following the creation of Euronext, the SBF changed its
name to Euronext Paris. Securities quoted on exchanges
participating in Euronext are traded and cleared over common
Euronext platforms. NSC is the common platform for trading and
Clearing 21 for the clearing. In addition, Euronext anticipates,
but not before 2008, the implementation of a central clearing
house, settlement and custody structure over a common system.
However, these securities will remain listed on their local
exchanges. As part of Euronext, Euronext Paris retains
responsibility for the admission of shares to Euronext
Pariss trading markets as well as the regulation of those
markets. Since July 2001, Euronext N.V. has been listed on the
Premier Marché of Euronext Paris. In October 2001,
Euronext announced that it was acquiring LIFFE, Londons
derivatives market. This acquisition became effective in January
2002. Following an agreement entered between Euronext and the
LIFFE, Euronext has agreed to migrate its entire derivative
operations to LIFFEs CONNECTTM trading platform.

Euronext announced on December 20, 2001 that
the Supervisory Board of Euronext NV and the Board of Directors
of Bolsa de Valores de Lisboa e Porto (BVLP), the
Portuguese exchange, have agreed on the terms of a merger. The
merger between Euronext and BVLP became effective as of
February 6, 2002 and BVLP became fully integrated within
Euronext under the name Euronext Lisbon.

Securities approved for listing by Euronext Paris
are traded in one of three markets. The securities of most large
public companies are listed on the Premier Marché,
with the Second Marché available for small and
medium-sized companies. Trading on the Nouveau
Marché was introduced in March 1996 to allow companies
seeking development capital to access the stock market. Euronext
Paris has announced that it currently expects that, beginning
January 2005, the Premier Marché, Second
Marché and Nouveau Marché will be combined,
and all securities listed on Euronext Paris will trade over a
single market. In addition, securities of some other companies
are traded on a non-regulated over-the-counter market, the
Marché Libre OTC, which is also operated by Euronext
Paris.

The Premier
Marché

The Premier Marché is a regulated
market managed and operated by Euronext Paris. Admission to the
Premier Marché is subject to certain capital
adequacy and liquidity requirements determined by Euronext
Paris. In addition, companies applying for listing on the
Premier Marché are required to publish comprehensive
information regularly and to keep the public informed of events
likely to affect the market price of their securities.

Securities listed on the Premier
Marché are officially traded through authorized
financial institutions that are members of Euronext Paris.
Trading takes place continuously on each trading day, as
determined by Euronext Paris, from 9:00 a.m. to
5:25 p.m. (Paris time), with a pre-opening session from
7:15 a.m. to 9:00 a.m. and a pre-closing session from
5:25 p.m. to 5:30 p.m. during which transactions are
recorded but not executed, and a closing auction at
5:30 p.m. From 5.30 p.m. to 5.40 p.m.
(trading-at-last phase), transactions are executed at the
closing price. Any trade of securities that occurs after a stock
exchange session closes is recorded on the next business day at
the previous sessions closing price for that security.
Euronext Paris publishes a daily official price list that
includes among other things, price information on listed
securities.

86



---



##### Table of Contents



Euronext Paris places securities listed on the
Premier Marché in one of two categories
(Continu or Fixing), depending on their trading
volume. Our shares are placed in the category known as
Continu (continuous electronic trading), which includes
the most actively traded securities.

Euronext Paris may temporarily reserve trading in
a security listed in Continu on the Premier
Marché if purchases and sales orders recorded in the
system would inevitably result in a price beyond a certain
threshold, determined on a basis of a percentage fluctuation
from a reference basis. The duration of the so-called
reservation period and the relevant thresholds vary depending on
whether the price fluctuation occurs when trading commences or
during the trading session. Euronext Paris may display an
indicative trading price during this reservation period. The
duration of the reserve period and fluctuation may be varied
from time to time by Euronext Paris. Euronext Paris may also
suspend trading of a security listed on the Premier
Marché in certain other limited circumstances,
including, for example, the occurrence of unusual trading
activity in a security. In addition, in exceptional cases, the
AMF may require Euronext Paris to suspend trading.

Since September 25, 2000, trades of
securities listed on the Premier Marché are settled
on a cash settlement basis on the third trading day after the
trade. However, market intermediaries are also permitted to
offer investors a deferred settlement service (which we refer to
as service de règlement différé or
SRD) for a fee. The SRD is only available for trades
in securities which either (1) are a component of the Index
SBF 120 or (2) have both a total market capitalization
of at least
1 billion
and a daily average volume of trades of at least
1 million
and which are normally cited on a list published by Euronext
Paris. The SRD allows shareholders to benefit from certain
leverage and other special features of the previous monthly
settlement market (formerly Marché à Règlement
Mensuel). Investors in securities eligible for the SRD can
elect on the determination date (date de liquidation),
which is, at the latest, the fifth trading day before the end of
the month, either to settle by the last trading day of the month
or to pay an additional fee and postpone the settlement to the
determination date of the following month. Our shares are
eligible for the SRD.

Equity securities traded on a deferred settlement
basis are considered to have been transferred only after they
have been registered in the purchasers account. Under
french securities, if the sale of securities traded on a
deferred settlement basis takes place during the month when a
dividend is paid, but before the dividend is actually paid, the
purchasers account will be credited with an amount equal
to the dividend paid and the sellers account will be
debited by the same amount.

Prior to any transfer of securities held in
registered form on the Premier Marché, the
securities must be converted into bearer form and accordingly
inscribed in an account maintained by an accredited intermediary
with Euroclear France S.A., a registered clearing agency.
Transactions in securities are initiated by the owner giving
instructions (through an agent, if appropriate) to the relevant
accredited intermediary. Trades of securities listed on the
Premier Marché are cleared and settled through
Clearing 21 and Euroclear France S.A. using a continuous
net settlement system. A fee or a commission is payable to the
broker-dealer or other agent involved in the transaction.

Other

For other limitations affecting our shareholders,
see Item 10. Additional Information  Form,
Holding and Transfer of Shares and Item 10.
Additional Information  Requirements for Holdings
Exceeding Certain Percentages.

87



---



##### Table of Contents






Item 10.     Additional
Information

Share Capital

As of December 31, 2003, our authorized
share capital amounted to
72,401,910,
divided into 23,738,311 fully paid-up ordinary shares with a par
value of 3.05
each. The book value and face value of shares held by us or on
our behalf by our subsidiaries amounted to
9.7 million.

Articles of Association
(Statuts)

We are a société anonyme, a form
of limited liability company, incorporated under French law. We
were created on April 21, 1958 for a duration of
99 years. We are subject to Book II (Livre II)
of the French Commercial Code (Code de Commerce) and to
decree no. 67-236 of March 23, 1967 for les
sociétés commerciales et les groupements
dintérêt économique (French company
law). Our registered office is located at 6-8 Allée de
lArche, Faubourg de lArche  ZAC Danton,
92400 Courbevoie, France and our telephone number is
(011-33-1) 47 78 21 21. Our main
subsidiaries are in France, Italy, Germany, the United States,
The Netherlands, Abu Dhabi, Malaysia, Brazil, the United Kingdom
and Norway.

We are registered in the Commercial Register
(Registre du commerce et des sociétés) of
Nanterre under the number B589 803 261.

Our corporate purpose in France and abroad, as
set forth in Article 3 of our articles of association
(statuts) is stated below as:

All engineering studies and services, and
construction of complex industrial plants, in particular for
hydrocarbons, as well as all fields of industry, notably
chemicals and life sciences.

The conception, manufacturing, purchase, sale,
construction, assembly and installation of materials, products,
equipment and systems intended for said installations, in
particular fixed or floating platforms and pipelines for the
development of oil fields at sea.

The provision of all services related to these
products, equipment and installations.

The development and implementation of all
processes and products for practical use in industry of the
results of research carried out by the Company or by any other
individual or entity.

The registration, acquisition, obtaining, direct
or indirect use, sale or purchase of all brands, processes,
patents, and licenses for the use of patents.

The direct or indirect participation by the
Company in all operations of the said type, either by way of
formation of companies, contributions to existing companies,
mergers with them, transfer to companies of all or part of its
assets or rights in real and personal property, subscriptions,
purchases and sales of securities and corporate interests,
partnerships, advances, loans or otherwise.

The investment by all means and in any form, in
companies or industrial, commercial, financial and real property
enterprises, whether French or foreign, regardless of legal form
or organization and, where necessary, the disposal of these
investments.

Generally all transactions of a commercial,
financial, industrial or civil nature or in real or personal
property, related directly or indirectly to any of the purposes
listed above and to any similar or related purposes, both on its
own behalf or on behalf of third parties, and more generally all
transactions facilitating or related to the realization of these
purposes.

Our board of directors is required to act within
the limits of our corporate purpose and within the powers
endowed to the shareholders meeting pursuant to French
law. However, we will be bound to third parties in their
transactions with us exceeding such limitations unless we can
prove that such third parties have knowledge of such limitations
or could not have ignored such limitation. Our corporate purpose
can be amended by an extraordinary general shareholders meeting.

88



---



##### Table of Contents



In this section, we summarize material
information concerning our share capital, together with material
provisions of applicable French law and our articles of
association (statuts) as amended by our shareholders on
April 29, 2004. An unofficial English translation of our
articles of association (statuts) is included as an
exhibit to this Annual Report on Form 20-F, which has been
filed with the U.S. Securities and Exchange Commission. You
may obtain copies of our articles of association
(statuts) in French from the registrar (Greffe) of
the Commercial Register of Nanterre, France. Please refer to
those full documents for additional details.

Directors



| |                                    
| | -----------------------------------
| | Directors and Senior
    Management

In accordance with French law governing a
société anonyme, a form of limited liability
company, the Companys affairs are managed by its board of
directors, or conseil dadministration, and by its
Chairman and Chief Executive Officer, who has full executive
authority to manage the affairs of the Company, subject to the
prior authorization of the board of directors or of the
Companys shareholders for certain decisions specified
by law.

Under French company law, the board of directors
may elect one person to assume the position of Chairman and
Chief Executive Officer or split these functions between two
different persons (either the Chairman of the board or another
natural person bearing the title of Directeur
Général (Chief Executive Officer)). According to
the Companys articles of association, the choice is made
by the board of directors deciding with a majority of all
members. Our board of directors has decided not to split these
two functions, which are currently performed by the same person.
The Chairman of the board of directors organizes and directs the
work of the board and reports on such work to the general
shareholders meeting.

According to French law and the Companys
articles of association, the Chief Executive Officer may propose
the appointment of up to five Directeurs Généraux
Délégués or Managing Directors to the board
of directors and the board of directors determines their
specific management powers and responsibilities. Under French
law, a Directeur Général
Délégué, like the Chief Executive Officer,
has broad powers to represent and bind the company in dealings
with third parties. The Chief Executive Officer may be removed
by the board of directors at any time. The Directeur
Général Délégué may be removed by
the board of directors at any time upon proposal of the Chief
Executive Officer. The Directeur Général (the
Chief Executive Officer) and the Directeurs
Généraux Délégués may be held
individually responsible for his/her actions if they are deemed
contrary to the companys interests. Our board of directors
has not currently designated any Directeurs
Généraux Délégués.

Pursuant to the Companys articles of
association, in addition to the appointment of Directeurs
Généraux Délégués, our board of
directors can appoint one or more Vice-Chairmen. Our board of
directors has not currently designated a Vice-Chairman.



| |                                                                                            
| | -------------------------------------------------------------------------------------------
| | Board of Directors Power to Vote on
    Agreements in which They are Materially Interested

Under French law, any agreements (except
agreements in the ordinary course of business entered into on an
arms length basis) between the Company, either directly or
through an intermediary, and any director, the Chief Executive
Officer, one of its Managing Directors and any of its
shareholders holding more than 10% of the voting rights, or in
case of a corporation, the company controlling the latter
according to Article L. 233-3 of the French Commercial
Code, are subject to a special approval procedure, in accordance
with Article L. 225-38 et seq. of the
French Commercial Code. Agreements between the Company and
another company, of which the Chief Executive Officer, one of
its Directeurs Généraux
Délégués, one of the members of the board of
directors of the Company is the owner, general partner, manager,
director, member of the Supervisory board, or in a general sense
is an officer, are also subject to prior authorization. The
director in question or the person concerned must
(i) inform the board of directors of the agreement and
(ii) obtain its prior approval before the transaction is
consummated. The Chairman of the board of directors must inform
the statutory auditors of the existence of such agreement and
the next shareholders general meeting must then approve
this agreement upon the presentation of a special report
prepared by the statutory auditors. If the shareholders
meeting refuses to approve the agreement, third parties may
still rely on it, but the director may be held liable to the
Company for any loss the Company may incur under the agreement.
The party to the agreement may not participate either in the
vote of the board of

89



---



##### Table of Contents



directors, nor in the vote of the
shareholders meeting. Any agreement entered into violation
of these requirements may be declared void by the Commercial
Court at the request of the Company or any shareholder, if such
agreement is contrary to the interests of the Company.




| |                                                   
| | --------------------------------------------------
| | Board of Directors Power to Vote
    Compensation

In consideration for their services on the board,
members of the board of directors are entitled to receive
directors fees (jetons de présence).
Directors fees are fixed by the shareholders meeting
and are then allocated by the members of the board of directors
among themselves. The board of directors may also grant to some
of its members exceptional compensation in respect to a specific
task or mandate. A member of the board of directors may not vote
for his or her individual remuneration, other than approval of
the allocation of directors fees. If he or she does, the
decision is void. The board of directors may also authorize the
reimbursement of travel and accommodation expenses as well as
other expenses incurred by the members of the board of directors
in the corporate interest.



| |                                                                          
| | -------------------------------------------------------------------------
| | Borrowing powers exercisable by the Members
    of the Board of Directors

In accordance with Article L. 225-43 of
the French Commercial Code, members of the board of directors
(including permanent representatives of companies of the board
of directors) or the Directeur Général or the
Directeurs Généraux Délégués may
not, directly or indirectly, borrow money or obtain a guarantee
from the Company. Any such loan or guarantee would be void. This
prohibition also applies to spouses or heirs of such persons,
and other intermediaries.



| |                                                           
| | ----------------------------------------------------------
| | Age Requirements for Members of the Board
    of Directors

In accordance with Article L. 225-19 of
the French Commercial Code and the provisions of our articles of
association (statuts), no more than one-third of the
number of directors may be over 70 years of age at the end
of the fiscal year. If such number is exceeded, the oldest
director is automatically deemed to have resigned.

In addition, in accordance with our articles of
association, the Chairman of the Board, the Chief Executive
Officer and Managing Directors may not be more than
65 years old. The Chairman and the Chief Executive Officer
shall be deemed to have resigned at the end of the annual
ordinary shareholders general meeting which approved the
financial accounts for the fiscal year in which he reaches this
age.



| |                                                           
| | ----------------------------------------------------------
| | Share Ownership Requirement for Director
    Qualification

Each director must, for the duration of his or
her term, hold at least 100 Technip shares, which must be
held in registered form.

If, upon his or her appointment, a director does
not hold or, during the term of his or her office ceases to
hold, the requisite number of shares, he or she will be deemed
to have resigned unless he rectifies the situation within
three months.

Shareholders Meetings and Voting
Rights



| |        
| | -------
| | General

Under French company law, there are two types of
general shareholders meetings, ordinary and extraordinary.

Ordinary general shareholders meetings are
required for matters such as:



| |   |                                                
| | - | -----------------------------------------------
| |  | electing, replacing and removing directors;    
|
| |  | allocating fees to the board of directors;     
|
| |  | appointing statutory auditors;                 
|
| |  | approving the annual and consolidated accounts;

90



---



##### Table of Contents





| |   |                                                                           
| | - | --------------------------------------------------------------------------
| |  | declaring dividends or authorizing dividends to
    be paid in shares; and
|
| |  | approving regulated agreements.                                           

Extraordinary general shareholders meetings
are required for approval of matters such as amendments to our
articles of association (statuts), including any
amendment required in connection with extraordinary corporate
actions. Extraordinary corporate actions include:



| |   |                                                                                                 
| | - | ------------------------------------------------------------------------------------------------
| |  | changing our articles of association, our name or
    our corporate purpose;                    
|
| |  | increasing or decreasing our share capital;                                                     
|
| |  | creating a new class of equity securities;                                                      
|
| |  | authorizing the issuance of investment
    certificates, convertible or exchangeable securities;
|
| |  | establishing any other rights to equity
    securities;                                         
|
| |  | a statutory merger; and                                                                         
|
| |  | the voluntary winding up of the Company prior to
    the end of its statutory term.             

Special shareholders meetings of a certain
category of shares are required for any modification of the
rights derived from such category of shares. The resolutions of
the shareholders general meeting affecting these rights
are effective only after the approval by the relevant special
meeting.



| |                         
| | ------------------------
| | Annual Ordinary Meetings

French company law requires our board of
directors to convene an annual ordinary general
shareholders meeting for approval of the annual accounts
and the consolidated accounts. This meeting must be held within
six months of the end of each year. This period may be
extended by an order of the President of the Commercial Court
(Tribunal de Commerce). If our board of directors fails
to convene a shareholders meeting, our statutory auditors
may call the meeting. In a bankruptcy, our liquidator or
court-appointed agent may also call a shareholders meeting
in some instances. Our board of directors may convene any
shareholders meeting upon proper notice any time during
the year. Our shareholders meeting may also be convened by
the majority shareholders in share capital or voting rights
following a tender offer on the shares of our Company or the
acquisition of a controlling block of shares. In addition, any
one of the following may request the court to appoint an agent
to convene a meeting:



| |   |                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | one or several shareholders holding at least 5%
    of our share capital;                                                                                                          
|
| |  | any interested party in cases of emergency;                                                                                                                                        
|
| |  | duly qualified associations of shareholders who
    have held their shares in registered form for at least two years
    and who together hold at least 1% of our voting rights; or
|
| |  | the workers committee in cases of emergency.                                                                                                                                      



| |                                     
| | ------------------------------------
| | Notice of Shareholders
    Meetings

We must announce general meetings at least
30 days in advance by means of a preliminary notice
(avis de réunion), which is published in the
Bulletin des Annonces Légales Obligatoires, or
BALO. The preliminary notice must first be sent to
the AMF. It must contain, among other things, the time, date and
place of the meeting, the agenda, a draft of the resolutions to
be submitted to the shareholders, a description of the
procedures which holders of bearer shares must follow to attend
the meeting and the procedure for voting by mail or by other
means, as the case may be.

At least 15 days prior to the date set for
the meeting on first call, and at least six days before any
second call, we must send a final notice (avis de
convocation) containing the final agenda and other
information for the meeting. The final notice must be sent by
mail to all registered shareholders who have held shares for
more than one month prior to the date of the preliminary notice
and must be published in a newspaper authorized to publish

91



---



##### Table of Contents



legal announcements in the local administrative
department (département) in which the Company is
registered, as well as in the BALO, with prior notice having
been given to the AMF.


In general, shareholders can only take action at
shareholders meetings on matters listed on the agenda for
the meeting. As an exception to this rule, shareholders may take
action with respect to the dismissal of members of the board of
directors and replacement of members of the board of directors
dismissed even though these actions have not been included on
the agenda. Additional resolutions to be submitted for approval
by the shareholders at the meeting may be proposed to our board
of directors within 10 days of the publication of the
preliminary notice in the BALO by:



| |   |                                                                                                                                                                                     
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | one or several shareholders holding a specified
    percentage of shares;                                                                                                           
|
| |  | a duly qualified association of shareholders who
    have held their shares in registered form for at least two years
    and who together hold at least 1% of our voting rights; or
|
| |  | the workers committee.                                                                                                                                                             

Our board of directors must submit these
resolutions to a vote of the shareholders.

During the two weeks preceding a
shareholders meeting, any shareholder may submit written
questions to our board of directors relating to the agenda for
the meeting. Our board of directors must respond to these
questions.



| |                                                    
| | ---------------------------------------------------
| | Attendance and Voting at Shareholders
    Meetings

Shareholders may attend ordinary general meetings
and extraordinary general meetings and exercise their voting
rights subject to the conditions specified in the French company
law and our articles of association (statuts). There is
no requirement that a shareholder have a minimum number of
shares in order to attend or to be represented at an ordinary or
extraordinary general meeting.

In order to participate in any general meeting, a
holder of shares held in registered form must have its shares
registered in its name in a shareholder account maintained by us
or on our behalf by an agent appointed by us no later than one
day prior to the date set for the meeting. A holder of bearer
shares must obtain a certificate from the accredited
intermediary with whom the holder has deposited its shares. This
certificate must indicate the number of bearer shares the holder
owns and must state that these shares are not transferable until
the time fixed for the meeting. According to our articles of
association, the holder must deposit this certificate at the
place specified in the notice of the meeting no later than one
day before the meeting.



| |                     
| | --------------------
| | Double Voting Rights

Since November 24, 1995, each share held in
registered form on our books in the name of the same holder for
two consecutive years confers on the shareholder the right to
two votes. Our shareholders will also be entitled to the right
to two votes for any additional shares issued as a result of
incorporation of reserves, profits or share premium provided
that such shares are attributed in respect of shares for which
our shareholders have already double voting rights. Each other
share confers on the shareholder the right to one vote. Shares
held in the form of American depositary shares will not confer
double voting rights. If a holder transfers or converts to
bearer form a share previously qualified for two votes, that
share will subsequently confer the right to only one vote.
Revocation of double voting rights would require an amendment to
our articles of association (statuts), which must be
approved at an extraordinary shareholders meeting. At
December 31, 2003, 4,247,404 of our shares carried double
voting rights, representing approximately 17.89% of our
outstanding shares and approximately 30.50% of our voting rights.



| |                          
| | -------------------------
| | Proxies and Votes By Mail

In general, all shareholders who have properly
registered their shares or duly presented a certificate from
their accredited financial intermediary may participate in
general meetings. Shareholders may participate in general
meetings either in person or by proxy. Shareholders may vote in
person, by proxy or by mail or by any

92



---



##### Table of Contents



means provided for by our articles of
association, including by remote data transmission (i.e., the
Internet) of the correspondence ballot papers on a proxy form
pursuant to applicable laws and regulations.


Proxies will be sent to any shareholder on
request. In order to be counted, these proxies must be received
at our registered office, or at any other address indicated on
the notice convening the meeting, prior to the date of the
meeting. A shareholder may grant proxies to his or her spouse or
to another shareholder. The legal representative of a
shareholder that is a corporation represents the corporation at
the shareholders meeting or may grant proxies to a
representative. The accredited financial intermediary of
non-French resident shareholders may transfer the vote or the
power of these shareholders for a shareholders meeting.
Alternatively, the shareholder may send us a blank proxy without
nominating any representative. In this case, the chairman of the
meeting will vote the blank proxies in favor of all resolutions
proposed or agreed by our board of directors and against all
others.

With respect to votes by mail, we must send
shareholders a voting form. The completed form must be returned
to us at least three days prior to the date of the
shareholders meeting.

Any shareholder who previously submitted a vote
by correspondence or granted a proxy may still attend a general
meeting and participate in the vote, in which case the
correspondence or proxy vote is invalidated.



| |       
| | ------
| | Quorum

French company law requires that shareholders
holding at least 25% of the shares entitled to voting rights
must be present in person or voting by mail or by proxy or by
any means including by remote data transmission (Internet), in
accordance with the applicable laws and regulations to fulfill
the quorum requirement for:



| |   |                                                                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | an ordinary general meeting; and                                                                                                                        
|
| |  | an extraordinary general meeting where an
    increase in our share capital is proposed through incorporation
    of reserves, profits or share premium.

For the purposes of attaining a quorum, each of
our shares having double voting rights counts as one share and
not two. The quorum requirement is 33 1/3% of the shares
entitled to voting rights, on the same basis, for any other
extraordinary general meeting.

If a quorum is not attained at a meeting, the
meeting is postponed. When a postponed ordinary meeting is
resumed, there is no quorum requirement. No quorum is required
when an adjourned extraordinary general meeting is resumed only
to approve an increase in our share capital through
incorporation of reserves, profits or share premium. In the case
of any other resumed extraordinary general meeting, shareholders
having at least 25% of our outstanding voting rights must be
present in person or voting by mail or by proxy for a quorum. If
a quorum is not attained, the reconvened meeting may be
adjourned for a maximum of two months. No deliberation by the
shareholders may take place without a quorum. However, only
questions which were on the agenda of the reconvened meeting may
be discussed and voted upon.



| |         
| | --------
| | Majority

At an ordinary general meeting of shareholders, a
simple majority of the votes is required to pass such resolution.

A simple majority of shareholders votes
present at the shareholders meeting may pass a resolution
concerning a capital increase by incorporation of reserves,
profits or share premium at an extraordinary general meeting. At
any other extraordinary general meeting, a two-thirds majority
of the shareholder votes present is required.

A unanimous shareholder vote is required to
increase liabilities of shareholders.

Abstention from voting by those present in person
or represented by proxy or voting by mail or present by any
means including by remote data transmission (Internet), in
accordance with the applicable laws and regulations is counted
as a vote against the resolution submitted to a shareholder vote.

93



---



##### Table of Contents



In general, each shareholder is entitled to one
vote per share at any general meeting, although shares held in
registered form on our books in the name of the same holder for
two years may be qualified for two votes, as we described at
 Shareholders Meetings and Voting
Rights  Double Voting Rights. Under French
company law, shares of a company held by entities controlled
directly or indirectly by that company are not entitled to
voting rights and do not count for quorum or majority purposes.

Changes in Our Share Capital



| |                                   
| | ----------------------------------
| | Increases in Our Share
    Capital

Under French company law, our share capital may
be increased only with the approval of our shareholders at an
extraordinary general meeting upon the recommendation of our
board of directors. Increases resulting from the incorporation
of reserves, profits or share premium are resolved by an
extraordinary shareholders meeting acting under the quorum
and majority requirements applicable to ordinary
shareholders meetings. Increases in our share capital by
an increase of nominal value requires the unanimous consent of
all the shareholders unless effected by capitalization of
reserves, profit or share premium. All other capital increases
require the approval of an extraordinary general meeting. See
 Shareholders Meetings and Voting
Rights  Attendance and Voting at Shareholders
Meetings.

Increases in our share capital may be effected by
the issuance of additional shares, by an increase in the nominal
value of the shares or by the creation of a new class of equity
securities. Increases in our share capital by issuing additional
securities may be effected by issuing securities for cash,
assets contributed in kind, securities contributed through a
tender offer, conversion, exchange, redemption of debt
securities previously issued, exercise of any other securities
giving right to such securities such as warrants or stock
options, capitalization of profits, reserves or share premiums,
subject to various conditions, in satisfaction of debt incurred
by us, or any combination of the above.

Our shareholders may delegate to our board of
directors the powers required to carry out in one or more stages
(subject to the time limitations provided by French law) any
increase in share capital previously authorized by our
shareholders (other than for an in-kind contribution). Our board
of directors may further delegate this right to the Chairman and
the Chief Executive Officer. Each time our shareholders vote for
a capital increase or decide to delegate to our board of
directors the right to effect a capital increase (except for a
contribution in kind or when it results from an earlier issue of
securities giving right to shares), they must decide whether or
not to proceed with a capital increase reserved to our employees
and employees of our subsidiaries and whether or not to delegate
to our board of directors the right to effect such reserved
capital increase.

On April 11, 2003, the shareholders
authorized our board of directors for a period of 26 months
to:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | increase our share capital by issuing, with
    preferential subscription rights, shares or other securities
    giving right, immediately or in the future, to our share
    capital, up to a maximum nominal amount of
    75,000,000; it
    being specified that the cumulative amount of capital increases
    to be realized pursuant to this authorization and the
    authorization indicated in the second bullet point cannot exceed
    a nominal amount of
    60,000,000;
|
| |  | increase our share capital by issuing, without
    preferential subscription rights, shares or other securities
    giving right, immediately or in the future, to our share
    capital, up to a maximum nominal amount of
    37,500,000; it
    being specified that this amount will be deducted from the
    maximum limit of capital increases fixed at
    75,000,000 in
    the first bullet point;                                                                           
|
| |  | increase our share capital by capitalizing
    reserves, profits or premiums up to a maximum nominal amount of
    75,000,000; it
    being specified that this amount will be deducted from the
    maximum limit of capital increases above fixed at
    75,000,000 in
    the first bullet point; and                                                                                                                                                                              
|
| |  | issue debt securities giving access to our share
    capital up to a nominal amount of
    2 billion.                                                                                                                                                                                                                                                                                                                                                                                  

Additionally, on April 29, 2004, the
shareholders authorized the board of directors to increase the
share capital in order to carry out one or several exchange
tender offers on another company up to a nominal amount equal to
37,500,000.

94



---



##### Table of Contents





| |                                   
| | ----------------------------------
| | Decreases in Our Share
    Capital

Under French company law, our share capital may
be decreased only with our shareholders approval at an
extraordinary general meeting. Decreases in our share capital
can be made either by decreasing the nominal value of the shares
or by reducing the number of outstanding shares. The number of
outstanding shares may be reduced either by an exchange of
shares or by a repurchase and cancellation of our shares. In the
case of a capital reduction, other than a reduction to absorb
losses or a reduction as a part of a program to repurchase our
shares, all shareholders must be offered the possibility to
participate in such reduction and the holders of each class of
shares must be treated equally.

The history of our issued share capital since
year-end 1999 is described below:

|                               |                                 |                           |            |            |         |  |      |       |  
|------------------------------ | ------------------------------- | ------------------------- | ---------- | ---------- | ------- |  | ---- | ----- | -
|                               |                                 | Number of                 |            |            | Share   | 
|                               |                                 | Shares Issued             |            |            | Capital | 
|                               |                                 |                           |            |            |         | 
|                               |                                 |                          
|                               |                                 | (in millions of EUR,      |           
|                               |                                 | except for shares issued) |           
|Shares as of December 31, 1999 |                                 |                           | 15,758,537 |            |         |  | 48.1 |      
|                               | 2000 increase(a)                |                           |            | 143,840    |         |  |      | 0.4   |  
|                               | Subscription to equity issue(b) |                           |            | 126,928    |         |  |      | 0.4   |  
|                               | Decrease in capital(c)          |                           |            |           |         |  |      |      |  
|Shares as of December 31, 2000 |                                 |                           | 16,029,305 |            |         |  | 48.9 |      
|                               | 2001 increase(a)                |                           |            | 118,420    |         |  |      | 0.4   |  
|                               | Subscription to equity issue(d) |                           |            | 10,565,723 |         |  |      | 32.2  |  
|                               | Decrease in capital(c)          |                           |            |           |         |  |      |      |  
|Shares as of December 31, 2001 |                                 |                           | 26,713,448 |            |         |  | 81.5 |      
|                               | 2002 increase                   |                           |            | 48,565     |         |  |      | 0.1   |  
|                               | 2002 increase(a)                |                           |            | 23,250     |         |  |      | 0.1   |  
|                               | Subscription to equity issue(b) |                           |            | 98,614     |         |  |      | 0.3   |  
|                               | Decrease in capital(c)          |                           |            | (3,475,953 | )       |  |      | (10.6 | )
|Shares as of December 31, 2002 |                                 |                           | 23,408,004 |            |         |  | 71.4 |      
|                               | 2003 increase                   |                           |            | 333,327    |         |  |      | 1.0   |  
|                               | 2003 increase(a)                |                           |            |           |         |  |      |      |  
|                               | Subscription to equity issue(b) |                           |            |           |         |  |      |      |  
|Shares as of December 31, 2003 |                                 |                           | 23,738,331 |            |         |  | 72.4 |      



---



|    |                                                        
|--- | -------------------------------------------------------
|(a) | This increase results from exercised stock
    options.



|    |                                                                                        
|--- | ---------------------------------------------------------------------------------------
|(b) | This increase results from a new equity issuance
    reserved for employees of Technip.



|    |                                                            
|--- | -----------------------------------------------------------
|(c) | Decrease in capital by cancellation of treasury
    shares.



|    |                                                                          
|--- | -------------------------------------------------------------------------
|(d) | This increase results from our exchange offers
    for Coflexip and ISIS.



| |                                   
| | ----------------------------------
| | Preemptive Subscription
    Rights

Under French company law, if we issue for cash
specific securities giving right, either immediately or at a
later date, to subscribe for new shares, current shareholders
will have preemptive subscription rights to these securities on
a pro rata basis. These preemptive rights entitle the
individual or entity that holds them to subscribe to an issue of
any securities that may increase the share capital of the
Company by means of a cash payment or a settling of cash debts.
These preemptive rights require us to give priority treatment to
those shareholders. Preemptive subscription rights are
transferable during the subscription period relating to a
particular offering. These rights may also be listed on Euronext
Paris.

A two-third majority of the shares entitled to
vote at an extraordinary general meeting may vote to waive
preemptive subscription rights with respect to any particular
public offering. French law requires that our board of directors
and our statutory auditors present reports that specifically
address any proposal to waive preemptive subscription rights. In
the event of a waiver, the issue of securities must be completed
within the period prescribed by law. Shareholders may also
decide at an extraordinary general meeting to give the existing

95



---



##### Table of Contents



shareholders a non-transferable priority right to
subscribe to the new securities, during a limited period of
time. Shareholders also may notify us that they wish to waive
their own preemptive subscription rights with respect to any
particular offering if they so choose.




| |                                                                    
| | -------------------------------------------------------------------
| | Financial Statements and Other
    Communications with Shareholders

In connection with any shareholders
meeting, we must provide a set of documents including our
Management report prepared by our board of directors and a
summary of the results of the five previous years to any
shareholder who so requests. In addition, French company law
requires that a special report be provided to the annual
ordinary shareholders meeting regarding stock options we
authorized and/or granted. This report must include options
granted to our directors and some of our employees during the
last fiscal year and the shares that they obtained through the
exercise of their stock options during the past fiscal year.

Pursuant to a new French act of August 1,
2003 (loi de sécurité financière), the
Chairman of our board of directors has delivered a special
report to the annual ordinary shareholders meeting
regarding the status of the preparation and organization of the
work of our board of directors, the status of the internal
control procedures implemented by our Company and on the
restrictions if any, that our board of directors have placed on
the powers granted to the Chief Executive Officer. In general,
this report describes the objectives of our internal controls,
the organization of the participants in our internal controls
and the internal control procedures we currently have in place.



| |          
| | ---------
| | Dividends

We may only distribute dividends out of our
distributable profits, plus any amounts held in our
reserve which our shareholders decide to make available for
distribution, other than those reserves which are specifically
required by law or our articles of association.
Distributable profits consist of our unconsolidated
net profit in each year, as increased or reduced by any profit
or loss carried forward from prior years, less any contributions
to the reserve accounts pursuant to law or our articles of
association.



| |              
| | -------------
| | Legal Reserve

French company law provides that French
sociétés anonymes such as the Company must
allocate 5% of their unconsolidated statutory net profit for
each year to their legal reserve fund before dividends may be
paid with respect to that year. Funds must be allocated until
the amount in the legal reserve is equal to 10% of the aggregate
nominal value of the issued and outstanding share capital. This
restriction on the payment of dividends also applies to each of
our French subsidiaries on an unconsolidated basis. At
December 31, 2003, our legal reserve was
9.8 million.
The legal reserve of any company subject to this requirement may
only be distributed to shareholders upon liquidation of the
company.



| |                      
| | ---------------------
| | Approval of Dividends

Under French company law, our board of directors
may propose a dividend for approval by the shareholders at the
annual general shareholders meeting. If we have earned
distributable profits since the end of the preceding year, as
reflected in an interim income statement certified by our
auditors, our board of directors may distribute interim
dividends, to the extent of the distributable profits for the
period covered by the interim income statement. Our board of
directors may declare interim dividends, subject to French law,
and may do so, for interim dividends paid in cash, without
obtaining shareholder approval. For interim dividends paid in
shares, prior authorization by an ordinary shareholders
meeting is required. We have historically declared annual, but
not interim dividends.



| |                          
| | -------------------------
| | Distribution of Dividends

Dividends are distributed to shareholders pro
rata according to their respective holdings of shares.
Outstanding dividends are payable to shareholders on the date of
the shareholders meeting at which the distribution of
dividends is approved. In the case of interim dividends,
distributions are made to shareholders on the date of the
meeting of our board of directors in which the distribution of
interim dividends is approved. The

96



---



##### Table of Contents



actual dividend payment date is decided by the
shareholders in an ordinary general meeting or by our board of
directors in the absence of such a decision by our shareholders.


In addition, our articles of association
authorize the shareholders, in an ordinary general meeting, to
authorize the grant to each shareholder of an option to receive
all or part of any dividends either in cash or in our shares.



| |                  
| | -----------------
| | Timing of Payment

Under French company law, we must pay any
dividends within nine months of the end of our fiscal year,
unless otherwise authorized by court order. Dividends on our
shares that are not claimed within five years of the date of
declared payment revert to the French State.

Form, Holding and Transfer of Shares



| |               
| | --------------
| | Form of Shares

Our articles of association (statuts)
provide that our shares may be held in registered or bearer
form. However, bearer shares do not qualify for double voting
rights.



| |                  
| | -----------------
| | Holding of Shares

Under French law, shareholders ownership
interests are represented by book entries instead of share
certificates. Certificates may, however, be issued by Euroclear
France if they are to be held outside of France. We maintain a
share account with Euroclear France for all shares in registered
form, which is administrated by BNP Paribas Securities Services.
In addition, we maintain separate accounts in the name of each
shareholder either directly, or, at a shareholders
request, through the shareholders accredited intermediary.
Each shareholders account shows the name of the holder and
the number of shares held and, in the case of shares held
through an accredited intermediary, it shows that they are held
through this intermediary. BNP Paribas Securities Services, as a
matter of course, issues confirmations to each registered
shareholder as to shares registered in the shareholders
account, but these confirmations are not documents of title.

Shares held in bearer form are held on the
shareholders behalf in an account maintained by an
accredited intermediary and are registered in an account which
the accredited intermediary maintains with Euroclear France.
That account is separate from our share account with Euroclear
France. Each accredited intermediary maintains a record of
shares held through it and will issue certificates of
registration for the shares that it holds. Shares held in bearer
form may only be transferred through accredited intermediaries
and Euroclear France. Our articles of association
(statuts) permit, in accordance with the applicable
legislation, the use of the procedure known as titres au
porteur identifiables, according to which Euroclear France
will, upon the Companys request, disclose to the Company
on a specific date a shareholders name, date of birth (or,
in the case of a legal person, name and date of organization),
nationality, address and the amount of securities held by the
shareholder which have, or may in the future acquire, voting
rights, and, as the case may be, the restrictions that might
apply to these securities.

Holders of shares outside of France may trade
them on Euronext Paris. Upon payment of a fee or commission,
accredited intermediaries can provide assistance to these
holders or to the brokers or agents through whom a sale is to be
effected.

In addition, according to French company law,
shares held by non-French residents may be held on these
shareholders behalf in a collective account or in several
individual accounts held by a financial intermediary. Said
intermediary must declare his position as an intermediary
holding shares on behalf of the beneficial owner. Consequently,
the owner of the shares recorded in the collective account or in
several individual accounts by an intermediary will be
represented in the general shareholders meeting by this
intermediary.

97



---



##### Table of Contents





| |                   
| | ------------------
| | Transfer of Shares

Our articles of association (statuts) do
not contain any restrictions relating to the transfer of shares.

Registered shares must be converted into bearer
form before being transferred on Euronext Paris and,
accordingly, must be registered in an account maintained by an
accredited intermediary. A shareholder may initiate a transfer
by giving instructions to the relevant accredited intermediary.
A fee or commission is payable to the broker involved in the
transaction, regardless of whether the transaction occurs within
or outside France. No registration duty is normally payable in
France, unless a transfer instrument has been executed in France.

For dealings on Euronext Paris, an impôt
sur les opérations de Bourse, or tax assessed on the
price at which the securities were traded, is payable by French
residents, at a rate of 0.003 on transactions up to
153,000 and at a
rate of 0.0015 thereafter, subject to a rebate of
23 per
transaction and maximum assessment of
610 per
transaction. Non-residents of France are generally not subject
to the payment of such impôt sur les opérations de
bourse.



| |                   
| | ------------------
| | Liquidation Rights

If we are liquidated, any assets remaining after
payment of our debts, liquidation expenses and all of our
remaining obligations will be distributed first to repay in full
the nominal value of our shares. Any surplus will be distributed
pro rata among shareholders in proportion to their
shareholdings.

Requirements for Holdings Exceeding Certain
Percentages

French company law provides that any individual
or entity, acting alone or in concert with others, that becomes
the owner or ceases to be the owner, directly or indirectly, of
more than 5%, 10%, 20%, 33 1/3%, 50% or 66 2/3% of the
outstanding shares or voting rights of a French company listed
on a regulated market of Euronext Paris, such as the Company, or
that increases or decreases its shareholding or voting rights
above or below any of those percentages, must notify the company
within five trading days of the date it crosses the threshold,
of the number of shares (including in the form of American
depositary shares) it holds and their voting rights. The
individual or entity must also notify the AMF, within five
trading days of the date it crosses the threshold.

French law and the COB regulations impose
additional reporting requirements on persons who acquire more
than 10% or 20% of the outstanding shares or voting rights of a
listed company. These persons must file a report with the
company and the AMF within 10 trading days of the date they
cross the threshold. In the report, the acquirer must specify
its intentions for the following 12-month period, including
whether or not it is acting alone or in concert and whether or
not it intends to continue its purchases, to acquire control of
the company in question or to seek nominations to the board of
directors. The AMF makes the notice public. The acquirer must
also publish a press release stating its intentions in a
financial newspaper of national circulation in France. The
acquirer may amend its stated intentions, provided that it does
so on the basis of significant changes in its own situation or
shareholders. Upon any change of intentions, it must file a new
report.

In addition, Article 13 of our articles of
association (statuts) provides that, without prejudice to
requirements under French company law, any individual or entity,
acting alone or in concert with others, that becomes the owner,
directly or indirectly, of 1% or more of our share capital or
voting rights must notify us by a letter with an acknowledgement
or receipt within 5 trading days of the date it crosses the
threshold, of the number of shares (including in the form of
American depositary shares) it holds and their voting rights.
This article provides that this obligation to notify us arises
at each increment of 1% up to and including 33%. This article
also obliges our shareholders to notify us each time their
holdings fall below these incremental thresholds. If a person
does not comply with this notification requirement, one or more
shareholders holding 1% or more of our share capital or voting
rights may require a shareholders meeting in the minutes
of the general shareholders meeting to deprive the shares
in excess of the relevant threshold of voting rights for all
shareholders meetings for two years following the date on
which the owner complies with the notification requirements.

Under the CMF regulations, and subject to limited
exemptions granted by the AMF, any person or persons acting in
concert who come to own more than 33 1/3% of the share
capital or voting rights of a French listed company must
initiate a public tender offer for the balance of the share
capital and voting rights of that company.

98



---



##### Table of Contents



We must publish in the BALO, no later than
15 days after the annual ordinary general
shareholders meeting, information with respect to the
total number of voting rights as of the date of the meeting. In
addition, if the number of voting rights changes by 5% or more
between two annual ordinary general meetings, we must publish in
the BALO, within 15 days of our knowledge of this change,
the new number of voting rights and provide the AMF with a
written notice. The AMF publishes the total number of voting
rights so notified by all listed companies in a weekly notice
(avis), mentioning the date each number was last updated.
In order to facilitate compliance with the notification
requirements, a holder of American depositary shares may deliver
any such notification to the depositary and the depositary
shall, as soon as practicable, forward such notification to us
and the AMF.

If any person fails to comply with the legal
notification requirements, the shares or voting rights in excess
of the relevant threshold will be deprived of voting rights for
all shareholders meetings until the end of a two-year
period following the date on which the owner thereof complies
with the notification requirements. In addition, any shareholder
who fails to comply with these requirements may have all or part
of its voting rights suspended for up to five years by the
Commercial Court located in the jurisdiction of the registered
office of the Company at the request of the Company, or any
shareholder or the AMF, and may be subject to a
18,000 fine.



| |                           
| | --------------------------
| | Purchase of Our Own Shares

Under French law, we may not subscribe to our own
shares. However, we may, either directly or through a financial
intermediary acting on our behalf, purchase our issued and
outstanding shares up to 10% of our share capital for one of
three purposes:



| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. | To reduce our share capital for reasons other
    than motivated by losses by canceling the shares we purchase,
    with our shareholders approval at an extraordinary general
    meeting;                                                                                                                                                                                                                                                                                                                       
|
| | 2. | To provide shares to our employees under a
    profit-sharing plan or stock option plan; or                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| | 3. | To set up a corporate share repurchase program
    because our shares are listed on the Premier Marché
    of Euronext Paris. To acquire our shares for this purpose, with
    our shareholders approval at an ordinary general meeting,
    we first must file an information memorandum (Note
    dinformation) that has received the approval, or visa,
    of the AMF either at the latest 15 days before such meeting
    or right after the board of directors implements the share
    repurchase program.

In addition, we may not repurchase pursuant to a
share repurchase program an amount of shares that would result
in the Company holding, directly or through a person acting on
our behalf, more than 10% of our outstanding share capital, or
if we have different classes of shares, 10% of the shares in
each class.

We must hold any shares we repurchase in
registered form. These shares also must be fully paid up. Shares
repurchased by us are deemed outstanding under French law but
are not entitled to voting rights and dividends, and we may not
exercise the preemptive subscription rights attached to them.

Our shareholders, at an extraordinary general
meeting, may decide to take these shares into account in
determining the preemptive subscription rights attached to the
other shares. However, if our shareholders decide to take them
into account, we must either sell the rights attached to the
shares we hold on the market before the end of the subscription
period or distribute them to the other shareholders on a pro
rata basis.

At the Shareholders Meeting of
April 29, 2004, our shareholders authorized the board of
directors to repurchase over the following 18 months up to
10% of our total outstanding share capital, setting a maximum
repurchase price of
150 per share
and a minimum resale price of
75 per share.

In addition, at the June 20, 2002 general
Shareholders Meeting, the shareholders granted our board
of directors the authorization to cancel some or all the shares
repurchased under a share repurchase program up to a limit of
10% of our share capital in any one 24-month period. This
authorization is granted for five years.

We may not cancel more than 10% of our
outstanding share capital over any 24-month period.

99



---



##### Table of Contents





| |                      
| | ---------------------
| | Trading In Our Shares

Under COB Regulation No. 90-04, as amended,
we may not trade in our own shares for the purpose of
manipulating the market. There are three requirements for trades
by a company in its own shares to be considered valid.
Specifically, in order to be deemed valid:



| |   |                                                                                                                                                                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | trades must be executed on behalf of the company
    by only one intermediary, or if the company uses its share
    repurchase program in part by way of derivatives, by two
    intermediaries, provided that the issuer is able to ensure the
    appropriate coordination between them;
|
| |  | any block trades may not be made at a price above
    the current market price; and                                                                                                                                                                                                       
|
| |  | each trade must be made at a price that falls
    between the lowest and the highest trading price of the trading
    session during which it is executed.                                                                                                                                

If a companys shares are continuously
quoted (cotation en continu), such as our shares, then a
trade must meet the following further requirements to be
considered valid:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the trade must not influence the determination of
    the quoted price before the opening of trading, at the opening
    of the trading or session, at the first trade of the shares, at
    the reopening of trading following a suspension either
    individually or generally, or, as applicable, in the last
    half-hour of any trading session or at the fixing of the closing
    price;
|
| |  | the trade must not be carried out in order to
    influence the price of a derivative instrument relating to the
    companys shares; and                                                                                                                                                                                                                                                       
|
| |  | the trade must not account for more than 25% of
    the average total daily trading volume in the shares during the
    three trading days immediately preceding the trade for shares.
    This last requirement applies only to trades in shares, such as
    ours, that are admitted on the Deferred Settlement Service
    (Service de Règlement Différé or
    SRD).                       

The use of repurchased shares to finance an
acquisition is deemed justified to the extent the acquisition is
performed after a three-month abstention period and an
independent expert has been designated to verify the value of
the shares, the value of the acquisition, and the fairness of
the exchange ratio.

However, there are two periods during which we
are not permitted to trade in our own securities: the 15-day
period before the date on which we make our consolidated or
annual accounts public, and the period beginning on the date at
which we become aware of information that, if disclosed, would
have a significant impact on the market price of our securities
and ending on the date this information is made public. This
requirement does not apply to trades executed on behalf of the
issuer by an intermediary acting pursuant to a liquidity
agreement (contrat de liquidité) complying with a
charter of ethics approved by the AMF.

After making a purchase, transfer or cancellation
of our own shares, we must file monthly reports with the AMF
that contain specified information about subsequent
transactions. The AMF makes this information publicly available.

100



---



##### Table of Contents



DESCRIPTION OF OUR AMERICAN DEPOSITARY
SHARES

American Depositary Receipts

Each of our American depositary shares represents
one-fourth of one Technip share deposited with the custodian, as
agent of the depositary, under the deposit agreement among
ourselves, the depositary and yourself as an American depositary
receipt holder. In the future, each American depositary share
may also from time to time represent any securities, cash or
other property deposited with the depositary but which have not
been distributed directly to you. Your American depositary
shares will be evidenced by what are known as American
depositary receipts.

You may hold American depositary shares either
directly or indirectly through your broker or other financial
institution. If you hold American depositary shares directly, by
having American depositary shares registered in your name on the
books of the depositary, you are an American depositary receipt
holder. This description assumes you hold your American
depositary shares directly. If you hold the American depositary
shares through your broker or financial institution nominee, you
must rely on the procedures of such broker or financial
institution to assert the rights of an American depositary
receipt holder described in this section. You should consult
with your broker or financial institution to find out what those
procedures are.

Because the depositarys nominee will
actually be the registered owner of the shares, you must rely on
it to exercise the rights of a shareholder on your behalf. The
obligations of the depositary and its agents are set out in the
deposit agreement. New York law governs the deposit agreement
and the American depositary shares.

The following is a summary of the material terms
of the deposit agreement. Because it is a summary, it does not
contain all the information that may be important to you. For
more complete information, you should read the entire deposit
agreement and the form of American depositary receipt, which
contains the terms of your American depositary shares.

Share Dividends and Other
Distributions



| |                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------
| | How will I receive dividends and other
    distributions on the shares underlying my American depositary
    shares?

We may make various types of distributions with
respect to our securities. The depositary has agreed to pay to
you the cash dividends or other distributions it or the
custodian receives on shares or other deposited securities,
after deducting its expenses. You will receive these
distributions in proportion to the number of underlying shares
that your American depositary shares represent.

Except as stated below, to the extent the
depositary is legally permitted, it will deliver such
distributions to American depositary receipt holders in
proportion to their interests in the following manner:

Cash.The depositary
will distribute any U.S. dollars available to it resulting
from a cash dividend or other cash distribution or the net
proceeds of sales of any other distribution or portion thereof
(to the extent applicable), on an averaged or other practicable
basis, subject to (i) appropriate adjustments for taxes
withheld, (ii) such distribution being impermissible or
impracticable with respect to certain registered holders and
(iii) deduction of the depositarys expenses in
(1) converting any foreign currency to U.S. dollars to
the extent that it determines that such conversion may be made
on a reasonable basis, (2) transferring foreign currency or
U.S. dollars to the United States by such means as the
depositary may determine to the extent that it determines that
such transfer may be made on a reasonable basis,
(3) obtaining any approval or license of any governmental
authority required for such conversion or transfer, which is
obtainable at a reasonable cost and within a reasonable time and
(4) making any sale by public or private means in any
commercially reasonable manner. If exchange rates fluctuate
during a time when the depositary cannot convert a foreign
currency, you may lose some or all of the value of the
distribution.

Shares.In the case
of a distribution in shares, the depositary will issue
additional American depositary receipts to evidence the number
of American depositary shares representing such shares. Only
whole American depositary shares will be issued. Any shares
which would result in fractional American depositary shares will
be sold and the net proceeds will be distributed to the American
depositary receipt holders entitled thereto.

101



---



##### Table of Contents



Rights to receive additional
shares.In the case of a distribution
of rights to subscribe for additional shares or other rights, if
we provide satisfactory evidence that the depositary may
lawfully distribute such rights, the depositary may arrange for
American depositary receipt holders to instruct the depositary
as to the exercise of such rights. However, if we do not furnish
such evidence or if the depositary determines it is not
practical to distribute such rights, the depositary may:



| |   |                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------
| |  | sell such rights if practicable and distribute
    the net proceeds as cash; or                        
|
| |  | allow such rights to lapse, in which case
    American depositary receipt holders will receive nothing.

We have no obligation to file a registration
statement under the Securities Act of 1933 in order to make any
rights available to American depositary receipt holders.

Other distributions.In the case of a distribution of securities or property other
than those described above, the depositary may either
(i) distribute such securities or property in any manner it
deems equitable and practicable, (ii) to the extent the
depositary deems distribution of such securities or property not
to be equitable and practicable, sell such securities or
property and distribute any net proceeds in the same way it
distributes cash or (iii) hold the distributed property, in
which case the American depositary shares will also represent
the distributed property.

Any U.S. dollars will be distributed by
checks drawn on a bank in the United States for whole
U.S. dollars and cents (fractional cents will be withheld
without liability for interest and added to future cash
distributions).

The depositary may choose any practical method of
distribution for any specific American depositary receipt
holder, including the distribution of foreign currency,
securities or property, or it may retain such items, without
paying interest on or investing them, on behalf of the American
depositary receipt holder as deposited securities.

The depositary is not responsible if it decides
that it is unlawful or impractical to make a distribution
available to any American depositary receipt holders.

There can be no assurances that the depositary
will be able to convert any currency at a specified exchange
rate or sell any property, rights, shares or other securities at
a specified price, nor that any of such transactions can be
completed within a specified time period.

Deposit, Withdrawal and Cancellation



| |                                                              
| | -------------------------------------------------------------
| | How does the depositary issue American
    depositary shares?

The depositary will issue American depositary
shares if you or your broker deposit Technip shares or evidence
of rights to receive Technip shares with the custodian. Shares
deposited with the custodian must be accompanied by certain
documents, including instruments showing that such shares have
been properly transferred or endorsed to the person on whose
behalf the deposit is being made.

The custodian will hold all deposited shares for
the account of the depositary. American depositary receipt
holders thus have no direct ownership interest in the shares and
only have such rights as are contained in the deposit agreement.
The custodian will also hold any additional securities, property
and cash received on or in substitution for the deposited
shares. The deposited shares and any such additional items are
referred to as deposited securities.

Upon each deposit of shares, receipt of related
delivery documentation and compliance with the other provisions
of the deposit agreement, including the payment of the fees and
charges of the depositary and any taxes or other fees or charges
owing, the depositary will issue an American depositary receipt
or American depositary receipts in the name of the person
entitled thereto evidencing the number of American depositary
shares to which such person is entitled. Certificated American
depositary receipts will be delivered at the depositarys
principal New York office or any other location that it may
designate as its transfer office.

102



---



##### Table of Contents





| |                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------
| | How do American depositary receipt holders
    cancel an American depositary share and obtain deposited
    securities?

When you turn in your Technip American depositary
share at the depositarys office, the depositary will, upon
payment of certain applicable fees, charges and taxes, and upon
receipt of proper instructions, deliver the underlying shares to
an account designated by you and maintained by us, in the case
of shares in registered form, or transfer them to an account of
an accredited financial institution on your behalf in the case
of shares in bearer form. At your risk, expense and request, the
depositary may deliver deposited securities at such other place
as you may request.

The depositary may only restrict the withdrawal
of deposited securities in connection with:



| |    |                                                                                                                                                                                                         
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. | temporary delays caused by closing our transfer
    books or those of the depositary or the deposit of shares in
    connection with voting at a shareholders meeting, or the
    payment of dividends;
|
| | 2. | the payment of fees, taxes and similar charges; or                                                                                                                                                      
|
| | 3. | compliance with any U.S. or foreign laws or
    governmental regulations relating to the American depositary
    receipts or to the withdrawal of deposited securities.                                 

This right of withdrawal may not be limited by
any other provision of the deposit agreement.

Voting Rights



| |               
| | --------------
| | How do I vote?

If you are an American depositary receipt holder
and the depositary asks you to provide it with voting
instructions, you may instruct the depositary how to exercise
the voting rights for the shares that underlie your American
depositary shares. After receiving voting materials from us, the
depositary will notify the American depositary receipt holders
of any shareholders meeting or solicitation of consents or
proxies. This notice will describe how you may instruct the
depositary to exercise the voting rights for the shares which
underlie your American depositary shares including complying
with the requirements that your name be placed upon our share
register and that you deliver your American depositary shares to
the depositary for holding pending the conclusion of the
meeting. For instructions to be valid, the depositary must
receive them on or before the date specified. The depositary
will try, as far as is practical, subject to the provisions of
and governing the underlying shares or other deposited
securities, to vote or to have its agents vote the shares or
other deposited securities as you instruct. The depositary will
only vote or attempt to vote as you instruct. The depositary
will not itself exercise any voting discretion. Furthermore,
neither the depositary nor its agents are responsible for any
failure to carry out any voting instructions, for the manner in
which any vote is cast or for the effect of any vote.

There is no guarantee that you will receive
voting materials in time to instruct the depositary to vote and
it is possible that you, or persons who hold their American
depositary shares through brokers, dealers or other third
parties, will not have the opportunity to exercise a right to
vote. Additionally, you will not qualify to exercise double
voting rights with respect to the Technip shares underlying your
American depositary shares, even if you have held your Technip
American depositary shares for more than two years.



| |                                                                                      
| | -------------------------------------------------------------------------------------
| | Can I qualify for double voting rights as a
    holder of American depositary shares?

Our articles of association (statuts)
provide that each of our shares that is held in registered form
on our books in the name of the same holder for two years
confers on the shareholder the right to two votes. Because our
American depositary shares do not represent specifically
identified Technip shares, and because the depositary does not
hold our shares in registered form on our books either in its
own name or in the name of American depositary shareholders, our
American depositary shares do not confer double voting rights.
The deposit agreement provides that neither holders of our
American depositary shares nor the depositary will be entitled
to exercise double voting rights unless we have advised the
depositary in writing and have agreed a mechanism for the
allocation of double voting rights with the depositary. We have
neither advised the depositary in writing nor agreed to an
allocation mechanism, and do not currently intend to establish a
mechanism allowing our American depositary shares to confer
double voting rights on their holders.

103



---



##### Table of Contents



Record Dates

The depositary may fix record dates for the
determination of the American depositary receipt holders who
will be entitled:



| |    |                                                                                                                                         
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------
| | 1. | to receive a dividend, distribution or rights; or                                                                                       
|
| | 2. | to give instructions for the exercise of voting
    rights at a meeting of holders of ordinary shares or other
    deposited securities;

all subject to the provisions of the deposit
agreement.

Reports and Other Communications



| |                                        
| | ---------------------------------------
| | Will I be able to view our
    reports?

The depositary will make available for inspection
by American depositary receipt holders any written
communications from us that are both received by the custodian
or its nominee as a holder of deposited securities and made
generally available to the holders of deposited securities. We
will furnish these communications in English when so required by
any rules or regulations of the U.S. Securities and
Exchange Commission.

Additionally, if we make any written
communications generally available to holders of our shares,
including the depositary or the custodian, and the depositary or
the custodian actually receive those written communications, the
depositary will mail copies of them, or, at its option,
summaries of them, to American depositary receipt holders.

Fees and Expenses



| |                                                             
| | ------------------------------------------------------------
| | What fees and expenses will I be
    responsible for paying?

American depositary receipt holders will be
charged a fee for each issuance of American depositary shares,
including issuances resulting from distributions of shares,
rights and other property, and for each surrender of American
depositary shares in exchange for deposited securities. The fee
in each case is U.S.$5.00 for each 100 American depositary
shares (or any portion thereof) issued or surrendered.

The following additional charges shall be
incurred by the American depositary receipt holders, by any
party depositing or withdrawing shares or by any party
surrendering American depositary receipts or to whom American
depositary receipts are issued (including, without limitation,
issuance pursuant to a stock dividend or stock split declared by
the Company or an exchange of stock regarding the American
depositary receipts or the deposited securities or a
distribution of American depositary receipts), whichever is
applicable:



| |    |                                                                                                                                                                                                                                                                                                                           
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. | to the extent permissible under the rules of the
    New York Stock Exchange, a fee of U.S.$0.02 or less per American
    depositary share (or portion thereof) for any cash distribution
    made pursuant to the deposit agreement;                                                                                     
|
| | 2. | to the extent not prohibited by the rules of any
    stock exchange or inter-dealer quotation system upon which the
    American depositary shares are traded, a fee of U.S.$1.50 per
    American depositary receipt or American depositary receipts for
    transfers of certificated American depositary receipts made;
|
| | 3. | stock transfer or other taxes and other
    governmental charges;                                                                                                                                                                                                                                                         
|
| | 4. | cable, telex and facsimile transmission and
    delivery charges incurred at your request;                                                                                                                                                                                                                                
|
| | 5. | transfer or registration fees for the
    registration of transfer of deposited securities on any
    applicable register in connection with the deposit or withdrawal
    of deposited securities; and                                                                                                                   
|
| | 6. | expenses of the depositary in connection with the
    conversion of foreign currency into U.S. dollars.                                                                                                                                                                                                                   

We will pay all other charges and expenses of the
depositary and any agent of the depositary (except the
custodian) pursuant to agreements from time to time between the
depositary and us. The fees described above may be amended from
time to time.

104



---



##### Table of Contents



Payment of Taxes

American depositary receipt holders must pay any
tax or other governmental charge payable by the custodian or the
depositary on any American depositary share or American
depositary receipt, deposited security or distribution. If an
American depositary receipt holder owes any tax or other
governmental charge, the depositary may (i) deduct the
amount thereof from any cash distributions or (ii) sell
deposited securities and deduct the amount owing from the net
proceeds of such sale. In either case, the American depositary
receipt holder remains liable for any shortfall. Additionally,
if any tax or governmental charge is unpaid, the depositary may
also refuse to effect any registration, registration of
transfer, split-up or combination of deposited securities or
withdrawal of deposited securities (except under limited
circumstances mandated by securities regulations). If any tax or
governmental charge is required to be withheld on any non-cash
distribution, the depositary may sell the distributed property
or securities to pay such taxes and distribute any remaining net
proceeds to the American depositary receipt holders entitled
thereto.

Reclassifications, Recapitalizations and
Mergers

If we take certain actions that affect the
deposited securities, including (i) any change in par
value, split-up, consolidation, cancellation or other
reclassification of deposited securities or (ii) any
recapitalization, reorganization, merger, consolidation,
liquidation, receivership, bankruptcy or sale of all or
substantially all of our assets, then the depositary may choose
to:



| |    |                                                                                                   
| | -- | --------------------------------------------------------------------------------------------------
| | 1. | amend the form of American depositary receipt;                                                    
|
| | 2. | distribute additional or amended American
    depositary receipts;                                
|
| | 3. | distribute cash, securities or other property it
    has received in connection with such actions;
|
| | 4. | sell any securities or property received and
    distribute the proceeds as cash; or              
|
| | 5. | none of the above.                                                                                

If the depositary does not choose any of the
above options, any of the cash, securities or other property it
receives will constitute part of the deposited securities and
each American depositary share will then represent a
proportionate interest in such property.

Amendment and Termination



| |                                              
| | ---------------------------------------------
| | How may the deposit agreement be
    amended?

We may agree with the depositary to amend the
deposit agreement and the American depositary shares without
your consent for any reason. American depositary receipt holders
must be given at least 30 days notice of any
amendment that imposes or increases any fees or charges (other
than stock transfer or other taxes and other governmental
charges, transfer or registration fees, cable, telex or
facsimile transmission costs, delivery costs or other such
expenses), or affects any substantial existing right of American
depositary receipt holders. If an American depositary receipt
holder continues to hold an American depositary receipt or
American depositary receipts after being so notified, such
American depositary receipt holder is deemed to agree to such
amendment. Notwithstanding the foregoing, an amendment can
become effective before notice is given if this is necessary to
ensure compliance with a new law, rule or regulation.

No amendment will impair your right to surrender
your American depositary shares and receive the underlying
securities. If a governmental body adopts new laws or rules
which require the deposit agreement or the American depositary
share to be amended, we and the depositary may make the
necessary amendments, which could take effect before you receive
notice thereof.



| |                                                 
| | ------------------------------------------------
| | How may the deposit agreement be
    terminated?

Upon the resignation or removal of the
depositary, the depositary will, and in other circumstances the
depositary may, terminate the deposit agreement by giving the
American depositary receipt holders at least 30 days
prior notice, and it must do so at our request. After
termination, the depositarys only responsibility will

105



---



##### Table of Contents



be (i) to deliver deposited securities to
American depositary receipt holders who surrender their American
depositary receipts and (ii) to hold or sell distributions
received on deposited securities. As soon as practicable after
the expiration of six months from the termination date, the
depositary will sell the deposited securities which remain and
hold the net proceeds of such sales, without liability for
interest, in trust for the American depositary receipt holders
who have not yet surrendered their American depositary receipts.
After making such sale, the depositary shall have no obligations
except to account for such proceeds and other cash. The
depositary will not be required to invest such proceeds or pay
interest on them.


Limitations on Obligations and Liability to
American Depositary Receipt Holders



| |                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Limits on our obligations and the
    obligations of the depositary; limits on liability to American
    depositary receipt holders and holders of American depositary
    shares

The deposit agreement expressly limits the
obligations and liability of the depositary, ourselves and our
respective agents. Neither we nor the depositary nor any such
agent will be liable if:



| |    |                                                                                                                                                                                                                                                                                                                                    
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. | any law, regulation, or provisions governing
    deposited securities, act of God, war or other circumstance
    beyond its control shall prevent, delay or subject to any civil
    or criminal penalty any act which the deposit agreement or the
    American depositary receipts provide shall be done or performed
    by it; 
|
| | 2. | it exercises or fails to exercise discretion
    under the deposit agreement or the American depositary receipt;                                                                                                                                                                                                                   
|
| | 3. | it performs its obligations without gross
    negligence or bad faith;                                                                                                                                                                                                                                                             
|
| | 4. | it takes any action or inaction by it in reliance
    upon the advice of or information from legal counsel,
    accountants, any person presenting shares for deposit, any
    registered holder of American depositary receipts, or any other
    person believed by it to be competent to give such advice or
    information; or
|
| | 5. | it relies upon any written notice, request,
    direction or other document believed by it to be genuine and to
    have been signed or presented by the proper party or parties.                                                                                                                                                  

Neither the depositary nor its agents have any
obligation to appear in, prosecute or defend any action, suit or
other proceeding in respect of any deposited securities or the
American depositary receipts. We and our agents shall only be
obligated to appear in, prosecute or defend any action, suit or
other proceeding in respect of any deposited securities or the
American depositary receipts, which in our opinion may involve
us in expense or liability, if indemnity satisfactory to us
against all expense (including fees and disbursements of
counsel) and liability is furnished as often as we require.

The depositary will not be responsible for
failing to carry out instructions to vote the deposited
securities or for the manner in which the deposited securities
are voted or the effect of the vote.

The depositary may own and deal in deposited
securities and in American depositary shares.

Disclosure of Interest in American Depositary
Shares

From time to time we may request you and other
holders and beneficial owners of American depositary shares to
provide information as to:



| |    |                                                                                                                                                                      
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. | the capacity in which you and other holders and
    beneficial owners own or owned American depositary shares; and                                                   
|
| | 2. | the identity of any other persons then or
    previously interested in such American depositary shares and the
    nature of such interest and various other matters.

You agree to provide any information requested by
us or the depositary pursuant to the deposit agreement. The
depositary has agreed to use reasonable efforts to comply with
written instructions received from us requesting that it forward
any such requests to you and other holders and beneficial owners
and to forward to us any responses to such requests to the
extent permitted by applicable law.

106



---



##### Table of Contents



Requirements for Depositary Actions

We, the depositary or the custodian may refuse to:



| |    |                                                                                                                                                       
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. | issue, register or transfer an American
    depositary receipt or American depositary receipts;                                                       
|
| | 2. | effect a split-up or combination of American
    depositary receipts;                                                                                 
|
| | 3. | deliver distributions on any such American
    depositary receipts; or                                                                                
|
| | 4. | permit the withdrawal of deposited securities
    (unless the deposit agreement provides otherwise), until the
    following conditions have been met:



| |   |                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the holder has paid all taxes, governmental
    charges, and fees and expenses as required in the deposit
    agreement;                                                                           
|
| |  | the holder has provided the depositary with any
    information it may deem necessary or proper, including, without
    limitation, proof of identity and the genuineness of any
    signature; and
|
| |  | the holder has complied with such regulations as
    the depositary may establish under the deposit agreement.                                                                                     

The depositary may also suspend the issuance of
American depositary shares, the deposit of shares, the
registration, transfer, split-up or combination of American
depositary receipts, or the withdrawal of deposited securities
(unless the deposit agreement provides otherwise), if the
register for American depositary receipts or any deposited
securities is closed or if we or the depositary decide it is
advisable to do so.

Books of Depositary

The depositary or its agent will maintain a
register for the registration, registration of transfer,
combination and split-up of American depositary receipts. You
may inspect such records at such office during regular business
hours, but solely for the purpose of communicating with other
holders in the interest of business matters relating to the
deposit agreement. The depositary will maintain facilities to
record and process the issuance, cancellation, combination,
split-up and transfer of American depositary receipts. These
facilities may be closed from time to time, to the extent not
prohibited by law.

Pre-release of American Depositary
Shares

The depositary may issue American depositary
shares prior to the deposit with the custodian of shares (or
rights to receive shares). This is called a pre-release of the
American depositary shares. A pre-release is closed out as soon
as the underlying shares (or other American depositary shares)
are delivered to the depositary. The depositary may pre-release
American depositary shares only if:



| |    |                                                                                                                             
| | -- | ----------------------------------------------------------------------------------------------------------------------------
| | 1. | the depositary has received collateral for the
    full market value of the pre-released American depositary
    shares; and
|
| | 2. | each recipient of pre-released American
    depositary shares agrees in writing that he or she:                             



| |   |                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------
| |  | owns the underlying shares;                                                                                     
|
| |  | assigns all rights in such shares to the
    depositary;                                                        
|
| |  | holds such shares for the account of the
    depositary; and                                                    
|
| |  | will deliver such shares to the custodian as soon
    as practicable, and promptly if the depositary so demands.

In general, the number of pre-released American
depositary shares will not evidence more than 20% of all
American depositary shares outstanding at any given time
(excluding those evidenced by pre-released American depositary
shares). However, the depositary may change or disregard such
limit from time to time as it deems appropriate. The depositary
may retain for its own account any earnings on collateral for
pre-released American depositary shares and its charges for
issuance thereof.

107



---



##### Table of Contents



We reserve the right to instruct the depositary
to suspend pre-releases.

The Depositary



| |                       
| | ----------------------
| | Who is the depositary?

Morgan Guaranty Trust Company of New York, a New
York banking corporation, is a commercial bank offering a wide
range of banking and trust services to its customers in the New
York metropolitan area, throughout the United States and around
the world. The depositarys office is located at 60 Wall
Street, New York, NY 10260.

Material Contracts



| |                   
| | ------------------
| | Deepwater Division

Aker Maritime ASA and Aker Maritime Norge AS
(collectively, Deepwater Division) and Coflexip
entered into a Share Purchase Agreement on October 27,
2000, whereby Coflexip agreed to purchase a number of companies
that comprise the Aker Maritime Deepwater Division for
U.S.$625 million subject to certain adjustments, consisting
of U.S.$513 million in cash and an assumption of a net debt
of U.S.$112 million. The transaction, which closed on
January 4, 2001, was financed with Coflexips own
resources and by new credit lines.



| |                           
| | --------------------------
| | Syndicated Credit Facility

On April 29, 2004, we signed a five-year
850 million
revolving credit facility which carries a margin of 37.5 basis
points over Euribor.

It will be used to refinance two previously
existing syndicated credit facilities signed in 2001 by Technip
and Coflexip, respectively (both maturing in 2006), and will be
used for general corporate purposes. As with the previous
facilities, the new facility is intended to be partially drawn
and used as a financial liquidity reserve for the Group.



| |         
| | --------
| | Eurobond

On May 26, 2004, we issued a seven-year
650 million
Eurobond, listed only on the Luxembourg Stock Exchange, which
carries a fixed interest rate of 4.625%.

Funds raised by this Eurobond will be used to
reinforce the Groups financial means and allow us to
continue our development. We decided to reinforce our financial
structure without waiting for the 2006 maturity of our
outstanding convertible bonds by taking advantage of the
historically low long-term interest rate environment.



| |                                    
| | -----------------------------------
| | Convertible/ Exchangeable
    Bonds

On January 22, 2002, we launched a
690 million
bond convertible into new shares or exchangeable into our
existing shares. Each of the 4,667,647 bonds issued carries a
nominal value of
170 and is
exchangeable or convertible into one of our shares at the
election of the holder. Subject to prior conversion or exchange
by the bondholder or our own exercise of early redemption
rights, we will redeem each bond for
190.0708 at
their maturity on January 1, 2007. Bond holder
representatives may trigger early redemption obligations upon
the occurrence of a specified event of default, including
notably an uncured failure to pay interest or principal on the
bonds, default by us or our subsidiaries on other indebtedness
or guarantees in an amount exceeding
50 million,
the contractual acceleration of any such indebtedness, an
uncured failure to meet our other undertakings for more than
14 days, protection from creditors, or delisting from our
equity securities from our principal trading markets.

108



---



##### Table of Contents



Following exercise of the over-allotment option,
the bonds issued amounted to
793.5 million,
the net proceeds of which were used to reimburse the greater
part of the Senior Credit Facilities described above. The bonds
were listed on the Premier Marché of Euronext Paris
on January 30, 2002. In December 2002, Technip repurchased
165,653 convertible bonds for a total amount of
28.16 million.
In accordance with the issuing contract, which received the
final approval of the Commission des opérations de
bourse on January 22, 2002, the 165,653 convertible
bonds were cancelled. As a result, the convertible bonds
outstanding amount was reduced to
765.2 million
as of December 31, 2002.




| |                                    
| | -----------------------------------
| | The Memorandum of
    Understanding

In the context of the business combination of
Technip and Coflexip, we entered into a memorandum of
understanding with ISIS (the major shareholder of Coflexip) and
ISISs controlling shareholder, IFP. We agreed in the
July 2, 2001 memorandum of understanding, amended on
July 25, 2001 to make simultaneous exchange offers for
Coflexip and ISIS, to list our shares on the New York Stock
Exchange in the form of American depositary shares, and to
convene an extraordinary general shareholders meeting to
approve the capital increase necessary to complete the exchange
offers.

In accordance with these obligations, in the
presence of Technip, IFP and ISIS agreed to mutual exchange
commitments on November 7, 2001, in which ISIS would
exchange its 1,436,622 shares of CGG (Compagnie
Générale Géophysique) for the 511,253 shares
of Technip held by IFP, and vice versa. Following the completion
of the ISIS exchange offer, we concluded a merger agreement with
ISIS on April 15, 2002, which was ratified by our
Shareholders Meeting in June 2002. Subsequently, on
November 18, 2002, we triggered the exchange of 1,436,622
CGG shares against 511,253 Technip shares. These shares will be
cancelled. Concomitantly, although independent of these
commitments, we decided to cancel all outstanding treasury
shares as of September 30, 2002 (representing 1,117,324
shares), which had been previously purchased in order to
stabilize the stock price and to face purchase options exercise.

Exchange Controls



| |                                                        
| | -------------------------------------------------------
| | Ownership of ADSs or Shares by Non-French
    Residents

Under French law, there is no limitation on the
right of non-French residents or non-French security holders to
own or, when applicable, to vote securities of a French company.

A French law dated February 14, 1996
abolished the requirement that a person who is not a resident of
the European Union obtain an autorisation préalable,
or prior authorization, prior to acquiring a controlling
interest in a French company. However, pursuant to the Decree n
2003-196 of March 7, 2003, both E.U. and non-E.U. residents
must file a déclaration administrative, or
administrative notice, with French authorities if, for example,
they come to own, directly or indirectly by any means more than
one-third of the capital or voting rights, in any French company.



| |                  
| | -----------------
| | Exchange Controls

Under current French exchange control
regulations, there are no limitations on the amount of payments
that may be remitted by a French company to non-French
residents. Laws and regulations concerning foreign exchange
controls do require, however, that all payments on transfers of
funds made by a French resident to a non-resident be handled by
an accredited intermediary. In France, all registered banks and
substantially all credit establishments are accredited
intermediaries.



| |      
| | -----
| | Other

For other limitations affecting shareholders, see
 Form, Holding and Transfer of Shares and
 Requirements for Holdings Exceeding Certain
Percentages.

109



---



##### Table of Contents



Taxation



| |                
| | ---------------
| | French Taxation

The following is a general summary of the
material French tax consequences of owning and disposing of our
shares. This summary may only be relevant to you if you are not
a resident of France and you do not hold your shares in
connection with a permanent establishment or a fixed base in
France through which you carry on a business or perform personal
services.

This discussion is intended only as a descriptive
summary. It does not address all aspects of French tax laws that
may be relevant to you in light of your particular
circumstances. It is based on the laws, conventions and treaties
in force as of the date of this annual report, all of which are
subject to change, possibly with retroactive effect, or
different interpretations.

In particular, holders of shares should be aware
that the French Budget Law for 2004 (n 2003-1311 dated
December 30, 2003) has abolished the avoir fiscal
and the précompte with respect to dividends to be
paid to French individual shareholders as of January 1,
2005. However, French non-individual shareholders will generally
no longer be entitled to use the avoir fiscal as of
January 1, 2005.

Although yet unclear, non-resident shareholders
that are entitled to and that comply with the procedures for
claiming benefits under an applicable tax treaty should be
entitled to the refund of the avoir fiscal with respect
to distributions paid until December 31, 2004. Also,
non-resident shareholders that are not entitled to benefit from
the transfer of the avoir fiscal, but are otherwise
entitled to benefit from a double tax treaty (i.e.,
corporate shareholders and individuals, if they are not entitled
to the avoir fiscal refund) should be entitled to a
refund of the précompte, if any, that we will pay in
cash on distributions that we make in 2004.

In addition, the French Budget Law for 2004 has
implemented a temporary equalization tax that will be levied at
the rate of 25% (assessed on the net dividend before withholding
tax) on dividends paid in 2005 out of profits that have not been
taxed at the ordinary corporate income tax rate or that have
been earned and taxed more than five years before the
distribution. However, unlike the précompte, such
temporary equalization tax will not be refundable to
non-resident shareholders.

If you are considering buying our shares, you
should consult your own tax advisor about the potential tax
effects of owning or disposing of shares in your particular
situation.



| |                                           
| | ------------------------------------------
| | Taxation on Sale or Disposal of
    Shares

Generally, you will not be subject to any French
income tax or capital gains tax when you sell or dispose of our
shares if both of the following apply to you:



| |   |                                                                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | you are not a French resident for French tax
    purposes; and                                                                                                                                                 
|
| |  | you have held not more than 25% of our dividend
    rights, known as droits aux bénéfices sociaux,
    at any time during the preceding five years, either directly or
    indirectly, alone or with relatives.

Subject to specific conditions, foreign states,
international organizations and a number of foreign public
bodies are not considered French residents for these purposes.

If a double tax treaty between France and your
country contains more favorable provisions, you may not be
subject to any French income tax or capital gains tax when you
sell or dispose of any of our shares even if one or both of the
above statements applies to you.

If you transfer listed shares using a written
agreement, that agreement must generally be registered. You will
be required to pay a registration duty of 1% of either the
purchase price or the market value of the shares transferred,
whichever is higher. The maximum duty is
3,049 per
transfer. However, in some circumstances, if the agreement is
executed outside France, you will not be required to pay this
duty.

110



---



##### Table of Contents





| |                      
| | ---------------------
| | Taxation of Dividends

In France, companies may only pay dividends out
of income remaining after tax has been paid.

Shareholders of our company that are residents of
France were entitled to a tax credit, known as the avoir
fiscal, on dividends paid by our company in 2003.

The amount of the avoir fiscal attached to
dividends paid in 2003 is equal to:



| |   |                                                                                                                                                                                                                                     
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 50% of the dividend paid for (i) individuals
    and (ii) companies which own at least 5% of the capital of
    the French distributing company and meet the conditions to
    qualify under the French parent-subsidiary regime; or
|
| |  | 10% of the dividend paid for other shareholders.                                                                                                                                                                                    

In addition, if the distribution of dividends by
us gives rise to the précompte, shareholders
entitled to the avoir fiscal at the rate of 10% generally
were entitled to an additional amount of avoir fiscal
equal to 80% of the précompte paid in cash by our
company (as further described below, the précompte
is a tax which is currently paid by French companies when they
distribute dividends out of certain profits and such dividends
carry an avoir fiscal).

As discussed in more detail above, as a result of
the reform enacted by the French Budget Law for 2004, French
resident individual shareholders will still benefit from the
avoir fiscal with respect to dividend distributions made
during 2004 but will not be entitled to the avoir fiscal
with respect to dividend distributions made from 2005 on.
Instead, from 2005 on, French resident individuals will be
entitled to the tax credit described in the introduction above.
French resident shareholders who are not individuals will
generally lose the benefit of the avoir fiscal as from
January 1, 2005.

Under French domestic law, French companies must
generally deduct a 25% French withholding tax from dividends
paid to non-residents and shareholders who are not resident in
France and are not eligible for the avoir fiscal.

Under most treaties between France and other
countries, the rate of this withholding tax may be reduced in
specific circumstances. Generally, the shareholder can
subsequently be entitled to a tax credit in his or her country
of residence for the amount of tax actually withheld. Under some
tax treaties, the withholding tax is eliminated altogether.

Although the French tax authorities have not yet
issued comments on this matter, the provisions of a treaty,
insofar as they provide for the transfer of the avoir
fiscal to individual shareholders or, as the case may be, a
refund of the précompte (see paragraph on the
précompte below), should continue to apply to
distributions paid until December 31, 2004 but will no
longer be applicable from 2005 on. It is unclear, however,
whether non-resident individual shareholders that benefit from a
tax treaty which provides for the transfer of the avoir
fiscal will be entitled to the new tax credit implemented by
the French Budget Law for 2004.

Non-resident shareholders, other than
individuals, are no longer entitled to a refund of the avoir
fiscal with respect to dividend distributions made from 2004
on.

111



---



##### Table of Contents



The following countries, French overseas
territories, known as Territoires dOutre-Mer, and
other territories have entered into income tax treaties with
France that provide for the arrangements as summarized below:

|             |  |             |  |                 |  |                          |  |                
|------------ |  | ----------- |  | --------------- |  | ------------------------ |  | ---------------
|Australia    |  | Ghana       |  | Mali            |  | Singapore                |  | French         
|Austria      |  | Iceland     |  | Malta           |  | South Korea              |  | Territoires    
|Belgium      |  | India       |  | Mauritius       |  | Spain                    |  | dOutre-Mer    
|Bolivia      |  | Israel      |  | Mexico          |  | Sweden                   |  | and            
|Brazil       |  | Italy       |  | Namibia         |  | Switzerland              |  | Others         
|Burkina Faso |  | Ivory Coast |  | The Netherlands |  | Togo                     |  |                
|Canada       |  | Japan       |  | New Zealand     |  | Turkey                   |  | Mayotte        
|Estonia      |  | Latvia      |  | Niger           |  | Ukraine                  |  | New Caledonia  
|Finland      |  | Lithuania   |  | Norway          |  | United Kingdom           |  | Saint-Pierre et
|Gabon        |  | Luxembourg  |  | Pakistan        |  | United States of America |  | Miquelon       
|             |  | Malaysia    |  | Senegal         |  | Venezuela                |  |                

Under these treaties, a shareholder who fulfills
specific conditions may generally apply to the French tax
authorities for the following:



| |   |                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a lower rate of withholding tax, generally 15%;
    and                                                                                                                
|
| |  | so long as the avoir fiscal remains in
    full force and effect, a refund of the avoir fiscal,
    after deduction of withholding tax payable on the avoir
    fiscal.

Except for the United States, none of the
countries or territories listed above has a treaty granting
benefits to holders of ADSs, as opposed to shares. Accordingly,
this discussion of treaty benefits does not apply to ADS holders.

If these arrangements apply to a shareholder, and
so long as the avoir fiscal is still available we will
withhold tax from the dividend at a lower rate, provided that
the shareholder has established, before the date of payment of
the dividend, that he or she is entitled to the lower rate and
has complied with the filing formalities. Otherwise, we must
withhold tax at the full rate of 25%, and the shareholder may
subsequently claim the excess tax paid.

Some of the countries and territories listed
above impose additional conditions for corporate entities to be
entitled to receive the avoir fiscal. In other countries
and territories, individual residents currently may receive the
avoir fiscal but corporate entities may not. In any
event, non-resident shareholders other than individuals will no
longer be entitled to a refund of the avoir fiscal with
respect to dividend distributions made from 2004 on.



| |              
| | -------------
| | The Précompte

Provided the distributed dividends carry an
avoir fiscal, a French company must generally pay an
equalization tax known as the précompte to the
French tax authorities if it distributes, before
December 31, 2004, dividends out of:



| |   |                                                                                           
| | - | ------------------------------------------------------------------------------------------
| |  | profits which have not been taxed at the ordinary
    corporate income tax rate; or       
|
| |  | profits which have been earned and taxed more
    than five years before the distribution.

The amount of the précompte is equal
to 50% of the net dividends before withholding tax.

As regards dividends paid in 2003, a shareholder
who is not a French resident currently may generally obtain a
refund of the amount of any précompte actually paid
in cash, net of applicable withholding tax, in two cases:



| |   |                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------
| |  | if the shareholder is entitled to the benefit of
    a tax treaty but the treaty does not provide for a refund of the
    avoir fiscal; or
|
| |  | if the shareholder is entitled to the benefits of
    a tax treaty but is not entitled to a refund of the avoir
    fiscal.               

112



---



##### Table of Contents



Although the French tax authorities have not yet
issued any guidelines on this matter, such non-resident
shareholders should be entitled to a refund of the
précompte, if any, that we shall pay on
distributions to be made in 2004.

Furthermore, it should be noted that as a
consequence of the suppression of the précompte for
dividends which will be paid as of January 1, 2005, the
French Budget Law for 2004 implements a temporary equalization
tax that will be levied at the rate of 25% (assessed on the net
dividends before withholding tax) on dividends paid in 2005 out
of profits that have not been taxed at the ordinary corporate
income tax rate or that have been earned and taxed more than
five years before the distribution. However, unlike the
précompte, such temporary equalization tax will not
be refundable to the non-resident shareholders.



| |                    
| | -------------------
| | Estate and Gift Tax

France imposes estate and gift tax where an
individual or entity acquires shares of a French company from a
non-resident of France by way of inheritance or gift. France has
entered into estate and gift tax treaties with a number of
countries. Under these treaties, residents of those countries
may be exempt from this tax or obtain a tax credit, assuming
specific conditions are met. You should consult your own tax
advisor about whether French estate and gift tax will apply to
you and whether you may claim an exemption or tax credit.



| |           
| | ----------
| | Wealth Tax

You will not be subject to French wealth tax,
known as impôt de solidarité sur la fortune,
with respect to your shares if both of the following apply to
you:



| |   |                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | you are not a French resident for the purpose of
    French taxation; and                                                                                      
|
| |  | you own less than 10% of our capital stock,
    either directly or indirectly, provided your shares do not
    enable you to exercise influence on our company.

If a double tax treaty between France and your
country contains more favorable provisions, you may not be
subject to French wealth tax even if one or both of the above
statements applies to you.

Taxation of U.S. Investors

The following is a general summary of certain
material U.S. federal income tax and French tax
consequences of owning and disposing of our shares or American
depositary shares. This discussion applies only to
U.S. holders. You will be a U.S. holder if you are the
beneficial owner of our shares or American depositary shares and
all of the following five points apply to you:



| |    |                                                                                                                      
| | -- | ---------------------------------------------------------------------------------------------------------------------
| | 1. | you own (directly, indirectly or by attribution),
    less than 10% of our outstanding share capital or voting power;
|
| | 2. | you are any one of the following:                                                                                    



| |     |                                                                                                          
| | --- | ---------------------------------------------------------------------------------------------------------
| | (a) | an individual who is a citizen or resident of the
    United States for U.S. federal income tax purposes;



| |     |                                                                                                                                                                                               
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | a corporation (or other entity taxable as a
    corporation for U.S. federal income tax purposes) created
    or organized in or under the laws of the United States or any
    state thereof;



| |     |                                                                                                          
| | --- | ---------------------------------------------------------------------------------------------------------
| | (c) | an estate the income of which is subject to
    U.S. federal income taxation regardless of its source; or



| |     |                                                                                                                                                                                                                                             
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (d) | a trust, if a court within the United States is
    able to exercise primary supervision over the administration of
    the trust, and if one or more U.S. persons have the
    authority to control all substantial decisions of the trust;



| |    |                                                                                                                                                                                                             
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 3. | you are entitled to the benefits of the
    Convention between the Government of the United States of
    America and the Government of the French Republic for the
    Avoidance of Double Taxation and the

113



---



##### Table of Contents



| |    |                                                                                                                                                                                                               
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    | Prevention of Fiscal Evasion with Respect to
    Taxes on Income and Capital, signed August 31, 1994 (the
    U.S.- France income tax treaty) under the
    limitation on benefits article of that treaty;
|
| | 4. | you hold your Technip shares or American
    depositary shares as capital assets; and                                                                                                                         
|
| | 5. | your functional currency is the U.S. dollar.                                                                                                                                                                  

If a partnership holds shares or American
depositary shares, the tax treatment of a partner generally will
depend upon the status of the partner and the activities of the
partnership. If you are a partner in a partnership that holds
our shares or American depositary shares, you are urged to
consult your own tax advisor regarding the specific tax
consequences of owning and disposing of such shares or American
depositary shares.

Special rules may apply to insurance companies,
tax-exempt entities, banks, financial institutions,
U.S. expatriates, persons subject to the alternative
minimum tax, securities broker-dealers, traders in securities
who elect to apply a mark-to-method of accounting, persons
holding our shares or American depositary shares as part of a
straddle, hedging transaction or conversion transaction, persons
who acquired our shares pursuant to the exercise of employee
stock options or otherwise as compensation, among others. Those
special rules are not discussed in this annual report.

Furthermore, this summary is based upon
applicable U.S. and French law and practice, all as
currently in effect, and all of which are subject to any changes
or changes in interpretation to U.S. tax laws (including
the U.S. Internal Revenue Code of 1986, as amended (the
Internal Revenue Code), final, temporary and
proposed Treasury regulations promulgated thereunder, rulings,
judicial decisions and administrative pronouncements) or French
laws or practice occurring after the date hereof, possibly with
retroactive effect. In addition, this summary is based, in part,
upon representations made by the Depositary to us and assumes
that the deposit agreement, and all other related agreements,
will be performed in accordance with their terms. Investors
should consult their tax advisors concerning the French,
U.S. federal, state or local income tax consequences of the
ownership or disposition of our shares or American depositary
shares in light of their particular situations as well as any
consequences arising under the laws of any other taxing
jurisdiction.



| |                      
| | ---------------------
| | Taxation of Dividends



| |                                 
| | --------------------------------
| | Withholding Tax and Avoir Fiscal

In France, companies may only pay dividends out
of income remaining after tax has been paid. When shareholders
resident in France received dividends from French companies in
2003, they generally were entitled to a tax credit, known as the
avoir fiscal.

The amount of the avoir fiscal attached to
dividends paid in 2003 is generally equal to:



| |   |                                                                                                                                                                                                                                     
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 50% of the dividend paid for (i) individuals
    and (ii) companies which own at least 5% of the capital of
    the French distributing company and meet the conditions to
    qualify under the French parent-subsidiary regime; or
|
| |  | 10% of the dividend paid for the other
    shareholders.                                                                                                                                                                            

In addition, if the distribution of dividends by
us gave rise to the précompte (see below paragraphs
relating to the précompte), shareholders entitled to
the avoir fiscal at the rate of 10%, were generally
entitled to an additional amount of avoir fiscal equal to
80% of the précompte paid in cash by the company.

As discussed in more detail under French
Taxation above, the French Budget Law for 2004 includes a
reform of the French tax treatment of distributions and
dividends paid by French companies to residents of France which
directly affects non-residents of France.

Under French domestic law, shareholders who are
not residents in France are not eligible for the avoir
fiscal and French companies must normally deduct a 25%
French withholding tax from dividends paid to non-residents of
France.

114



---



##### Table of Contents



Under the U.S.-France income tax treaty, this
withholding tax is reduced to 15% if your ownership of our
shares or American depositary shares is not effectively
connected with a permanent establishment or a fixed base that
you have in France, and some other requirements are satisfied.

As regards distributions made by our company in
2003, additional provisions of the U.S.-France income tax treaty
apply if you are considered an eligible
U.S. holder of shares or American depositary shares. You
are eligible if your ownership of the shares or
American depositary shares is not effectively connected with a
permanent establishment or a fixed base that you have in France
and any one of the following four points applies to you:



| |    |                                                                                                                                                                                                                                                                                                                                        
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. | you are an individual or other non-corporate
    holder that is a resident of the United States for purposes of
    the U.S.-France income tax treaty (without also being a resident
    of France for French tax purposes);                                                                                                           
|
| | 2. | you are a U.S. corporation, other than a
    regulated investment company which owns directly or indirectly
    less than 10% of the capital of the French payor company;                                                                                                                                                              
|
| | 3. | you are a U.S. corporation which is a
    regulated investment company which owns directly or indirectly
    less than 10% of the capital of the French payor company,
    provided that less than 20% of your shares or ADSs are
    beneficially owned by persons who are neither citizens nor
    residents of the United States; or
|
| | 4. | you are a partnership or trust that is a resident
    of the United States for purposes of the U.S.-France income tax
    treaty, but only to the extent that your partners, beneficiaries
    or grantors would qualify as eligible under
    point 1 or point 2 above.                                                             

Pursuant to the U.S.-France income tax treaty,
eligible U.S. holders are entitled to a refund of all or
part of the avoir fiscal, net of the applicable
withholding tax.

An individual holder of our shares or ADSs that
is a resident of the United States as defined pursuant to the
provisions of the U.S.-France income tax treaty and whose
ownership of our shares is not connected with a permanent
establishment in France, if he is still entitled to the transfer
of the avoir fiscal with respect to distributions to be
made in 2004, should remain an eligible
U.S. holder with respect to distributions to be made by us
in 2004. As regards distributions of dividends to be made from
January 1, 2005, and subject to confirmation by
administrative guidelines from the French tax authorities,
individual U.S. holders should be entitled to the transfer
of the new tax credit implemented by the French Budget Law for
2004.

Other U.S. holders (e.g.,
corporations, pension funds and other tax-exempt
U.S. holders) will no longer be entitled to any refund of
the avoir fiscal in respect of dividends paid from 2004
on. They will not be entitled to the newly implemented tax
credit either.

If you are an eligible U.S. holder, we will
withhold tax from your dividend at the reduced rate of 15%,
provided that you have previously established that you are a
resident of the United States under the U.S.-France income tax
treaty in accordance with the following procedures:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | you must complete French Treasury
    Form RF I A EU-No. 5052 and send it to the
    French paying agent before the date of payment of the dividend.
    If you are not an individual, you must also send the French
    paying agent an affidavit attesting that you are the beneficial
    owner of all the rights attached to the full ownership of our
    shares or American depositary shares, including, among other
    things, the dividend rights;
|
| |  | if you cannot complete Form RF I A
    EU-No. 5052 before the date of payment of the dividend, you
    may complete a simplified certificate and send it to the French
    paying agent, or, if any, to the U.S. bank managing your
    account holding our shares or to the depositary, as the case may
    be, before the date of payment of the dividend. This certificate
    must state all of the following five points:                              



| |     |                                                                                                                                                          
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | you are a resident of the United States for
    purposes of the U.S.-France income tax treaty;                                                           
|
| | (b) | your ownership of our shares or American
    depositary shares is not effectively connected with a permanent
    establishment or a fixed base in France;

115



---



##### Table of Contents





| |     |                                                                                                                                                                                               
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (c) | you own all the rights attached to the full
    ownership of our shares or American depositary shares,
    including, among other things, the dividend rights;                                
|
| | (d) | you fulfill all the requirements under the
    U.S.-France income tax treaty to be entitled to the reduced rate
    of withholding tax and to be entitled to receive the avoir
    fiscal; and
|
| | (e) | you claim the reduced rate of withholding tax and
    payment of the avoir fiscal so long as it is in full
    force and effect.                                                              

If you are an eligible U.S. holder of ADSs,
you can obtain the form or certificate from the Depositary and
also the U.S. Internal Revenue Service (the
IRS), and the Depositary will file it with French
tax authorities as long as you deliver the completed form or
certificate to the Depositary within the time period specified
in the distribution to registered U.S. holders of ADSs.

If you are not an eligible U.S. holder, or
if you have not completed Form RF I A
EU-No. 5052 or the five-point certificate before the
dividend payment date, we will deduct French withholding tax at
the rate of 25%. In that case, you may claim a refund from the
French tax authorities of the excess withholding tax.

As an eligible U.S. holder, and
so long it remains in effect, you may also claim the avoir
fiscal by completing Form RF I A
EU-No. 5052 and sending it to the French tax authorities
before December 31 of the second year following the year
during which the dividend is paid. You will be entitled to a
payment equal to the avoir fiscal, less a 15% withholding
tax on the avoir fiscal. As noted below, you will not
receive this payment until after the close of the calendar year
in which the dividend was paid. To receive the payment, you must
submit a claim to the French tax authorities and attest that you
are subject to U.S. federal income taxes on the payment of
the avoir fiscal and the related dividend. For
partnerships or trusts, the partners, beneficiaries or grantors
must make the attestation.

Although the French tax authorities have not yet
issued any guidance regarding the procedures for claiming the
benefit of the reduced rate of French withholding tax following
the suppression of the avoir fiscal and, if applicable,
the transfer of the newly implemented tax credit, any such
benefits will be subject to the accomplishment of formalities.

Specific rules apply to the following:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                             
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | tax-exempt U.S. pension funds, which include
    the exempt pension funds established and managed in order to pay
    retirement benefits subject to the provisions of
    Section 401(a) of the Internal Revenue Code (qualified
    retirement plans), Section 403(b) of the Internal Revenue
    Code (tax deferred annuity contracts) or Section 457 of the
    Internal Revenue Code (deferred compensation plans); and
|
| |  | various other tax-exempt entities, including
    certain state-owned institutions, not-for-profit organizations
    and individuals with respect to dividends which they
    beneficially own and which are derived from an investment
    retirement account.                                                                                                                                                              

Entities in these two categories are eligible for
the reduced withholding tax rate of 15% on dividends, subject to
the same withholding tax filing requirements as eligible
U.S. holders, except that they may have to supply
additional documentation evidencing their entitlement to these
benefits.

With respect to dividends paid before 2004, these
entities were entitled to claim a partial avoir fiscal
equal to 30/85 of the gross avoir fiscal, provided that
they own, directly or indirectly, less than 10% of our capital
and they satisfy the filing requirements specified in the IRS
Treasury regulations.

Please note that tax-exempt U.S. pension
funds and such other tax-exempt entities will be treated like
any other corporate shareholders as regards the suppression of
the avoir fiscal, and thus, in any event, these entities
will no longer be entitled to any avoir fiscal with
respect to dividends received as of January 1, 2004.

Any avoir fiscal and any French
withholding tax refunds of excess withholding tax are generally
expected to be paid within 12 months after the holder of
shares or American depositary shares files
Form RF I A EU-No. 5052. However, they will
not be paid before January 15 following the end of the
calendar year in which the dividend is paid.

116



---



##### Table of Contents



For U.S. federal income tax purposes, the
gross amount of any distribution and any related avoir
fiscal payment, including any French tax withheld, will be
included in your gross income as ordinary dividend income when
payment is received by you (or the Depositary, if you hold
American depositary shares), to the extent paid or deemed paid
out of our current or accumulated earnings and profits as
determined for U.S. federal income tax purposes. To the
extent, if any, that the amount of any such distribution exceeds
our current and accumulated earnings and profits as calculated
for U.S. federal income tax purposes, it will be treated
first as a tax-free return of capital and thereafter any balance
in excess of adjusted basis will be taxable as capital gain.
Dividends paid by us will not give rise to the dividends
received deduction generally allowed to U.S. corporate
shareholders with respect to dividends received from other
U.S. corporations. Dividends generally will constitute
foreign source passive income for foreign tax credit
purposes (or, for some holders, foreign source financial
services income).

Further, the amount of any dividend paid in euro,
including any French tax withheld, will equal the
U.S. dollar value of the euro amount received calculated by
reference to the exchange rate in effect on the date the
dividend is received by you, in the case of shares, or by the
depositary, in the case of American depositary shares,
regardless of whether the payment is in fact converted into
U.S. dollars. If you convert the euro amount into
U.S. dollars on the date of receipt you generally should
not recognize any exchange gain or loss. If you do not convert
any such euro that is received by you into U.S. dollars on
the date you receive it, you generally will have a basis in the
euro amount equal to its U.S. dollar value on the date of
receipt. You also generally will be required to recognize any
exchange gain or loss realized on a subsequent conversion or
other disposition of such euro amount, which will be treated as
U.S. source ordinary income or loss. Moreover, you may be
required to recognize exchange gain or loss if you receive a
refund paid in euros under the U.S.-France income tax treaty of
tax withheld in excess of the treaty rate. This exchange gain or
loss generally will be treated as U.S. source ordinary
income or loss.

French withholding tax imposed on the dividends
you receive and on any avoir fiscal at 15% under the
U.S.-France income tax treaty is treated as payment of a foreign
income tax. You may take this amount as a credit against your
U.S. federal income tax liability, subject to complex
conditions and limitations, or you may alternatively choose to
deduct all foreign taxes paid by you as itemized deductions in
the taxable year. A deduction however does not reduce
U.S. tax on a dollar-for-dollar basis like a tax credit.
The United States Treasury has expressed concerns that parties
to whom American depositary shares are released may be taking
actions that are inconsistent with the claiming of foreign tax
credits for U.S. holders of American depositary shares.
Accordingly, the discussion above regarding the creditability of
French withholding tax could be affected by future actions that
may be taken by the United States Treasury.



| |              
| | -------------
| | The Précompte

As currently applicable, and provided the
distributed dividends carry an avoir fiscal, a French
company must generally pay an equalization tax known as the
précompte to the French tax authorities if it
distributes, before December 31, 2004, dividends out of:



| |   |                                                                                           
| | - | ------------------------------------------------------------------------------------------
| |  | profits which have not been taxed at the ordinary
    corporate income tax rate; or       
|
| |  | profits which have been earned and taxed more
    than five years before the distribution.

The amount of the précompte is equal
to 50% of the net dividends before withholding tax.

If you are not entitled to the full avoir
fiscal, you should generally obtain a refund from the French
tax authorities of any précompte paid by us with
respect to dividends distributed to you until December 31,
2004.

However, as mentioned above, the French tax
authorities have not yet issued any guidelines to confirm
whether such non-resident shareholders will be entitled to the
refund of the précompte, if any, that we will pay on
distributions to be made in 2004. Under the U.S.-France income
tax treaty, the amount of the précompte refunded to
U.S. residents is reduced by 15% withholding tax applicable
to dividends (and with respect to distribution made before 2004
by the partial avoir fiscal, if any). You are generally
entitled to a refund of any précompte which we
actually pay in cash, but not to any précompte which
we pay by off-setting French and/or foreign tax credits. To
apply for a refund of the précompte, you should file
French Treasury Form RF I B EU-No. 5053

117



---



##### Table of Contents



before the end of the second year following the
year in which the dividend was paid. The form and its
instructions are available from the IRS in the United States or
from the French Centre des Impôts des
Non-Résidents whose address is 9 rue
dUzès, 75094 Paris Cédex 2, France.


For U.S. federal income tax purposes, the
gross amount of the précompte will be included in
your gross income as ordinary income. It generally will
constitute foreign source passive income for foreign
tax credit purposes (or, for some holders, foreign source
financial services income). The amount of any
précompte paid in euro, including any French
withholding taxes, will equal the U.S. dollar value of the
euro amount received on the date the précompte is
included in income which, for a U.S. holder of American
depositary shares, will be the date of receipt by the
depositary, regardless of whether the payment is in fact
converted into U.S. dollars. If you hold shares and you
convert the euro amount into U.S. dollars on the date of
receipt you generally should not recognize any exchange gain or
loss. If you do not convert the euro amount into
U.S. dollars on the date of receipt you generally will have
a basis in the euro equal to its U.S. dollar value on the
date of receipt. You also generally will be required to
recognize any exchange gain or loss realized on a subsequent
conversion or other disposition of such euro amount, which will
be treated as U.S. source ordinary income or loss.



| |                                                          
| | ---------------------------------------------------------
| | Recent U.S. Tax Law Changes Applicable
    to Individuals

Under 2003 U.S. tax legislation, some
U.S. holders (including individuals) are eligible for
reduced rates of U.S. federal income tax (currently a
maximum of 15%) in respect of qualified dividend
income received in taxable years beginning after
December 31, 2002 and beginning before January 1,
2009. For this purpose, qualified dividend income generally
includes dividends paid by non-U.S. corporations if, among other
things, certain minimum holding periods are met and either
(i) the shares (or American depositary shares) with respect
to which the dividend has been paid are readily tradable on an
established securities market in the United States, or
(ii) the non-U.S. corporation is eligible for the
benefits of a comprehensive U.S. income tax treaty (such as
the U.S.-France income tax treaty) which provides for the
exchange of information. We currently believe that dividends
paid with respect to our shares and American depositary shares
will constitute qualified dividend income for U.S. federal
income tax purposes, provided the individual U.S. holders
of our shares and American depositary shares meet certain
requirements. Some of the eligibility requirements for non-U.S.
corporations are not entirely certain, however, and further
guidance from the IRS is anticipated. In addition, the IRS is
expected to issue certification procedures in 2004 whereby a
non-U.S. corporation will be required to certify as to the
eligibility of its dividends for the reduced U.S. federal
income tax rates.



| |                          
| | -------------------------
| | Taxation of Capital Gains

If you are a resident of the United States for
purposes of the U.S.-France income tax treaty, you will not be
subject to French tax on any capital gain if you sell or dispose
of your shares or American depositary shares, unless you have a
permanent establishment or fixed base in France and the shares
or American depositary shares you sold or disposed of were part
of the business property of that permanent establishment or
fixed base. Special rules apply to individuals who are residents
of more than one country.

In general, for U.S. federal income tax
purposes, you will recognize capital gain or loss if you sell or
dispose of your shares or American depositary shares in an
amount equal to the difference between U.S. dollar value of
the amount realized for the share or American depositary share
and your tax basis in the share or American depositary share
(determined in U.S. dollars). This gain or loss generally
will be U.S. source gain or loss, and will be treated as
long-term capital gain or loss if your holding period for the
share or American depositary share exceeds one year at the time
of disposition. The deductibility of capital losses is subject
to significant limitations. If you are an individual, any
capital gain generally will be subject to U.S. federal
income tax at preferential rates if you meet specified minimum
holding periods.

Further, deposits or withdrawals of shares by you
for American depositary shares will not be subject to
U.S. federal income tax.

118



---



##### Table of Contents





| |                                              
| | ---------------------------------------------
| | Passive Foreign Investment Company
    Status

A non-U.S. corporation will be classified as a
Passive Foreign Investment Company (a PFIC) for
any taxable year if at least 75% of its gross income consists of
passive income (such as dividends, interest, rents, royalties,
or gains on the disposition of certain minority interests), or
at least 50% of the average value of its assets consist of
assets that produce, or are held for the production of, passive
income. We currently believe that we did not qualify as a PFIC
for the taxable year ending December 31, 2003, for
U.S. federal income tax purposes. If we were characterized
as a PFIC for any taxable year, you would suffer adverse tax
consequences. These consequences may include having gains
realized on the disposition of shares or American depositary
shares treated as ordinary income rather than capital gains and
being subject to punitive interest charges on certain dividends
and on the proceeds of the sale or other disposition of the
shares or American depositary shares. Furthermore, dividends
paid by us would not be qualified dividend income
and would be subject to the higher rates applicable to other
items of ordinary income. You should consult your own tax
advisor regarding the potential application of the PFIC rules to
us and to your ownership of Technip shares or American
depositary shares.



| |                             
| | ----------------------------
| | French Estate and Gift Taxes

Under The Convention Between the United
States of America and the French Republic for the Avoidance of
Double Taxation and the Prevention of Fiscal Evasion with
Respect to Taxes on Estates, Inheritance and Gifts of
November 24, 1978, if you transfer your shares or
American depositary shares by gift, or if they are transferred
by reason of your death, that transfer will be subject to French
gift or inheritance tax only if one of the following applies:



| |   |                                                                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | you are domiciled in France at the time of making
    the gift, or at the time of your death; or                                                                                                                      
|
| |  | you used your shares or American depositary
    shares in conducting a business through a permanent
    establishment or fixed base in France, or you held such shares
    or American depositary shares for that use.



| |                  
| | -----------------
| | French Wealth Tax

The French wealth tax does not generally apply to
shares or American depositary shares if the holder is a resident
of the United States for purposes of the U.S.-France income tax
treaty.



| |                                                               
| | --------------------------------------------------------------
| | United States Information Reporting and
    Backup Withholding

Dividend payments and proceeds paid from the sale
or other disposition of shares or American depositary shares may
be subject to information reporting to the IRS and possible
U.S. federal backup withholding at a current rate of 28%.
Certain exempt recipients (such as corporations) are not subject
to these information reporting requirements. Backup withholding
will not apply to a holder who furnishes a correct taxpayer
identification number or certificate of foreign status and makes
any other required certification, or who is otherwise exempt
from backup withholding. U.S. persons who are required to
establish their exempt status generally must provide IRS
Form W-9 (Request for Taxpayer Identification Number and
Certification). Non-U.S. holders generally will not be subject
to U.S. information reporting or backup withholding.
However, these holders may be required to provide certification
of non-U.S. status in connection with payments received in the
United States or through some U.S.-related financial
intermediaries. Backup withholding is not an additional tax.
Amounts withheld as backup withholding may be credited against
your U.S. federal income tax liability. You may obtain a
refund of any excess amounts withheld under the backup
withholding rules by timely filing the appropriate claim for a
refund with the IRS and furnishing any required information.

119



---



##### Table of Contents



Dividends and Paying Agents

Not applicable.

Statements by Experts

Not applicable.

Documents on Display

The documents referred to in this annual report
can be read at the U.S. Securities and Exchange
Commissions public reference facilities at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549. Please
call the SEC at 1-800-SEC-0330 for more information on the
public reference room and their copy charges.

Subsidiary Information

Not applicable.

120



---



##### Table of Contents






Item 11.     Quantitative
and Qualitative Disclosures About Market Risk

The information provided below contains
certain forward-looking statements that involve inherent risks,
uncertainties and other factors, principally with respect to
unanticipated changes in foreign exchange or interest rates and
fluctuations in the level of our exposure to market risks.
Actual results may differ from those set forth in any
forward-looking statements.

Our major market risk consists of fluctuations in
currency exchange rates. We use simple derivative financial
instruments primarily to manage this risk exposure. These
financial instruments are designated as hedges of underlying
exposures associated with specific revenues, costs, assets,
liabilities or commitments. Fair value calculations are
presented in Note 27(b) to our Consolidated Financial
Statements and are set out in the table below.

Cash Management

Cash surpluses are almost entirely denominated in
euro, U.S. dollars (or Malaysian Ringgit which had a fixed
exchange rate with the U.S. dollar as of December 31,
2003), British pound sterling, Norwegian Crown, and Brazilian
Real. Part of the cash surplus is allocated to forecasted
expenditures on given projects. We invest these cash surpluses
in short-term floating investments to ensure liquidity and avoid
interest rate risk.

Since the beginning of 2000, we have used a
dedicated financing entity (Technip Eurocash SNC) to manage
centrally our cash and hedging, with the exception of cash held
by our Malaysian, Singaporean, Saudi Arabian, Brazilian
subsidiaries and some of the Offshore branch foreign
subsidiaries. Each participating subsidiary transfers its cash
surplus to Technip Eurocash SNC and requests cash when needed.
Cash flow forecasts are centrally analyzed on a regular basis by
Technip Eurocash SNC.

Debt Management

We have limited financial debt
(1,214 million,
1,337.5 million,
and
1,638.9 million
at December 31, 2003, 2002, and 2001, respectively). 2003
and 2002 figures include respectively
84.5 million
and
90.4 million
of convertible bonds redemption premium issued on 2002.

On December 31, 2003, our short term debt of
226.3 million
is composed of the following:



| |   |                                                                                              
| | - | ---------------------------------------------------------------------------------------------
| |  | commercial paper for
    205 million
    with an average maturity of less than three months;
|
| |  | short term part of the long-term debts, which
    amounts to
    5.7 million;               
|
| |  | bank overdrafts and others for
    8.3 million;
    and                                     
|
| |  | accrued interests on the convertible bonds for
    7.4 million.                             

The outstanding amount of the credit facility,
obtained for the Aker Maritime Deepwater Division acquisition
used by Technip Offshore International and some of the eligible
subsidiaries, was U.S.$141 million as of December 31,
2003. This bank credit facility is fully repayable at maturity
at June 26, 2006. Additionally, the outstanding debt used
for the financing of some of the convertible bond repurchase was
U.S.$87 million as of December 31, 2003. This credit
line is fully repayable at maturity on December 30, 2007.

At the end of January 2002, we issued a debenture
loan with a conversion option into new shares and/or exchange in
existing shares (OCEANE offer) for an amount of
793.5 million.
The reimbursement date was set on January 1, 2007 for bonds
not converted into shares at this date.

The OCEANE offer, which received the COB final
visa on January 22, 2002, had the following terms and
conditions:



| |   |                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------
| |  | issue price
    170 (number of
    bonds issued: 4,667,647);                                          
|
| |  | coupon payable on January 1 of each year
    amounts to 1% per year of the bonds nominal value;        
|
| |  | the reimbursement date was set on January 1,
    2007 for bonds not converted into shares at this date;

121



---



##### Table of Contents





| |   |                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------
| |  | the bond reimbursement price as of
    January 1, 2007 is
    190.07 in case
    of non conversion or exchange; and
|
| |  | the actuarial yield rate for the bondholder is
    3.25% per year in case of non conversion or exchange.            

The debenture loan was used mid-February 2002 to
reimburse part of the credit facility issued by us to finance
the purchase of Coflexip shares.

We repurchased 458,794 convertible bonds through
December 2003 for an amount of
78 million,
and subsequently in January 2004, 419,742 additional convertible
bonds for an amount of
71.4 million.

In accordance with the terms and conditions of
the convertible bonds, which received the COB visa on
January 22, 2002, the 878,536 convertible bonds repurchased
have been cancelled, reducing the amount to
715.5 million
on December 31, 2003 and thereafter to
644.1 million
on February 25, 2004.

For our unused and confirmed multicurrency
banking credit lines as of December 31, 2003, see
Item 5. Operating and Financial Review and
Prospects  Liquidity and Capital Resources.

On April 29, 2004, we raised an
850 million
new bank revolving facility with a five-year facility to replace
two of the authorized unused and confirmed credit lines. As a
result, the Group had unused and confirmed multicurrency credit
lines of approximately
1,068 million,
of which approximately
734 million
is available beyond December 31, 2004.

On May 26, 2004, we issued a
650 million
seven-year eurobond maturing on May 26, 2011 with a 4.625%
coupon. The use of proceeds is for general corporate purposes
with a view to reinforcing the Groups financial structure
without waiting for the January 1, 2007 maturity of our
outstanding convertible bond by taking advantage of the
historically low long-term interest rate environment.

Fair Value of On Balance-Sheet Financial
Instruments

We report marketable securities included in cash
and cash equivalents at market prices in our consolidated
financial statements included in this annual report. The fair
value of all current assets and liabilities (cash and cash
equivalents, accounts and notes receivables, advances to
suppliers, accounts and notes payable, other creditors) is
considered to be equivalent to the carrying amounts due to the
short maturity to these items.

The fair value of the long-term debt determined
on a borrowing-by-borrowing basis, by discounting future cash
flows using the borrowing rates at the balance sheet dates for
similar types of borrowing arrangement, is approximated by the
carrying value.

Currency Risk

We operate under long-term contracts that are
frequently denominated in currencies other than our functional
currency, the euro. As of December 31, 2003, revenues from
contracts denominated in non-euro currencies were approximately
70% of our total net sales, of which more than 70% were
denominated in U.S. dollars. Approximately 37% of our
operating expenses during this period were denominated in
U.S. dollars and significant amounts were also denominated
in Japanese yen, British pound sterling, Malaysian Ringitt,
Brazilian Real and Norwegian Crown.

Our policy is to continually assess our exposure
to exchange risk on contracts and, whenever practicable, to
reduce risks by incurring operating expenses in the same
currency in which the corresponding net sales are generated. We
further reduce our exposure to exchange rate fluctuations
through the use of forward exchange contracts, currency exchange
rate guarantees or options when we believe it appropriate.
Typically, we hedge a contract once it has been awarded or, in
some cases, at the latest, once it comes into force. However,
because we may be subject to significant exchange rate exposure
during the period from the contract bid to the awarding of the
contract, we may, depending on our appreciation of the
probability that the contract will be awarded to us and on
market conditions, enter into currency options or currency
exchange rate guarantees for contracts on which we have bid (see
Note 1(r)) to the our Consolidated Financial Statements.

122



---



##### Table of Contents



We do not enter into forward exchange contracts
or exchange options for purpose other than described above. Our
policy does not permit us to take, or authorize our subsidiaries
or businesses to take, speculative market positions.

The tables below present the maturities and fair
value of our hedging instruments as of December 31, 2003,
and December 31, 2002, respectively and are based on
maturities and interest and exchange rates at these same dates
and present future cash flows generated by derivatives
instruments.

As of December 31, 2003

|                                       |        |                                      |         |         |      |  |       |        |            |  |      |      |  |      |   |   |         |  |   |       |  |  |       |   |  |  |         |         |  |  |       |       |  
|-------------------------------------- | ------ | ------------------------------------ | ------- | ------- | ---- |  | ----- | ------ | ---------- |  | ---- | ---- |  | ---- | - | - | ------- |  | - | ----- |  |  | ----- | - |  |  | ------- | ------- |  |  | ----- | ----- | -
|                                       |        |                                      |         |         |      |  |       |       
|                                       |        | Maturing in year ending December 31, |         |         |      |  |       |        |           
|                                       |        |                                      |         |         |      |  |       |        | Fair value | 
|Foreign Exchange Contracts             |        | 2004                                 |         |         | 2005 |  |       | 2006   |            |  | 2007 |      |  | 2008 |   |   | 5 years |  |   | Total |  |  | Total |  
|                                       |        |                                      |         |         |      |  |       |        |            |  |      |      |  |      |   |   |         |  |   |       |  |  |       |  
|                                       |        |                                     
|                                       |        | (in millions of EUR)                 |        
|Sell currency, buy national currencies |        |                                      |         |         |      |  |       |        |            |  |      |      |  |      |   |   |         |  |   |       |  |  |       |   |  |  |         |         |  |  |       |      
|                                       | U.S.$  |                                      |         | 1,138.4 |      |  |       | 1,73.1 |            |  |      | 27.8 |  |      |   |  |         |  |   |      |  |  |       |  |  |  |         | 1,339.3 |  |  |       | 196.1 |  
|                                       | GBP    |                                      |         | 25.2    |      |  |       | 0.2    |            |  |      |     |  |      |   |  |         |  |   |      |  |  |       |  |  |  |         | 25.4    |  |  |       | 0.1   |  
|                                       | AED    |                                      |         | 18.8    |      |  |       |       |            |  |      |     |  |      |   |  |         |  |   |      |  |  |       |  |  |  |         | 18.8    |  |  |       | 1.6   |  
|                                       | Others |                                      |         | 20.8    |      |  |       |       |            |  |      |     |  |      |   |  |         |  |   |      |  |  |       |  |  |  |         | 20.8    |  |  |       | 0.3   |  
|                                       |        |                                      |         |         |      |  |       |        |            |  |      |      |  |      |   |   |         |  |   |       |  |  |       |  
|Total                                  |        |                                      | 1,203.1 |         |      |  | 173.3 |        |            |  | 27.8 |      |  |      |  |   |         |  |  |       |  |  |      |   |  |  | 1,404.3 |         |  |  | 198.1 |      
|                                       |        |                                      |         |         |      |  |       |        |            |  |      |      |  |      |   |   |         |  |   |       |  |  |       |  
|Buy currency, sell national currencies |        |                                      |         |         |      |  |       |        |            |  |      |      |  |      |   |   |         |  |   |       |  |  |       |   |  |  |         |         |  |  |       |      
|                                       | U.S.$  |                                      |         | 327.3   |      |  |       | 49.0   |            |  |      |     |  |      |   |  |         |  |   |      |  |  |       |  |  |  |         | 376.3   |  |  |       | (68.4 | )
|                                       | JPY    |                                      |         | 11.9    |      |  |       |       |            |  |      |     |  |      |   |  |         |  |   |      |  |  |       |  |  |  |         | 11.9    |  |  |       | (1.4  | )
|                                       | GBP    |                                      |         | 97.3    |      |  |       | 9.3    |            |  |      |     |  |      |   |  |         |  |   |      |  |  |       |  |  |  |         | 106.6   |  |  |       | (0.1  | )
|                                       | Others |                                      |         | 4.7     |      |  |       | 4.9    |            |  |      |     |  |      |   |  |         |  |   |      |  |  |       |   |  |  |         | 9.6     |  |  |       | (0.1  | )
|                                       |        |                                      |         |         |      |  |       |        |            |  |      |      |  |      |   |   |         |  |   |       |  |  |       |  
|Total                                  |        |                                      | 441.2   |         |      |  | 63.2  |        |            |  |     |      |  |      |  |   |         |  |  |       |  |  |      |   |  |  | 504.4   |         |  |  | (70.0 | )    
|                                       |        |                                      |         |         |      |  |       |        |            |  |      |      |  |      |   |   |         |  |   |       |  |  |       |  
|Sell/buy foreign currencies            |        |                                      | 214.2   |         |      |  | 47.6  |        |            |  | 37.2 |      |  |      |  |   |         |  |  |       |  |  |      |   |  |  | 299.0   |         |  |  | 17.7  |      
|                                       |        |                                      |         |         |      |  |       |        |            |  |      |      |  |      |   |   |         |  |   |       |  |  |       |  
|Total                                  |        |                                      | 214.2   |         |      |  | 47.6  |        |            |  | 37.2 |      |  |      |  |   |         |  |  |       |  |  |      |   |  |  | 299.0   |         |  |  | 17.7  |      
|                                       |        |                                      |         |         |      |  |       |        |            |  |      |      |  |      |   |   |         |  |   |       |  |  |       |  

As of December 31, 2002

|                                       |        |                                      |       |       |      |  |       |       |            |  |      |      |  |      |   |   |         |  |   |       |  |  |       |   |  |  |         |         |  |  |       |       |  
|-------------------------------------- | ------ | ------------------------------------ | ----- | ----- | ---- |  | ----- | ----- | ---------- |  | ---- | ---- |  | ---- | - | - | ------- |  | - | ----- |  |  | ----- | - |  |  | ------- | ------- |  |  | ----- | ----- | -
|                                       |        |                                      |       |       |      |  |       |      
|                                       |        | Maturing in year ending December 31, |       |       |      |  |       |       |           
|                                       |        |                                      |       |       |      |  |       |       | Fair value | 
|Foreign Exchange Contracts             |        | 2003                                 |       |       | 2004 |  |       | 2005  |            |  | 2006 |      |  | 2007 |   |   | 5 years |  |   | Total |  |  | Total |  
|                                       |        |                                      |       |       |      |  |       |       |            |  |      |      |  |      |   |   |         |  |   |       |  |  |       |  
|                                       |        |                                     
|                                       |        | (in millions of EUR)                 |      
|Sell currency, buy national currencies |        |                                      |       |       |      |  |       |       |            |  |      |      |  |      |   |   |         |  |   |       |  |  |       |   |  |  |         |         |  |  |       |      
|                                       | U.S.$  |                                      |       | 748.4 |      |  |       | 340.6 |            |  |      | 40.2 |  |      |   |  |         |  |   |      |  |  |       |  |  |  |         | 1,129.2 |  |  |       | 107.3 |  
|                                       | GBP    |                                      |       | 35.8  |      |  |       |      |            |  |      |     |  |      |   |  |         |  |   |      |  |  |       |  |  |  |         | 35.8    |  |  |       | 0.1   |  
|                                       | AED    |                                      |       | 6.1   |      |  |       | 1.5   |            |  |      |     |  |      |   |  |         |  |   |      |  |  |       |  |  |  |         | 7.6     |  |  |       | 1.3   |  
|                                       | Others |                                      |       | 10.1  |      |  |       |      |            |  |      |     |  |      |   |  |         |  |   |      |  |  |       |  |  |  |         | 10.1    |  |  |       | 2.2   |  
|                                       |        |                                      |       |       |      |  |       |       |            |  |      |      |  |      |   |   |         |  |   |       |  |  |       |  
|Total                                  |        |                                      | 800.5 |       |      |  | 342.1 |       |            |  | 40.2 |      |  |      |  |   |         |  |  |       |  |  |      |   |  |  | 1,182.8 |         |  |  | 110.9 |      
|                                       |        |                                      |       |       |      |  |       |       |            |  |      |      |  |      |   |   |         |  |   |       |  |  |       |  
|Buy currency, sell national currencies |        |                                      |       |       |      |  |       |       |            |  |      |      |  |      |   |   |         |  |   |       |  |  |       |   |  |  |         |         |  |  |       |      
|                                       | U.S.$  |                                      |       | 252.2 |      |  |       | 194.3 |            |  |      | 41.7 |  |      |   |  |         |  |   |      |  |  |       |  |  |  |         | 488.2   |  |  |       | (40.2 | )
|                                       | JPY    |                                      |       | 8.5   |      |  |       | 10.7  |            |  |      |     |  |      |   |  |         |  |   |      |  |  |       |  |  |  |         | 19.2    |  |  |       | (1.2  | )
|                                       | GBP    |                                      |       | 38.3  |      |  |       |      |            |  |      |     |  |      |   |  |         |  |   |      |  |  |       |  |  |  |         | 38.3    |  |  |       | (1.5  | )
|                                       | Others |                                      |       | 0.2   |      |  |       |      |            |  |      |     |  |      |   |  |         |  |   |      |  |  |       |   |  |  |         |        |  |  |       | 0.2   |  
|                                       |        |                                      |       |       |      |  |       |       |            |  |      |      |  |      |   |   |         |  |   |       |  |  |       |  
|Total                                  |        |                                      | 299.2 |       |      |  | 63.2  |       |            |  | 41.7 |      |  |      |  |   |         |  |  |       |  |  |      |   |  |  | 545.9   |         |  |  | (42.9 | )    
|                                       |        |                                      |       |       |      |  |       |       |            |  |      |      |  |      |   |   |         |  |   |       |  |  |       |  
|Sell/buy foreign currencies            |        |                                      | 156   |       |      |  | 47.6  |       |            |  | 1.6  |      |  |      |  |   |         |  |  |       |  |  |      |   |  |  | 171.2   |         |  |  | 9.9   |      
|                                       |        |                                      |       |       |      |  |       |       |            |  |      |      |  |      |   |   |         |  |   |       |  |  |       |  
|Total                                  |        |                                      | 156   |       |      |  | 47.6  |       |            |  | 1.6  |      |  |      |  |   |         |  |  |       |  |  |      |   |  |  | 171.2   |         |  |  | 9.9   |      
|                                       |        |                                      |       |       |      |  |       |       |            |  |      |      |  |      |   |   |         |  |   |       |  |  |       |  

123



---



##### Table of Contents



Interest Risk

We require that our cash invested in marketable
securities remain liquid. Therefore, most cash is invested in
floating rate investments.

At the end of January 2002, we issued a debenture
loan with a conversion option into new shares and/or exchange in
existing shares at a fixed 1% annual coupon, and with an 11.81%
redemption premium payable on January 1, 2007 in case of
non conversion or exchange into shares. In addition, during the
first quarter of 2002, Coflexip entered into a
U.S.$186 million national amount forward interest rate
agreement to convert the U.S.$ LIBOR rate into a U.S.$ fixed
rate for the period from July through December 2002.

Most of the other debt at the end of
December 31, 2003 is variable-rate debt. We usually do not
enter into interest rate derivative contracts, except when
interest rate markets offer attractive conditions. Only the debt
of U.S.$109 million part to the credit facility obtained
for the Aker Maritime Deepwater Division was covered by interest
rate swaps, which converted the U.S.$ LIBOR rate into a U.S.$
fixed rate through the June 2006 maturity date.

As a result, as of December 31, 2003,
fixed-rate debt amounted to 73% of total debt.

In addition in 2003, we entered into several
forward interest rate agreements for an aggregate
U.S.$119 million notional amount to convert the U.S.$ LIBOR
rate into a U.S.$ fixed rate for the year 2004.




Item 12.     Description
of Securities to be registered

Not Applicable.

124



---



##### Table of Contents






PART II



Item 13.     Defaults,
Dividend Arrearages and Delinquencies

To our knowledge, there has been no material
default in the payment of principal or interest or any other
material default not cured within 30 days relating to our
indebtedness or that of any of our subsidiaries.




Item 14.     Material
Modifications to the Rights of Security Holders and Use of
Proceeds

To our knowledge, no one (i) has modified
materially the instruments defining the rights of holders of our
shares or (ii) has modified materially or qualified the
rights evidenced by our registered securities by issuing or
modifying any other class of securities.




Item 15.     Controls
and Procedures

Our Chief Executive Officer and our Chief
Financial Officer have evaluated the effectiveness of the design
and operation of our disclosure controls and procedures (as
defined in Exchange Act Rule 13a-14(c)) as of a date within
90 days of the filing of this Annual Report on
Form 20-F. Based on that evaluation, our Chief Executive
Officer and our Chief Financial Officer have concluded that, as
of the evaluation date, our disclosure controls and procedures
were effective to ensure that material information relating to
us and our consolidated subsidiaries would be made known to them
by others within these entities, particularly during the period
in which this annual report was being prepared, in order to
allow timely decisions regarding required disclosure.

There have been no significant changes in our
internal controls or, to our knowledge, other factors that could
significantly affect our internal controls subsequent to the
evaluation date. Therefore, no corrective actions were taken.




Item 16.     [Reserved]



Item 16A.     Audit
Committee Financial Expert

The Board of Directors has determined that
Mr. Lebègue is an audit committee financial
expert as defined in the instructions to Item 16A of
Form 20-F.




Item 16B.     Code
of Ethics

We have adopted a code of ethics that applies to
Daniel Valot and Olivier Dubois. This code of ethics is
available in print to any shareholder upon request to our
Investor Relations group
(e-mail: investor-relations@technip.com or
telephone: + 33 1 47 78 66 75).




Item 16C.     Principal
Accountant Fees and Services

Barbier Frinault & Autres (Ernst & Young)
served as our independent auditors for each of the financial
years in the two-year period ended December 31, 2003, for
which audited financial statements appear in this annual report
on Form 20-F. Claude Charron has acted as our co-auditor
for French Statutory purposes.

125



---



##### Table of Contents



The following table presents the aggregate fees
for professional services and other services rendered by Barbier
Frinault & Autres (Ernst & Young) and Claude Charron for
each of the financial years ended December 31, 2002, and
December 31, 2003:

|                      |  |                  |       |  |                |  |                  |                 |  |  |                |  |  |  |    | 
|--------------------- |  | ---------------- | ----- |  | -------------- |  | ---------------- | --------------- |  |  | -------------- |  |  |  | -- | 
|                      |  | 2003             |       |  |                |  | 2002             |                 |  | 
|                      |  | Barbier Frinault |       |  |                |  | Barbier Frinault |                 |  | 
|                      |  | & Autres         |       |  | 2003           |  |                  | & Autres        |  |  | 2002           | 
|                      |  | (Ernst & Young)  |       |  | Claude Charron |  |                  | (Ernst & Young) |  |  | Claude Charron | 
|                      |  |                  |       |  |                |  |                  |                 |  |  |                | 
|                      |  |                 
|                      |  | (in  thousand)  |      
|Audit Fees(1)         |  |                  | 3,581 |  |                |  | 120              |                 |  |  | 3,583          |  |  |  | 81 | 
|Audit-Related Fees(2) |  |                  |      |  |                |  |                 |                 |  |  |               |  |  |  |   | 
|Tax Fees(3)           |  |                  | 1,411 |  |                |  |                 |                 |  |  | 1,388          |  |  |  |   | 
|All Other Fees(4)     |  |                  |      |  |                |  |                 |                 |  |  |               |  |  |  |   | 
|                      |  |                  |       |  |                |  |                  |                 |  |  |                | 
|Total                 |  |                  | 4,992 |  |                |  | 120              |                 |  |  | 4,971          |  |  |  | 81 | 
|                      |  |                  |       |  |                |  |                  |                 |  |  |                | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Audit Fees consist of fees billed for the annual
    audit services engagement and other audit services, which are
    those services that only the external auditor reasonably can
    provide, and include the group audit; statutory audits; comfort
    letters and consents; attest services; and assistance with and
    review of documents filed with the AMF and the SEC or other
    regulatory bodies.                                                                      
|   
|(2) | Audit-Related Fees consist of fees billed for
    assurance and related services that are reasonably related to
    the performance of the audit or review of our financial
    statements or that are traditionally performed by the external
    auditor.                                                                                                                                                                                                                            
|   
|(3) | Tax Fees include fees billed for tax compliance
    services, including the preparation of original and amended tax
    returns and claims for refund; tax consultations, such as
    assistance and representation in connection with tax audits and
    appeals, tax advice related to mergers and acquisitions,
    transfer pricing, and requests for rulings or technical advice
    from taxing authorities; tax planning services; and expatriate
    tax planning and services.
|   
|(4) | All Other Fees include fees billed for training;
    risk management consulting engagements; and services related to
    the Groups environmental report.                                                                                                                                                                                                                                                                                                                             

Audit
Committee Pre-approval Policies and Procedures

On December 16, 2003, in line with new
regulations regarding auditor independence applicable in France
and the United States, the audit committee of our board of
directors adopted a procedure for the engagement of our
statutory auditors. According to procedure which stipulates that
the audit committee has complete authority on engagement and
renumeration of our external auditors, the audit committee
pre-approved certain categories of defined engagements, subject
to maximum amounts.

The procedure contains a pre-approved list of
services that the statutory auditors may provide us:



| |   |                                                                        
| | - | -----------------------------------------------------------------------
| |  | statutory audit and audit-related engagements up
    to
    2 million;
|
| |  | tax advising engagements up to
    0.5 million;                       
|
| |  | risk-management advisory services up to
    0.5 million;
    and      
|
| |  | with a unit cap per engagement up to
    0.2 million.                 

Any engagement of our statutory auditors outside
the scope of the above pre-approved services or an engagement
within the scope but exceeding the approved fee-levels must be
approved by the audit committee in advance.

The procedure also defines the statutory audit
services, audit-related services, tax services and other
non-audit related services. Furthermore it defines prohibited
services, which in France includes any engagement without a
proven connection with the statutory auditors engagement.

126



---



##### Table of Contents



The CFO of each subsidiary for which any such
engagement is considered must provide prior written notice to
the Branch Financial Controller with a copy to the Group
Corporate Secretary.




Item 16D.     Exemptions
from the Listing Standards for Audit Committees

Not applicable.




Item 16E.     Purchases
of Equity Securities

Not applicable.

127



---



##### Table of Contents






PART III




Item 17.     Financial
Statements

Not applicable.




Item 18.     Financial
Statements

TECHNIP

|                                                                                                                        |  |      |      | 
|----------------------------------------------------------------------------------------------------------------------- |  | ---- | ---- | 
|                                                                                                                        |  | Page |     
|                                                                                                                        |  |      |     
|Report of Independent Auditors                                                                                          |  |      | F-2  | 
|Consolidated Statements of Operations for the
    Years Ended December 31, 2003, 2002 and 2001                          |  |      | F-3  | 
|Consolidated Balance Sheets as of
    December 31, 2003, 2002 and 2001                                                  |  |      | F-4  | 
|Consolidated Statements of Cash Flows for the
    Years Ended December 31, 2003, 2002 and 2001                          |  |      | F-6  | 
|Consolidated Statements of Changes in
    Shareholders Equity for the Years Ended December 31,
    2003, 2002 and 2001 |  |      | F-7  | 
|Notes to the Consolidated Financial Statements                                                                          |  |      | F-8  | 
|                                                                                                                       
|                                                                                                                       
|THE COFLEXIP STENA OFFSHORE GROUP                                                                                      
|                                                                                                                       
|Consolidated Balance Sheet as of
    December 31, 2001 (unaudited)                                                      |  |      | F-69 | 
|Consolidated Statement of Operations for the year
    ended December 31, 2001 (unaudited)                               |  |      | F-70 | 
|Consolidated Statement of Shareholders
    Equity as of December 31, 2001 (unaudited)                                  |  |      | F-71 | 
|Consolidated Statement of Cash Flows for the year
    ended December 31, 2001 (unaudited)                               |  |      | F-72 | 
|Notes to the Consolidated Financial Statements
    (unaudited)                                                          |  |      | F-73 | 




Item 19.     Exhibits



|     |                                                                                                                                                                                                 
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.1  | Articles of Association, as amended as of
    April 29, 2004, of Technip                                                                                                                        
|    
|8.1  | Subsidiaries of Technip (see Note 29 to the
    Consolidated Financial Statements)                                                                                                              
|    
|12.1 | Certification of the Chief Executive Officer
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                      
|    
|12.2 | Certification of the Chief Financial Officer
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                      
|    
|13.1 | Certification of the Chief Executive Officer and
    the Chief Financial Officer pursuant to Section 18 U.S.C.
    Section 1350, as adopted by Section 906 of the
    Sarbanes-Oxley Act of 2002
|    
|14.1 | Consent of Barbier Frinault & Autres (Ernst
    & Young) as auditors of Technip                                                                                                                 

128



---



##### Table of Contents



INDEX TO FINANCIAL STATEMENTS

|                                                                                                                        |  |      |      | 
|----------------------------------------------------------------------------------------------------------------------- |  | ---- | ---- | 
|                                                                                                                        |  | Page |     
|                                                                                                                        |  |      |     
|TECHNIP                                                                                                                
|                                                                                                                       
|Report of Independent Auditors                                                                                          |  |      | F-2  | 
|Consolidated Statements of Operations for the
    Years Ended December 31, 2003, 2002 and 2001                          |  |      | F-3  | 
|Consolidated Balance Sheets as of
    December 31, 2003, 2002 and 2001                                                  |  |      | F-4  | 
|Consolidated Statements of Cash Flows for the
    Years Ended December 31, 2003, 2002 and 2001                          |  |      | F-6  | 
|Consolidated Statements of Changes in
    Shareholders Equity for the Years Ended December 31,
    2003, 2002 and 2001 |  |      | F-7  | 
|Notes to the Consolidated Financial Statements                                                                          |  |      | F-8  | 
|                                                                                                                       
|                                                                                                                       
|THE COFLEXIP STENA OFFSHORE GROUP                                                                                      
|                                                                                                                       
|Consolidated Balance Sheet as of
    December 31, 2001 (unaudited)                                                      |  |      | F-69 | 
|Consolidated Statement of Operations for the year
    ended December 31, 2001 (unaudited)                               |  |      | F-70 | 
|Consolidated Statement of Shareholders
    Equity as of December 31, 2001 (unaudited)                                  |  |      | F-71 | 
|Consolidated Statement of Cash Flows for the year
    ended December 31, 2001 (unaudited)                               |  |      | F-72 | 
|Notes to the Consolidated Financial Statements
    (unaudited)                                                          |  |      | F-73 | 

F-1



---



##### Table of Contents



TECHNIP

REPORT OF INDEPENDENT AUDITORS

To the Shareholders and the Board of Directors of
Technip:

We have audited the accompanying consolidated
balance sheets of Technip and its subsidiaries
(Technip) as of December 31, 2003, 2002, and
2001, and the related consolidated statements of operations,
changes in shareholders equity and cash flows, for each of
the three years in the period ended December 31, 2003, all
expressed in
euro ().
These financial statements are the responsibility of the
management of Technip. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with
auditing standards generally accepted in France and in
accordance with the standards of the Public Company Accounting
Oversight Board (United States). These standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis,
evidence supporting the amount and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred
to above present fairly in all material respects, the
consolidated financial position of Technip as of
December 31, 2003, 2002 and 2001, and the result of their
operations and their cash flows for each of the three years in
the period ended December 31, 2003 in conformity with
accounting principles generally accepted in France.

Accounting principles generally accepted in
France vary in certain significant respects from accounting
principles generally accepted in the United States of America.
Information relating to the nature and effect of such
differences is presented in Note 30 to 32 to the
consolidated financial statements.

Neuilly-sur-Seine, France. 
 April 2, 2004, except for Notes 30 to 32, for which
the date is May 10, 2004.

BARBIER FRINAULT & AUTRES

ERNST & YOUNG


Represented by Gilles Puissochet


F-2



---



##### Table of Contents



TECHNIP

CONSOLIDATED STATEMENTS OF
OPERATIONS

|                                                                                        |  |      |   |                                                           |        |  |            |     |  |      |            |   |  |     |            |   |  |  |            |  
|--------------------------------------------------------------------------------------- |  | ---- | - | --------------------------------------------------------- | ------ |  | ---------- | --- |  | ---- | ---------- | - |  | --- | ---------- | - |  |  | ---------- | -
|                                                                                        |  |      |   |                                                          
|                                                                                        |  |      |   | For the years ended December 31,                          |       
|                                                                                        |  |      |   |                                                           |       
|                                                                                        |  |      |   |                                                           |        | 
|                                                                                        |  |      |   | 2003                                                      |        |  |           
|                                                                                        |  |      |   |                                                           |        |  | 2002       |     |  | 2001 |           
|                                                                                        |  | Note |   |                                                           | U.S.$* |  |            | EUR |  |      | EUR        |   |  | EUR |           
|                                                                                        |  |      |   |                                                           |        |  |            |     |  |      |            |   |  |     |           
|                                                                                        |  |      |   |                                                          
|                                                                                        |  |      |   | (Amounts in millions of euro, except as otherwise stated) |       
|Net sales                                                                               |  |      | 3 |                                                           |        |  | 5,755.6    |     |  |      | 4,711.1    |   |  |     | 4,452.3    |   |  |  | 3,546.0    |  
|Cost of sales                                                                           |  |      |   |                                                           |        |  | (4,875.3   | )   |  |      | (3,990.6   | ) |  |     | (3,754.8   | ) |  |  | (3,094.3   | )
|                                                                                        |  |      |   |                                                           |        |  |            |     |  |      |            |   |  |     |           
|GROSS MARGIN                                                                            |  |      |   |                                                           |        |  | 880.2      |     |  |      | 720.5      |   |  |     | 697.5      |   |  |  | 451.7      |  
|Research and development expenses                                                       |  |      |   |                                                           |        |  | (40.7      | )   |  |      | (33.3      | ) |  |     | (37.4      | ) |  |  | (18.3      | )
|Selling, general and administrative expenses                                            |  |      |   |                                                           |        |  | (417.5     | )   |  |      | (341.7     | ) |  |     | (312.5     | ) |  |  | (149.0     | )
|                                                                                        |  |      |   |                                                           |        |  |            |     |  |      |            |   |  |     |           
|OPERATING INCOME BEFORE DEPRECIATION AND
    AMORTIZATION                               |  |      |   |                                                           |        |  | 422.1      |     |  |      | 345.5      |   |  |     | 347.6      |   |  |  | 284.4      |  
|Depreciation and amortization other than goodwill                                       |  |      |   |                                                           |        |  | (144.0     | )   |  |      | (117.9     | ) |  |     | (143.0     | ) |  |  | (49.6      | )
|                                                                                        |  |      |   |                                                           |        |  |            |     |  |      |            |   |  |     |           
|OPERATING INCOME                                                                        |  |      |   |                                                           |        |  | 278.1      |     |  |      | 227.6      |   |  |     | 204.6      |   |  |  | 234.8      |  
|Financial result                                                                        |  |      | 6 |                                                           |        |  | (54.1      | )   |  |      | (44.3      | ) |  |     | (66.9      | ) |  |  | (6.5       | )
|Income of equity affiliates                                                             |  |      |   |                                                           |        |  | 1.3        |     |  |      | 1.1        |   |  |     |           |   |  |  | 15.6       |  
|Non-operating loss                                                                      |  |      | 7 |                                                           |        |  | (9.3       | )   |  |      | (7.6       | ) |  |     | (6.9       | ) |  |  | (6.6       | )
|                                                                                        |  |      |   |                                                           |        |  |            |     |  |      |            |   |  |     |           
|INCOME BEFORE INCOME TAX, GOODWILL
    AMORTIZATION AND MINORITY INTERESTS              |  |      |   |                                                           |        |  | 216.0      |     |  |      | 176.8      |   |  |     | 130.8      |   |  |  | 237.3      |  
|Income tax                                                                              |  |      | 8 |                                                           |        |  | (100.2     | )   |  |      | (82.0      | ) |  |     | (46.3      | ) |  |  | (65.5      | )
|Minority interests                                                                      |  |      |   |                                                           |        |  | (1.0       | )   |  |      | (0.8       | ) |  |     | 3.9        |   |  |  | (2.4       | )
|                                                                                        |  |      |   |                                                           |        |  |            |     |  |      |            |   |  |     |           
|NET INCOME (LOSS) BEFORE GOODWILL
    AMORTIZATION                                      |  |      |   |                                                           |        |  | 114.8      |     |  |      | 94.0       |   |  |     | 88.4       |   |  |  | 169.4      |  
|                                                                                        |  |      |   |                                                           |        |  |            |     |  |      |            |   |  |     |           
|Goodwill amortization                                                                   |  |      |   |                                                           |        |  | (138.9     | )   |  |      | (113.7     | ) |  |     | (117.8     | ) |  |  | (61.3      | )
|                                                                                        |  |      |   |                                                           |        |  |            |     |  |      |            |   |  |     |           
|NET INCOME (LOSS)                                                                       |  |      |   |                                                           |        |  | (24.1      | )   |  |      | (19.7      | ) |  |     | (29.4      | ) |  |  | 108.1      |  
|                                                                                        |  |      |   |                                                           |        |  |            |     |  |      |            |   |  |     |           
|Non-diluted earnings (loss) per share                                                   |  |      |   |                                                           |        |  | (1.0       | )   |  |      | (0.84      | ) |  |     | (1.10      | ) |  |  | 4.45       |  
|Number of shares considered for diluted earnings
    per share computation              |  |      | 9 |                                                           |        |  | 29,302,440 |     |  |      | 29,302,440 |   |  |     | 28,385,816 |   |  |  | 25,387,550 |  
|Diluted earnings before non-operating income and
    goodwill amortization per share(1) |  |      | 9 |                                                           |        |  | 4.86       |     |  |      | 3.98       |   |  |     | 3.91       |   |  |  | 6.93       |  
|Diluted earnings (loss) per share(1)                                                    |  |      | 9 |                                                           |        |  |           |     |  |      |           |   |  |     |           |   |  |  | 4.26       |  



---



|    |                                                                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The net income used for the diluted earnings per
    share computation is restated for redemption premium
    amortization after tax and OCEANE financial costs after tax (see
    Note 9). In 2002 and 2003, the diluted earnings per
    share were negative and are consequently not disclosed.
|   
|*   | For the convenience of the reader, the financial
    statements as of and for the year ended December 31, 2003
    have been translated into U.S. dollars (U.S.$) at the rate
    of 1.00 =
    U.S.$1.2217 on May 28, 2004. (See
    Note 1(a).)                                                

The accompanying notes are an integral part of
these Consolidated Financial Statements.

F-3



---



##### Table of Contents



TECHNIP

CONSOLIDATED BALANCE SHEETS

|                                          |  |      |    |                               |        |  |          |     |  |      |          |  |  |     |          |  |  |  |          | 
|----------------------------------------- |  | ---- | -- | ----------------------------- | ------ |  | -------- | --- |  | ---- | -------- |  |  | --- | -------- |  |  |  | -------- | 
|                                          |  |      |    |                              
|                                          |  |      |    | As of December 31,            |       
|                                          |  |      |    |                               |       
|                                          |  |      |    |                               |        | 
|                                          |  |      |    | 2003                          |        |  |         
|                                          |  |      |    |                               |        |  | 2002     |     |  | 2001 |         
|                                          |  | Note |    |                               | U.S.$* |  |          | EUR |  |      | EUR      |  |  | EUR |         
|                                          |  |      |    |                               |        |  |          |     |  |      |          |  |  |     |         
|                                          |  |      |    |                              
|                                          |  |      |    | (Amounts in millions of euro, |       
|                                          |  |      |    | except as otherwise stated)   |       
|ASSETS                                    |  |      |    |                               |        |  |          |     |  |      |          |  |  |     |          |  |  |  |          | 
|Intangible assets, net                    |  |      | 11 |                               |        |  | 3,050.6  |     |  |      | 2,497.0  |  |  |     | 2,637.6  |  |  |  | 2,713.4  | 
|Property, plant and equipment, net        |  |      | 12 |                               |        |  | 902.2    |     |  |      | 738.5    |  |  |     | 861.1    |  |  |  | 982.3    | 
|Other investments and loans, net          |  |      | 13 |                               |        |  | 10.3     |     |  |      | 8.4      |  |  |     | 18.3     |  |  |  | 104.9    | 
|Equity affiliates                         |  |      | 14 |                               |        |  | 2.6      |     |  |      | 2.1      |  |  |     | 1.2      |  |  |  | 6.2      | 
|                                          |  |      |    |                               |        |  |          |     |  |      |          |  |  |     |         
|TOTAL NON-CURRENT ASSETS                  |  |      |    |                               |        |  | 3,965.6  |     |  |      | 3,246.0  |  |  |     | 3,518.2  |  |  |  | 3,806.8  | 
|Contracts-in-progress                     |  |      | 15 |                               |        |  | 7,780.0  |     |  |      | 6,368.2  |  |  |     | 4,896.2  |  |  |  | 6,313.6  | 
|Inventories and deferred bid costs, net   |  |      | 16 |                               |        |  | 89.9     |     |  |      | 73.6     |  |  |     | 80.8     |  |  |  | 111.9    | 
|Advances to suppliers                     |  |      |    |                               |        |  | 298.8    |     |  |      | 244.6    |  |  |     | 122.5    |  |  |  | 98.0     | 
|Accounts and notes receivable, net        |  |      | 17 |                               |        |  | 923.1    |     |  |      | 755.6    |  |  |     | 725.6    |  |  |  | 605.9    | 
|Other current assets, net                 |  |      | 18 |                               |        |  | 522.5    |     |  |      | 427.7    |  |  |     | 521.6    |  |  |  | 418.1    | 
|                                          |  |      |    |                               |        |  |          |     |  |      |          |  |  |     |         
|RECEIVABLES AND OTHER CURRENT ASSETS, NET |  |      |    |                               |        |  | 1,445.6  |     |  |      | 1,183.3  |  |  |     | 1,247.2  |  |  |  | 1,024.0  | 
|Marketable securities                     |  |      |    |                               |        |  | 134.4    |     |  |      | 110.0    |  |  |     | 99.1     |  |  |  | 149.8    | 
|Cash                                      |  |      |    |                               |        |  | 955.9    |     |  |      | 782.4    |  |  |     | 642.0    |  |  |  | 613.6    | 
|                                          |  |      |    |                               |        |  |          |     |  |      |          |  |  |     |         
|CASH AND CASH EQUIVALENTS                 |  |      | 19 |                               |        |  | 1,090.2  |     |  |      | 892.4    |  |  |     | 741.1    |  |  |  | 763.4    | 
|                                          |  |      |    |                               |        |  |          |     |  |      |          |  |  |     |         
|TOTAL CURRENT ASSETS                      |  |      |    |                               |        |  | 10,704.7 |     |  |      | 8,762.1  |  |  |     | 7,087.8  |  |  |  | 8,310.9  | 
|                                          |  |      |    |                               |        |  |          |     |  |      |          |  |  |     |         
|TOTAL ASSETS                              |  |      |    |                               |        |  | 14,670.3 |     |  |      | 12,008.1 |  |  |     | 10,606.0 |  |  |  | 12,117.7 | 
|                                          |  |      |    |                               |        |  |          |     |  |      |          |  |  |     |         



---



|  |                                                                                                                                                                                                                                                   
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | For the convenience of the reader, the financial
    statements as of and for the year ended December 31, 2003
    have been translated into U.S. dollars (U.S.$) at the rate
    of 1.00 =
    U.S.$1.2217 on May 28, 2004.
    (See Note 1(a).)

The accompanying notes are an integral part of
these Consolidated Financial Statements.

F-4



---



##### Table of Contents



TECHNIP


CONSOLIDATED BALANCE SHEETS
(continued)

|                                                 |  |      |    |                               |        |  |          |     |  |      |          |   |  |     |          |   |  |  |          |  
|------------------------------------------------ |  | ---- | -- | ----------------------------- | ------ |  | -------- | --- |  | ---- | -------- | - |  | --- | -------- | - |  |  | -------- | -
|                                                 |  |      |    |                              
|                                                 |  |      |    | As of December 31,            |       
|                                                 |  |      |    |                               |       
|                                                 |  |      |    |                               |        | 
|                                                 |  |      |    | 2003                          |        |  |         
|                                                 |  |      |    |                               |        |  | 2002     |     |  | 2001 |         
|                                                 |  | Note |    |                               | U.S.$* |  |          | EUR |  |      | EUR      |   |  | EUR |         
|                                                 |  |      |    |                               |        |  |          |     |  |      |          |   |  |     |         
|                                                 |  |      |    |                              
|                                                 |  |      |    | (Amounts in millions of euro, |       
|                                                 |  |      |    | except as otherwise stated)   |       
|LIABILITIES AND SHAREHOLDERS
    EQUITY         |  |      |    |                               |        |  |          |     |  |      |          |   |  |     |          |   |  |  |          |  
|Common stock:
    3.05 nominal
    value,       |  |      |    |                               |        |  | 88.5     |     |  |      | 72.4     |   |  |     | 71.4     |   |  |  | 81.5     |  
|23,738,331 shares as of December 31,
    2003,   |  |      |    |                               |        |  |          |     |  |      |          |   |  |     |          |   |  |  |          |  
|23,408,004 shares as of December 31,
    2002,   |  |      |    |                               |        |  |          |     |  |      |          |   |  |     |          |   |  |  |          |  
|26,713,448 shares as of December 31,
    2001    |  |      |    |                               |        |  |          |     |  |      |          |   |  |     |          |   |  |  |          |  
|Paid-in-surplus                                  |  |      |    |                               |        |  | 1,527.6  |     |  |      | 1,250.4  |   |  |     | 1,250.5  |   |  |  | 1,605.5  |  
|Retained earnings                                |  |      |    |                               |        |  | 789.8    |     |  |      | 646.5    |   |  |     | 721.8    |   |  |  | 661.5    |  
|Cumulative translation adjustment                |  |      |    |                               |        |  | (2.3     | )   |  |      | (1.9     | ) |  |     | 12.0     |   |  |  | 13.1     |  
|Treasury shares and shares held by subsidiary(1) |  |      |    |                               |        |  | (11.9    | )   |  |      | (9.7     | ) |  |     |         |   |  |  | (255.5   | )
|Net income (loss)                                |  |      |    |                               |        |  | (24.1    | )   |  |      | (19.7    | ) |  |     | (29.4    | ) |  |  | 108.1    |  
|                                                 |  |      |    |                               |        |  |          |     |  |      |          |   |  |     |         
|SHAREHOLDERS EQUITY                             |  |      | 20 |                               |        |  | 2,367.7  |     |  |      | 1,938.0  |   |  |     | 2,026.3  |   |  |  | 2,214.2  |  
|MINORITY INTERESTS                               |  |      |    |                               |        |  | 11.2     |     |  |      | 9.2      |   |  |     | 16.3     |   |  |  | 21.4     |  
|Commitments and contingencies                    |  |      | 26 |                               |        |  |          |     |  |      |          |   |  |     |          |   |  |  |          |  
|Retirement indemnities                           |  |      |    |                               |        |  | 109.1    |     |  |      | 89.3     |   |  |     | 86.3     |   |  |  | 80.1     |  
|Accrued liabilities                              |  |      | 21 |                               |        |  | 286.9    |     |  |      | 234.8    |   |  |     | 242.5    |   |  |  | 257.5    |  
|Convertible bonds redemption premium             |  |      | 23 |                               |        |  | 103.2    |     |  |      | 84.5     |   |  |     | 90.4     |   |  |  |         |  
|Long-term debt                                   |  |      |    |                               |        |  | 1,103.4  |     |  |      | 903.2    |   |  |     | 950.1    |   |  |  | 1,182.2  |  
|Short-term debt                                  |  |      |    |                               |        |  | 276.5    |     |  |      | 226.3    |   |  |     | 297.0    |   |  |  | 456.7    |  
|                                                 |  |      |    |                               |        |  |          |     |  |      |          |   |  |     |         
|Total Financial debt                             |  |      | 22 |                               |        |  | 1,379.9  |     |  |      | 1,129.5  |   |  |     | 1,247.1  |   |  |  | 1,638.9  |  
|Progress payments on contracts                   |  |      | 15 |                               |        |  | 8,610.3  |     |  |      | 7,047.8  |   |  |     | 5,420.2  |   |  |  | 6,472.5  |  
|Accounts and notes payable                       |  |      |    |                               |        |  | 956.7    |     |  |      | 783.1    |   |  |     | 720.8    |   |  |  | 770.8    |  
|Other creditors                                  |  |      | 24 |                               |        |  | 845.3    |     |  |      | 691.9    |   |  |     | 756.1    |   |  |  | 662.3    |  
|                                                 |  |      |    |                               |        |  |          |     |  |      |          |   |  |     |         
|TOTAL LIABILITIES                                |  |      |    |                               |        |  | 12,291.4 |     |  |      | 10,060.9 |   |  |     | 8,563.4  |   |  |  | 9,882.1  |  
|                                                 |  |      |    |                               |        |  |          |     |  |      |          |   |  |     |         
|TOTAL LIABILITIES & SHAREHOLDERS
    EQUITY     |  |      |    |                               |        |  | 14,670.3 |     |  |      | 12,008.1 |   |  |     | 10,606.0 |   |  |  | 12,117.7 |  
|                                                 |  |      |    |                               |        |  |          |     |  |      |          |   |  |     |         



---



|    |                                                                                                                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | As of December 31, 2003, 140,953 shares held
    by the Company have been deducted from shareholders
    equity. In 2002, Technip cancelled its treasury shares except
    49,499 shares intended to cover the stock option plans recorded
    in marketable securities.
|   
|*   | For the convenience of the reader, the financial
    statements as of and for the year ended December 31, 2003
    have been translated into U.S. dollars (U.S.$) at the rate
    of 1.00 =
    U.S.$1.2217 on May 28, 2004.
    (See Note 1(a).)                       

The accompanying notes are an integral part of
these Consolidated Financial Statements.

F-5



---



##### Table of Contents



TECHNIP

CONSOLIDATED STATEMENTS OF CASH
FLOWS

|                                                                                                              |                   |                                  |          |       |      |  |          |       |   |  |          |       |   |  |          |       |  
|------------------------------------------------------------------------------------------------------------- | ----------------- | -------------------------------- | -------- | ----- | ---- |  | -------- | ----- | - |  | -------- | ----- | - |  | -------- | ----- | -
|                                                                                                              |                   |                                 
|                                                                                                              |                   | For the years ended December 31, |         
|                                                                                                              |                   |                                  |         
|                                                                                                              |                   |                                  |          |      
|                                                                                                              |                   | 2003                             |          |       |     
|                                                                                                              |                   |                                  |          |       | 2002 |  |          | 2001  |  
|                                                                                                              |                   | U.S.$*                           |          |       | EUR  |  |          | EUR   |   |  | EUR      |      
|                                                                                                              |                   |                                  |          |       |      |  |          |       |   |  |          |      
|                                                                                                              |                   |                                 
|                                                                                                              |                   | (Amounts in millions of euro,    |         
|                                                                                                              |                   | except as otherwise stated)      |         
|CASH FLOW FROM OPERATING ACTIVITIES:                                                                          |                   |                                  |          |       |      |  |          |       |   |  |          |       |   |  |          |      
|Net income (loss)                                                                                             |                   |                                  | (24.1    | )     |      |  | (19.7    | )     |   |  | (29.4    | )     |   |  | 108.1    |      
|Minority interests                                                                                            |                   |                                  | 1.0      |       |      |  | 0.8      |       |   |  | (3.9     | )     |   |  | 2.4      |      
|                                                                                                              |                   |                                  |          |       |      |  |          |       |   |  |          |      
|Net income (loss) before minority
    interests                                                               |                   |                                  | (23.1    | )     |      |  | (18.9    | )     |   |  | (33.3    | )     |   |  | 110.5    |      
|Adjustments to reconcile income before
    minority interests to net cash provided by operating
    activity: |                   |                                  |          |       |      |  |          |       |   |  |          |       |   |  |          |      
|Amortization of intangible assets and goodwill                                                                |                   |                                  | 156.7    |       |      |  | 128.6    |       |   |  | 133.6    |       |   |  | 69.3     |      
|Depreciation of property, plant and equipment                                                                 |                   |                                  | 126.2    |       |      |  | 103.0    |       |   |  | 127.2    |       |   |  | 41.6     |      
|Amortization of OCEANE loans redemption
    premium                                                          |                   |                                  | 19.7     |       |      |  | 16.1     |       |   |  | 16.9     |       |   |  |         |      
|Income of equity affiliates, net of dividends                                                                 |                   |                                  | (1.3     | )     |      |  | (1.1     | )     |   |  |         |       |   |  | (7.5     | )    
|Increase in non-current provisions, net                                                                       |                   |                                  | 3.7      |       |      |  | 3.0      |       |   |  | 6.2      |       |   |  | 2.1      |      
|Net gain on disposal of fixed assets and
    investments                                                      |                   |                                  | 0.4      |       |      |  | 0.3      |       |   |  | (10.7    | )     |   |  | (2.8     | )    
|Increase (Decrease) in provisions for deferred tax                                                            |                   |                                  | (2.1     | )     |      |  | (1.7     | )     |   |  |         |       |   |  |         |      
|Net changes in operating assets and
    liabilities:                                                          |                   |                                  |          |       |      |  |          |       |   |  |          |       |   |  |          |      
|Decrease (increase) in advances to suppliers                                                                  |                   |                                  | (149.2   | )     |      |  | (122.1   | )     |   |  | (24.6    | )     |   |  | 10.4     |      
|Decrease (increase) in contracts-in-progress                                                                  |                   |                                  | (1,798.3 | )     |      |  | (1,472.0 | )     |   |  | 1,400.0  |       |   |  | (267.4   | )    
|Decrease (increase) in accounts and notes
    receivables                                                     |                   |                                  | (1.7     | )     |      |  | (1.4     | )     |   |  | 90.3     |       |   |  | 51.1     |      
|Decrease (increase) in other current assets                                                                   |                   |                                  | 123.5    |       |      |  | 101.1    |       |   |  | (129.1   | )     |   |  | (124.4   | )    
|Increase (decrease) in accrued liabilities                                                                    |                   |                                  | (9.4     | )     |      |  | (7.7     | )     |   |  | (15.0    | )     |   |  | (6.1     | )    
|Increase (decrease) in progress payments on
    contracts                                                     |                   |                                  | 1,988.4  |       |      |  | 1,627.6  |       |   |  | (1,290.4 | )     |   |  | 173.1    |      
|Increase (decrease) in accounts payables and
    other Creditors                                              |                   |                                  | (7.5     | )     |      |  | (6.1     | )     |   |  | 161.7    |       |   |  | 62.1     |      
|                                                                                                              |                   |                                  |          |       |      |  |          |       |   |  |          |      
|Net cash provided by operating
    activities                                                                 |                   |                                  | 426.0    |       |      |  | 348.7    |       |   |  | 432.8    |       |   |  | 112.0    |      
|CASH FLOW FROM INVESTING ACTIVITIES:                                                                          |                   |                                  |          |       |      |  |          |       |   |  |          |       |   |  |          |      
|Capital expenditures (property, plant and
    equipment)                                                      |                   |                                  | (149.5   | )     |      |  | (122.4   | )     |   |  | (124.3   | )     |   |  | (44.4    | )    
|Capital expenditures (intangibles)                                                                            |                   |                                  | (0.4     | )     |      |  | (0.3     | )     |   |  | (1.5     | )     |   |  | (22.5    | )    
|Proceeds from disposal of intangible assets                                                                   |                   |                                  | 0.4      |       |      |  | 0.3      |       |   |  | 0.2      |       |   |  |         |      
|Proceeds from disposal of fixed assets                                                                        |                   |                                  | 128.0    |       |      |  | 104.8    |       |   |  | 111.8    |       |   |  | 2.0      |      
|Acquisition of investments                                                                                    |                   |                                  | (4.0     | )     |      |  | (3.3     | )     |   |  | (0.4     | )     |   |  | (1,040.0 | )    
|Proceeds from disposal of investments                                                                         |                   |                                  | 2.0      |       |      |  | 1.6      |       |   |  | 31.2     |       |   |  | 211.8    |      
|Aker Deepwater Division purchase price reduction                                                              |                   |                                  | 46.7     |       |      |  | 38.2     |       |   |  |         |       |   |  |         |      
|Increase (decrease) from changes in scope of
    consolidation**                                              |                   |                                  | (9.7     | )     |      |  | (7.9     | )     |   |  | 1.7      |       |   |  | 232.8    |      
|                                                                                                              |                   |                                  |          |       |      |  |          |       |   |  |          |      
|Net cash provided by (used in) investing
    activities                                                       |                   |                                  | 13.4     |       |      |  | 11.0     |       |   |  | 18.7     |       |   |  | (660.3   | )    
|CASH FLOW FROM FINANCING ACTIVITIES:                                                                          |                   |                                  |          |       |      |  |          |       |   |  |          |       |   |  |          |      
|Increase in short-term debt                                                                                   |                   |                                  | 7.1      |       |      |  | 5.8      |       |   |  | 91.0     |       |   |  | 4.4      |      
|Decrease in short-term debt                                                                                   |                   |                                  | (86.7    | )     |      |  | (71.0    | )     |   |  | (252.0   | )     |   |  | (82.3    | )    
|Increase in long-term debt                                                                                    |                   |                                  | 93.5     |       |      |  | 76.5     |       |   |  | 794.7    |       |   |  | 1,107.1  |      
|Decrease in long-term debt                                                                                    |                   |                                  | (118.9   | )     |      |  | (97.3    | )     |   |  | (952.0   | )     |   |  | (210.1   | )    
|Increase in loans                                                                                             |                   |                                  |         |       |      |  |         |       |   |  |         |       |   |  | (14.9    | )    
|Decrease in loans                                                                                             |                   |                                  |         |       |      |  |         |       |   |  |         |       |   |  | (0.1     | )    
|Repurchase of own shares                                                                                      |                   |                                  | (7.9     | )     |      |  | (6.5     | )     |   |  | (45.4    | )     |   |  | (1.6     | )    
|Increase (decrease) in minority interests                                                                     |                   |                                  |         |       |      |  |         |       |   |  | (5.1     | )     |   |  | 1.8      |      
|Parent companys equity:                                                                                      |                   |                                  |          |       |      |  |          |       |   |  |          |       |   |  |          |      
|                                                                                                              | capital increases |                                  |          |      |      |  |          |      |   |  |          | 12.3  |   |  |          | 10.0  |  
|                                                                                                              | Dividends paid    |                                  |          | (94.4 | )    |  |          | (77.3 | ) |  |          | (79.7 | ) |  |          | (50.9 | )
|Net cash provided by (used in) financing
    activities                                                       |                   |                                  | (207.4   | )     |      |  | (169.8   | )     |   |  | (436.1   | )     |   |  | 763.4    |      
|Net effect of exchange rate Changes                                                                           |                   |                                  | (47.2    | )     |      |  | (38.6    | )     |   |  | (37.7    | )     |   |  | (14.8    | )    
|                                                                                                              |                   |                                  |          |       |      |  |          |       |   |  |          |      
|Net increase (decrease) in cash and cash
    equivalents                                                      |                   |                                  | 184.8    |       |      |  | 151.3    |       |   |  | (22.3    | )     |   |  | 200.3    |      
|Cash and cash equivalent at the beginning of the
    year                                                     |                   |                                  | 905.4    |       |      |  | 741.1    |       |   |  | 763.4    |       |   |  | 563.1    |      
|Cash and cash equivalent at the end of the
    year                                                           |                   |                                  | 1,090.2  |       |      |  | 892.4    |       |   |  | 741.1    |       |   |  | 763.4    |      
|                                                                                                              |                   |                                  |          |       |      |  |          |       |   |  |          |      
|Non cash increase in shareholders equity
    related to the Coflexip and ISIS acquisitions                   |                   |                                  | 60.5     |       |      |  | 49.5     |       |   |  |         |       |   |  | 1,563.6  |      
|Cash paid for income taxes                                                                                    |                   |                                  | (86.3    | )     |      |  | (70.6    | )     |   |  | (63.8    | )     |   |  | (65.3    | )    
|Interest paid                                                                                                 |                   |                                  | (29.7    | )     |      |  | (24.3    | )     |   |  | (30.1    | )     |   |  | (16.4    | )    



---



|   |                                                                                                                                                                                                                                                   
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|*  | For the convenience of the reader, the financial
    statements as of and for the year ended December 31, 2003
    have been translated into U.S. dollars (U.S.$) at the rate
    of 1.00 =
    U.S.$1.2217 on May 28, 2004. (See
    Note 1(a).)
|  
|** | This represents the cash balances of companies
    acquired (or disposed of) measured as of the date of the
    acquisition or disposal.                                                                                                          

The accompanying notes are an integral part of
these Consolidated Financial Statements.

F-6



---



##### Table of Contents



TECHNIP

CONSOLIDATED STATEMENTS OF CHANGES IN
SHAREHOLDERS EQUITY

|                                                   |  |                                                           |            |   |        |  |       |         |  |  |            |   |          |             |        |   |               |  |       |               |  |  |               |   |  |  |        |   |  |  |         |  
|-------------------------------------------------- |  | --------------------------------------------------------- | ---------- | - | ------ |  | ----- | ------- |  |  | ---------- | - | -------- | ----------- | ------ | - | ------------- |  | ----- | ------------- |  |  | ------------- | - |  |  | ------ | - |  |  | ------- | -
|                                                   |  | Stock Issued                                              |            |   |        |  |       |         |  |  |            |   | Treasury |             |        |   |               | 
|                                                   |  | Number of                                                 |            |   |        |  |       |         |  |  | Cumulative |   |          | Shares/     |        |   |               |  |      
|                                                   |  | Shares                                                    |            |   | Common |  |       | Paid-in |  |  | Retained   |   |          | Translation |        |   | Shares held   |  |       | Net           |  |  | Shareholders |  
|                                                   |  | Issued                                                    |            |   | Stock  |  |       | Surplus |  |  | Earnings   |   |          | Adjustment  |        |   | by Subsidiary |  |       | Income (Loss) |  |  | Equity        |  
|                                                   |  |                                                           |            |   |        |  |       |         |  |  |            |   |          |             |        |   |               |  |       |               |  |  |               |  
|                                                   |  |                                                          
|                                                   |  | (Amounts in millions of euro, except as otherwise stated) |           
|As of December 31, 2000                            |  |                                                           | 16,029,305 |   |        |  | 48.9  |         |  |  | 64.5       |   |          |             | 498.2  |   |               |  | (0.2  | )             |  |  | (59.2         | ) |  |  | 214.2  |   |  |  | 766.4   |  
|                                                   |  |                                                           |            |   |        |  |       |         |  |  |            |   |          |             |        |   |               |  |       |               |  |  |               |  
|Capital increase                                   |  |                                                           | 10,684,143 |   |        |  | 32.6  |         |  |  | 1,541.0    |   |          |             |        |   |               |  |       |               |  |  |               |   |  |  |        |   |  |  | 1,573.6 |  
|Appropriation of net income 2000                   |  |                                                           |            |   |        |  |       |         |  |  |            |   |          |             | 163.3  |   |               |  |       |               |  |  |               |   |  |  | (214.2 | ) |  |  | (50.9   | )
|Foreign currency translation                       |  |                                                           |            |   |        |  |       |         |  |  |            |   |          |             |        |   |               |  | 13.3  |               |  |  |               |   |  |  |        |   |  |  | 13.3    |  
|Net income loss                                    |  |                                                           |            |   |        |  |       |         |  |  |            |   |          |             |        |   |               |  |       |               |  |  |               |   |  |  | 108.1  |   |  |  | 108.1   |  
|Treasury shares/ shares held by subsidiary         |  |                                                           |            |   |        |  |       |         |  |  |            |   |          |             |        |   |               |  |       |               |  |  | (196.3        | ) |  |  |        |   |  |  | (196.3  | )
|                                                   |  |                                                           |            |   |        |  |       |         |  |  |            |   |          |             |        |   |               |  |       |               |  |  |               |  
|As of December 31, 2001                            |  |                                                           | 26,713,448 |   |        |  | 81.5  |         |  |  | 1,605.5    |   |          |             | 661.5  |   |               |  | 13.1  |               |  |  | (255.5        | ) |  |  | 108.1  |   |  |  | 2,214.2 |  
|                                                   |  |                                                           |            |   |        |  |       |         |  |  |            |   |          |             |        |   |               |  |       |               |  |  |               |  
|Capital increase                                   |  |                                                           | 170,509    |   |        |  | 0.5   |         |  |  | 11.8       |   |          |             |        |   |               |  |       |               |  |  |               |   |  |  |        |   |  |  | 12.3    |  
|Capital decrease                                   |  |                                                           | (3,475,953 | ) |        |  | (10.6 | )       |  |  | (366.8     | ) |          |             |        |   |               |  |       |               |  |  |               |   |  |  |        |   |  |  | (377.4  | )
|Appropriation of net income 2001                   |  |                                                           |            |   |        |  |       |         |  |  |            |   |          |             | 28.4   |   |               |  |       |               |  |  |               |   |  |  | (108.1 | ) |  |  | (79.7   | )
|Foreign currency Translation                       |  |                                                           |            |   |        |  |       |         |  |  |            |   |          |             |        |   |               |  | (1.1  | )             |  |  |               |   |  |  |        |   |  |  | (1.1    | )
|Net income loss                                    |  |                                                           |            |   |        |  |       |         |  |  |            |   |          |             |        |   |               |  |       |               |  |  |               |   |  |  | (29.4  | ) |  |  | (29.4   | )
|Treasury shares/ shares held by
    subsidiary (a) |  |                                                           |            |   |        |  |       |         |  |  |            |   |          |             |        |   |               |  | 255.5 |               |  |  |               |   |  |  | 255.5  |   |  |  |         |  
|Other (including merger ISIS)                      |  |                                                           |            |   |        |  |       |         |  |  |            |   |          |             | 31.9   |   |               |  |       |               |  |  |               |   |  |  |        |   |  |  | 31.9    |  
|                                                   |  |                                                           |            |   |        |  |       |         |  |  |            |   |          |             |        |   |               |  |       |               |  |  |               |  
|As of December 31, 2002                            |  |                                                           | 23,408,004 |   |        |  | 71.4  |         |  |  | 1,250.5    |   |          |             | 721.8  |   |               |  | 12.0  |               |  |  |              |   |  |  | (29.4  | ) |  |  | 2,026.3 |  
|                                                   |  |                                                           |            |   |        |  |       |         |  |  |            |   |          |             |        |   |               |  |       |               |  |  |               |  
|Capital increase                                   |  |                                                           | 330,327    |   |        |  | 1.0   |         |  |  | (0.1       | ) |          |             | 47.6   |   |               |  |       |               |  |  |               |   |  |  |        |   |  |  | 48.5    |  
|Appropriation of net income 2002                   |  |                                                           |            |   |        |  |       |         |  |  |            |   |          |             | (106.7 | ) |               |  |       |               |  |  |               |   |  |  | 29.4   |   |  |  | (77.3   | )
|Foreign currency Translation                       |  |                                                           |            |   |        |  |       |         |  |  |            |   |          |             | (13.9  | ) |               |  |       |               |  |  |               |   |  |  |        |   |  |  | (13.9   | )
|Net loss                                           |  |                                                           |            |   |        |  |       |         |  |  |            |   |          |             |        |   |               |  |       |               |  |  |               |   |  |  | (19.7  | ) |  |  | (19.7   | )
|Treasury shares                                    |  |                                                           |            |   |        |  |       |         |  |  |            |   |          |             |        |   |               |  |       |               |  |  | (9.7          | ) |  |  |        |   |  |  | (9.7    | )
|Others                                             |  |                                                           |            |   |        |  |       |         |  |  | (16.2      | ) |          |             |        |   |               |  |       |               |  |  |               |   |  |  |        |   |  |  | (16.2   | )
|As of December 31, 2003                            |  |                                                           | 23,738,331 |   |        |  | 72.4  |         |  |  | 1,250.4    |   |          |             | 646.5  |   |               |  | (1.9  | )             |  |  | (9.7          | ) |  |  | (19.7  | ) |  |  | 1,938.0 |  
|                                                   |  |                                                           |            |   |        |  |       |         |  |  |            |   |          |             |        |   |               |  |       |               |  |  |               |  
|As of December 31, 2003(in millions U.S.$*)        |  |                                                           | 23,738,331 |   |        |  | 88.5  |         |  |  | 1,527.6    |   |          |             | 789.8  |   |               |  | (2.3  | )             |  |  | (11.9         | ) |  |  | (24.1  | ) |  |  | 2,367.7 |  



---



|    |                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Technip wrote off the shares held by the company
    and its subsidiary ISIS except 49,499 shares reserved for the
    stock option plans recorded in marketable securities.                                                                      
|   
|*   | For the convenience of the reader, the financial
    statements as of and for the year ended December 31, 2003
    have been translated into U.S. dollars (U.S.$) at the rate
    of 1.00 =
    U.S.$1.2217 on May 28, 2004. (See
    Note 1(a).)

The accompanying notes are an integral part of
these Consolidated Financial Statements.

F-7



---



##### Table of Contents



TECHNIP

NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS

(Amounts in millions of euro, except as
otherwise stated)


Introductory note  Changes in scope
of consolidation and business description

(a) Change
in scope of consolidation

Technip-Coflexip is now called
Technip since Technip-Coflexip and Coflexip legally
merged in July 2003. The accounting impacts resulting from the
merger are presented in Note 2.

As Technip-Coflexip and ISIS merged in June 2002,
the reciprocal shareholding between ISIS and Technip-Coflexip
resulting from the public exchange offer on ISIS shares that
occurred in October 2001 has therefore ended.

Since October 2001, Coflexip and ISIS have been
fully consolidated in Technip financial statements of Technip
following two successful public offers on Coflexip and ISIS
shares, launched in July 2001 and carried out in October 2001.

The consolidated financial statements of Technip
for the 2003 and 2002 fiscal years are not directly comparable
to those for the 2001 fiscal year due to the major changes in
the scope of consolidation that occurred on October 1, 2001.

Before this date, Technip held a 29.4% interest
in Coflexip, which was accounted for under the equity method.
Since October 1, 2001, Coflexip and ISIS have been fully
consolidated in the Technip financial statements.

Technip statement of operations in 2001 include
operations of the former Technip for twelve months in 2001,
income of Coflexip until September 30, 2001 accounted for
as an equity affiliate and the operations of Coflexip for three
months (fourth quarter 2001).

(b) Operational
branches

Following the acquisition of Coflexip in October
2001, the Group reorganized its operational segments. The Group
is now organized into three Branches as follows:



| |   |                                                                                                                                                                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The Offshore Branch, which includes the former
    Coflexip business units (including the Deepwater Division
    acquired from Aker Maritime in early 2001) and the offshore
    business units from the former Technip.                                                                              
|
| |  | The Onshore / Downstream Branch, which comprises
    all business units from the former Technip in charge of
    engineering and construction of petrochemical and refining units
    as well as onshore upstream facilities, including gas treatment
    units, LNG facilities and onshore pipelines.
|
| |  | The Industries Branch, which is devoted to
    engineering and construction of non-oil related facilities:
    pharmaceutical units, chemical facilities, power plants, cement
    factories, industrial buildings and infrastructures.                                                               

From a geographical standpoint, Technip will
report on the basis of four regions:



| |   |                             
| | - | ----------------------------
| |  | Europe, Russia-Central Asia;
|
| |  | Africa, Middle East;        
|
| |  | Asia-Pacific; and           
|
| |  | Americas.                   

F-8



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(c) Nature
of business and operating cycle

Technips principal business includes the
following:



| |   |                                                                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Lump-sum or cost-to-cost engineering service
    contracts performed over a short period; and                                                                                                                                                                                                       
|
| |  | Engineering, manufacturing, installation and
    commissioning service contracts lasting approximately
    12 months;                                                                                                                                                                               
|
| |  | Turnkey projects related to complex industrial
    facilities with engineering, procurement, construction and
    start-up, in respect of industrial performances and a
    contractual schedule. The average duration of these contracts is
    three years but can vary depending on the contract.

(d) Statement
of operations presentation

As is common practice in Technips business
sector and in accordance with French accounting principles,
starting from 2001, the Groups statement of operations has
been presented by destination of expenses and no longer by
nature of expenses.

In 2003, the goodwill amortization
line item has been reclassified and is now shown in a single
line below the operating income section of the consolidated
statement of operations.

The consolidated statement of operations for the
years ended December 31, 2002 and 2001, respectively have
been modified in accordance with the new presentation.

Note 1  Summary of
significant accounting principles

(a) Basis
of presentation

The consolidated financial statements of Technip,
and its consolidated subsidiaries (Technip,
the Company or the Group) have been
prepared in accordance with generally accepted accounting
principles in France and comply with the New principles
and methodology relative to consolidated financial
statements, Regulation Number 99-02 of the French
Comité de la Réglementation
Comptable approved by the order dated June 22,
1999.

For the convenience of the reader, the financial
statements as of and for the year ended December 31, 2003
have been translated into U.S. dollars at the noon buying
rate in New York City on May 28, 2004 for cable transfers
in Euro, as certified for custom purposes by the Federal Reserve
Bank of New York, of
1.00 =
U.S.$1.2217. No representation is made that the euro amounts
have been, could have been or could be converted into
U.S. dollars at such a rate or at any other rate at any
other date.

(b) Consolidation
methods

Subsidiaries in which Technips voting
rights exceed 50% are consolidated. Significant jointly
controlled entities are consolidated using the proportionate
consolidation method.

The equity method is used for investments in
which the Company has the ability to exercise significant
influence over the operating and financial policies of the
investee company. In the absence of other evidence, such
influence is presumed to exist for investments in companies in
which the Companys direct or indirect ownership is between
20% and 50% of total voting rights.

The historical cost method is used to account for
investments in which the Companys ownership is less than
20% or for non-significant investees or subsidiaries. The list
of Technips main consolidated subsidiaries and the related
percentage of control by Technip as of December 31, 2003 is
provided in Note 29.

F-9



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(c) Use
of estimates

The preparation of the consolidated financial
statements in conformity with generally accepted accounting
principles in France requires management to make estimates and
assumptions that may affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts
of the revenues and expenses during the reporting period and, in
particular, the gross margin at completion on long-term
contracts. Actual results could differ from those estimates.

(d) Revenue
recognition

Long-term
contracts

Revenue and gross margin on long-term contracts
are determined using the percentage-of-completion method. The
percentage-of-completion ratio representing the progress of the
contract is computed consistently for all contracts as follows:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | For long-term contracts, which include
    construction services (lump-sum turnkey contracts), the
    percentage-of-completion is based on technical milestones
    defined for the main components of the contract, that the
    Company considers to stand for the best measure of progress of
    these contracts. Milestones related to engineering and
    construction parts of the contract are valued on the basis of
    the hours spent while milestones related to deliveries of
    procurement parts of the contract are valued on the basis of the
    cost of the related purchase.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | For these contracts, the completion of early
    phases, such as engineering design, confirmation of significant
    orders, and assurance that field conditions are satisfactory, is
    necessary to firmly assess identified risks and to estimate with
    sufficient precision the total future costs as well as the
    expected timetable. As a result, the related positive gross
    margin is recognized when the gross margin at completion can be
    estimated more precisely, on a contract-by-contract basis. The
    gross margin corresponding to the completion ratio reached at
    that time is immediately recognized. The remaining gross margin
    is recognized using the percentage-of-completion method for the
    remaining duration of the contract.
|
| | For contracts awarded before July 1, 2001,
    the gross margin recognition started when the
    percentage-of-completion ratio reaches 25%. For the years
    presented, the effect of this change in estimate was not
    significant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          



| |   |                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | For long-term contracts, which do not include
    construction services, revenue and gross margin are recognized
    based on the relation that costs incurred to date bear to
    estimated total costs.

Allowance is made for the total foreseeable
losses in the case of unprofitable long-term contracts.

Long-term contract gross margin is based on an
estimate of total costs at completion, which are reviewed and
revised periodically throughout the life of the contract.

A long-term contract is completed, when the
contractual transfer of ownership is achieved or, in the case of
make-good contracts relating to complex integrated
systems, when the provisional acceptance is received, even if
there are minor conditions outstanding.

At completion of the contract, accrued
liabilities are recorded as necessary, to cover pending
contingencies and expenses, including warranty costs.

Other
contracts

The Group also performs a large number of
non-significant contracts for which revenue and gross margin is
recorded when services have been rendered.

F-10



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(e) Foreign
currency transactions

Foreign currency transactions are translated into
Euro at the rate of exchange applicable at the transaction date,
except for those related to long-term contracts, which are
translated using the contract rate, based on foreign
currency hedging (see Note 1(r)).

At year-end, monetary assets and liabilities
denominated in foreign currencies are translated into Euro at
the rate of exchange prevailing at that date except for
contracts-in-progress accounts and progress payments
received from long-term contract customers which are recorded at
the contract rate. The resulting exchange gains or
losses are recorded in the statement of operations.

(f) Translation
to reporting currency

The statement of operations of foreign
subsidiaries are translated into Euro at the average rate of
exchange prevailing during the year. Balance sheets are
translated at the exchange rate at the balance sheet date.
Differences arising in the translation of financial statements
of foreign subsidiaries are recorded in shareholders
equity as foreign currency translation adjustments.

The functional currency of the foreign
subsidiaries is the local currency.

The Brazilian subsidiaries financial
statements were denominated in U.S. dollars until 2002.
Since January 1, 2003, the functional currency of these
subsidiaries is the local currency, the Brazilian Real, in light
of the trends in foreign currency movements with regard to these
companies.

(g) Intangible
assets, net

Intangible assets primarily consist of
fonds de commerce, which are amortized over
five years, and licenses and patents, which are amortized over
ten years. Costs related to software rights are recorded in
operating income when incurred, except for those costs incurred
in connection with the development of computer systems such as
the E-Procurement platform, which are amortized over five years.

Goodwill resulting from business combinations
accounted for using the purchase method is recorded in the
balance sheet under the Goodwill line item. Goodwill
is amortized over a period ranging from 5 to 25 years,
depending on the activity of the business acquired and is
allocated to the different operational segments.

Intangible assets are tested for impairment
whenever events or circumstances indicate that the carrying
amount of an asset (asset group) may not be recoverable. An
impairment loss would be recognized when the carrying amount of
an asset exceeds the estimated undiscounted cash flows used in
determining the fair value of the asset. The amount of the
impairment loss to be recorded is calculated by the excess of
the assets carrying value over its fair value. Fair value is
generally determined using a discounted cash flow analysis
corresponding to the most likely scenario adopted by the Board
of Directors. Actual results may differ from forecasts.

The goodwill tested is allocated to the
operational segments and to identified assets and liabilities.
The scenarios retained in 2003 are based on the business plan
for the years 2004 to 2006 corresponding to these business
segments, as approved by the Board of Directors. After 2006, the
annual growth rate is 3% including a 1.5% inflation rate. The
forecasts are thus drawn up over a period of 10 years with
a standard terminal value, defined in 2013. The discounting of
future cash flows is carried out at a rate of 7.31%. The tax
rate used is 34.0%.

F-11



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(h) Property,
plant and equipment

Property, plant and equipment are stated at cost.
They are depreciated on a straight-line basis over their
estimated useful lives as follows:

|                              |  |  |                 | 
|----------------------------- |  |  | --------------- | 
|Buildings                     |  |  | 10 to 50  years | 
|Vessels                       |  |  | 10 to 25  years | 
|Machinery and equipment       |  |  | 6 to 10 years   | 
|Office fixtures and furniture |  |  | 5 to 10 years   | 
|Vehicles                      |  |  | 3 to 7 years    | 
|EDP equipment                 |  |  | 3 to 5 years    | 

Property, plant and equipment used by Technip
under capital lease agreements are recorded in the balance sheet
and depreciation expense is recorded in the consolidated
statements of operations as if acquired by the Company with a
credit facility.

The carrying value of property, plant and
equipment is reviewed for impairment whenever events or changes
in circumstances indicate that there may be impairment. If the
review indicates that the carrying value of any of the tangible
assets will not be recoverable, the tangible asset will be
reduced to its estimated net realizable value.

Dry-docking expenses on vessels are amortized
evenly over the anticipated period between dry-dockings. This
accounting principle corresponds to the alternative method
allowed by the CRC 2002-10 to the component-based
approach.

(i) Other
investments and loans

Other investments are recorded at the lower of
historical cost or net realizable value, assessed on an
individual investment basis upon the underlying net equity
value, future profitability or market value.

(j) Deferred
bid costs

Costs directly attributable to obtaining future
turnkey engineering/ construction contracts, the signature of
which can be reasonably expected, are deferred and capitalized
in the balance sheet under the deferred bid costs
line item, then transferred to the contract costs upon final
contract award. At year-end, an allowance is provided according
to the probability of success.

(k) Contracts-in-progress

Profits expected to be realized on contracts,
which are recognized in the consolidated statements of
operations as described in Note 1(d), are
based on the Companys estimates of total contract sales
value and costs at completion. Bonuses and claims amounts are
included in revenue when estimated to be probable.

As is common in the industry, certain contracts
are performed jointly by the Company with third parties through
joint ventures. The Companys share in these contracts is
recognized in its consolidated statements of operations through
the proportionate consolidation of the corresponding joint
venture (see Note 1(b)).

Contracts-in-progress include:



| |   |                                                                                                                                                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | equipment and material purchases, costs of
    subcontracted services and miscellaneous services incurred in
    relation to the contracts;                                                                                                  
|
| |  | man-hour costs directly assigned to the contract,
    valued using hourly rates, which include an overhead factor
    covering all operating expenses except for selling, research and
    development expenses and under-activity costs; and

F-12



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



| |   |                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------
| |  | the gross margin recognized under the
    percentage-of-completion method as described in
    Note 1(d).

Contracts-in-progress do not include financial
interests.

Costs incurred in relation with a contract are
accumulated and presented in the balance sheet under the
Contracts-in-progress line item together with the
gross margin recognized (see Note 1(d)).

Progress payments made by customers under ongoing
long-term contracts are accumulated in the balance sheet under
the Progress payments on contracts line item.

At completion of the contract:



| |   |                                                                                                                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Contracts-in-progress (which at that
    time amounts to the total sales price of the contract) is
    reduced by accumulated progress payments received by the Company
    under this contract, the remaining balance being invoiced to the
    customer and recorded under the Other receivables on
    contracts line item (see Note 17); and
|
| |  | If necessary, accrued liabilities are recorded to
    cover pending contingencies and expenses, and are shown under
    the Expenses to complete contracts line item in the
    balance sheet. These liabilities are considered as current for
    the purpose of the preparation of the statements of cash flows.                                

(l) Inventories

Inventories are stated at the lower of cost or
market value, with cost being determined on the weighted-average
cost basis.

(m) Receivables

Receivables are stated at their nominal value. A
provision for doubtful accounts is recorded if receivables are
expected to be uncollectible.

(n) Advances
to suppliers

Advance payments made to suppliers under
contracts-in-progress are shown under the line item
Advances to suppliers in the balance sheet.

(o) Cash
and cash equivalents

Cash and cash equivalents consist of cash and
liquid marketable securities with an initial maturity of less
than three months. Liquid marketable securities are recognized
in the balance sheet at their market value at closing date.
Changes in fair value, both unrealized gains and losses, are
recognized in each periods statement of operations.

(p) Retirement
indemnities and Accrued liabilities

Accrued liabilities are recorded based on the
analysis of related exposure or the expense incurred, based on
the best estimates available.

Foreseeable losses on contracts: a provision is
recorded for foreseeable losses in the case of unprofitable
long-term contracts.

Contingencies related to contracts: this
provision concerns litigation mainly on former contracts.

Territoriality Contingencies related to
contracts: when multiple affiliates or partners are involved in
a contract, the complexity of the applicable national rules and
regulations in countries where the Company

F-13



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

operates, such as administrative and tax rules
and regulations, may sometimes cause the Company to use
assumptions in order to measure related obligations.

Expenses to complete contracts: at the time of
completion of a contract, pending charges and works to be
performed to reach the final acceptance are accounted for as
Expenses to complete contracts.

Accrual for retirement
indemnitiesincludes:



| |   |                                                                                           
| | - | ------------------------------------------------------------------------------------------
| |  | End-of-career indemnities, which are to be paid
    at retirement date,                   
|
| |  | Deferred wages indemnities, which are to be paid
    when employees leave the company, and
|
| |  | Retirement indemnities, which are to be paid as
    annuities.                            

The actuarial estimation is based on usual
parameters such as future wage and salary increases, life
expectancy, turnover of staff and rate of return on investment.
However, the method used in France is not the preferential
method recommended by the CNC (the French Institute of
Accountants) and applicable starting from January 1, 2004.

Restructuring:the
total estimated costs related to a restructuring plan are
recorded in the period when the plan is finalized.

(q) Deferred
taxation

Deferred taxes are provided on items recognized
in different periods for financial reporting and tax purposes
following the liability method, under which deferred taxes are
computed by utilizing the rate expected to be in effect when the
tax becomes payable.

If the balance leads to deferred taxation, it is
accounted for as a liability. If such balance is an asset, which
is more likely than not to be realized in the future, it is
accounted for as a receivable.

(r) Financial
instruments

To hedge its exposure to exchange rate
fluctuations during the bid period of long-term contracts, the
Company occasionally enters into insurance contracts, upon which
foreign currencies are exchanged at a specified rate and at a
specified future date only if the contemplated new contract is
awarded. A premium paid at the outset by the Company to enter
into such insurance contract is charged to the income statement
when paid. If the commercial bid is not successful, the
insurance contract is automatically terminated without any cash
settlements or penalties. On the other hand, if the commercial
contract is awarded to the Company, a second premium is paid to
the insurance company, the cost of which is charged to the
income statement over the duration of the contract.

On certain occasions, the Company may buy foreign
currency options during the bid period.

Forward exchange contracts are used to hedge firm
contractual commitments not previously hedged using an insurance
contract. The contract rate used to recognize the
commercial commitment (see Note 1(e)) is
calculated on the basis of these financial instruments.

All the financial instruments held by the Group
are aimed at hedging future inflows and outflows against
exchange rate fluctuations during the period of performance of
the contracts.

The hedging instrument sometimes relates to the
portion of anticipated foreign currency cash inflows for a
contract not naturally hedged by estimated foreign currency cash
outflows to be incurred during the performance of the same
contract.

Every Group subsidiary enters into forward
exchange contracts with banks or with the Group financing
company, Technip Eurocash SNC (a general partnership).

F-14



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The Group does not buy or sell any financial
instruments for speculative purposes. All financial instruments
held by the Group are off-balance sheet commitments and are
consequently not reflected in the balance sheet.

All financial instruments and related underlying
transactions have a maturity of less than four years.

(s) Research
and development costs

Research and development costs are expensed when
incurred and classified as operating expenses under the Selling,
General and Administrative expenses line item. However, they are
deferred in the balance sheet when technical feasibility and
return on investment can be demonstrated.

(t) Financial
result

The financial result on long-term contracts is
recorded under net sales. Financial result not related to
long-term contracts is presented separately in the consolidated
statement of income under the Financial result line
item.

(u) Non-operating
result

Non-operating result relates to income and
expenses arising from assets disposals and from the
restructuring operations.

(v) Diluted
earnings per share

Diluted earnings per share have been calculated
on the basis of the net income before deduction of financial
costs and redemption premium amortization after tax relating to
the OCEANE loan. It is also based on the number of common stock
outstanding as of each year-end including outstanding stock
options granted to employees as of such date and after deduction
of existing shares held by subsidiaries.

(w) Shares
held by subsidiaries

Shares held by subsidiaries are presented as a
reduction of shareholders equity except for shares
specifically assigned to stock-option plans.

Note 2  Changes in scope of
consolidation: significant acquisitions and
divestitures



| |                                         
| | ----------------------------------------
| | For the year ended December 31,
    2003

Technip-Coflexip is now called
Technip since Technip-Coflexip and Coflexip legally
merged in July 2003. The merger resulted in a capital increase
of
1.0 million,
a paid-in-surplus of
48.5 million
arising from the repurchase of Coflexips minority
interests and additional goodwill of
35.2 million.

Moreover, during the first half of the year,
Coflexip and Aker Maritime reached an agreement regarding the
purchase price adjustment mechanisms stipulated in the contract
following the acquisition of Aker Maritimes Deepwater
Division, leading to a
40.7 million
purchase price reduction. This reduction leads to a decrease in
the goodwill recorded in the consolidated balance sheets.

F-15



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The Coflexip goodwill after the merger and the
Aker Maritime price reduction is detailed as follows:

|                                                                                                     |  |  |        |             |  |  |         |  
|---------------------------------------------------------------------------------------------------- |  |  | ------ | ----------- |  |  | ------- | -
|                                                                                                     |  |  |        | In millions | 
|                                                                                                     |  |  |        | of EUR      | 
|                                                                                                     |  |  |        |             | 
|Creation of 5,504,436 Technip shares
    (147.99 a share)                                           |  |  |        |             |  |  | 814.6   |  
|Cash paid for 5,000,000 Coflexip shares
    (199 a share)                                           |  |  |        |             |  |  | 995.0   |  
|Net purchase costs                                                                                   |  |  |        |             |  |  | 28.7    |  
|                                                                                                     |  |  |        |             |  | 
|Purchase price for 52.47% in
    Coflexip                                                            |  |  |        |             |  |  | 1,838.3 |  
|Coflexip net equity as of September 30, 2001
    (52.47%)                                            |  |  |        |             |  |  | (421.4  | )
|                                                                                                     |  |  |        |             |  | 
|Step-up for 52.47% in Coflexip                                                                       |  |  |        |             |  |  | 1,416.9 |  
|Step-up for 16.63% in Coflexip via ISIS                                                              |  |  |        |             |  |  | 253.1   |  
|                                                                                                     |  |  |        |             |  | 
|Step-up for 69.1% in Coflexip                                                                        |  |  |        |             |  |  | 1,670.0 |  
|Release of net goodwill recognized by Coflexip
    (foreign exchange effect included)                |  |  |        |             |  |  | 503.5   |  
|Preliminary allocation to identified assets:                                                         |  |  |        |             |  |  |         |  
|Vessels                                                                                              |  |  | (106.4 | )           |  |  |         |  
|Buildings                                                                                            |  |  | (24.2  | )           |  |  |         |  
|Patents                                                                                              |  |  | (59.4  | )           |  |  | (125.5  | )
|Deferred tax                                                                                         |  |  | 64.5   |             |  |  |         |  
|                                                                                                     |  |  |        |             |  | 
|Goodwill determined at date of acquisition
    (gross)                                               |  |  |        |             |  |  | 2,048.0 |  
|                                                                                                     |  |  |        |             |  | 
|Adjustment on Coflexip shares from ISIS (after
    merger)                                           |  |  |        |             |  |  | 5.5     |  
|Gain on sales of CSO assets                                                                          |  |  |        |             |  |  | (48.3   | )
|Depreciation of American deferred tax assets                                                         |  |  |        |             |  |  | 13.8    |  
|Provisions for transfers                                                                             |  |  |        |             |  |  | 32.1    |  
|Provisions and miscellaneous charges                                                                 |  |  |        |             |  |  | 48.0    |  
|                                                                                                     |  |  |        |             |  | 
|Goodwill 2002 after adjustments
    (gross)                                                          |  |  |        |             |  |  | 2,099.1 |  
|                                                                                                     |  |  |        |             |  | 
|Aker Deepwater Division price reduction                                                              |  |  |        |             |  |  | (40.7   | )
|Capital increase following the repurchase of
    minority interests for the Technip/ Coflexip merger |  |  |        |             |  |  | 49.5    |  
|Book value of minority interests repurchased                                                         |  |  |        |             |  |  | (14.3   | )
|Other                                                                                                |  |  |        |             |  |  | (1.0    | )
|                                                                                                     |  |  |        |             |  | 
|Goodwill 2003 after adjustments
    (gross)                                                          |  |  |        |             |  |  | 2,092.6 |  
|                                                                                                     |  |  |        |             |  | 

Thus, Coflexips total goodwill after the
purchase of the two installments in 2000 and 2001 and after the
adjustments made in 2002 and 2003 can be analyzed as follows:

|                                                                                                   |  |             |         |  
|-------------------------------------------------------------------------------------------------- |  | ----------- | ------- | -
|                                                                                                   |  | In millions |        
|                                                                                                   |  | of EUR      |        
|                                                                                                   |  |             |        
|Goodwill on the purchase of 29.4% of Coflexip
    shares (April 2000)                              |  |             | 447.5   |  
|Goodwill on the purchase of 69.1% of Coflexip
    shares (October 2001) after Aker price reduction |  |             | 2,057.4 |  
|Goodwill on the Technip/Coflexip merger
    (July 2003)                                            |  |             | 35.2    |  
|Accumulated amortization as of December 31,
    2003                                               |  |             | (269.8  | )
|                                                                                                   |  |             |        
|Goodwill after adjustments (net)                                                                   |  |             | 2,270.3 |  

Goodwill has been allocated in its entirety to
the Offshore segment which is further allocated to the following
activities:

|                                                     |  |  |         | 
|---------------------------------------------------- |  |  | ------- | 
|Goodwill net, related to the Floaters
    activity |  |  | 322.6   | 
|Goodwill net, related to the Surf
    activity     |  |  | 1,947.7 | 

F-16



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The Group performed an impairment test on this
goodwill by comparing the book value of the activity to its fair
value, based on estimated discounted cash flows converted to a
current value. (See Note 1(g)). Based on the
impairment test, no impairment is required.

In 2003, the Group raised its stake in SEAMEC
(India) to 78.2% following a 20% purchase of interests.

For the year
ended December 31, 2002

The year 2002 was marked by the merger of Technip
and ISIS in June. Technip already held a 99.05% interest at the
end of December 2001. As the contribution value was
750 million,
which is a value close to the one set as part of the public
offer in 2001, the impact on the consolidated statements is
limited. Following the merger, ISIS contributed to Technip its
portfolio of shares, including the shares of Technip
(cancelled), Coflexip, CGG (exchanged for Technip shares, then
cancelled), and shares of Novasep and Géoservices (sold).

No significant acquisition occurred in 2002.

In 2002, Technip sold its minority stake of 46%
in its subsidiary Ipedex, accounted under the equity method in
2001. In 2002, Coflexip disposed of non-strategic assets
including the subsidiaries McNulty Offshore Ltd and Captain
Franck McNulty & Sons Ltd (construction site in United
Kingdom), as well as the activities and resources related to the
Well operations segment (including the Seawell
vessel). The former Coflexip head office, building located at
Porte Maillot, was also sold.

The goodwill resulting from the acquisition of
the 69.1% interest in Coflexip has been adjusted in order to
take into account the consolidated gains on sales that took
place in the Coflexip scope during the year 2002. Other
adjustments have also affected the goodwill, and these are
presented below. In addition, the residual goodwill of Coflexip
resulting from the two stages of the acquisition remaining after
allocation to identified assets and liabilities has been
allocated to two business lines of the Offshore operational
segment: the first concerns the floaters and floaters facilities
sector and relates mainly to the Aker Maritime division business
acquired by Coflexip in 2001; the second concerns the SURF
activity (Subsea, Umbilicals, Risers and Flowlines) and
corresponds to the main activity of Coflexip before the
acquisition of Aker.

For the year
ended December 31, 2001

In August 2001, Technip launched two public
offers on Coflexip and ISIS, in order to take control of
Coflexip, in which Technip already held a 29.4% interest
(initially 29.7%).

(a) Purchase
of 99.05% interest in ISIS

As a result of the public exchange offer launched
in the beginning of July 2001, Technip finalized the purchase of
a 99.05% interest in ISIS (4,601,170 shares) at the
beginning of October 2001. The exchange ratio was
11 Technip shares for 10 ISIS shares, which created an
additional 5,061,287 Technip (renamed Technip-Coflexip) shares
(749 million).

The ISIS balance sheet item
Investments as of September 30, 2001
represented shares of public companies (11.5% interest in
Technip, 16.6% interest in Coflexip and 12.3% interest in
Compagnie Generale de Géophysique CGG)
and shares of private companies with an estimated value of
205 million
for sale to Institut Français du Pétrole (IFP).

Moreover, in consideration of two promises of
exchange signed by ISIS and IFP in November 2001, the CGG shares
held by ISIS will be sold to IFP in a 36-month period beginning
December 31, 2001 under certain conditions. These shares
are recorded at their historical book value
(73.1 million)
in the ISIS accounts.

F-17



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The balance sheets of ISIS as of
September 30, 2001 and December 31, 2001 used for
Technip consolidation purposes are detailed as follows.

|                                               |  |                    |       |  |          |  |       | 
|---------------------------------------------- |  | ------------------ | ----- |  | -------- |  | ----- | 
|                                               |  | Sept. 30,          |       |  | Dec. 31, | 
|                                               |  | 2001(*)            |       |  | 2001     | 
|                                               |  |                    |       |  |          | 
|                                               |  |                   
|                                               |  | In millions of EUR |      
|Investments(**)                                |  |                    | 161.0 |  |          |  | 161.0 | 
|Current assets                                 |  |                    | 168.4 |  |          |  | 169.6 | 
|                                               |  |                    |       |  |          | 
|TOTAL ASSETS                                   |  |                    | 329.4 |  |          |  | 330.6 | 
|                                               |  |                    |       |  |          | 
|Shareholders equity                           |  |                    | 301.7 |  |          |  | 302.8 | 
|Liabilities                                    |  |                    | 27.7  |  |          |  | 27.8  | 
|                                               |  |                    |       |  |          | 
|TOTAL SHAREHOLDERS EQUITY AND
    LIABILITIES |  |                    | 329.4 |  |          |  | 330.6 | 
|                                               |  |                    |       |  |          | 



---



|     |                                                                                                                   
|---- | ------------------------------------------------------------------------------------------------------------------
|(*)  | Unaudited.                                                                                                        
|    
|(**) | Historical book value: Technip,
    31.7 million,
    Coflexip,
    56.2 million
    and CGG,
    73.1 million.

The difference between the purchase price and the
shareholders equity at the date of acquisition of ISIS by
Technip amounted to
450.2 million
[749-(301.7 x 99.05%)] and was fully allocated to
revaluing the Technip and Coflexip shares.

(b) Purchase
of 52.47% interest in Coflexip

Since April 2000, Technip has held a 29.4%
(initially 29.7%) interest in Coflexip. As a result of the
public exchange offers launched at the beginning of July 2001,
Technip finalized the additional purchase of a 52.47% interest
in Coflexip at the beginning of October 2001. As a result of the
public exchange offer on ISIS, which holds 16.6% of Coflexip
(see Note 2(a)) and of this transaction,
Technip holds directly and indirectly a 98.36% interest in
Coflexip. The purchase of the 52.47% interest in Coflexip was
through cash (OPA) for 5,000,000 shares
(199 per share,
i.e., total of
995 million)
and the exchange of new Technip shares issued based on the
exchange ratio of 9 Technip shares for 8 ISIS shares
(OPE). This transaction created 5,504,436 new
Technip shares
(814.6 million).

The global purchase price of Coflexip shares
obtained at the end of the public offers on Coflexip shares
(52.47%) amounted to
1,838.3 million,
including net purchase costs of
28.7 million.

F-18



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Coflexip balance sheets as of September 30,
2001 and December 31, 2001 used for Technip consolidation
purposes are detailed as follows.

|                                               |  |                    |         |  |          |  |         | 
|---------------------------------------------- |  | ------------------ | ------- |  | -------- |  | ------- | 
|                                               |  | Sept. 30,          |         |  | Dec. 31, | 
|                                               |  | 2001(*)            |         |  | 2001     | 
|                                               |  |                    |         |  |          | 
|                                               |  |                   
|                                               |  | In millions of EUR |        
|Intangible assets                              |  |                    | 481.1   |  |          |  | 517.4   | 
|Tangible assets                                |  |                    | 695.3   |  |          |  | 689.1   | 
|Investments                                    |  |                    | 16.7    |  |          |  | 17.0    | 
|Other current assets                           |  |                    | 685.2   |  |          |  | 698.3   | 
|Cash and cash equivalents                      |  |                    | 241.5   |  |          |  | 213.2   | 
|                                               |  |                    |         |  |          | 
|TOTAL ASSETS                                   |  |                    | 2,119.8 |  |          |  | 2,135.0 | 
|                                               |  |                    |         |  |          | 
|Shareholders equity                           |  |                    | 788.0   |  |          |  | 807.0   | 
|Minority interests                             |  |                    | 15.1    |  |          |  | 15.7    | 
|Long-term debt                                 |  |                    | 508.0   |  |          |  | 566.6   | 
|Short-term debt                                |  |                    | 751.8   |  |          |  | 712.9   | 
|Bank overdrafts                                |  |                    | 56.9    |  |          |  | 32.8    | 
|                                               |  |                    |         |  |          | 
|TOTAL SHAREHOLDERS EQUITY AND
    LIABILITIES |  |                    | 2,119.8 |  |          |  | 2,135.0 | 
|                                               |  |                    |         |  |          | 



---



|    |           
|--- | ----------
|(*) | Unaudited.

The following information is presented below:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the 2001 Coflexip condensed income statement
    including the Aker Maritime Deepwater Division (CSO) goodwill
    amortization of
    142.6 million
    at the end of the year and,                                                                                                                                                                                                                                                                                                          
|
| |  | the 2001 fourth quarter Coflexip income statement
    used by Technip for consolidation purposes is presented below.
    It is not affected by the exceptional amortization provided for
    above, as a result of (i) the accounting rules applicable
    to the allocation of the Coflexip purchase price and
    (ii) the positive result on the impairment test performed
    on the goodwill determined on the Coflexip acquisition, on the
    basis of the discounted future cash flows.

|                                                          |  |                    |         |   |                  |  |       |  
|--------------------------------------------------------- |  | ------------------ | ------- | - | ---------------- |  | ----- | -
|                                                          |  | 2001               |         |   | 2001             | 
|                                                          |  | (12 months)        |         |   | (4th quarter)(*) | 
|                                                          |  |                    |         |   |                  | 
|                                                          |  |                   
|                                                          |  | In millions of EUR |        
|Net sales                                                 |  |                    | 1,898.8 |   |                  |  | 495.0 |  
|Operating income before depreciation and
    amortization |  |                    | 222.5   |   |                  |  | 61.6  |  
|Depreciation and amortization other than goodwill         |  |                    | (103.7  | ) |                  |  | (26.5 | )
|Operating income before goodwill
    amortization         |  |                    | 118.8   |   |                  |  | 35.1  |  
|Goodwill amortization                                     |  |                    | (170.4  | ) |                  |  | (7.8  | )
|                                                          |  |                    |         |   |                  | 
|Operating income                                          |  |                    | (51.6   | ) |                  |  | 27.3  |  
|Financial result                                          |  |                    | (10.9   | ) |                  |  | 2.4   |  
|Income tax                                                |  |                    | (42.8   | ) |                  |  | (8.3  | )
|Income of equity affiliates                               |  |                    | (0.1    | ) |                  |  | (1.2  | )
|Minority interests                                        |  |                    |        |   |                  |  | (0.6  | )
|                                                          |  |                    |         |   |                  | 
|Net income                                                |  |                    | (105.4  | ) |                  |  | 19.6  |  
|                                                          |  |                    |         |   |                  | 



---



|    |           
|--- | ----------
|(*) | Unaudited.

F-19



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The 2001 proforma consolidated income statement
as restated following the implementation of the bond issue in
January 2003 is presented below. The unaudited 2001 proforma
consolidated income statement of Technip has been drawn up
assuming that the acquisitions of ISIS and Coflexip described
above were carried out at January 1, 2001. It is specified
that the activity of ISIS is not material and therefore not
presented.

|                                                          |  |                    |         |   |             |                  |         |               |            |  |             |            |          |                |         |   |         |  |       |     |  |  |         |  
|--------------------------------------------------------- |  | ------------------ | ------- | - | ----------- | ---------------- | ------- | ------------- | ---------- |  | ----------- | ---------- | -------- | -------------- | ------- | - | ------- |  | ----- | --- |  |  | ------- | -
|                                                          |  |                    |         |   |             |                  |         | Proforma 2001 |            |  |             |            | Proforma |               
|                                                          |  |                    |         |   |             | Presented in the |         |               | Additional |  |             | 2001 after |         
|                                                          |  | Technip historical |         |   | Adjustments |                  |         | annual report |            |  | adjustments |            |          | additional     |        
|                                                          |  | 2001 (12 months)   |         |   | 2001(*)     |                  |         | in 2001(*)    |            |  | 2001(*)     |            |          | adjustments(*) |        
|                                                          |  |                    |         |   |             |                  |         |               |            |  |             |            |          |                |        
|                                                          |  | Technip            |         |   | Coflexip    |                  |         | Technip       |            |  | Technip     |            |          | Technip        |         |   | Technip | 
|                                                          |  |                    |         |   |             |                  |         |               |            |  |             |            |          |                |         |   |         | 
|                                                          |  |                   
|                                                          |  | In millions of EUR |        
|Net sales                                                 |  |                    | 3,051.0 |   |             |                  | 1,898.8 |               |            |  |             |            |          |                | 4,949.8 |   |         |  |       |     |  |  | 4,949.8 |  
|Operating income before depreciation and
    amortization |  |                    | 223.0   |   |             |                  | 222.6   |               |            |  |             |            |          |                | 445.6   |   |         |  | 4.0   | (e) |  |  | 449.6   |  
|Depreciation and amortization other than goodwill         |  |                    | (19.5   | ) |             |                  | (103.7  | )             |            |  | (14.2       | )(a)       |          |                | (137.4  | ) |         |  |       |     |  |  | (137.4  | )
|Operating income before goodwill
    amortization         |  |                    | 203.5   |   |             |                  | 118.9   |               |            |  | (14.2       | )          |          |                | 308.2   |   |         |  |       |     |  |  | 312.2   |  
|Goodwill amortization                                     |  |                    | (41.6   | ) |             |                  | (170.5  | )             |            |  | 96.3        | (b)        |          |                | (115.8  | ) |         |  |       |     |  |  | (115.8  | )
|Operating income                                          |  |                    | 161.9   |   |             |                  | (51.6   | )             |            |  | 82.1        |            |          |                | 192.4   |   |         |  |       |     |  |  | 196.4   |  
|Financial result                                          |  |                    | (10.1   | ) |             |                  | (10.0   | )             |            |  | (31.7       | )(c)       |          |                | (51.8   | ) |         |  | 22.6  | (f) |  |  | (29.2   | )
|Non-operating income                                      |  |                    | (6.6    | ) |             |                  |         |               |            |  | 2.8         |            |          |                | (3.8    | ) |         |  |       |     |  |  | (3.8    | )
|Income of equity affiliates                               |  |                    | 25.2    |   |             |                  | (0.8    | )             |            |  | (24.0       | )(d)       |          |                | 0.4     |   |         |  |       |     |  |  | 0.4     |  
|Income tax                                                |  |                    | (57.2   | ) |             |                  | (42.8   | )             |            |  | 19.5        |            |          |                | (80.5   | ) |         |  | (16.3 | )   |  |  | (96.8   | )
|Minority interests                                        |  |                    | (1.8    | ) |             |                  | (0.1    | )             |            |  | (1.7        | )          |          |                | (3.6    | ) |         |  |       |     |  |  | (3.6    | )
|                                                          |  |                    |         |   |             |                  |         |               |            |  |             |            |          |                |         |   |         | 
|Net income                                                |  |                    | 111.4   |   |             |                  | (105.3  | )             |            |  | 47.0        |            |          |                | 53.1    |   |         |  | 10.3  |     |  |  | 63.4    |  
|                                                          |  |                    |         |   |             |                  |         |               |            |  |             |            |          |                |         |   |         | 
|Diluted pro forma earnings per share                      |  |                    |         |   |             |                  |         |               |            |  |             |            |          |                | 2.09    |   |         |  |       |     |  |  | 2.50    |  
|                                                          |  |                    |         |   |             |                  |         |               |            |  |             |            |          |                |         |   |         | 



---



|    |                                                                                                                                                                                                                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | (*)          Unaudited.                                                                                                                                                                                                                                                                                                              
|   
|(a) | Amortization of the revaluation of identified
    assets (vessels, buildings and patents) for the first nine
    months of 2001.                                                                                                                                                                                                     
|   
|(b) | Reversal of goodwill amortization recorded in
    Coflexip statement of income
    (212.1 million)
    and calculation of a normative goodwill amortization: Mannesmann
    8 million,
    others
    3.5 million,
    Coflexip 29.7%,
    22.4 million
    and Coflexip 52.47%,
    81.9 million,
    i.e.,
    115.8 million.
|   
|(c) | Nine months interest expense related to the
    credit facility financing the public offer on Coflexip.                                                                                                                                                                                                                             
|   
|(d) | Reversal of twelve months income from
    Coflexip according to equity accounting.                                                                                                                                                                                                                                                  
|   
|(e) | Coflexip acquisition costs following the public
    offer and the public exchange offer.                                                                                                                                                                                                                                             
|   
|(f) | Impact of the substitution of the bond issue for
    the credit facility.                                                                                                                                                                                                                                                            



|         |                                                  
|-------- | -------------------------------------------------
|Note 3  | Business and geographical segment
    information



|    |                                    
|--- | -----------------------------------
|(a) | Information by business
    segment

Technip has three operational segments, which are
defined as follows:



| |   |                                                                                                                                                                                                                            
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Offshore Branch  integrated design,
    engineering, fabrication and construction services, including
    floaters, subsea flow lines, risers and umbilicals as well as
    project management and maintenance operations.
|
| |  | Onshore Downstream Branch  design and
    implementation of production, refining and treatment units.                                                                                                                     
|
| |  | Industries Branch  project management
    and engineering services to a diverse array of clients unrelated
    to the hydrocarbons industry.                                                                              

F-20



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The significant change in scope of consolidation,
which took place on October 1, 2001, does not allow for a
true comparison (see Introductory Note (a)).
The 2001 business activity includes Technips previous
12-month activity plus Coflexips activity (which only
concerns the Offshore operational segment) from October 1,
2001 (i.e., only 4th quarter 2001).

The segment result used by the Company to measure
segment profitability is operating income before depreciation
and amortization.

|                                                                           |  |                    |         |          |            |  |         |            |  |  |           |  |  |       |       |  |  |  |          | 
|-------------------------------------------------------------------------- |  | ------------------ | ------- | -------- | ---------- |  | ------- | ---------- |  |  | --------- |  |  | ----- | ----- |  |  |  | -------- | 
|                                                                           |  |                    |         | Onshore/ |            |  |         |            |  |  |          
|                                                                           |  | Offshore           |         |          | Downstream |  |         | Industries |  |  | Corporate |  |  | Total |      
|                                                                           |  |                    |         |          |            |  |         |            |  |  |           |  |  |       |      
|                                                                           |  |                   
|                                                                           |  | In millions of EUR |        
|2003                                                                       |  |                    |         |          |            |  |         |            |  |  |           |  |  |       |       |  |  |  |          | 
|Net Sales                                                                  |  |                    | 2,209.7 |          |            |  | 2,119.0 |            |  |  | 382.4     |  |  |       |      |  |  |  | 4,711.1  | 
|Operating income before depreciation and
    amortization                  |  |                    | 242.7   |          |            |  | 100.4   |            |  |  | 2.4       |  |  |       |      |  |  |  | 345.5    | 
|Backlog as of December 31(*)                                               |  |                    | 2,894.9 |          |            |  | 3,907.5 |            |  |  | 378.0     |  |  |       |      |  |  |  | 7,180.4  | 
|Capital expenditures (property, plant and
    equipment)                   |  |                    | 102.0   |          |            |  | 16.4    |            |  |  | 4.0       |  |  |       |      |  |  |  | 122.4    | 
|Segment assets                                                             |  |                    |         |          |            |  |         |            |  |  |           |  |  |       |       |  |  |  |          | 
|Net goodwill                                                               |  |                    | 2,270.3 |          |            |  | 138.3   |            |  |  | 0.1       |  |  |       |      |  |  |  | 2,408.7  | 
|2002                                                                       |  |                    |         |          |            |  |         |            |  |  |           |  |  |       |       |  |  |  |          | 
|Net Sales                                                                  |  |                    | 2,125.0 |          |            |  | 1,938.6 |            |  |  | 388.7     |  |  |       |      |  |  |  | 4,452.3  | 
|Operating income before depreciation and
    amortization                  |  |                    | 250.1   |          |            |  | 85.3    |            |  |  | 12.2      |  |  |       |      |  |  |  | 347.6    | 
|Backlog as of December 31(*)                                               |  |                    | 1,760.7 |          |            |  | 3,625.7 |            |  |  | 389.7     |  |  |       |      |  |  |  | 5,776.1  | 
|Capital expenditures (property, plant and
    equipment)                   |  |                    | 106.0   |          |            |  | 16.0    |            |  |  | 2.3       |  |  |       |      |  |  |  | 124.3    | 
|Segment assets                                                             |  |                    | 5,314.0 |          |            |  | 3,991.0 |            |  |  | 956.0     |  |  |       | 345.0 |  |  |  | 10,606.0 | 
|Net goodwill                                                               |  |                    | 2,379.5 |          |            |  | 149.0   |            |  |  | 0.3       |  |  |       |      |  |  |  | 2,528.8  | 
|2001                                                                       |  |                    |         |          |            |  |         |            |  |  |           |  |  |       |       |  |  |  |          | 
|Net Sales                                                                  |  |                    | 722.0   |          |            |  | 2,352.0 |            |  |  | 472.0     |  |  |       |      |  |  |  | 3,546.0  | 
|(of which Offshore Coflexip for the 4th
    quarter:
    495.0 million)   |  |                    |         |          |            |  |         |            |  |  |           |  |  |       |       |  |  |  |          | 
|Operating income before depreciation and
    amortization                  |  |                    | 86.3    |          |            |  | 189.0   |            |  |  | 9.1       |  |  |       |      |  |  |  | 284.4    | 
|(of which Offshore Coflexip for the 4th
    quarter:
    61.6 million)    |  |                    |         |          |            |  |         |            |  |  |           |  |  |       |       |  |  |  |          | 
|Backlog as of December 31                                                  |  |                    | 2,138.0 |          |            |  | 2,498.0 |            |  |  | 290.0     |  |  |       |      |  |  |  | 4,926.0  | 
|(of which Offshore Coflexip for the 4th
    quarter:
    1,887.0 million) |  |                    |         |          |            |  |         |            |  |  |           |  |  |       |       |  |  |  |          | 
|Capital expenditures (property, plant and
    equipment)                   |  |                    | 25.4    |          |            |  | 17.0    |            |  |  | 2.0       |  |  |       |      |  |  |  | 44.4     | 
|(of which Offshore Coflexip for the 4th
    quarter:
    25.4 million)    |  |                    |         |          |            |  |         |            |  |  |           |  |  |       |       |  |  |  |          | 
|Segment assets                                                             |  |                    | 5,637.3 |          |            |  | 5,224.0 |            |  |  | 726.5     |  |  |       | 529.9 |  |  |  | 12,117.7 | 
|Net Goodwill                                                               |  |                    | 2,435.8 |          |            |  | 149.2   |            |  |  |          |  |  |       |      |  |  |  | 2,584.9  | 



---



|    |                                                                                           
|--- | ------------------------------------------------------------------------------------------
|(*) | The remaining portion of ongoing contracts sales
    price to be recognized in the future.

F-21



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Segment assets are those assets related
exclusively to the operations of commercial contracts operated
in each operational business segment; all other operating assets
not exclusively related to a single business segment are
allocated based on net sales reported by each business segment.



|    |                                        
|--- | ---------------------------------------
|(b) | Information by geographical
    segment

Technip has activity in four major geographical
areas:

Europe, Russia  Central Asia;

Africa, Middle East;

Asia-Pacific; and

Americas.

Note: The significant change in the scope of
consolidation, which took place on October 1, 2001, does
not allow for a true comparison on the statements of income
indicators (see Introductory Note (a)). The
2001 business activity includes Technips previous 12-month
activity plus Coflexips activity from October 1, 2001
(i.e., only 4th quarter 2003).

The segment result used by the Company to measure
segment profitability is operating income before depreciation
and amortization.

|                                                          |  |                    |         |  |             |  |         |         |  |  |          |  |  |         |         |  |       |  |       |  |  |  |         | 
|--------------------------------------------------------- |  | ------------------ | ------- |  | ----------- |  | ------- | ------- |  |  | -------- |  |  | ------- | ------- |  | ----- |  | ----- |  |  |  | ------- | 
|                                                          |  | Europe,            |         |  |             |  |         |         |  |  |          |  | 
|                                                          |  | Russia, &          |         |  |             |  |         |         |  |  |          |  | 
|                                                          |  | Central            |         |  | Africa &    |  |         | Asia    |  |  |          |  |  |         |        
|                                                          |  | Asia(*)            |         |  | Middle East |  |         | Pacific |  |  | Americas |  |  | Vessels |         |  | Total | 
|                                                          |  |                    |         |  |             |  |         |         |  |  |          |  |  |         |         |  |       | 
|                                                          |  |                   
|                                                          |  | In millions of EUR |        
|2003                                                      |  |                    |         |  |             |  |         |         |  |  |          |  |  |         |         |  |       |  |       |  |  |  |         | 
|Net sales                                                 |  |                    | 1,138.2 |  |             |  | 2,150.3 |         |  |  | 344.5    |  |  |         | 1,078.1 |  |       |  |      |  |  |  | 4,711.1 | 
|Operating income before depreciation and
    amortization |  |                    | 118.9   |  |             |  | 144.3   |         |  |  | 23.2     |  |  |         | 59.1    |  |       |  |      |  |  |  | 345.5   | 
|Backlog as of December 31(**)                             |  |                    | 1,480.2 |  |             |  | 4,161.5 |         |  |  | 509.5    |  |  |         | 1,029.2 |  |       |  |      |  |  |  | 7,180.4 | 
|Property, plant and equipment, net                        |  |                    | 213.4   |  |             |  | 27.0    |         |  |  | 5.0      |  |  |         | 90.1    |  |       |  | 403.0 |  |  |  | 738.5   | 
|2002                                                      |  |                    |         |  |             |  |         |         |  |  |          |  |  |         |         |  |       |  |       |  |  |  |         | 
|Net sales                                                 |  |                    | 1,196.6 |  |             |  | 1,482.0 |         |  |  | 445.2    |  |  |         | 1,328.5 |  |       |  |      |  |  |  | 4,452.3 | 
|Operating income before depreciation and
    amortization |  |                    | 148.4   |  |             |  | 102.9   |         |  |  | 22.1     |  |  |         | 74.2    |  |       |  |      |  |  |  | 347.6   | 
|Backlog as of December 31(**)                             |  |                    | 833.7   |  |             |  | 3,038.0 |         |  |  | 510.7    |  |  |         | 1,393.7 |  |       |  |      |  |  |  | 5,776.1 | 
|Property, plant and equipment, net                        |  |                    | 249.0   |  |             |  | 36.9    |         |  |  | 5.6      |  |  |         | 140.2   |  |       |  | 429.4 |  |  |  | 861.1   | 
|2001                                                      |  |                    |         |  |             |  |         |         |  |  |          |  |  |         |         |  |       |  |       |  |  |  |         | 
|Net sales                                                 |  |                    | 942.0   |  |             |  | 1,209.0 |         |  |  | 560.0    |  |  |         | 835.0   |  |       |  |      |  |  |  | 3,546.0 | 
|Operating income before depreciation and
    amortization |  |                    | 73.2    |  |             |  | 74.8    |         |  |  | 72.2     |  |  |         | 64.2    |  |       |  |      |  |  |  | 284.4   | 
|Backlog as of December 31(**)                             |  |                    | 793.0   |  |             |  | 1,694.0 |         |  |  | 771.0    |  |  |         | 1,668.0 |  |       |  |      |  |  |  | 4,926.0 | 
|Property, plant and equipment, net                        |  |                    | 327.2   |  |             |  | 0.9     |         |  |  | 6.5      |  |  |         | 147.6   |  |       |  | 500.1 |  |  |  | 982.3   | 



---



|    |                               
|--- | ------------------------------
|(*) | Of which net sales for France:

2003:
164.9 million,


2002:
77.9 million,


2001:
88.5 million.




|     |                                                                              
|---- | -----------------------------------------------------------------------------
|(**) | The remaining portion of ongoing contracts sales,
    price to be recognized.

F-22



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(c) Major
Customers

No customer accounts for more than 10% of the
total net sales of the Group for the years ended
December 31, 2003, 2002 and 2001 respectively.

Note 4  Operating
income

Operating income is stated after accounting for
the following items:



|    |                              
|--- | -----------------------------
|(a) | Amortization and depreciation

|                                      |  |                    |        |   |          |  |        |          |  |  |        |  
|------------------------------------- |  | ------------------ | ------ | - | -------- |  | ------ | -------- |  |  | ------ | -
|                                      |  | 12/31/03           |        |   | 12/31/02 |  |        | 12/31/01 | 
|                                      |  |                    |        |   |          |  |        |          | 
|                                      |  |                   
|                                      |  | In millions of EUR |       
|Amortization of intangible assets(a)  |  |                    | (14.9  | ) |          |  | (15.8  | )        |  |  | (8.0   | )
|                                      |  |                    |        |   |          |  |        |          | 
|Depreciation of tangible assets       |  |                    |        |   |          |  |        |          |  |  |        |  
|Buildings(b)                          |  |                    | (9.5   | ) |          |  | (21.3  | )        |  |  | (8.7   | )
|Vessels                               |  |                    | (35.0  | ) |          |  | (42.7  | )        |  |  | (14.2  | )
|Machinery and equipment               |  |                    | (35.2  | ) |          |  | (37.8  | )        |  |  | (6.5   | )
|Office fixtures and furniture         |  |                    | (20.9  | ) |          |  | (21.4  | )        |  |  | (12.2  | )
|Other                                 |  |                    | (2.4   | ) |          |  | (4.0   | )        |  |  |       |  
|                                      |  |                    |        |   |          |  |        |          | 
|Total depreciation of tangible assets |  |                    | (103.0 | ) |          |  | (127.2 | )        |  |  | (41.6  | )
|                                      |  |                    |        |   |          |  |        |          | 
|Goodwill amortization                 |  |                    | (113.7 | ) |          |  | (117.8 | )        |  |  | (61.3  | )
|Total depreciation and amortization   |  |                    | (231.6 | ) |          |  | (260.8 | )        |  |  | (110.9 | )
|                                      |  |                    |        |   |          |  |        |          | 



---



|    |                                 
|--- | --------------------------------
|(a) | Excluding goodwill amortization.



|    |                                               
|--- | ----------------------------------------------
|(b) | Of which
    (1.4) million
    from TP Italy.

The sharp increase in depreciation and
amortization results from the change in scope of consolidation
that occurred in October 2001 as Coflexip manages and uses
significant industrial assets.

In 2003, the decrease in depreciation of tangible
assets results from the change in the vessels estimated
life. The Company provides for depreciation of vessels using the
straight-line method over the estimated useful lives of 10 to
25 years. During 2003, the Company changed the depreciable
lives of certain vessels to reflect their updated estimated
economic lives. The effect of this change in accounting estimate
reduced depreciation expense in 2003 by approximately
8.9 million.



|    |                                      
|--- | -------------------------------------
|(b) | Research and development
    expenses

Research and development costs amounted to
33.3 million,
37.4 million
and
18.3 million
for the years ended December 31, 2003, 2002 and 2001,
respectively.



|    |                                             
|--- | --------------------------------------------
|(c) | Financial results from ongoing
    contracts

As described in Note 1(t),
financial income and expense arising from ongoing turnkey
contracts are included in net sales for
9.9 million,
13.6 million
and
17 million
for the years ended December 31, 2003, 2002 and 2001,
respectively.

Note 5  Payroll and staff
(unaudited)

Technip has a workforce of about 19,000 people,
in 52 countries, including an average of 4,000 external staff
integrated in operating teams (for fully consolidated
companies). In 2002, the Group also had a workforce of about
19,000 people.

F-23



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the companies accounted for under the
proportionate consolidation method, the workforce is not
significant.

The payroll expenses recorded in 2003 stands at
900.3 million,
compared to
874.4 million
in 2002.

Note 6  Financial
result

|                                                                 |  |                    |       |   |          |  |       |          |  |  |       |  
|---------------------------------------------------------------- |  | ------------------ | ----- | - | -------- |  | ----- | -------- |  |  | ----- | -
|                                                                 |  | 12/31/03           |       |   | 12/31/02 |  |       | 12/31/01 | 
|                                                                 |  |                    |       |   |          |  |       |          | 
|                                                                 |  |                   
|                                                                 |  | In millions of EUR |      
|Dividends from investments (a)                                   |  |                    | 2.1   |   |          |  | 0.4   |          |  |  | 0.9   |  
|Net gain on sales of securities                                  |  |                    | 1.5   |   |          |  |      |          |  |  | 9.2   |  
|Interest expenses (b)                                            |  |                    | (37.6 | ) |          |  | (30.2 | )        |  |  | (26.5 | )
|Interest income (c)                                              |  |                    | 26.0  |   |          |  | 14.3  |          |  |  | 4.5   |  
|Changes in provisions related to unconsolidated
    subsidiaries |  |                    |      |   |          |  | (0.5  | )        |  |  | (0.8  | )
|OCEANE: financial costs and issue costs
    amortization (d)     |  |                    | (9.7  | ) |          |  | (10.4 | )        |  |  |      |  
|OCEANE: redemption premium amortization                          |  |                    | (16.1 | ) |          |  | (16.9 | )        |  |  |      |  
|Credit Facility: financial costs                                 |  |                    | (1.9  | ) |          |  | (3.0  | )        |  |  |      |  
|Valuation allowance for shares held by the Company               |  |                    |      |   |          |  | (2.4  | )        |  |  |      |  
|Others (e)                                                       |  |                    | (8.6  | ) |          |  | (18.2 | )        |  |  | 6.2   |  
|                                                                 |  |                    |       |   |          |  |       |          | 
|Total financial result                                           |  |                    | (44.3 | ) |          |  | (66.9 | )        |  |  | (6.5  | )
|                                                                 |  |                    |       |   |          |  |       |          | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Of which dividends from TPL AV, which is not
    consolidated. The 2001 dividends from investments include
    dividends received from Cogema.                                                                                                                                                                                                                                                                                                                                     
|   
|(b) | As described in Note 1(t),
    interest expenses and income recorded in the financial result do
    not include the financial result arising from ongoing turnkey
    contracts, which is included in net sales (see
    Note 4(c)).                                                                                                                                                                                                                                               
|   
|(c) | Including
    7.6 million
    interest from commercial paper in 2003 compared to
    10.8 million
    in 2002, and
    9.6 million
    related to the financing of the Coflexip acquisition in 2001.                                                                                                                                                                                                                                                                            
|   
|(d) | Including, as of December 31, 2003,
    7.2 million
    in financial costs and
    2.5 million
    in issuing costs amortization related to the OCEANE loan issued
    at the end of January 2002 for
    793.5 million
    compared to
    8.2 million
    in financial costs and
    2.2 million
    in issuing costs amortization in 2002.                                                                                                                                 
|   
|(e) | Including in 2003 a
    2.9 million
    exchange loss compared to a
    13.4 million
    exchange loss in 2002, resulting mainly from exchange losses
    resulting from the conversion into US dollar functional currency
    of the Brazilian subsidiaries current accounts denominated
    in local currency following the significant devaluation in the
    Brazilian Real in 2002, and the sudden US dollar weakening
    compared to the European currencies at year-end.

Note 7  Non-operating
loss

|                                                         |  |                    |      |   |          |  |      |          |  |  |      |  
|-------------------------------------------------------- |  | ------------------ | ---- | - | -------- |  | ---- | -------- |  |  | ---- | -
|                                                         |  | 12/31/03           |      |   | 12/31/02 |  |      | 12/31/01 | 
|                                                         |  |                    |      |   |          |  |      |          | 
|                                                         |  |                   
|                                                         |  | In millions of EUR |     
|Dilution of the percentage interest in
    Coflexip (a)  |  |                    |     |   |          |  |     |          |  |  | (2.7 | )
|Gain/(loss) on sales of consolidated
    investments (b) |  |                    | (1.5 | ) |          |  | 3.7  |          |  |  | 2.8  |  
|Gain on sales of unconsolidated
    investments (c)      |  |                    |     |   |          |  | 1.9  |          |  |  |     |  
|Restructuring costs (d)                                  |  |                    | (7.1 | ) |          |  | (7.0 | )        |  |  | (3.1 | )
|Non recurring losses on former projects (e)              |  |                    |     |   |          |  | (8.7 | )        |  |  |     |  
|Net gain on sales of tangible assets (f)                 |  |                    | 2.4  |   |          |  |     |          |  |  |     |  
|Other (g)                                                |  |                    | (1.4 | ) |          |  | 3.2  |          |  |  | (3.6 | )
|                                                         |  |                    |      |   |          |  |      |          | 
|Non-operating loss                                       |  |                    | (7.6 | ) |          |  | (6.9 | )        |  |  | (6.6 | )
|                                                         |  |                    |      |   |          |  |      |          | 

F-24



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



---



|    |                                                                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | In 2001, this item corresponds to the dilution of
    the Group interest in Coflexip for
    (2.7) million
    (0.3% of shareholders equity as of September 30,
    2001).                                                                          
|   
|(b) | In 2003, the loss comes from the disposal of
    Unirig Pty Ltd shares. This item represents the sale of Ipedex
    shares in 2002 and mainly corresponds to the sale of
    Chemoproject in 2001.                                                    
|   
|(c) | In 2002, this item corresponds to the sale of
    Rintekno shares.                                                                                                                                                                                    
|   
|(d) | In 2003, this item consists of restructuring
    costs of the German and Finnish subsidiaries. In 2002, it
    includes restructuring costs of the German subsidiaries. In
    2001, this caption mainly concerns restructuring costs of EHR
    GmbH.
|   
|(e) | In 2002, this item includes the TP Germany
    non-operating costs concerning two contracts dating from the
    acquisition by the Group of KTI/MDEU from Mannesmann in 1999.                                                                         
|   
|(f) | In 2003, this item includes a
    3.5 million
    net gain on the CB3 building sale and a
    (1.1) million
    capital loss resulting from the move from the CB3 building.                                                                         
|   
|(g) | In 2002, this item includes
    6.2 million
    in tax credits linked to the payment of dividends from Italian
    subsidiaries in previous years, and a
    1.3 million
    capital gain on the repurchase of convertible bonds.                   

Note 8  Income tax



|    |                                   
|--- | ----------------------------------
|(a) | Analysis of income tax
    expense

|                                                                            |                   |                    |       |       |          |  |       |          |   |  |       |       |  
|--------------------------------------------------------------------------- | ----------------- | ------------------ | ----- | ----- | -------- |  | ----- | -------- | - |  | ----- | ----- | -
|                                                                            |                   | 12/31/03           |       |       | 12/31/02 |  |       | 12/31/01 |  
|                                                                            |                   |                    |       |       |          |  |       |          |  
|                                                                            |                   |                   
|                                                                            |                   | In millions of EUR |      
|Current income tax                                                          |                   |                    | (94.2 | )     |          |  | (26.0 | )        |   |  | (77.7 | )    
|                                                                            | French Companies  |                    |       | (21.4 | )        |  |       | 44.9     |   |  |       | (20.2 | )
|                                                                            | Foreign Companies |                    |       | (72.9 | )        |  |       | (70.9    | ) |  |       | (57.5 | )
|Deferred income tax                                                         |                   |                    | 12.2  |       |          |  | (19.9 | )        |   |  | 12.5  |      
|                                                                            | French Companies  |                    |       | 10.9  |          |  |       | (13.4    | ) |  |       | (6.4  | )
|                                                                            | Foreign Companies |                    |       | 1.3   |          |  |       | (6.5     | ) |  |       | 18.9  |  
|                                                                            |                   |                    |       |       |          |  |       |          |  
|Total income tax expense before tax on net
    gain on sales of investments |                   |                    | (82.0 | )     |          |  | (45.9 | )        |   |  | (65.2 | )    
|                                                                            |                   |                    |       |       |          |  |       |          |  
|Tax on the net gain on sales of investments                                 |                   |                    |      |       |          |  | (0.4  | )        |   |  | (0.3  | )    
|                                                                            |                   |                    |       |       |          |  |       |          |  
|Total income tax expense                                                    |                   |                    | (82.0 | )     |          |  | (46.3 | )        |   |  | (65.5 | )    
|                                                                            |                   |                    |       |       |          |  |       |          |  

The income tax expense related to Group French
tax consolidation amounts to
31.0 million.
This amount includes tax regularization for
5.4 million.

F-25



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | Reconciliation between the provision for
    income tax before net gain on sales of investments and pre-tax
    income before gain on sales of investments

The reconciliation between total income tax
expense and pre-tax income in 2003, 2002 and 2001 is based on
pre-tax income before gain on sales of investments and includes
the non-deductible part of goodwill depreciation.

|                                                                            |                                                                        |                    |       |       |          |  |       |          |   |  |       |       |  
|--------------------------------------------------------------------------- | ---------------------------------------------------------------------- | ------------------ | ----- | ----- | -------- |  | ----- | -------- | - |  | ----- | ----- | -
|                                                                            |                                                                        | 12/31/03           |       |       | 12/31/02 |  |       | 12/31/01 |  
|                                                                            |                                                                        |                    |       |       |          |  |       |          |  
|                                                                            |                                                                        |                   
|                                                                            |                                                                        | In millions of EUR |      
|Net income (loss)                                                           |                                                                        |                    | (19.7 | )     |          |  | (29.4 | )        |   |  | 108.1 |      
|Minority interests                                                          |                                                                        |                    | 0.8   |       |          |  | (3.9  | )        |   |  | 2.4   |      
|Income tax before tax on the social net gain on
    sales of investments    |                                                                        |                    | 82.0  |       |          |  | 46.3  |          |   |  | 65.2  |      
|                                                                            | Less: income of equity affiliates (a)                                  |                    |       | (1.1  | )        |  |       |         |   |  |       | (15.6 | )
|                                                                            | Less: non deductible goodwill amortization                             |                    |       | 126.6 |          |  |       | 130.7    |   |  |       | 57.8  |  
|                                                                            | Less: gain on sales of investments +
    variance from restated assets |                    |       | (3.5  | )        |  |       | (5.6     | ) |  |       | (2.8  | )
|                                                                            |                                                                        |                    |       |       |          |  |       |          |  
|Pre-tax income before gain on sales of
    investments                      |                                                                        |                    | 185.1 |       |          |  | 138.1 |          |   |  | 215.1 |      
|                                                                            |                                                                        |                    |       |       |          |  |       |          |  
|French income tax rate                                                      |                                                                        |                    | 35.43 | %     |          |  | 35.43 | %        |   |  | 36.23 | %    
|Theoretical income tax                                                      |                                                                        |                    | 65.6  |       |          |  | 48.9  |          |   |  | 77.9  |      
|Difference between French and foreign tax rates                             |                                                                        |                    | 6.9   |       |          |  | 6.3   |          |   |  | 0.9   |      
|Permanent differences                                                       |                                                                        |                    | (3.1  | )     |          |  | (4.4  | )        |   |  | (7.2  | )    
|Others (b)                                                                  |                                                                        |                    | 12.6  |       |          |  | (4.5  | )        |   |  | (6.3  | )    
|                                                                            |                                                                        |                    |       |       |          |  |       |          |  
|Total income tax expense before tax on net
    gain on sales of investments |                                                                        |                    | 82.0  |       |          |  | 46.3  |          |   |  | 65.3  |      
|                                                                            |                                                                        |                    |       |       |          |  |       |          |  
|Effective tax rate (c)                                                      |                                                                        |                    | 44.29 | %     |          |  | 33.53 | %        |   |  | 30.36 | %    



---



|    |                                                                                                                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | In 2001, the income of equity affiliates results
    from Coflexips consolidation under the equity method for
    the first 9 months of the year.                                                                                                                    
|   
|(b) | Including
    13.0 million
    tax in 2003 related to operational losses not recognized in the
    Offshore Segment American subsidiaries.                                                                                                                           
|   
|(c) | The effective tax rate rose to 44.3% in 2003 from
    33.5% in 2002. This increase results mainly from the
    groups decision not to recognize further deferred tax
    assets in view of the operational losses recorded in the United
    States in 2003 and 2002.



|    |                                        
|--- | ---------------------------------------
|(c) | Deferred tax assets and
    liabilities

As of December 31, 2003, 2002 and 2001, the
deferred tax assets and liabilities in the balance sheets were
as follows:

|                             |  |                    |        |   |          |  |        |          |  |  |        |  
|---------------------------- |  | ------------------ | ------ | - | -------- |  | ------ | -------- |  |  | ------ | -
|                             |  | 12/31/03           |        |   | 12/31/02 |  |        | 12/31/01 | 
|                             |  |                    |        |   |          |  |        |          | 
|                             |  |                   
|                             |  | In millions of EUR |       
|Deferred tax assets (a)      |  |                    | 120.1  |   |          |  | 73.6   |          |  |  | 90.1   |  
|Deferred tax liabilities (b) |  |                    | (162.5 | ) |          |  | (126.2 | )        |  |  | (135.8 | )
|                             |  |                    |        |   |          |  |        |          | 
|Net deferred tax asset       |  |                    | (42.4  | ) |          |  | (52.6  | )        |  |  | (45.7  | )
|                             |  |                    |        |   |          |  |        |          | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | In 2003, the Group decided not to recognize
    deferred tax assets on the operational losses in the Offshore
    segment generated by American subsidiaries leading to a decrease
    in net deferred tax assets between December 31, 2002 and
    December 31, 2003. On the basis of the future results of
    the Group, the Group decided to record a valuation allowance
    against a part of the deferred tax assets relating to losses
    carried forward in the United States for U.S.$12.8 million
    in 2002. The deferred tax assets in 2001 mainly includes

F-26



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | from the contribution of Coflexip for
    68.0 million,
    of which
    52.3 million
    relates to tax losses carried forward.                                                                                                                                                                                                                                                                                           
|   
|(b) | Deferred tax liabilities as of December 31,
    2001 result primarily from Coflexips consolidation of
    49.4 million,
    of which
    36.8 million
    relates to differences between accounting and tax depreciation.
    Additionally, Technip recognized
    64.5 million
    of deferred tax in the purchase price allocation at the time of
    the acquisition of Coflexip in October 2001 (see
    Note 2 (b)).

Deferred tax assets mainly consist of
non-deductible accrued liabilities and tax losses carried
forward of some subsidiaries, while deferred tax liabilities are
related to revenues that have not yet been subject to taxation
and to differences between accumulated depreciation and capital
allowance on owned assets.



|    |                           
|--- | --------------------------
|(d) | Tax losses carried forward

Tax losses carried forward and not yet utilized
mainly come from TSE (formerly MSE), a German subsidiary
acquired in 1999, and from Coflexip American subsidiaries. They
amount to
237.0 million.

Unrecorded deferred tax assets principally relate
to tax losses carried forward on TSE, which amount to
48.0 million
as of December 31, 2003, and tax losses on Technip Offshore
American subsidiaries, which amount to
36.6 million
as of December 31, 2003. Based on the financial prospects
of these entities, Technip decided not to recognize this
deferred tax asset in its consolidated financial statements.

Note 9  Diluted earnings per
share

The diluted earnings per share have been
determined in accordance with Note 1(v).

|                                                                                                |  |                    |        |   |          |  |        |          |  |  |        |  
|----------------------------------------------------------------------------------------------- |  | ------------------ | ------ | - | -------- |  | ------ | -------- |  |  | ------ | -
|                                                                                                |  | 12/31/03           |        |   | 12/31/02 |  |        | 12/31/01 | 
|                                                                                                |  |                    |        |   |          |  |        |          | 
|                                                                                                |  |                   
|                                                                                                |  | In millions of EUR |       
|Net income                                                                                      |  |                    | (19.7  | ) |          |  | (29.4  | )        |  |  | 108.1  |  
| Redemption premium amortization after
    tax                                                 |  |                    | 10.4   |   |          |  | 10.9   |          |  |  |       |  
| OCEANE financial costs after tax                                                              |  |                    | 4.6    |   |          |  | 4.7    |          |  |  |       |  
| Non-operating loss                                                                            |  |                    | 7.6    |   |          |  | 6.9    |          |  |  | 6.6    |  
| Goodwill amortization                                                                         |  |                    | 113.7  |   |          |  | 117.8  |          |  |  | 61.3   |  
|                                                                                                |  |                    |        |   |          |  |        |          | 
|Restated net income before non-operating income
    and goodwill amortization                   |  |                    | 116.6  |   |          |  | 110.9  |          |  |  | 176.0  |  
|                                                                                                |  |                    |        |   |          |  |        |          | 
|Number of shares (in thousands):                                                                |  |                    |        |   |          |  |        |          |  |  |        |  
|Issued shares as of December 31 (b)                                                             |  |                    | 23,738 |   |          |  | 23,408 |          |  |  | 26,714 |  
|Stock options (subscription options) (a)                                                        |  |                    | 1,496  |   |          |  | 476    |          |  |  | 521    |  
|Convertible bonds                                                                               |  |                    | 4,209  |   |          |  | 4,502  |          |  |  |       |  
|Technip shares held by subsidiaries                                                             |  |                    | (141   | ) |          |  |       |          |  |  | (1,847 | )
|                                                                                                |  |                    |        |   |          |  |        |          | 
|                                                                                                |  |                    | 29,302 |   |          |  | 28,386 |          |  |  | 25,388 |  
|                                                                                                |  |                    |        |   |          |  |        |          | 
|Diluted earnings per share (in euros) (c)                                                       |  |                    |       |   |          |  |       |          |  |  | 4.26   |  
|Diluted earnings per share before non-operating
    income and goodwill amortization (in euros) |  |                    | 3.98   |   |          |  | 3.91   |          |  |  | 6.93   |  



---



|    |                                                                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Does not take into account the 2003 plan, which
    accounts for 697,000 shares as of December 31, 2002.                                                                                             
|   
|(b) | Does not take into account the capital increase
    resulting from the 2004 Employee Stock Participation Plan
    (331,780 shares which became effective as of January 1,
    2003 (see Note 28 (c)).



|    |                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------
|(c) | In 2002 and 2003 the diluted earnings per share
    are negative and are consequently not disclosed.

F-27



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Note 10  Compensation of the
members of the Board of Directors

The amount of directors fees paid by
Technip to the members of the Board of Directors during 2003 was
157,500. The
gross amount of compensation and benefits of all kinds paid by
Technip to the members of the Board of Directors during 2003 was
778,840.

Note 11  Intangible assets,
net

Intangible assets are detailed as follows:

|                                 |  |                    |         |   |          |  |         |          |  |  |         |  
|-------------------------------- |  | ------------------ | ------- | - | -------- |  | ------- | -------- |  |  | ------- | -
|                                 |  | 12/31/03           |         |   | 12/31/02 |  |         | 12/31/01 | 
|                                 |  |                    |         |   |          |  |         |          | 
|                                 |  |                   
|                                 |  | In millions of EUR |        
|Other intangible assets          |  |                    | 132.3   |   |          |  | 142.3   |          |  |  | 149.1   |  
|Accumulated amortization         |  |                    | (44.0   | ) |          |  | (33.5   | )        |  |  | (20.6   | )
|                                 |  |                    |         |   |          |  |         |          | 
|Other intangible assets, net (a) |  |                    | 88.3    |   |          |  | 108.8   |          |  |  | 128.5   |  
|                                 |  |                    |         |   |          |  |         |          | 
|Goodwill                         |  |                    | 2,737.6 |   |          |  | 2,746.6 |          |  |  | 2,687.6 |  
|Accumulated amortization         |  |                    | (328.9  | ) |          |  | (217.8  | )        |  |  | (102.7  | )
|                                 |  |                    |         |   |          |  |         |          | 
|Goodwill, net (b)                |  |                    | 2,408.7 |   |          |  | 2,528.8 |          |  |  | 2,584.9 |  
|                                 |  |                    |         |   |          |  |         |          | 
|Intangible assets, net           |  |                    | 2,497.0 |   |          |  | 2,637.6 |          |  |  | 2,713.4 |  
|                                 |  |                    |         |   |          |  |         |          | 

The decrease in intangible assets, net results
from the sharp increase of the goodwill amortization relating to
the acquisition of Coflexip in 2001.



|    |                  
|--- | -----------------
|(a) | Intangible assets

In January 2001, Coflexip purchased the Aker
Maritime Deepwater Division. As a part of the purchase price
allocation, Coflexip identified intangible assets consisting of
patents and trademarks of
51.4 million,
to be amortized over 10 years. This valuation has been
confirmed within Technips consolidated financial
statements.

In October 2001, as a result of the public offers
on Coflexip and ISIS, Technip identified, as a part of the
purchase price allocation, intangible assets consisting of
patents and trademarks, other than those resulting from the
acquisition of the Aker Maritime ASA Deepwater Division, for
59.4 million,
to be amortized over 10 years.

At the end of November 2001, Technip purchased
software for its E-Procurement platform. The purchase price of
the software was
19.7 million,
to be amortized over five years (see
Note 1 (g)).



|    |              
|--- | -------------
|(b) | Goodwill, net

|                            |  |                    |         |  |          |  |         |          |  |  |         | 
|--------------------------- |  | ------------------ | ------- |  | -------- |  | ------- | -------- |  |  | ------- | 
|                            |  | 12/31/03           |         |  | 12/31/02 |  |         | 12/31/01 | 
|                            |  |                    |         |  |          |  |         |          | 
|                            |  |                   
|                            |  | In millions of EUR |        
|KTI/MDEU                    |  |                    | 119.5   |  |          |  | 127.5   |          |  |  | 135.6   | 
|Coflexip (April 2000)       |  |                    | 363.6   |  |          |  | 386.0   |          |  |  | 408.1   | 
|Coflexip (October 2001)     |  |                    | 1,872.2 |  |          |  | 1,993.5 |          |  |  | 2,027.7 | 
|Coflexip merger (July 2003) |  |                    | 34.5    |  |          |  |        |          |  |  |        | 
|Others                      |  |                    | 18.9    |  |          |  | 21.8    |          |  |  | 13.5    | 
|                            |  |                    |         |  |          |  |         |          | 
|Net                         |  |                    | 2,408.7 |  |          |  | 2,528.8 |          |  |  | 2,584.9 | 
|                            |  |                    |         |  |          |  |         |          | 

The goodwill represents the difference between
the purchase price of an acquisition and the fair value of its
net assets. This goodwill is amortized over a period that is
dependent upon the activities of the acquired company (see
Note 1 (g)).

F-28



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The goodwill calculated in 1999 in relation to
the purchase of KTI/MDEU from Mannesmann represented
159.5 million,
gross, amortized on a 20-year basis, which corresponds to an
annual amortization of
8 million.

The goodwill increase in 2000 results from the
acquisition of 29.7% of Coflexip on April 19, 2000 with a
goodwill of
447.5 million,
gross, amortized on a 20-year basis corresponding to an annual
amortization expense of
22.4 million.

The goodwill increase in 2001 primarily comes
from additional direct and indirect investments in Coflexip
finalized at the beginning of October 2001 as a result of the
public offers on Coflexip and ISIS. The purchase of this
additional percentage of interest, after allocation to
identified assets for a gross value of
125.5 million
has created additional goodwill of
2,048 million,
to be amortized over 25 years, or
81.9 million
per year. Amortization expense from October 1, 2001 to
December 31, 2001 was
20.4 million.

In 2002, the goodwill from the additional
investments in Coflexip (52.47%) increased by
51.1 million,
gross (see Note 2). In addition, amortization
expense in 2002 corresponds to a full year and amounts to
84 million
for the part acquired in 2001, compared to
21.6 million
for the fourth quarter 2001.

In 2003, the AKER Deepwater Division purchase
price reduction led to a decrease in the goodwill by
40.7 million.
In addition, Technip raised the goodwill by
35.2 million
following the merger between Technip and Coflexip in July 2003
(capital increase and paid-in-surplus for
49.5 million
less minority interests amounting to
14.3 million,
see Note 2).

Note 12  Property, plant and
equipment, net

|                         |  |                    |      |  |           |  |        |           |  |  |            |   |  |           |        |   |        |  |        |       |  |  |       |   |  |  |         |  
|------------------------ |  | ------------------ | ---- |  | --------- |  | ------ | --------- |  |  | ---------- | - |  | --------- | ------ | - | ------ |  | ------ | ----- |  |  | ----- | - |  |  | ------- | -
|                         |  |                    |      |  |           |  |        | Machinery |  |  | Office     |   |  |           |        |  
|                         |  |                    |      |  |           |  |        | and       |  |  | fixtures & |   |  |           |        |  
|                         |  | Land               |      |  | Buildings |  |        | Vessels   |  |  | equipment  |   |  | furniture |        |   | Others |  |        | Total | 
|                         |  |                    |      |  |           |  |        |           |  |  |            |   |  |           |        |   |        |  |        |       | 
|                         |  |                   
|                         |  | In millions of EUR |     
|Gross value              |  |                    | 14.1 |  |           |  | 181.9  |           |  |  | 655.7      |   |  |           | 443.0  |   |        |  | 141.1  |       |  |  | 63.2  |   |  |  | 1,499.0 |  
|Accumulated depreciation |  |                    |     |  |           |  | (81.5  | )         |  |  | (252.7     | ) |  |           | (305.3 | ) |        |  | (96.0  | )     |  |  | (25.0 | ) |  |  | (760.5  | )
|                         |  |                    |      |  |           |  |        |           |  |  |            |   |  |           |        |   |        |  |        |       | 
|Total December 31, 2003  |  |                    | 14.1 |  |           |  | 100.4  |           |  |  | 403.0      |   |  |           | 137.7  |   |        |  | 45.1   |       |  |  | 38.2  |   |  |  | 738.5   |  
|                         |  |                    |      |  |           |  |        |           |  |  |            |   |  |           |        |   |        |  |        |       | 
|Gross value              |  |                    | 73.5 |  |           |  | 243.0  |           |  |  | 625.7      |   |  |           | 439.1  |   |        |  | 162.3  |       |  |  | 60.1  |   |  |  | 1,603.7 |  
|Accumulated depreciation |  |                    |     |  |           |  | (99.5  | )         |  |  | (196.3     | ) |  |           | (302.9 | ) |        |  | (114.2 | )     |  |  | (29.7 | ) |  |  | (742.6  | )
|                         |  |                    |      |  |           |  |        |           |  |  |            |   |  |           |        |   |        |  |        |       | 
|Total December 31, 2002  |  |                    | 73.5 |  |           |  | 143.5  |           |  |  | 429.4      |   |  |           | 136.2  |   |        |  | 48.1   |       |  |  | 30.4  |   |  |  | 861.1   |  
|                         |  |                    |      |  |           |  |        |           |  |  |            |   |  |           |        |   |        |  |        |       | 
|Gross value              |  |                    | 87.0 |  |           |  | 280.4  |           |  |  | 740.6      |   |  |           | 576.3  |   |        |  | 104.0  |       |  |  | 54.4  |   |  |  | 1,842.7 |  
|Accumulated depreciation |  |                    |     |  |           |  | (114.7 | )         |  |  | (240.9     | ) |  |           | (382.7 | ) |        |  | (73.0  | )     |  |  | (49.1 | ) |  |  | (860.4  | )
|                         |  |                    |      |  |           |  |        |           |  |  |            |   |  |           |        |   |        |  |        |       | 
|Total December 31, 2001  |  |                    | 87.0 |  |           |  | 165.7  |           |  |  | 499.7      |   |  |           | 193.6  |   |        |  | 31.0   |       |  |  | 5.3   |   |  |  | 982.3   |  
|                         |  |                    |      |  |           |  |        |           |  |  |            |   |  |           |        |   |        |  |        |       | 

As of December 31, 2003, the head office
building located in La Défense was sold. The
buildings net book value was
94.6 million.

Additionally, in 2003, the change in the
vessels estimated life results in a
8.9 million
decrease in the depreciation expense (see
Note 4 (a)).

F-29



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Included in property, plant and equipment are the
following capitalized leases:

|            |  |                    |      |  |          |  |     |       |  |  |      |  |  |  |     | 
|----------- |  | ------------------ | ---- |  | -------- |  | --- | ----- |  |  | ---- |  |  |  | --- | 
|            |  |                    |      | 
|            |  | 12/31/03           |      |  | 12/31/02 | 
|            |  |                    |      |  |          | 
|            |  | Gross              |      |  | Net      |  |     | Gross |  |  | Net  | 
|            |  |                    |      |  |          |  |     |       |  |  |      | 
|            |  |                   
|            |  | In millions of EUR |     
|Real Estate |  |                    | 14.0 |  |          |  | 3.0 |       |  |  | 14.0 |  |  |  | 3.4 | 
|Vessels     |  |                    | 52.6 |  |          |  | 3.8 |       |  |  | 57.0 |  |  |  | 6.1 | 
|Equipment   |  |                    | 4.1  |  |          |  | 0.0 |       |  |  | 4.4  |  |  |  | 0.1 | 
|            |  |                    |      |  |          |  |     |       |  |  |      | 
|Total       |  |                    | 70.7 |  |          |  | 6.8 |       |  |  | 75.4 |  |  |  | 9.6 | 
|            |  |                    |      |  |          |  |     |       |  |  |      | 

Note 13  Other investments and
loans, net

|                                       |  |                    |      |   |          |  |      |          |  |  |       |  
|-------------------------------------- |  | ------------------ | ---- | - | -------- |  | ---- | -------- |  |  | ----- | -
|                                       |  | 12/31/03           |      |   | 12/31/02 |  |      | 12/31/01 | 
|                                       |  |                    |      |   |          |  |      |          | 
|                                       |  |                   
|                                       |  | In millions of EUR |     
|Investments at historical
    cost (a) |  |                    | 9.3  |   |          |  | 9.7  |          |  |  | 85.8  |  
|Valuation allowance                    |  |                    | (5.3 | ) |          |  | (4.7 | )        |  |  | (5.8  | )
|                                       |  |                    |      |   |          |  |      |          | 
|Net value                              |  |                    | 4.0  |   |          |  | 5.0  |          |  |  | 80.0  |  
|                                       |  |                    |      |   |          |  |      |          | 
|Loans related to investments           |  |                    | 1.5  |   |          |  | 2.2  |          |  |  | 7.8   |  
|Valuation allowance                    |  |                    | (1.5 | ) |          |  | (1.5 | )        |  |  | (4.9  | )
|                                       |  |                    |      |   |          |  |      |          | 
|Net value                              |  |                    |     |   |          |  | 0.7  |          |  |  | 2.9   |  
|                                       |  |                    |      |   |          |  |      |          | 
|Security deposits                      |  |                    | 2.5  |   |          |  | 5.9  |          |  |  | 1.6   |  
|Treasury bonds                         |  |                    | 0.0  |   |          |  | 0.0  |          |  |  | 1.6   |  
|Others                                 |  |                    | 1.9  |   |          |  | 6.7  |          |  |  | 18.8  |  
|                                       |  |                    |      |   |          |  |      |          | 
|Other investments and loans, net       |  |                    | 8.4  |   |          |  | 18.3 |          |  |  | 104.9 |  
|                                       |  |                    |      |   |          |  |      |          | 



---



|    |                                                                                                                                                                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Investments as of December 31, 2001 are
    mainly made of ISISs shares in Compagnie
    Générale de Géophysique, representing a net value
    of
    73.1 million,
    net. These shares have been exchanged for Technip shares (held
    by the company), and cancelled in November 2002.

Note 14  Equity
affiliates

Equity affiliates are analyzed as follows:

|           |  |                  |      |   |                    |  |      |          |  |  |          |   |  |          |     |  |          |  |     |  |  |  |     | 
|---------- |  | ---------------- | ---- | - | ------------------ |  | ---- | -------- |  |  | -------- | - |  | -------- | --- |  | -------- |  | --- |  |  |  | --- | 
|           |  |                  |      |  
|           |  | Percentage owned |      |   | In millions of EUR | 
|           |  |                  |      |   |                    | 
|           |  | 12/31/03         |      |   | 12/31/02           |  |      | 12/31/01 |  |  | 12/31/03 |   |  | 12/31/02 |     |  | 12/31/01 | 
|           |  |                  |      |   |                    |  |      |          |  |  |          |   |  |          |     |  |          | 
|Ipedex (a) |  |                  |     |   |                    |  |     |          |  |  | 46.0     | % |  |          |    |  |          |  |    |  |  |  | 3.2 | 
|Tipiel (b) |  |                  |     |   |                    |  |     |          |  |  | 36.9     | % |  |          |    |  |          |  |    |  |  |  | 2.5 | 
|TPL Arabia |  |                  |     |   |                    |  |     |          |  |  | 40.0     | % |  |          |    |  |          |  |    |  |  |  | 0.5 | 
|TP India   |  |                  | 50.0 | % |                    |  | 50.0 | %        |  |  |         |   |  |          | 1.1 |  |          |  | 0.9 |  |  |  |    | 
|Nargan     |  |                  | 20.0 | % |                    |  | 20.0 | %        |  |  |         |   |  |          | 1.0 |  |          |  | 0.3 |  |  |  |    | 
|           |  |                  |      |   |                    |  |      |          |  |  |          |   |  |          |     |  |          | 
|Total      |  |                  |      |   |                    |  |      |          |  |  |          |   |  |          | 2.1 |  |          |  | 1.2 |  |  |  | 6.2 | 
|           |  |                  |      |   |                    |  |      |          |  |  |          |   |  |          |     |  |          | 



---



|    |                                            
|--- | -------------------------------------------
|(a) | Technip sold its subsidiary Ipedex in 2002.



|    |                                                                                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------
|(b) | Tipiel, previously accounted for using the equity
    method, is now consolidated using the proportionate
    consolidation method.

F-30



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The Groups quota in the income of equity
affiliates amounts to
1.1 million
and essentially results from Nargan.

Note 15 
Contracts-in-progress

Contracts-in-progress relate to ongoing turnkey
contracts, engineering/ procurement contracts and ongoing
contracts including installation or commissioning operations,
which are recorded as described in Note 1(k).

|                           |  |                    |         |  |          |  |         |          |  |  |         | 
|-------------------------- |  | ------------------ | ------- |  | -------- |  | ------- | -------- |  |  | ------- | 
|                           |  | 12/31/03           |         |  | 12/31/02 |  |         | 12/31/01 | 
|                           |  |                    |         |  |          |  |         |          | 
|                           |  |                   
|                           |  | In millions of EUR |        
|Contracts-in-progress, net |  |                    | 6,368.2 |  |          |  | 4,896.2 |          |  |  | 6,313.6 | 
|                           |  |                    |         |  |          |  |         |          | 

Contracts in progress include accumulated margins
recognized on ongoing contracts. As described in
Note 1(k), amounts shown under the
Contracts-in-progress line item are financed by
progress payments received from customers which amount to
7,047.8 million,
5,420.2 million
and
6,472.5 million
as of December 31, 2003, 2002 and 2001, respectively.

Note 16  Inventories and
deferred bid costs, net

|                                            |  |                    |       |   |          |  |      |          |  |  |       |  
|------------------------------------------- |  | ------------------ | ----- | - | -------- |  | ---- | -------- |  |  | ----- | -
|                                            |  | 12/31/03           |       |   | 12/31/02 |  |      | 12/31/01 | 
|                                            |  |                    |       |   |          |  |      |          | 
|                                            |  |                   
|                                            |  | In millions of EUR |      
|Raw materials                               |  |                    | 40.1  |   |          |  | 45.6 |          |  |  | 51.2  |  
|Work in progress                            |  |                    | 23.5  |   |          |  | 18.5 |          |  |  | 40.1  |  
|Finished goods and merchandise              |  |                    | 13.5  |   |          |  | 15.8 |          |  |  | 21.2  |  
|Less: valuation allowance                   |  |                    | (10.1 | ) |          |  | (8.4 | )        |  |  | (9.3  | )
|                                            |  |                    |       |   |          |  |      |          | 
|Inventories, net                            |  |                    | 67.0  |   |          |  | 71.5 |          |  |  | 103.2 |  
|                                            |  |                    |       |   |          |  |      |          | 
|Deferred bid costs, net(a)                  |  |                    | 6.6   |   |          |  | 9.3  |          |  |  | 8.7   |  
|                                            |  |                    |       |   |          |  |      |          | 
|Inventories and deferred bid costs,
    net |  |                    | 73.6  |   |          |  | 80.8 |          |  |  | 111.9 |  
|                                            |  |                    |       |   |          |  |      |          | 






|    |                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Costs directly linked to the awarding of future
    turnkey engineering/ construction contracts, the signature of
    which can be reasonably expected, are deferred and capitalized
    in the balance sheet.

Note 17  Accounts and notes
receivable, net

|                                             |  |                    |       |   |          |  |       |          |  |  |       |  
|-------------------------------------------- |  | ------------------ | ----- | - | -------- |  | ----- | -------- |  |  | ----- | -
|                                             |  | 12/31/03           |       |   | 12/31/02 |  |       | 12/31/01 | 
|                                             |  |                    |       |   |          |  |       |          | 
|                                             |  |                   
|                                             |  | In millions of EUR |      
|Receivables on contracts and retainage       |  |                    | 755.6 |   |          |  | 725.1 |          |  |  | 604.4 |  
|Doubtful receivables                         |  |                    | 41.8  |   |          |  | 41.0  |          |  |  | 42.0  |  
|Allowance for doubtful accounts              |  |                    | (41.8 | ) |          |  | (40.5 | )        |  |  | (40.5 | )
|                                             |  |                    |       |   |          |  |       |          | 
|Total accounts and notes receivable,
    net |  |                    | 755.6 |   |          |  | 725.6 |          |  |  | 605.9 |  
|                                             |  |                    |       |   |          |  |       |          | 

The Groups main clients include major oil
and gas, petrochemical or oil-related companies.

The maturity of receivables corresponds to the
operating cycle of the contracts.

Each clients financial situation is
periodically reviewed and any potential risks are recorded as a
reserve.

F-31



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Note 18  Other current assets,
net

|                                              |  |                    |       |  |          |  |       |          |  |  |       |  |  |  |       | 
|--------------------------------------------- |  | ------------------ | ----- |  | -------- |  | ----- | -------- |  |  | ----- |  |  |  | ----- | 
|                                              |  |                    |       |  |          | 
|                                              |  | 12/31/03           |       |  | 12/31/02 |  |       | 12/31/01 | 
|                                              |  |                    |       |  |          |  |       |          | 
|                                              |  | Gross              |       |  | Net      |  |       | Net      |  |  | Net   | 
|                                              |  |                    |       |  |          |  |       |          |  |  |       | 
|                                              |  |                   
|                                              |  | In millions of EUR |      
|Deferred tax assets (see
    Note 8(c))       |  |                    | 145.0 |  |          |  | 120.1 |          |  |  | 73.6  |  |  |  | 90.1  | 
|Value added tax                               |  |                    | 62.8  |  |          |  | 60.0  |          |  |  | 40.0  |  |  |  | 47.9  | 
|Prepaid income tax and other current tax      |  |                    | 37.0  |  |          |  | 39.8  |          |  |  | 62.6  |  |  |  | 48.5  | 
|Advances to non-consolidated subsidiaries     |  |                    | 2.4   |  |          |  | 0.4   |          |  |  | 7.8   |  |  |  | 6.1   | 
|Joint venture associates current account     |  |                    | 14.1  |  |          |  | 13.6  |          |  |  | 16.8  |  |  |  | 18.6  | 
|Receivables from suppliers                    |  |                    | 14.5  |  |          |  | 14.5  |          |  |  | 2.5   |  |  |  | 3.5   | 
|Receivables from personnel                    |  |                    | 1.7   |  |          |  | 1.7   |          |  |  | 1.4   |  |  |  | 2.8   | 
|Dividends to be received on investments       |  |                    |      |  |          |  |      |          |  |  | 1.5   |  |  |  |      | 
|Prepaid expenses                              |  |                    | 39.5  |  |          |  | 39.5  |          |  |  | 53.4  |  |  |  | 30.8  | 
|Insurance indemnities to be received          |  |                    | 0.1   |  |          |  | 0.1   |          |  |  | 5.4   |  |  |  | 19.4  | 
|Funds in escrow                               |  |                    |      |  |          |  |      |          |  |  | 68.9  |  |  |  | 66.0  | 
|Redemption premium on bonds (see
    Note 23) |  |                    | 51.6  |  |          |  | 51.6  |          |  |  | 73.5  |  |  |  |      | 
|Others                                        |  |                    | 92.5  |  |          |  | 86.4  |          |  |  | 114.2 |  |  |  | 84.4  | 
|                                              |  |                    |       |  |          |  |       |          |  |  |       | 
|Total Other current assets, net               |  |                    | 461.2 |  |          |  | 427.7 |          |  |  | 521.6 |  |  |  | 418.1 | 
|                                              |  |                    |       |  |          |  |       |          |  |  |       | 

Note 19  Cash and cash
equivalents



|    |                                             
|--- | --------------------------------------------
|(a) | Marketable securities  Cash
    equivalents

|                                                    |  |                    |       |  |          |  |       |          |  |  |       | 
|--------------------------------------------------- |  | ------------------ | ----- |  | -------- |  | ----- | -------- |  |  | ----- | 
|                                                    |  | 12/31/03           |       |  | 12/31/02 |  |       | 12/31/01 | 
|                                                    |  |                    |       |  |          |  |       |          | 
|                                                    |  |                   
|                                                    |  | In millions of EUR |      
|Historical cost                                     |  |                    | 110.0 |  |          |  | 102.6 |          |  |  | 149.8 | 
|Valuation allowance                                 |  |                    |      |  |          |  | (3.5  | )        |  |  |      | 
|                                                    |  |                    |       |  |          |  |       |          | 
|Marketable securities market value at
    year-end |  |                    | 110.0 |  |          |  | 99.1  |          |  |  | 149.8 | 
|Detailed analysis of marketable securities:         |  |                    |       |  |          |  |       |          |  |  |       | 
|Mutual funds                                        |  |                    | 40.5  |  |          |  | 70.4  |          |  |  | 51.0  | 
|Certificates of deposit                             |  |                    | 21.1  |  |          |  | 15.5  |          |  |  | 97.8  | 
|Shares held by the company(*)                       |  |                    |      |  |          |  | 3.2   |          |  |  |      | 
|Fixed term deposits                                 |  |                    | 34.6  |  |          |  | 8.3   |          |  |  |      | 
|Others                                              |  |                    | 13.8  |  |          |  | 1.7   |          |  |  | 1.0   | 
|                                                    |  |                    |       |  |          |  |       |          | 
|Total marketable securities                         |  |                    | 110.0 |  |          |  | 99.1  |          |  |  | 149.8 | 
|                                                    |  |                    |       |  |          |  |       |          | 



---



|    |                                                                                                                                                                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(*) | In 2003, shares held by the Company have been
    cancelled and deducted from the Groups shareholders
    equity 92,223 shares were acquired in 2003 at an average price
    of 70.54. In
    2002, the shares held by the Company were assigned to stock
    option plans. 573,004 shares were acquired in 2002 at an average
    price of 92.85.



|    |     
|--- | ----
|(b) | Cash

Cash amounts to
782.4 million
as of December 31, 2003, compared to
642.0 million
and
613.6 million
in 2002 and 2001, respectively.

F-32



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                                                                                 
|--- | --------------------------------------------------------------------------------
|(c) | Detailed analysis of cash and marketable
    securities by historical currencies

|                    |  |                    |       |  |          |  |       | 
|------------------- |  | ------------------ | ----- |  | -------- |  | ----- | 
|                    |  | 12/31/03           |       |  | 12/31/02 | 
|                    |  |                    |       |  |          | 
|                    |  |                   
|                    |  | In millions of EUR |      
|Euro                |  |                    | 391.9 |  |          |  | 315.0 | 
|U.S. Dollar         |  |                    | 311.4 |  |          |  | 260.9 | 
|Great Britain Pound |  |                    | 63.1  |  |          |  | 61.8  | 
|Norwegian Crown     |  |                    | 40.0  |  |          |  | 27.2  | 
|Others              |  |                    | 86.0  |  |          |  | 76.2  | 
|                    |  |                    |       |  |          | 
|Total               |  |                    | 892.4 |  |          |  | 741.1 | 
|                    |  |                    |       |  |          | 

A large part of cash and marketable securities
are booked or realized in euro or U.S. Dollars. The Group
frequently uses these currencies within the framework of its
commercial relations. Cash and cash equivalents in other
currencies correspond to deposits retained by subsidiaries
located in countries where such currencies are the national
currency in order to ensure their liquidity, or to amounts
received from clients prior to the payment of expenses in these
same currencies, or the payment of dividends.

Note 20  Shareholders
equity



|    |                                                        
|--- | -------------------------------------------------------
|(a) | Parent companys common stock
    breakdown and changes

As of December 31, 2003, Technip common
stock consisted of 23,738,331 outstanding shares with a par
value of 3.05.
The changes since December 31, 2000 can be analyzed as
follows:

|                                                       |  |               |            |              |        |  |      |  
|------------------------------------------------------ |  | ------------- | ---------- | ------------ | ------ |  | ---- | -
|                                                       |  | No. of shares |            |              | Common | 
|                                                       |  | outstanding   |            |              | stock  | 
|                                                       |  |               |            |              |        | 
|                                                       |  |               |            | (In millions |       
|                                                       |  |               |            | of EUR)      |       
|Common stock as of December 31,
    2000               |  |               | 16,029,305 |              |        |  | 48.9 |  
|2001 increase (1)                                      |  |               | 118,420    |              |        |  | 0.4  |  
|Public Exchange Offer increase (3)                     |  |               | 10,565,723 |              |        |  | 32.2 |  
|                                                       |  |               |            |              |        | 
|Common stock as of December 31,
    2001               |  |               | 26,713,448 |              |        |  | 81.5 |  
|2002 increase (1)                                      |  |               | 23,330     |              |        |  | 0.1  |  
|ISIS merger increase (4)                               |  |               | 48,565     |              |        |  | 0.1  |  
|Employee subscriptions (2)                             |  |               | 98,614     |              |        |  | 0.3  |  
|Cancellation of the shares held by ISIS (5)            |  |               | (1,847,376 | )            |        |  | (5.6 | )
|Cancellation of CGG shares (6)                         |  |               | (511,253   | )            |        |  | (1.6 | )
|Cancellation of the shares held by the
    Company (7) |  |               | (1,117,324 | )            |        |  | (3.4 | )
|                                                       |  |               |            |              |        | 
|Common stock as of December 31,
    2002               |  |               | 23,408,004 |              |        |  | 71.4 |  
|Coflexip merger increase (8)                           |  |               | 330,327    |              |        |  | 1.0  |  
|                                                       |  |               |            |              |        | 
|Common stock as of December 31,
    2003               |  |               | 23,738,331 |              |        |  | 72.4 |  
|                                                       |  |               |            |              |        | 



---



|    |                                                                                                                                                                                                                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | These increases result from the exercise of stock
    options granted to employees as described in
    Note 20(d).                                                                                                                                                                                                                             
|   
|(2) | Employee subscriptions: the shareholders
    authorized the conditions for such transaction at a meeting held
    on April 30, 1998 and another held on June 20, 2002.                                                                                                                                                                         
|   
|(3) | Following the completion of the two public
    exchange offers on, respectively, Coflexip shares and ISIS
    shares, in July 2001, Technip carried out on October 11,
    2001 an increase in capital of 10,565,723 shares of which
    5,504,436 shares relate to Coflexip shareholders and
    5,061,287 shares relate to ISIS shareholders.
|   
|(4) | The merger between Technip and ISIS took place as
    the subsidiarys shares were held at 99.05%. As the
    transaction was a renunciation merger, the minoritys
    payment by capital increase was very low.                                                                                                                              

F-33



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                                                                                                                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(5) | The merger put an end to the reciprocal
    shareholding between Technip and ISIS of 1,847,376 shares,
    which had been recorded in the shareholders equity in
    2001. These shares were cancelled in July 2002 following the
    merger in accordance with the draft agreement of July 2001 with
    ISIS.                                  
|   
|(6) | Technip exchanged CGG shares for Technip shares
    held by IFP in accordance with the exchange agreement signed in
    2001. Technip then cancelled its own shares.                                                                                                                                                                              
|   
|(7) | In 2003, shares held by the company were excluded
    from shareholders equity resulting in a
    9.7 million
    decrease in shareholders equity. In 2002, Technip
    continued to repurchase its own shares and subsequently
    cancelled all the shares held by the Company except 49,499
    shares intended to cover stock-option plans.
|   
|(8) | Capital increase resulting from the merger with
    Coflexip in July 2003 (see Note 2).                                                                                                                                                                                                                                                           

The Company owns 140,953, 49,499 and
623,595 shares as of December 31, 2003, 2002 and 2001,
respectively. In 2003, shares held by the company have been
fully deducted from shareholders equity. In 2002, the
shares held by the company were entirely set aside to cover
stock-option plans. They are classified in marketable securities.

(b) Technip
shareholders as of December 31

|                                                        |  |          |        |  |          |  |        |          |  |  |        | 
|------------------------------------------------------- |  | -------- | ------ |  | -------- |  | ------ | -------- |  |  | ------ | 
|                                                        |  | 12/31/03 |        |  | 12/31/02 |  |        | 12/31/01 | 
|                                                        |  |          |        |  |          |  |        |          | 
|IFP                                                     |  |          | 6.7%   |  |          |  | 6.8%   |          |  |  | 7.9%   | 
|Gaz de France                                           |  |          | 7.2%   |  |          |  | 7.3%   |          |  |  | 6.4%   | 
|Total Group                                             |  |          | 3.3%   |  |          |  | 3.8%   |          |  |  | 4.7%   | 
|Employees                                               |  |          | 2.6%   |  |          |  | 2.6%   |          |  |  | 2.5%   | 
|Treasury shares and shares held by
    subsidiaries (*) |  |          | 0.6%   |  |          |  | 0.2%   |          |  |  | 9.2%   | 
|Others                                                  |  |          | 79.6%  |  |          |  | 79.3%  |          |  |  | 69.3%  | 
|                                                        |  |          |        |  |          |  |        |          | 
|Total                                                   |  |          | 100.0% |  |          |  | 100.0% |          |  |  | 100.0% | 
|                                                        |  |          |        |  |          |  |        |          | 



---



|    |                                                                
|--- | ---------------------------------------------------------------
|(*) | December 31, 2003 balance includes 140,953
    treasury shares.

December 31, 2002 balance includes 49,499
treasury shares.


December 31, 2001 balance includes: 623,595
treasury shares and 1,847,376 shares held by subsidiaries,
i.e., a total of 2,470,971 shares.


(c) Cumulative
translation adjustments

Cumulative translation adjustments reflect the
exchange differences arising from the translation into Euro of
the financial statements of foreign subsidiaries as described in
Note 1(f). Since January 1, 2003,
certain Brazilian subsidiaries changed their functional currency
from US Dollar into Brazilian Real regarding the status of the
financial flows of their activity.

(d) Executive
Stock Option Plan

The 1998 stock option plan was authorized by the
shareholders meeting held on April 30, 1998 and
implemented by the Board of Directors on April 30, 1998. It
replaces the last part of the 1996 stock option plan for the
remaining options and will use treasury shares. These options
are valid up to five years from the date of grant.

The 1999 stock option plan was authorized by the
shareholders meeting held on April 30, 1999 and
implemented by the Board of Directors on April 30, 1999.
These options are valid up to five years from the date
of grant.

F-34



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The 2000 stock option plan was authorized by the
shareholders meeting held on April 28, 2000 and
implemented by the Board of Directors on December 14, 2000.
These options are valid up to eight years from the date
of grant.

The 2003 stock option plan was authorized by the
shareholders meeting held on June 20, 2002 and
implemented by the Management Board on December 9, 2002.
These options are valid up to six years from the date
of grant.

The 2003 stock option plan (remaining portion of
2nd part) was authorized by the shareholders meeting held
on August 24, 2001 and implemented by the Board of
Directors on May 21, 2003. These options are valid up to
6 years from the date of grant.

The former stock option plans implemented by
Coflexip have been held by Technip since the merger between
Technip and Coflexip SA. The stock option plans can be described
as follows:



| |   |                                                                                                                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The stock option plan 9.2 was authorized by the
    shareholders meeting held on May 21, 1996 and
    implemented by the Board of Directors on March 24, 1997.
    These options are valid up to ten years from the date
    of grant.   
|
| |  | The stock option plan 9.3 was authorized by
    the shareholders meeting held on May 21, 1996 and
    implemented by the Board of Directors on May 18, 1998.
    These options are valid up to ten years from the date
    of grant.     
|
| |  | The stock option plan 10 was authorized by
    the shareholders meeting held on June 2, 1999 and
    implemented by the Board of Directors on December 14, 1999.
    These options are valid up to ten years from the date
    of grant. 
|
| |  | The stock option plan 11 was authorized by
    the shareholders meeting held on May 30, 2000 and
    implemented by the Board of Directors on March 20, 2001.
    These options are valid up to ten years from the date of
    the grant.

F-35



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                                                                   |  |                                            |            |   |                |  |            |           |  |  |            |   |  |         |            |   |              |  |            |       |  |  |            |  |  |  |           |  
|------------------------------------------------------------------ |  | ------------------------------------------ | ---------- | - | -------------- |  | ---------- | --------- |  |  | ---------- | - |  | ------- | ---------- | - | ------------ |  | ---------- | ----- |  |  | ---------- |  |  |  | --------- | -
|                                                                   |  |                                           
|                                                                   |  | Number of subscription or purchase options |           
|                                                                   |  |                                            |           
|                                                                   |  | Plan 1996/                                 |            |   |                |  |            |           | 
|Technip Plans                                                      |  | 1998                                       |            |   | Plan 1999/2001 |  |            | Plan 2003 |  |  |           
|                                                                   |  |                                            |            |   |                |  |            |           |  |  |           
|                                                                   |  |                                            |            |   |                |  |            | Remaining |  |  |           
|                                                                   |  | 3rd                                        |            |   | 1st            |  |            | 2nd       |  |  | 1st        |   |  | 2nd     |            |   | portion (2nd |  |            |      
|                                                                   |  | 1998(a)                                    |            |   | 1999(b)        |  |            | 2000(c)   |  |  | 2003(d)    |   |  | 2003(d) |            |   | 2003)(e)     |  |            | TOTAL | 
|                                                                   |  |                                            |            |   |                |  |            |           |  |  |            |   |  |         |            |   |              |  |            |       | 
|December 31, 1999 (purchase)                                       |  |                                            | 138,711    |   |                |  | 315,520    |           |  |  |           |   |  |         |           |   |              |  |           |       |  |  |           |  |  |  | 454,231   |  
|                                                                   |  |                                            |            |   |                |  |            |           |  |  |            |   |  |         |            |   |              |  |            |       | 
|Options exercised                                                  |  |                                            | (1,400     | ) |                |  | (2,200     | )         |  |  |           |   |  |         |           |   |              |  |           |       |  |  |           |  |  |  | (3,600    | )
|Options cancelled                                                  |  |                                            | (5,200     | ) |                |  | (7,900     | )         |  |  |           |   |  |         |           |   |              |  |           |       |  |  |           |  |  |  | (13,100   | )
|Options granted (purchase)                                         |  |                                            |           |   |                |  |           |           |  |  | 139,576    |   |  |         |           |   |              |  |           |       |  |  |           |  |  |  | 139,576   |  
|Options granted (subscription)                                     |  |                                            |           |   |                |  |           |           |  |  | 493,028    |   |  |         |           |   |              |  |           |       |  |  |           |  |  |  | 493,028   |  
|                                                                   |  |                                            |            |   |                |  |            |           |  |  |            |   |  |         |            |   |              |  |            |       | 
|December 31, 2000                                                  |  |                                            | 132,111    |   |                |  | 305,420    |           |  |  | 632,604    |   |  |         |           |   |              |  |           |       |  |  |           |  |  |  | 1,070,135 |  
|                                                                   |  |                                            |            |   |                |  |            |           |  |  |            |   |  |         |            |   |              |  |            |       | 
|Options exercised (purchase)                                       |  |                                            | (25,111    | ) |                |  | (20,800    | )         |  |  |           |   |  |         |           |   |              |  |           |       |  |  |           |  |  |  | (45,911   | )
|Options exercised (subscription)                                   |  |                                            |           |   |                |  |           |           |  |  |           |   |  |         |           |   |              |  |           |       |  |  |           |  |  |  |          |  
|Options cancelled (purchase)                                       |  |                                            |           |   |                |  |           |           |  |  |            |   |  |         |           |   |              |  |           |       |  |  |           |  |  |  |          |  
|Options cancelled (subscription)                                   |  |                                            |           |   |                |  |           |           |  |  | (3,200     | ) |  |         |           |   |              |  |           |       |  |  |           |  |  |  | (3,200    | )
|Options granted (purchase)                                         |  |                                            |           |   |                |  |           |           |  |  |           |   |  |         |           |   |              |  |           |       |  |  |           |  |  |  |          |  
|Options granted (subscription)                                     |  |                                            |           |   |                |  |           |           |  |  |           |   |  |         |           |   |              |  |           |       |  |  |           |  |  |  |          |  
|                                                                   |  |                                            |            |   |                |  |            |           |  |  |            |   |  |         |            |   |              |  |            |       | 
|December 31, 2001 (purchase)                                       |  |                                            | 107,000    |   |                |  | 284,620    |           |  |  | 139,576    |   |  |         |           |   |              |  |           |       |  |  |           |  |  |  | 531,196   |  
|December 31, 2001
    (subscription)                               |  |                                            |           |   |                |  |           |           |  |  | 489,828    |   |  |         |           |   |              |  |           |       |  |  |           |  |  |  | 489,828   |  
|                                                                   |  |                                            |            |   |                |  |            |           |  |  |            |   |  |         |            |   |              |  |            |       | 
|Options exercised (purchase)                                       |  |                                            | (4,700     | ) |                |  | (4,400     | )         |  |  |           |   |  |         |           |   |              |  |           |       |  |  |           |  |  |  | (9,100    | )
|Options exercised (subscription)                                   |  |                                            |           |   |                |  |           |           |  |  |           |   |  |         |           |   |              |  |           |       |  |  |            |  |  |  |          |  
|Options cancelled (purchase)                                       |  |                                            | (4,300     | ) |                |  | (8,100     | )         |  |  |           |   |  |         |           |   |              |  |           |       |  |  |           |  |  |  | (12,400   | )
|Options cancelled (subscription)                                   |  |                                            |           |   |                |  |           |           |  |  | (13,950    | ) |  |         |           |   |              |  |           |       |  |  |           |  |  |  | (13,950   | )
|Options granted (purchase)                                         |  |                                            |           |   |                |  |           |           |  |  |           |   |  |         |           |   |              |  |           |       |  |  |            |  |  |  |          |  
|Options granted (subscription)                                     |  |                                            |           |   |                |  |           |           |  |  |           |   |  |         | 234,080    |   |              |  | 462,920    |       |  |  |           |  |  |  | 697,000   |  
|                                                                   |  |                                            |            |   |                |  |            |           |  |  |            |   |  |         |            |   |              |  |            |       | 
|December 31, 2002 (purchase)                                       |  |                                            | 98,000     |   |                |  | 272,120    |           |  |  | 139,576    |   |  |         |           |   |              |  |           |       |  |  |           |  |  |  | 509,696   |  
|December 31, 2002
    (subscription)                               |  |                                            |           |   |                |  |           |           |  |  | 475,878    |   |  |         | 234,080    |   |              |  | 462,920    |       |  |  |           |  |  |  | 1,172,878 |  
|                                                                   |  |                                            |            |   |                |  |            |           |  |  |            |   |  |         |            |   |              |  |            |       | 
|Options exercised (purchase)                                       |  |                                            |           |   |                |  |           |           |  |  |           |   |  |         |           |   |              |  |           |       |  |  |           |  |  |  |          |  
|Options exercised (subscription)                                   |  |                                            |           |   |                |  |           |           |  |  |           |   |  |         |           |   |              |  |           |       |  |  |           |  |  |  |          |  
|Options cancelled (purchase)                                       |  |                                            | (98,000    | ) |                |  | (14,200    | )         |  |  |           |   |  |         |           |   |              |  |           |       |  |  |           |  |  |  | (112,200  | )
|Options cancelled (subscription)                                   |  |                                            |           |   |                |  |           |           |  |  | (27,200    | ) |  |         | (22,090    | ) |              |  | (4,400     | )     |  |  |           |  |  |  | (53,690   | )
|Options granted (purchase)                                         |  |                                            |           |   |                |  |           |           |  |  |           |   |  |         |           |   |              |  |           |       |  |  |           |  |  |  |          |  
|Options granted (subscription)                                     |  |                                            |           |   |                |  |           |           |  |  |           |   |  |         |           |   |              |  |           |       |  |  | 5,200      |  |  |  | 5,200     |  
|                                                                   |  |                                            |            |   |                |  |            |           |  |  |            |   |  |         |            |   |              |  |            |       | 
|December 31, 2003 (purchase)                                       |  |                                            |           |   |                |  | 257,920    |           |  |  | 139,576    |   |  |         |           |   |              |  |           |       |  |  |           |  |  |  | 397,496   |  
|December 31, 2003
    (subscription)                               |  |                                            |           |   |                |  |           |           |  |  | 448,678    |   |  |         | 211,990    |   |              |  | 458,520    |       |  |  | 5,200      |  |  |  | 1,124,388 |  
|                                                                   |  |                                            |            |   |                |  |            |           |  |  |            |   |  |         |            |   |              |  |            |       | 
|Technip treasury shares dedicated to the purchase
    options plan |  |                                            |            |   |                |  |            |           |  |  |            |   |  |         |            |   |              |  |            |       |  |  |            |  |  |  |           |  
|Maturity date                                                      |  |                                            | 04.30.2003 |   |                |  | 04.30.2004 |           |  |  | 12.14.2008 |   |  |         | 12.09.2008 |   |              |  | 12.09.2008 |       |  |  | 05.21.2009 |  |  |  |           |  



---



|    |                                                                                      
|--- | -------------------------------------------------------------------------------------
|(a) | Options exercisable with deferred payment of
    3 years beginning April 30, 1998.   
|   
|(b) | Options exercisable with deferred payment of
    3 years beginning April 30, 1999.   
|   
|(c) | Options exercisable with deferred payment of
    3 years beginning December 14, 2000.
|   
|(d) | Options exercisable with deferred payment of
    3 years beginning December 9, 2002. 
|   
|(e) | Options exercisable with deferred payment of
    3 years beginning May 22, 2006.     

F-36



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                                                           |  |                    |          |   |          |  |         |         |  |  |         |   |  |       |         |   |  |  |          |  
|---------------------------------------------------------- |  | ------------------ | -------- | - | -------- |  | ------- | ------- |  |  | ------- | - |  | ----- | ------- | - |  |  | -------- | -
|Coflexip Stock option plans                                |  | Plan 9.2           |          |   | Plan 9.3 |  |         | Plan 10 |  |  | Plan 11 |   |  |      
|                                                           |  |                    |          |   |          |  |         |         |  |  |         |   |  |      
|                                                           |  |                    |          |  
|                                                           |  | Options granted in |          |   |         
|                                                           |  |                    |          |   |         
|                                                           |  | 1997               |          |   | 1998     |  |         | 1999    |  |  | 2001    |   |  | Total |        
|                                                           |  |                    |          |   |          |  |         |         |  |  |         |   |  |       |        
|Number of purchase options granted                         |  |                    |         |   |          |  |        |         |  |  |        |   |  |       | 34,415  |   |  |  | 34,415   |  
|Number of subscription options
    granted                 |  |                    | 200,000  |   |          |  | 123,400 |         |  |  | 127,386 |   |  |       | 180,000 |   |  |  | 630,786  |  
|Cumulative figures as of December 31, 2003:                |  |                    |          |   |          |  |         |         |  |  |         |   |  |       |         |   |  |  |          |  
|Options exercised (purchase)                               |  |                    |         |   |          |  |        |         |  |  |        |   |  |       |        |   |  |  |         |  
|Options exercised (subscription)                           |  |                    | (127,926 | ) |          |  | (450    | )       |  |  | (16,152 | ) |  |       |        |   |  |  | (144,528 | )
|Options cancelled (purchase)                               |  |                    |         |   |          |  |        |         |  |  |        |   |  |       |        |   |  |  |         |  
|Options cancelled (subscription)                           |  |                    | (33,387  | ) |          |  | (25,200 | )       |  |  | (19,850 | ) |  |       | (36,000 | ) |  |  | (114,437 | )
|Options granted as of December 31, 2003
    (purchase)     |  |                    |         |   |          |  |        |         |  |  |        |   |  |       | 34,415  |   |  |  | 34,415   |  
|Options granted as of December 31, 2003
    (subscription) |  |                    | 38,687   |   |          |  | 97,750  |         |  |  | 91,384  |   |  |       | 144,000 |   |  |  | 371,821  |  

(e) Distributable
retained earnings

The distributable retained earnings of the parent
company amount to approximately
300 million,
after estimated taxation as of December 31, 2003, as
deduction of withholding tax in the event of payment of
dividends.

(f) Statutory
legal reserve

Under French Company Law, companies must allocate
5% of their consolidated statutory net profit for each year to
their legal reserve fund before dividends may be paid with
respect to that year. Funds are allocated until the amount in
the legal reserve is equal to 10% of the aggregate nominal value
of the issued and outstanding share capital. The legal reserve
may only be distributed to shareholders upon liquidation of the
Company. The statutory legal reserve was
9.8 million
at December 31, 2003.

(g) Dividends

The net dividend per share has been as follows
for the years ended December 31, 2003, 2002 and 2001:

|                       |  |          |      |  |      |  |      |      |  |  |      | 
|---------------------- |  | -------- | ---- |  | ---- |  | ---- | ---- |  |  | ---- | 
|                       |  | 2003     |      |  | 2002 |  |      | 2001 | 
|                       |  |          |      |  |      |  |      |      | 
|                       |  |         
|                       |  | In Euros |     
|Net dividend per share |  |          | 3.30 |  |      |  | 3.30 |      |  |  | 3.30 | 

F-37



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Note 21  Accrued
liabilities

|                                       |  |                    |       |  |          |  |       |          |  |  |       | 
|-------------------------------------- |  | ------------------ | ----- |  | -------- |  | ----- | -------- |  |  | ----- | 
|                                       |  | 2003               |       |  | 2002     |  |       | 2001     | 
|                                       |  |                    |       |  |          |  |       |          | 
|                                       |  | 12/31/03           |       |  | 12/31/02 |  |       | 12/31/01 | 
|                                       |  |                    |       |  |          |  |       |          | 
|                                       |  |                   
|                                       |  | In millions of EUR |      
|Accrued contingencies:                 |  |                    |       |  |          |  |       |          |  |  |       | 
|Foreseeable losses on contracts        |  |                    | 6.4   |  |          |  | 5.5   |          |  |  | 4.8   | 
|Contingencies related to contracts     |  |                    | 86.3  |  |          |  | 59.5  |          |  |  | 53.2  | 
|Territoriality and other contingencies |  |                    | 41.2  |  |          |  | 43.1  |          |  |  | 35.5  | 
|Provision for dry docking long-term    |  |                    | 6.1   |  |          |  | 7.7   |          |  |  | 14.7  | 
|Other (a)                              |  |                    | 10.5  |  |          |  | 45.3  |          |  |  | 14.7  | 
|                                       |  |                    |       |  |          |  |       |          | 
|Subtotal                               |  |                    | 150.5 |  |          |  | 161.1 |          |  |  | 122.9 | 
|                                       |  |                    |       |  |          |  |       |          | 
|Accrued expenses:                      |  |                    |       |  |          |  |       |          |  |  |       | 
|Expenses to complete contracts         |  |                    | 74.8  |  |          |  | 74.9  |          |  |  | 128.2 | 
|Restructuring                          |  |                    | 7.3   |  |          |  | 4.2   |          |  |  | 4.6   | 
|Other                                  |  |                    | 2.2   |  |          |  | 2.3   |          |  |  | 1.8   | 
|                                       |  |                    |       |  |          |  |       |          | 
|Subtotal                               |  |                    | 84.3  |  |          |  | 81.4  |          |  |  | 134.6 | 
|                                       |  |                    |       |  |          |  |       |          | 
|Accrued liabilities                    |  |                    | 234.8 |  |          |  | 242.5 |          |  |  | 257.5 | 
|                                       |  |                    |       |  |          |  |       |          | 



---



|    |                                                                  
|--- | -----------------------------------------------------------------
|(a) | As of December 31, 2002, include the
    following contingencies:



| |   |                                                          
| | - | ---------------------------------------------------------
| |  | Contingencies on future CAMC disposal:
    16.9 million,
|
| |  | Exchange loss contingencies:
    10.3 million.          

|                                       |  |                    |       |  |          |          |       |             |          |  |             |       |  |         |       |   |          |  |      |   |  |  |       | 
|-------------------------------------- |  | ------------------ | ----- |  | -------- | -------- | ----- | ----------- | -------- |  | ----------- | ----- |  | ------- | ----- | - | -------- |  | ---- | - |  |  | ----- | 
|                                       |  |                    |       |  |          | Decrease |       |             | Decrease |  |             |       |  |        
|                                       |  |                    |       |  |          | Used     |       |             | Unused   |  |             | Other |  |         |      
|                                       |  | 12/31/02           |       |  | Increase |          |       | (provision) |          |  | (provision) |       |  | changes |       |   | 12/31/03 | 
|                                       |  |                    |       |  |          |          |       |             |          |  |             |       |  |         |       |   |          | 
|                                       |  |                   
|                                       |  | In millions of EUR |      
|Foreseeable losses on contracts        |  |                    | 5.5   |  |          |          | 1.8   |             |          |  | (0.9        | )     |  |         |      |   |          |  |     |   |  |  | 6.4   | 
|Contingencies related to contracts     |  |                    | 59.5  |  |          |          | 70.6  |             |          |  | (23.1       | )     |  |         | (18.3 | ) |          |  | (2.4 | ) |  |  | 86.3  | 
|Territoriality and other contingencies |  |                    | 43.1  |  |          |          | 19.0  |             |          |  | (1.2        | )     |  |         | (20.6 | ) |          |  | 0.9  |   |  |  | 41.2  | 
|Provision for dry-docking long-term    |  |                    | 7.7   |  |          |          | 13.6  |             |          |  | (14.4       | )     |  |         |      |   |          |  | (0.8 | ) |  |  | 6.1   | 
|Expenses to complete contracts         |  |                    | 74.9  |  |          |          | 54.1  |             |          |  | (54.2       | )     |  |         |      |   |          |  |     |   |  |  | 74.8  | 
|Restructuring                          |  |                    | 4.2   |  |          |          | 7.7   |             |          |  | (4.6        | )     |  |         |      |   |          |  |     |   |  |  | 7.3   | 
|Others                                 |  |                    | 47.6  |  |          |          | 4.0   |             |          |  | (37.7       | )     |  |         |      |   |          |  | (1.2 | ) |  |  | 12.7  | 
|                                       |  |                    |       |  |          |          |       |             |          |  |             |       |  |         |       |   |          | 
|Total                                  |  |                    | 242.5 |  |          |          | 170.8 |             |          |  | (136.1      | )     |  |         | (38.9 | ) |          |  | (3.5 | ) |  |  | 234.8 | 
|                                       |  |                    |       |  |          |          |       |             |          |  |             |       |  |         |       |   |          | 

Contingencies related to contracts
and Territoriality and other contingencies line
items are composed of provisions for litigations.

F-38



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Note 22  Financial
debt



|    |                   
|--- | ------------------
|(a) | Analysis by nature

|                                     |  |                    |         |  |          |  |         |          |  |  |         | 
|------------------------------------ |  | ------------------ | ------- |  | -------- |  | ------- | -------- |  |  | ------- | 
|                                     |  | 12/31/03           |         |  | 12/31/02 |  |         | 12/31/01 | 
|                                     |  |                    |         |  |          |  |         |          | 
|                                     |  |                   
|                                     |  | In millions of EUR |        
|Convertible bonds (a)                |  |                    | 715.5   |  |          |  | 765.3   |          |  |  |        | 
|Bank borrowings and credit lines (b) |  |                    | 184.1   |  |          |  | 187.7   |          |  |  | 1,394.9 | 
|Commercial paper short-term          |  |                    | 205.0   |  |          |  | 276.0   |          |  |  | 184.5   | 
|Bank overdrafts                      |  |                    | 8.3     |  |          |  | 7.2     |          |  |  | 33.9    | 
|Refundable advances                  |  |                    | 6.2     |  |          |  | 6.2     |          |  |  | 6.1     | 
|Employee loans                       |  |                    |        |  |          |  |        |          |  |  | 0.1     | 
|Accrued interest payable             |  |                    | 7.4     |  |          |  |        |          |  |  | 3.9     | 
|Leasing and other                    |  |                    | 3.0     |  |          |  | 4.7     |          |  |  | 15.5    | 
|                                     |  |                    |         |  |          |  |         |          | 
|Total financial debt                 |  |                    | 1,129.5 |  |          |  | 1,247.1 |          |  |  | 1,638.9 | 
|                                     |  |                    |         |  |          |  |         |          | 
|Short-term financial debt (c)        |  |                    | 226.3   |  |          |  | 297.0   |          |  |  | 456.7   | 



---



|    |                                                                                                                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | At the end of January 2002, Technip issued a bond
    loan with a conversion option into new shares and/or exchange
    for existing shares (OCEANE offer) for an initial amount of
    793.5 million.
    The reimbursement date was set on January 1, 2007 for bonds
    not converted into shares at this date.



| |                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------
| | The OCEANE offer, which received the AMF final
    visa on January 22, 2002, has the following main
    characteristics:



| |   |                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------
| |  | Issued at a price of
    170 (number of
    bonds issued: 4,667,647),                                   
|
| |  | The coupon payable on January 1 of each year
    amounts to 1% per year of the bonds nominal value,     
|
| |  | The redemption date was set on January 1,
    2007 for bonds not converted into shares at such date,     
|
| |  | The bond redemption price as of January 1,
    2007 is 190.07
    in case of non conversion or exchange,
|
| |  | The actuarial yield rate for the bondholder is
    3.25% per year in case of non conversion or exchange. 



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The bond loan was used to reimburse part of the
    credit facility issued by Technip to finance the purchase of
    Coflexip shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| | Technip repurchased 165,653 convertible bonds in
    2002 and 293,141 convertible bonds in 2003 for the amount of
    78.0 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| | A credit facility for U.S.$50.0 million entered
    into in 2002, and amended to
    75.0 million
    in 2003, was used to complete the 2002 convertible bonds
    redemption and 96% of the 2003 convertible bonds redemption. The
    credit facility can be used in U.S. Dollars or in Euro. The
    repayment date remains unchanged (December 31, 2007). As a
    result, the Group has lengthened its debt maturity and has
    diversified its capital resources denominated in foreign
    currencies, particularly by using debt in U.S. Dollars, in
    which many assets and sales contracts of the Company are
    denominated.
|
| | In accordance with the bond loan issuing
    contract, the 458,794 convertible bonds thus redeemed have been
    cancelled, reducing the outstanding amount to
    715.5 million
    as of December 31, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                              



|    |                                                                                 
|--- | --------------------------------------------------------------------------------
|(b) | The bank borrowings and credit lines as of
    December 31, 2003 mainly include:



| |                                                                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The credit facility for U.S.$350 million with a
    pool of banks with an outstanding balance of
    U.S.$141 million
    (111.6 million)
    as of December 31, 2003. This credit facility has been used
    by Technip Offshore International and some of its eligible
    subsidiaries to finance part of the acquisition of the Aker

F-39



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



| |                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Maritime ASA Deepwater Division in January 2001.
    This credit bank facility is fully repayable at maturity on
    June 26, 2006.                                                 
|
| | The U.S.$87.0 million
    (68.9 million)
    credit line used to finance the redemption of the convertible
    bonds which is fully repayable at maturity on December 30,
    2007.



|    |                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------
|(c) | The financial short-term debt, which represents
    226.3 million,
    is comprised of the following:



| |   |                                                                           
| | - | --------------------------------------------------------------------------
| |  | Commercial paper for
    205.0 million
    (term of 1 to 3 months),      
|
| |  | Short-term part of long-term debts, which amounts
    to
    5.7 million,
|
| |  | Bank overdrafts and other short-term debts for
    8.3 million,
    and  
|
| |  | Accrued interest on convertible bonds for
    7.4 million.               

(b) Analysis
by nature of interest rate(After
possible hedging of interest rates)

|              |  |             |         | 
|------------- |  | ----------- | ------- | 
|              |  | 12/31/03    |        
|              |  |             |        
|              |  | In millions |        
|              |  | of EUR      |        
|Fixed rate    |  |             | 821.4   | 
|Variable rate |  |             | 308.1   | 
|              |  |             |        
|Total         |  |             | 1,129.5 | 
|              |  |             |        

The variable-rate debt includes U.S.$119.0
million
(94.2 million)
for which the interest rate has been determined for the whole
year 2004.

In 2003, the average rate of the fixed-rate debt
stands at 3.52% per year.

Over the same period, the average rate of the
overall Group debt (fixed and variable rate) stands at 1.81% per
year (3.10% per year including the amortization of the
redemption premium relating to the convertible bond loan).

The average rate of the debt is calculated by
dividing the amount of financial charges for the fiscal year
(with the exclusion of bank fees not expressly related to the
debt) by the average outstanding debt for the fiscal year.



|    |                     
|--- | --------------------
|(c) | Analysis by currency

|                                  |  |                    |         |   |          |  |         |          |  |  |         |  
|--------------------------------- |  | ------------------ | ------- | - | -------- |  | ------- | -------- |  |  | ------- | -
|                                  |  | 12/31/03           |         |   | 12/31/02 |  |         | 12/31/01 | 
|                                  |  |                    |         |   |          |  |         |          | 
|                                  |  |                   
|                                  |  | In millions of EUR |        
|Euro                              |  |                    | 938.1   |   |          |  | 1,054.8 |          |  |  | 1,189.7 |  
|U.S. Dollar                       |  |                    | 183.9   |   |          |  | 182.2   |          |  |  | 432.8   |  
|Great Britain Pound               |  |                    | 2.4     |   |          |  |        |          |  |  | 8.3     |  
|Others                            |  |                    | 5.1     |   |          |  | 10.1    |          |  |  | 8.1     |  
|                                  |  |                    |         |   |          |  |         |          | 
|Total financial debt              |  |                    | 1,129.5 |   |          |  | 1,247.1 |          |  |  | 1,638.9 |  
|Less: amounts due within one year |  |                    | (226.3  | ) |          |  | (297.0  | )        |  |  | (456.7  | )
|                                  |  |                    |         |   |          |  |         |          | 
|Total long-term debt              |  |                    | 903.2   |   |          |  | 950.1   |          |  |  | 1,182.2 |  
|                                  |  |                    |         |   |          |  |         |          | 

F-40



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                                        
|--- | ---------------------------------------
|(d) | Annual maturities of long-term
    debt

|                         |  |             |       | 
|------------------------ |  | ----------- | ----- | 
|                         |  | 12/31/03    |      
|                         |  |             |      
|                         |  | In millions |      
|                         |  | of EUR      |      
|2004                     |  |             | 5.7   | 
|2005                     |  |             | 2.8   | 
|2006 (**)                |  |             | 827.5 | 
|2007                     |  |             | 69.3  | 
|2008 and after           |  |             | 3.6   | 
|                         |  |             |      
|Total long-term debt (*) |  |             | 908.9 | 
|                         |  |             |      



---



|     |                                                                                                                                                                                                          
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(*)  | Includes the short-term part of the long-term
    debt for
    5.7 million.                                                                                                                             
|    
|(**) | As described in Note 22(a),
    the OCEANE, redemption date was set up on January 1, 2007.
    For the convenience of the reader, the Company presents this
    amount of
    715.5 million
    in 2006.



|    |                                            
|--- | -------------------------------------------
|(e) | Debt guaranteed by surety and
    mortgages

|                                                  |  |                    |     |  |                |  |         |       |  |  |         | 
|------------------------------------------------- |  | ------------------ | --- |  | -------------- |  | ------- | ----- |  |  | ------- | 
|                                                  |  |                   
|                                                  |  | 12/31/03           |    
|                                                  |  |                    |    
|                                                  |  | Guaranteed         |     |  | Non-guaranteed |  |         | Total | 
|                                                  |  |                    |     |  |                |  |         |       | 
|                                                  |  |                   
|                                                  |  | In millions of EUR |    
|Bank overdrafts, short term facilities and others |  |                    |    |  |                |  | 15.6    |       |  |  | 15.6    | 
|Commercial paper                                  |  |                    |    |  |                |  | 205.0   |       |  |  | 205.0   | 
|Short-term part of long-term debts                |  |                    | 3.5 |  |                |  | 2.2     |       |  |  | 5.7     | 
|                                                  |  |                    |     |  |                |  |         |       | 
|Total short term financial debt                   |  |                    | 3.5 |  |                |  | 222.8   |       |  |  | 226.3   | 
|Long-term financial debt                          |  |                    | 2.5 |  |                |  | 900.7   |       |  |  | 903.2   | 
|                                                  |  |                    |     |  |                |  |         |       | 
|Total financial debts                             |  |                    | 6.0 |  |                |  | 1,123.5 |       |  |  | 1,129.5 | 
|                                                  |  |                    |     |  |                |  |         |       | 

As of December 31, 2003,
6.0 million
of bank and financial debts used by Technip and its subsidiaries
are covered by mortgages granted by these companies.



|          |                                     
|--------- | ------------------------------------
|Note 23  | Convertible bonds redemption premium

Following the repurchase and the cancellation of
458,794 convertible bonds in 2002 and 2003, the amount of the
convertible bond redemption premium has been reduced to
84.5 million
(compared to
90.4 million
as of December 31, 2002 and
93.7 million
when issued).

F-41



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|          |                
|--------- | ---------------
|Note 24  | Other creditors

|                                      |  |                    |       |  |          |  |       |          |  |  |       | 
|------------------------------------- |  | ------------------ | ----- |  | -------- |  | ----- | -------- |  |  | ----- | 
|                                      |  | 12/31/03           |       |  | 12/31/02 |  |       | 12/31/01 | 
|                                      |  |                    |       |  |          |  |       |          | 
|                                      |  |                   
|                                      |  | In millions of EUR |      
|Payroll costs                         |  |                    | 70.4  |  |          |  | 62.0  |          |  |  | 66.9  | 
|Social security charges               |  |                    | 38.0  |  |          |  | 20.6  |          |  |  | 18.4  | 
|Income and value added taxes          |  |                    | 288.1 |  |          |  | 276.7 |          |  |  | 294.1 | 
|Deferred income                       |  |                    | 13.2  |  |          |  | 7.1   |          |  |  | 4.4   | 
|Debts on fixed assets                 |  |                    | 11.5  |  |          |  | 15.7  |          |  |  | 9.9   | 
|Ongoing project accruals              |  |                    | 124.5 |  |          |  | 78.6  |          |  |  | 63.5  | 
|Fee accruals                          |  |                    | 2.8   |  |          |  | 1.9   |          |  |  | 2.1   | 
|Current accounts on ongoing contracts |  |                    | 16.0  |  |          |  | 28.9  |          |  |  |      | 
|Debt covered by a guarantee           |  |                    |      |  |          |  | 68.9  |          |  |  | 66.0  | 
|Subsidies                             |  |                    | 6.6   |  |          |  | 7.0   |          |  |  | 6.7   | 
|Other                                 |  |                    | 120.8 |  |          |  | 188.7 |          |  |  | 130.3 | 
|                                      |  |                    |       |  |          |  |       |          | 
|Other creditors                       |  |                    | 691.9 |  |          |  | 756.1 |          |  |  | 662.3 | 
|                                      |  |                    |       |  |          |  |       |          | 



|          |                           
|--------- | --------------------------
|Note 25  | Related party transactions

None

Note 26  Commitments and
contingencies

The commitments are presented below. Contractual
commitments related to financial debt are presented in
Note 22. There are no material commitments that are
not described below.

|                                  |  |       |         |           |          |  |         |            |  |           |            |  |  |  |       |            
|--------------------------------- |  | ----- | ------- | --------- | -------- |  | ------- | ---------- |  | --------- | ---------- |  |  |  | ----- | -----------
|                                  |  |       |         |          
|                                  |  |       |         | Payments  |         
|                                  |  |       |         |           |         
|                                  |  |       |         | Less than |          |  | One to  |            |  | More than |           
|Contractual commitments           |  | Total |         |           | one year |  |         | five years |  |           | five years | 
|                                  |  |       |         |           |          |  |         |            |  |           |            | 
|Capital leases                    |  |       | 2.6     |           |          |  | 1.6     |            |  |           | 1.0        |  |  |  |      | (a)        
|Operating leases (long-term)      |  |       | 398.2   |           |          |  | 48.5    |            |  |           | 167.1      |  |  |  | 182.6 | (a)        
|Foreign exchange rate instruments |  |       | 2,205.7 |           |          |  | 1,856.5 |            |  |           | 349.2      |  |  |  |      | Note  27(b)
|Interest rate instruments         |  |       | 180.5   |           |          |  | 94.2    |            |  |           | 86.3       |  |  |  |      | Note  27(c)
|                                  |  |       |         |           |          |  |         |            |  |           |            | 
|Total                             |  |       | 2,789.0 |           |          |  | 2,000.8 |            |  |           | 603.6      |  |  |  | 182.6 |            
|                                  |  |       |         |           |          |  |         |            |  |           |            | 

|                           |  |       |          |                                 |          |  |         |            |  |           |            |  |  |  |         |    
|-------------------------- |  | ----- | -------- | ------------------------------- | -------- |  | ------- | ---------- |  | --------- | ---------- |  |  |  | ------- | ---
|                           |  |       |          |                                
|                           |  |       |          | Amount of commitments by period |         
|                           |  |       |          |                                 |         
|                           |  |       |          | Less than                       |          |  | One to  |            |  | More than |           
|Others commitments         |  | Total |          |                                 | one year |  |         | five years |  |           | five years | 
|                           |  |       |          |                                 |          |  |         |            |  |           |            | 
|Parent company guarantees  |  |       | 10,729.4 |                                 |          |  | 5,925.7 |            |  |           | 3,158.5    |  |  |  | 1,645.2 |    
|Others commitments given   |  |       | 1,609.7  |                                 |          |  | 523.5   |            |  |           | 914.2      |  |  |  | 172.0   |    
|                           |  |       |          |                                 |          |  |         |            |  |           |            | 
|Total commitments given    |  |       | 12,339.1 |                                 |          |  | 6,449.2 |            |  |           | 4,072.7    |  |  |  | 1,817.2 | (b)
|                           |  |       |          |                                 |          |  |         |            |  |           |            | 
|Total commitments received |  |       | 592.5    |                                 |          |  | 199.2   |            |  |           | 393.3      |  |  |  |        | (b)



|    |                                        
|--- | ---------------------------------------
|(a) | Capital leases and operating
    leases

The Group rents various equipment, vessels and
buildings, mainly under lease contracts that will end during the
next ten years.

In 2003, the rental expense amounted to
29.5 million
(including vessels for
13.5 million)
compared to
41.3 million
in 2002.

F-42



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

As of December 31, 2003, the future minimum
payments for these leases is as follows:

|                                |  |                    |      |   |           |  |       | 
|------------------------------- |  | ------------------ | ---- | - | --------- |  | ----- | 
|                                |  | Capital            |      |   | Operating | 
|                                |  | lease              |      |   | lease     | 
|                                |  |                    |      |   |           | 
|                                |  |                   
|                                |  | In millions of EUR |     
|For the year ended December 31, |  |                    |      |   |           |  |       | 
|2004                            |  |                    | 1.6  |   |           |  | 48.5  | 
|2005                            |  |                    | 1.0  |   |           |  | 46.2  | 
|2006                            |  |                    |     |   |           |  | 45.9  | 
|2007                            |  |                    |     |   |           |  | 40.1  | 
|2008                            |  |                    |     |   |           |  | 34.8  | 
|2009 and thereafter             |  |                    |     |   |           |  | 182.6 | 
|                                |  |                    |      |   |           | 
|Total                           |  |                    | 2.6  |   |           |  | 398.2 | 
|Less interest                   |  |                    | (0.4 | ) |           |  |      | 
|                                |  |                    |      |   |           | 
|Total current net value         |  |                    | 2.2  |   |           |  | 398.2 | 
|                                |  |                    |      |   |           | 

In 2003, Technip entered into a new lease
contract related to an office building located in Paris-La
Défense, which is the Groups new headquarters. This
lease relates to the period from March 1, 2003 to
February 27, 2015. The first lease payment of
23.5 million,
before indexation to the cost of construction, concerns 2004.
The lease payment remains constant per period of 36 months
except for changes in the construction index.

The decrease of the operating leases results from
the early withdrawal from a lease relating to a vessel
(The Dove).

In 2003, 2002 and 2001, no new significant
leasing contracts have been entered into by the Group.



|    |            
|--- | -----------
|(b) | Commitments

The commitments are presented below:

|                          |  |                    |          |  |          |  |          |          |  |  |         | 
|------------------------- |  | ------------------ | -------- |  | -------- |  | -------- | -------- |  |  | ------- | 
|                          |  | 12/31/03           |          |  | 12/31/02 |  |          | 12/31/01 | 
|                          |  |                    |          |  |          |  |          |          | 
|                          |  |                   
|                          |  | In millions of EUR |         
|Parent company guarantees |  |                    | 10,729.4 |  |          |  | 8,807.6  |          |  |  | 5,507.0 | 
|Other commitments given   |  |                    | 1,609.7  |  |          |  | 1,696.2  |          |  |  | 1,558.1 | 
|                          |  |                    |          |  |          |  |          |          | 
|Total commitments given   |  |                    | 12,339.1 |  |          |  | 10,503.8 |          |  |  | 7,065.1 | 
|                          |  |                    |          |  |          |  |          |          | 
|Commitments received      |  |                    | 592.5    |  |          |  | 445.3    |          |  |  | 474.0   | 

Parent company guarantees given by the parent
company to clients cover the good performance of the specified
contracts-in-progress, of which the average expiration period
until the release of the commitment guarantees is 5 years.

Other commitments given mainly relate to
guarantees or counter-guarantees given by banks and insurance
companies to various clients in connection with ongoing
contracts, in order to secure good performance of the contracts
or following the payment of retention.

Commitments received mainly relate to similar
guarantees obtained from suppliers or subcontractors in
connection with ongoing contracts.

F-43



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |              
|--- | -------------
|(c) | Contingencies

Exceptional events and litigation:

The Company is subject to various legal
proceedings and claims arising in the normal course of its
business. In the opinion of the management, the probable
outcomes of these actions will not materially affect the
consolidated financial position, results of operations or assets
of the Company and its subsidiaries.

The main current litigations are as follows:

Acquisition by Coflexip of the Aker Maritime
ASA Deepwater Division:following this
acquisition, Coflexip notified Aker Maritime that, under the
price adjustment provisions of the Share Purchase Agreement, it
was entitled to a U.S.$136.7 million reduction in the
purchase price of the Deepwater Division. This litigation ended
in 2003. Aker Maritime accepted a reduction of the purchase
price of
40.7 million.
This price reduction led to a decrease of the goodwill in the
consolidated financial statements.

Other pending
litigation:on December 21, 2001,
a French company filed a complaint with the Tribunal de Commerce
(Commercial Court) of Versailles against Coflexip, Coflexip
Stena Offshore Limited and Coflexip Stena Offshore
International. The claim alleges that Coflexip breached several
confidentiality agreements. This company also brought an action
in the courts in Scotland and in the U.S. against Coflexip
for infringement of a patent related to pipe-in-pipe
technologies. The patent of this company was invalidated by the
EPO (European Patent Office). On the basis of the available
information, Technip believes that these allegations are
unfounded and that its potential exposure is not material.

Siemens subcontracting on Peterhead
contract:A German subsidiary of
Technip initiated arbitration proceedings against Siemens
claiming a price adjustment. The claim relates to a significant
increase in the scope of services rendered in completion of a
1998 construction contract
(22 million)
for high-pressure connection piping at the Peterhead electrical
power plant built by Siemens for Scottish Electric. This
litigation ended in 2003.



| |        
| | -------
| | Seamec:

In February 2003, Technip through its subsidiary
Coflexip Stena Offshore Mauritius Limited, purchased an
additional interest of 20% of its Indian listed subsidiary,
South East Marine Engineering and Construction Ltd (SEAMEC) in
the frame of the public offer ordered by the Securities and
Exchange Board of India (SEBI) pursuant to the Indian stock
exchange Regulations, as a consequence of the change of control
of SEAMEC, launched by Technip on Coflexip shares in July 2001.

The Securities Appellate Tribunal (S.A.T.), at
the request of minority shareholders of SEAMEC, ordered Technip,
on October 27, 2003, to pay the shareholders who brought
their shares to the public offer an additional amount calculated
on the quoted value of SEAMEC shares in April 2000, based on the
allegation that the change of control of Coflexip and
consequently the change of control of SEAMEC occurred in April
2000, when Technip acquired the participation of Stena Offshore
International BV of 29.68% in the share capital of Coflexip.

Technip filed an appeal with the Supreme Court of
India and on January 9, 2004 was granted a stay of the
S.A.T. decision on the condition that bank guarantees be issued
in order to secure the relevant amount, pending final decision
on the merit. A bank guarantee of an amount of Indian Rupees
2.25 billion,
(40 million)
for the principal amount has been issued on February 17,
2004. Based on the evaluation made by the Group of its
exposition on this litigation, no provision has been made in the
December 31, 2003 accounts.

F-44



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                                                   
|--- | --------------------------------------------------
|(d) | Retirement indemnities and related
    commitments

The Group contributes to retirement or
post-retirement benefit schemes in conformity with the laws and
usual practices of countries where the subsidiaries operate.

|                                                  |  |                 |       | 
|------------------------------------------------- |  | --------------- | ----- | 
|Benefit obligations                               |  | 2003(*)         |      
|                                                  |  |                 |      
|                                                  |  | (in millions of |      
|                                                  |  | EUR)            |      
|Actuarial debt                                    |  |                 | 182.3 | 
|Market value of hedging assets                    |  |                 | 58.3  | 
|Financial hedging                                 |  |                 | 124.0 | 
|Unrecognized assets                               |  |                 | 34.7  | 
|Net provision (consolidated financial statements) |  |                 | 89.3  | 



---



| |                                                                       
| | ----------------------------------------------------------------------
| | (*)          These
    amounts may be modified in accordance with IFRS

Actuarial valuation of Technips obligations
regarding retirement benefit schemes and other commitments such
as post-retirement healthcare benefit schemes are determined in
conformity with the 2003 R01 recommendation of the CNC.
Hedging plan assets are estimated at Fair Value. The
calculations are based on actuarial assumptions especially
defined for each entity (personnel turnover and future salary
increases) and on the following key actuarial assumptions:

|                               |  |        |      |  |         |  |      |                 |  |  |      | 
|------------------------------ |  | ------ | ---- |  | ------- |  | ---- | --------------- |  |  | ---- | 
|                               |  | France |      |  | Germany |  |      | The Netherlands | 
|                               |  |        |      |  |         |  |      |                 | 
|Discount rate                  |  |        | 4.5% |  |         |  | 5.5% |                 |  |  | 5.0% | 
|Expected return on plan assets |  |        | 4.6% |  |         |  | N/A  |                 |  |  | 4.6% | 

Discount rate depends on retirement benefit
schemes.

Main benefit schemes are described as
follows:

For Italian companies, retirement indemnities
paid to the employees are determined on the basis of the current
wage and professional years spent in the company. Actual benefit
obligations in Italy amount to
24.4 million.

For German companies, there are three different
benefit schemes described as follows:



| |   |                                                                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In the event of death, disability or retirement
    before 65 years of age, the company has to pay employees
    indemnities.                                           
|
| |  | For employees with over 10 years
    length of service within the company and who are over
    35 years of age, the company offers a supplementary
    retirement plan.
|
| |  | The company pays a bonus to employees with
    25 years seniority or more within the company a
    bonus. The indemnity is at least equal to one months
    salary.   

Actual benefit obligations in Germany amount to
52.4 million.

For Dutch companies, the calculation of
retirement indemnities is based on a supplementary defined
benefit retirement plan. Actual benefit obligations amount to
55.9 million.

In France, the Group is committed to paying
indemnities that are determined on the basis of the wage at
retirement date and professional years spent in the company.
Actual benefit obligations amount to
29 million.

F-45



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Note 27  Market related
exposure



|    |               
|--- | --------------
|(a) | Liquidity risk

Technip group financing is governed by the group
policy and implemented by the Finances and Control management
department.

Cash management is centralized at the head office
and coordinated through the financial centers located throughout
the Groups main operating subsidiaries.

In 2003, the EEIG Technip Eurocash was created in
1999 to act as a cash pooling entity for the Groups
various entities in respect of the various legislation and
regulations in force locally, and was transformed into an
SNC (general partnership). Thus, the EEIG Technip
Eurocash entered into cash pooling agreements with the
Groups main subsidiaries in order to pool the surplus
cash, to meet their needs by pooling the Groups financial
resources except when economic and financial conditions lead to
priority being given to a local debt. Technip Eurocashs
management committee is made up of representatives of Group
entities that are members of the SNC. This committee meets
several times per year.

At the end of January 2002, Technip took
advantage of beneficial market conditions to issue a bond loan
with an option for conversion into new shares and/or exchange
for existing shares (the OCEANE offer) for a nominal amount of
793.5 million
(see Note 22).

The repurchases of convertible bonds in 2002 and
in 2003 were mainly refinanced by a bank credit (expiration
December 30, 2007). The additional repurchase made in 2003
and those made since January 1, 2004, which have all been
financed by means of cash, may be refinanced by the use of
another credit facility confirmed since the fourth quarter of
2003 with maturity on December 31, 2008 (see
Notes 22(a) and 28(c)).

Technip has extended the average maturity of its
debt by replacing a debt payable semiannually from June 30,
2002 to December 31, 2006 by (i) a redeemable bond
issue at a single date as of January 1, 2007, in the
absence of conversion in consideration for a reduced financial
cost in cash, and (ii) partially in 2003 by means of a
credit facility which matures at the end of 2007. Technip also
has the possibility of extending the maturity of part of its
debt as of December 31, 2003 through the use of another
credit facility not drawn down as of December 31, 2003 and
maturing at the end of 2008.

As of December 31, 2003, the Group has
various unused financing sources that allow the Group to meet
its financial needs:

1/ Multi-currency credit lines amounting to
the equivalent of
330 million
granted by several banks to Technip Eurocash: these credit
lines maturity dates are in 2004, but they may be renewed
several months before their respective maturity dates.

2/ A
387 million
and U.S.$42 million
(33.3 million)
credit line granted to Technip by a pool of banks in October
2001. These amounts correspond to the balance of the credit
facility taken out during the public offer on Coflexip,
initially
1,265 million
and then U.S. Dollars 70 million after the various
payments that occurred since October 2001.

The financial characteristics of this credit line
are as follows:



| |   |                                                                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The available amount of
    387 million
    is reduced by
    35 million
    on December 31, 2004; the balance is reduced twice-yearly
    by four equal amounts as from June 30, 2005.
|
| |  | The available amount of U.S.$42 million
    continues to be reduced twice-yearly by equal amounts as of
    June 30 and December 31 of each year, until
    December 31, 2006.           
|
| |  | The credit line is not guaranteed by liens or
    mortgages given on the Groups assets.                                                                                                 

F-46



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

This credit line comes with the usual commitments
for such financing from Technips main entities. At
December 31, 2003, the debt position of the Group easily
meets the maximum ratios inserted in the banking
covenants. Technip estimates that the probability of
occurrence of a situation of anticipated maturity is low on the
basis on its projected cash flow situation.

3/ A bank credit amounting to
200 million
also usable in U.S.$ or in euros granted to Technip. Its
maturity date is December 31, 2008. The commitments are the
same as those mentioned for the previous credit line.

4/ The balance not used by Technip and its
eligible subsidiaries amounts to U.S.$209 million
(165.5 million)
of a total credit facility amount of U.S.$350 million taken
out for financing the purchase of the Aker Maritime ASA
Deepwater Division by Coflexip. This credit line is not
guaranteed by liens or mortgages given on the Groups
assets. It contains the usual commitments from Technip and from
the main entities eligible as borrowers. Technip estimates that
the probability of occurrence of a situation of anticipated
maturity is low on the basis on its projected cash flow
situation.

5/ Various unused credit facilities
amounting to
14.8 million.

The credit agreements with respect to these
various financing arrangements do not include an early payment
clause in case of deterioration of the borrowers rating.
As of December 31, 2003, bank credit lines confirmed and
available for the Group (excluding the credit facility of
200 million
mentioned above) amount to
931 million
of which
547 million
is available beyond December 31, 2004. The outstanding
commercial papers issued at the same date amount to
205 million
for terms of 1 to 3 months within the scope of the program
declared to the Banque de France for a maximum
amount of
600 million.

The long-term debt payment schedule is provided
in Note 22. The amounts due with respect to 2004 and
2005 amount to
8.6 million.



|    |              
|--- | -------------
|(b) | Currency risk

As indicated in Note 1(e),
Technip uses financial instruments to manage its exposure to
currency risks incurred in the normal course of its business.
The Group does not use financial instruments for trading or
speculative purposes. The exchange hedging contracts are divided
up between several counter parties who are selected after due
analysis.

The primary hedging instruments used to manage
Technips exposure to currency risks are as follows:

|                                                                       |  |                    |       |  |          |  |         |          |  |         |       |   |         |       |         |         |       |  |         |  |  |  |       | 
|---------------------------------------------------------------------- |  | ------------------ | ----- |  | -------- |  | ------- | -------- |  | ------- | ----- | - | ------- | ----- | ------- | ------- | ----- |  | ------- |  |  |  | ----- | 
|                                                                       |  |                    |       |  |          | 
|                                                                       |  | 12/31/03           |       |  | 12/31/02 |  |         | 12/31/01 | 
|                                                                       |  |                    |       |  |          |  |         |          | 
|                                                                       |  | Maturity           |       |  |          |  |         |          | 
|                                                                       |  | 2005               |       |  |          |  | Fair    |          |  | Nominal |       |   | Nominal |       |         | Nominal |      
|                                                                       |  | and after          |       |  | 2004     |  |         | value    |  |         | value |   |         | value |         |         | value | 
|                                                                       |  |                    |       |  |          |  |         |          |  |         |       |   |         |       |         |         |       | 
|                                                                       |  |                   
|                                                                       |  | In millions of EUR |      
|Buy currency, sell national currency (forwards
    and swaps)          |  |                    | 63.3  |  |          |  | 441.2   |          |  |         | (70.0 | ) |         |       | 504.4   |         |       |  | 545.9   |  |  |  | 98.3  | 
|Sell currency, buy national currency (forwards,
    swaps and options) |  |                    | 201.2 |  |          |  | 1,203.1 |          |  |         | 198.1 |   |         |       | 1,404.3 |         |       |  | 1,182.8 |  |  |  | 738.0 | 
|Sell/Buy foreign currencies                                            |  |                    | 84.8  |  |          |  | 214.2   |          |  |         | 17.7  |   |         |       | 299.0   |         |       |  | 171.2   |  |  |  | 90.5  | 
|Total                                                                  |  |                    | 349.2 |  |          |  | 1,858.5 |          |  |         | 145.8 |   |         |       | 2,207.7 |         |       |  | 1,899.9 |  |  |  | 926.8 | 

F-47



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                   
|--- | ------------------
|(c) | Interest rate risk

The table below presents the maturity of the
financial assets and the financial debts of Technip at
December 31, 2003. The schedule of maturity corresponds to
the interest rates revision date. It presents the amount of
interest rate swaps carried out for the debt.

|                          |  |                     |        |   |            |  |       |            |  |  |       |  |  |  |         | 
|------------------------- |  | ------------------- | ------ | - | ---------- |  | ----- | ---------- |  |  | ----- |  |  |  | ------- | 
|                          |  |                    
|                          |  | Technip Group       |       
|                          |  |                     |       
|                          |  | DD to               |        |   | One to     |  |       | Over       |  |  |      
|                          |  | one year            |        |   | five years |  |       | five years |  |  | Total | 
|                          |  |                     |        |   |            |  |       |            |  |  |       | 
|                          |  |                    
|                          |  | In millions of Euro |       
|Financial debt (a)        |  |                     | 406.8  |   |            |  | 722.7 |            |  |  |      |  |  |  | 1,129.5 | 
|Financial assets (b)      |  |                     | 892.4  |   |            |  |      |            |  |  |      |  |  |  | 892.4   | 
|Net (c)  (c) = (a) - (b) |  |                     | (485.6 | ) |            |  | 722.7 |            |  |  |      |  |  |  | 237.1   | 
|Off balance sheet*(d)     |  |                     | (86.3  | ) |            |  | 86.3  |            |  |  |      |  |  |  |        | 
|Net  (c) + (d)           |  |                     | (571.9 | ) |            |  | 809.0 |            |  |  |      |  |  |  | 237.1   | 



---



|    |                                                                                                  
|--- | -------------------------------------------------------------------------------------------------
|DD: | Day to day                                                                                       
|   
|*   | Operations modifying the nature of interest rate
    and/or the financial debt maturity schedule.

Analysis of the sensitivity to the change in
interest rates: In as much as the net indebtedness before and
after management within one year and variable rate is negative,
Technip is not exposed to interest rate risk on its debt.

Method of monitoring the interest rate risk:
Technip regularly analyzes its exposure to interest rate risk.
This activity is the responsibility of the Treasury Department
and the Deputy Financial Director in charge of the financing and
the treasury of the Group, who, in turn, reports to the Finances
and Control Chief Executive Officer. The Treasury Department at
head office consists of 13 people.

Interest rate hedging transactions and hedging
methods are described below.

The Group does not use financial instruments for
speculative purposes.

As of December 31, 2003, before recourse to
interest rate swaps, the outstanding fixed-rate debt amounts to
735.4 million,
including mainly the outstanding amount of
715.5 million
related to the bond loan.

In addition, the Group hedged U.S.$109 million
(86.3 million)
of its bank debt at a variable rate by swaps transforming them
into fixed-rate debt. The underlying debt with regard to these
hedging transactions relates to a part of the outstanding amount
of the credit facility used to finance the acquisition of the
Aker Maritime ASA Deepwater Division.

The total amount of the fixed-rate debt amounts
to
821.7 million
as of December 31, 2003.

Furthermore, at the end of 2003, the Group fixed
for the whole year 2004, an outstanding debt at variable rate
for U.S.$119 million
(94.2 million)
by Forward Rate Agreements  FRAs  entered
into by the Group.

The hedging transactions and Forward Rate
Agreements were entered into with bank counterparties that
satisfy the Groups criteria.



|    |            
|--- | -----------
|(d) | Credit risk

A significant portion of the Companys
activity is concentrated with a limited number of clients since
the worldwide market is dominated by a small number of major oil
and gas companies. The Company regularly performs credit risk
analyses before entering into new contracts and has set up
procedures for monitoring payments made by clients.

The Group has not observed significant payment
defaults by its clients in 2003 and to date.

F-48



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Note 28  Subsequent
events



|    |                                    
|--- | -----------------------------------
|(a) | Repurchase of convertible
    bonds

From January 1, 2004 to the beginning of
February 2004, Technip repurchased 419,742 additional
convertible bonds for an amount of
71.4 million,
thus increasing the number of the convertible bonds repurchased
since the issue to 878,536.

In accordance with the issued contract, these
repurchased convertible bonds were cancelled. The outstanding
amount of the convertible bond issue has thus decreased to
644.1 million
(compared to
715.5 million
as of December 31, 2003).

Following the repurchase and the additional
cancellation of 419,742 convertible bonds since January 1,
2004, the redemption premium amount was reduced to
76.1 million
(compared to
84.5 million
as of December 31, 2003).

In order to refinance the repurchases carried out
in 2003 and 2004 (which are not financed by the credit facility
granted in 2002), the Group has another bank credit usable in
U.S. Dollars or euros.



|    |                                              
|--- | ---------------------------------------------
|(b) | Repurchase by the Group of its own
    shares

In January 2004, Technip repurchased 15,028 of
its own shares.

In February 2004, Technip repurchased 257,920 of
its own shares following the automatic exercise of the call
option with regard to Technip shares, entered into previously in
order to cover the 1999 Stock Option Plan (purchase options), as
the price of the Technip share has exceeded the price above
which this call option is to be automatically exercised. These
shares should be resold to the people concerned by the 1999
Stock Option Plan before April 30, 2004, the maturity date
of this plan.



|    |                                            
|--- | -------------------------------------------
|(c) | Capital increase reserved for
    employees

The Technip Group announced in November 2003 the
implementation of an employee shareholding plan. This operation
which offers the choice between a traditional
formula and a formula referred to as leverage
concerned approximately 12,000 Group employees in France and in
foreign countries. The subscription price was set on
February 9, 2004 at an amount of
73.63. This
amount corresponds to 80% of the average of the first Technip
stock prices on the Euronext Paris Premier marché
during the 20 trading days before February 9, 2004. For the
employees of the American subsidiaries, the subscription price
amounts to 78.23
corresponding to 85% of the reference stock price
(92.04). The
date of use of this new capital increase was set at
January 1, 2004.

The number of issued shares will be about
331,780, which will lead to an equivalent capital increase for
Technip.



|          |                                                     
|--------- | ----------------------------------------------------
|Note 29  | Main consolidated companies and equity
    investees

|                                      |  |              |        |                   |           |  |                | 
|------------------------------------- |  | ------------ | ------ | ----------------- | --------- |  | -------------- | 
|                                      |  |              |        | December 31, 2003 |          
|Consolidated Companies                |  | City/Country |        |                   | % control | 
|                                      |  |              |        |                   |           | 
|Technip                               |  |              | France |                   |           |  | Parent company | 
|Technip France                        |  |              | France |                   |           |  | 100%           | 
|Technip Eurocash                      |  |              | France |                   |           |  | 100%           | 
|TPL  Technologie Progetti Lavori SpA |  |              | Italy  |                   |           |  | 100%           | 
|Technip Italy                         |  |              | Italy  |                   |           |  | 100%           | 
|TPG UK                                |  |              | UK     |                   |           |  | 100%           | 
|Technip TPS                           |  |              | France |                   |           |  | 100%           | 
|Technip Iberia                        |  |              | Spain  |                   |           |  | 100%           | 

F-49



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                                               |  |              |                      |                   |           |  |        | 
|---------------------------------------------- |  | ------------ | -------------------- | ----------------- | --------- |  | ------ | 
|                                               |  |              |                      | December 31, 2003 |          
|Consolidated Companies                         |  | City/Country |                      |                   | % control | 
|                                               |  |              |                      |                   |           | 
|S.C.I. CB3 Défense                             |  |              | France               |                   |           |  | 100%   | 
|Technip Overseas                               |  |              | Panama               |                   |           |  | 100%   | 
|Technip Benelux NV                             |  |              | Belgium              |                   |           |  | 100%   | 
|Technip Capital                                |  |              | Belgium              |                   |           |  | 100%   | 
|ABAY Engineering                               |  |              | Belgium              |                   |           |  | 100%   | 
|Technip Far East                               |  |              | Malaysia             |                   |           |  | 100%   | 
|Technip Anlagenbau Gmbh                        |  |              | Germany              |                   |           |  | 100%   | 
|Technip International AG                       |  |              | Switzerland          |                   |           |  | 100%   | 
|TTIL SNC                                       |  |              | France               |                   |           |  | 100%   | 
|Technip KT India                               |  |              | India                |                   |           |  | 100%   | 
|Technip Upstream Houston (ex. CBS Engineering) |  |              | USA                  |                   |           |  | 100%   | 
|Technip USA                                    |  |              | USA                  |                   |           |  | 100%   | 
|Technip Benelux BV                             |  |              | The Netherlands      |                   |           |  | 100%   | 
|Technip Americas                               |  |              | USA                  |                   |           |  | 100%   | 
|Technip Holding Benelux BV                     |  |              | The Netherlands      |                   |           |  | 100%   | 
|Technip KTI SpA                                |  |              | Italy                |                   |           |  | 100%   | 
|Technip Germany                                |  |              | Germany              |                   |           |  | 100%   | 
|EHR                                            |  |              | Germany              |                   |           |  | 100%   | 
|Technip Seiffert                               |  |              | Germany              |                   |           |  | 100%   | 
|IG SPA                                         |  |              | Italy                |                   |           |  | 100%   | 
|Technip Singapore                              |  |              | Singapore            |                   |           |  | 100%   | 
|Technip Middle East                            |  |              | United Arab Emirates |                   |           |  | 100%   | 
|Technip Engenharia                             |  |              | Brazil               |                   |           |  | 100%   | 
|Citex                                          |  |              | France               |                   |           |  | 100%   | 
|Eurobatch                                      |  |              | France               |                   |           |  | 100%   | 
|SNPE Ingénierie Défense                        |  |              | France               |                   |           |  | 100%   | 
|Seal Engineering                               |  |              | France               |                   |           |  | 100%   | 
|Technipnet BV                                  |  |              | The Netherlands      |                   |           |  | 100%   | 
|Technip Nouvelle-Calédonie                     |  |              | New Caledonia        |                   |           |  | 100%   | 
|Engineering Re                                 |  |              | Switzerland          |                   |           |  | 100%   | 
|EPC-Business BV                                |  |              | The Netherlands      |                   |           |  | 100%   | 
|Technip Bolivar                                |  |              | Venezuela            |                   |           |  | 100%   | 
|Technip Oil & Gas BV                           |  |              | The Netherlands      |                   |           |  | 100%   | 
|Technip Portugal                               |  |              | Portugal             |                   |           |  | 93.75% | 
|PT Technip Indonesia                           |  |              | Indonesia            |                   |           |  | 90%    | 
|Technip Biopharm                               |  |              | USA                  |                   |           |  | 85%    | 
|Technip CIS                                    |  |              | Russia               |                   |           |  | 70%    | 
|Technip Tianchen                               |  |              | China                |                   |           |  | 60%    | 
|TSS Dalia SNC                                  |  |              | France               |                   |           |  | 45%    | 
|Bechtel Technip Goro, LLC                      |  |              | USA                  |                   |           |  | 50%    | 
|BRI-Technip (Q-CHEM)                           |  |              | Qatar                |                   |           |  | 50%    | 
|CTME FZCO                                      |  |              | United Arab Emirates |                   |           |  | 50%    | 
|SPF-TKP Omifpro SNC/SP-TKP Fertilizer          |  |              | France /Italy        |                   |           |  | 50%    | 
|Technip India                                  |  |              | India                |                   |           |  | 50%    | 
|UCI FZC (Amenam)                               |  |              | United Arab Emirates |                   |           |  | 50%    | 
|Technip Engineering (B)                        |  |              | Brunei               |                   |           |  | 49%    | 
|Technip Engineering Thaïland                   |  |              | Thaïland             |                   |           |  | 49%    | 

F-50



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                                       |  |              |                            |                   |           |  |        | 
|-------------------------------------- |  | ------------ | -------------------------- | ----------------- | --------- |  | ------ | 
|                                       |  |              |                            | December 31, 2003 |          
|Consolidated Companies                 |  | City/Country |                            |                   | % control | 
|                                       |  |              |                            |                   |           | 
|Dalia Floater Angola                   |  |              | France                     |                   |           |  | 45%    | 
|Tipiel                                 |  |              | Colombia                   |                   |           |  | 44.10% | 
|TPG (M)                                |  |              | Malaysia                   |                   |           |  | 44.10% | 
|Technip Angola                         |  |              | Angola                     |                   |           |  | 60%    | 
|TP Saudi Arabia                        |  |              | Saudi Arabia               |                   |           |  | 40%    | 
|Consorcia Contrina SNC/CC(S)V          |  |              | France/ Venezuela          |                   |           |  | 34.40% | 
|Saibos Akogep SNC                      |  |              | France                     |                   |           |  | 30%    | 
|Madecos (TSKJ/LNG)                     |  |              | Portugal                   |                   |           |  | 25%    | 
|Nargan                                 |  |              | Iran                       |                   |           |  | 20%    | 
|Inversiones DIN S.A./DIT Harris        |  |              | Venezuela                  |                   |           |  | 20%    | 
|Technip Offshore International         |  |              | Paris, France              |                   |           |  | 100%   | 
|Flexifrance                            |  |              | Le Trait, France           |                   |           |  | 100%   | 
|Technip Offshore Nigeria Ltd.          |  |              | Lagos, Nigeria             |                   |           |  | 100%   | 
|Cofleximmo                             |  |              | Paris, France              |                   |           |  | 100%   | 
|Technip Marine                         |  |              | Paris, France              |                   |           |  | 100%   | 
|Angoflex S.A.                          |  |              | Paris, France              |                   |           |  | 100%   | 
|Angoflex Limitada                      |  |              | Lobito, Angola             |                   |           |  | 70%    | 
|Coflexip Développement                 |  |              | Paris, France              |                   |           |  | 100%   | 
|Technip Offshore N.V.                  |  |              | Amsterdam, The Netherlands |                   |           |  | 100%   | 
|Technip Offshore Contracting B.V.      |  |              | Amsterdam, The Netherlands |                   |           |  | 100%   | 
|Technip Offshore Holdings Ltd.         |  |              | Aberdeen, UK               |                   |           |  | 100%   | 
|Technip Offshore UK Ltd.               |  |              | Aberdeen, UK               |                   |           |  | 100%   | 
|Technip Ships One Ltd.                 |  |              | Aberdeen, UK               |                   |           |  | 100%   | 
|Technip Ships Three Ltd.               |  |              | Aberdeen, UK               |                   |           |  | 100%   | 
|Technip-Coflexip U.K. Holdings Ltd.    |  |              | Aberdeen, UK               |                   |           |  | 100%   | 
|Coflexip U.K. Ltd.                     |  |              | Aberdeen, UK               |                   |           |  | 100%   | 
|Perry Slingsby Systems Ltd.            |  |              | Aberdeen, UK               |                   |           |  | 100%   | 
|DUCO Ltd.                              |  |              | Newcastle, UK              |                   |           |  | 100%   | 
|Genesis Oil and Gas Consultants Ltd.   |  |              | Aberdeen, UK               |                   |           |  | 100%   | 
|Technip Offshore Norge AS              |  |              | Oslo, Norway               |                   |           |  | 100%   | 
|Technip-Coflexip Norge AS              |  |              | Oslo, Norway               |                   |           |  | 100%   | 
|Coflexip Stena Offshore AS             |  |              | Lysaker, Norway            |                   |           |  | 100%   | 
|Technip-Coflexip U.S.A. Holdings Inc.  |  |              | Houston, Texas, USA        |                   |           |  | 100%   | 
|Technip Offshore Contractors Inc.      |  |              | Houston, Texas, USA        |                   |           |  | 100%   | 
|R.J. Brown Deepwater, Inc.             |  |              | Houston, Texas, USA        |                   |           |  | 100%   | 
|DUCO Inc.                              |  |              | Houston, Texas, USA        |                   |           |  | 100%   | 
|Coflexip Maritime Inc.                 |  |              | Houston, Texas, USA        |                   |           |  | 100%   | 
|Technip Offshore Inc.                  |  |              | Houston, Texas, USA        |                   |           |  | 100%   | 
|Technip Offshore Mooring Inc.          |  |              | Houston, Texas, USA        |                   |           |  | 100%   | 
|Deep Oil Technology Inc.               |  |              | Houston, Texas, USA        |                   |           |  | 50%    | 
|Genesis Oil and Gas Consultants Inc.   |  |              | Houston, Texas, USA        |                   |           |  | 100%   | 
|Gulf Marine Fabricators Inc.           |  |              | Houston, Texas, USA        |                   |           |  | 100%   | 
|Spars International Inc.               |  |              | Houston, Texas, USA        |                   |           |  | 50%    | 
|Perry Slingsby Systems Inc.            |  |              | Jupiter, Florida, USA      |                   |           |  | 100%   | 
|Technip Offshore Canada Limited        |  |              | St Johns, Canada          |                   |           |  | 100%   | 
|Technip Offshore Jersey Ltd.           |  |              | Jersey                     |                   |           |  | 100%   | 
|Coflexip Stena Offshore Mauritius Ltd. |  |              | Mauritius                  |                   |           |  | 100%   | 

F-51



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                                                           |  |              |                        |                   |           |  |       | 
|---------------------------------------------------------- |  | ------------ | ---------------------- | ----------------- | --------- |  | ----- | 
|                                                           |  |              |                        | December 31, 2003 |          
|Consolidated Companies                                     |  | City/Country |                        |                   | % control | 
|                                                           |  |              |                        |                   |           | 
|Flex Service N.V.                                          |  |              | Dutch Antilles         |                   |           |  | 100%  | 
|Sunflex Offshore N.V.                                      |  |              | Dutch Antilles         |                   |           |  | 100%  | 
|Flexone N.V.                                               |  |              | Dutch Antilles         |                   |           |  | 100%  | 
|Brasflex Tubo Flexiveis Ltda.                              |  |              | Rio de Janeiro, Brazil |                   |           |  | 100%  | 
|Brasflex Overseas Inc.                                     |  |              | Virgin Islands         |                   |           |  | 100%  | 
|SeaOil Marine Services Inc.                                |  |              | Cayman, Islands        |                   |           |  | 100%  | 
|Flexibras Tubos Flexiveis Ltda.                            |  |              | Vitoria, Brazil        |                   |           |  | 100%  | 
|Technip Oceania Pty Ltd.                                   |  |              | Perth, Australia       |                   |           |  | 100%  | 
|Technip CSO Australia Pty Ltd.                             |  |              | Perth, Australia       |                   |           |  | 100%  | 
|Technip CSO Oceania Pty Ltd.                               |  |              | Perth, Australia       |                   |           |  | 100%  | 
|Technip CSO Oil and Gas Pty Ltd.                           |  |              | Perth, Australia       |                   |           |  | 100%  | 
|Genesis Oil and Gas Consultants Pty Ltd.                   |  |              | Perth, Australia       |                   |           |  | 100%  | 
|South East Asia Marine Engineering &
    Construction Ltd. |  |              | Calcutta, India        |                   |           |  | 78.2% | 
|Technip Rauma Offshore OY                                  |  |              | Finland                |                   |           |  | 100%  | 
|Mantyluoto Works OY                                        |  |              | Finland                |                   |           |  | 100%  | 
|PI Rauma OY                                                |  |              | Finland                |                   |           |  | 50%   | 
|Coflexip Singapore Pte                                     |  |              | Singapore              |                   |           |  | 100%  | 



|          |                                                                                               
|--------- | ----------------------------------------------------------------------------------------------
|Note 30  | Summary of differences between accounting
    principles followed by the Company and U.S. GAAP

The accompanying Consolidated Financial
Statements have been prepared in accordance with the accounting
principles described in Note 1 above
(French GAAP), which differ in certain
significant respects from those applicable in the United States
(U.S. GAAP). These differences relate mainly to
the following items, and the necessary adjustments are shown in
the tables set forth in Note 31.



|    |                          
|--- | -------------------------
|(a) | Contract costs accounting

As described in Note 1(k),
some General and Administrative costs are considered as contract
costs and are accumulated in Contracts-in-progress.

Under U.S. GAAP, General and Administrative
costs not directly related to contracts are to be recorded when
expensed. As a result of this difference, revenue and gross
margin recorded on contracts might differ.



|    |                   
|--- | ------------------
|(b) | Contract bid costs

Under French GAAP, contract bid costs
directly attributable to a future contract, the signature of
which can be reasonably expected, are capitalized. Such deferred
costs are transferred to the contract costs once the contract is
obtained or, if not obtained at year-end, depreciated according
to the probability of success assessed for each outstanding
offer.

Under U.S. GAAP, such costs have been
expensed as incurred.



|    |                                                                                    
|--- | -----------------------------------------------------------------------------------
|(c) | Foreign currency transactions on long-term
    contracts and derivative instruments

Under French GAAP, foreign currency transactions
on long-term contracts are recorded at the contract exchange
rate as defined in Note 1(r) resulting from
the foreign exchange instruments the Company entered into.

Under U.S. GAAP, foreign currency
transactions are recorded at the spot rate except in certain
cases for the portion of the transaction hedged with the
corresponding financial instrument, which is recorded at the
hedged rate.

F-52



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

As described in Note 1(f),
under French GAAP, monetary assets and liabilities
denominated in a foreign currency are translated into euro at
year-end exchange rates, except for
contracts-in-progress accounts and progress payments
received from long-term contract customers. The resulting
exchange gains and losses are recorded in income statement.

Under U.S. GAAP, exchange gains or losses
resulting from the adjustment of balances denominated in foreign
currency are included in net income, except if related to a
transaction denominated as a hedge. Since January 1, 2001,
such exchange gains and losses are all included in net income.

Under French GAAP, the fair values of the
derivatives instruments related to future transactions are not
recorded.

For U.S. GAAP purposes, the fair values of
the derivative instruments including certain derivative
instruments embedded are recorded in accordance with Statement
of Financial Accounting Standards No. 133, Accounting
for Derivative Instruments and Hedging Activities
(SFAS No. 133), subsequently amended, in the
balance sheet. Changes in these fair values are reported either
in shareholders equity or in the income statement, with
respect to the hedging accounting criteria as defined by SFAS
No. 133. Embedded derivatives as defined by SFAS
No. 133 are recorded at their fair values. Changes in their
fair values are reported in the income statement. The Company
recorded the effect of the adoption of SFAS No. 133 as a
cumulative effect of a change in accounting principle on
January 1, 2001. See Note 32(g) for
additional information on the impact of the adoption.



|    |                    
|--- | -------------------
|(d) | Pension Obligations

Under French GAAP, pension and other than
pension post-employment benefits are accrued in accordance with
the practices prevailing in each country.

Under U.S. GAAP, valuation methods and
assumptions have been harmonized and accounting recognition of
plans has been prepared as if U.S. GAAP had been
consistently applied.



|    |                         
|--- | ------------------------
|(e) | Stock-based compensation

Under French GAAP, common shares issued upon
the exercise of options granted to employees and directors are
recorded as an increase to share capital at the exercise price
on the exercise date. Technip holds treasury stock to settle
qualified employee deferred stock purchase plans. In accordance
with French GAAP, the Company did not record any
compensation expenses on stock-based plans.

Under U.S. GAAP, APB Opinion No. 25
(APB 25), Accounting for stock issued to
employees, defines conditions to classify such plans as
compensatory or non-compensatory. If a plan is deemed to be
compensatory, APB 25 requires that compensation arising
from such plan be measured based on the intrinsic value of the
shares granted or sold to employees. For fixed plans, the
compensation expense is calculated as the difference between the
fair value at the grant date and the employee exercise price.
Compensation expense for compensatory stock-based plans is
recognized over the vesting period. Disclosures in accordance
with APB 25, SFAS 123, and SFAS 148 are presented in
Note 32(e).



|    |                        
|--- | -----------------------
|(f) | Acquisition of KTI/MDEU

Under French GAAP, KTI/MDEU has been
consolidated since January 1, 1999 as the operational
control was transferred to Technip at this date.

Under U.S. GAAP, KTI/MDEU has been
consolidated since March 3, 1999, the date of the legal
transfer of the acquired shares. As a result, net income has
been adjusted to exclude net income and goodwill amortization
recorded for January and February.

F-53



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The change in the date of consolidation described
above did not result in a significant impact on the gross
goodwill as calculated on January 1, 1999, except for the
net income recognized over the period of January and February
1999, and except that, under U.S. GAAP, the Company further
identified acquired technology and know-how in the
purchase accounting.

Such allocation to acquired technology and
know-how has been evaluated to be
10 million,
mainly consisting of ethylene furnace technology, and is being
amortized over its expected useful life of 10 years.



|    |                             
|--- | ----------------------------
|(g) | Territoriality contingencies

As described in Note 1(p), the
Company uses assumptions to measure its obligations related to
territoriality contingencies. Due to the complexity of the
regulations in various country where it operates, the Company
identifies the contracts, which could be subject to such
uncertainty, and accrues an amount under French GAAP for
probable and estimable risks.

Under U.S. GAAP, such provisions would not
be recorded, as they could not meet all the criteria of SFAS
No. 5.



|    |                     
|--- | --------------------
|(h) | Consolidation method

Under French GAAP, certain non-significant
investments in which the Companys ownership is between 20%
and 50% are accounted for under the cost method. In addition,
certain non significant subsidiaries in which the Companys
ownership exceeds 50% are accounted for under the cost method or
under the equity method.

Under U.S. GAAP, such subsidiaries would
have been accounted for under the equity method or consolidated,
respectively. However, this difference does not result in any
significant adjustments to the Consolidated Financial Statements
for any periods reconciled to U.S. GAAP, as these
subsidiaries are not material.

In its consolidated financial statements, the
Company applies the pro-rata consolidation method to account for
its investments in joint ventures that the Company sometimes
forms with third parties to perform turnkey contracts. Under
U.S. GAAP, these investments would be accounted for using
the equity method or consolidated, depending on the percentage
of voting interest in the joint ventures. Summarized information
about the Companys pro-rata interest in the joint ventures
is provided in Note 32(a).



|    |                                                
|--- | -----------------------------------------------
|(i) | Redemption premium of the convertible
    bonds

Under French GAAP, the premium of the convertible
debenture loan is amortized ratably over the life of the loan.
Under U.S. GAAP, the Company should apply the effective
interest method to amortize such premium. For the years
presented, the difference between the two methods is not
material.



|    |                                                        
|--- | -------------------------------------------------------
|(j) | Coflexip gain on disposition of Cal Dive
    securities

After acquiring the interest in Coflexip, the
Company was unable to perform a complete valuation of the assets
and liabilities acquired. Accordingly, the Company could not
precisely identify the difference between the cost of its
investment in Coflexip and the net assets acquired, and
therefore elected under French GAAP to amortize this difference
over a 20-year period based on an overall analysis of goodwill
components at the date of acquisition. The Company recognized
the subsequent gain reported by Coflexip on the sale of Cal Dive
securities as a separate non-operating line as described in
Note 2(c).

For U.S. GAAP purposes, the Company reduced
its share of the gain recorded by Coflexip on its disposal of
Cal Dive securities. The amount recognized under U.S. GAAP
was the difference between the selling price and the fair value
of the Cal Dive securities at the date of the acquisition of the
29.7% interest in Coflexip. Goodwill amortization was reduced
accordingly.

F-54



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                                      
|--- | -------------------------------------
|(k) | Research and development
    expenses

Under French GAAP, as described in
Note 1(s), research and development costs are
to be deferred and subsequently amortized when technical
feasibility and return on investment can be demonstrated.

Under U.S. GAAP, all research and
development costs are to be expensed when incurred. This
difference in accounting under French GAAP and U.S. GAAP
did not result in any reconciling items.



|    |                                                  
|--- | -------------------------------------------------
|(l) | Rent expenses of Adria (Technip
    headquarters)

On March 1, 2003, Technip commenced an
operating lease agreement for the Adria Tower in La Défense
for 12 years. Based upon the terms of the lease agreement,
there was a free rent period until December 31, 2003. All
rental payments subsequent to the free rent period are to be
paid according to a contractual table.

Under French GAAP, the rental expense related to
this agreement is recognized based upon the contractual table.
As such, no rental expense was recorded in Technips
consolidated statements of operations for the year ended
December 31, 2003 for this lease.

Under U.S. GAAP, the Company recognizes the
related rental expense on a straight-line basis and records the
difference between the amounts charged to expense and the rent
paid as deferred rent.



|    |                      
|--- | ---------------------
|(m) | Goodwill amortization

Under French GAAP, the Company amortizes goodwill
arising from its acquisition over its estimated useful life, not
exceeding 20 years.

Prior to January 1, 2002, under
U.S. GAAP, goodwill resulting from business combinations
initiated after June 30, 2001 was no longer amortized.
Prior to January 1, 2002, goodwill resulting from business
combinations initiated before that date was amortized over its
estimated useful life consistent with French GAAP. On
January 1, 2002, the Company adopted Statement of Financial
Accounting Standards No. 142, Goodwill and Other
Intangible Assets (SFAS 142), for U.S. GAAP purposes.
As a result, goodwill is no longer subject to amortization for
U.S. GAAP purposes subsequent to the date of adoption. The
U.S. GAAP amounts have been adjusted to reverse the
amortization of goodwill recorded under French GAAP
(113.7 million
in 2003,
117.8 million
in 2002 and
20.5 million
in 2001).

As of January 1, 2002, the Company performed
the transitional impairment test under SFAS 142 and compared the
carrying value for each reporting unit to its fair value, which
was determined based on discounted expected future cash flows.
Upon completion of the transitional impairment test, the Company
determined that there was no impairment as of January 1,
2002, as the fair value of each reporting unit exceeded its
carrying amount.

As described in Note 1(g) and
in Note 2, the Group performed its annual impairment
test of goodwill by comparing the book value of the activity to
its fair value, based on estimated discounted cash flows
converted to a current value. Based on this test, no impairment
is required.

F-55



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

A summary of changes in the Companys
goodwill presented under French GAAP as of December 31,
2003, by business segment is as follows:

|             |  |                    |         |              |             |  |       |              |  |              |        |   |  |  |         | 
|------------ |  | ------------------ | ------- | ------------ | ----------- |  | ----- | ------------ |  | ------------ | ------ | - |  |  | ------- | 
|             |  |                   
|             |  | Goodwill           |        
|             |  |                    |        
|             |  |                    |         | Acquisitions |             |  |      
|             |  | January 1,         |         |              | &           |  |       |              |  | December 31, |       
|             |  | 2003               |         |              | Adjustments |  |       | Amortization |  |              | 2003   |  
|             |  |                    |         |              |             |  |       |              |  |              |        |  
|             |  |                   
|             |  | In millions of EUR |        
|CSO Floaters |  |                    | 404.4   |              |             |  | (41.7 | )            |  |              | (40.1  | ) |  |  | 322.6   | 
|CSO Surf     |  |                    | 1,975.1 |              |             |  | 35.3  |              |  |              | (62.7  | ) |  |  | 1,947.7 | 
|KTI/MDEU     |  |                    | 127.5   |              |             |  |      |              |  |              | (8.0   | ) |  |  | 119.5   | 
|Others       |  |                    | 21.8    |              |             |  |      |              |  |              | (2.9   | ) |  |  | 18.9    | 
|             |  |                    |         |              |             |  |       |              |  |              |        |  
|Total        |  |                    | 2,528.8 |              |             |  | (6.4  | )            |  |              | (113.7 | ) |  |  | 2,408.7 | 
|             |  |                    |         |              |             |  |       |              |  |              |        |  

The total amount allocated to intangible assets
subject to amortization and the estimated aggregate amortization
expense has been disclosed in Note 11. The Company
does not have any intangible assets with indefinite lives.



|    |                                                          
|--- | ---------------------------------------------------------
|(n) | Acquisition of minority interests of
    Coflexip in 2003

In 2003, under French GAAP, the newly issued
shares of Technip have been recorded based upon a 2003 valuation
of Coflexip, with the same basis of valuation as in 2001. Under
US GAAP, the share price was determined based upon the
market value of the Technip shares at the consummation of the
Technip/ Coflexip merger in July 2003.



|    |                                               
|--- | ----------------------------------------------
|(o) | Presentation of Consolidated Balance
    Sheet

The classification of certain items in and the
format of the Companys Consolidated Balance Sheets vary to
some extent from U.S. GAAP.



| |   |                                              
| | - | ---------------------------------------------
| |  | Advances received from customers on contracts

In accordance with French GAAP, Advances
received from customers on contracts are classified as a
liability. Under U.S. GAAP, advances received, determined
on a contract-by-contract basis, are shown as a reduction of
Contracts-in-Progress or other contracts related
asset accounts or, when the advances received exceed the total
of contract related asset accounts costs, as a liability. Such
requirement would reduce the contracts related asset accounts
and the Progress payments on contracts line items by
6,228.9,
4,716.8 million
and
5,910.9 million
as of December 31, 2003, 2002 and 2001, respectively.



| |   |                    
| | - | -------------------
| |  | Deferred tax assets

Under French GAAP, deferred tax assets which are
not likely to be realized in the future are not recorded as an
asset in the balance sheet. Under U.S. GAAP, such deferred
tax assets would be recorded and a valuation allowance would
reduce their net value to the portion likely to be realized in
the future.



| |   |                                                
| | - | -----------------------------------------------
| |  | Treasury shares reserved for stock option plans

Under French GAAP, the Group shares held by
subsidiaries reserved for stock option plans are presented as
marketable securities. Under U.S. GAAP, these shares are
presented as a reduction of stockholders equity.

F-56



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                                                          
|--- | ---------------------------------------------------------
|(p) | Presentation of Consolidated Statements of
    Operations



| |   |                                            
| | - | -------------------------------------------
| |  | Operating expenses/ revenues classification

Under French GAAP, certain items, such as
Restructuring Costs and Consulting Fees
have been recorded below the Operating income
section in the Consolidated Statements of Operations.

Under U.S. GAAP, these items would be
classified as operating expenses/ revenues.



| |   |                                            
| | - | -------------------------------------------
| |  | General and Administrative costs accounting

As described in Note 30(a),
some General and Administrative expenses are classified as
contract costs and have been consequently recorded within Cost
of Sales under French GAAP up to December 31, 2002.
Effective January 1, 2003, these expenses are directly
presented under the Selling, General and Administrative
expenses line item of the consolidated statement of
operations under French GAAP.

Under U.S. GAAP, General and Administrative
expenses not directly related to a contract are recorded when
incurred. As a consequence, the Selling, General and
Administrative expenses line item of the consolidated
statement of operation would not be modified for the year ended
December 31, 2003 and would be modified by
(31.4) million
and
(59.0) million
for the years ended December 31, 2002 and 2001,
respectively.



| |   |                                           
| | - | ------------------------------------------
| |  | Goodwill amortization for equity investees

Under French GAAP, goodwill amortization includes
amortization of acquisition goodwill for equity investees.

Under U.S. GAAP, prior to the adoption of
SFAS 142, goodwill amortization for equity investees would be
classified in Income of equity affiliates.



| |   |                               
| | - | ------------------------------
| |  | Equity in Earnings in Coflexip

As described in Note 2(c), the
Company classified in 2000 a portion of its net income in equity
affiliates in non-operating income while the other portion was
recorded in the line item Income from equity
affiliates in the consolidated statements of income.

Under U.S. GAAP, the non-operating portion
of the net income in equity affiliates discussed above would be
presented in Income from equity affiliates in the
consolidated statements of income.



| |   |                                        
| | - | ---------------------------------------
| |  | Financial result from ongoing contracts

As described in Note 1(t), the
Company, under French GAAP, records net interest income as
revenue in the period it is earned to reflect the financial
component of its contract revenues. Such net interest income
amounted to
9.9 million,
14.0 million
and
17.0 million
in the years ended December 31, 2003, 2002 and 2001,
respectively.

Under U.S. GAAP, such net interest income
would be deducted from Revenues and presented in a separate line
item within operating income. As these types of earnings are
factored into our contracts negotiations, it is appropriate
under U.S. GAAP to include these amounts in operating
income.



|    |                
|--- | ---------------
|(q) | Related parties

U.S. GAAP definition of related parties is
more extensive than in French GAAP. The Group designs and
manufactures installation for TOTAL Group pursuant to contracts
entered into at an arms-length basis.

Sales to TOTAL Group amounted to
87.8 million
in 2003. As of December 31, 2003, TOTAL Group owed
16.3 million
to the Group.

F-57



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                         
|--- | ------------------------
|(r) | Gross margin recognition

Under French GAAP, for long-term lump sum turnkey
projects, awarded prior to July 1, 2001, the recognition of
the gross margin for a given contract started when the
percentage-of-completion ratio reached 25%.

Under U.S. GAAP (SOP 81-1,
paragraph 25), for long-term lump sum turnkey projects,
gross margin for each contract is recognized when the projected
gross margin can be estimated more precisely. This analysis is
performed on a contract-by-contract basis, but historically,
this occurs when the percentage-of-completion ratio is
approximately 25%. For all periods presented, this difference is
not material.

For long-term lump sum turnkey projects started
after July 1, 2001, the French GAAP and U.S. GAAP
accounting is the same.

Note 31  Reconciliation
to U.S. GAAP

(a) Net
income

|                                                                                   |  |                         |       |   |                    |  |       |      |  |  |       |   |  |  |       |  
|---------------------------------------------------------------------------------- |  | ----------------------- | ----- | - | ------------------ |  | ----- | ---- |  |  | ----- | - |  |  | ----- | -
|                                                                                   |  |                        
|                                                                                   |  | Year ended December 31, |      
|                                                                                   |  |                         |      
|                                                                                   |  | 2003*                   |       |   | 2003               |  |       | 2002 |  |  | 2001  |  
|                                                                                   |  |                         |       |   |                    |  |       |      |  |  |       |  
|                                                                                   |  | In millions             |       |   |                   
|                                                                                   |  | of U.S.$                |       |   | In millions of EUR | 
|Net income (loss) as reported in the
    Consolidated Income Statements            |  |                         | (24.1 | ) |                    |  | (19.7 | )    |  |  | (29.4 | ) |  |  | 108.1 |  
|Contract costs accounting                                                          |  |                         | 0.6   |   |                    |  | 0.5   |      |  |  | (2.6  | ) |  |  | 2.6   |  
|Contract bid costs                                                                 |  |                         | 1.3   |   |                    |  | 1.1   |      |  |  | (2.6  | ) |  |  | 1.2   |  
|Foreign currency transactions                                                      |  |                         | (12.7 | ) |                    |  | (10.4 | )    |  |  | (15.6 | ) |  |  | (15.9 | )
|Derivative instruments                                                             |  |                         | (0.7  | ) |                    |  | (0.6  | )    |  |  | 18.2  |   |  |  |      |  
|Pension obligations                                                                |  |                         | (7.6  | ) |                    |  | (6.2  | )    |  |  | 3.2   |   |  |  | 0.9   |  
|Stock based compensation                                                           |  |                         | (0.1  | ) |                    |  | (0.1  | )    |  |  | (4.8  | ) |  |  | (9.4  | )
|Acquisition of KTI/MDEU                                                            |  |                         | (0.9  | ) |                    |  | (0.7  | )    |  |  | (0.7  | ) |  |  | (0.7  | )
|Coflexip gain on disposition of Cal Dive                                           |  |                         |      |   |                    |  |      |      |  |  |      |   |  |  | 1.4   |  
|Rent expenses of Adria                                                             |  |                         | (24.7 | ) |                    |  | (20.3 | )    |  |  |      |   |  |  |      |  
|Amortization of goodwill                                                           |  |                         | 138.9 |   |                    |  | 113.7 |      |  |  | 117.8 |   |  |  | 20.5  |  
|                                                                                   |  |                         |       |   |                    |  |       |      |  |  |       |  
|Total after U.S. GAAP adjustments before
    tax and SFAS No. 133 adoption effects |  |                         | 70.0  |   |                    |  | 77.1  |      |  |  | 83.5  |   |  |  | 108.7 |  
|Tax effects of the above adjustments                                               |  |                         | 15.0  |   |                    |  | 12.3  |      |  |  | (0.2  | ) |  |  | 4.4   |  
|Cumulative effect of SFAS No. 133 adoption,
    net of tax                         |  |                         |      |   |                    |  |      |      |  |  |      |   |  |  | 1.7   |  
|                                                                                   |  |                         |       |   |                    |  |       |      |  |  |       |  
|Net income under U.S. GAAP                                                         |  |                         | 85.0  |   |                    |  | 69.6  |      |  |  | 83.3  |   |  |  | 114.8 |  
|                                                                                   |  |                         |       |   |                    |  |       |      |  |  |       |  

F-58



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(b) Shareholders
equity

|                                                                                   |  |                         |         |   |                    |  |         |      |  |  |         |   |  |  |         |  
|---------------------------------------------------------------------------------- |  | ----------------------- | ------- | - | ------------------ |  | ------- | ---- |  |  | ------- | - |  |  | ------- | -
|                                                                                   |  |                        
|                                                                                   |  | Year ended December 31, |        
|                                                                                   |  |                         |        
|                                                                                   |  | 2003*                   |         |   | 2003               |  |         | 2002 |  |  | 2001    |  
|                                                                                   |  |                         |         |   |                    |  |         |      |  |  |         |  
|                                                                                   |  | In millions             |         |   |                   
|                                                                                   |  | of U.S.$                |         |   | In millions of EUR | 
|Shareholders equity as reported in the
    Consolidation Balance Sheets           |  |                         | 2,367.7 |   |                    |  | 1,938.0 |      |  |  | 2,026.3 |   |  |  | 2,214.2 |  
|Contract costs accounting                                                          |  |                         | (12.6   | ) |                    |  | (10.3   | )    |  |  | (10.8   | ) |  |  | (8.2    | )
|Contract bid costs                                                                 |  |                         | (25.0   | ) |                    |  | (20.5   | )    |  |  | (21.6   | ) |  |  | (19.0   | )
|Foreign currency transactions                                                      |  |                         | (52.7   | ) |                    |  | (43.1   | )    |  |  | (32.7   | ) |  |  | (17.1   | )
|Derivative instruments                                                             |  |                         | 114.3   |   |                    |  | 93.6    |      |  |  | (28.9   | ) |  |  |        |  
|Pension obligations                                                                |  |                         | (5.5    | ) |                    |  | (4.5    | )    |  |  | 1.7     |   |  |  | (1.5    | )
|Minimum liability adjustments                                                      |  |                         | (17.3   | ) |                    |  | (14.2   | )    |  |  | (9.7    | ) |  |  |        |  
|Acquisition of KTI/MDEU                                                            |  |                         | 4.3     |   |                    |  | 3.5     |      |  |  | 4.2     |   |  |  | 4.9     |  
|Territoriality contingencies                                                       |  |                         | 43.2    |   |                    |  | 35.4    |      |  |  | 35.4    |   |  |  | 35.4    |  
|Foreign currency translation adjustment                                            |  |                         |        |   |                    |  |        |      |  |  |        |   |  |  | (0.2    | )
|Coflexip gain on disposition of Cal Dive                                           |  |                         | (32.5   | ) |                    |  | (26.6   | )    |  |  | (26.6   | ) |  |  | (26.6   | )
|Treasury shares                                                                    |  |                         |        |   |                    |  |        |      |  |  | (3.2    | ) |  |  |        |  
|Rent expenses of Adria                                                             |  |                         | (24.7   | ) |                    |  | (20.3   | )    |  |  |        |   |  |  |        |  
|Amortization of goodwill                                                           |  |                         | 307.9   |   |                    |  | 252.0   |      |  |  | 138.3   |   |  |  | 20.5    |  
|Acquisition of minority interests of Coflexip in
    2003                          |  |                         | (30.5   | ) |                    |  | (25.0   | )    |  |  |        |   |  |  |        |  
|                                                                                   |  |                         |         |   |                    |  |         |      |  |  |         |  
|Total after U.S. GAAP adjustments before
    tax and SFAS No. 133 adoption effects |  |                         | 2,636.4 |   |                    |  | 2,158.0 |      |  |  | 2,072.4 |   |  |  | 2,202.4 |  
|Tax effects of the above adjustments                                               |  |                         | 7.7     |   |                    |  | 6.3     |      |  |  | 36.1    |   |  |  | 17.0    |  
|Cumulative effect of SFAS No. 133 adoption,
    net of tax                         |  |                         |        |   |                    |  |        |      |  |  |        |   |  |  | 8.9     |  
|                                                                                   |  |                         |         |   |                    |  |         |      |  |  |         |  
|Shareholders equity under
    U.S. GAAP                                           |  |                         | 2,644.1 |   |                    |  | 2,164.3 |      |  |  | 2,108.5 |   |  |  | 2,228.3 |  
|                                                                                   |  |                         |         |   |                    |  |         |      |  |  |         |  



---



|  |                                                                                                                                                                                                                                                                                                                                                    
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | For the convenience of the reader, the financial
    statements as of and for the year ended December 31, 2003
    have been translated into U.S. dollars (U.S.$) at the rate
    of 1.00 =
    U.S.$1.2217, the noon-buying rate for cable wire transfers fixed
    by the Federal Reserve Bank of New York on May 28, 2004.
    (See Note 1(a)).

The reconciliation of U.S. GAAP
shareholders equity from December 31, 2002 to
December 31, 2003 is as follows:

|                                                          |  |             |         |  
|--------------------------------------------------------- |  | ----------- | ------- | -
|                                                          |  | In millions |        
|                                                          |  | of EUR      |        
|                                                          |  |             |        
|U.S. GAAP shareholders equity at
    December 31, 2002   |  |             | 2,108.5 |  
|U.S. GAAP net income for 2003                             |  |             | 69.6    |  
|Minimum liability adjustments, net of tax                 |  |             | (3.0    | )
|Additional paid-in capital (stock based
    compensation) |  |             | 0.1     |  
|Dividends paid                                            |  |             | (77.3   | )
|Capital increase                                          |  |             | 48.5    |  
|Capital decrease                                          |  |             |        |  
|Foreign currency translation adjustment                   |  |             | (13.9   | )
|Treasury stock                                            |  |             | (6.5    | )
|Others                                                    |  |             | (16.2   | )
|Effect of SFAS No. 133, net of tax                        |  |             | 79.5    |  
|Acquisition of minority interests of Coflexip in
    2003 |  |             | (25.0   | )
|U.S. GAAP shareholders equity at
    December 31, 2003   |  |             | 2,164.3 |  

F-59



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(c) Net
sales

|                                        |  |                         |         |   |                    |  |         |      |  |  |         |   |  |  |         |  
|--------------------------------------- |  | ----------------------- | ------- | - | ------------------ |  | ------- | ---- |  |  | ------- | - |  |  | ------- | -
|                                        |  |                        
|                                        |  | Year ended December 31, |        
|                                        |  |                         |        
|                                        |  | 2003                    |         |   | 2003               |  |         | 2002 |  |  | 2001    |  
|                                        |  |                         |         |   |                    |  |         |      |  |  |         |  
|                                        |  |                         |         |   |                    |  |         |     
|                                        |  | In millions             |         |   |                   
|                                        |  | of U.S.$                |         |   | In millions of EUR | 
|Net sales under French GAAP             |  |                         | 5,755.6 |   |                    |  | 4,711.1 |      |  |  | 4,452.3 |   |  |  | 3,546.0 |  
|Contract costs accounting               |  |                         | 0.6     |   |                    |  | 0.5     |      |  |  | (2.6    | ) |  |  | 2.6     |  
|Contract bid costs                      |  |                         | 1.3     |   |                    |  | 1.1     |      |  |  | (10.8   | ) |  |  | 1.2     |  
|Foreign currency transactions           |  |                         | (38.5   | ) |                    |  | (31.5   | )    |  |  | 7.1     |   |  |  | 14.5    |  
|Financial result from ongoing contracts |  |                         | (12.1   | ) |                    |  | (9.9    | )    |  |  | (14.0   | ) |  |  | (17.0   | )
|                                        |  |                         |         |   |                    |  |         |      |  |  |         |  
|Net sales under U.S. GAAP               |  |                         | 5,706.9 |   |                    |  | 4,671.3 |      |  |  | 4,432.0 |   |  |  | 3,547.3 |  
|                                        |  |                         |         |   |                    |  |         |      |  |  |         |  

(d) Operating
income

|                                     |  |                         |       |   |                    |  |       |      |  |  |       |   |  |  |       |  
|------------------------------------ |  | ----------------------- | ----- | - | ------------------ |  | ----- | ---- |  |  | ----- | - |  |  | ----- | -
|                                     |  |                        
|                                     |  | Year ended December 31, |      
|                                     |  |                         |      
|                                     |  | 2003                    |       |   | 2003               |  |       | 2002 |  |  | 2001  |  
|                                     |  |                         |       |   |                    |  |       |      |  |  |       |  
|                                     |  |                         |       |   |                    |  |       |     
|                                     |  | In millions             |       |   |                   
|                                     |  | of U.S.$                |       |   | In millions of EUR | 
|Operating income under French GAAP   |  |                         | 278.1 |   |                    |  | 227.6 |      |  |  | 204.6 |   |  |  | 234.8 |  
|Contract costs accounting            |  |                         | 0.6   |   |                    |  | 0.5   |      |  |  | (2.6  | ) |  |  | 2.6   |  
|Contract bid costs                   |  |                         | 1.3   |   |                    |  | 1.1   |      |  |  | (2.6  | ) |  |  | 1.2   |  
|Pension obligations                  |  |                         | (7.6  | ) |                    |  | (6.2  | )    |  |  | 3.2   |   |  |  | 0.9   |  
|Stock based compensation             |  |                         | (0.1  | ) |                    |  | (0.1  | )    |  |  | (4.8  | ) |  |  | (9.4  | )
|Acquisition of KTI/MDEU              |  |                         | (0.9  | ) |                    |  | (0.7  | )    |  |  | (0.7  | ) |  |  | (0.7  | )
|Amortization of goodwill             |  |                         |      |   |                    |  |      |      |  |  |      |   |  |  | (24.0 | )
|Restructuring costs                  |  |                         | (8.7  | ) |                    |  | (7.1  | )    |  |  | (7.0  | ) |  |  | (3.1  | )
|Non-recurring loss on former project |  |                         |      |   |                    |  |      |      |  |  | (8.7  | ) |  |  |      |  
|Rent expenses of Adria               |  |                         | (24.7 | ) |                    |  | (20.3 | )    |  |  |      |   |  |  |      |  
|Other                                |  |                         | (1.5  | ) |                    |  | (1.2  | )    |  |  | (4.3  | ) |  |  | (3.6  | )
|                                     |  |                         |       |   |                    |  |       |      |  |  |       |  
|Operating income under
    U.S. GAAP |  |                         | 236.5 |   |                    |  | 193.6 |      |  |  | 177.1 |   |  |  | 198.7 |  
|                                     |  |                         |       |   |                    |  |       |      |  |  |       |  

F-60



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Note 32  Additional
information



|    |                                                                        
|--- | -----------------------------------------------------------------------
|(a) | Combined information concerning
    proportionate consolidated entities

In accordance with regulations of the
U.S. Securities and Exchange Commission with respect to the
use of the proportionate consolidation method, summarized
financial information about the Companys shares of assets,
liabilities, revenues, expenses and cash flows included in the
financial statements and related to joint-ventures jointly
controlled by all parties having an equity interest in the joint
venture has been prepared under French GAAP for the three years
ended December 31, 2003, 2002 and 2001, respectively.

|                                    |  |                         |         |   |      |  |         |      |  |  |         |  
|----------------------------------- |  | ----------------------- | ------- | - | ---- |  | ------- | ---- |  |  | ------- | -
|                                    |  |                        
|                                    |  | Year ended December 31, |        
|                                    |  |                         |        
|                                    |  | 2003                    |         |   | 2002 |  |         | 2001 | 
|                                    |  |                         |         |   |      |  |         |      | 
|                                    |  |                        
|                                    |  | In millions of EUR      |        
|Balance sheet data:                 |  |                         |         |   |      |  |         |      |  |  |         |  
|Non current assets                  |  |                         | 1.9     |   |      |  | 1.7     |      |  |  | 1.0     |  
|Current assets                      |  |                         | 1,095.7 |   |      |  | 1,172.2 |      |  |  | 2,010.9 |  
|Non current liabilities             |  |                         |        |   |      |  |        |      |  |  | 2.6     |  
|Current liabilities                 |  |                         | 1,097.6 |   |      |  | 1,173.7 |      |  |  | 2,009.3 |  
|Income statement data:              |  |                         |         |   |      |  |         |      |  |  |         |  
|Net Sales                           |  |                         | 445.3   |   |      |  | 428.7   |      |  |  | 559.8   |  
|Cost of sales                       |  |                         | (423.7  | ) |      |  | (391.9  | )    |  |  | (540.2  | )
|                                    |  |                         |         |   |      |  |         |      | 
|Gross Margin                        |  |                         | 21.6    |   |      |  | 36.8    |      |  |  | 19.6    |  
|Operating Income                    |  |                         | 20.3    |   |      |  | 34.8    |      |  |  | 19.5    |  
|Cash flow data:                     |  |                         |         |   |      |  |         |      |  |  |         |  
|Cash flow from operating activities |  |                         | 26.5    |   |      |  | 45.6    |      |  |  | (47.8   | )
|Cash flow from investing activities |  |                         | (0.1    | ) |      |  | 0.2     |      |  |  | (0.1    | )
|Cash flow from financing activities |  |                         |        |   |      |  |        |      |  |  | (1.4    | )



|    |                     
|--- | --------------------
|(b) | Comprehensive income

The following information is presented under
French GAAP.

|                                                         |  |                         |       |   |      |  |       |      |  |  |       | 
|-------------------------------------------------------- |  | ----------------------- | ----- | - | ---- |  | ----- | ---- |  |  | ----- | 
|                                                         |  |                        
|                                                         |  | Year ended December 31, |      
|                                                         |  |                         |      
|                                                         |  | 2003                    |       |   | 2002 |  |       | 2001 | 
|                                                         |  |                         |       |   |      |  |       |      | 
|                                                         |  |                        
|                                                         |  | In millions of EUR      |      
|Net income                                               |  |                         | (19.7 | ) |      |  | (29.4 | )    |  |  | 108.1 | 
|Other comprehensive income, net of tax:                  |  |                         |       |   |      |  |       |      |  |  |       | 
|Minimum liability adjustments, net of tax                |  |                         | (9.5  | ) |      |  | (6.3  | )    |  |  |      | 
|Changes in cumulative translation adjustment             |  |                         | (13.9 | ) |      |  | (1.1  | )    |  |  | 13.3  | 
|                                                         |  |                         |       |   |      |  |       |      | 
|Total Comprehensive income                               |  |                         | (43.1 | ) |      |  | (36.8 | )    |  |  | 121.4 | 
|                                                         |  |                         |       |   |      |  |       |      | 
|Accumulated other comprehensive income, end of
    year: |  |                         |       |   |      |  |       |      |  |  |       | 
|Cumulative translation adjustment                        |  |                         | (1.9  | ) |      |  | 12.0  |      |  |  | 13.1  | 

F-61



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                   
|--- | ------------------
|(c) | Earnings per share

Earnings per share, according to U.S. GAAP,
giving effect to the adjustments would be as follows:

|                                                                 |                                                            |                         |      |                      |      |  |      |      |  |  |      |      |  |  |       |      | 
|---------------------------------------------------------------- | ---------------------------------------------------------- | ----------------------- | ---- | -------------------- | ---- |  | ---- | ---- |  |  | ---- | ---- |  |  | ----- | ---- | 
|                                                                 |                                                            |                        
|                                                                 |                                                            | Year ended December 31, |     
|                                                                 |                                                            |                         |     
|                                                                 |                                                            | 2003                    |      |                      | 2003 |  |      | 2002 |  |  | 2001 |     
|                                                                 |                                                            |                         |      |                      |      |  |      |      |  |  |      |     
|                                                                 |                                                            | U.S.$                   |      |                      |     
|                                                                 |                                                            |                         |      | (In millions of EUR, |     
|                                                                 |                                                            |                         |      | except per share     |     
|                                                                 |                                                            |                         |      | amounts)             |     
|Net income before cumulative effect of SFAS
    No. 133 adoption |                                                            |                         | 85.0 |                      |      |  | 69.6 |      |  |  | 83.3 |      |  |  | 113.1 |     
|Net income                                                       |                                                            |                         | 85.0 |                      |      |  | 69.6 |      |  |  | 83.3 |      |  |  | 114.8 |     
|Basic earnings per share:                                        |                                                            |                         |      |                      |      |  |      |      |  |  |      |      |  |  |       |     
|                                                                 | Before cumulative effect of SFAS No. 133
    adoption      |                         |      | 3.63                 |      |  |      | 2.97 |  |  |      | 3.23 |  |  |       | 6.75 | 
|                                                                 | Cumulative effect of SFAS No. 133 adoption,
    net of tax |                         |      |                      |      |  |      |     |  |  |      |     |  |  |       | 0.10 | 
|                                                                 | Net income                                                 |                         |      | 3.63                 |      |  |      | 2.97 |  |  |      | 3.23 |  |  |       | 6.85 | 
|Diluted earnings per share:                                      |                                                            |                         |      |                      |      |  |      |      |  |  |      |      |  |  |       |     
|                                                                 | Before cumulative effect of SFAS No. 133
    adoption      |                         |      | 3.08                 |      |  |      | 2.52 |  |  |      | 2.75 |  |  |       | 6.67 | 
|                                                                 | Cumulative effect of SFAS No. 133 adoption,
    net of tax |                         |      |                      |      |  |      |     |  |  |      |     |  |  |       | 0.10 | 
|Net income                                                       |                                                            |                         | 3.08 |                      |      |  | 2.52 |      |  |  | 2.75 |      |  |  | 6.77  |     

Reconciliation of basic and diluted numbers of
shares used for the determination of earnings per share under
U.S. GAAP:

|                                         |  |                |        |   |      |  |        |      |  |  |        | 
|---------------------------------------- |  | -------------- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | 
|                                         |  | 2003           |        |   | 2002 |  |        | 2001 | 
|                                         |  |                |        |   |      |  |        |      | 
|                                         |  |               
|                                         |  | (In thousands) |       
|Basic number of shares under U.S. GAAP   |  |                | 23,432 |   |      |  | 25,823 |      |  |  | 16,770 | 
|OCEANE bonds dilutive effect             |  |                | 4,209  |   |      |  | 4,502  |      |  |  |       | 
|Stock options dilutive effect            |  |                | (*     | ) |      |  | (*     | )    |  |  | 192    | 
|                                         |  |                |        |   |      |  |        |      | 
|Diluted number of shares under U.S. GAAP |  |                | 27,641 |   |      |  | 30,325 |      |  |  | 16,962 | 
|                                         |  |                |        |   |      |  |        |      | 



---



|    |                                                              
|--- | -------------------------------------------------------------
|(*) | In 2002 and in 2003, the stock options are
    anti-dilutive.



|    |                                                      
|--- | -----------------------------------------------------
|(d) | Certain Investments in Debt and Equity
    Securities

The Company holds certain investments in debt and
equity securities (treasury bonds, mutual funds, certificates of
deposit) which are highly liquid and are classified in Cash and
Cash equivalents, changes in their fair value are recorded in
income (see Note 19).



|    |                         
|--- | ------------------------
|(e) | Stock based compensation

Stock
option plans:

Technip adopted several fixed stock option plans
that are settled with its own shares. Options are granted to
employees with a discount between 0% and 5% from the market
value of the shares at the grant date.

For plans adopted prior to January 1, 1998,
options that are exercised are settled through the issuance of
new shares. The options vest ratably over a two and half year
period and are valid up to five years from the date of grant.
For plans adopted after January 1, 1998, options that are
exercised are settled with Technip treasury shares. These
options vest over a three-year period and are valid up to five
years from the date of grant.

On December 14, 2000, the Company decided to
change the exercise and the vesting period of the 1998 and 1999
plans. The new exercise period and the new vesting period are,
respectively, five years and three years. A new measurement date
was determined as of December 14, 2000.

F-62



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Since December 14, 2000, all the options
granted by Technip vest over three years, with a maturity of six
years.

No compensation expense has been recorded in
connection with the stock options granted by Technip under
French GAAP. Under U.S. GAAP, the compensation cost
recorded by the Company is, respectively,
0.1 million,
0.9 million
and
9.4 million
for the years ended December 31, 2003, 2002 and 2001.

|                  |  |                  |           |                  |                |  |       | 
|----------------- |  | ---------------- | --------- | ---------------- | -------------- |  | ----- | 
|                  |  |                  |           | Weighted average |               
|                  |  | Number of shares |           |                  | exercise price | 
|                  |  |                  |           |                  |                | 
|                  |  |                  |           | (in EUR)         |               
|December 31, 2000 |  |                  | 1,212,385 |                  |                |  | 120.5 | 
|                  |  |                  |           |                  |                | 
|Granted           |  |                  |          |                  |                |  |      | 
|Exercised         |  |                  | (156,511  | )                |                |  | 89.3  | 
|Forfeited         |  |                  | (3,200    | )                |                |  | 143.2 | 
|                  |  |                  |           |                  |                | 
|December 31, 2001 |  |                  | 1,052,674 |                  |                |  | 125.1 | 
|                  |  |                  |           |                  |                | 
|Granted           |  |                  | 711,240   |                  |                |  | 72.0  | 
|Exercised         |  |                  | (9,100    | )                |                |  | 101.6 | 
|Forfeited         |  |                  | (58,000   | )                |                |  | 103.1 | 
|                  |  |                  |           |                  |                | 
|December 31, 2002 |  |                  | 1,696,814 |                  |                |  | 103.7 | 
|                  |  |                  |           |                  |                | 
|Granted           |  |                  | 5,200     |                  |                |  | 74.0  | 
|Exercised         |  |                  |          |                  |                |  |       | 
|Forfeited         |  |                  | (180,130  | )                |                |  | 103.6 | 
|December 31, 2003 |  |                  | 1,521,884 |                  |                |  | 103.6 | 
|                  |  |                  |           |                  |                | 

The options outstanding at December 31, 2003
expire in various years through 2009. In 2003, 98,000 options
have expired.

Information about the 1,521,884 stock options
outstanding at December 31, 2003 is summarized as follows:

|                            |  |          |       |                     |             |  |           |                  |  |  |             |  |  |  |         | 
|--------------------------- |  | -------- | ----- | ------------------- | ----------- |  | --------- | ---------------- |  |  | ----------- |  |  |  | ------- | 
|                            |  |          |       |                    
|                            |  |          |       | Options outstanding |            
|                            |  |          |       |                     |            
|                            |  | Exercise |       |                     | Number      |  |           | Weighted average |  |  | Number      | 
|                            |  | price    |       |                     | outstanding |  |           | remaining life   |  |  | exercisable | 
|                            |  |          |       |                     |             |  |           |                  |  |  |             | 
|                            |  | (in EUR) |       |                     |             |  |           |                  | 
|Plan 1999/2001 First Layer  |  |          | 95.9  |                     |             |  | 257,920   |                  |  |  | 0.3         |  |  |  | 257,920 | 
|Plan 1999/2001 Second Layer |  |          | 143.2 |                     |             |  | 588,254   |                  |  |  | 5.0         |  |  |  | 588,254 | 
|Plan 2002                   |  |          | 72.0  |                     |             |  | 670,510   |                  |  |  | 4.9         |  |  |  |        | 
|Plan 2003                   |  |          | 74.0  |                     |             |  | 5,200     |                  |  |  | 5.4         |  |  |  |        | 
|Plan 2002                   |  |          | 72.0  |                     |             |  | 670,510   |                  |  |  | 4.9         |  |  |  |        | 
|Total                       |  |          | 103.6 |                     |             |  | 1,521,884 |                  |  |  | 4.2         |  |  |  | 846,174 | 
|                            |  |          |       |                     |             |  |           |                  |  |  |             | 



| |                        
| | -----------------------
| | Coflexip Stock Options:

CSO adopted several options plans. Options are
granted to employee with a discount between 0% or 5%. Technip
maintains a conversion option for the employees in Technip
shares when these options are exercised. An additional
acquisition cost of
63.2 million
euros has been included in the purchase price of CSO
corresponding to the fair market value of the options at the
acquisition date. The compensation cost recognized in 2002
amounts to
0.7 million
and was 0 in
2003.

406,236 and 461,903 are, respectively,
outstanding options still unexercised as at December 31,
2003 and December 31, 2002. The average options life and
the average exercise price are 5.9 years and
119.3.

F-63



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Employee
Stock Purchase Plans:

Technip maintains savings plans that allow
substantially all full-time employees of Technip and its
subsidiaries to purchase shares of Technip. The shares are sold
to employees at a discount of 20% from the average market price
of Technip stock over the last 20 business days prior to the
date of authorization by the management committee. Shares
purchased by employees under these plans are subject to certain
restrictions over the sale or transfer of the shares by
employees.

Shares sold to employee stock purchase plans are
as follows:

|                                        |  |      |   |  |      |  |        |      |  |  |   | 
|--------------------------------------- |  | ---- | - |  | ---- |  | ------ | ---- |  |  | - | 
|                                        |  | 2003 |   |  | 2002 |  |        | 2001 | 
|                                        |  |      |   |  |      |  |        |      | 
|Number of shares                        |  |      |  |  |      |  | 98,717 |      |  |  |  | 
|Proceeds on sales (in millions of euro) |  |      |  |  |      |  | 10.1   |      |  |  |  | 
|Average cost of treasury sales          |  |      |  |  |      |  | 102.5  |      |  |  |  | 

In accordance with French GAAP, the Company has
not recorded compensation expense on stock purchase plans. Under
U.S. GAAP, the compensation cost recorded by the Company
for period ended December 31, 2002 is
3.2 million.
No compensation has been recorded for the period ended
December 31, 2001 and 2003.

Technip applies the intrinsic value method to
account for compensation cost associated with options and shares
granted to employees. Had compensation cost for stock options
awarded under these plans been determined based on the fair
value at the dates of grant consistent with the methodology of
SFAS No. 123, Technips net income and basic earnings
per share would have reflected the following pro forma amounts:

|                                     |                                                                                                                                                     |                         |      |      |      |  |      |       |   |  |       |       |  
|------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------- | ---- | ---- | ---- |  | ---- | ----- | - |  | ----- | ----- | -
|                                     |                                                                                                                                                     |                        
|                                     |                                                                                                                                                     | Year Ended December 31, |     
|                                     |                                                                                                                                                     |                         |     
|                                     |                                                                                                                                                     | 2003                    |      |      | 2002 |  |      | 2001  |  
|                                     |                                                                                                                                                     |                         |      |      |      |  |      |       |  
|                                     |                                                                                                                                                     |                        
|                                     |                                                                                                                                                     | (In millions of EUR)    |     
|Net Income under U.S. GAAP           |                                                                                                                                                     |                         | 69.6 |      |      |  | 83.3 |       |   |  | 114.8 |      
|                                     | As reported                                                                                                                                         |                         |      |      |      |  |      |       |   |  |       |       |  
|                                     | Include: Total stock based-employee compensation
    expense determined under APB25 for all awards net of related tax
    effects                   |                         |      | 0.1  |      |  |      | 4.8   |   |  |       | 9.4   |  
|                                     | Deduct: Total stock-based employee compensation
    expense determined under fair value based method for all awards,
    net of related tax effects |                         |      | (9.2 | )    |  |      | (14.6 | ) |  |       | (16.2 | )
|                                     |                                                                                                                                                     |                         |      |      |      |  |      |       |  
|                                     | Pro Forma                                                                                                                                           |                         |      | 60.5 |      |  |      | 73.5  |   |  |       | 108.0 |  
|                                     |                                                                                                                                                     |                         |      |      |      |  |      |       |  
|Basic earning per share              |                                                                                                                                                     |                         | 2.97 |      |      |  | 3.23 |       |   |  | 6.85  |      
|Diluted earning per share            |                                                                                                                                                     |                         | 2.52 |      |      |  | 2.75 |       |   |  | 6.77  |      
|Pro forma basic earnings per share   |                                                                                                                                                     |                         | 2.58 |      |      |  | 2.85 |       |   |  | 6.44  |      
|Pro forma diluted earnings per share |                                                                                                                                                     |                         | 2.19 |      |      |  | 2.42 |       |   |  | 6.37  |      

The fair value of Technips option grants is
estimated on the date of grant using the Binomial option pricing
model with the following assumptions for the grants:

|                      |  |                         |      |  |      |  |      |      |  |  |     | 
|--------------------- |  | ----------------------- | ---- |  | ---- |  | ---- | ---- |  |  | --- | 
|                      |  |                        
|                      |  | Year ended December 31, |     
|                      |  |                         |     
|                      |  | 2003                    |      |  | 2002 |  |      | 2001 | 
|                      |  |                         |      |  |      |  |      |      | 
|Expected life (years) |  |                         | 6.0  |  |      |  | 6.0  |      |  |  | N/A | 
|Interest rate         |  |                         | 3.8% |  |      |  | 3.8% |      |  |  | N/A | 
|Volatility            |  |                         | 35%  |  |      |  | 35%  |      |  |  | N/A | 
|Dividend yield        |  |                         | 2.1% |  |      |  | 2.1% |      |  |  | N/A | 

F-64



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                                                                             
|--- | ----------------------------------------------------------------------------
|(f) | Pension plan and other cost retirement
    benefits other than pension plans

In accordance with the laws and practices of each
country, Technip participates in employee benefit pension plans
offering death and disability, retirement and special
termination benefits. Those plans provide benefits of various
types from flat currency amounts per year of service to final
pay plans integrated with social security and multi-employer
plans.

For defined contribution plans, expenses
correspond to the contributions paid. For defined benefit
pension plans, accruals and prepaid expenses are determined
using the projected unit credit method. Accruals and prepaid
expenses are recorded in accordance with the prevailing
accounting practice in each country. In some cases, adjustments
to comply with Companys rules have been made. Special
termination benefits are recorded on an accrual basis at the
time the offer is accepted by the employees or their
representatives. Disclosures in accordance with SFAS
No. 132, are as follows:

|                                                   |  |                    |       |   |                |  |       |      |  |  |       |   |  |      |      |   |      |  |      |   |  |  |      |  
|-------------------------------------------------- |  | ------------------ | ----- | - | -------------- |  | ----- | ---- |  |  | ----- | - |  | ---- | ---- | - | ---- |  | ---- | - |  |  | ---- | -
|                                                   |  |                    |       |  
|                                                   |  | Pension Benefits   |       |   | Other Benefits | 
|                                                   |  |                    |       |   |                | 
|                                                   |  | 2003               |       |   | 2002           |  |       | 2001 |  |  | 2003  |   |  | 2002 |      |   | 2001 | 
|                                                   |  |                    |       |   |                |  |       |      |  |  |       |   |  |      |      |   |      | 
|                                                   |  |                   
|                                                   |  | In millions of EUR |      
|Change in benefit obligation:                      |  |                    |       |   |                |  |       |      |  |  |       |   |  |      |      |   |      |  |      |   |  |  |      |  
|Benefit Obligation at beginning of
    year        |  |                    | 160.1 |   |                |  | 130.5 |      |  |  | 115.3 |   |  |      | 0.8  |   |      |  | 0.9  |   |  |  | 1.0  |  
|Service cost                                       |  |                    | 8.3   |   |                |  | 6.9   |      |  |  | 6.7   |   |  |      |     |   |      |  |     |   |  |  |     |  
|Interest cost                                      |  |                    | 7.7   |   |                |  | 5.7   |      |  |  | 4.6   |   |  |      | 0.0  |   |      |  |     |   |  |  | 0.1  |  
|Plan participants contributions                    |  |                    | 0.1   |   |                |  |      |      |  |  |      |   |  |      |     |   |      |  |     |   |  |  |     |  
|Acquisitions/disposals                             |  |                    | 15.1  |   |                |  | (0.1  | )    |  |  | 8.8   |   |  |      |     |   |      |  |     |   |  |  |     |  
|Curtailments/Settlements                           |  |                    | 0.2   |   |                |  |      |      |  |  | 0.2   |   |  |      |     |   |      |  |     |   |  |  |     |  
|Actuarial (gain)                                   |  |                    | (2.0  | ) |                |  | 23.6  |      |  |  | (1.2  | ) |  |      |     |   |      |  |     |   |  |  |     |  
|Benefits paid                                      |  |                    | (4.5  | ) |                |  | (6.5  | )    |  |  | (3.9  | ) |  |      | (0.0 | ) |      |  | (0.1 | ) |  |  | (0.1 | )
|Other                                              |  |                    | (0.8  | ) |                |  |      |      |  |  |      |   |  |      |     |   |      |  |     |   |  |  |     |  
|                                                   |  |                    |       |   |                |  |       |      |  |  |       |   |  |      |      |   |      | 
|Benefit Obligation at end of year                  |  |                    | 184.2 |   |                |  | 160.1 |      |  |  | 130.5 |   |  |      | 0.8  |   |      |  | 0.8  |   |  |  | 0.9  |  
|Change in plan assets:                             |  |                    |       |   |                |  |       |      |  |  |       |   |  |      |      |   |      |  |      |   |  |  |      |  
|Fair value of plan assets at beginning
    of year |  |                    | 44.8  |   |                |  | 45.4  |      |  |  | 48.2  |   |  |      |     |   |      |  |     |   |  |  |     |  
|Actual return on plan assets                       |  |                    | 4.5   |   |                |  | (1.1  | )    |  |  | (2.2  | ) |  |      |     |   |      |  |     |   |  |  |     |  
|Group contribution                                 |  |                    | 2.9   |   |                |  | 2.0   |      |  |  | 0.3   |   |  |      |     |   |      |  |     |   |  |  |     |  
|Plan participants contributions                    |  |                    | 0.1   |   |                |  |      |      |  |  |      |   |  |      |     |   |      |  |     |   |  |  |     |  
|Benefits paid                                      |  |                    | (1.9  | ) |                |  | (1.5  | )    |  |  | (0.9  | ) |  |      |     |   |      |  |     |   |  |  |     |  
|Acquisitions and disposals                         |  |                    | 9.1   |   |                |  |      |      |  |  |      |   |  |      |     |   |      |  |     |   |  |  |     |  
|Other                                              |  |                    | (0.4  | ) |                |  |      |      |  |  |      |   |  |      |     |   |      |  |     |   |  |  |     |  
|                                                   |  |                    |       |   |                |  |       |      |  |  |       |   |  |      |      |   |      | 
|Fair value of plan assets at end of
    year       |  |                    | 59.3  |   |                |  | 44.8  |      |  |  | 45.4  |   |  |      |     |   |      |  |     |   |  |  |     |  
|Funded status of the plan                          |  |                    | 124.9 |   |                |  | 115.3 |      |  |  | 85.1  |   |  |      | 0.8  |   |      |  | 0.8  |   |  |  | 0.9  |  
|Unrecognized actuarial (gains) or losses           |  |                    | 32.3  |   |                |  | (31.4 | )    |  |  | (4.3  | ) |  |      |     |   |      |  |     |   |  |  |     |  
|                                                   |  |                    |       |   |                |  |       |      |  |  |       |   |  |      |      |   |      | 
|Accrued (prepaid) benefit cost                     |  |                    | 92.6  |   |                |  | 83.9  |      |  |  | 80.8  |   |  |      | 0.8  |   |      |  | 0.8  |   |  |  | 0.9  |  
|                                                   |  |                    |       |   |                |  |       |      |  |  |       |   |  |      |      |   |      | 

The projected benefit obligation, accumulated
benefit obligation and fair value of plan assets for the pension
plan with accumulated benefit obligation in excess of plan
assets are as follows:

|                                                                |  |      |       |  |      |  |       |      |  |  |      | 
|--------------------------------------------------------------- |  | ---- | ----- |  | ---- |  | ----- | ---- |  |  | ---- | 
|                                                                |  | 2003 |       |  | 2002 |  |       | 2001 | 
|                                                                |  |      |       |  |      |  |       |      | 
|Projected Benefit Obligation                                    |  |      | 128.3 |  |      |  | 104.3 |      |  |  | 86.2 | 
|Accumulated Benefit Obligation                                  |  |      | 108.2 |  |      |  | 93.1  |      |  |  | 74.1 | 
|Fair Value of Plan Assets with ABO in excess of
    Plan Assets |  |      | 13.3  |  |      |  | 4.0   |      |  |  | 41.0 | 

F-65



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                                        |  |                    |      |   |                |  |      |      |  |  |      |   |  |      |     |  |      |  |   |  |  |  |     | 
|--------------------------------------- |  | ------------------ | ---- | - | -------------- |  | ---- | ---- |  |  | ---- | - |  | ---- | --- |  | ---- |  | - |  |  |  | --- | 
|                                        |  |                    |      |  
|                                        |  | Pension Benefits   |      |   | Other Benefits | 
|                                        |  |                    |      |   |                | 
|                                        |  | 2003               |      |   | 2002           |  |      | 2001 |  |  | 2003 |   |  | 2002 |     |  | 2001 | 
|                                        |  |                    |      |   |                |  |      |      |  |  |      |   |  |      |     |  |      | 
|                                        |  |                   
|                                        |  | In millions of EUR |     
|Annual cost under U.S. GAAP:            |  |                    |      |   |                |  |      |      |  |  |      |   |  |      |     |  |      |  |   |  |  |  |     | 
|Service cost                            |  |                    | 8.3  |   |                |  | 6.9  |      |  |  | 6.7  |   |  |      |    |  |      |  |  |  |  |  |    | 
|Expected interest cost                  |  |                    | 7.7  |   |                |  | 5.7  |      |  |  | 4.6  |   |  |      | 0.0 |  |      |  |  |  |  |  | 0.1 | 
|Expected return on plan assets          |  |                    | (4.7 | ) |                |  | (2.7 | )    |  |  | (3.5 | ) |  |      |    |  |      |  |  |  |  |  |    | 
|Amortization of actuarial gain and loss |  |                    | 2.5  |   |                |  | 0.3  |      |  |  |     |   |  |      |    |  |      |  |  |  |  |  |    | 
|Effects of settlements/ curtailments    |  |                    | 0.2  |   |                |  |     |      |  |  |     |   |  |      |    |  |      |  |  |  |  |  |    | 
|                                        |  |                    |      |   |                |  |      |      |  |  |      |   |  |      |     |  |      | 
|Net periodic benefit cost               |  |                    | 14.0 |   |                |  | 10.2 |      |  |  | 8.0  |   |  |      | 0.0 |  |      |  |  |  |  |  | 0.1 | 
|                                        |  |                    |      |   |                |  |      |      |  |  |      |   |  |      |     |  |      | 

Annual cost under French GAAP for pension
benefits plans are as follows:

|                               |  |                    |     |  |      |  |     |      |  |  |      |  |  |      |     |  |      |  |     |  |  |  |     | 
|------------------------------ |  | ------------------ | --- |  | ---- |  | --- | ---- |  |  | ---- |  |  | ---- | --- |  | ---- |  | --- |  |  |  | --- | 
|                               |  | 2003               |     |  | 2002 |  |     | 2001 |  |  | 2003 |  |  | 2002 |     |  | 2001 | 
|                               |  |                    |     |  |      |  |     |      |  |  |      |  |  |      |     |  |      | 
|                               |  |                   
|                               |  | In millions of EUR |    
|Annual cost under French GAAP: |  |                    | 5.1 |  |      |  | 5.6 |      |  |  | 3.4  |  |  |      | 0.0 |  |      |  | 0.1 |  |  |  | 0.1 | 

The difference between these amounts and the
annual costs under U.S. GAAP stems from differences in the
timing of amortization of the initial transition liability and
of actuarial gains and losses and from the absence of
recognition of excess funding by certain companies.

Health care costs are assumed to increase by 1.3%
in 2003 and later, 1.3% in 2002 and 1.3% in 2001. The effect of
a one-percentage point increase and one-percentage point
decrease in the assumed health care cost trend rates on the
aggregate of the service and interest cost components of net
periodic postretirement health care benefit cost and on the
accumulated postretirement benefit obligation for health care
benefits is not significant.

Amounts recognized in the statement of financial
position:

|                                              |  |                    |       |   |                |  |      |      |  |  |      |   |  |      |     |  |      |  |     |  |  |  |     | 
|--------------------------------------------- |  | ------------------ | ----- | - | -------------- |  | ---- | ---- |  |  | ---- | - |  | ---- | --- |  | ---- |  | --- |  |  |  | --- | 
|                                              |  |                    |       |  
|                                              |  | Pension Benefits   |       |   | Other Benefits | 
|                                              |  |                    |       |   |                | 
|                                              |  | 2003               |       |   | 2002           |  |      | 2001 |  |  | 2003 |   |  | 2002 |     |  | 2001 | 
|                                              |  |                    |       |   |                |  |      |      |  |  |      |   |  |      |     |  |      | 
|                                              |  |                   
|                                              |  | In millions of EUR |      
|Accrued benefit liability (including MLA)     |  |                    | 113.7 |   |                |  | 99.9 |      |  |  | 86.5 |   |  |      | 0.8 |  |      |  | 0.9 |  |  |  | 1.0 | 
|Prepaid benefit cost                          |  |                    | (6.9  | ) |                |  | (6.3 | )    |  |  | (5.7 | ) |  |      |    |  |      |  |    |  |  |  |    | 
|Minimum liability adjustment                  |  |                    | (14.2 | ) |                |  | (9.7 | )    |  |  |     |   |  |      |    |  |      |  |    |  |  |  |    | 
|                                              |  |                    |       |   |                |  |      |      |  |  |      |   |  |      |     |  |      | 
|Net amount recognised for under
    U.S. GAAP |  |                    | 92.6  |   |                |  | 83.9 |      |  |  | 80.8 |   |  |      | 0.8 |  |      |  | 0.9 |  |  |  | 1.0 | 
|                                              |  |                    |       |   |                |  |      |      |  |  |      |   |  |      |     |  |      | 

The net accruals included as of December 31,
2003, 2002 and 2001 in the accompanying consolidated balance
sheets can be compared with balances determined under
U.S. GAAP as follows:

|                                                                                                                                                |  |                    |       |   |                |  |      |      |  |  |      |   |  |      |     |  |      |  |     |  |  |  |     | 
|----------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | ----- | - | -------------- |  | ---- | ---- |  |  | ---- | - |  | ---- | --- |  | ---- |  | --- |  |  |  | --- | 
|                                                                                                                                                |  |                    |       |  
|                                                                                                                                                |  | Pension Benefits   |       |   | Other Benefits | 
|                                                                                                                                                |  |                    |       |   |                | 
|                                                                                                                                                |  | 2003               |       |   | 2002           |  |      | 2001 |  |  | 2003 |   |  | 2002 |     |  | 2001 | 
|                                                                                                                                                |  |                    |       |   |                |  |      |      |  |  |      |   |  |      |     |  |      | 
|                                                                                                                                                |  |                   
|                                                                                                                                                |  | In millions of EUR |      
|Net amount accrued for under U.S. GAAP
    (before prepaid costs)                                                                               |  |                    | 113.7 |   |                |  | 99.9 |      |  |  | 86.5 |   |  |      | 0.8 |  |      |  | 0.9 |  |  |  | 1.0 | 
|Excess funding of plans recognized in income only
    when paid back to the Company                                                             |  |                    | (6.9  | ) |                |  | (6.3 | )    |  |  | (5.7 | ) |  |      |    |  |      |  |    |  |  |  |    | 
|Impact of transition obligation of prior service
    cost and of actuarial gains recognized with a different timing
    under local regulations |  |                    | (4.1  | ) |                |  | 1.6  |      |  |  | (1.7 | ) |  |      |    |  |      |  |    |  |  |  |    | 
|Minimum Liabilities Adjustment                                                                                                                  |  |                    | (14.2 | ) |                |  | (9.7 | )    |  |  |     |   |  |      |    |  |      |  |    |  |  |  |    | 
|                                                                                                                                                |  |                    |       |   |                |  |      |      |  |  |      |   |  |      |     |  |      | 
|Net amount accrued for in consolidated
    financial statements                                                                                 |  |                    | 88.5  |   |                |  | 85.5 |      |  |  | 79.1 |   |  |      | 0.8 |  |      |  | 0.9 |  |  |  | 1.0 | 
|                                                                                                                                                |  |                    |       |   |                |  |      |      |  |  |      |   |  |      |     |  |      | 

F-66



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                       
|--- | ----------------------
|(g) | Derivative instruments

As described in Note 30(c),
Technip adopted SFAS No. 133 beginning January 1, 2001
for purposes of the U.S. GAAP reconciliation. SFAS
No. 133 requires that all derivative instruments be
recorded at fair value on the balance sheet and establishes
criteria for designation and effectiveness of derivative
transactions for which hedge accounting is applied. Technip
assesses the initial and ongoing effectiveness of its hedging
relationships in accordance with its documented procedure.

As a consequence of the international
Groups business activities, most of its commercial
transactions are denominated in non-euro currencies. Technip
enters into derivative financial instruments to manage its
exposure to fluctuations in foreign currency exchange rates. All
derivative instruments held by Technip are economic hedge of
existing or anticipated commercial transactions. For more
information on Technips derivatives strategy, see
Item 11.

According to SFAS No. 133, all derivative
instruments (including certain derivative instruments embedded
in other contracts), whether designated in hedging relationships
with the hedged underlying transaction or not, are recorded in
the balance sheet at fair value and changes in fair value are
recognized in net income, unless the derivative instrument
qualifies as a hedge of future cash flows. For derivatives
qualifying as hedges of future cash flows, the effective portion
of changes in fair value is recorded temporarily in
shareholders equity (Other Comprehensive
Income or OCI), then recognized in the income
statement along with the related effect of the hedged
transaction. Any ineffective portion of the hedge is recorded in
the income statement as it occurs. For derivatives qualifying as
fair value hedges, changes in fair value of both the derivative
and the hedged item are recognized in net income.

The adoption of SFAS No. 133 as of
January 1, 2001 had a cumulative effect on OCI and net
income of
7.2 million
and
1.7 million,
respectively, net of a
(4.0) million
and a
(1.0) million
tax effect. Recognition of derivatives in accordance with the
description above resulted in an increase (decrease) to OCI and
net income of
(7.7) million
and
(5.9) million
in 2001, respectively, net of a
4.3 million
and a
3.3 million
tax effect. Adoption of SFAS No. 133 in 2001 resulted in a
decrease of shareholders equity by
(4.7) million.



|    |         
|--- | --------
|(h) | Goodwill

As discussed in Note 30(m),
SFAS 142 was effective for the Company as of
January 1, 2002 and for purchase business combinations
consummated after June 30, 2001. The Company performed its
transitional and annual test and the Company determined that
there was no impairment.



|    |                                              
|--- | ---------------------------------------------
|(i) | Recently issued accounting
    pronouncements

In January 2003, Financial Accounting Standards
Board (FASB) issued FASB Interpretation No. 46,
Consolidation of Variable Interest Entities, an
Interpretation of Accounting Research Bulletin (ARB)
No. 51. This interpretation provides guidance on how to
apply the controlling financial interest criteria in ARB 51
to variable interest entities. Given the Interpretations
complexity, the FASB issued several FASB Staff Positions (FSPs)
throughout 2003 to clarify the Boards intent on certain of
the Interpretations provisions, and in December 2003, the
Board revised the Interpretation (FIN 46-R) to address
certain technical corrections and to clarify many of the
implementation issues that had arisen. Variable interest
entities (VIEs) include many entities that have previously been
referred to as special-purpose entities (SPEs), but also may
include many other entities not previously thought of as SPEs. A
variable interest entity is an entity that either does not have
equity investors with voting rights or has equity investors that
do not provide sufficient financial resources for the entity to
support its activities. Interpretation 46 requires a company to
consolidate a variable interest entity if the (a) company
is subject to a majority of the risk of loss from the variable
interest entitys activities, (b) is entitled to
receive a majority of the entitys residual returns or
(c), both. The application of this interpretation is
required at December 31, 2003 for entities created after
February 1, 2003 and at December 31, 2004 for other
entities. The

F-67



---



##### Table of Contents



TECHNIP


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

adoption of this Interpretation for entities
created after February 1, 2003 did not have an impact on
the Companys results of operations, financial position or
cash flows. The Company is still assessing the impact of this
Interpretation on the Companys results of operations,
financial position and cash flows for entities created before
February 1, 2003.

In November 2002, the Emerging Issues Task Force
of the Financial Accounting Standards Board issued Emerging
Issues Task Force No. 00-21 (EITF 00-21), Accounting
for Revenue Arrangements with Multiple Deliverables, which was
amended in January 2003 and requires that (a) revenue
should be recognized separately for separate units of accounting
in multiple deliverables arrangements, (b) revenue for a
separate unit of accounting should be recognized only when the
arrangement consideration is reliably measurable and the
earnings process is substantially complete, and
(c) consideration should be allocated among the separate
units of accounting based on their relative fair value.
EITF 00-21 is applicable to transactions entered into in
fiscal periods beginning after June 15, 2003. The Company
is currently assessing the impact on its financial position,
results of operations and cash-flows of the adoption of
EITF 00-21.

Within the framework of the European Unions
adoption of international accounting standards, all European
companies listed on regulated exchanges must prepare as from
January 1, 2005 their consolidated financial statements in
accordance with IFRS standards. Currently, all of the IFRS
accounting standards have not been finalized, nor is it clear
whether all such standards will have been released and endorsed
by the European Commission by the 2005 deadline. The eventual
transition from French GAAP to IFRS will be made in compliance
with IFRS 1, First-Time Adoption of IFRS, which provides
guidance on retroactive application and outlines certain
exemptions and exceptions.

Based on proposed SEC regulations regarding the
applicable periods to be presented under a comprehensive set of
generally accepted accounting principles, the Company currently
anticipates adopting January 1, 2004 as its transition date
to IFRS, and thus to present restated 2004 and 2005 IFRS
financial statements in its annual report on Form 20-F for
the year ending December 31, 2005. However, based on
currently applicable SEC regulations (for which the foregoing
proposal would amend), the Company would be required to adopt
January 1, 2003 as its transition date.

In the meantime, the Company will continue to use
French GAAP for its primary financial statements. The Company is
currently assessing the impact, which could be significant, that
the application of IFRS will have on the Companys
consolidated financial statements. Once all IFRS have been
issued and endorsed by the European Commission and the
transition date to IFRS is definitive, the Company will disclose
as soon as practicable the impact. Upon adoption of IFRS, the
Company will disclose in its primary financial statements a
reconciliation between French GAAP and IFRS (including narrative
and net income and shareholders equity reconciliation for
the applicable periods presented), as well as additional
reconciliation disclosures between IFRS and U.S. GAAP.

F-68



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP

CONSOLIDATED BALANCE SHEET

|                                                                              |  |                        |           |  
|----------------------------------------------------------------------------- |  | ---------------------- | --------- | -
|                                                                              |  | December 31,           |          
|                                                                              |  | 2001                   |          
|                                                                              |  | Unaudited              |          
|                                                                              |  |                        |          
|                                                                              |  | (amounts in            |          
|                                                                              |  | thousands of EUR,      |          
|                                                                              |  | except per Share data) |          
|ASSETS                                                                        |  |                        |           |  
|Current assets                                                                |  |                        |           |  
|Cash and cash equivalents                                                     |  |                        | 213,181   |  
|Trade accounts receivable (Note 3)                                            |  |                        | 365,124   |  
|Contracts-in-progress (Note 4)                                                |  |                        | 104,280   |  
|Inventories (Note 5)                                                          |  |                        | 102,859   |  
|Deferred income taxes (Note 11)                                               |  |                        | 39,641    |  
|Prepaid expenses and other current assets                                     |  |                        | 86,377    |  
|                                                                              |  |                        |          
|Total current assets                                                          |  |                        | 911,462   |  
|                                                                              |  |                        |          
|Investments in and advances to companies under
    the equity method (Note 6) |  |                        |          |  
|Other long-term investments and receivables                                   |  |                        | 17,019    |  
|                                                                              |  |                        |          
|Investments and other assets                                                  |  |                        | 17,019    |  
|                                                                              |  |                        |          
|Property, plant, vessels and equipment
    (Note 7)                           |  |                        | 689,129   |  
|                                                                              |  |                        |          
|Intangible assets (Note 8)                                                    |  |                        | 517,400   |  
|                                                                              |  |                        |          
|TOTAL ASSETS                                                                  |  |                        | 2,135,010 |  
|                                                                              |  |                        |          
|LIABILITIES AND SHAREHOLDERS
    EQUITY                                      |  |                        |           |  
|Current liabilities                                                           |  |                        |           |  
|Bank overdrafts                                                               |  |                        | 32,768    |  
|Current portion of long-term debt (Note 9)                                    |  |                        | 48,079    |  
|Trade accounts payable                                                        |  |                        | 212,257   |  
|Advance billings on contracts (Note 4)                                        |  |                        | 115,357   |  
|Other current liabilities (Note 12)                                           |  |                        | 337,219   |  
|                                                                              |  |                        |          
|Total current liabilities                                                     |  |                        | 745,680   |  
|                                                                              |  |                        |          
|Long-term debt (Note 9)                                                       |  |                        | 487,227   |  
|Deferred income taxes (Note 11)                                               |  |                        | 21,066    |  
|Other long-term liabilities (Note 12)                                         |  |                        | 58,316    |  
|                                                                              |  |                        |          
|Total long-term liabilities                                                   |  |                        | 566,609   |  
|                                                                              |  |                        |          
|Minority Interests                                                            |  |                        | 15,152    |  
|                                                                              |  |                        |          
|Common stock                                                                  |  |                        |           |  
|EUR1.60 par value as of December 31,
    2001;                                |  |                        |           |  
|Authorized and issued:                                                        |  |                        |           |  
|18,862,388 shares as of December 31, 2001
    (Note 13)                       |  |                        | 30,180    |  
|Additional paid-in capital and treasury stock                                 |  |                        | 289,902   |  
|Retained earnings                                                             |  |                        | 517,261   |  
|Net income for the year                                                       |  |                        | (105,320  | )
|Foreign currency translation adjustment                                       |  |                        | 75,546    |  
|                                                                              |  |                        |          
|Total shareholders equity                                                    |  |                        | 807,569   |  
|                                                                              |  |                        |          
|TOTAL LIABILITIES AND SHAREHOLDERS
    EQUITY                                |  |                        | 2,135,010 |  
|                                                                              |  |                        |          

See notes to consolidated financial statements

F-69



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP

CONSOLIDATED STATEMENT OF OPERATIONS

|                                                                                             |                                              |                        |            |            |  
|-------------------------------------------------------------------------------------------- | -------------------------------------------- | ---------------------- | ---------- | ---------- | -
|                                                                                             |                                              | December 31,           |           
|                                                                                             |                                              | 2001                   |           
|                                                                                             |                                              | Unaudited              |           
|                                                                                             |                                              |                        |           
|                                                                                             |                                              | (amounts in thousands, |           
|                                                                                             |                                              | except per share data) |           
|Net operating revenues                                                                       |                                              |                        | 1,898,820  |           
|Cost of operations                                                                           |                                              |                        | (1,513,044 | )         
|Depreciation and amortization                                                                |                                              |                        | (274,179   | )         
|Selling, general and administrative expenses                                                 |                                              |                        | (163,230   | )         
|                                                                                             |                                              |                        |           
|OPERATING INCOME                                                                             |                                              |                        | (51,633    | )         
|                                                                                             |                                              |                        |           
|Interest and other financial income                                                          |                                              |                        | 22,255     |           
|Interest and other financial expense                                                         |                                              |                        | (33,564    | )         
|Net foreign exchange gains/(losses)                                                          |                                              |                        | 1,315      |           
|Equity income of investees (Note 6)                                                          |                                              |                        | (826       | )         
|Minority interest                                                                            |                                              |                        | (98        | )         
|                                                                                             |                                              |                        |           
|INCOME BEFORE INCOME TAXES                                                                   |                                              |                        | (62,551    | )         
|                                                                                             |                                              |                        |           
|Income taxes (Note 11)                                                                       |                                              |                        | (42,769    | )         
|                                                                                             |                                              |                        |           
|NET INCOME                                                                                   |                                              |                        | (105,320   | )         
|                                                                                             |                                              |                        |           
|Earnings per share (see Note 14) in
    circulation:                                         |                                              |                        |            |           
|                                                                                             | Basic Earnings per share in circulation      |                        |            | (5.61      | )
|                                                                                             | Diluted Earnings per share in circulation(*) |                        |            | (5.61      | )
|Average number of shares and share equivalents
    outstanding (see Note 14) in circulation: |                                              |                        |            |           
|                                                                                             | On common shares                             |                        |            | 18,767,950 |  
|                                                                                             | On a diluted basis                           |                        |            | 18,989,317 |  






|    |                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------
|(*) | As a consequence of the 2001 loss, basic and
    diluted earnings per share are similar as the exercise of stock
    options would be anti-dilutive.

See notes to consolidated financial statements

F-70



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP

CONSOLIDATED STATEMENT OF SHAREHOLDERS
EQUITY (UNAUDITED)

(In thousands of EUR, except number of
shares)


|                                   |  |                                                          |            |  |        |  |            |         |  |  |          |  |  |             |      |       |                |  |          |               |  |  |        |  |  |  |          |  
|---------------------------------- |  | -------------------------------------------------------- | ---------- |  | ------ |  | ---------- | ------- |  |  | -------- |  |  | ----------- | ---- | ----- | -------------- |  | -------- | ------------- |  |  | ------ |  |  |  | -------- | -
|                                   |  | Number                                                   |            |  |        |  | Additional |         |  |  |          |  |  |             |      | Total |               
|                                   |  | of shares                                                |            |  | Common |  |            | paid-in |  |  | Treasury |  |  | Retained    |      |       | Translation    |  |          | shareholders | 
|                                   |  | issued                                                   |            |  | stock  |  |            | capital |  |  | stock    |  |  | earnings(c) |      |       | adjustments(a) |  |          | equity        | 
|                                   |  |                                                          |            |  |        |  |            |         |  |  |          |  |  |             |      |       |                |  |          |               | 
|                                   |  |                                                         
|                                   |  | (amounts in thousands of euros, unless stated otherwise) |           
|Balance at December 31, 2000       |  |                                                          | 18,685,759 |  |        |  | 29,897     |         |  |  | 284,064  |  |  |             | (814 | )     |                |  | 538,887  |               |  |  | 53,995 |  |  |  | 906,029  |  
|                                   |  |                                                          |            |  |        |  |            |         |  |  |          |  |  |             |      |       |                |  |          |               | 
|Net income                         |  |                                                          |            |  |        |  |            |         |  |  |          |  |  |             |      |       |                |  | (105,320 | )             |  |  |        |  |  |  | (105,320 | )
|Translation adjustment(a)          |  |                                                          |            |  |        |  |            |         |  |  |          |  |  |             |      |       |                |  |          |               |  |  | 21,551 |  |  |  | 21,551   |  
|Treasury stock sold (net)          |  |                                                          |            |  |        |  |            |         |  |  |          |  |  |             | 474  |       |                |  |          |               |  |  |        |  |  |  | 474      |  
|Effect of share issuance (note 13) |  |                                                          | 176,629    |  |        |  | 283        |         |  |  | 6,178    |  |  |             |      |       |                |  |          |               |  |  |        |  |  |  | 6,461    |  
|Dividends paid(b)                  |  |                                                          |            |  |        |  |            |         |  |  |          |  |  |             |      |       |                |  | (21,627  | )             |  |  |        |  |  |  | (21,627  | )
|                                   |  |                                                          |            |  |        |  |            |         |  |  |          |  |  |             |      |       |                |  |          |               | 
|Balance at December 31, 2001       |  |                                                          | 18,862,388 |  |        |  | 30,180     |         |  |  | 290,242  |  |  |             | (340 | )     |                |  | 411,941  |               |  |  | 75,546 |  |  |  | 807,569  |  
|                                   |  |                                                          |            |  |        |  |            |         |  |  |          |  |  |             |      |       |                |  |          |               | 






|    |                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------
|(a) | The translation adjustment results from the euro
    variations against the british pound and the U.S. dollar.



|    |                                                                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | With respect to 2000 financial year, the
    COFLEXIPs Annual shareholders meeting held on
    May 29, 2001 decided to pay a cash dividend of EUR 1.16 per
    share (dividends paid on 18,643,944 shares).



|    |                                                                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(c) | Retained earnings include legal and other
    non-distributable reserves in an amount of EUR 3,181 thousand at
    December 31, 2001 and EUR 3,166 thousand at
    December 31, 2000.

F-71



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP

CONSOLIDATED STATEMENT OF CASH FLOWS

|                                                                                                             |  |                       |          |  
|------------------------------------------------------------------------------------------------------------ |  | --------------------- | -------- | -
|                                                                                                             |  | December 31,          |         
|                                                                                                             |  | 2001                  |         
|                                                                                                             |  | Unaudited             |         
|                                                                                                             |  |                       |         
|                                                                                                             |  | (amounts in thousands |         
|                                                                                                             |  | of EUR)               |         
|CASH FLOWS FROM OPERATING ACTIVITIES                                                                         |  |                       |          |  
|Net income                                                                                                   |  |                       | (105,320 | )
|Depreciation and amortization                                                                                |  |                       | 274,179  |  
|Deferred income taxes                                                                                        |  |                       | 1,848    |  
|Minority interest                                                                                            |  |                       | 98       |  
|Equity income of investees                                                                                   |  |                       | 568      |  
|Increase/(decrease) in other long-term liabilities                                                           |  |                       | 8,649    |  
|Increase/ decrease in operating assets and
    liabilities (net of effect from acquisition of
    business): |  |                       |          |  
|Decrease/(increase) in trade accounts receivable                                                             |  |                       | (83,524  | )
|Net decrease/(increase) in contracts-in-progress
    and advance billings on contracts                       |  |                       | (50,560  | )
|(Increase)/decrease in inventories                                                                           |  |                       | (15,717  | )
|(Increase)/decrease in prepaid expenses and other
    current assets                                         |  |                       | (12,463  | )
|Increase/(decrease) in bank overdrafts                                                                       |  |                       | 24,798   |  
|Increase/(decrease) in trade accounts and notes
    payable                                                  |  |                       | 87,119   |  
|Increase/(decrease) in other current liabilities                                                             |  |                       | (99,894  | )
|                                                                                                             |  |                       |         
|NET CASH PROVIDED BY OPERATING
    ACTIVITIES                                                                |  |                       | 29,781   |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                                                         |  |                       |          |  
|Purchases of property, plant, vessels and
    equipment                                                      |  |                       | (178,847 | )
|Cash paid for acquired businesses                                                                            |  |                       | (550,962 | )
|Cash of acquired businesses                                                                                  |  |                       | 74,418   |  
|Net advances repaid by (made to) affiliates                                                                  |  |                       | (152,508 | )
|Disposals of other long-term investments and
    collections of long-term receivables                        |  |                       | (14,822  | )
|Proceeds from sale of assets                                                                                 |  |                       | 3,147    |  
|                                                                                                             |  |                       |         
|NET CASH PROVIDED BY (USED IN) INVESTING
    ACTIVITIES                                                      |  |                       | (819,574 | )
|CASH FLOWS FROM FINANCING ACTIVITIES                                                                         |  |                       |          |  
|Repayment of long-term debt                                                                                  |  |                       | (43,149  | )
|Issuance of long-term debt                                                                                   |  |                       | 493,567  |  
|Increase in common stock                                                                                     |  |                       | 6,461    |  
|Dividends paid by Coflexip S.A.                                                                              |  |                       | (21,627  | )
|Treasury stock sold                                                                                          |  |                       | 474      |  
|                                                                                                             |  |                       |         
|NET CASH (USED) IN PROVIDED BY FINANCING
    ACTIVITIES                                                      |  |                       | 435,726  |  
|Effects of exchange rate changes on cash                                                                     |  |                       | (31,533  | )
|                                                                                                             |  |                       |         
|NET INCREASE IN CASH AND CASH
    EQUIVALENTS                                                                |  |                       | (385,600 | )
|Cash and cash equivalents at beginning of year                                                               |  |                       | 598,781  |  
|                                                                                                             |  |                       |         
|CASH AND CASH EQUIVALENTS AT END OF
    YEAR                                                                 |  |                       | 213,181  |  
|                                                                                                             |  |                       |         
|Supplemental disclosures of cash flow information:                                                           |  |                       |          |  
|Cash paid during the period for:                                                                             |  |                       |          |  
|Interest                                                                                                     |  |                       | 33,737   |  
|Income taxes                                                                                                 |  |                       | 96,263   |  
|                                                                                                             |  |                       |         

See notes to consolidated financial statements

F-72



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Description of business:

Coflexip Stena Offshore is a subsea oil services
Group providing a wide range of services (project management,
engineering, procurement, subsea pipeline and umbilical laying,
construction and maintenance work) and products (design and
manufacture of flexible pipes, control umbilicals and Remote
Operated Vehicles). Contracts are primarily conducted with oil
and gas producers operating in the North Sea, Brazil, Asia
Pacific and the Rest of the World.

Note 1  Summary of significant
accounting policies

The consolidated financial statements have been
prepared in accordance with generally accepted accounting
principles in France and comply with the New principles
and methodology relative to consolidated financial
statements, Regulation Number 99-02 of the French
Comité de la Réglementation Comptable.
This first application did not result in any significant effect
on the consolidated financial statements for the years before
2001. Therefore, pro-forma consolidated financial statements are
not required.



| |                            
| | ---------------------------
| | Principles of consolidation

The consolidated financial statements include the
accounts of Coflexip and all majority-owned subsidiaries.
Investments in which ownership interest ranges from 20% to 50%
and in which the Group exercises significant influence over
operating and financial policies are accounted for using the
equity method.

Significant investments in which ownership
interest is 50% and in which Coflexip has a joint control with a
limited number of partners (joint-ventures) are
accounted for under the proportionate method. Balances and
transactions between fully consolidated companies are eliminated
for consolidation purposes.



| |                                                            
| | -----------------------------------------------------------
| | Translation of financial statements of
    foreign entities

Under the Groups accounting policy for
foreign currency translation, each foreign entitys results
are measured in the currency in which that entity primarily
conducts its business (the functional currency). The functional
currency of all the Groups foreign subsidiaries is the
local currency with the exception of subsidiaries operating in
Brazil where the U.S. dollar is the functional currency.

When translating foreign functional currency
financial statements to Euros, year-end exchange rates are
applied to asset and liability accounts, while average annual
rates are applied to income statement accounts. Adjustments
resulting from this process are recorded in a separate component
of shareholders equity.

Transactions denominated in currencies other than
the entitys functional currency are remeasured into the
functional currency using current exchange rates. Gains or
losses from remeasurement are included in income.



| |                                      
| | -------------------------------------
| | Contracts and revenue
    recognition

The Group recognizes revenues and related costs
of long-term product supply contracts and installation contracts
using the percentage-of-completion method based on the relation
that costs incurred to date bear to estimated total costs.
Revenues include agreed claims for extra work and changes in
contract scope. Revenues that exceed amounts invoiced to
customers under the terms of the contracts are included in
Contracts-in-progress in the balance sheet. Billings that exceed
revenues recognized under percentage-of-completion are included
in Advance billings on contracts.

Most long-term contracts have provisions for
progress payments. Contract price and cost estimates are
reviewed periodically as the work progresses and any revision to
estimates are reflected in income to the extent of the
percentage of contract completion. There are no unbilled
revenues, which will not be billed. Insurance coverage is
obtained for certain claims under product warranties granted.
Insurance premiums for product warranty coverage are charged to
expense as contract revenue is recognized.

F-73



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)

The Group also has short-term contracts and
individually insignificant long-term contracts. Revenues from
these contracts are recognized on the completed-contract method
since the Groups financial position and results of
operations do not vary significantly from those, which would
result from the use of the percentage-of-completion method.

A contract is considered complete when all
significant costs have been incurred and the installation is
operating according to specifications or has been accepted by
the customer. Prior to contract completion, costs incurred are
included in the balance sheet under Contracts-in-progress and
billings are included under Advance billings on contracts. For
all contracts, provisions are made currently for known and
anticipated losses.



| |                 
| | ----------------
| | Cash equivalents

Cash equivalents consist of short-term
investments with original maturities of less than three months
when acquired. These securities are carried at cost, which
approximates market value.



| |                 
| | ----------------
| | Use of estimates

The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those
estimates.



| |            
| | -----------
| | Inventories

Inventories are stated at the lower of cost or
market value with cost determined on the weighted-average basis.



| |                                           
| | ------------------------------------------
| | Property, plant, vessels and
    equipment

Property, plant, vessels and equipment are stated
at cost. Property, plant and equipment used by the Group under
capital lease agreements are recorded in the balance sheet and
in the income statement as if acquired by the Company with a
credit facility.

Property, plant, vessels and equipment are
depreciated on a straight-line basis over the estimated useful
lives of the assets, which are as follows:

|                               |  |  |                 | 
|------------------------------ |  |  | --------------- | 
|Land improvements              |  |  | 5 to 10  years  | 
|Buildings                      |  |  | 15 to 20  years | 
|Vessels                        |  |  | 10 to 25  years | 
|Machinery and equipment        |  |  | 3 to  8  years  | 
|Office furniture and equipment |  |  | 5 to 10  years  | 
|Vehicles                       |  |  | 3 to  5  years  | 

Repairs, maintenance and renewal costs, which do
not materially prolong the useful life of an asset, are expensed
as incurred. Dry-docking expenses on vessels are amortized
evenly over the anticipated period between dry-dockings.



| |                  
| | -----------------
| | Intangible assets

Goodwill, representing the excess of the purchase
price over the fair value of net assets of businesses acquired,
which is being amortized on a straight-line basis over the
economic life, ranging from five to 25 years.

Patents, trademarks and other intangible assets
are depreciated on a straight-line basis over the estimated
useful lives of the assets, ranging from eight to 10 years.

F-74



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)

Impairment of long-lived assets

Long-lived assets (tangible and intangible assets
including goodwill) are written-down when, as a result of events
or changes in circumstances within the year, it appears that
their recoverable value is less than their carrying value.

Research and development

Research and development costs are expensed as
incurred.

Government grants

The Group receives government research grants,
which are repayable; in the event the related research project
proves to be successful. These research grants are recognized in
income when the research project has been determined to be
unsuccessful and conditions necessary for their receipt have
been met. Grants received for research projects whose outcome
has yet to be determined are reported as other long-term
liabilities.

Income taxes

The Group computes taxes on income in accordance
with the tax rules and regulations of the taxing authorities
where the income is earned. The Group provides for deferred
income taxes on temporary differences between financial and tax
reporting using the liability method under which deferred taxes
are calculated applying currently legislated tax rates in effect
when the temporary differences will reverse.

The Group does not provide for deferred taxes on
the undistributed earnings of its subsidiaries as these earnings
are considered to be indefinitely reinvested or would not be
taxed when remitted. Valuation allowances are recorded against
deferred tax assets when it is more likely than not that some
portion or all of the deferred tax assets will not be realized.

Accrued liabilities and provisions

The Group did not elect for early application of
Règlement 2000-6 from the French
Comité de la Réglementation Comptable
relating to the accounting for accrued liabilities and
provisions.

Pension plans

Pension contributions prescribed by local laws
are expensed as incurred. As national organizations are
responsible for pension payments, the Group has no additional
liability for these plans.

In France, legislation requires that lump sum
retirement indemnities be paid to employees based upon their
years of service and compensation at retirement. The actuarial
liability of this obligation is included in other long-term
liabilities.

Earnings per share

Basic earnings per share is calculated by
dividing net income by the average number of common shares
outstanding during the year. Diluted earnings per share is
calculated by dividing net income by the average number of
common shares outstanding assuming dilution, the calculation of
which assumes that the average outstanding stock-options are
exercised during the period and the proceeds used by the Group
to purchase shares at the average market price for the period.

F-75



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)

Financial instruments

All financial instruments held by the Group are
for hedging purposes. The Group does not hold financial
instruments for trading on speculative purposes. All financial
instruments are off balance sheet items and therefore have no
carrying value.

Accordingly gains and losses from changes in fair
values are deferred. Gains or losses upon settlement of
derivative positions when the underlying transaction occurs are
recognized in the income statement or recorded as part of the
underlying asset or liability as appropriate depending on the
circumstances. Excluding certain interest rate swaps, all
financial instruments have initial terms of less than two years
and all underlying transactions are expected to occur within two
years.

Note 2  Acquisitions and
Disposal



| |                                                      
| | -----------------------------------------------------
| | Acquisitions for the year ended
    December 31, 2001

On January 2001, the Group acquired the Aker
Maritime Deepwater Division (CSO Deepwater Division Aker
Maritime) for U.S.$513 million in cash plus the repayment
of U.S.$142 million in current accounts of former
shareholders. The acquisition price is subject to various price
adjustment mechanisms based on the December 31, 2000
consolidated financial statements of the Deepwater Division.
Since the implementation of these price adjustment mechanisms is
still under discussion with the seller, the Company did not
anticipate any favorable outcome of this proceeding in its
consolidated financial statements at December 31, 2001.
Should this procedure reduce the purchase price of the Deepwater
Division, the Group would make a corresponding adjustment to the
balance sheet reflecting the revised acquisition goodwill.

To finance this acquisition, the Group expended
approximately U.S.$285 million of its cash and borrowed
U.S.$370 million in bank debt pursuant to a short-term
credit agreement, which was refinanced in June 2001 with a five
year syndicated credit facility for an amount of
US$350 million.

Unaudited pro
forma financial information

The unaudited pro forma financial information for
2000 is presented for informational purposes only and is not
necessarily indicative of what the financial position or results
of operations of the new Group Coflexip Stena Offshore/ Aker
Maritime Deepwater would have been if these transactions had
occurred at January 1 or December 31, 2000, nor does
it purport to be indicative of future financial position or
results of operations.

The unaudited pro forma financial information has
been prepared in accordance with French GAAP. This data should
has been prepared from and should be read in conjunction with
the audited financial statements of Coflexip Stena Offshore
prepared under French GAAP, which are included in this document.

F-76



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)

CONSOLIDATED BALANCE SHEETS

|                                                                     |  |                               |           |   |           |  |           |      |  |  |           | 
|-------------------------------------------------------------------- |  | ----------------------------- | --------- | - | --------- |  | --------- | ---- |  |  | --------- | 
|                                                                     |  |                              
|                                                                     |  | Years ended December 31,      |          
|                                                                     |  |                               |          
|                                                                     |  | 2001                          |           |   | Pro-forma |  |           | CSO  | 
|                                                                     |  | Unaudited                     |           |   | 2000      |  |           | 2000 | 
|                                                                     |  |                               |           |   |           |  |           |      | 
|                                                                     |  |                              
|                                                                     |  | (amounts in thousands of EUR, |          
|                                                                     |  | except per Share data)        |          
|ASSETS                                                               |  |                               |           |   |           |  |           |      |  |  |           | 
|Current assets Cash and cash equivalents                             |  |                               | 213,181   |   |           |  | 366,429   |      |  |  | 598,781   | 
|Trade accounts receivable                                            |  |                               | 365,124   |   |           |  | 261,129   |      |  |  | 192,990   | 
|Contracts-in-progress                                                |  |                               | 104,280   |   |           |  | 76,875    |      |  |  | 72,677    | 
|Inventories                                                          |  |                               | 102,859   |   |           |  | 83,897    |      |  |  | 79,816    | 
|Deferred income taxes                                                |  |                               | 39,641    |   |           |  | 33,687    |      |  |  | 32,075    | 
|Prepaid expenses and other current assets                            |  |                               | 86,377    |   |           |  | 85,173    |      |  |  | 64,820    | 
|                                                                     |  |                               |           |   |           |  |           |      | 
|Total current assets                                                 |  |                               | 911,462   |   |           |  | 907,189   |      |  |  | 1,041,159 | 
|                                                                     |  |                               |           |   |           |  |           |      | 
|Investments in and advances to companies under
    the equity method |  |                               |          |   |           |  | 153       |      |  |  |          | 
|Other long-term investments and receivables                          |  |                               | 17,019    |   |           |  | 4,230     |      |  |  | 3,770     | 
|                                                                     |  |                               |           |   |           |  |           |      | 
|Investments and other assets                                         |  |                               | 17,019    |   |           |  | 4,383     |      |  |  | 3,770     | 
|                                                                     |  |                               |           |   |           |  |           |      | 
|Property, plant, vessels and equipment                               |  |                               | 689,129   |   |           |  | 601,990   |      |  |  | 502,240   | 
|                                                                     |  |                               |           |   |           |  |           |      | 
|Intangible assets                                                    |  |                               | 517,400   |   |           |  | 667,983   |      |  |  | 52,024    | 
|                                                                     |  |                               |           |   |           |  |           |      | 
|Total assets                                                         |  |                               | 2,135,010 |   |           |  | 2,181,546 |      |  |  | 1,599,193 | 
|                                                                     |  |                               |           |   |           |  |           |      | 
|LIABILITIES AND SHAREHOLDERS
    EQUITY                             |  |                               |           |   |           |  |           |      |  |  |           | 
|Current liabilities Bank overdrafts                                  |  |                               | 32,768    |   |           |  | 29,117    |      |  |  | 7,623     | 
|Current portion of long-term debt                                    |  |                               | 48,079    |   |           |  | 28,091    |      |  |  | 28,090    | 
|Trade accounts payable                                               |  |                               | 212,257   |   |           |  | 139,607   |      |  |  | 81,430    | 
|Advance billings on contracts                                        |  |                               | 115,357   |   |           |  | 142,257   |      |  |  | 93,433    | 
|Other current liabilities                                            |  |                               | 337,219   |   |           |  | 433,572   |      |  |  | 365,176   | 
|                                                                     |  |                               |           |   |           |  |           |      | 
|Total current liabilities                                            |  |                               | 745,680   |   |           |  | 772,643   |      |  |  | 575,752   | 
|                                                                     |  |                               |           |   |           |  |           |      | 
|Long-term debt                                                       |  |                               | 487,227   |   |           |  | 424,992   |      |  |  | 48,556    | 
|Deferred income taxes                                                |  |                               | 21,066    |   |           |  | 15,268    |      |  |  | 21,099    | 
|Other long-term liabilities                                          |  |                               | 58,316    |   |           |  | 47,786    |      |  |  | 34,757    | 
|                                                                     |  |                               |           |   |           |  |           |      | 
|Total long-term liabilities                                          |  |                               | 566,609   |   |           |  | 488,046   |      |  |  | 104,412   | 
|                                                                     |  |                               |           |   |           |  |           |      | 
|Minority interests                                                   |  |                               | 15,152    |   |           |  | 14,828    |      |  |  | 13,000    | 
|Common stock                                                         |  |                               |           |   |           |  |           |      |  |  |           | 
|EUR 1.60 par value at December 31,
    2001;                         |  |                               |           |   |           |  |           |      |  |  |           | 
|EUR 1.60 par value at December 31,
    2000;                         |  |                               |           |   |           |  |           |      |  |  |           | 
|Authorized and issued:                                               |  |                               |           |   |           |  |           |      |  |  |           | 
|18,862,388 shares at December 31,
    2001;                          |  |                               |           |   |           |  |           |      |  |  |           | 
|18,685,759 shares at December 31,
    2000;                          |  |                               |           |   |           |  |           |      |  |  |           | 
|Additional paid-in capital and treasury stock                        |  |                               | 286,415   |   |           |  | 283,250   |      |  |  | 283,250   | 
|Retained earnings                                                    |  |                               | 517,261   |   |           |  | 316,190   |      |  |  | 316,190   | 
|Net income for the year                                              |  |                               | (105,320  | ) |           |  | 222,697   |      |  |  | 222,697   | 
|Foreign currency translation adjustment                              |  |                               | 79,033    |   |           |  | 53,995    |      |  |  | 53,995    | 
|                                                                     |  |                               |           |   |           |  |           |      | 
|Total shareholders equity                                           |  |                               | 807,569   |   |           |  | 906,029   |      |  |  | 906,029   | 
|                                                                     |  |                               |           |   |           |  |           |      | 
|TOTAL LIABILITIES AND SHAREHOLDERS
    EQUITY                       |  |                               | 2,135,010 |   |           |  | 2,181,546 |      |  |  | 1,599,193 | 
|                                                                     |  |                               |           |   |           |  |           |      | 

F-77



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)

CONSOLIDATED STATEMENTS OF INCOME

|                                             |  |                          |            |   |           |  |            |      |  |  |           |  
|-------------------------------------------- |  | ------------------------ | ---------- | - | --------- |  | ---------- | ---- |  |  | --------- | -
|                                             |  |                         
|                                             |  | Years ended December 31, |           
|                                             |  |                          |           
|                                             |  | 2001                     |            |   | Pro-forma |  |            | CSO  | 
|                                             |  | Unaudited                |            |   | 2000      |  |            | 2000 | 
|                                             |  |                          |            |   |           |  |            |      | 
|                                             |  |                         
|                                             |  | (amounts in thousands,   |           
|                                             |  | except per share data)   |           
|Net operating revenues                       |  |                          | 1,898,820  |   |           |  | 1,455,032  |      |  |  | 1,064,556 |  
|Cost of operations                           |  |                          | (1,513,044 | ) |           |  | (1,103,812 | )    |  |  | (756,532  | )
|Depreciation and amortization                |  |                          | (274,179   | ) |           |  | (144,275   | )    |  |  | (94,880   | )
|Selling, general and administrative expenses |  |                          | (163,230   | ) |           |  | (172,153   | )    |  |  | (104,291  | )
|                                             |  |                          |            |   |           |  |            |      | 
|OPERATING INCOME                             |  |                          | (51,633    | ) |           |  | 34,791     |      |  |  | 108,853   |  
|                                             |  |                          |            |   |           |  |            |      | 
|Interest and other financial income          |  |                          | 22,255     |   |           |  | 34,596     |      |  |  | 30,660    |  
|Interest and other financial expense         |  |                          | (33,564    | ) |           |  | (39,450    | )    |  |  | (11,745   | )
|Net foreign exchange gains/(losses)          |  |                          | 1,315      |   |           |  | 695        |      |  |  | 695       |  
|Other income                                 |  |                          |           |   |           |  | 11,686     |      |  |  | 10,400    |  
|Capital gain on sale of Caldive              |  |                          |           |   |           |  | 167,400    |      |  |  | 167,400   |  
|Equity income of investees                   |  |                          | (826       | ) |           |  | (535       | )    |  |  | 2,672     |  
|Minority interest                            |  |                          | (98        | ) |           |  | (7,866     | )    |  |  | (401      | )
|                                             |  |                          |            |   |           |  |            |      | 
|INCOME BEFORE INCOME TAXES                   |  |                          | (62,551    | ) |           |  | 202,386    |      |  |  | 308,534   |  
|                                             |  |                          |            |   |           |  |            |      | 
|Income taxes                                 |  |                          | (42,769    | ) |           |  | (58,227    | )    |  |  | (85,837   | )
|                                             |  |                          |            |   |           |  |            |      | 
|NET INCOME                                   |  |                          | (105,320   | ) |           |  | 144,160    |      |  |  | 222,697   |  
|                                             |  |                          |            |   |           |  |            |      | 

The audited financial statements of Aker Maritime
Deepwater at December 31, 2000 are prepared in
U.S. dollars and have been restated in euro using the
average exchange rate of
 1.00 = 0.9215 U.S.$.



| |                       
| | ----------------------
| | Basis for presentation

The unaudited consolidated balance sheet at
December 31, 2000 and the unaudited consolidated income
statement for the year ended December 31, 2000 give effect
to the combination of Coflexip Stena Offshore and the Aker
Maritime Deepwater Division under the purchase method of
accounting. The unaudited consolidated income statement for the
year ended December 31, 2000 has been prepared as if the
acquisition of the Aker Maritime Deepwater Division had occurred
on January 1, 2000. The unaudited consolidated balance
sheet at December 31, 2000 has been prepared as if this
transaction had occurred at December 31, 2000.

Purchase price of the Aker Maritime Deepwater
Division The main pro
forma adjustments are as follows:



| |    |                                                                                                                                                                                                                                                                 
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. | Residual goodwill of
     566 million
    upon completion of the purchase price allocation.                                                                                                                                                                    
|
| | 2. | Additional
     (18) million
    interest expenses for the year ended December 31, 2000
    relating to the financing and long-term refinancing of this
    transaction, based on a Libor+0.5% interest rate (before income
    tax effect of
     6 million).
|
| | 3. | Pro forma goodwill amortization and depreciation
    resulting from the goodwill allocation on identified assets:
    theses adjustments relate to:                                                                                                             



| |   |                                                                                                                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the estimated amortization of the goodwill on the
    Aker Maritime Deepwater Division for the year ended
    December 31, 2000, using the straight-line method over a
    period of 25 years:
     23 millions;
|
| |  | reversal of the goodwill amortization recorded by
    the Aker Maritime Deepwater Division:
     2 millions;                                                                                                    

F-78



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)



| |   |                                                                                                                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | preliminary estimated additional depreciation of
    revalued identified assets for the year ended December 31,
    2000, computed on a 10 year period:
     5 million,
    not including a
     2 million
    favorable deferred tax income.



| |    |                      
| | -- | ---------------------
| | 4. | Deferred income taxes

Deferred income taxes resulting from the purchase
price allocation on identified assets of the Aker Maritime
Deepwater Division have been determined in accordance with the
geographical location of these assets. The income tax rate used
is 35%. Income taxes relating to the financing costs have been
computed on the basis of the income tax rate applicable in the
United States and in France (35% and 36%, respectively).



| |                                                  
| | -------------------------------------------------
| | Disposal for the year ended
    December 31, 2001

No significant disposal occurred in 2001.

Note 3  Trade accounts
receivable

|                                      |  |                     |         |  
|------------------------------------- |  | ------------------- | ------- | -
|                                      |  | December 31, 2001   |        
|                                      |  | Unaudited           |        
|                                      |  |                     |        
|                                      |  | In thousands of EUR |        
|Trade accounts receivable             |  |                     | 371,267 |  
|Less: allowance for doubtful accounts |  |                     | (6,143  | )
|                                      |  |                     |        
|Trade accounts receivable 
    net   |  |                     | 365,124 |  
|                                      |  |                     |        

The market for the Groups services is the
offshore oil and gas industry, and the Groups customers
consist primarily of major well-established oil and gas
producers.

For all customers, credit is extended based upon
an evaluation of the customers financial condition, and
generally collateral is not required. Credit losses are provided
for in the financial statements and have consistently been
within managements expectations.

The Groups sole customer in Brazil,
Petrobras, is a major oil and gas producing company. Receivables
from Petrobras amounted to EUR 33,269 thousand at
December 31, 2001. Due to the individual significance of
certain long-term contracts, receivables from other customers
may represent a significant portion of trade accounts receivable
at any given time.

Note 4  Contracts-in-progress,
advance billings on contracts

|                                |  |                     |         |         |              |  |         | 
|------------------------------- |  | ------------------- | ------- | ------- | ------------ |  | ------- | 
|                                |  |                     |         | Advance |             
|                                |  | Contracts           |         |         | billings     | 
|                                |  | in Progress         |         |         | on contracts | 
|                                |  |                     |         |         |              | 
|                                |  |                    
|                                |  | In thousands of EUR |        
|December 31, 2001 (Unaudited)   |  |                     |         |         |              |  |         | 
|Percentage of completion method |  |                     | 99,097  |         |              |  | 94,254  | 
|Completed contract method       |  |                     | 5,183   |         |              |  | 21,103  | 
|                                |  |                     |         |         |              | 
|Total                           |  |                     | 104,280 |         |              |  | 115,357 | 
|                                |  |                     |         |         |              | 

F-79



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)

Note 5  Inventories

|                           |  |                     |         |  
|-------------------------- |  | ------------------- | ------- | -
|                           |  | December 31, 2001   |        
|                           |  | Unaudited           |        
|                           |  |                     |        
|                           |  | In thousands of EUR |        
|Raw materials              |  |                     | 51,180  |  
|Work in progress           |  |                     | 40,072  |  
|Finished goods             |  |                     | 20,942  |  
|Less: valuation allowances |  |                     | (9,335  | )
|                           |  |                     |        
|Net inventories            |  |                     | 102,859 |  
|                           |  |                     |        

Note 6  Investments in and
advances to companies under the equity method

The Group holds no investments accounted for
under the equity method at December 31, 2001.

Note 7  Property, plant,
vessels and equipment

|                                |  |                                                  |           |          |              |  |         |           |            |          |           |  |            |           |         |        |        |  |          |   |  |  |           | 
|------------------------------- |  | ------------------------------------------------ | --------- | -------- | ------------ |  | ------- | --------- | ---------- | -------- | --------- |  | ---------- | --------- | ------- | ------ | ------ |  | -------- | - |  |  | --------- | 
|                                |  |                                                 
|                                |  | For the year ended December 31, 2001 (Unaudited) |          
|                                |  |                                                  |          
|                                |  |                                                  |           | Business |              |  |         |           | Changes in |          |           | 
|                                |  | Balance at                                       |           |          | acquisitions |  |         |           |            | exchange |           |  | Balance at |          
|                                |  | beginning                                        |           |          | and          |  |         | Additions |            |          |           |  | rates and  |           |         | end of |       
|                                |  | of period                                        |           |          | disposals    |  |         | at cost   |            |          | Disposals |  |            | transfers |         |        | period | 
|                                |  |                                                  |           |          |              |  |         |           |            |          |           |  |            |           |         |        |        | 
|                                |  |                                                 
|                                |  | In thousands of EUR                              |          
|Cost                            |  |                                                  |           |          |              |  |         |           |            |          |           |  |            |           |         |        |        |  |          |   |  |  |           | 
|Land                            |  |                                                  | 6,263     |          |              |  | 232     |           |            |          |          |  |            |           |        |        |        |  | 9,526    |   |  |  | 16,021    | 
|Buildings and land improvements |  |                                                  | 83,005    |          |              |  | 57,348  |           |            |          | 3,439     |  |            |           |        |        |        |  | 3,563    |   |  |  | 147,355   | 
|Vessels                         |  |                                                  | 384,338   |          |              |  |        |           |            |          | 117,217   |  |            |           | (311    | )      |        |  | 133,410  |   |  |  | 634,654   | 
|Machinery and equipment         |  |                                                  | 360,391   |          |              |  | 52,910  |           |            |          | 41,958    |  |            |           | (10,183 | )      |        |  | 57,704   |   |  |  | 502,780   | 
|Assets under construction       |  |                                                  | 138,990   |          |              |  | (4,374  | )         |            |          | 13,181    |  |            |           | (4      | )      |        |  | (139,179 | ) |  |  | 8,614     | 
|Other assets                    |  |                                                  | 64,613    |          |              |  | 2,548   |           |            |          | 3,052     |  |            |           | (679    | )      |        |  | (42,598  | ) |  |  | 26,936    | 
|                                |  |                                                  |           |          |              |  |         |           |            |          |           |  |            |           |         |        |        | 
|Total cost                      |  |                                                  | 1,037,600 |          |              |  | 108,664 |           |            |          | 178,847   |  |            |           | (11,177 | )      |        |  | 22,426   |   |  |  | 1,336,360 | 
|                                |  |                                                  |           |          |              |  |         |           |            |          |           |  |            |           |         |        |        | 
|Accumulated depreciation        |  |                                                  |           |          |              |  |         |           |            |          |           |  |            |           |         |        |        |  |          |   |  |  |           | 
|Buildings and land improvements |  |                                                  | 49,839    |          |              |  |        |           |            |          | 10,346    |  |            |           |        |        |        |  | 3,134    |   |  |  | 63,319    | 
|Vessels                         |  |                                                  | 198,381   |          |              |  |        |           |            |          | 37,914    |  |            |           |        |        |        |  | 2,837    |   |  |  | 239,132   | 
|Machinery and equipment         |  |                                                  | 241,368   |          |              |  |        |           |            |          | 42,211    |  |            |           | (4,676  | )      |        |  | 37,648   |   |  |  | 316,551   | 
|Other assets                    |  |                                                  | 45,772    |          |              |  |        |           |            |          | 6,379     |  |            |           | (934    | )      |        |  | (22,988  | ) |  |  | 28,229    | 
|                                |  |                                                  |           |          |              |  |         |           |            |          |           |  |            |           |         |        |        | 
|Total accumulated depreciation  |  |                                                  | 535,360   |          |              |  |        |           |            |          | 96,850    |  |            |           | (5,610  | )      |        |  | 20,631   |   |  |  | 647,231   | 
|                                |  |                                                  |           |          |              |  |         |           |            |          |           |  |            |           |         |        |        | 
|Net book value                  |  |                                                  | 502,240   |          |              |  | 108,664 |           |            |          | 81,997    |  |            |           | (5,567  | )      |        |  | 1,795    |   |  |  | 689,129   | 
|                                |  |                                                  |           |          |              |  |         |           |            |          |           |  |            |           |         |        |        | 

Included above are buildings recorded under
capital leases for a total cost EUR 13,989 thousand at
December 31, 2001 and a net book value of EUR 3,889
thousand at December 31, 2001.

Vessels include capital leases for a total cost
of EUR 133,765 thousand at December 31, 2001 and a net
book value of EUR 18,979 thousand at December 31, 2001.

Machinery and equipment include assets recorded
under capital leases for a total cost of EUR 0 thousand at
December 31, 2001 and a net book value of EUR 0
thousand at December 31, 2001.

Included in cost of operations is an amount of
EUR 25,070 thousand in 2001 representing repairs and
maintenance expense.

F-80



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)

Note 8  Intangible
assets

|                                                |  |                     |          |  
|----------------------------------------------- |  | ------------------- | -------- | -
|                                                |  | December 31, 2001   |         
|                                                |  | Unaudited           |         
|                                                |  |                     |         
|                                                |  | In thousands of EUR |         
|Goodwill                                        |  |                     | 678,574  |  
|Patents, trademarks and other intangible assets |  |                     | 59,283   |  
|                                                |  |                     |         
|Total                                           |  |                     | 737,857  |  
|Less: accumulated amortization                  |  |                     | (220,457 | )
|Intangible assets  net                         |  |                     | 517,400  |  
|                                                |  |                     |         

On January 2001, the Group completed the
acquisition of the Aker Maritime Deepwater Division (CSO
Deepwater Division Aker Maritime). At December 31, 2001,
the Company recognized a residual goodwill on this acquisition
of  589,967
thousand following its purchase price allocation process under
which an estimated amount of
 51,401
thousand has been allocated to other intangible assets. This
residual goodwill is amortized over 25 years. Amortization
for year ended December 31, 2001 amounts to
 23,583
thousand.

As a result of its analysis on the projected
profitability of the Aker subsidiaries, the Company decided to
record a
 144,769
thousand additional amortization of the goodwill on Aker. This
impairment of assets has been computed using the discounted
future cash flows methodology.

Note 9  Long-Term
Debt

The analysis of long-term debt is presented as
follows:

Analysis of long-term debt by
currency

|                                                                   |  |                     |         |  
|------------------------------------------------------------------ |  | ------------------- | ------- | -
|                                                                   |  | December 31, 2001   |        
|                                                                   |  | Unaudited           |        
|                                                                   |  |                     |        
|                                                                   |  | In thousands of EUR |        
|Euro                                                               |  |                     | 80,692  |  
|U.S. dollar                                                        |  |                     | 432,803 |  
|British Pound                                                      |  |                     | 8,289   |  
|Other currencies                                                   |  |                     | 13,522  |  
|                                                                   |  |                     |        
|Total                                                              |  |                     | 535,306 |  
|                                                                   |  |                     |        
|Less: amounts due within one year (excluded
    convertible notes) |  |                     | (48,079 | )
|                                                                   |  |                     |        
|Long-term debt                                                     |  |                     | 487,227 |  
|                                                                   |  |                     |        

F-81



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)

Analysis of long-term debt by annual
maturities

|                    |  |                     |         | 
|------------------- |  | ------------------- | ------- | 
|                    |  | December 31, 2001   |        
|                    |  | Unaudited           |        
|                    |  |                     |        
|                    |  | In thousands of EUR |        
|2002                |  |                     | 48,080  | 
|2003                |  |                     | 30,658  | 
|2004                |  |                     | 25,683  | 
|2005                |  |                     | 18,073  | 
|2006                |  |                     | 412,767 | 
|2007 and thereafter |  |                     | 45      | 
|                    |  |                     |        
|Total               |  |                     | 535,306 | 
|                    |  |                     |        

Analysis of long-term debt by interest
rate

|                                                             |  |                     |         | 
|------------------------------------------------------------ |  | ------------------- | ------- | 
|                                                             |  | December 31, 2001   |        
|                                                             |  | Unaudited           |        
|                                                             |  |                     |        
|                                                             |  | In thousands of EUR |        
|Below 7.5%                                                   |  |                     | 135,314 | 
|7.5 to 10%                                                   |  |                     | 5,343   | 
|10% and over                                                 |  |                     | 10,015  | 
|Variable rates (effective rate December 31,
    2001  2.86% |  |                     | 384,634 | 
|                                                             |  |                     |        
|Total                                                        |  |                     | 535,306 | 
|                                                             |  |                     |        

At December 31, 2001, the line item
Below 7.5% includes EUR135,028 thousands of
debts with variable rates. These variable rate debts are covered
by swaps guaranteeing fix rates from 4.53% to 6.37%.

As of December 31, 2001, an amount of
135,028 thousands of euro corresponding to debt with variable
rate swapped at fixed rates ranging from 4.53% to 6.37% (spread
excluded) was included in the line interest rate below
7.5%. This amount included principally an interest swap
concluded in 2001 with a nominal value of USD 109 million
and a maturity date in 2006; such swap was designated as a hedge
of the variable interest rate of a portion of the debt related
to the acquisition of CSO Aker Maritime Deepwater.

The weighted average interest rate on bank
overdrafts was 3.11 % at December 31, 2001 (6.39 % at
December 31, 2000).

Analysis by type of debt

|                          |  |                      |        |  |           |  |         |       |  |  |         | 
|------------------------- |  | -------------------- | ------ |  | --------- |  | ------- | ----- |  |  | ------- | 
|                          |  |                     
|                          |  | At December 31, 2001 |       
|                          |  | Unaudited            |       
|                          |  |                      |       
|                          |  | Secured              |        |  | Unsecured |  |         | Total | 
|                          |  |                      |        |  |           |  |         |       | 
|                          |  |                     
|                          |  | In thousands of EUR  |       
|Capital lease obligations |  |                      | 5,457  |  |           |  |        |       |  |  | 5,457   | 
|Bank                      |  |                      | 32,739 |  |           |  | 488,310 |       |  |  | 521,049 | 
|Other                     |  |                      |       |  |           |  | 8,800   |       |  |  | 8,800   | 
|                          |  |                      |        |  |           |  |         |       | 
|Total                     |  |                      | 38,196 |  |           |  | 497,110 |       |  |  | 535,306 | 
|                          |  |                      |        |  |           |  |         |       | 

In January 2001, the Group completed the
acquisition of the CSO Aker Maritime Deepwater Division for
U.S. $513 million plus the repayment of a debt of
U.S. $142 million. To finance this acquisition, the
Group

F-82



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)

expended approximately U.S.$285 million of
its cash and borrowed U.S.$370 million in bank debt
pursuant to a short-term credit agreement. This short-term
borrowing was refinanced in 2001 with a five year syndicated
credit facility for an amount of US$350 million, fully
reimbursable at maturity on June 26, 2006, and by a
syndicated credit line of US$70 million reimbursable in
5 years. As of December 31, 2001 the syndicated credit
facility of US$350 million has been fully used and
EUR75 million has been drawn down on the credit facility of
US$70 million in order to refinance the remaining
acquisition debt, as well as capital and operating expenditures.

At December 31, 2001, the outstanding amount
due under the facility in place with a syndicate of Banks in
order to finance the Sunrise 2000 represents USD 18,651
thousand. In addition, the Group has also an available USD
7.5 million credit facility for the Sunrise 2000.

At December 31, 2001, obligations under
capital lease agreements of the Group are secured by cash
deposits in an amount of EUR 2,726 thousand and related to the
CSO Wellservicer.

In addition, at December 31, 2001, the Group
had EUR 100,825 thousand of available borrowings under long-term
credit facilities as well as a further EUR 99,568 thousand
available under short-term facilities.

Note 10  Fair values of
financial instruments

It is the policy of the Group to finance the main
strategic investments on a fixed rate basis either directly
through fixed rate based facilities or through interest swap
agreements to hedge the exposure to future increase in interests
rates. All the transactions entered into by the Group are
hedging operations. The Group does not enter into any
speculative transactions.

In certain circumstances, however, and
particularly when interest rates are declining, in order to
optimize its exposition to fluctuations in interest rates, the
Group may accept to keep a portion of its debt at variable rate.
All short term credit lines are however at variable rate. As of
December 31, 2001, the portion of the debt of the Group
with variable interest rate amounted to 384.6 million of
euro.

The strategy of the Group is also to minimize the
exposure to currency fluctuations as soon as contracts are
signed.

In addition, the Group signs multi-currency
contracts in order to optimize the allocation by currency of
contract revenues with its costs structure.

Subsidiaries purchase forward foreign exchange
contracts to hedge the estimated margin on contracts signed in a
currency other than the functional currency of the entity
concerned.

The following methods and assumptions were used
by the company in estimating its fair value disclosures for
financial instruments in accordance with the SFAS No. 107:

Long-term debt:The
fair values of the Groups long-term debt are estimated
using discounted cash flow analyses, based on the Groups
current incremental borrowing rates for similar types of
borrowing arrangements.

Foreign currency exchange contracts:The fair values of the Groups
foreign currency exchange contracts are estimated based on
quoted market prices of comparable contracts, adjusted through
interpolation when necessary for maturity differences.

Short-term debt:The
carrying amount of the Groups borrowings under its
short-term revolving credit agreements approximates their fair
value.

Cash and cash equivalents:The carrying amount reported in the
balance sheet for cash and cash equivalents approximates its
fair value.

Foreign currency exchange contracts and interest
rate swaps are off-balance-sheet hedging instruments and
therefore have no carrying value.

F-83



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)

Gains and losses related to hedging instruments
are recognized in earnings when the transaction occurs. The
Group does not enter into financial instruments for trading or
speculative purposes.

The carrying amounts and fair values of the
Groups financial instruments are as follows:

|                              |  |                      |         |  |            |  |         |  
|----------------------------- |  | -------------------- | ------- |  | ---------- |  | ------- | -
|                              |  |                     
|                              |  | At December 31, 2001 |        
|                              |  | Unaudited            |        
|                              |  |                      |        
|                              |  | Carrying or          |         |  |           
|                              |  | Notional             |         |  | Estimated  | 
|                              |  | Amount               |         |  | Fair value | 
|                              |  |                      |         |  |            | 
|                              |  |                     
|                              |  | In thousands of EUR  |        
|Balance-sheet instruments     |  |                      |         |  |            |  |         |  
|Long-term debt                |  |                      | 535,306 |  |            |  | 537,455 |  
|Off balance-sheet instruments |  |                      |         |  |            |  |         |  
|Interest rate swaps           |  |                      | 138,314 |  |            |  | 1,752   |  
|Currency forwards             |  |                      | 322,087 |  |            |  | (7,190  | )
|Currency options              |  |                      |        |  |            |  |        |  

Note 11  Income
taxes

The income tax charge taxes consists of:

|                                 |  |              |        |  
|-------------------------------- |  | ------------ | ------ | -
|                                 |  | December 31, |       
|                                 |  | 2001         |       
|                                 |  | Unaudited    |       
|                                 |  |              |       
|                                 |  | In thousands |       
|                                 |  | of EUR       |       
|Current income taxes             |  |              |        |  
|French                           |  |              | 8,060  |  
|Foreign                          |  |              | 32,860 |  
|                                 |  |              |       
|                                 |  |              | 40,920 |  
|                                 |  |              |       
|Deferred income taxes            |  |              |        |  
|French                           |  |              | (2,797 | )
|Foreign                          |  |              | (3,186 | )
|                                 |  |              |       
|Gross deferred taxes             |  |              | (5,983 | )
|                                 |  |              |       
|Deferred tax assets depreciation |  |              | (7,831 | )
|                                 |  |              |       
|Net deferred taxes               |  |              | 1,848  |  
|                                 |  |              |       
|Total                            |  |              | 42,768 |  
|                                 |  |              |       

On the basis of its future expected results, the
Group recorded in 2001 a 7 U.S.$ million depreciation
on deferred income tax assets accounted for by its subsidiaries
in the United States.

Under the law enacted in December 2001, the
French tax rate has decreased from 37.76% to 36.23%. This
decrease applies to income for years ended after
31 December 2000. The impact of this lower percentage is an
increase on current income taxes of EUR 947 thousand.

F-84



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)

Deferred income taxes result from the tax effect
of temporary differences between the financial reporting and tax
bases of the Groups assets and liabilities. Deferred
income taxes include the following significant components:

|                                           |  |              |        |  
|------------------------------------------ |  | ------------ | ------ | -
|                                           |  | Year ended   |       
|                                           |  | December 31, |       
|                                           |  | 2001         |       
|                                           |  |              |       
|                                           |  | In thousands |       
|                                           |  | of EUR       |       
|Profit in inventory                        |  |              | 476    |  
|Long-term contracts and related provisions |  |              | 9,828  |  
|Net operating loss carry-forward           |  |              | (4,054 | )
|Capital leases                             |  |              | 371    |  
|Other                                      |  |              | (4,773 | )
|                                           |  |              |       
|Deferred income taxes                      |  |              | 1,848  |  
|                                           |  |              |       

The Groups tax expense varies from the
French statutory tax rate as a result of the following factors:

|                                                                                      |  |              |         |  
|------------------------------------------------------------------------------------- |  | ------------ | ------- | -
|                                                                                      |  | Year ended   |        
|                                                                                      |  | December 31, |        
|                                                                                      |  | 2001         |        
|                                                                                      |  | Unaudited    |        
|                                                                                      |  |              |        
|                                                                                      |  | In thousands |        
|                                                                                      |  | of EUR       |        
|Statutory tax rate                                                                    |  |              | (22,426 | )
|Equity income of investees                                                            |  |              | (300    | )
|Non deductible depreciation and amortization
    charge                               |  |              | 61,772  |  
|Deferred taxes depreciation                                                           |  |              | 7,831   |  
|Adjustments for foreign income taxes different
    from the French statutory tax rate |  |              | (10,647 | )
|Other items  net                                                                     |  |              | 6,538   |  
|                                                                                      |  |              |        
|Effective tax                                                                         |  |              | 42,768  |  
|                                                                                      |  |              |        

F-85



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)

Analysis of the net deferred tax liabilities and
assets is as follows:

|                                                                                      |  |              |         |  
|------------------------------------------------------------------------------------- |  | ------------ | ------- | -
|                                                                                      |  | December 31, |        
|                                                                                      |  | 2001         |        
|                                                                                      |  | Unaudited    |        
|                                                                                      |  |              |        
|                                                                                      |  | In thousands |        
|                                                                                      |  | of EUR       |        
|Gross deferred tax assets                                                             |  |              |         |  
|Profit in inventory                                                                   |  |              | 1,418   |  
|Long-term contracts                                                                   |  |              | 14,707  |  
|Capital leases                                                                        |  |              | 567     |  
|Net operating loss carry-forwards                                                     |  |              | 52,343  |  
|Difference between accumulated depreciation and
    capital allowance on owned assets |  |              | 2,927   |  
|Employee benefit                                                                      |  |              | 2,557   |  
|Other                                                                                 |  |              | 16,838  |  
|                                                                                      |  |              |        
|Gross deferred tax assets                                                             |  |              | 91,357  |  
|                                                                                      |  |              |        
|Less: valuation allowance                                                             |  |              | (23,376 | )
|                                                                                      |  |              |        
|Total deferred tax assets, net                                                        |  |              | 67,981  |  
|                                                                                      |  |              |        
|Deferred tax liabilities                                                              |  |              |         |  
|Difference between accumulated depreciation and
    capital allowance on owned assets |  |              | 36,791  |  
|Capital leases                                                                        |  |              | 4,946   |  
|Long-term contracts                                                                   |  |              | 1,694   |  
|Other                                                                                 |  |              | 5,975   |  
|                                                                                      |  |              |        
|Gross deferred tax liability                                                          |  |              | 49,406  |  
|                                                                                      |  |              |        
|Net deferred tax                                                                      |  |              | 18,575  |  
|                                                                                      |  |              |        
|Reflected on consolidated balance
    sheet                                           |  |              |         |  
|Current deferred tax assets, net                                                      |  |              | 39,641  |  
|Current deferred tax liabilities, net                                                 |  |              | 21,066  |  
|                                                                                      |  |              |        
|Net deferred tax assets
    (liabilities)                                             |  |              | 18,575  |  
|                                                                                      |  |              |        

In accordance with provisions of the French tax
code, effective January 1, 1993, Coflexip S.A. elected to
file a consolidated tax return for French subsidiaries in which
the Group holds an interest of more than 95% from the beginning
of the year.

Beginning January 1, 2002, Coflexip SA and
its French subsidiaries are consolidated in
Technip-Coflexips tax return.

F-86



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)

Note 12  Other
liabilities

Other current liabilities consist of the
following:

|                                                             |  |              |         | 
|------------------------------------------------------------ |  | ------------ | ------- | 
|                                                             |  | December 31, |        
|                                                             |  | 2001         |        
|                                                             |  | Unaudited    |        
|                                                             |  |              |        
|                                                             |  | In thousands |        
|                                                             |  | of EUR       |        
|Income and other taxes payable and accrued
    payroll costs |  |              | 75,746  | 
|Accrued contract costs and provisions                        |  |              | 139,642 | 
|Accrued payables                                             |  |              | 83,832  | 
|Suppliers of fixed assets                                    |  |              | 6,549   | 
|Other creditors                                              |  |              | 31,450  | 
|                                                             |  |              |        
|Other current liabilities                                    |  |              | 337,219 | 
|                                                             |  |              |        

Other long-term liabilities consist of the
following:

|                                                              |  |              |        | 
|------------------------------------------------------------- |  | ------------ | ------ | 
|                                                              |  | December 31, |       
|                                                              |  | 2001         |       
|                                                              |  | Unaudited    |       
|                                                              |  |              |       
|                                                              |  | In thousands |       
|                                                              |  | of EUR       |       
|Government research grants                                    |  |              | 6,702  | 
|Provision for drydocking                                      |  |              | 14,743 | 
|Employee profit sharing scheme                                |  |              | 7,181  | 
|Retirement indemnities                                        |  |              | 8,760  | 
|Minority interests (reclassified in
    shareholders equity) |  |              |       | 
|Other liabilities                                             |  |              | 20,930 | 
|                                                              |  |              |       
|Other long-term liabilities                                   |  |              | 58,316 | 
|                                                              |  |              |       

Note 13  Common stock and
redeemable notes

Coflexip S.A.s common stock at
December 31, 2001 is made up of 18,862,388 fully paid
ordinary shares, each with a par value of EUR 1.60. In
2001, Coflexips shares of common stock increased as the
result of issuance of 176,629 fully paid ordinary shares
(stock-option exercised), which increased the shares of common
stock of Coflexip SA from EUR 29,897,214.40 to
EUR 30,179,820.80.

F-87



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)

Stock options

A summary of Coflexips stock option
activity, and related information at December 31, 2001
follows:

|                                |  |            |          |          |           |  |         | 
|------------------------------- |  | ---------- | -------- | -------- | --------- |  | ------- | 
|                                |  |           
|                                |  | 2001       |         
|                                |  | Unaudited  |         
|                                |  |            |         
|                                |  |            |          | Weighted |          
|                                |  |            |          | average  |          
|                                |  |            |          | exercise |          
|                                |  | Number     |          |          | price     | 
|                                |  | of options |          |          | per share | 
|                                |  |            |          |          |           | 
|Outstanding  Beginning of year |  |            | 504,976  |          |           |  | EUR 68  | 
|Granted                         |  |            | 214,415  |          |           |  | EUR 154 | 
|Exercised                       |  |            | (191,829 | )        |           |  | EUR 36  | 
|Forfeited                       |  |            | (18,318  | )        |           |  | EUR 128 | 
|                                |  |            |          |          |           | 
|Outstanding  end of year       |  |            | 509,244  |          |           |  | EUR 114 | 
|                                |  |            |          |          |           | 

In connection with these stock option plans,
Coflexip held 34,415 of its shares at December 31, 2001,
and 49,615 of its shares at December 31, 2000 respectively.

The following table summarizes information
concerning outstanding and exercisable options at
December 31, 2001 (contractual life in year, exercise price
in euros):

|         |  |          |      |  |          |           |        |             |  |  |             |  |  |             |         |  |  |  |         | 
|-------- |  | -------- | ---- |  | -------- | --------- | ------ | ----------- |  |  | ----------- |  |  | ----------- | ------- |  |  |  | ------- | 
|         |  |          |      |  |          | Remaining |        |             |  |  |            
|         |  | Year     |      |  | Exercise |           |        | contractual |  |  | Number      |  |  | Number      |        
|         |  | of grant |      |  | price    |           |        | life        |  |  | outstanding |  |  | exercisable |        
|         |  |          |      |  |          |           |        |             |  |  |             |  |  |             |        
|Plan 9.2 |  |          | 1997 |  |          |           | 47.35  |             |  |  | 5.43        |  |  |             | 67,043  |  |  |  | 67,043  | 
|Plan 9.3 |  |          | 1998 |  |          |           | 123.70 |             |  |  | 6.43        |  |  |             | 117,950 |  |  |  | 117,950 | 
|Plan 10  |  |          | 1999 |  |          |           | 76.61  |             |  |  | 7.95        |  |  |             | 121,336 |  |  |  | 121,336 | 
|Plan 11  |  |          | 2001 |  |          |           | 154.27 |             |  |  | 9.22        |  |  |             | 202,915 |  |  |  |        | 

Stock-options generally vest from two years from
the date of grant. The weighted average remaining contractual
life of those options is 7.8 years.

F-88



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)

Note 14  Earnings Per
Share

The following table sets forth the computation of
basic and diluted earnings (loss) per share:

|                                                                                                                         |  |              |            |  
|------------------------------------------------------------------------------------------------------------------------ |  | ------------ | ---------- | -
|                                                                                                                         |  | 2001         |           
|                                                                                                                         |  | Unaudited    |           
|                                                                                                                         |  |              |           
|                                                                                                                         |  | In thousands |           
|                                                                                                                         |  | of EUR       |           
|Numerator:                                                                                                               |  |              |            |  
|Numerator for basic earnings per
    share  Net income available to common stockholders                                 |  |              | (105,320   | )
|                                                                                                                         |  |              |           
|Numerator for diluted earnings per
    share  Net income available to common stockholders
    after assumed conversions |  |              | (105,320   | )
|Denominator:                                                                                                             |  |              |            |  
|Denominator for basic earnings per share in
    circulation                                                             |  |              |            |  
|Weighted-average shares                                                                                                  |  |              | 18,767,950 |  
|Effect of dilutive securities:                                                                                           |  |              |            |  
|Stock options                                                                                                            |  |              | 221,367    |  
|                                                                                                                         |  |              |           
|Dilutive potential common shares                                                                                         |  |              | 221,367    |  
|                                                                                                                         |  |              |           
|Denominator for diluted earnings (loss) per
    share  Adjusted weighted-average shares and assumed
    conversions     |  |              | 18,989,317 |  
|                                                                                                                         |  |              |           
|Basic Earnings per share in circulation (in Euros)                                                                       |  |              | (5.61      | )
|                                                                                                                         |  |              |           
|Diluted Earnings per share in circulation (in
    Euros)(*)                                                              |  |              | (5.61      | )
|                                                                                                                         |  |              |           



---



|    |                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------
|(*) | As a consequence of the 2001 loss, basic and
    diluted earnings per share are similar as the exercise of stock
    options would be anti-dilutive.

Note 15  Research and
Development

Included in other operating expenses is net
research and development expense as follows:

|                                       |  |              |        |  
|-------------------------------------- |  | ------------ | ------ | -
|                                       |  | 2001         |       
|                                       |  | Unaudited    |       
|                                       |  |              |       
|                                       |  | In thousands |       
|                                       |  | of EUR       |       
|Research and development expenditures  |  |              | 19,938 |  
|Government grants recognized in income |  |              | (116   | )
|                                       |  |              |       
|Net research and development expense   |  |              | 19,822 |  
|                                       |  |              |       

F-89



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)

Note 16  Personnel
(unaudited)

The number of personnel employed by Coflexip S.A.
and consolidated subsidiaries during the year was as follows:

|                         |  |           |       | 
|------------------------ |  | --------- | ----- | 
|                         |  | 2001      |      
|                         |  | Unaudited |      
|                         |  |           |      
|France                   |  |           | 888   | 
|Brazil                   |  |           | 722   | 
|United States of America |  |           | 1,741 | 
|United Kingdom           |  |           | 2,565 | 
|Finland                  |  |           | 890   | 
|Norway                   |  |           | 147   | 
|Africa                   |  |           | 98    | 
|Asia Pacific             |  |           | 278   | 
|                         |  |           |      
|Total                    |  |           | 7,329 | 
|                         |  |           |      

The number of employees includes the
sub-contracted workforce for 1,497 in 2001.

Note 17  Analysis by
Geographic Zone



| |                                                       
| | ------------------------------------------------------
| | Disclosures about segments and related
    information

Effective, January 1, 1998, the Group
adopted Financial Accounting Standard Boards Statement of
Financial Accounting Standards No 131, Disclosures about
Segments of an Enterprise and Related Information. Reportable
segments derive their revenue from the manufacture of offshore
flexible pipes used for the transportation of oil and gas,
integrated offshore construction services, installation of
flexible and rigid pipes, inspection, repair and maintenance
services, installation of Floating Production Storage and
Offloading systems (FPSOs), manufacture of ROVs that support
subsea construction activities.

The Group has five reportable segments: North
Sea, Brazil, Asia Pacific, Aker Division and Rest of World. The
Group evaluates and manages performance on a project by project
basis, from manufacturing step to selling step. The analysis of
the performance of each reportable segment is based on the
EBITDA (earnings before interests and taxes from operations
before depreciation and amortization and before corporate
allocations) of the projects sold in each geographic area.

The accounting policies of the reportable
segments are the same as those described in the summary of
significant accounting policies. As assets are not managed on a
segment basis for internal purposes, no information is provided
about segment assets and amortisation expenses. Interest expense
and income and income taxes are reviewed at group level; no
disclosure is reported by segment.

One customer accounted for 15% of net operating
revenues in 2001. In 2001, two other customers accounted for 12%
and 9% of net operating revenues, respectively.



| |                                                                           
| | --------------------------------------------------------------------------
| | Measurement of segment profit or loss by
    location of management units:

The following tables present net operating
revenues, EBITDA (Earnings Before Interests, Taxes and
Depreciation and Amortization), and operating income.

F-90



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)

Operating income represents net operating
revenues and other operating income less operating costs and
expenses of the geographic zone or industry segment excluding
general corporate expenses. General corporate expenses include
group management, financing and marketing activities, as well as
research and development.

|                                 |  |                                                         |         |      |        |  |         |         |         |  |        |  |  |              |         |   |              |  |         |       |  |  |         |   |  |  |           |  
|-------------------------------- |  | ------------------------------------------------------- | ------- | ---- | ------ |  | ------- | ------- | ------- |  | ------ |  |  | ------------ | ------- | - | ------------ |  | ------- | ----- |  |  | ------- | - |  |  | --------- | -
|                                 |  |                                                        
|                                 |  | For the year ended and at December 31, 2001 (Unaudited) |        
|                                 |  |                                                         |        
|                                 |  |                                                         |         | Asia |        |  |         |         | Rest of |  |        |  |  | Consolidated |        
|                                 |  | North Sea                                               |         |      | Brazil |  |         | Pacific |         |  | Aker   |  |  | World        |         |   | Eliminations |  |         | Total | 
|                                 |  |                                                         |         |      |        |  |         |         |         |  |        |  |  |              |         |   |              |  |         |       | 
|                                 |  |                                                        
|                                 |  | In thousands of EUR                                     |        
|Revenues from external customers |  |                                                         | 619,981 |      |        |  | 176,282 |         |         |  | 78,154 |  |  |              | 660,977 |   |              |  | 363,425 |       |  |  |        |   |  |  | 1,898,820 |  
|Intersegment revenues            |  |                                                         | 24,211  |      |        |  |        |         |         |  | 1,420  |  |  |              |        |   |              |  | 3,878   |       |  |  | (29,509 | ) |  |  |          |  
|                                 |  |                                                         |         |      |        |  |         |         |         |  |        |  |  |              |         |   |              |  |         |       | 
|Total Revenues                   |  |                                                         | 644,192 |      |        |  | 176,282 |         |         |  | 79,574 |  |  |              | 660,977 |   |              |  | 367,303 |       |  |  | (29,509 | ) |  |  | 1,898,820 |  
|                                 |  |                                                         |         |      |        |  |         |         |         |  |        |  |  |              |         |   |              |  |         |       | 
|Segment Profit and Loss EBITDA   |  |                                                         | 154,124 |      |        |  | 62,116  |         |         |  | 19,299 |  |  |              | (3,036  | ) |              |  | 40,676  |       |  |  |         |   |  |  | 273,179   |  
|                                 |  |                                                         |         |      |        |  |         |         |         |  |        |  |  |              |         |   |              |  |         |       | 
|General Corporate Expenses       |  |                                                         |         |      |        |  |         |         |         |  |        |  |  |              |         |   |              |  |         |       |  |  |         |   |  |  | (50,633   | )
|                                 |  |                                                         |         |      |        |  |         |         |         |  |        |  |  |              |         |   |              |  |         |       | 
|Segment Profit and Loss EBITDA   |  |                                                         |         |      |        |  |         |         |         |  |        |  |  |              |         |   |              |  |         |       |  |  |         |   |  |  | 222,546   |  
|                                 |  |                                                         |         |      |        |  |         |         |         |  |        |  |  |              |         |   |              |  |         |       | 
|Depreciation                     |  |                                                         |         |      |        |  |         |         |         |  |        |  |  |              |         |   |              |  |         |       |  |  |         |   |  |  | (274,179  | )
|                                 |  |                                                         |         |      |        |  |         |         |         |  |        |  |  |              |         |   |              |  |         |       | 
|Operating income                 |  |                                                         |         |      |        |  |         |         |         |  |        |  |  |              |         |   |              |  |         |       |  |  |         |   |  |  | (51,633   | )
|                                 |  |                                                         |         |      |        |  |         |         |         |  |        |  |  |              |         |   |              |  |         |       | 



| |                                                                     
| | --------------------------------------------------------------------
| | Measurement of segment profit or loss by
    location of subsidiary:

The following table presents net operating
revenues, operating income and identifiable assets by
geographical zone (by location of subsidiary):

|                                     |  |                                                         |           |      |           |  |           |        |  |  |         |              |  |       |        |  |              |  |         |       |  |  |          |   |  |  |           |  
|------------------------------------ |  | ------------------------------------------------------- | --------- | ---- | --------- |  | --------- | ------ |  |  | ------- | ------------ |  | ----- | ------ |  | ------------ |  | ------- | ----- |  |  | -------- | - |  |  | --------- | -
|                                     |  |                                                        
|                                     |  | For the year ended and at December 31, 2001 (Unaudited) |          
|                                     |  |                                                         |          
|                                     |  |                                                         |           | Asia |           |  | Rest of   |        |  |  |         | Consolidated | 
|                                     |  | France                                                  |           |      | North Sea |  |           | Brazil |  |  | Pacific |              |  | World |        |  | Eliminations |  |         | Total | 
|                                     |  |                                                         |           |      |           |  |           |        |  |  |         |              |  |       |        |  |              |  |         |       | 
|                                     |  |                                                        
|                                     |  | In thousands of EUR                                     |          
|Revenues from unaffiliated customers |  |                                                         | 201,082   |      |           |  | 858,503   |        |  |  | 85,668  |              |  |       | 65,305 |  |              |  | 688,262 |       |  |  |          |   |  |  | 1,898,820 |  
|Revenues between geographic zones    |  |                                                         | 79,842    |      |           |  | 184,325   |        |  |  | 4,882   |              |  |       | 1,536  |  |              |  | 33,376  |       |  |  | (303,961 | ) |  |  |           |  
|                                     |  |                                                         |           |      |           |  |           |        |  |  |         |              |  |       |        |  |              |  |         |       | 
|Net operating revenues               |  |                                                         | 280,924   |      |           |  | 1,042,828 |        |  |  | 90,550  |              |  |       | 66,841 |  |              |  | 721,638 |       |  |  | (303,961 | ) |  |  | 1,898,820 |  
|                                     |  |                                                         |           |      |           |  |           |        |  |  |         |              |  |       |        |  |              |  |         |       | 
|Operating income                     |  |                                                         |           |      |           |  |           |        |  |  |         |              |  |       |        |  |              |  |         |       |  |  |          |   |  |  |           |  
|(before corporate expenses)          |  |                                                         | 41,885    |      |           |  | (70,026   | )      |  |  | 9,338   |              |  |       | 29,975 |  |              |  | (12,172 | )     |  |  |          |   |  |  | (1,000    | )
|General corporate expenses           |  |                                                         |           |      |           |  |           |        |  |  |         |              |  |       |        |  |              |  |         |       |  |  |          |   |  |  | (50,633   | )
|                                     |  |                                                         |           |      |           |  |           |        |  |  |         |              |  |       |        |  |              |  |         |       | 
|Operating income                     |  |                                                         |           |      |           |  |           |        |  |  |         |              |  |       |        |  |              |  |         |       |  |  |          |   |  |  | (51,633   | )
|                                     |  |                                                         |           |      |           |  |           |        |  |  |         |              |  |       |        |  |              |  |         |       | 
|Tangible assets                      |  |                                                         | 1,174,408 |      |           |  | 374,883   |        |  |  | 124,060 |              |  |       | 28,836 |  |              |  | 432,823 |       |  |  |          |   |  |  | 2,135,010 |  
|                                     |  |                                                         |           |      |           |  |           |        |  |  |         |              |  |       |        |  |              |  |         |       | 

Note 18  Commitments and
contingencies



| |                                                   
| | --------------------------------------------------
| | Performance guarantees and contract
    warranties

Contract performance guaranteed by the Group by
way of bank guarantees amounted to EUR 135,092 thousands at
December 31, 2001.

The total warranties directly issued by the Group
on commercial contracts amounted to EUR 1,361,041 thousands
at December 31, 2001.

F-91



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)



| |       
| | ------
| | Leases

The Group leases office space, machinery, vessels
and equipment, data processing equipment, vehicles and other
items of personal property under leases expiring at various
dates during the next ten years. Management expects that, in the
normal course of business, leases that expire will be renewed or
replaced by other leases.



| |       
| | ------
| | Rental

Rental expense in 2001 was EUR 37,332
thousand (including rental expenses of vessels for a total
amount of EUR 17,621 thousand).

At December 31, 2001, minimum rental
commitments under all capital leases and operating leases for
future years are as follows:

|                                                |  |                     |        |   |           |  |         | 
|----------------------------------------------- |  | ------------------- | ------ | - | --------- |  | ------- | 
|                                                |  | Capital             |        |   | Operating | 
|                                                |  | leases              |        |   | leases    | 
|                                                |  |                     |        |   |           | 
|                                                |  |                    
|                                                |  | In thousands of EUR |       
|2002                                            |  |                     | 1,830  |   |           |  | 37,343  | 
|2003                                            |  |                     | 1,866  |   |           |  | 35,258  | 
|2004                                            |  |                     | 1,867  |   |           |  | 25,266  | 
|2005                                            |  |                     | 952    |   |           |  | 23,215  | 
|2006                                            |  |                     |        |   |           |  | 20,503  | 
|2007 and thereafter                             |  |                     |        |   |           |  | 51,310  | 
|                                                |  |                     |        |   |           | 
|Total minimum lease payments                    |  |                     | 6,515  |   |           |  | 192,895 | 
|Less: amounts representing interest             |  |                     | (1,101 | ) |           |  |        | 
|                                                |  |                     |        |   |           | 
|Present value of net minimum lease
    payments |  |                     | 5,414  |   |           |  |        | 
|                                                |  |                     |        |   |           | 

During 2001, no new capital lease obligation was
incurred.



| |                                                      
| | -----------------------------------------------------
| | Legal proceedings, claims and other
    contingencies

The Group entered in negotiations with Petrobras
in early 1999 regarding certain commercial disputes related to
the financial crisis affecting Brazil, and which concern,
notably, the application of dollar indexation clauses in local
supply contracts.

The operating income has been favorably impacted
in 1999 up to EUR 19.1 million by the positive conclusion
of certain of these commercial negotiations with Petrobras.

The Group is involved in various claims from
customers and legal proceedings. These cases are, in the opinion
of management, ordinary routine matters incidental to the normal
business conducted by the Group. These claims have been provided
for under accrued contract costs and provisions (see
note 12) when a loss is considered probable and can be
reasonably estimated.

Acquisition by Coflexip of the Aker Maritime ASA
Deepwater Division: following this acquisition, Coflexip
notified Aker Maritime, that under the price adjustment
provisions of the Share Purchase Agreement, it was entitled to a
U.S.$136.7 million reduction in the purchase price of the
Deepwater Division. In accordance with the price adjustment
mechanisms stipulated in the contract, an independent auditor
will assess this claim before it is finalized. At
December 31, 2001, the selection of the auditor is the
subject of an arbitral proceeding between Aker Maritime and
Coflexip. Coflexip expects to conclude this arbitral proceeding
during fiscal year 2002. Should this procedure reduce the
purchase price of the Deepwater Division, Coflexip would make a
corresponding adjustment to the balance sheet reflecting the
revised acquisition goodwill.

F-92



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)

McNulty Offshore (a Coflexips subsidiary
since the acquisition of the Deepwater Division from Aker
Maritime), as a party to an alliance contract entered into in
1996, has been involved in a dispute with a customer relating to
the performance of its contract. The customer filed a
counter-claim with the Court against McNulty Offshore. When
acquiring the Deepwater Division, Coflexip has received specific
warranties on the outcome of this dispute and consequently
believes that it will not incur material liabilities in
connection with these claims for which no provision has been
recorded.

On December 21, 2001, a French company filed
a complaint with the Tribunal de Commerce de Versailles against
Coflexip, Coflexip Stena Offshore Limited and Coflexip Stena
Offshore. The claim alleges that Coflexip breached several
confidentiality agreements. This company also brought an action
in the court in Scotland against Coflexip for infringement of a
patent related to pipe-in-pipe technologies. On the
basis of the available information, Coflexip believes that these
allegations are unfounded and that its exposure is not material.
Consequently, no provision has been recorded in relation to
these actions.

Note 19  Related Party
Transactions

In 1974, Coflexip entered into a licensing
contract with the Institut Français du Pétrole
(IFP), a French research and development
organization which holds a controlling interest in ISIS, a
principal shareholder of Coflexip. Pursuant to the contract, the
Group is entitled to use certain IFP technology and know-how in
exchange for the payment of royalties.

The contract does not expire until Coflexip
ceases to manufacture and sell products based on IFP technology
and know-how. Royalties due to the IFP amounted to
EUR 2,952 thousand in 2001.

The Group purchases certain specialized plastics
required for manufacturing flexible pipe from ATOFINA S.A., a
significant supplier and a 99%-owned subsidiary of TotalFinaElf.
The purchase contract for such plastics was initially entered
into on an arms-length basis and was renewed in 2000 on
arms-length terms. Purchases from ATOFINA S.A. amounted to
EUR 13,967 thousand in 2001.

The Group manufactures flexible pipe and provides
installation services to engineering subsidiaries of Technip,
the main shareholder of Coflexip. Net operating revenues from
these companies amounted to EUR 5,130 thousand in 2001.

At December 2001, Coflexip obtained from
Technip-Coflexip
 75 million
borrowing. Interest expenses related to this borrowing amounted
to  96
thousand in 2001.

Note 20  Customer Backlog
(Unaudited)

The Group had firm unfilled customer orders
(backlog) for its products and services of
approximately EUR 1,887 million at December 31,
2001. An order is generally completed within one to three
calendar years following the year in which it is placed.

Note 21  Subsequent
Events

No significant event occurred as of today.

Note 22  List of principal
consolidated subsidiaries and equity accounted
companies

|                                   |  |               |  |               |                | 
|---------------------------------- |  | ------------- |  | ------------- | -------------- | 
|                                   |  |               |  | Percentage of |               
|                                   |  |               |  | interest in   |               
|Consolidated Companies             |  | Location      |  | consolidation |               
|                                   |  |               |  |               |               
|Coflexip                           |  | Paris, France |  |               | Parent Company | 
|Cofleximmo                         |  | Paris, France |  |               | 100            | 
|Coflexip Stena Offshore Deep Water |  | Paris, France |  |               | 100            | 

F-93



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)

|                                              |  |                                     |  |               |     | 
|--------------------------------------------- |  | ----------------------------------- |  | ------------- | --- | 
|                                              |  |                                     |  | Percentage of |    
|                                              |  |                                     |  | interest in   |    
|Consolidated Companies                        |  | Location                            |  | consolidation |    
|                                              |  |                                     |  |               |    
|Angoflex                                      |  | Paris, France                       |  |               | 100 | 
|Coflexip Stena Offshore International         |  | Boulogne Billancourt, France        |  |               | 100 | 
|Coflexip Developpement                        |  | Boulogne Billancourt, France        |  |               | 100 | 
|Coflexip Stena Offshore N.V                   |  | Amsterdam, Netherlands              |  |               | 100 | 
|Coflexip Stena Offshore Contracting BV        |  | Amsterdam, Netherlands              |  |               | 100 | 
|Coflexip Stena Offshore Holdings Ltd.         |  | Aberdeen, United Kingdom            |  |               | 100 | 
|Coflexip Stena Offshore Ltd.                  |  | Aberdeen, United Kingdom            |  |               | 100 | 
|Coflexip Stena Offshore Ships One Ltd.        |  | Aberdeen, United Kingdom            |  |               | 100 | 
|Coflexip Stena Offshore Ships Three Ltd.      |  | Aberdeen, United Kingdom            |  |               | 100 | 
|Coflexip U.K. Stena Offshore Holdings Ltd.    |  | Aberdeen, United Kingdom            |  |               | 100 | 
|Coflexip U.K. Ltd.                            |  | Aberdeen, United Kingdom            |  |               | 100 | 
|Perry Slingsby, Ltd.                          |  | Aberdeen, United Kingdom            |  |               | 100 | 
|DUCO Ltd.                                     |  | Newcastle, United Kingdom           |  |               | 100 | 
|Captain Franck Mc Nulty and sons              |  | Aberdeen, United Kingdom            |  |               | 90  | 
|Genesis Oil and Gas Consultants Ltd.          |  | Aberdeen, United Kingdom            |  |               | 100 | 
|Mc Nulty Offshore Ltd.                        |  | Aberdeen, United Kingdom            |  |               | 90  | 
|Coflexip International Norge AS               |  | Oslo, Norway                        |  |               | 100 | 
|Coflexip Stena Offshore Norge AS              |  | Oslo, Norway                        |  |               | 100 | 
|Coflexip Stena Offshore AS                    |  | Lysaker, Norway                     |  |               | 100 | 
|Coflexip Stena Offshore U.S.A. Holding Inc.   |  | Houston, TX, U.S.A                  |  |               | 100 | 
|Coflexip Stena Offshore Services Inc.         |  | Houston, TX, U.S.A                  |  |               | 100 | 
|DUCO Inc.                                     |  | Houston, TX, U.S.A                  |  |               | 100 | 
|Coflexip Maritime Inc.                        |  | Houston, TX, U.S.A                  |  |               | 100 | 
|CSO Aker Maritime Inc.                        |  | Houston, TX, U.S.A                  |  |               | 100 | 
|CSO Aker Engineering Inc.                     |  | Houston, TX, U.S.A                  |  |               | 100 | 
|CSO Aker Marine Contractors Inc.              |  | Houston, TX, U.S.A                  |  |               | 100 | 
|Deep Oil Technology Inc.                      |  | Houston, TX, U.S.A                  |  |               | 50  | 
|Genesis Oil and Consultants Inc.              |  | Houston, TX, U.S.A                  |  |               | 100 | 
|Spars International Inc.                      |  | Houston, TX, U.S.A                  |  |               | 50  | 
|Perry Slingsby, Inc.                          |  | Jupiter, Florida, U.S.A             |  |               | 100 | 
|R.J. Brown Deepwater, Inc.                    |  | Houston, TX, U.S.A                  |  |               | 100 | 
|Coflexip Stena Offshore Newfoundland          |  | St Johns, Newfoundland, Canada     |  |               | 100 | 
|Stena Offshore (Jersey) Ltd.                  |  | Jersey                              |  |               | 100 | 
|Coflexip Stena Offshore (Mauritius) Ltd.      |  | Mauritius                           |  |               | 100 | 
|Flexservice N.V                               |  | Dutch West Indies                   |  |               | 100 | 
|Sunflex Offshore N.V                          |  | Dutch West Indies                   |  |               | 100 | 
|Flexone N.V                                   |  | Dutch West Indies                   |  |               | 100 | 
|Brasflex                                      |  | Rio de Janeiro, Brazil              |  |               | 100 | 
|Brasflex Overseas                             |  | Virgin Islands                      |  |               | 100 | 
|Sea Oil                                       |  | Cayman Islands, British West Indies |  |               | 100 | 
|Flexibras                                     |  | Vitoria, Brazil                     |  |               | 100 | 
|Sigma                                         |  | Vitoria, Brazil                     |  |               | 100 | 
|Marflex                                       |  | Rio de Janeiro, Brazil              |  |               | 100 | 
|Coflexip Stena Offshore Asia Pacific PTY Ltd. |  | Perth, Australia                    |  |               | 100 | 
|Coflexip Stena Offshore PTY Ltd.              |  | Perth, Australia                    |  |               | 100 | 
|Coflexip Stena Offshore Maritime Pty Ltd.     |  | Perth, Australia                    |  |               | 100 | 

F-94



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)

|                                                           |  |                     |  |               |      | 
|---------------------------------------------------------- |  | ------------------- |  | ------------- | ---- | 
|                                                           |  |                     |  | Percentage of |     
|                                                           |  |                     |  | interest in   |     
|Consolidated Companies                                     |  | Location            |  | consolidation |     
|                                                           |  |                     |  |               |     
|Coflexip Stena Offshore Oil and Gas Pty Ltd.               |  | Perth, Australia    |  |               | 100  | 
|Genesis Oil and Gas Consultants Pty Ltd.                   |  | Perth, Australia    |  |               | 100  | 
|South East Asia Marine Engineering &
    Construction Ltd. |  | Calcutta, India     |  |               | 58.2 | 
|Coflexip Stena Offshore Aker Rauma Inc.                    |  | Finland             |  |               | 100  | 
|Mantyluoto Works OY                                        |  | Finland             |  |               | 100  | 
|PI Rauma OY                                                |  | Finland             |  |               | 50   | 
|CSO Singapour                                              |  | Singapour           |  |               | 100  | 
|Gulf Marine Fabricators Inc.                               |  | Houston, TX, U.S.A. |  |               | 100  | 
|CSO Aker Maritime Pty Ltd.                                 |  | Australia           |  |               | 100  | 

F-95



---



##### Table of Contents



SIGNATURES

The registrant certifies that it meets all of the
requirements for filing on Form 20-F and has duly caused
and authorized the undersigned to sign this annual report on its
behalf.



| |        
| | -------
| | TECHNIP



| |     |                 
| | --- | ----------------
| | By: | /s/ Daniel Valot

| |                               
| | ------------------------------
| |                               
| | Name: Daniel Valot            
| | Title: Chief Executive Officer

Date: June 29, 2004