##### Table of Contents



As filed with the Securities and Exchange
Commission on June 11, 2002




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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, 2001 |  | 
|o |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR
    15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
    Commission file number 1-15234           |  | 

TECHNIP-COFLEXIP


(Exact name of Registrant as specified in its
charter)


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

La Défense 6

170, Place Henri Régnault


92973 Paris, La Défense Cedex


(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: 26,736,698

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



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TABLE OF CONTENTS



|                                                                                                                           |                                                                                       |  |  |  |  |  |  | 
|-------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PRESENTATION OF INFORMATION                                                                                               
|CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS                                                                 
|PART I                                                                                                                    
|                                                                                                                           | Item 1. Identity of Directors, Senior Management and Advisers                        
|                                                                                                                           | Item 2. Offer Statistics and Expected Timetable                                      
|                                                                                                                           | Item 3. Key Information                                                              
|                                                                                                                           | Item 4. Information on Technip-Coflexip                                              
|                                                                                                                           | Item 5. Operating and Financial Review and Prospects                                 
|                                                                                                                           | Item 6. Directors, Senior Management and Employees                                   
|                                                                                                                           | Item 7. Major Shareholders and Related Party Transactions                            
|                                                                                                                           | Item 8. Financial Information                                                        
|                                                                                                                           | Item 9. The Offer and Listing                                                        
|                                                                                                                           | Item 10. Additional Information                                                      
|                                                                                                                           | Item 11. Quantitative And Qualitative Disclosures About Market Risk                  
|                                                                                                                           | Item 12. Description of Securities to be Registered                                  
|PART II                                                                                                                   
|                                                                                                                           | Item 13. Defaults, Dividend Arrearages and Delinquencies                             
|                                                                                                                           | Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
|PART III                                                                                                                  
|                                                                                                                           | Item 15. [Reserved.]                                                                 
|                                                                                                                           | Item 16. [Reserved.]                                                                 
|                                                                                                                           | Item 17. Financial Statements                                                        
|                                                                                                                           | Item 18. Financial Statements                                                        
|                                                                                                                           | Item 19. Exhibits                                                                    
|REPORT OF INDEPENDENT AUDITORS Barbier, Frinault & Autres Ernst & Young Network 41, rue Ybry 92576 Neuilly-sur-Seine Cedex
|CONSOLIDATED INCOME STATEMENTS                                                                                            
|CONSOLIDATED BALANCE SHEETS                                                                                               
|CONSOLIDATED BALANCE SHEETS (continued)                                                                                   
|CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                                     
|CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY                                                                
|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      
|CONSOLIDATED BALANCE SHEET                                                                                                
|CONSOLIDATED STATEMENT OF OPERATIONS                                                                                      
|CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED)                                                                
|CONSOLIDATED STATEMENT OF CASH FLOWS                                                                                      
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)                                                                
|REPORT OF INDEPENDENT AUDITORS                                                                                            
|FINANCIAL HIGHLIGHTS                                                                                                      
|CONSOLIDATED BALANCE SHEETS                                                                                               
|CONSOLIDATED STATEMENTS OF INCOME                                                                                         
|CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY                                                                           
|CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                                     
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                                                
|SIGNATURES                                                                                                                
|By-Laws, as amended, of Technip-Coflexip                                                                                  
|Offering Circular dated January 22, 2002                                                                                  



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##### Table of Contents



TABLE OF CONTENTS

|                                                              |  |                                                                                  |   |      |     | 
|------------------------------------------------------------- |  | -------------------------------------------------------------------------------- | - | ---- | --- | 
|                                                              |  |                                                                                  |   | Page
|                                                              |  |                                                                                  |   |     
|PRESENTATION OF INFORMATION                                   |  |                                                                                  | 4 |     
|CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
    STATEMENTS |  |                                                                                  | 4 |     
|PART I                                                        |  |                                                                                  |   |     
|Item 1:                                                       |  | Identity of Directors, Senior Management and
    Advisers                        |   |      | 7   | 
|Item 2:                                                       |  | Offer Statistics and Expected Timetable                                          |   |      | 7   | 
|Item 3:                                                       |  | Key Information                                                                  |   |      | 7   | 
|Item 4:                                                       |  | Information on Technip-Coflexip                                                  |   |      | 17  | 
|Item 5:                                                       |  | Operating and Financial Review and Prospects                                     |   |      | 77  | 
|Item 6:                                                       |  | Directors, Senior Management and Employees                                       |   |      | 107 | 
|Item 7:                                                       |  | Major Shareholders and Related Party Transactions                                |   |      | 118 | 
|Item 8:                                                       |  | Financial Information                                                            |   |      | 119 | 
|Item 9:                                                       |  | The Offer and Listing                                                            |   |      | 121 | 
|Item 10:                                                      |  | Additional Information                                                           |   |      | 123 | 
|Item 11:                                                      |  | Quantitative And Qualitative Disclosures About
    Market Risk                   |   |      | 147 | 
|Item 12:                                                      |  | Description of Securities to be Registered                                       |   |      | 150 | 
|PART II                                                       |  |                                                                                  |   |     
|Item 13:                                                      |  | Defaults, Dividend Arrearages and Delinquencies                                  |   |      | 151 | 
|Item 14:                                                      |  | Material Modifications to the Rights of Security
    Holders and Use of Proceeds |   |      | 151 | 
|PART III                                                      |  |                                                                                  |   |     
|Item 15:                                                      |  | [Reserved.]                                                                      |   |      | 152 | 
|Item 16:                                                      |  | [Reserved.]                                                                      |   |      | 152 | 
|Item 17:                                                      |  | Financial Statements                                                             |   |      | 152 | 
|Item 18:                                                      |  | Financial Statements                                                             |   |      | 152 | 
|Item 19:                                                      |  | Exhibits                                                                         |   |      | 152 | 

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PRESENTATION OF INFORMATION

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

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, including, without limitation, certain statements
made in the sections entitled Item 3. Key
Information  Risk Factors, Item 4.
Information on Technip-Coflexip and Item 5.
Operating and Financial Review and Prospects, are
statements of future expectations. 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 or phrases such as believe, aim,
expect, anticipate, intend,
foresee, likely, should,
planned, may, estimated,
potential or other similar words and phrases.
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 prospectus. Risks that
could cause actual results to differ materially from the results
anticipated in the forward-looking statements include, among
other things:



| |   |                                                                                                                                                                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | changes in general political, economic and
    business conditions;                                                                                                                                                                                                       
|
| |  | changes in currency exchange rates, in particular
    between the euro and the U.S. dollar, interest rates and
    inflation rates;                                                                                                                                       
|
| |  | changes in the composition of Technip-Coflexip
    and the successful integration of acquisitions, divestitures and
    joint venture activities;                                                                                                                         
|
| |  | changes in the competitive environment in which
    we operate;                                                                                                                                                                                                           
|
| |  | changes in the rate of offshore oil and gas
    development;                                                                                                                                                                                                              
|
| |  | changes to our business structure;                                                                                                                                                                                                                                        
|
| |  | changes in the demand, supply and market prices
    relating to crude oil, refined products, natural gas and
    petrochemicals, including changes in production quotas in OPEC
    countries and the deregulation of the natural gas transmission
    industry in Europe;
|
| |  | changes in the degree of patent and other legal
    protection afforded to our products;                                                                                                                                                                                  
|
| |  | regulatory developments and changes;                                                                                                                                                                                                                                      
|
| |  | losses or lower than expected margins on one or
    more large contracts;                                                                                                                                                                                                 
|
| |  | potential liability resulting from pending or
    future litigation;                                                                                                                                                                                                      
|
| |  | risks and uncertainties attendant to doing
    business in numerous countries that may be exposed to, or may
    have recently experience economic or governmental instability;                                                                                           

The risk factors described beginning on
page 11 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

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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.

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-Coflexip 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.

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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 1997, 1998, 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. The euro did not exist prior to
January 1, 1999, and the conversion rate used may not
reflect the French franc/euro exchange rate that would have
applied if the euro had existed at such times. Solely for the
convenience of the reader, this annual report contains
translations of certain euro and French franc amounts into
U.S. dollars at specified rates. These translations should
not be construed as representations that the converted amounts
actually represent such U.S. dollar amounts or could be
converted into U.S. dollars at the rates indicated or at
any other rate. Unless otherwise stated, the translations of
euros into U.S. dollars have been made at the rate of
 1.12 per
$1.00, or $0.8901 per
 1.00, the
noon buying rate in New York City for cable transfers in euros
as certified for customs purposes by the Federal Reserve Bank of
New York (the Noon Buying Rate) on December 31,
2001. See  Exchange Rate Information
below for information regarding the euro and French
franc/U.S. dollar exchange rates from 1995 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
(GAAP), which differ in certain significant respects
from U.S. GAAP. See Notes 29 and 30 to our audited
consolidated financial statements for the years ended
December 31, 1999, 2000 and 2001 (the Consolidated
Financial Statements) included elsewhere in this annual
report 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.

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The tables below present selected consolidated
financial data for the Group for the five-year period ended
December 31, 2001. Such data with respect to the years
ended December 31, 1997, 1998, 1999, 2000 and 2001 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 Network, independent
auditors, as indicated in their report thereon, which also
appears in this annual report.

|                                         |  |                                          |         |      |  |      |         |      |  |      |         |   |  |  |         |  |  |  |         |  |  |  |         | 
|---------------------------------------- |  | ---------------------------------------- | ------- | ---- |  | ---- | ------- | ---- |  | ---- | ------- | - |  |  | ------- |  |  |  | ------- |  |  |  | ------- | 
|                                         |  |                                         
|                                         |  | Year ended December 31,                 
|                                         |  |                                         
|                                         |  |                                          |         |     
|                                         |  | 2001                                     |         |     
|                                         |  |                                          |         | 2000 |  | 1999 |         | 1998 |  | 1997
|                                         |  | U.S.$(1)                                 |         |     |  |     |         |     |  |     |         | 
|                                         |  |                                          |         |      |  |      |         |      |  |      |         |  
|                                         |  |                                         
|                                         |  | (amounts in millions, except share data)
|Income Statement Data:                   |  |                                          |         |      |  |      |         |      |  |      |         |   |  |  |         |  |  |  |         |  |  |  |         | 
|French GAAP                              |  |                                          |         |      |  |      |         |      |  |      |         |   |  |  |         |  |  |  |         |  |  |  |         | 
|Net sales                                |  |                                          | 3,156.3 |      |  |      | 3,546.0 |      |  |      | 2,972.0 |   |  |  | 2,782.2 |  |  |  | 1,846.4 |  |  |  | 1,809.3 | 
|Operating expenses                       |  |                                          | 3,001.9 |      |  |      | 3,372.5 |      |  |      | 2,816.1 |   |  |  | 2,630.7 |  |  |  | 1,710.9 |  |  |  | 1,687.5 | 
|Operating income                         |  |                                          | 154.4   |      |  |      | 173.5   |      |  |      | 155.9   |   |  |  | 151.5   |  |  |  | 135.5   |  |  |  | 124.7   | 
|Net income                               |  |                                          | 96.2    |      |  |      | 108.1   |      |  |      | 214.2   |   |  |  | 172.6   |  |  |  | 105.4   |  |  |  | 95.6    | 
|U.S. GAAP                                |  |                                          |         |      |  |      |         |      |  |      |         |   |  |  |         |  |  |  |         |  |  |  |         | 
|Net sales                                |  |                                          | 3,157.5 |      |  |      | 3,547.3 |      |  |      | 2,989.5 |   |  |  | 2,783.7 |  |  |  | N/A     |  |  |  | N/A     | 
|Operating income                         |  |                                          | 176.8   |      |  |      | 198.7   |      |  |      | 151.7   |   |  |  | 150.9   |  |  |  | N/A     |  |  |  | N/A     | 
|Net income                               |  |                                          | 102.1   |      |  |      | 114.8   |      |  |      | 164.9   |   |  |  | 109.6   |  |  |  | N/A     |  |  |  | N/A     | 
|Per Share Data:                          |  |                                          |         |      |  |      |         |      |  |      |         |   |  |  |         |  |  |  |         |  |  |  |         | 
|French GAAP                              |  |                                          |         |      |  |      |         |      |  |      |         |   |  |  |         |  |  |  |         |  |  |  |         | 
|Non-Diluted net income per share         |  |                                          | 3.96    |      |  |      | 4.45    |      |  |      | 13.90   |   |  |  | 10.95   |  |  |  | 6.68    |  |  |  | 5.78    | 
|Diluted net income per share             |  |                                          | 3.79    |      |  |      | 4.26    |      |  |      | 12.85   |   |  |  | 10.75   |  |  |  | 6.51    |  |  |  | 5.60    | 
|Non-Diluted number of shares (thousands) |  |                                          | 24,242  |      |  |      | 24,242  |      |  |      | 15,412  |   |  |  | 15,759  |  |  |  | 15,776  |  |  |  | 16,553  | 
|Diluted number of shares (thousands)(2)  |  |                                          | 25,388  |      |  |      | 25,388  |      |  |      | 16,665  |   |  |  | 16,051  |  |  |  | 16,192  |  |  |  | 17,077  | 
|U.S. GAAP                                |  |                                          |         |      |  |      |         |      |  |      |         |   |  |  |         |  |  |  |         |  |  |  |         | 
|Basic net income per share               |  |                                          | 6.09    |      |  |      | 6.85    |      |  |      | 10.84   |   |  |  | 7.12    |  |  |  | N/A     |  |  |  | N/A     | 
|Diluted net income per share             |  |                                          | 6.02    |      |  |      | 6.77    |      |  |      | 10.73   |   |  |  | 7.10    |  |  |  | N/A     |  |  |  | N/A     | 
|Basic number of shares (thousands)       |  |                                          | 16,770  |      |  |      | 16,770  |      |  |      | 15,210  |   |  |  | 15,387  |  |  |  | N/A     |  |  |  | N/A     | 
|Diluted number of share (thousands)(2)   |  |                                          | 16,962  |      |  |      | 16,962  |      |  |      | 15,374  |   |  |  | 15,446  |  |  |  | N/A     |  |  |  | N/A     | 
|Other Financial Data:                    |  |                                          |         |      |  |      |         |      |  |      |         |   |  |  |         |  |  |  |         |  |  |  |         | 
|French GAAP                              |  |                                          |         |      |  |      |         |      |  |      |         |   |  |  |         |  |  |  |         |  |  |  |         | 
|Purchase of fixed assets                 |  |                                          | 2,377.0 |      |  |      | 2,670.5 |      |  |      | 702.2   |   |  |  | 109.8   |  |  |  | 10.5    |  |  |  | 33.7    | 
|Depreciation and amortization            |  |                                          | 98.7    |      |  |      | 110.9   |      |  |      | 43.0    |   |  |  | 31.8    |  |  |  | 14.0    |  |  |  | 15.0    | 

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|                            |  |                       |          |      |  |      |          |      |  |      |         |   |  |  |         |   |  |  |         |   |  |  |         |  
|--------------------------- |  | --------------------- | -------- | ---- |  | ---- | -------- | ---- |  | ---- | ------- | - |  |  | ------- | - |  |  | ------- | - |  |  | ------- | -
|                            |  |                      
|                            |  | At December 31,      
|                            |  |                      
|                            |  |                       |          |     
|                            |  | 2001                  |          |     
|                            |  |                       |          | 2000 |  | 1999 |          | 1998 |  | 1997
|                            |  | U.S.$(1)              |          |     |  |     |          |     |  |     |         | 
|                            |  |                       |          |      |  |      |          |      |  |      |         |  
|                            |  |                      
|                            |  | (amounts in millions)
|Balance Sheet Data:         |  |                       |          |      |  |      |          |      |  |      |         |   |  |  |         |   |  |  |         |   |  |  |         |  
|French GAAP                 |  |                       |          |      |  |      |          |      |  |      |         |   |  |  |         |   |  |  |         |   |  |  |         |  
|Cash and cash equivalents   |  |                       | 679.5    |      |  |      | 763.4    |      |  |      | 563.1   |   |  |  | 1,019.4 |   |  |  | 861.5   |   |  |  | 936.3   |  
|Working capital requirement |  |                       | (619.2   | )    |  |      | (695.7   | )    |  |      | (648.0  | ) |  |  | (830.9  | ) |  |  | (537.9  | ) |  |  | (531.1  | )
|Fixed assets, net           |  |                       | 3,388.4  |      |  |      | 3,806.8  |      |  |      | 1,050.7 |   |  |  | 431.8   |   |  |  | 264.1   |   |  |  | 275.3   |  
|Total assets                |  |                       | 10,785.9 |      |  |      | 12,117.7 |      |  |      | 6,906.6 |   |  |  | 6,205.0 |   |  |  | 4,474.3 |   |  |  | 4,768.3 |  
|Total short-term debt       |  |                       | 406.5    |      |  |      | 456.7    |      |  |      | 191.2   |   |  |  | 15.0    |   |  |  | 8.8     |   |  |  | 16.5    |  
|Total long-term debt        |  |                       | 1,052.3  |      |  |      | 1,182.2  |      |  |      | 4.8     |   |  |  | 6.8     |   |  |  | 2.1     |   |  |  | 17.7    |  
|Shareholders equity        |  |                       | 1,970.8  |      |  |      | 2,214.2  |      |  |      | 766.4   |   |  |  | 596.2   |   |  |  | 484.1   |   |  |  | 490.2   |  
|Minority interests          |  |                       | 19.0     |      |  |      | 21.4     |      |  |      | 3.4     |   |  |  | 2.3     |   |  |  | 2.8     |   |  |  | 3.4     |  
|U.S. GAAP                   |  |                       |          |      |  |      |          |      |  |      |         |   |  |  |         |   |  |  |         |   |  |  |         |  
|Total long term debt        |  |                       | 1,052.3  |      |  |      | 1,182.2  |      |  |      | 4.8     |   |  |  | 6.8     |   |  |  | N/A     |   |  |  | N/A     |  
|Total assets                |  |                       | 6,829.2  |      |  |      | 7,672.4  |      |  |      | 2,451.8 |   |  |  | 2,304.8 |   |  |  | N/A     |   |  |  | N/A     |  
|Shareholders equity        |  |                       | 1,983.4  |      |  |      | 2,228.3  |      |  |      | 764.9   |   |  |  | 639.6   |   |  |  | N/A     |   |  |  | N/A     |  



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|    |                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Translated solely for convenience into dollars at
    the Noon Buying Rate on December 31, 2001 of
     1.12 per
    $1.00.                                                              
|   
|(2) | Diluted share capital excludes
    1,847,376 shares held by our subsidiary ISIS, which we have
    announced our intent to cancel subsequent to our proposed merger
    with ISIS in 2002.

Exchange Rate Information

Under the provisions of the Treaty on European
Union signed by the then 12 member states of the European Union
in early 1992, a European Monetary Union, known as the EMU, was
implemented on January 1, 1999, and a single European
currency, known as the euro, was introduced. The following
member states participate in the EMU and have adopted the euro
as their national currency: Austria, Belgium, Finland, France,
Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal,
Spain and, since January 1, 2001, Greece. The legal rate of
conversion between French francs and the euro was established on
January 1, 1999 at FF 6.55957 =
 1.00.

Since January 1, 1999, the euro has been the
lawful currency of the EMU states. Euro banknotes and coins
entered circulation starting January 1, 2002. New public
debt will be issued in euro and outstanding obligations
denominated in national currencies have been converted at the
legal rates established on January 1, 1999 (unless specific
contracts provide for an alternative conversion rate). During a
limited period of time, which began on January 1, 2002 and
ended on February 17, 2002, the French franc, including
banknotes and coins, subsisted as a non-decimal denomination of
the newly introduced euro banknotes and coins. On
February 17, 2002, the French franc was completely
withdrawn.

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 $ 1.00
or U.S. dollars per
 1.00, as
the case may be. 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

9



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these rates or any 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 $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  |  |                         |         |                         |  |      |         |             |  |          |         |         |  |      |          |     |  |   |      |  |  |   |      |  |  |   |      |  |  |   |      | 
|1997            |  |                         | 6.02    |                         |  |      | 5.84    |             |  |          | 6.35    |         |  |      | 5.19     |     |  |   |     |  |  |   |     |  |  |   |     |  |  |   |     | 
|1998            |  |                         | 5.59    |                         |  |      | 5.90    |             |  |          | 6.21    |         |  |      | 5.39     |     |  |   |     |  |  |   |     |  |  |   |     |  |  |   |     | 
|1999(2)         |  |                         | FF 6.51 |                         |  |      | FF 6.20 |             |  |          | FF 6.54 |         |  |      | FF  5.55 |     |  | $ | 1.01 |  |  | $ | 1.06 |  |  | $ | 1.18 |  |  | $ | 1.00 | 
|2000            |  |                         |        |                         |  |      |        |             |  |          |        |         |  |      |         |     |  |   | 0.94 |  |  |   | 0.92 |  |  |   | 1.03 |  |  |   | 0.83 | 
|2001            |  |                         |        |                         |  |      |        |             |  |          |        |         |  |      |         |     |  |   | 1.12 |  |  |   | 1.12 |  |  |   | 1.20 |  |  |   | 1.05 | 
|Monthly amounts |  |                         |         |                         |  |      |         |             |  |          |         |         |  |      |          |     |  |   |      |  |  |   |      |  |  |   |      |  |  |   |      | 
|November 2001   |  |                         |        |                         |  |      |        |             |  |          |        |         |  |      |         |     |  |   | 1.12 |  |  |   | 1.13 |  |  |   | 1.14 |  |  |   | 1.11 | 
|December 2001   |  |                         |        |                         |  |      |        |             |  |          |        |         |  |      |         |     |  |   | 1.12 |  |  |   | 1.12 |  |  |   | 1.14 |  |  |   | 1.12 | 
|January 2002    |  |                         |        |                         |  |      |        |             |  |          |        |         |  |      |         |     |  |   | 1.16 |  |  |   | 1.13 |  |  |   | 1.16 |  |  |   | 1.11 | 
|February 2002   |  |                         |        |                         |  |      |        |             |  |          |        |         |  |      |         |     |  |   | 1.15 |  |  |   | 1.15 |  |  |   | 1.16 |  |  |   | 1.14 | 
|March 2002      |  |                         |        |                         |  |      |        |             |  |          |        |         |  |      |         |     |  |   | 1.15 |  |  |   | 1.14 |  |  |   | 1.16 |  |  |   | 1.13 | 
|April 2002      |  |                         |        |                         |  |      |        |             |  |          |        |         |  |      |         |     |  |   | 1.11 |  |  |   | 1.13 |  |  |   | 1.14 |  |  |   | 1.11 | 
|May 2002        |  |                         |        |                         |  |      |        |             |  |          |        |         |  |      |         |     |  |   | 1.07 |  |  |   | 1.09 |  |  |   | 1.11 |  |  |   | 1.07 | 



---



|    |                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------
|(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 Technip-Coflexips results of operations,
see Item 5. Operating and Financial Review and
Prospects  Liquidity and Capital Resources.

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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

Because most of our sales are to companies
in the hydrocarbon/ petrochemical industry, a reduction in
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 86.7% of our net sales in
2001, 81.5% of our net sales in 2000 and 78.3% of our net sales
in 1999. We estimate that the hydrocarbon/ petrochemical
industry will continue to account for a substantial majority of
our net sales. The prices of oil and gas on the world markets
are the most significant influence on the hydrocarbon/
petrochemical industrys capital expenditures. In the
upstream segment of the industry, sustained reductions in oil
and gas prices reduce our upstream clients financial
incentives to invest in new developments, with high-cost
offshore developments 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, 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.

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

We derived approximately 80% of our 2001 net
sales on a pro forma basis 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 our final costs or margins on a contract at the time of
bidding or during the early phases of its execution.

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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 26% of our backlog at
December 31, 2001, 35% of our backlog at December 31,
2000 and 40% at December 31, 1999. 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.

We may fail to successfully develop
integrated services, which could inhibit our ability to
successfully obtain and execute large contracts and increase our
revenues or reduce our growth opportunities and
net income

Our recent experience indicates that clients,
particularly in the offshore sector, are increasingly interested
in consolidating the development of large sites into fewer, and
hence larger and more technically complex, turnkey projects or
even awarding the entire contract to a single project manager.
This trend, if continued, will require engineering and
construction firms to organize 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 also 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.

Benefits from integration of our operations
with those of Coflexip may not be achieved to the extent or
within the time period that we currently anticipate, which would
reduce or delay our realization of increased revenues, earnings,
cost savings and operational benefits

Following our acquisition of control of Coflexip,
we have commenced a program of integrating our Technip
operations with those of Coflexip, including:



| |   |                                                                                   
| | - | ----------------------------------------------------------------------------------
| |  | corporate headquarters and administration offices,                                
|
| |  | Coflexips services business,                                                     
|
| |  | offshore project management and engineering teams
    and                         
|
| |  | technological approaches to realizing offshore
    platforms on deep-sea projects.

Our goal in integrating these operations is to
increase revenues and earnings through cost savings and
operational benefits and to increase our capability to obtain
and execute large contracts from present and potential
customers. In so doing, we may encounter substantial
difficulties integrating our operations and fail to achieve the
increased revenues, earnings, cost savings and operational
benefits we expect, and could even incur substantial costs as a
result of, among other things:



| |   |                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | loss of key employees,                                                                                                                                      
|
| |  | failures or delays in obtaining new contracts
    from present and potential customers as a result of their
    concerns related to the integration process,

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| |   |                                                                                                                                                                                                                                                                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | possible inconsistencies in standards, controls,
    procedures and policies, business cultures and compensation
    structures between Technip and Coflexip and the need to
    implement, integrate and harmonize various business-specific
    operating procedures and systems, as well as company-wide
    financial, accounting, information and other systems and
|
| |  | the diversion of managements attention from
    the day-to-day business as a result of the need to deal with
    integration issues.                                                                                                                                                                                                                                   

The diversion of management attention and any
difficulties encountered from integrating our respective
businesses could increase our costs or reduce our revenues,
earnings and operating results. For these reasons, we may fail
to successfully complete the necessary integration or realize
any of the anticipated benefits. Actual cost savings and
operational benefits may be higher or lower than we currently
expect and may take a longer or shorter time to achieve than we
currently expect.

One or more of our contracts for projects
in Iran and Libya 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 and 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 or Libya of U.S.$ 20 million or more
which directly contribute to the enhancement of Iran or
Libyas ability to develop their respective petroleum
industries. We are engaged in activities in Iran and Libya,
consisting principally of turnkey project management services.
Our net sales in Iran during the year ended December 31,
2001 amounted to
 29.1 million
(approximately U.S.$ 25.9 million) and in Libya
 0.5
million (approximately U.S.$ 0.4 million). At
December 31, 2001, we had backlog amounting to
approximately
 416.5
million (approximately U.S.$ 370.7 million) in Iran and an
immaterial amount of backlog in Libya. If the
U.S. government were to determine that some or all of our
activities in Iran and Libya 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 Libya and of
U.S. and international sanctions, see Item 4.
Information on Technip-Coflexip  Geographical and
Segment Breakdown of Net Sales and Backlog.

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 significant 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. Higher prevailing interest rates will
raise our cost of borrowing under our financial debt carrying
variable rates, notably our financial debt related to the
financing of this exchange offer and the French exchange offer,
and could result in lower net 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. 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.

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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 fluctuated significantly.


Integration of the Deepwater Division
involves uncertain costs and benefits

On January 6, 2001, Coflexip acquired the
Deepwater Division, substantially increasing the size of
Coflexips operations. Coflexip has made substantial
progress in the integration of these businesses that it did not
previously operate. The realization of benefits from the
business combination between Technip and Coflexip will depend to
a large extent on how well we can integrate the operations and
management of the Deepwater Division with our existing
operations and management. The integration process involves
inherent uncertainties and increases the demands on management
to oversee the operations and manage the human resources of a
significantly larger company. Failure to fully integrate the
operations and management of the Deepwater Division could result
in a material decrease in our results compared to our
expectations. In addition, as a consequence of our acquisition
of Coflexip, we may incur liabilities associated with the
Deepwater Division with respect to its products, operations and
contracts. For example, in November 2001, we recorded a
charge of
 27.3
million to constitute reserves relating to a contract into which
the Deepwater Division had entered a few days after its
acquisition by Coflexip. This non-recurring event resulted from
lower than expected activity due to project delays. Although we
have taken measures to avoid the recurrence of this type of
problem, the Deepwater Divisions backlog includes several
multi-year contracts entered into prior to the business
combination, and full integration of the Deepwater Division
involves continued risks.

Our manufacturing dependence on major
suppliers could result in business interruptions or higher
operating costs

We purchase most of the steel wire we use in
flexible pipe manufacturing from Trefileurope S.A. and
N.V. Bekaert S.A. pursuant to one-year renewable
contracts, and Trefileurope is our only external source for
several types of steel wire. We also purchase specialized
plastics required for manufacturing flexible pipe exclusively
from AtoFina, a subsidiary of TotalFinaElf. If any of these
suppliers failed to produce these materials or to make them
available to us at reasonable prices, we would need to develop
alternative sources of supply, use substitute materials or pay
more for these materials, any of which could result in temporary
business interruptions or increase the cost of flexible pipe.
Any of these developments could raise our operating costs or
cause delays in our projects.

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 would decline, and our volume and net income
could grow more slowly or decrease.

Because a large number of oil and gas
projects are found in developing countries, political
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 instability. For the year ended
December 31, 2001, approximately 75% 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

14



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Gulf War in 1990 and 1991 disrupted some of
our projects. More recently, 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 course, which could reduce our net
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 in part on government-sponsored or
private export credit and insurance agencies, such as the French
COFACE, the Italian SACE and the Japanese and
U.S. Export-Import Bank, to assist our clients to obtain
financing for 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.

Risks Related to Our Shares and American
Depositary Shares

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 March 31, 2002, our two largest
shareholders, Institut Français du Pétrole
(IFP) and Gaz de France, owned in the aggregate,
approximately 14.21% of our outstanding share capital and
approximately 20.53% of our

15



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##### Table of Contents



voting rights. In addition, TotalFinaElf owns
approximately 3.74% of our share capital and approximately 6.54%
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 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 reduce their value to you.

Double voting rights of our shares, lock-up
arrangements with our major shareholders 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 bylaws (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 March 31, 2002, 2,509,790 of our
shares carried double voting rights, representing approximately
9.39% of our outstanding share capital and approximately 18.74%
of our voting rights. Moreover, some of our major shareholders
have entered into lock-up arrangements in which they have agreed
not to dispose of our shares for specified periods of time. 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, lock-up
arrangements 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 bylaws (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 you
may not be able to vote by giving instructions to the depositary
on how to vote deposited shares held for you. 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 Description of Our American Depositary Shares.

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Item
4.     Information on
Technip-Coflexip

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 2001, 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 net sales of
 3,546 million
( 4,950 million
on a pro forma basis reflecting our business combination as of
January 1, 2001).

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 over 40 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 approximately 80% of our 2001 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 75% of our net sales in
markets outside the European Union in 2001. Our main engineering
and business centers outside of France are located in Italy,
Germany, the United Kingdom, Norway, Finland, the
Netherlands, the United States, Brazil, Abu-Dhabi, China,
India, Malaysia and Australia. Our manufacturing plants
(flexible pipelines, umbilicals, robotics), construction yards
and spoolbases are located in France, Brazil, the United
Kingdom, the United States, Finland and Azerbaijan. Our
staff numbers approximately 18,000 full time employees based in
over 50 countries and we run a world class fleet of
15 offshore construction vessels.

We are fully committed to pursuing opportunities
in offshore oil and gas development, and following our business
combination with Coflexip at the end of September 2001, we are
positioned to offer integrated turnkey engineering and
construction services on major deepwater projects as a provider
of integrated design, engineering, fabrication and construction
services, running from the topsides to the flowlines on the
seabed below. On the basis of 2001 pro forma revenues, we are a
world leader in the provision of subsea development systems and
surface facilities for the offshore oil and gas industry and
hold the leading position in the manufacture of flexible pipe
for subsea field development. We have also recently reinforced
our capacity in this strategic sector with the acquisition of
the privately owned UTC Projetos e Consultoria Ltda, a leading
Brazilian engineering and construction company in the upstream
sector with approximately 350 employees.

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 refineries and petrochemical plants. The size and
geographic scope of our onshore activities expanded
significantly in 1999, through the acquisition of the
engineering activities of the Mannesmann group, which increased
our net sales by approximately 50% in 2000.

We believe our operations benefit from
substantial competitive strengths. Our reputation as a turnkey
project manager and our access to key technologies is a
competitive strength in the winning of contract tenders. We also
believe that our execution of turnkey contracts benefits from
our substantial cost control and risk management expertise as
well as our experience as a contract manager. As a result of
these strengths, we have historically achieved overall operating
margins above the average for our industry. However, because of
the substantial business risks inherent in the turnkey contracts
into which we enter, it is not possible for us to predict the
margins of our current and future business.

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During our 44 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 ExxonMobil, Saudi Aramco,
BP Amoco, Shell, DuPont de Nemours, Procter & Gamble,
Aventis, Michelin, Renault, and numerous national energy
companies including our historical shareholder TotalFinaElf. We
have been publicly traded in France 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.

The Industry in Which We Operate

We derived 86.7% of our net sales in 2001 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 production of oil and gas from
subsea deposits, and in the onshore segment, which consists of
both the production of oil and gas from land deposits and the
downstream processing of oil and gas, whether through refining
or through the production of petrochemicals. Demand for our
services in this industry depends principally on the rate of new
capital spending on production and processing facilities.

We expect new capital spending on production
(referred to as upstream activities in our industry)
to be principally in offshore development. In recent years,
exploration and production companies have concentrated
increasing resources on the exploration and acquisition of
production rights to offshore oil and gas fields. We are
committed to engineering new technological solutions for
increasingly deeper fields and are developing new floating
platforms for these fields, including our TPG 3300 floating
platform which we are proposing to clients in deepwater project
bids and our SPAR platforms. We have also worked to develop new
products and solutions in the subsea segment of our business,
including risers and flexible pipe and umbilicals to permit the
development of fields at depths of 8,200 feet (2,500 meters) See
 Oil and Gas Production-Offshore Field
Development.. We believe that the extension of upstream
activities to deep offshore fields presents an opportunity to
those firms capable of providing innovative engineering
solutions and management skills to increasingly large offshore
projects while strictly containing costs.

New capital spending on downstream activities
will principally be driven by population growth and economic
development, notably in Asia. 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.

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Our activities have developed in three principal
industrial branches (Offshore; Onshore/ Downstream and
Industries), with the following contributions to net sales in
2001 and backlog at December 31, 2001:



|     |     
|---- | ----
|LOGO | LOGO

LOGO

Offshore: Net Sales of

722.0 million in 2001 (or

2,126 million on a pro forma basis)

We are a provider of integrated design,
engineering, fabrication and construction services including
floaters, subsea flowlines, risers and umbilicals as well as
project management and maintenance operations. The new
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 engineer and construct floating production architectures for
offshore developments, including drilling rigs and storage
facilities. 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 subsea well intervention tasks and
inspection, repair and maintenance services for subsea
installations and equipment. On the basis of year 2001 pro forma
production volumes, we are also a world leader in the design and
manufacture of flexible pipe for use in offshore developments
and control umbilicals, which control subsea wellheads. With the
expected growth in offshore oil and gas development (which we
anticipate will be on average about 15% annually in terms of
capital spending), we are targeting annual sales growth of
approximately 10% and operating margins between 12% and 14% for
the Offshore Branch. Our aim in 2002 is for our Offshore Branch
to generate approximately half of our revenues, as compared to
43% on a pro forma basis in 2001, and approximately two thirds
of our earnings before interest, taxes, depreciation and
amortization.

Onshore/ Downstream: Net Sales of
 2,352.0 million
in 2001

Since our founding in 1958, we have participated
in over 500 onshore/downstream projects throughout the
world. We have also designed and built for national oil
companies and many of the worlds private sector
multi-national oil companies 197 complete refineries or
modifications of existing plants, representing more than
600 individual refinery units and more than 100 gas
processing units, including the worlds largest sulfur
recovery

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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

472.0 million in 2001

We also offer our project management and
engineering services to a diverse array of clients unrelated to
the hydrocarbons industry. Past projects have included over
160 life sciences plants, 70 cement plants,
60 power plants as well as industrial research centers,
office parks, manufacturing and food processing plants, theme
parks and data processing centers, among others. Leveraging on
our substantial engineering and turnkey management expertise,
our long-term goal is for our Industries Branch to generate
approximately 15% of our total revenues by 2007, as compared to
approximately 10% on a pro forma basis in 2001.

Our overall strategy can be summarized as follows:



| |   |                                                                                        
| | - | ---------------------------------------------------------------------------------------
| |  | Target a 50-50 revenue split between our offshore
    and other activities,            
|
| |  | Maintain a capital spending policy in line with
    this target,                       
|
| |  | Keep our focus on gas and gas-related projects,
    particularly in the Middle East,   
|
| |  | Grow revenue from our Industries segment to
    approximately 15% of combined revenues.

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THE YEAR IN REVIEW 2001

JANUARY

Coflexip  in which we held nearly 30%
of the capital at the time  finalized the acquisition
of Aker Maritimes Deepwater Division.

FEBRUARY

DSM awarded us the design and construction of a
300,000-ton-a-year polypropylene plant based on BPs
gas-phase Innovene technology, at Geleen (The Netherlands).

MARCH

We were awarded a contract worth 300 million
euros, to design and build, using our proprietary technology,
the worlds largest ethylene steamcracker
(1,400,000 tons/yr), which will be the core unit of the
10th Complex at Assaluyeh (Iran).

Copebras awarded us a turnkey contract worth
about $100 million, for the design and construction of a
phosphatic fertilizer plant at Catalao (Brazil).

In association with BE&K, we were awarded, by
Chevron Phillips Chemical and Solvay Polymers, the engineering,
equipment supply and construction of a high-density polyethylene
plant at Baytown, Texas (USA).

EADS Airbus selected us, as the leader of a
consortium, to provide the engineering services and project
management of the Airbus superjumbo A380 assembly plant in
Toulouse (France).

APRIL

We were awarded two contracts in Canada valued
together at $125 million, for the design and construction
of hydrogen units based on our own technology. The first unit,
with a capacity of 200 MMSCFD (the worlds largest
single-train unit) will be built at Mildred Lake, Alberta, for
Syncrude Canada. The second unit, with a capacity of
40 MMSCFD, will be built at Regina, Saskatchewan, for
Consumers Cooperative Refineries.

MAY

BP awarded us the front end engineering design
(FEED) for the Shah Deniz offshore drilling and production
facilities in the Caspian Sea (Azerbaijan). The design studies
will carried out by us based on our TPG 500 concept for a
self-installing fixed platform.

JUNE

In association with Samsung, we were awarded, by
Petrovietnam, a contract worth about
 400 million
for the turnkey design construction of an ammonia/urea complex
at Phu My (Vietnam).

INCO selected our joint venture with Bechtel to
provide engineering, equipment and material procurement,
construction supervision and project management for the
nickel-cobalt complex at Goro, in New Caledonia.

Within the framework of the development of
Nakika, SHELL awarded Coflexip the leading-edge installation
contract for infield flowlines and risers in the ultra
deepwaters (1800 to 2100 meters) of the Mississippi Canyon
(Gulf of Mexico).

JULY

We launched two public cash tender/ exchange
offers on Coflexip and Isis. The Boards of Directors of Coflexip
and Isis, voicing a favorable opinion of the offers, recommended
that their shareholders subscribe to the offers.

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Within the framework of their contract with SHELL
Exploration for the development of Sorooz and Noroosh offshore
oil fields (seven fixed platforms), NPCC/ Naft Sazeh Qeshm
selected us as their partner to carry out the engineering work
and to participate in equipment procurement (Iran).

Norsk Hydro awarded Coflexip an integrated
project worth
 80 million
for flowlines and risers to be used in the development of Fram
Vest (360 meter water depth) in the North Sea (Norway).

AUGUST

In association with Al Jaber Energy Services, we
were awarded, by UAE Offsets Group, a turnkey project worth
$495 million for the construction of a 185-kilometer water
pipeline from Fujaïrah to Abu Dhabi, a pipeline link
to Sharjah, pumping stations, water storage tanks and associated
facilities (United Arab Emirates).

The new gas treatment facilities at Habshan,
designed and constructed by Bechtel and us for Abu Dhabi
National Oil Co, reached full capacity (one billion SCFD)
(United Arab Emirates).

Coflexip was awarded a significant share of the
mooring and installation package for the Bonga field
(1100 meters water depth), operated by SHELL Nigeria
Exploration and Production (Nigeria).

SEPTEMBER

The MIDOR refinery at Alexandria  the
biggest turnkey project ever designed and built entirely by us
($1.2 billion) was running at more than 100% of it nominal
capacity (100,000 barrels/ day) (Egypt).

The new deepwater pipelay and subsea construction
vessel CSO Deep Blue commenced operations for the
Williams Banjo/ Seahawk project for the installation of the
export pipelines, located in a water depth of 1100 meters, from
the Boomvang and Nansen fields (Gulf of Mexico).

We were awarded, by Williams, a major integrated
contract for the export pipelines from Devils Tower field
(1750 meters) (Gulf of Mexico).

OCTOBER

The offers on Coflexip and Isis were successful:
our holding of 98.36% of Coflexip and 99.05% of Isis, created a
world leader in engineering, technologies and implementation of
oil and gas, petrochemical and industrial projects named:
Technip-Coflexip.

We entered the Euronext 100 index, a market
capitalization weighted index of the largest and most liquid
stocks traded on the Paris, Amsterdam and Brussels Stock
Exchanges and our shares were listed in the form of ADSs on the
New York Stock Exchange on October 19.

We finalized the acquisition of UTC Projectos y
Consultoria (350 people), an engineering and construction
firm based in Rio de Janeiro (Brazil), specialized in the
deepwater offshore sector.

With the national oil and gas transportation
company of Kazakhstan we created a joint venture engineering and
construction company named Technip Kazakhstan.

In association with Chiyoda, we were awarded by
Qatargas a turnkey contract worth about
 100 million
for the expansion of the liquefied natural gas (LNG) plant
at Ras Laffan (Qatar).

NOVEMBER

We were awarded the engineering, supply and
construction of the hull, mooring and riser systems of the Spar
production platform for the Gunnison field, operated by
Kerr-McGee (Gulf of Mexico).

Brunei SHELL Petroleum awarded us a turnkey
contract for the first phase of development of the Egret
offshore gas field (Brunei).

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DECEMBER

The
 200
million contract signed with NPC for the design and construction
of the ethylene steamcracker for the 9th complex at
Assaluyeh (Iran) came into force.

The construction of the extra-heavy crude
processing facilities for the Sincor project 
designed and built by us and our partners  was
completed according to the contractual schedule, thus allowing
TotalFinaElf to begin start-up operations at the complex, which
will produce 184,000 barrels/ day of light crude
(Venezuela).

The General Meeting of Shareholders amended our
by-laws (statuts) to adopt the form of a corporation with
a Management Board and a Supervisory Board.

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The Technip-Coflexip Business
Combination

In April 2000, we demonstrated our commitment to
further developing our business in offshore production by making
a strategic investment in Coflexip, a leading engineering and
construction firm in the field of offshore production with a
portfolio of capabilities and clients largely complementary to
our own. Technips historical strength in the offshore
market had been project management and platform design and
construction, as reflected in our recent Elgin-Franklin North
Sea platform built for Elf Exploration UK (in partnership with
McDermott and Barmac) and in our innovative new floating
deep-water offshore platform, the TPG 3300. Coflexip provided a
set of operations complementary to our own, focused not only on
the engineering of the subsea portion of an offshore project,
but also on the design, manufacture and laying of pipe. In
addition to complementarities between our respective operations,
we believe that Technip and Coflexip benefited from a
complementary client base: while national oil and gas companies
in producer countries or joint ventures in which they
participate made up approximately 80% of our clientele in 2001
in terms of net sales, Coflexips net sales for the same
period were principally derived from contracts with the major
international oil companies. Concurrent with our April 2000
investment in Coflexip, we entered into a strategic alliance
with Coflexip to jointly develop market opportunities with a
particular emphasis on integrated deep offshore projects. The
aim of the alliance was to obtain a leading presence in the
traditional and deep offshore sectors.

In early 2001, Coflexip further broadened its
offshore capabilities by acquiring the Deepwater Division from
Aker Maritime ASA, which included its SPAR platforms and
engineering capacity.

Building on the success of the strategic alliance
established between Technip and Coflexip for offshore production
projects, we decided to reinforce our engineering and service
offerings in this sector through a business combination of the
two companies. On July 3, 2001, we initiated a public
exchange offer with a cash election for all outstanding Coflexip
shares, concurrently with a public exchange offer for
Coflexips largest shareholder ISIS, an investment company
then controlled by the French Petroleum Institute, known by its
French acronym IFP. On July 25, 2001, Coflexips board
voted unanimously to recommend our exchange offer to Coflexip
shareholders. On August 30, 2001, both exchange offers were
extended to Coflexip and ISIS shareholders in the United States.
Following the closing of these exchange offers, we changed our
name to Technip-Coflexip and hold 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.

The Technip-Coflexip business combination has
allowed us to form a major engineering and construction group
specializing in oil services at a time when the industry is
restructuring on a global scale and becoming increasingly
oriented toward new opportunities in offshore deposits. In our
view, the complementary nature of the technology, geographical
operations and client bases of Technip and Coflexip, as well as
the increased scale, scope and resources of the new group, will
provide us with a stronger position across high growth segments.
We believe that the increased competitiveness of each business
segment and the prospects for stronger growth, particularly in
the area of offshore gas and petroleum production, will benefit
the shareholders, customers and employees of Technip-Coflexip.
We also believe that we will be able to offer our clients an
expanded choice of technological solutions, giving the combined
operations a competitive advantage. The integration of our
activities has resulted in greater global reach, with
approximately 18,000 employees in over 50 countries. We also
expect to benefit from significant operational benefits and cost
savings from integrating these operations.

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Summary of the Business Combinations
Estimated Cost Savings and Operational Benefits

The table below describes the projected phasing
in of operational benefits and cost savings deriving from the
integration of our activities, in terms of the expected revenue
and cost contributions to the new groups earnings before
interest and taxes between 2002 and 2005, in each case compared
to the combined amount of earnings before interest and taxes
generated by the Technip and Coflexip groups in 2000 prior to
the business combination.

LOGO

Targeted Cost Savings

While Technip and Coflexips operations were
largely complementary, we anticipate that the Technip-Coflexip
business combination provides us with the cost savings
opportunities described below. Based on facts currently known to
us, we estimate that cost savings arising from our integration
of the Technip-Coflexip predecessor companies will amount to
approximately
 50 million
before interest and taxes in 2002 and
 85 million
before interest and taxes from 2003 onwards, in each case
compared to the combined cost bases of Technip and Coflexip as
separate groups in 2000. Within the
 85 million
in cost savings before interest and tax cost savings targeted
for 2003, we have identified the following potential sources of
integration efficiencies:

Procurement:
 65 million

We have historically been an industry leader in
cost-optimizing equipment procurement on turnkey engineering and
construction contracts and will be in a position to leverage our
procurement expertise and newly developed e-procurement system
over the integrated companies operations. Of the
 65 million
in expected procurement savings before interest and taxes, we
expect approximately one-third to result from the extension of
our internet-based purchasing system over a larger base, with
the remainder divided over the former Coflexip, Deepwater
Division and Technip cost structures. Our procurement savings
targets assume that our combined procurement expenditures will
amount to approximately
 3 billion
by 2003, of which approximately 70% will relate to procurement
of goods subject to integration savings, e-procurement
efficiencies or other synergies. See
 Description of Our Operations-Execution of a
Turnkey Project-Procurement.

Corporate,
information technology and sales and marketing:
 9 million

Corporate expenses.By integrating our businesses under
one shared structure, we anticipate generating cost savings by
having a single consolidated headquarters and management
organization, consolidated corporate reporting functions and
economies of scale in financial services such as insurance and
treasury management.

Information technology.Our business is increasingly dependent
on information technologies for all our activities, ranging from
engineering studies and modeling to procurement of equipment and
monitoring of our operations. By integrating our combined
operations on a single information technology platform, we
anticipate benefitting from reduced operating costs compared to
operating two separate information technology platforms.

Sales and marketing networks.Our geographical network of
operational bases is complementary to Coflexips network of
operational bases. Combining these networks will expand local
support to more than a dozen engineering centers worldwide,
enhancing client proximity and thus reducing client contact
expenses.

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| |                                                                               
| | ------------------------------------------------------------------------------
| | Bidding costs, engineering and sundry other
    cost savings:
     11 million

Bidding costs.Bidding on a turnkey project is an
expensive undertaking involving preliminary studies and
substantial coordination with potential subcontractors and
equipment providers, and on a major project tender may typically
require expenditures by us of
 1 million
to
 2 million.
Although the integration of our operations will not reduce the
cost of individual bids, we expect that it will increase our
success rate in obtaining contracts because of improved market
credibility, our complementary client relationships and the
expanded scope of technological solutions that our combined
operations will be able to offer. To the extent we reduce the
percentage of contract bids not awarded to us, we will
consequently reduce the bidding costs that are included in
selling expenses and cannot be allocated to specific contracts.

Engineering.Prior
to the business combination, Coflexip relied on joint venture
partners or subcontractors for some engineering design services.
With our geographically complementary network of local
engineering centers, we will target increased cost effectiveness
and profitability through internalization of these engineering
costs.



| |                              
| | -----------------------------
| | Targeted Operational Benefits

We aim to use the increased scale, market
coverage, product offerings and general capacity of the new
group to handle more and larger integrated projects to increase
earnings before interest and taxes by a targeted amount of
approximately
 10 million
in 2002,
 40 million
in 2003,
 90 million
in 2004 and
 120 million
from 2005 onwards, with a minimum targeted increase in revenues
of approximately
 1,575 million
by 2005, in each case compared to the combined revenues and
earnings before interest and taxes generated by Technip and
Coflexip as separate groups in 2000. Our minimum targeted
increase in revenues assumes that by 2005 the combined
groups higher expected success rate in winning bids,
access to larger integrated contracts and wider role on projects
will contribute to additional sales of approximately
 750 to
 850 million
related to deepwater surface facilities, approximately
 250 to
 350 million
related to shallow water facilities, approximately
 450 to
 650 million
related to large integrated offshore field development contracts
(including the subsea portion), and approximately
 30 to
 60 million
related to forward engineering contracts and studies, in each
case compared to the combined sales generated by Technip and
Coflexip as separate groups in 2000.

We estimate that the increase in earnings before
interest and taxes in 2005 of
 120 million
will be attributed to the following: approximately
 66 million
will be derived from our increased success rate at winning
deepwater and shallow water project awards of larger sizes and
our increased value added to these projects, approximately
 47 million
will be derived from our access to larger integrated field
development contracts and approximately
 7 million
will be derived from increased conceptual and forward
engineering studies.

The envisaged cost savings, operational benefits
and revised earnings estimates resulting from the
Technip-Coflexip business combination are forward-looking
statements, subject to numerous risks. Actual results may differ
significantly from these targets in terms of timing, amount or
nature, notably due to the difficulties of integrating large,
complex businesses employing thousands of persons in many
countries and facilities. For the reasons enumerated above, as
well as the factors described under the caption
Item 3-Key Financial Information-Risk Factors,
we cannot assure you that these cost savings, operational
benefits and earnings will in fact be achieved in the time frame
envisaged, if at all.

Other Major Recent Acquisitions

Our policy is to use acquisitions selectively to
expand the range of projects accessible to us, both by obtaining
key technologies we do not already possess and 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.

Since the beginning of 1999, we have actively
pursued external growth opportunities in line with this policy.
First in early 1999, we acquired control of the engineering
business of the Mannesmann group. In early 2000, we made a
strategic investment in, and formed an alliance with, Coflexip.
In late 2000 we bought the half of the chemical engineering
joint-venture Krebs-Speichim which we did not already own. In
2001, we completed the

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rapprochement between Technip and Coflexip
(and its recently acquired Deepwater Division) through the
Technip-Coflexip business combination described above at
 The Technip-Coflexip Business Combination. In
2002, we finalized our acquisition of the privately owned UTC
Projetos e Consultoria Ltda, a leading Brazilian engineering and
construction company in the upstream sector. Each of these
operations is described below.


Mannesmann Acquisition

In March 1999, we acquired KTI and MDEU, the
engineering subsidiaries and divisions of Mannesmann.

With KTI we acquired advanced capabilities and
proprietary technologies in the ethylene and hydrogen sectors
and a good market presence in the United States, Europe and
India. Our acquisition of MDEU brought us substantial know-how
and experience in onshore pipeline and power generation projects
and a substantial global client portfolio. Together, these
businesses accounted for total net sales of approximately
 850 million
in 2000 and employed approximately 3,800 persons at year
end. We have renamed the principal KTI companies Technip
Benelux, Technip USA, and Technip
KTIndia and we have renamed MDEU Technip
Germany.

In addition to new technologies, expertise and
client relationships, the acquisition of these businesses
provided us with a low cost opportunity to expand our operations
by nearly half in terms of net sales and to enhance our position
in the refining and petrochemicals sectors in particular. These
businesses generated net losses for 1998, the year prior to our
acquisition. Through restructuring and application of our
contract management skills, we have brought the profitability of
these businesses in line with that of our other onshore/
downstream businesses.

Under the acquisition agreement, we paid
Mannesmann consideration of
 146.1 million
in March 1999 for the acquired businesses. In February 2000, as
a result of insufficient provisions for contracts in course, we
obtained a price adjustment under the acquisition agreement and
Mannesmann returned to us
 63.3 million
of our original consideration bringing the final purchase price
to
 82.8 million.
In connection with our acquisition of these businesses, we
recorded provisions for restructuring and contract risks
amounting to
 47.0 million
in 1999.

Krebs-Speichim Acquisition

In 1997 we set up the Krebs-Speichim joint
venture in chemical engineering through the combination of an
existing business unit with a subsidiary of Cogema, the French
nuclear energy specialist, to improve our market share in the
fertilizers, fine chemicals and pharmaceutical industries. In
1999 Krebs-Speichim, which we accounted for using the
proportional consolidation method, contributed approximately
 75 million
to our consolidated net sales. In 2000, we acquired the
remaining 50% of Krebs-Speichim for consideration of
 21.7 million,
substantially reinforcing our presence in the chemical
engineering sector. As a result of this acquisition, we have
merged Krebs-Speichim into our principal French subsidiary and
assumed on a consolidated basis the joint ventures
workforce, which numbered approximately 850 persons at
December 31, 2000.

UTC Acquisition

On April 18, 2001 we announced our
acquisition, subject to the completion of due diligence and the
obtaining of regulatory approvals, of the privately owned UTC
Projetos e Consultoría Ltda, a leading Brazilian
engineering and construction company in the upstream sector,
based in Rio de Janeiro. We closed our acquisition of this
company in October 2001.

The Brazilian offshore sector is considered
within the industry to be one of the more promising deepwater
areas in the world. It has attracted a large number of
international oil companies since its opening to foreign
companies in 1998. UTC, which employs over 350 people, has
developed its activities both in offshore and onshore projects
and has a long track record in services and turnkey contracts
for local operators.

This acquisition is another building block in the
implementation of our offshore growth strategy. The acquisition
will also strengthen our presence in Brazil, where we possess
substantial operations, with a factory in Vitoria to manufacture
flexible subsea pipes and have a pipe-laying ship on long-term
charter to Petrobras. In

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addition, our subsidiary Krebs Engenharia has
been active for years in the Brazilian petrochemical and
fertilizer industries.




| |                                                                 
| | ----------------------------------------------------------------
| | The Acquisition of the Deepwater Division
    from Aker Maritime

In January 2001, Coflexip acquired the Deepwater
Division from Aker Maritime. The Deepwater Division is composed
of a number of companies specializing in the engineering and
fabrication of floating production systems for subsea and
deepwater field developments. The terms of this agreement are
described more fully 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. Its
activities encompass engineering, project management,
fabrication of production structures (fixed and floating) and
topsides, mooring and riser systems, as well as marine and
logistics services. It employed approximately
3,700 employees as of December 31, 2000.

The acquisition of the Deepwater Division
strengthens our ability to offer broader and more integrated
solutions to our clients worldwide, reinforces our presence in
critical markets such as the United States, the Gulf of Mexico
and the United Kingdom, adds an operational presence in
areas such as the Caspian Sea and Nigeria, and reinforces our
engineering resources in subsea and deepwater field
developments. Through the Deepwater Divisions expertise in
floating production units, we are now in a position to engineer,
fabricate and install deepwater SPAR systems, a patented design
of which eight units have been already successfully
commercialized in the U.S. Gulf of Mexico. We also acquired the
capability to perform the conversion of ship-hulls into floating
production, storage and off-loading systems (FPSOs),
particularly at our yard in Newcastle, England.

Industrial 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 86.7% of our total net sales in 2001, 81.5% of
our total net sales in 2000, and 78.3% in 1999. Within the
hydrocarbon/petrochemical industry, we manage our activities are
in two branches: offshore activities and more traditional
onshore activities, whether upstream or downstream. A final
branch of activity consists of engineering and project
management services for diverse industries unrelated to
hydrocarbon/petrochemicals. In each of these branches of
activities we have developed specific engineering and
technological capabilities. Our basic project management model
summarized below, however, applies to all of them equally.

Our role on a project is to act as general
contractor providing the engineering design, procuring the
equipment and managing the construction of this infrastructure.
However, with limited exceptions, we are not a construction
or manufacturing firm. Construction work is generally
sub-contracted to specialized firms, while equipment is
typically acquired through competitive bidding processes. Our
own 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 organize financing. In other cases,
we intervene in a more limited capacity, providing 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 this discussion of Industrial Branches of
Activity and Geographical Breakdown of Net Sales and
Backlog.

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Offshore Branch

In 2001, we generated net sales of
 722.0 million,
or 20.4% of our total net sales, from offshore oil and gas
production as compared to
 130.0 million,
or 4.4% of total net sales, in 2000 and
 56.0 million,
or 2.0%, in 1999. On a pro forma basis, our offshore branch
accounted for 2001 sales of
 2,126 million.
At December 31, 2001, our offshore branch represented
approximately 43.4% of our total backlog.

We are a provider of integrated design,
engineering, fabrication and construction services in the
offshore oil and gas sector, running from the surface platform
to the flowlines on the seabed below and including project
management maintenance operations on existing installations. We
are capable of executing integrated offshore projects, covering
the engineering and execution of both the surface and subsea
portions of a project and a wide range of services. We have
traditionally had strong offerings in the offshore market for
project management services. With our highly-skilled process
engineers and technicians, we have also developed technological
expertise in conceiving and implementing our own products,
technologies and related proprietary equipment for offshore
projects including notably subsea pipelines, umbilicals,
robotics, platforms. Through our CSO operations, we are a
recognized leader in the engineering of the subsea portions of
offshore projects, including notably flexible piping and control
systems, providing floaters, risers, flowlines and subsea
components and project management services for integrated
developments such as subsea tie backs. These subsea activities
accounted for 61% of our Offshore segment backlog at
December 31, 2001 (or
 1,142 million).
Our expertise in surface platform design and construction is
reflected in our recent Elgin-Franklin North Sea platform built
for Elf Exploration UK (in partnership with McDermott and
Barmac) and in our innovative new semi-submersible deep-water
offshore platform, the TPG 3300. The recently acquired
Deepwater Division brings us proven SPAR floating platform
technology for offshore gas and oil facilities. Our Deepwater
Divisions services are backed by best in class
expertise in process, naval architecture and flow assurance,
including proprietary technologies in the design of SPARs and
other floating production facilities and associated top
tensioned risers. We believe that adding the capacity to propose
this technological solution as well as our existing capability
to provide other technological options, such the TPG 3300,
floating production and storage structures, tension leg
platforms and compliant towers, will provide us with a
competitive advantage vis-à-vis many of our competitors.
Our floaters activities accounted for 46.6% of our Offshore
segment backlog at December 31, 2001 (or
 996 million).

In addition to our turnkey management of an
entire field development project and the provision and
installation of highly-specialized equipment, our offshore
activities include global conceptual and front end engineering
services to a producer prior to its decision to commit to a
particular field development. 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. The ability to
offer front end engineering services in advance of a contract is
particularly useful for design competitions, where the client
requests contractors to provide their best design and cost
proposals for particularly challenging deepwater field
developments.



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

The subsea oilfield services industry is a part
of the broader offshore oil and gas industry. Subsea production
infrastructure is designed to produce hydrocarbons from wells
terminating on the seabed rather than on platforms and include
pipelines (flowlines and risers), umbilicals (underwater cables
that carry hydraulic or electrical power, data signals and well
service fluids for the operation and control of undersea
installations), control systems, manifolds, valves and
wellheads, among other components. The deployment of subsea
infrastructure may be spread out over many years, as the initial
offshore wells are depleted and new subsea wellheads are
installed and tied into existing surface facilities. A
determining factor for the viability of an offshore development
project is the technical capacity to economically design, build
and install subsea infrastructure able to operate at the
required depth. We help our clients to expand the range of
economically viable production, as demonstrated by our contract
to install infield flow lines and risers in the Gulf of Mexico
at record depths of 5,800 to 7,000 feet.

The engineering, fabrication and installation of
the equipment connecting subsea well heads to the surface
platform is frequently referred to as SURF
activities, which stands for subsea umbilicals, risers and
flowlines. Umbilicals, risers and flowlines are based on
flexible and rigid piping, the design, manufacture and

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installation of which form the core of SURF
activities. Flexible pipe is primarily used as an alternative to
rigid steel pipe for the offshore transportation of oil and gas,
as well as for the casing of umbilicals. Unlike rigid steel
pipe, flexible pipe adapts easily to variable subsea surfaces
and does not require any ocean floor preparation other than
removal of debris or other obstacles. While most of the
equipment we install in our SURF activities is procured through
competitive bidding from third parties, we are the world leader
of flexible pipe based on 2001 production volumes and use
predominantly our own flexible pipe, umbilicals and risers. See
 Description of our Operations 
Manufacturing and Supply.


To support our installation of SURF systems, we
maintain the worlds most advanced fleet of subsea pipe
laying and construction vessels. Governmental regulations (such
as in the North Sea) may require burial of flexible (as well as
rigid) pipe 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 diving-support or pipelaying vessels. We expect
our launching of the pipe laying vessel CSO Deep Bluein
2001 to contribute to growth in our rigid pipelaying services in
the Gulf of Mexico and the North Sea. 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 involve maintenance and
repair of existing subsea infrastructure, as well as the
eventual removal and abandonment of subsea products. We also
provide subsea well intervention worldwide through our well
operations division in Aberdeen, Scotland, and maintain a
specialist team in Oslo, Norway to focus on the North Sea
region. Subsea well intervention involves maintenance, data
acquisition, production enhancement and decommissioning
activities in subsea wells.

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  Competition.



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

We design and construct drilling, production,
processing, utilities and living quarter platforms and floating
facilities for the development of offshore and deep offshore oil
and gas fields. We are especially experienced in the engineering
and project management of fixed and floating surface facilities
and offer unique technological solutions such as our floating
production and storage system, self-installing drilling platform
decks not requiring use of cumbersome separate installation
equipment such as floating cranes (Unideck TPG) and our
streamlined platform for exploiting marginal fields (MOSS).

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 500 feet below the surface (suitable for many North
Sea fields) 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. In 2000, we
delivered our second operational TPG 500 platform.

Semi-submersible
Platforms.The SPAR is a
semi-submersible deepwater drilling and production platform, the
technology for which we co-developed and jointly own with J Ray
McDermott S.A. of Panama. The structure comprises a vessel 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 ballast 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 principally located on the platform rather
than on the seabed, reducing the cost and time involved in
common maintenance work.

Our SPAR deepwater platforms constitute an
important component of our business strategy to develop
long-term relationships with our clients. We have recently
announced significant engineering, procurement and

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construction contracts for a SPAR floating
production platforms. Kerr-McGee, who already operates our SPAR
platforms in the Gulf of Mexico, announced the purchase of an
additional SPAR platform on November 13, 2001, scheduled
for delivery in the third quarter of 2003. In addition, on
February 22, 2001, British Petroleum announced the purchase
of five SPAR Platforms for their operations in the Gulf of
Mexico.


In addition to our SPAR platforms, we have also
developed a self-installing high-capacity semi-submersible
platform for depths up to 3,300 feet, suitable for use in
West Africa, the Gulf of Mexico, Brazil and deeper
North Sea fields. We have not yet delivered a TPG 3300
to a client, although major potential clients have already
reviewed the concept, and are evaluating it as one of several
technical solutions we are proposing in an upcoming bid on a
West African deep offshore development.

Floating Production and Storage
Systems.In addition to the large
fixed and semi-submersible platforms described above, we are
also active in the design and installation of Floating
Production, Storage and Offloading Systems (FPSO). These
systems, in which production and storage facilities are housed
in a ship hull, are appropriate for developing deposits in deep
or shallow waters.



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

Over the next several years, we anticipate that
increases in world oil prices supported by the expected economic
recovery in North America and East Asia will contribute to
continued expenditures on new infrastructure for oil and gas
production. In recent years, the major international exploration
and production companies have acquired substantial new field
exploitation rights. We anticipate that if oil prices do not
decline significantly from current levels, these companies will
launch tenders for the development of these new fields over the
next several years.

As a result, we expect that substantial new
offshore oil and gas fields will be developed for production,
with a growing proportion of deep offshore fields. The deep
offshore fields that we are likely to focus on are in the
regions of West Africa, the Gulf of Mexico, Brazil and Southeast
Asia. We also anticipate that there will be continued demand for
our services in the more mature offshore markets such as the
North Sea and the Caspian Sea. We have identified contract
tenders in 2002 for offshore projects valued at approximately
 6.5 billion.
We believe that the combination of the Technip, Coflexip and our
Deepwater Divisions engineering assets will generate
commercial and operational benefits that will position us to
compete for and execute offshore production projects more
efficiently. Based on our activities, we anticipate that clients
commissioning offshore development projects will increasingly
prefer contractors with the ability to offer integrated
solutions for the entire development and financing of a site
over contractors bidding for only selected parts of a
development. Additionally, our longstanding expertise in natural
gas developments is expected to be a strategic advantage as
natural gas increasingly substitutes petroleum in the production
of petrochemicals and the generation of electricity, favoring
development of offshore gas deposits.



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

Our Offshore segment strategy aims to build on
our leading position in our traditional subsea markets
(North Sea and Brazil) to develop a strong presence in
other key subsea markets and build up a leading presence as
a provider of floating platforms. Each of these strategic
objectives forms part of an overall plan to position ourselves
as the leading fully-integrated provider of offshore engineering
and project management services to the oil and gas industry.

Defend our SURF leadership position in our
traditional markets.We are the
established market leader for SURF projects in the North Sea and
Brazil, two markets that we believe will continue to generate
significant contract volume. We aim to maintain and develop our
role in these markets, leveraging on our established
relationships and additional client relationships developed
through the business combination, local production facilities as
well as our recent acquisition of the UTC engineering group in
Brazil.

Develop strategic subsea
markets.We are additionally targeting
key markets that we believe have the potential to become major
contributors to our SURF activities. We are already active
providing SURF services in the Gulf of Mexico, and intend to
further develop our SURF activities with our recently
commissioned CSO Deep

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Blue pipe laying
vessel and synergies with our fast-growing SPAR activities. The
U.S. governments recent approval of FPSOs in the Gulf of
Mexico and the exploration and production of deeper fields in
this region are expected to be contributors to growth. We are
also targeting the Angola offshore market, through the
establishment of an umbilical joint venture (with first
production expected in 2003) in conjunction with Sonangol, the
national oil company with whom we have already jointly
established a local engineering firm.


Focus on surface facility projects in selected
geographic zones.Our positioning in
this segment should benefit from strong demand for surface
facilities, particularly for floating production facilities for
deepwater and from our proprietary technologies: the SPAR
concept, and the TPG500 and TPG3300 platforms. To date, we have
provided 6 SPAR platforms to our clients and contracts for
3 more SPARs are currently under execution. Two TPG500
platforms have been delivered and the TPG3300 concept is now
commercially available. We seek to grow our market share in
surface facilities segment through targeting specific offshore
markets where we feel we enjoy strategic advantages, namely in
the Gulf of Mexico where our SPAR platforms have been in demand,
in Brazilian waters where we seek to leverage our current
position as a leading provider of subsea services, and in West
African waters where our technologies and references strongly
position us to compete for ultra-deepwater projects.

2001: Major Achievements in the Offshore
Branch

EUROPE



| |          
| | ---------
| | North Sea



| |          
| | ---------
| | UK sector

The associated gas fields of Elgin and Franklin,
located in the central part of the UK sector of the
North Sea at a water depth of 93 meters, were brought
on stream by TotalFinaElf in March and September, 2001. The
central processing/utilities/accommodation platform was designed
and built by us under an alliance contract with Elf Exploration
UK, McDermott and Barmac. Modeled on the TPG 500 concept,
which was developed by us, it is the largest self-elevating
platform in the world (45,000 tons) able to produce
220,000 barrels of oil equivalent per day
(140,000 bl/day of condensates and
13 million m3 of gas), i.e. about 5.5% of
British production of liquids and 4.5% of British gas
production. Elgin and Franklin are
high-pressure/high-temperature fields (1,100 bars and
200oC), whose development and exploitation required
many technological innovations.

In a consortium with ABB Offshore Systems, we
successfully completed, ahead of schedule, phases 1 and 3
of the Nuggets development, located east of the Shetland Islands
at a water depth of about 120 meters. Phase 1 included
the installation of a new manifold and its tie-back to the Alwyn
North platform with 40 km of subsea pipelines and the
installation and connection of two subsea wells.

Phase 3 comprised a second manifold, an
adjacent well, an umbilical and 14.5 kilometers of
pipelines, tied back to the manifold installed during
Phase 1.

Subsea pipelay and installation operations were
carried out successfully at the end of 2001, by vessels from our
fleet, the CSO Apache and the CSO Constructor.
Trenching operations were performed by the Normand Pioneer.

We executed two EPCI subsea construction
contracts for the development of the Otter field operated by
TotalFinaElf. The first contract, which was signed with
TotalFinaElf, included the design, fabrication and installation
of a 22 kilometer subsea pipeline transportation system
linking the field to the Eider production platform at a water
depth of 155 meters. We were also responsible for the
design, fabrication and installation of a rigid production
pipeline and a rigid water injection pipeline, both with a
10 inch diameter, and three 22 kilometer submarine
cables. The contract also included the installation of two rigid
risers connected to the Eider platform, as well as their tie-in,
testing and protection.

The second contract, which was signed with FMC
Kongsberg Subsea, included construction works required for the
installation of the subsea production facility. All construction
and installation operations were carried out by our vessels CSO
Apache and CSO Wellservicer, supported by the Normand Pioneer.

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We executed for ExxonMobil a subsea tie-back
contract to link the Lewis 1 development to the Beryl Alpha
platform, as well as tie-backs of the gas lift pipeline and
control lines to the Nevis subsea distribution unit. In order to
provide flow assurance, a pipe-in-pipe production
line, using proprietary-technology insulation material, was
supplied and installed between the eight inch production
pipeline (12% chrome), fabricated at Evanton, and the
14 inch transport pipeline.

Within the framework of two fast-track contracts
for BP, we provided subsea construction services at the Davy and
Hoton fields. The first contract, concerning Davy, included the
fabrication, installation, tests and commissioning of a
10 kilometer, rigid reeled eight inch pipeline, as well as
a rigid riser, the burial of all pipelines and their tie-in to
the Davy platform. The second contract, concerning the Hoton
development, included the fabrication, installation, tests and
commissioning of a 12 kilometer, 8 inch reeled pipe
and an umbilical; the delivery and installation of a J tube
and associated structures at the West Sole Alpha platform, as
well as burial operations for all the pipelines and their tie-in.

These two contracts, carried out simultaneously,
were completed successfully under a tight schedule.

The tie-back contracts were completed by
inspection, repair and maintenance (IRM) activities, most
of which were carried out under the THT (Texaco, Amerada Hess
and Talisman Energy) frame agreement. In this connection, an
important three-year contract was signed to provide a diving
support vessel (DSV) and underwater services in the North
Sea, the objective being to maximize uptime and production
potential of the three operators assets throughout the UK
and Danish sectors of the North Sea. In addition, the contract
has provision for executing EPCI projects: pipelay/trenching,
wellservicing, decommissioning/abandonment and other
construction services.

Wellservicing activities have been further
strengthened by heavy utilization of the CSO Seawell, which was
revamped in order to offer increased capacity for cleaning
subsea wells.

Norwegian
sector

In 2001, this sector was characterized by the
execution of integrated contracts of medium size.

The Visund project for Norsk Hydro, comprising
the installation of two six inch flexible risers, an eight inch
flexible riser and a dynamic service umbilical, called for the
utilization during summer 2001 of the vertical pipelay system
(VLS), patented by us, for a Pliant wave
configuration.

We executed an integrated contract at the Tambar
field for BP, comprising the delivery of flexible and rigid
pipes, diverless subsea tie-ins and trenching. This operation
demonstrated our high-quality skills in the areas of rigid
reeled pipe and pipelay technique.

In July 2001, Norsk Hydro entrusted us with an
 80 million
contract for the fabrication, delivery and installation of
static and dynamic pipelines for the development of the Fram
Vest field. The contract included fabrication, delivery and
installation of two 10 inch flexible pipes, a multibore riser, a
dynamic service umbilical, and two 12 inch and 13 inch rigid
pipelines with a length of 50 kilometers. In addition, the
contract included the installation of a 25 kilometer static
service umbilical.

Finland

In December 2000, BP entrusted us with the
fabrication of topsides (by Gulf Marine Fabricators in the
United States) and the hull (at the Mäntyluoto yard in
Finland) of a SPAR floating platform for its Horn Mountain
field, located at a water depth of 1,700 meters in the Gulf of
Mexico. Installation of the platform is expected during the
second quarter of 2002.

Spain

We successfully executed a contract for REPSOL
covering the engineering, fabrication, trenching and
installation of 8.5 kilometers of 5.5 inch flexible flowlines,
two jumpers and a subsea electrohydraulic umbilical at the
Chipiron field, offshore Tarragona. The success of this
operation doubled the production capacity of Spanish crude in
the Mediterranean Sea.

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NORTH AMERICA
AND GULF OF MEXICO

Canada

As a member of the Terra Nova alliance, we
successfully completed subsea operations at the Terra Nova
field, offshore Newfoundland. The operations involved
stabilization and tests of the flexible pipes installed in 2000,
as well as diving operations performed from the CSO Marianos.
These operations were completed ahead of schedule and
contributed to the first successful oil from the field in
January 2002.

Gulf
of Mexico

During the summer of 2001, through the work of
the CSO Deep Blue, we installed, at a water depth of
approximately 1,100 meters, more than 160 kilometers of rigid
pipes and 12 inch to 18 inch diameter steel catenary risers
(SCRs) and executed their tie-back to the SPAR platforms at the
Boomvang and Nansen fields. This first contract, for Williams,
saw the first use of the pipelay and payload capacities of the
CSO Deep Blue, and of our new spoolbase in Mobile, Alabama.
Fabrication of the hulls of the two Truss SPARS,
which was carried out in Finland, had been entrusted to CSO Aker
Maritime in 2000.

The Brutus tension leg platform fabricated by an
American affiliate of ours (Gulf Marine Fabricators) in 2000 was
delivered to Shell Exploration and Production Company
(SEPCO) in mid-2001. This project, begun in 2000, mobilized
more than 600 people at the Corpus Christi yard in Texas at the
time for the integration of the hull (15,800 tons) and the five
bridge modules, weighing approximately 22,000 tons. This
platform, located in the Gulf of Mexico at a water depth of more
than 910 meters, will produce close to 200 million barrels
of crude per year.

In November 2001, we were awarded by Kerr-McGee
an engineering, procurement and construction contract for a SPAR
floating production platform hull, associated moorings and riser
system for the Gunnison field located in the Gulf of
Mexicos Blocks 667, 668 and 669 in 950 meter water depth.

The engineering of the hull will be performed by
our affiliates CSO Aker Engineering in Houston and CSO Aker
Rauma in Finland. CSO Aker Maritime in Houston will be in charge
of the engineering and procurement of the riser system, while
the mooring system will be engineered and procured by CSO Aker
Rauma. The hull will be built at our Mäntyluoto fabrication
facility in Finland. Delivery of the SPAR hull is scheduled for
the third quarter of 2003.

The hull for Gunnison SPAR will be the third
Truss SPAR delivered to Kerr-McGee: the Neptune, the first
Caisson SPAR installed in the Gulf of Mexico; the Nansen,
recently installed in the Gulf of Mexico; and the Boomvang hull,
currently being assembled in the Gulf of Mexico.

In January 2002, Gulf Marine Fabricators was
entrusted by Atlanta with the fabrication of TotalFinaElf
Matterhorn a tension leg production platform that will be
installed in Mississippi Canyon Block 243 at a water depth of
850 meters. This contract included procurement, fabrication and
outfitting of a 6000-ton topsides facility, as well as the
fabrication of six anchor piles, each 126 meters long.

The year 2001 also included the delivery, in
March 2001, of three platforms for Pemexs Combisa project.
This project included fabrication of a booster compression
platform, the second stage of a high-pressure compression
platform, and a production platform. Their decks are among the
largest single-piece topsides ever fabricated for the Gulf
of Mexico.

BRAZIL

In order to develop our upstream oil and gas
activities in Brazil, particularly in deep offshore, we
finalized the acquisition and took 100% control of UTC Projectos
y Consultoria, a 350-person, privately-owned Brazilian
engineering and construction company based in Rio de Janeiro.
UTC has a long track record in services and turnkey contracts
for local operators, both offshore and onshore. It has notably a
long-standing working relationship with Petrobas, who recently
awarded the company the FEED (front end engineering design) of
the floating facilities for the Albacora Leste field.

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We delivered four crude export risers to Petrobas
for the semi-submersible platforms P18 and P19 at the Marlim
field offshore Brazil at a water depth of almost 1,000 meters.
These risers, which were fabricated at our plant in Le Trait,
Normandy, marked the first use in Brazil of Coflon®, a
material with strong resistance to high temperatures.

In addition, Petrobas ordered two 4 inch
production risers made of Coflon® for its Coral field,
located in the Santos Basin in southern Brazil.

During the second quarter of 2001, Sunrise 2000,
a vessel from our fleet, installed at a water depth of
1,080 meters, two 9 1/8 inch and 11 1/8 inch oil
and gas export lines at the Marlim field for platforms P38 and
P40. These lines were fabricated by our plant at Le Trait in
Normandy.

AFRICA

Nigeria

In August 2001, Single Buoy Mooring
(SBM) entrusted us with a major contract for the
development of the Bonga field, which is operated by Shell
offshore Nigeria at a water depth of 1100 meters. Our
Offshore Branch will be in charge of project management,
engineering, procurement, transport and installation of three
19 dynamic offloading risers (2.3 kilometers long)
between the fields FPSO and its offloading
buoy  a world first in the utilization of a flexible
pipe of such diameter and length as an export line. The risers
will be fabricated at our plant at Le Trait in Normandy in
autumn 2002. Installation of these risers and of more than
55 kilometers of gas lift risers and control lines, as well
as the installation of five large 140-ton manifolds will take
place during the summer of 2003.

We together with Saibos continued our joint
execution of the $330 million turnkey project awarded by
ELF Petroleum Nigeria for the design, construction and
installation of an offshore oil processing/production platform
and related utilities for the Amenam field. This platform will
treat oil from the two neighboring drilling platforms, which
produces 130,000 barrels per day. Amenam is located
35 kilometers off the coast of Nigeria at a water depth of
40 meters. Our services include the engineering, which as
of today is almost completed, participation in the purchase of
the equipment as well as supervision of the construction and
installation. Construction of the topsides and the jacket for
the production platform began in April 2001 at the McDermott
yard at Jebel Ali in the United Arab Emirates and should be
completed at the beginning of 2003.

We also carried out, for TotalFinaElf, the design
and basic engineering for the development of the Akpo deepwater
(1400 meters) oil field. The project includes an FPSO able
to produce 70,000 barrels of oil per day and to store
1.75 million barrels, as well as subsea wellheads and pipes.



| |       
| | ------
| | Angola

We executed for Cabinda Oil Company, an affiliate
of Chevron, the design and basic engineering (FEED) for the
development of deepwater oil fields offshore Benguela-Belize and
Tombocco. The development of these fields will notably include a
42-slot drilling and production facility.

The Girassol field, located at a water depth of
1350 meters some 150 kilometers offshore from Angola,
began production at the end of 2001. We have executed
approximately one-third of the engineering for this development
project, notably process studies for a floating treatment
facility (200,000 barrels/day), storage (two million
barrels) and crude loading (FPSO). With reserves estimated
between 750 million and one billion barrels, Girassol,
operated by TotalFinaElf, is the most important African
deepwater development, and its FPSO (300 meters long by
60 meters wide) is the largest floating oil production
facility in the world.



| |      
| | -----
| | Libya

During the first quarter, we completed the basic
engineering (FEED) for the Western Gas Libya project to
develop several gas fields. The offshore part of the project was
executed by our engineering center in Paris. That part of the
project involves a fixed drilling/production platform equipped
with subsea wellheads that will be installed 150 kilometers
offshore Tripoli at a water depth of 190 meters. We are
also in charge of management of

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the whole project (onshore and offshore) and
supervision of the construction. Works contracts are currently
being performed by subcontractors.




| |        
| | -------
| | Tunisia

COPAREX Netherlands BV entrusted us with a
contract to provide 9 kilometers of flexible pipes, riser
and jumpers, as well as 7 kilometers of umbilical. This
contract was completed on schedule to the satisfaction of the
client.



| |             
| | ------------
| | South Africa

We were selected by Bluewater (UK) Ltd to
carry out the integrated contract for the development of the
Sable field of SOEKOR E&P (Pty) Ltd. This development
includes the tie-in of six subsea wells to a floating production
unit (FPSO) to be carried out during the third quarter of
2002. First oil is expected at the end of the year.



| |            
| | -----------
| | CASPIAN SEA



| |           
| | ----------
| | Azerbaijan

In May 2001, BP entrusted us with the basic
engineering for the Shah Deniz offshore production and drilling
facilities. This contract marks the first significant step in
exploiting the large gas reserves of this field in the shallow
waters of the Caspian Sea. The design study was carried out by
us modeled on our self-installing fixed TPG 500 platform.
The project should enter its construction phase during the
second half of 2002.



| |            
| | -----------
| | MIDDLE EAST



| |     
| | ----
| | Iran

The joint venture NPCC/ NAFT SAZEH QESHM awarded
us an engineering and procurement contract for development of
the Soroosh and Nowrooz oil fields operated by SHELL Exploration
BV in Iranian waters. The project includes fixed production
facilities comprising mainly: three production platforms, two
living quarters platforms, two wellhead platforms, as well as
pipelines and cables. The Soroosh and Nowrooz fields are located
in the Persian Gulf at water depths ranging from 30 to
40 meters, at 80 kilometers and 50 kilometers,
respectively, from Kharg Island. This integrated development
aims to achieve output of 190,000 barrels per day from 2003.



| |             
| | ------------
| | ASIA PACIFIC



| |          
| | ---------
| | Australia

We executed subsea tie-back operations for
Woodside Petroleums Echo-Yodel field. The work included
the laying of a rigid reeled pipe, a caisson, an umbilical, as
well as subsea tie-backs.

The contract covered project management, design
and follow-up of construction operations, transport and
installation of a 23 kilometer long, 12 inch diameter
export pipeline made of 13% chrome, an electrohydraulic subsea
umbilical, and a riser caisson weighing approximately
160 tons on the Goodwyn Alpha gas production platform.

Installation at sea was carried out by the CSO
Apache, a specialized vessel for laying rigid reeled pipe, and
the CSO Venturer, a dynamically positioned diving support vessel.

BHP Billiton entrusted us with a design and
construction contract for the Griffin 9 and Scindian
1A/3 fields offshore Australia. We were in charge of
project management, engineering, fabrication and installation of
6.6 kilometers of 8 inch rigid pipe and associated
equipment. The pipelay operations were performed by the CSO
Apache while the CSO Venturer carried out the overall diving and
subsea construction operations.

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| |                   
| | ------------------
| | Malaysia/ Thailand

As the leader of a consortium with Samsung and
Saipem, we continued the execution of a turnkey contract, worth
$600 million, which was awarded in March 2000 by
Carigali-Triton Operating Company (CTOC), for development of the
Cakerawala gas field located in the Malaysia-Thailand Joint
Development Area. The project included design and construction
of a drilling and treatment complex comprising three drilling
platforms (36 wellheads), a compression platform, a central
processing platform, a power generation unit, as well as subsea
pipelines, distributed control systems and a 500,000 barrel
FSO. The Cakerawala field is located 180 kilometers
offshore at a water depth of 55 meters. Its gas reserves
are estimated at 56 billion m3. The
consortium led by us was entrusted with providing engineering,
procurement of equipment and a flexible riser and anchoring
system, construction, installation and hook-up, as well as
start-up operations, which are currently underway, with the goal
of coming on stream in mid-2002. Within the consortium, our
engineering center based in Kuala Lumpur carried out the
engineering for all the platforms, as well as procurement, and
supervised the construction of the three drilling platforms and
the compression platform. Technip-Coflexip also provided our
proprietary float-over UNIDECK® concept for the central
processing platform (7 billion m3 of gas/year
and 15,000 barrels/day of condensates).

In June 2001, Lundin Malaysia Ltd entrusted us
with the design and construction of a wellhead platform and the
engineering of the jacket for a central processing platform for
development of the Bunga Raya associated gas field, located
offshore Malaysia and Vietnam.

At the end of the year, Brunei Shell Petroleum
awarded us a turnkey contract, worth about $22 million, for
its Egret Phase 1 Gas Development Project offshore Brunei.
The facilities include a fixed drilling platform, a multi-phase
pipeline and a subsea cable.

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Onshore/ Downstream Branch

In 2001, we generated net sales of
 2,352.0 million,
or 66.3% of our total net sales, from our onshore/downstream
branch as compared to
 2,290.9
million, or 77.1% of total net sales, in 2000 and
 2,121.7 million,
or 76.3%, in 1999. At December 31, 2001, our onshore branch
accounted for approximately 50.7% of our total backlog.

Onshore activities include oil and gas field
development, gas treatment plants, oil refineries and
petrochemical plants. Our activities in this branch consist
mainly of the design and implementation of production and
treatment units. We also design and build related utilities and
offsite facilities 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 treatment centers and product shipping 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 into line with environmental standards.

Pipelines.Since 1960, we have completed more
than 140 onshore pipeline projects in over 40 countries,
amounting to a total 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 on
schedule even under the most adverse circumstances, including
desert, tundra, mountain and swamp. We have also entered into a
joint venture, MEPR B.V. with Maats B.V. of the Netherlands, for
the rental of pipeline construction equipment. MEPRs
rental fleet is one of the largest in the world.

Natural Gas Treatment and Liquefaction.We are a global sales leader in
engineering and construction of infrastructure for the natural
gas industry, with over forty years of experience engineering
innovative client solutions. We were a pioneer in the field of
natural gas liquefaction and responsible for the construction of
the first high-capacity liquefaction facility at Arzew, Algeria
in the early 1960s. With Bonny LNG currently developed in
Nigeria, we continue to be a global leader in the liquefaction
of natural gas.

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®, using cold temperatures to
separate gases. 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 refinery
off-gases.

Refineries.Each refinery is uniquely configured to process crude oil into a
determined range of products and by-products. Since our founding
in 1958 we have designed and built more than 27 complete
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 TotalFinaElf, 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, including:



| |   |                                                                                           
| | - | ------------------------------------------------------------------------------------------
| |  | 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.                                         
|
| |  | 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.

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Since 1992 we have participated in a global
alliance with Air Products and 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 increasingly 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. Some natural gas deposits have
an undesirably high sulfur content which must be recovered as
part of processing. We have built approximately 30% of the
worlds installed sulfur recovery capacity. The businesses
we acquired through the Mannesmann acquisition have enhanced our
engineering services with recognized proprietary technologies in
sulfur recovery as well as proprietary technologies in hydrogen
for handling feed-stocks ranging from natural gas and refinery
off-gases to LPG and naphtha.


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 and installed capacity of the plants we have constructed.
We believe that we have designed and built 15% 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 and Technip Benelux) 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. Our acquisition also brought new
technologies for producing and applying gas (hydrogen and carbon
monoxide) used in the synthesis of some petrochemicals.

Fertilizers.We have designed and built,
throughout the world, more than 400 fertilizer units for the
production of ammonia, urea, nitric acid and ammonium, nitrates,
sulfuric acid, phosphoric acid, superphosphates and compound
fertilizers. In 1997 we set up the Krebs-Spiechim joint venture
in chemical engineering with a subsidiary of Cogema to
improve our market share in the fertilizer industry. In the
first years of its existence, Krebs-Speichim established itself
as a leading European chemical engineering company in terms of
sales, and has major clients in fertilizers as well as in life
sciences and fine chemicals. In 2000, we acquired the remaining
50% of Krebs-Speichim for
 21.7 million,
which we subsequently merged into our principal French
subsidiary. This acquisition substantially reinforced our
presence in fertilizers, bringing us proprietary technology in
phosphoric acid production.

Our capacity to provide chemical engineering
services and manage projects in fertilizers is substantially
enhanced by our access to the most up-to-date technologies in
the field provided by companies including Topsoe, Monsanto and
Stamicarbon.



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

Over the next several years, we anticipate that
two main factors will contribute to continued expenditures on
Onshore/ Downstream branch infrastructure. In the emerging
countries, demographic and economic growth will increase demand
for energy, refinery products, fertilizers and petrochemicals.
For a description of the principal factors that we believe will
drive demand for projects for the development of onshore oil and
gas reserves, see   Offshore Branch 
Industry Considerations. We expect that natural gas will
increasingly substitute petroleum in the production of
petrochemicals, the generation of electricity and ultimately the
production of transportation fuels, turning our expertise in
extraction, transportation and processing of natural gas into a
strategic advantage.

In the highly industrialized countries, new
environmental regulations, especially concerning the composition
of gasoline, will require the revamping of existing refinery
infrastructure, particularly in the United States. and in
southern Europe. In the European Union in particular, the first
phase of new regulations pertaining to refineries was
implemented as of January 1, 2000 and generated a number of
contracts to prepare for it. In the second phase, refineries are
required to produce gasoline with reduced levels of sulfur,
benzine, olefines and aromatics by the year 2005. Over the
period 2001 to 2020, the International Energy Agency has
estimated that the average

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annual growth in demand for primary energy in
terms of millions of barrels of oil equivalent (MBOE)/day will
be 1.9% for oil and 2.7% for natural gas, which we believe will
help drive future capital investment in this branch.


In 2002, we estimate that worldwide investment in
petrochemical and fertilizer facilities for the whole of the
year will amount to approximately U.S.$15 billion. While recent
investment in petrochemicals facilities has been dampened by
excess capacity compared to global demand, the emergence of a
new petrochemical industry is at the same time taking place in
those countries which enjoy a big competitive advantage, having
huge reserves of lower-cost natural gas, especially in the
Middle East. Given our position in the Middle East, we believe
we are very well positioned to take advantage of this
fast-growing business.



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

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

Capture expected growth in demand for gas
projects.As natural gas is
increasingly used in the generation of electricity and
production of petrochemicals, we aim to defend our current
leadership in the development, processing and transportation of
natural gas, in particular by focusing on large-scale gas
development projects in the Middle East where we have
historically had strong relationships with the major actors in
our industry. We also seek to further develop our position in
natural gas liquefaction projects. We expect this segment of the
market will see twelve to twenty liquified natural gas trains
constructed by 2010. At the same time, we seek to develop our
capacities in the emerging field of converting gas into
synthetic liquid hydrocarbons (a process generally known as
gas-to-liquids or GTL), a process we
believe will permit the economic development of many remote gas
discoveries that are otherwise deemed too far from market to
have any economical value

Support our clients development of a
gas-based petrochemical industry.With
the Q-Chem and other projects, we have assisted our clients in
the developing world to develop local industry through the
processing of natural gas into ethylene, polyethylene and
polypropylene and other petrochemicals. Because of the inherent
cost-advantages of petrochemical manufacturing proximate to the
fields, we are focusing on this sector as an expected growth
area in which our proprietary technologies and extensive
references in the Middle East and elsewhere make us particularly
competitive.

Continued emphasis on refinery
projects.We are an established leader
in the engineering and turnkey construction of refinery
projects, and aim to maintain our strong position in this
sector, which we believe will benefit from growth both in the
emerging countries and in the industrialized countries. In
addition to our general portfolio of technologies and
engineering references, we believe that our expertise in
hydrogen refining (in which we believe our market share is
approximately 40%) will be a strategic advantage as demand for
this refinery product develops.

2001: Major Achievements in the Onshore/
Downstream Branch

The year 2001 saw the completion of several major
projects: the commissioning of the MIDOR refinery in Egypt, the
start-up of the OGD2 gas processing facilities in Abu Dhabi, the
start-up of a coke calcining plant in Bahrain, as well as
completion of construction of Sincors extra-heavy crude
processing complex in Venezuela.

Aside from a major ammonia/urea project in
Vietnam, new contracts were obtained mainly in the
Middle East: in the United Emirates (Fujairah pipeline), in
Qatar (LNG), in Saudi Arabia (Berri gas facilities) and in Iran
(ethylene steam crackers at the 9th and 10 complexes). In
March 2002, we were also awarded, in a joint venture,
a lump sum turnkey contract for trains 4 and 5 of the Bonny
LNG complex in Nigeria.

In Europe and North America, we had sustained
activity in the hydrogen units sector, winning about
a dozen projects representing cumulative production
capacity of 800,000 m3/hour and won two
significant projects in polyolefins.



| |       
| | ------
| | EUROPE

In Italy, mechanical acceptance of the first
three oil and gas collection and processing lines at Val
dAgri was issued in September by ENI Division Agip. Our
engineering center in Rome continued the engineering and

40



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##### Table of Contents



procurement for the 4th line, construction
of which will begin in April 2002 and will be completed in
November 2003. These four lines, for the development of the
Viggiano field  the most important hydrocarbon
reserve in southern Italy  will have a global
processing capacity of 104,000 barrels/day.


Our Italian affiliate carried out the complete
revamping of Enichems LPG storage facilities in Cagliari,
Sardinia, and was also entrusted with the revamping and
automation of Enichems ethylene plant in Porto Torres.

In France, our most significant project in the
refining sector was the design study for expanding SARAs
refinery in Martinique and bringing it into compliance with the
new Auto Oil 2005 fuel standards. In the petrochemicals sector,
we continued execution of the contract for a capacity
increase (+35%) of the steam-cracking line at Carling and
delivered a GK6 furnace based on our in-house design to
ATOFINA, mechanical acceptance of which was issued in February
2002.

Via our affiliates in Paris and Lisbon, we
successfully completed engineering and services projects for the
revamping of Petrogals three hydrodesulfurization units at
Sines and Porto in Portugal. At Sines, the installation of a new
reactor, new compressors and heat exchangers has increased
capacity from 34,000 to 37,000 barrels/day. Modifications
made on the Porto unit were aimed at reducing the sulfur content
of gas oil (max. 30 ppm) and increasing capacity from
22,000 to 25,000 barrels/day.

Our affiliate based in Lisbon, was entrusted with
the detail engineering and elaboration of as-built
plans in the areas of civil works, electricity and
communications for the LNG terminal to be built at Sines.
Technip Portugal also participated in the engineering of the
surface facilities for underground storage of LNG
(80,000 m3) at Sines for Sigas, a Petrogal/
BP/ Borealis joint venture.

In September 2001, Repsol YPF awarded us
a turnkey contract covering the modernization of nine
steam-cracking furnaces at Repsol Quimcas ethylene plant
located at Tarragona in Spain.

We carried on the services contract awarded by
Repsol in 2000 for the design and construction of offsites and
utilities for the new hydrocracker at Tarragona. Under the terms
of the contract, our Dutch affiliate will provide the
engineering and procurement services for
a 65,000-m3/hr hydrogen unit.

In Greece, in the context of a longstanding
collaboration with Motor Oil Hellas, our engineering center in
Rome was awarded a contract for the instrumentation and
automation revamping of their lube oil plant at the Corinth
refinery.

We have begun executing a contract, worth about
 50 million,
awarded in December 2000 by Petkim for the design and
construction of a 120,000 ton/year low density
polyethylene plant at Aliaga in Turkey. Commissioning of
the plant is expected in 2004.

The year 2001 was marked by the award of new
projects involving hydrogen units in Europe. A turnkey
contract worth
 30 million
was signed with PCK Refinery for the design and
construction of a 35,000m3/hr unit on the site
of the Schwedt refinery in Germany. We were also entrusted
by OMV with the design and construction of
a 30,000m3/hr unit at Schwechat in Austria, as
well as the expansion of the hydrogen unit feeding the
hydrocracker of Total Raffinaderij Nederlands refinery at
Vlissingen in the Netherlands.

In the petrochemicals sector, in the Netherlands,
we won a major contract for the design and construction of
a 300,000 ton/year polypropylene plant. This
PPF6 plant, for the DSM group, will be built at Geleen and
will use BPs Innovene gas-phase technology. It is the
third project of this type entrusted to us by DSM, following
PPF 3 on the same site at Geleen and the plant at
Gelsenkirchen in Germany.

In August, our engineering center in The Hague
completed on schedule a contract with DOW Chemicals for the
revamping of 18 ethylene furnaces at Terneuzen and was
awarded by the client the Safety Incentive
Award 2001.

In Belgium, our engineering center based in Paris
carried on the engineering and services contract for the design
and construction of a new 250,000 ton/year high
density polyethylene line at Solvays petrochemical site in
Lillo. This project is now in the start-up phase. For its part,
our Italian affiliate completed its project for the
debottlenecking and expansion of the PTA plant at Geel and was
issued acceptance of that facility by BP last December.

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Scanraff entrusted additional work to
Technip-Italy under a contract signed in
September 2000. This project, which involves the propylene
recovery and storage unit at the Lysekil refinery in Sweden,
will be completed in September 2002.



| |              
| | -------------
| | NORTH AMERICA

In May 2001, we won two contracts, together worth
$125 million, for the design and construction of hydrogen
plants in Canada. These two plants will use our proprietary KTI
Steam Methane Reformer Technology. The first plant will be
constructed for Syncrude Canada at Fort McMurray
in Alberta. With a capacity of 200 million SCFD
of hydrogen, it will be the biggest single-train unit of this
type in the world. The second plant, with a capacity of
40 million SCDF of hydrogen will be built at Regina,
Saskatchewan, for Consumers Cooperative Refineries.
Execution of these projects has been entrusted to our
engineering center based in Los Angeles.

In the United States, Technip USA (Houston)
was entrusted with a contract for the design and
construction of an additional cryogenic gas processing line for
the Neptune plant in Centerville, Louisiana. At the beginning
of 2002, Cheniere Energy awarded this same engineering
center a basic engineering contract for a liquefied
natural gas (LNG) terminal at Freeport, Texas.

Within the framework of environmental programs
for the reduction of nitrogen oxide (NOx) emissions,
Technip USA, which has acquired great expertise in this
area over the past twenty years, was awarded in 2001 an
engineering contract for the reduction of NOx emissions from
ExxonMobils refinery and petrochemical complex at
Baytown, Texas. Phillips Petroleum also awarded it an
engineering and services procurement project concerning the
reduction of NOx emissions from the refining complex at
Sweeny, Texas.

In the petrochemical sector, Technip USA, in
association with BE&K, won from Chevron Phillips Chemical
Co. and Solvay Polymers, a contract for the engineering,
procurement and construction of a 318,000 ton/year
high density polyethylene plant at Chevron Phillips Chemical
Co.s complex at Cedar Bayou, Baytown, Texas.



| |              
| | -------------
| | LATIN AMERICA

Construction of Sincors extra-heavy crude
processing facilities in Venezuela was completed at the end of
2001, in accordance with the contract schedule and to the
satisfaction of the client.

Sincor, whose shareholders are TotalFinaElf
(47%), PDVSA (38%) and Statoil (15%), had awarded this turnkey
project to Contrina  a joint venture company made up
of us, Kellogg Brown and Root, Parsons and the Venezuelan
companies Proyecta and Dit-Harris  in September 1998.

This contract, worth about $750 million,
involved the grassroots design and construction of facilities to
upgrade extra-heavy crude (8 to 8.5°API) in the Jose
region, near Puerto La Cruz. The facilities principally comprise
a vacuum distillation unit (284,000 barrels/day), a mild
hydrocracker, a naphtha hydrotreater, utilities and offsites, as
well as distributed control systems. They will allow the
production of 180,000 barrels/day of high-quality synthetic
crude (32° API and very low sulfur content) from previously
diluted extra-heavy crude from Zuata. The basic engineering for
this project was performed entirely by our engineering center in
Paris. Construction (20 million manhours) was carried out
without lost-time accidents.

In the Dutch Antilles, our Italian affiliate
pursued the execution of the contract for the expansion of the
Curacao refinery for the company Isla, an affiliate of PDVSA.
This $190 million project consists of revamping certain
units to increase their capacity and technical performance, and
to treat atmospheric emissions. The engineering and procurement
of equipment and materials have been completed. Completion of
construction is expected in August 2002.

AFRICA

In Nigeria, construction of the third liquefied
natural gas (LNG) train at Bonny, with a capacity of
2.95 million tons/year, progressed ahead of schedule and
had achieved 75% completion at the end of February 2002. Under
the terms of a turnkey contract worth $1.2 billion awarded
by Nigeria LNG Ltd in December 1999,

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TSKJ  a consortium composed equally of
us, Snamprogetti, KBR and JGC  is also currently
designing and building a one million ton/year LPG recovery unit,
as well as utilities and offsites. Delivery of the third LNG
train and related facilities is expected during the first
quarter of 2003.


In early 2001, TSKJ successfully won, in an
international competitive tender process, the contract for the
project specification for the NLNGPlus Project concerning two
additional LNG trains at Bonny. This work was completed for the
client in November 2001.

In March 2002, Nigeria LNG Ltd
(NLNG) awarded the engineering, procurement and
construction contract for the design and construction of the
NLNGPlus Project covering trains 4 and 5 of the Bonny complex.
Each of the two new trains and associated facilities will be
able to process 4 million tonnes per year of LNG as of
2005, thus bringing overall production capacity to 16.8 million
tons of LNG and 2 million tons of LPG per year.

In addition to train 3 now being built, TSKJ had
already designed and built trains 1 and 2, brought on stream
respectively in August 1999 and February 2000, together with
their associated utilities and offsites. Furthermore, TSKJ has
also recently provided NLNG with a price for an additional
4 million ton/year LNG train (train 6). NLNG shareholders
are Nigerian National Petroleum Company (49%), subsidiaries of
Royal Dutch/ Shell (25.6%), TotalFinaElf (15%) and Agip (10.4%).

Technip-Coflexip completed the basic engineering
(FEED) phase of the project management contract for
Western Gas Libya which concerns the development of
several gas fields in Libya. The onshore portion of the project,
awarded by Agip Gas BV, was carried out by our affiliate based
in Rome. It includes development of an onshore gas field located
at Wafa (550 km southwest of Tripoli), design and construction
of a 10 billion m3/ year gas processing plant at
Melitah on the Libyan coast west of Tripoli and of a network of
onshore pipelines between Wafa and Melitah (500 km) consisting
of 16 inch and 30 inch lines for transporting gas and liquids
produced onshore to the treatment plant. Total cost of the
investment is estimated at more than $5 billion. During the
execution phase, we will be in charge of supervising the
subcontractors now being selected for the work.

The MIDOR refinery in Egypt reached full
production capacity in the summer of 2001. Performance tests,
which began in August, were carried out successfully on each of
the units: the atmospheric and vacuum distillation units, the
naphtha hydrotreater, the hydrogen plant, the gas oil
desulfurization unit, the reformer, the delayed coker, the LPG
units and the hydrocracker. With a capacity of 100,000
barrels/day, this refinery is designed to convert heavy products
into desulfurized distillates and to meet the European
environmental standards to be applied as of 2005. Today it is
the most modern and most sophisticated refinery and the one best
adapted to the demands of the market in the whole Mediterranean
Basin. For us, the MIDOR refinery is a first-class reference,
all the more since it is the largest turnkey project ($1.2)
entirely carried out within our group. Engineering and
supervision of construction represented 2 million manhours
for us. Construction required 27 million manhours and the
presence of 7,000 people on the site at peak time, 500 of
whom were supervising construction.

MIDDLE
EAST

In March 2002, we won a major turnkey contract
for the expansion of the gas complex at Berri in
Saudi Arabia. The objective of this project awarded by
Saudi Arabian Oil Company (Saudi Aramco) is to process
additional quantities of sour gas from the Qatif field, which is
under development. We will provide a low-pressure gas
sweetening unit, two sulfur recovery units, a new feed gas
compressor, and will revamp the existing units. These services
will increase the capacity of the complex by
2.5 billion m3 of gas/ year, while the
sulfur recovery capacity will be increased by 1,330 tons/day.
The contract will be executed by our Italian affiliate, and our
local affiliate Technip Saudi Arabia, will be in charge of
construction.

Mechanical acceptance of the three sulfur
production units (3 × 350 tons/ day) and of
the related utilities for the development of the Hawiyah gas
field was issued by Saudi Aramco in December 2001. These
facilities, whose design and construction were awarded to our
Italian affiliate in 1998, are now operational.

We carried on the turnkey contract which we were
awarded by Saudi Aramco in December 2000 for the design and
construction of facilities related to the development of the
Haradh gas field. This contract covers utilities and offsites as
well as a pipeline system required for operation of a new plant,
which will be able to process
16.2 billion m3 of gas/ year. Completion of
the project is expected in 2003. The partners in this project are

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our subsidiaries: Technip Italy (utilities and
offsites), Technip Germany (onshore pipeline system) and Technip
Saudi Arabia (construction).


During recent years, we have played a significant
role in the major gas developments carried out by
Saudi Aramco. The turnkey contracts for Berri, Hawiyah and
Haradh, to which Abqaiq  completed in
1998  can be added, together represent sales for us
of over one billion dollars.

In the petrochemicals sector, SABIC entrusted us
in March 2002 with the design and construction of an acetic acid
plant at Yanbu, on the site of Arabian Industrial Fibers
Companys complex. With a capacity of 30,000 tons/
year, this plant will use ethane oxidation technology developed
by SABIC. This turnkey project was entrusted to our engineering
center based in Rome, in association with Technip Saudi Arabia.
Commissioning of the plant will take place during the second
half of 2004.

In Qatar, the our joint venture won a contract
worth about
 100 million
for the expansion of the liquefied natural gas
(LNG) facility at Ras Laffan. Under the terms of the
contract signed with Qatar Liquefied Gas Company (Qatargas), the
joint venture will carry out detail engineering, procurement and
construction for debottlenecking the three LNG trains. The
services and works involved will mainly consist in modifying or
upgrading the process equipment in order to expand the capacity
of each train from two to three million tons/ year. This
project will be executed by an integrated team pooling the
expertise of both partners. The engineering center is located in
Paris.

Technip Italy is currently completing the
revamping and expansion of the sulfur recovery units at Ras
Laffan, under a contract worth $50 million awarded by
Qatargas in 2000.

Acceptance of Qatar Vinyl Companys
(QVC) complex, which was built grassroots inside the Qapco
petrochemical complex at Mesaieed, was issued in August 2001
after the start-up of the dichloroethane (DCE), caustic soda and
vinyl chloride monomer (VCM) units, one month ahead of the
contractual schedule. These facilities were designed and
constructed by us in consortium with Krupp Uhde, under the terms
of a turnkey contract awarded in December 1998 by QVC, a company
owned by Qatar Petroleum, Qapco, Norsk Hydro and Elf Atochem.
Within the consortium, our engineering center was in charge of
designing and building the main utilities and offsites:
a 122 MW power plant; 2 caustic soda storage
tanks (2 × 30,000 m3); EDC, VCM
and salt storage; transport and unloading facilities; water
treatment and cooling units. Twenty million manhours without
lost time for accidents were achieved, a particularly notable
performance considering that almost half of these hours were
spent inside the plant while it was in operation.

Q-CHEMs (Qatar Petroleum/ Phillips
Petroleum) project for the design and construction of a new
petrochemical complex at Mesaieed had progressed more than 90%
at the end of February 2002. The turnkey project worth
$750 million had been awarded to us in October 1999 in a
50/50 joint venture with Kellogg Brown & Root (KBR).
The facilities include an amine sweetening unit and a sulfur
recovery unit using our processes, a 500,000 ton/ year
ethylene cracker using KBR technology with furnaces designed by
us, a 450,000 ton/ year high-density/ low-density
polyethylene plant and a 45,000 ton/ year hexene unit using
the Phillips process, as well as utilities and offsites.
Construction is expected to be completed in June and
commissioning of the complex should take place in November 2002.

Qatar Petroleum also entrusted our engineering
center based in Abu Dhabi with a basic engineering contract for
the installation of additional storage tanks at the Mesaieed
site, notably 2 tanks, 100,000 m3 each, for
storing butane.

In the United Arab Emirates, in a joint venture
with Al Jaber Energy Services, we won a contract worth almost
 500 million
to design and build a 185 km potable water transmission
pipeline linking Fujairah to the city of Al Ain in Abu Dhabi, a
16 km pipeline link to Al Dhaid in the Emirate of Sharjah,
pumping stations, as well as water storage tanks and associated
facilities. This contract, signed last August with UAE Offsets
Group, is part of a vast development program involving
construction of a desalination plant and a power plant in
Fujairah. Our engineering center in Dusseldorf will handle
engineering, procurement and project management, with support
from our engineering center in Abu Dhabi. Al Jaber Energy
Services, based in Abu Dhabi, will be in charge of construction
and erection. Completion of the project is expected in 2003.

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The new facilities for the gas treatment complex
at Habshan in Abu Dhabi passed their performance tests
satisfactorily, and were commissioned and brought on stream in
April and reached their design capacity in July 2002.
Designed and built by us and Bechtel (50/ 50), under a turnkey
contract worth $1.3 billion for Abu Dhabi National Oil
Company (ADNOC), these facilities include 3 trains with a
total treatment capacity of 10 billion m3
of gas/ year, LNG recovery units, condensates units,
3 sulfur recovery units, as well as all utilities and
offsites to serve the process units. The basic engineering had
been entirely performed by our engineering center in Paris. This
very large OGD2 (Onshore Gas Development Phase 2) project
mobilized up to 10,000 people on the site and established a
world safety record, with 33 million hours of construction
without an accident. It is actually the second major expansion
of the Habshan complex, following OGD1, which had also been
handled by us and Bechtel between 1993 and 1996. This new
project consolidated our position as international leader in
engineering and turnkey implementation of major onshore gas
complexes.

Abu Dhabi Onshore Operations (ADCO) awarded
us two major basic engineering contracts, one for the North East
Abu Dhabi development, concerning the Rumaitha and Al
Dabbiya oil fields, the other concerning the Bab field.

The project to expand and revamp the
fractionation plant at Ruwais was completed by teams from our
engineering center based in Abu Dhabi. This turnkey contract
worth $90 million, awarded by GASCO at the end of 1999, had
the objective of treating gas from Habshan.

In the United Emirates, the Group is considered
the leader in the onshore oil and gas field development sectors.
With a staff of more than 600 people, our center in Abu Dhabi is
the largest engineering center in the Middle East.

In Bahrain, we delivered two coke calcining lines
(450,000 tons/ year) and 4 seawater desalination lines
(41,000 m3/ day) to Alba, under a turnkey
contract worth 220 million euros, signed by the
Groups German affiliate at the beginning of 1999.
Performance and reliability tests, carried out over
30 consecutive production days, were successfully completed
on January 20, 2002, and the plant was inaugurated on the
30th of the same month. Alba (Aluminium Bahrain) is a major
aluminum producer in the Middle East. The company is owned 77%
by the Emirate of Bahrain and 20% by Saudi funds (SABIC). The
green coke imported by ship is calcinated in two 67-meter-long
rotary furnaces, at temperatures reaching
1,300o C. The calcinated coke is mainly used for
manufacturing anodes in the aluminum electrolysis lines. In
addition to the furnaces and incinerators, we designed and built
the cooling facilities required for the process and desalination
units, as well as large-dimension storage facilities.

The year 2001 was marked by strong Group activity
in the ethylene sector in Iran. In March, in association with
the Iranian company Nargan, we signed with JAM Petrochemical
Company, a contract worth about
 300 million
for the design and construction of a steam cracker for
production of 1,400,000 tons/ year of ethylene. This plant,
which will constitute the central unit of the gigantic 10th
Complex at Assaluyeh, will use our proprietary technologies,
furnaces and processes and will be the largest steam cracker in
the world and the only large-capacity steam cracker using both
gas and liquid feedstocks to produce ethylene and propylene.

In December 2001, the
 200 million
contract for the design and construction of the steam cracker at
the 9th Complex  signed with National
Petrochemical Company (NPC) in September 2000 came in
force. This project consists in building a one-million ton/year
steam cracker at the Assaluyeh site. With our partner Nargan, we
will perform the same services as for the 10th Complex,
notably basic and detail engineering, supply of equipment and
materials, supervision during construction and commissioning and
start-up, as well as supply of our proprietary ethylene
production technologies and furnaces. Financing of the project
is based on export credit facilities from Italy, France and The
Netherlands.

The contract signed with Arak Petrochemical
Company in May 2001, for expansion of Araks ethylene
plant, became effective in March 2002. This project, worth about
 50 million
and covering engineering and supply of equipment, will increase
the capacity of the existing plant from 247,000 to
306,000 tons per year.

The work will be executed by our Italian
affiliate in partnership with Nargan. The Arak plant operates on
naphtha and kerosene and uses our proprietary technology for the
production of ethylene.

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We also worked on the
 100 million
contract, which became effective in September 2000, for the
design and construction of a 300,000-ton/ year linear low
density polyethylene plant at Bandar Imam, whose commissioning
is expected in 2003.



| |             
| | ------------
| | CENTRAL ASIA

In January 2002, we were awarded a new contract
in Turkmenistan for the turnkey implementation of a diesel
hydrotreatment plant on the site of the Turkmenbashi refinery.
Under the terms of the contract, worth
 130 million
and signed with Turkmenneftegas, the new unit will produce
1,500,000 tons per year of hydrotreated diesel with less
than 10 ppm of sulfur. The facilities will mainly include a
hydrotreatment unit, a sulfur recovery unit based on our
proprietary technology, as well as associated utilities, storage
tanks and control systems. The contract will come into force as
soon as the financing of the project is arranged and secured
through a multi-source financing scheme that is currently being
set up.

The lube oil plant at Turkmenbashi came on stream
during summer 2001, i.e. 24 months after the contract came
into force. The project, worth
 180 million,
was carried out in close collaboration by several of our
engineering centers (Paris, The Hague and Saint Petersburg for
the design work and Dusseldorf/ Paris for procurement and
construction supervision). The MSCC catalytic cracker at the
Turkmenbashi refinery (1.8 million tons/ year) started
up in July 2001. It had been ordered under the terms of a
 200 million
turnkey contract, signed shortly before the contract for the
lube oil plant. This project had been entrusted to our
engineering center based in Paris.



| |              
| | -------------
| | ASIA/ PACIFIC

Mechanical acceptance of the new units at the
Guhawati refinery in India was issued in January 2002. These
facilities include a hydrotreatment unit using the UOP process
and a hydrogen unit based on our proprietary technology. They
were designed and built jointly by our teams based in Rome and
those of its affiliate KT India in New Delhi, under the
terms of a turnkey contract worth about $50 million.

In Southeast Asia, the most important project won
in 2001 was the contract signed in June with Petrovietnam for
the turnkey design and construction of an ammonia/ urea complex
at Phu My in Baria Vung-Tau Province, in Vietnam. This project,
worth about $400 million, came into force in August 2001
and was entrusted to a Technip-Coflexip/ Samsung Engineering
consortium led by our engineering center in Rome. The facilities
will include a 1,350 ton/ day ammonia plant based on Haldor
Topsoe technology, a 2,200 ton/ day urea plant based on
Snamprogetti technology, as well as related utilities and
offsites, including production and export of electric power.
Start-up of the complex is expected in June 2004.

Our engineering center in Kuala Lumpur completed,
during the first quarter of 2002, construction of offsites and
infrastructures on the petrochemical site at Kerteh, in
Malaysia, for Optimal Chemicals (Petronas/ Union Carbide). On
the same site, Technip Malaysia carried on construction of a
225,000 ton/ year high-pressure polyethylene plant for
Petlin (DSM/ Petronas/ Polyfin).

In China, we developed our activity with the
design and construction, for Sinopec, of a 200,000 ton/
year polypropylene plant at Yangzi and the expansion of a
polyethylene plant at Dushanzi.

Within the framework of our alliance with BP
concerning PTA units, our Italian affiliate continued the
project for engineering, procurement of certain equipment and
construction supervision of a 350,000 ton/ year purified
terephthalic acid (PTA) plant at Zhuhai, whose start-up is
expected at the end of 2002.

Construction work for the 700,000 ton/ year
PTA plant at Taichung, Taiwan, began in May 2001. Under the
terms of the contract, our engineering center based in Rome was
entrusted by CAPCO with the engineering, procurement and
construction supervision. The plant will be based on BPs
process.

Industries Branch

We also offer our engineering and construction
services to a diverse array of other industries. Past projects
have included cement plants, fine chemicals and life sciences
facilities, industrial research centers, office parks,

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manufacturing and food processing plants, theme
parks, data processing centers and electricity co-generation
plants, among others.


In 2001, we generated net sales of
 472.0 million,
or 13.3% of our total net sales, from the Industries branch
compared to
 551.1 million,
or 18.5% of total net sales, in 2000 and
 604.5 million,
or 21.7% of total net sales, in 1999. In 2002, as a result of
the consolidation of Coflexip for the full fiscal year, this
segment will have significantly less weight in our total sales
than in 2001. Our goal is to increase the contribution of this
segment to total sales to approximately 15% by 2007. At
December 31, 2001, the Industries branch represented
approximately 5.9% of our total backlog. Because this area
generates contracts which on average have shorter project cycles
than our larger hydrocarbon/petrochemicals contracts, our
backlog figures may tend to understate this areas future
proportionate contribution to net sales.

Life Sciences.We have implemented over
160 major turnkey projects for clients in the life sciences
industry. Projects range from research centers to production
facilities for bulk active ingredients as well as manufacturing
facilities for leading international clients in sectors
including fine chemicals, intermediates, pharmaceuticals,
veterinary products, and agrochemicals.

Basic Chemicals.We are one of the world leaders in
the design and construction of electrochemicals and soda ash
production plants, we have completed over 100 projects in
inorganic basic chemicals since 1970. We use a large range of
proprietary or licensed technologies that are recognized as
state-of-the-art worldwide.

Food Processing.We have completed over
1000 food processing projects for leading international
clients in sectors including beverages, dairy products,
bakeries, animal foods, sugar, edible oils and distilleries
(fermentation ethanol). In this field, we have developed
proprietary technologies in ethanol production, palm oil
refining and food yeast production.

Power Generation.We are extensively involved in the
power plant business worldwide, primarily through our subsidiary
Technip Germany (formerly MDEU). Our capability has been proven
in more than 1000 nuclear and hydrocarbon-fired power plant
projects and in high pressure piping systems for power plants.
We are now a qualified supplier for a wide range of plant
systems covering engineering, supply, prefabrication,
construction and commissioning on site. We also can provide the
dismantling of nuclear and plasma power plants.

Cement.Our
cement division designs and builds greenfield cement plants. We
also handle major expansions and upgradings of existing
facilities, throughout the world. Proprietary technologies for
pre-calcination of clinker (the kiln-fired precursor of ground
cement) and process optimization are among our competitive
strengths in this field. Our major past projects include 20 new
cement plants and over 50 plant expansions and upgrades.

Hydrometallurgy.We are a leading company in the
supply of solvent extraction systems for non-ferrous metals
production. We offer our own solvent extraction technology based
on our proprietary mixer-settler equipment. We have managed the
design and construction of over 40 plants (using a total of
more than 500 Krebs-Speichim mixer-settlers) based on this
technology in 17 countries for the metal extraction and/or
purification of metals including copper, nickel/cobalt, uranium,
rare earths, vanadium, tantalum/niobium, indium, gallium and
germanium. We have provided our solvent extraction technology to
nine uranium solvent extraction plants, representing the
majority of all uranium ore treatment plants built over the last
20 years, and to 10 nickel/cobalt separation and
recovery plants.

Architectural Engineering.We have developed expertise in the
implementation of architectural projects for sophisticated
buildings. Our architectural engineering services include
engineering studies, project management, coordination and
planning. Our notable achievements include the French National
Library in Paris, the EuroDisney theme park in France, the
Renault Research Center, and Banque Nationale de Paris-BNP data
processing centers, as well as our award in March 2001 of the
architecture and integration of the Airbus A380 assembly
plant in Toulouse, France.

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| |                        
| | -----------------------
| | 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. Many of these industries, such
as food processing, basic chemicals or cement, are not expected
to generate frequent orders for new facilities but do demand
relatively frequent revamping and expansion projects for
existing facilities. From this perspective, winning a bid
awarded by a large repeat client is of greater importance than
what the value of the individual contract might suggest.



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

We aim for our Industries segment to contribute
approximately 15% of our consolidated sales by 2007, compared to
approximately 10% on a pro forma basis in 2001. Our strategy for
growth in this segment consists of internationalizing our
engineering activities in fields such as life sciences,
chemicals and electricity that we successfully conduct in
several core markets, while expanding generally into the
architecture and engineering of infrastructure and industrial
buildings generally.

2001: Major Achievements in the Industries
Branch

In 2001, our Industries Branch carried out
engineering services or projects for most of the major groups
operating in Europe in the pharmaceuticals and cosmetics
sectors. The Industries Branch also won significant contracts in
the fertilizers sector with Copebras in Brazil, in the chemicals
sector with BASF and Bayer, in metallurgy with Inco and
Péchiney and in industrial buildings with EADS Airbus.

Life
sciences

We successfully completed, for Aventis Pasteur,
the engineering and project management services contract for the
vaccine production units and the high-ceiling storage facilities
at the Val de Reuil pharmaceuticals site in France. Aventis
Pasteur entrusted us with the design of a pharmaceutical
packaging unit (at Val de Reuil) and a pilot workshop (at Marcy
lEtoile), as well as the design and construction of cold
rooms for these two sites.

Our engineering center in Paris completed the
revamping and expansion of the pilot workshop at Aventis
Pharmas research center in Vitry. This workshop includes
19 reactors for the production of clinical lots for testing
medicines before they are put on the market. The Group was also
awarded the design and construction of a unit for the production
of active ingredients in Vitry.

Our groups engineering center in Lyon was
also awarded, by Merck Sharp & Dohme, a project
for the design and construction of a quality control laboratory
at Mirabel, near Riom.

In France we were awarded, several design
contracts by the Servier group, a project to expand the dry
forms workshop plant for Fournier in Dijon, and the revamping of
Isochems pharmaceutical synthesis workshop in Toulouse.

Our engineering center based in Rome designed and
built, for BMS-Indena, a unit for extracting and purifying a
pharmaceutical active ingredient in Settala in Italy. Our
subsidiary in Italy, Technip-Italy also completed, for
Bristol-Myers Squibb (BMS), the engineering and equipment supply
of the gas and liquid waste treatment facilities for a
pharmaceutical plant in Ireland.

Technip-Iberia participated, on behalf of
Biochimie of the Novartis group, in a major project involving
the expansion of an antibiotics plant in Les Francesques del
Vallés, near Barcelona in Spain. Technip-Iberia was
involved in all phases of the project, including basic
engineering, detailed engineering, project management and
construction supervision. The expansion involved the
synthesizing zones and the utilities, including notably two new
reactor lines, loading facilities for solids and liquids,
centrifuges, cooling systems, and a solvent recovery and
recycling unit. These facilities started up during the second
half of 2001.

We carried out the expansion of
LOréals cosmetics plant near Warsaw, Poland.
The project consisted of integrating into the existing plant a
processing unit and packaging facilities, as well as utilities
and storage, to be used mainly in the production of shampoos. In
2001, our engineering center based in Paris, which successfully

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executed this project, was entrusted by
LOréal with the revamping and expansion of its plant
at Caudry in France.


Our engineering center which opened a short time
ago in Thailand, and which was certified ISO 9001 in October
2001, successfully completed its project for the design and
construction of a human vaccine plant near Bangkok. This plant,
built for GPO-MBP, a joint venture between Aventis Pasteur and
Government Organization of Thailand, will produce
25 million doses of vaccine per year and will be
commissioned shortly.

The new finished-form pharmaceutical unit at
Tianjin, China, was delivered to Servier by Technip Tianchen,
our local affiliate. The design study had been carried out
earlier by us in Paris.

We were awarded, by Aventis CropScience, a
contract, worth about U.S.$25 million, for the engineering,
equipment supply and supervision of construction of a pesticides
plant at Hangzou. This project is being jointly carried out by
our engineering center in Lyon and Technip Tianchens teams.

Lastly, Krebs Enghenaria, one of our Brazilian
affiliates, won a contract with Servier for the engineering and
project management of a finished-form pharmaceutical plant at
Rio de Janeiro, in Brazil.



| |            
| | -----------
| | Fertilizers

In March 2001, our Brazilian affiliate,
Krebs Engenharia, was awarded by Copebras a turnkey contract,
worth about $100 million, for the design and construction
of a phosphatic fertilizer plant at Catalão, Goias State,
in Brazil. The new facilities, which are scheduled to come on
stream at the end of 2002, will include a sulfuric acid unit
(1,350 tons/day), a phosphoric acid unit
(370 tons/day), a 1,200 tons/day simple superphosphate
(SSP) unit and a triple superphosphate (TSP) unit, as
well as a granulation unit.

Krebs Engenharia successfully completed another
turnkey project, worth $20 million, at Catalão for
Fosfertil. This contract included the design and construction of
a 350,000 tons/year SSP production unit, an SSP granulation
unit and related utilities and offsites. Performance tests were
carried out successfully at the beginning of 2002.

In Senegal, the project to double the capacity of
a sulfuric/phosphoric acid complex for Industries Chimiques du
Sénégal (ICS), at Darou Koudoss, was completed in
August 2001. This project was designed to increase the
capacity of the existing complex by 3,000 tons/day of
sulfuric acid and 1,015 tons/day of phosphoric acid.
Start-up and performance tests are scheduled to be carried out
in the near future.

In addition, Technip-Coflexip continued executing
a turnkey contract awarded by Kemapco for a 350 tons/day
nitric acid unit at Aqaba in Jordan, with start-up expected in
2002.



| |          
| | ---------
| | Chemicals

In March 2002, BASF awarded our German
affiliate, Technip Germany, a contract, worth about
 50 million,
concerning the conversion of a chlorine production unit at
Ludwigshafen in Germany. This project will allow use of a
membrane technology.

Construction of a PVC suspension unit at
Martorell, near Barcelona, in Spain was completed in January and
the new facilities came on stream during the first half of 2001.
The contract, awarded to us in September 1999 by Hispavic
(Solvay group), involved a capacity expansion of
120,000 tons/year and the revamping of existing units.
Within the framework of this project, our engineering centers
based in Barcelona, Lyon and Paris worked in close collaboration
to carry out the engineering, procurement and construction
supervision.

Our Industries Branch designed and built, for
Aragonesas, a hydrogen peroxide unit at Sabinanigo, and provided
the engineering for the construction of two solid chlorine units
of different types (ATCC and DCCNa) at the same site. The Group
also worked for Aragonesas on the expansion of its PVC
suspension units at Vilaseca and Monzon.

Technip Iberia carried out basic engineering,
detailed engineering (not including civil works), equipment
procurement and project management for an aroma chemicals plant
built for Kao Corporation, at Olesa de Montserrat, near
Barcelona.

49



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We continued work on the projects concerning
sodium chlorate production units for Albchem in Canada and for
Atisholz in Switzerland.

The turnkey project for the design and
construction in Finland of a plant producing a chemical additive
for binding paper pulp has been carried out in accordance with
the contractual schedule and should be completed in
June 2002. Execution of the contract had been entrusted by
BASF, in December 2000, to a joint venture made up of our
engineering center in Dusseldorf and the Finnish engineering
company Rintekno Oy, in which we hold a 28.6% share. The plant,
which will have a capacity of 140,000 tons/year, is being
constructed at Hamina.

In June 2001, we were issued the mechanical
reception certificate for the hydrocyanic acid unit built for
Butachimie (Rhodia/ Du Pont) at Chalampé in France.

Our Industries Branch was entrusted in 2001 with
engineering for the expansion of the boosters plant for the
Ariane 5 satellites launcher. This propellant plant is located
in French Guyana, within the Kourou space center.

The year 2001 saw the start-up of the
120,000-ton/year acrylic acid unit built at Bayport, Texas, in
the United States for American Acryl, a joint venture between
Nippon Shokubai and ELF Atochem North America. This turnkey
project, worth $150 million, was executed by our teams from
Technip USA in Houston and Paris, in partnership with Parsons,
which carried out the construction. The facilities include an
acrylic acid unit, a butyl acrylate unit, as well as offsites
and utilities.

In Malaysia, the 150,000 tons/year PCV plant at
Kerteh, designed and built for Vinyl Chloride Malaysia by
Technip-Coflexips engineering center based in Kuala
Lumpur, was brought on stream.

Our affiliate in China, Technip Tianchen was
selected by Bayer, in November 2001, to carry out the
engineering, equipment supply and construction of the
infrastructures for the new chemical complex at Caojing, near
Shanghai, in China. Under the terms of this project, Technip
Tianchen will provide the utilities needed for operating the
complexs two units: a polycarbonate plant and a
polyisocyanate plant, whose design and construction had also
been entrusted to it in April 2001. These facilities are
expected to come on stream in 2003.



| |                
| | ---------------
| | Agro-industries

In January 2002, the company SOGB, of the
Bolloré group, entrusted our Industries Branch with
providing the technology, design and construction of a palm oil
plant at its site at Grand Béribi, 400 km west of
Abidjan, in Ivory Coast. The plant will produce 30,000 tons
of crude palm and 6,000 tons of palm kernels per year. It
will be the seventh palm oil plant built by us in Ivory Coast,
based on our own technology.

Two months earlier in the same country, we were
issued an acceptance certificate for the Gbapet palm oil plant
(20,000 tons/year), whose turnkey construction had been
entrusted to us by the company Palmci in November 1999.

Vietnam National Alcohol Corporation awarded us a
contract for the design and construction of a
60,000 hl/year ethanol production unit. This unit will be
built near Ho Chi Minh City, on the site of a
distillery already provided by us, and will be based on our
proprietary technology. Commissioning of this unit is expected
in June 2003.



| |           
| | ----------
| | Metallurgy

In June 2001, the Canadian group INCO
selected us and Bechtel  with Hatch as
subcontractor  to provide engineering, procurement
and construction supervision as well as project management of
the whole Goro nickel-cobalt project in the south of
New Caledonia. The Goro complex will produce
54,000 tons of nickel and 5,400 tons of cobalt per
year. It will include a hydrometallurgical processing plant,
mining facilities, a power plant, chemical units, as well as
infrastructures. Total investment is estimated to be
$1.4 billion. With Bechtel we have already executed basic
studies, and, notably, an environmental impact study, thus
allowing the opening of a public inquiry, which is necessary in
order to obtain a construction and operating permit for the
facilities. The EPC contract is expected to be awarded shortly.

50



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We won, as a subcontractor for Péchiney, an
engineering, procurement and construction contract to revamp and
optimize the bauxite and aluminum production plant belonging to
Corporation of Guyana, in Venezuela.



| |                 
| | ----------------
| | Microelectronics

In France, acceptance of Atmels new
semi-conductors manufacturing facility at Rousset was issued in
June 2001. This project was executed on a very tight
schedule (13 months) by a team of ours from Lyon working on
the site. Services included basic and detailed engineering,
subcontracting enquiries and finalization, as well as
coordination and supervision of construction. The new facility
will include 4,300 m3 of clean rooms,
2,000 m3 of which are class ISO 2.



| |                     
| | --------------------
| | Industrial buildings

A leader of a consortium also including
Aéroport de Paris Ingénierie and the architectural
firm Cardete & Huet, we were selected, in March 2001,
by EADS Airbus to carry out engineering services and project
management of the assembly plant for the A380 super-jumbo, to be
built at Toulouse, France. This plant will include about twenty
120 meter span assembly halls.



| |       
| | ------
| | Energy

The expansion and revamping of the power plants
at Abqaiq, in Saudi Arabia, were completed in
February 2002, one month ahead of the contractual schedule.
This turnkey project was performed by our engineering center
based in Rome, for Saudi Aramco. The new facilities include
three 40 MW gas turbines, a steam boiler, two electrical
substations and a distributed control system.

In May 2001, two months ahead of the
contractual schedule, Technip Italy also completed for Motor Oil
Hellas the capacity expansion of the power plant at the Corinth
refinery in Greece.

In Germany, our affiliate based in Dusseldorf
continued, for RWE, construction of a thermal waste treatment
unit which will be integrated with the power plant at Hamm, near
Dortmund. Construction will be completed during the first half
of 2002.

The contract for delivery of a high-pressure
piping system for RWEs lignite-fired power plant at
Niederhaussem near Cologne will be completed in
October 2002 in accordance with the contractual schedule.

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, 2001, 2000 and 1999.

|                           |  |                         |         |            |  |            |         |            |  |  |         |  |  |  |         | 
|-------------------------- |  | ----------------------- | ------- | ---------- |  | ---------- | ------- | ---------- |  |  | ------- |  |  |  | ------- | 
|                           |  |                        
|                           |  | Year Ended December 31,
|                           |  |                        
|                           |  | 2001                    |         | 2001       |  | 2000       |         | 1999      
|                           |  | Pro forma(1)            |         | Historical |  | Historical |         | Historical
|                           |  |                         |         |            |  |            |         |           
|                           |  |                        
|                           |  | ( in millions)        
|Offshore Branch            |  |                         | 2,126.0 |            |  |            | 722.0   |            |  |  | 130.0   |  |  |  | 56.0    | 
|Onshore/ Downstream Branch |  |                         | 2,352.0 |            |  |            | 2,352.0 |            |  |  | 2,290.9 |  |  |  | 2,121.7 | 
|Industries Branch          |  |                         | 472.0   |            |  |            | 472.0   |            |  |  | 551.1   |  |  |  | 604.5   | 
|                           |  |                         |         |            |  |            |         |            |  |  |         |  |  |  |         | 
|Total                      |  |                         | 4,950.0 |            |  |            | 3,546.0 |            |  |  | 2,972.0 |  |  |  | 2,782.2 | 
|                           |  |                         |         |            |  |            |         |            |  |  |         |  |  |  |         | 



---

(1)  Unaudited

51



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| |                             
| | ----------------------------
| | 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, 2001, 2000 and 1999.

|                             |  |                         |         |            |  |            |         |            |  |  |         |  |  |  |         | 
|---------------------------- |  | ----------------------- | ------- | ---------- |  | ---------- | ------- | ---------- |  |  | ------- |  |  |  | ------- | 
|                             |  |                        
|                             |  | Year Ended December 31,
|                             |  |                        
|                             |  | 2001                    |         | 2001       |  | 2000       |         | 1999      
|                             |  | Pro Forma(1)            |         | Historical |  | Historical |         | Historical
|                             |  |                         |         |            |  |            |         |           
|                             |  |                        
|                             |  | ( in millions)        
|Europe/ Russia/ Central Asia |  |                         | 1,497.0 |            |  |            | 942.0   |            |  |  | 717.0   |  |  |  | 922.9   | 
|Africa/ Middle East          |  |                         | 1,305.0 |            |  |            | 1,209.0 |            |  |  | 1,448.3 |  |  |  | 1,296.8 | 
|Americas                     |  |                         | 1,541.0 |            |  |            | 835.0   |            |  |  | 454.5   |  |  |  | 337.6   | 
|Asia Pacific                 |  |                         | 607.0   |            |  |            | 560.0   |            |  |  | 352.2   |  |  |  | 224.9   | 
|                             |  |                         |         |            |  |            |         |            |  |  |         |  |  |  |         | 
|Total                        |  |                         | 4,950.0 |            |  |            | 3,546.0 |            |  |  | 2,972.0 |  |  |  | 2,782.2 | 
|                             |  |                         |         |            |  |            |         |            |  |  |         |  |  |  |         | 



---

(1)  Unaudited



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

Venezuela adopted a new hydrocarbons law at the
beginning of 2002, increasing royalty rates payable to the state
by companies producing Venezuelan reserves and requiring that
state-owned Petroleos de Venezuela SA hold a minimum stake of
51% in all future exploration and production ventures. The same
law opens the right to own downstream assets to foreign persons.
We cannot predict the effect, positive or negative, that the new
law could have on our activities in Venezuela. In addition,
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 and
Libya 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 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 either of these countries meet the statutory requirements of
an investment as defined by ILSA.

ILSA currently requires, among other things, that
the U.S. President impose two or more of the following
sanctions, if he determines that a person has with actual
knowledge, made an investment of U.S.$20 million or more,
in Iran or Libya (or, in the case of Libya, U.S.$40 million
or more for investments made prior to June 13, 2001) that
directly and significantly contributed to the
enhancement of that countrys ability to develop its
petroleum resources:



| |   |                                                                                                                                                                                                                                 
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | denial of Export-Import Bank support (guarantees,
    insurance or extension of credit) in connection with the export
    of goods or services to any sanctioned person;                                                        
|
| |  | a ban on any specific license, permission or
    authority to export goods or technology to a sanctioned person;                                                                                                                
|
| |  | the prohibition of loans or credit (except for
    the purpose of relieving human suffering) from U.S. financial
    institutions in an amount greater than U.S.$10 million in
    any 12 month period to any sanctioned person;
|
| |  | if a financial institution, denial of designation
    as a primary dealer in U.S. government debt instruments or
    service as a repository of U.S. government funds;                                                          
|
| |  | prohibition on U.S. government procurement of
    goods or services from the sanctioned person; and                                                                                                                             
|
| |  | restrictions on imports from a sanctioned person.                                                                                                                                                                               

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ILSA was amended in August 2001 to provide for,
among other things, a five-year extension of the law and to
reduce the investment threshold for Libya from
U.S.$40 million to U.S.$20 million, in line with
ILSAs threshold for Iran. Our net sales in 2001 in Iran
amounted to
 29.1 million
(approximately U.S.$25.9 million) and in Libya to
 0.5 million
(approximately U.S.$0.4 million). As activity on several
recently signed turnkey management contracts progresses, we
expect our sales in Iran to increase significantly. As of
December 31, 2001, we had backlog amounting to
approximately
 416.5 million
(approximately U.S.$370.7 million) in Iran and an
immaterial amount of backlog in Libya. Our backlog in Iran
includes our recently announced Soroosh and Nowrooz oil field
development project. As mentioned, we do not believe that the
services we provide in either of these countries meet the
statutory requirements of an investment as defined
by ILSA. ILSA does not specify how the value of an investment is
to be calculated. Consequently, if our activities in these
countries were deemed to be an investment by the President of
the United States, we cannot determine whether any such
investment would in fact exceed the value thresholds established
by ILSA.

Under ILSA, the President has the authority to
grant country-specific and project-specific 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. To date there
have not been any enforcement actions 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 or Libya. 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.

On November 11, 1993, in response to the
Lockerbie bombing, the United Nations Security Council adopted
Resolution 883 banning trade with Libya in oil equipment
important to the refinery industry. Pursuant to
United Nations Security Council Resolution 1192, adopted on
August 27, 1998, the Security Council decided that measures
against Libya would be immediately suspended once the
Secretary-General reported that the two Libyans accused in
the Lockerbie bombing had arrived at the Netherlands for trial
and that the conditions regarding the investigation of UTA
flight 772 had been met. On April 5, 1999, the UN sanctions
were suspended pursuant to Security Council Resolution 1192.



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

Backlog consists of the uncompleted portion of
contracts in force, which we define as signed contracts on which
we have received a down payment and for which financing has been
arranged. 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. Our backlog figures for
2000 and 1999 do not reflect our then 29.7% interest in
Coflexip. The following table sets forth our consolidated
backlog by branch of activity at December 31, 2001, 2000
and 1999.

|                           |  |                 |      |      |  |      |      |  |  |  |      | 
|-------------------------- |  | --------------- | ---- | ---- |  | ---- | ---- |  |  |  | ---- | 
|                           |  |                
|                           |  | At December 31,
|                           |  |                
|                           |  | 2001            |      | 2000 |  | 1999
|                           |  |                 |      |      |  |     
|                           |  |                
|                           |  | ( in billions)
|Offshore Branch            |  |                 | 2.14 |      |  |      | 0.26 |  |  |  | 0.05 | 
|Onshore/ Downstream Branch |  |                 | 2.50 |      |  |      | 2.74 |  |  |  | 3.09 | 
|Industries Branch          |  |                 | 0.29 |      |  |      | 0.41 |  |  |  | 0.33 | 
|                           |  |                 |      |      |  |      |      |  |  |  |      | 
|Total                      |  |                 | 4.93 |      |  |      | 3.41 |  |  |  | 3.47 | 
|                           |  |                 |      |      |  |      |      |  |  |  |      | 

Broken down by geographic zone, 34.4% of our
backlog at December 31, 2001, was attributed in Africa/
Middle East, 33.8% in the Americas, 16.1% in Europe/ Russia/
Central Asia and 15.7% in Asia Pacific.

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At December 31, 2001, our five largest
contracts accounted for approximately 26% of our total backlog.
While substantial, the percentage share of our five largest
contracts has decreased from approximately 35% of total backlog
at year end 2000, approximately 40% of total backlog at year end
1999 and approximately 60% of total backlog at year end 1996,
largely as a result of the increased number of contracts in our
portfolio.

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. In the past it was typical for each
facility on a major site to be contracted out in a separate
turnkey project. The 1995 NKossa oil production project in
the 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. In 1998, for
example the U.S.$0.6 billion Girassol offshore development
(Angola) was awarded as four turnkey contracts and in 2000, the
U.S.$2.5 billion Barracuda offshore development (Brazil)
was awarded as one single turnkey contract.

As the project 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 nearly 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, in all
cases, 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 which 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 delivery.
From our point of view, while lump-sum contracts entail business
and financial risk, notably by requiring us to absorb any cost
overruns, they also allow us to appropriate any cost savings
which we generate during the life of the project. Because of
these business and financial risks, we cannot generally
accurately estimate the margins of our lump-sum turnkey
contracts until a substantial portion of the work has been
completed.



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

Another type of contractual arrangement common in
our industry is cost-plus contracting. Under
cost-plus contracts, the project contractor passes the design,
equipment and construction costs on to the customer after adding
a predetermined percentage commission. While cost-plus contracts
often contain performance bonuses and penalties, much of the bid
negotiation is focused on the percentage commission, with
relatively little reward for efficient project management and
relatively little guarantee against cost overruns. For these
reasons, we generally determine that bid tenders for cost-plus
contracts do not offer adequate opportunities for profitability.
The current international market for engineering and
construction services primarily involves lump-sum turnkey
contracts due to the requirements of financial institutions.
Cost-plus contracts remain common in the United States and some
European countries.

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| |                     
| | --------------------
| | Cooperative 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,
including our competitors, 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 of the
performance of our obligations and liabilities under the
contract.

In 2001, approximately 45% of our net sales were
derived from joint venture projects. Recent joint ventures
include the Cakerawala upstream facility (Thailand/ Malaysia)
signed through a joint venture among Technip Géoproduction
Malaysia (35% of consortium), Saipem (13% of consortium) and
Samsung (52% of consortium) and the OGD II downstream gas
facility (United Arab Emirates) signed through a joint venture
with Bechtel. In both cases, we act as the managing partner of
the joint-venture.



| |                             
| | ----------------------------
| | Single-Project Joint Venture

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 risk of the project. Each of the joint
venture participants is usually committed to share in a
predetermined percentage of income or loss of the joint venture
project. 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, any savings below, or cost overruns
above, the target price are shared by the customer and us.
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.



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

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

|                         |  |                                                                                                                                                                      
|------------------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Financial Engineering    |  | Our financial engineering teams assist clients in
    obtaining external project finance before work commences.                                                      
|Engineering Design       |  | Our engineering services draws on our internal
    engineering staff and our proprietary 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 |  | Our commissioning/start-up service verifies the
    readiness of the facility and starts operations. Once start-up
    is completed, our role in the project is over.

As a general rule of thumb, engineering design
services account for approximately 10% of a projects total
contract value. Equipment accounts for approximately 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.

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Financing costs are supported 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 enter a contract into backlog until financing has been
arranged, facilitation of financing is important for our revenue
recognition process.




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

Through our financial engineering teams located
in Paris, Rome, Kuala Lumpur, Houston, Düsseldorf and The
Hague, we help our clients to arrange financing, 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,                                                      
|
| |  | 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 take an equity investment in the project or
financial exposure to its operating results.



| |                                                          
| | ---------------------------------------------------------
| | Examples of recently arranged client finance
    include:

Turkmenistan:U.S.$186 million for a lube oil plant (combination of a
HERMES export credit and a commercial loan).

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 at
Alexandria (confirmation of letters of credit and financing
granted by European Investment Bank (EIB)).

Malaysia:Financing
of a U.S.$140 million EPC contract under French and German
export credits and a commercial loan.

Iran: 200 million
multi-source (COFACE, SACE and NCM) export credit for the
construction of an ethylene unit.
 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

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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 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 detail 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 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.

Detail 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,
umbilicals and remote operated subsea vehicles, 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 source products,
including notably flexible piping, from ourselves where we
believe we possess unique industry-leading 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.

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We have started to carry out part of our
equipment procurement over a proprietary business-to-business
internet system. We anticipate that conducting our equipment
tenders over this electronic system will reduce 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 located. Use of internet technologies
should also allow our separate geographic purchasing centers to
better coordinate procurement and benefit from economies of
scale. We commenced the first phase, handling tendering and
auctions of piping and instrumentation bulk materials, in
October 2000 and have since extended the system to most other
products and services. This first phase covers principally calls
for bids, clarification of tender specifications, submission of
bids, bid analysis and finally either bid negotiation or an
auction process. We are phasing in a full-scale internet-based
purchasing system, or e-procurement, for all aspects
of material and equipment sourcing and delivery. In addition to
the tasks covered by the first phase, 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, we aim to
reduce processing costs, which amounted to
 90 million
in 2000 for Technip (the year before our system launch), by
approximately 20% and potentially reduce the purchase price of
equipment by five to 10%. We spent approximately
 5 million
in 2000 and approximately
 15 million
for 2001 for the establishment of the e-procurement system. The
ongoing annual operating cost of this system amounted to
approximately
 4 million
in 2001.

On July 10, 2001, we announced with our
partner JGC the establishment of a joint venture company called
EPC-Business B.V. to operate a worldwide e-commerce site
focused on equipment and materials procurement and services for
turnkey and engineering, procurement, construction and
installation (EPCI) projects. This internet site has replaced
our pre-existing e-procurement site. In the context of the
Technip-Coflexip business combination we are currently
integrating the traditional procurement processes of the former
Coflexip and Deepwater Division structures with our own
e-procurement organization and systems.



| |             
| | ------------
| | 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 less construction
services, we do not carry the related overhead and payroll costs
of an internal unit.

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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



| |               
| | --------------
| | 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 financial
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, project modifications creating unanticipated costs,
delays caused by local weather conditions and suppliers or
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 majeureprovisions. Other factors that may add to
an individual projects risks include the novelty of the
technologies used, the experience 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 also potentially 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 penalty and
liquidated damages payments. Because these contracts typically
contain confidentiality clauses and are not published, it is
difficult for an investor to evaluate these risks. 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, but frequently covers aspects such as the
facilitys operability, energy efficiency, capacity and in
some cases its quality of product. Our guarantees are

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generally equal to 5 to 20% of the
contract price, although in offshore projects clients generally
require a higher ceiling, and are irrevocable and binding until
the 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 upon our achieving agreed objective milestones such as,
for example, the completion of 50% of the projects
engineering drawings.

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). We authorize
these situations only exceptionally and on a case-by-case basis.
Because substantially all of our projects are in positive cash
positions at any given time, 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.



| |                
| | ---------------
| | 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. See
 Special Challenges of Turnkey Project
Management, above.

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
    finances 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 contract negotiation. This includes
    negotiation of payment curves to minimize contract and
    financing risks.                                                                     

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| |   |                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Using experienced project managers. This allows
    us to perform contracts on schedule and avoid project
    modifications which can delay completion and increase
    equipment costs.
|
| |  | Conducting regular project reviews by senior
    management together with project management.                                                                                           
|
| |  | Obtaining appropriate and specialized insurance
    to cover financing and construction risks.                                                                                          

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, although offshore contracts generally require a
higher ceiling, 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 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. When obtained, these contractual
indemnification protections may not in all cases be supported by
adequate insurance maintained by the customer, subcontractor or
joint venture partner.



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

In addition to carrying out turnkey projects, we
also provide independent engineering services. Plant maintenance
does not form a material part of our business. While the average
service contract taken individually is small relative to our
median turnkey contract, collectively they accounted for
approximately 20% of our net sales in 2001 and 20% of backlog at
December 31, 2001. While we bill these services on an
hourly or a cost-plus basis, we only accept projects meeting the
same profitability criteria as in 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 ExxonMobil, Williams and TotalFinaElf through our
specialized subsidiary RJ Brown Deepwater is a strategic
asset in our bidding for offshore oil and gas development
projects.



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

Our personnel carry out a range of services in
the Offshore segment, principally centered on the subsea
installation of piping and the maintenance of installed systems.

Flexible Pipelaying.We install flexible pipe using
specially equipped DP marine service vessels and barges,
including the CSO Deep Blue, the Sunrise 2000and
the CSO Venturer. 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 2,500 meters water
depth and began its first job in summer 2001 in the Gulf of
Mexico. We have recently converted the CSO Constructorby
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 product. Each
marine service vessel is equipped with either VLS (vertical
laying systems) or other specialized flexible pipe laying
equipment that enables us to track the laying routes, to
approach close to surface platforms and to lay pipe accurately.
We believe that our marine service vessels and installation
experience provide us with a competitive advantage in the
installation of flexible pipe. We operate the only fleet of
marine service vessels dedicated to large-scale flexible pipe
installation. Furthermore, our diving support vessels are used
to install flexible pipe on projects where flowline volumes are
necessarily more modest. See  Property, Plant
and Equipment  Marine Service Vessels.

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Rigid Pipelaying.We install rigid steel pipe
applying a Company-patented reel method used aboard our
reelship, the CSO Apache, and perform related
construction services using its fleet of diving support vessels.
See Property, Plant and Equipment  Marine
Service Vessels  CSO Apache and
Diving Support Vessels. Using the CSO Apache,
we have successfully laid pipelines at water depths of
approximately 3,300 feet, with the capability to lay
pipelines at much greater depths. For example, 12-inch diameter
pipelines can be laid in water depths up to 3,500 feet and
6-inch diameter pipelines can be laid in water depths in excess
of 6,000 feet. All the pipelines laid by the CSO Apacheare rigid, reeled pipelines, assembled at one of our
spoolbases. Onshore spoolbases allow us to complete welding,
assembly and quality checks onshore where labor costs are
generally lower than comparable labor costs offshore. Work
occurs in a more stable, controlled and safer work environment,
prior to the pipe being taken offshore. Spoolbases permit us to
complete the fabrication process onshore and in advance of
installation, whereas part of this process is typically
completed offshore in conventional pipelaying operations.

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 method which involves offshore welding
and installation from a lay barge. The CSO Apachecan
install pipelines at rates in excess of 3,000 feet per hour. The
CSO Apaches superior installation speed as compared
to traditional pipelaying allows faster completion of a project
with less exposure to costly weather delays.

The CSO Deep Blueis outfitted with twin
2,500 ton reels for rigid pipelay down to 8,200 feet
(2,500 meters) water depth and supplemented with an
optional J-Lay system for large diameter pipelines and riser
installations. The reel method of rigid pipelay has considerable
commercial and technical advantages over conventional pipelay by
S-Lay method and for intermediate length of
pipelines, over J-Lay method. S-Lay and
J-Lay refer to the shape of the pipe during
installation. S-Lay is traditionally best suited for
shallow water installation, while J-Lay, although
well suited for deepwater installation, involves offshore
welding. We have developed and patented an automated welding and
laying system for rigid pipe, known as Modular J Lay
(M-J Lay), which can be mobilized on a number
of the Groups vessels. In 1998 the system was first
employed by the CSO Constructorto install seven miles of
rigid pipeline off the coast of California on ExxonMobils
SYU field.

Trenching Services.As part of our flexible and rigid
pipelaying activities, we provide trenching services in regions
where pipe is required to be buried beneath the seabed.
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.

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
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. Our services
include routine inspection and maintenance, as well as
specialized repair operations.

Inspection is conducted by direct manned
intervention or ROVs or a combination of both techniques. In
performing inspection, 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

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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 fabrication 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, in the United States and in the United
Kingdom. We also manufacture umbilicals in Brazil.

Depending on the specific contract, the SPAR hull
is typically fabricated in several pieces by our subsidiary
Mäntyluoto Works, which employs approximately
650 persons at its plant near Pori, Finland. The pieces are
then transported to a local shipyard where the main sections are
joined afloat and welded together to form the complete hull.
Concomitantly to hull, our subsidiaries Gulf Marine Fabricators,
Inc. and CSO Aker in Houston fabricate and preinstall,
respectively, the riser system and mooring lines. We are
responsible for the engineering, procurement, fabrication 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.

Flexible
Pipe.We are the world leader in
the design and manufacture of offshore flexible pipe, with a
market share of approximately 75% on the basis of 2001
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 deep water, rugged ocean floors and
small, dispersed fields of hydrocarbons. Our order books
demonstrate a trend towards smaller but more frequent orders
with faster delivery time, driving a 14% volume increase in our
production plants in Brazil and France in 2001.

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. Because
DRAPs drilling lines are used to prevent well blowouts,
injuries, significant capital losses and environmental damage
are generally more likely to be associated with DRAPs than with
the Groups other products.

Umbilicals.We are a leading manufacturer of control/chemical injection
umbilicals (underwater cables that carry hydraulic/electrical
power, data signals and/or well service fluids for the operation
and control of subsea completions). Our principal manufacturing
activities are conducted in Newcastle, UK, and Houston, Texas,
through our subsidiary Duco. Umbilicals are often manufactured
using flexible pipe manufacturing technology and link subsea oil
and/or gas wells to fixed platforms and floating production
facilities, frequently in extremely hostile environments.

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Robotics.In
May 2000, we increased our capabilities in the engineering and
manufacture of remote intervention products through the
acquisition of Slingsby Engineering Ltd., a specialist
U.K.-based ROV manufacturer. The business was joined with our
existing robotics subsidiary, Perry Tritech, Inc., and the
combined units were renamed Perry Slingsby Systems. Perry
Slingsby Systems has introduced two new product lines to the
deep ocean seafloor market, principally for the trenching and
burial of telecommunications cables.



| |                                
| | -------------------------------
| | 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 contracts, it is common for clients to initially
approach one company with which they have worked in the past.
Additional candidates are invited to submit bids only if the
clients are dissatisfied with the first companys bid. 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 and
the construction schedule.

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, located in ten
principal regional centers around the world, 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 towards 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 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 contract, we only bid on
selected projects. Among our principal criteria in determining
whether we will respond to a call for bids are:



| |   |                                                                                              
| | - | ---------------------------------------------------------------------------------------------
| |  | Our confidence in a projects chances of
    securing financing.                             
|
| |  | The projects opportunities for profits
    compared to known risks.                         
|
| |  | The technological fit of a project to our profile.                                           
|
| |  | The projects timing compared to our current
    commitments.                                
|
| |  | Our assessment of whether the client already has
    a preference for us or for a competitor.

Contracts in the United States in particular have
tended not to meet our criteria in recent years due to factors
such as longstanding relationships between U.S. customers
and local engineering and construction companies, low average
margins and a general preference for cost-plus contracts. As a
result of our selective bid policy, in the period 1995-2001, we
experienced an average worldwide success rate of 25%-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.

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Engineering and Management.We compete principally with large,
international companies, some of which are larger and more
highly integrated than we are. Generally, our industry has moved
from a system traditionally based on national preferences to a
more competitive global bidding process. Our principal
international competitors include the American companies
Halliburton (the corporate parent of Kellog Brown &
Root), Bechtel, Fluor Daniel, Jacobs, Foster Wheeler, McDermott,
Parsons and Washington Group, the Japanese companies JGC,
Chiyoda and Toyo, the European companies Kvaerner, Stolt
Offshore, ABB Lummus, Snamprogetti, Lurgi, Linde and Krupp
Uhde and the Korean companies Samsung, Hyundai and Daewoo. In
addition, local construction and engineering companies are
active in emerging countries either as competitors or joint
venture partners, often benefiting from national preferences. In
time, these local companies may develop the capacity and
credibility to compete internationally.

In the offshore oil and gas sector in particular,
the consolidation of engineering companies in the last several
years has resulted in fewer but more substantial competitors. No
competitor in our industry offers internal capabilities in the
full range of upstream and downstream activities of the
hydrocarbon/petrochemical industry. Some engineering and
construction companies, notably us and Halliburton, are more
fully integrated across the entire industry than others. Two
additional smaller companies, Bouygues Offshore and Saipem,
offer relatively integrated upstream services, although neither
provides substantial internal subsea or downstream capacities.
We believe that client preferences in the offshore market
increasingly favors integrated generalists with the capacity to
integrate the entire architecture of a project. The downstream
segment is served by more competitors, many of whom are
relatively integrated within that segment, contributing to more
aggressive bid pricing than is generally seen in the
upstream segment.

Surface Facilities.Our principal competitors in the
design and construction of surface facilities for the offshore
oil and gas industry include J. Ray McDermott (which jointly
holds with us the rights to the SPAR platform), Halliburton,
Bouygues Offshore and Kvaerner.

Subsea Services.Our principal competitors in
providing subsea contracting and inspection, repair and
maintenance services include J. Ray McDermott; Stolt
Offshore; Allseas Marine Contractors; DSND, and the following
subsidiaries of Halliburton Company: EMC; Brown & Root;
Rockwater, and Subsea International. The Group is subject to
intense competition from these offshore contractors with respect
to installation services, particularly in the North Sea.

Design and Manufacturing of Flexible Pipe.We are the world leader, based on
pro forma 2001 revenues, in the design and manufacture of
flexible pipe for offshore applications. Our main competitors in
the field of flowline and riser applications are Wellstream
Company, a subsidiary of Halliburton, and NKT Cable, 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. Our flexible pipe business also faces significant
competition from manufacturers of rigid steel pipe, including
British Steel, Mannesmann Roehrenwerhe AG and Vallourec
Industries.

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

Robotics.We
compete with a limited number of specialized ROV and subsea
robotic equipment manufacturers, including Soil Machine Dynamics
Ltc., 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.

65



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| |           
| | ----------
| | 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 refining, gas, hydrogen, sulfur, ethylene,
fertilizers, chemicals, pyrotechnics, life sciences,
hydrometallurgy and cement. A limited number of these patents
are held in common with IFP, J. Ray McDermott or other
industrial partners. This year, our remaining patents on key
aspects of the CSO Apacherigid pipe-laying system will
expire in the U.K., Norway, Denmark, U.S., Canada and
Australia. Our broad portfolio of licensed and proprietary
technology is a strategic asset in winning and implementing
projects; however, we do not believe that any one individual
patent or technology is material to our operations or financial
condition.

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 TPG 3300 platform, the improvement of
the performance of the our products and services and on
developing further applications of our flexible and reeled pipe
technology, especially in ultra deepwater (between 1,000 meters
and 2,000 meters). Recent successes include the development
of the CSO Deep Bluepipelaying vessel and our SPAR
platform. We pursue a three-pronged approach to acquiring new
technologies relevant to our operations: internal acquisition
through research and development, external acquisition through
the purchase of specialized companies or mixed internal/external
development through research alliances.



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

Our internally-financed research and development
expenses for 2001, 2000 and 1999 were
 18.3 million,
 7.2 million
and
 10.3 million,
respectively. A substantial majority of our research and
development activities are attributed to specific projects, when
separately identifiable, and therefore not included in
these amounts.

Our research and development activities 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 (including new
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). We also
use internal 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 significant 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 the IFP,
particularly in the field of deep water offshore oil and gas
production.



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

We also occasionally acquire important
technologies by acquiring the businesses that developed them.
For example, through our acquisitions of the KTI businesses
since renamed Technip Benelux and Technip USA, we have gained
advanced capabilities and proprietary technologies in the
ethylene sector, described elsewhere in this prospectus.
Coflexips acquisition of the Deepwater Division prior to
our business combination gives the new group access to key SPAR
technologies for offshore platforms.

66



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Human Resources

Our key resources are our employees,
approximately 60% of whom are design engineers or project
management personnel with university degrees. The
Technip-Coflexip business combination carried out in 2001 has
lead to the formation of a new group employing
18,000 persons in over fifty countries. This gives us the
flexibility to adapt to the needs of 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 mission of our human resources policies is to
facilitate the integration of the former Technip and Coflexip
structures, support the organic growth of the groups
activities, develop our employees skills and assist in the
realization of integration synergies.

LOGO



| |            
| | -----------
| | Integration

2001 was the year in which we commenced the
integration of the former Technip and Coflexip teams. The
complementary structure of the two predecessor groups, their
shared corporate values as well as the adaptability and openness
of our staff to change have contributed to our efficient and
rapid implementation of integration measures.

Within only a few weeks from the closing of our
exchange offer, our combined corporate teams were brought
together at our group headquarters located at Paris 
La Défense, permitting our corporate services to
become fully operational on an integrated basis without delay.
Significant communication resources have been dedicated to
providing information regarding the new group to employees
throughout the structure. We have also organized training
sessions and seminars to bring together employees from each of
our three business segments with a view to establishing personal
relationships and dialogue essential to developing a new
group identity.



| |                                          
| | -----------------------------------------
| | 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, 2001, employees of the
new group held shares representing 2.51% of our share capital.
Of this amount, shares representing approximately 1.32% were
held in custody through an administered employee share plan of
the type defined at article 225-102(3) of the French
Commercial Code.

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In France, prior to the business combination over
75% of our employees were shareholders. In 2000, we extended the
opportunity to participate in our employee shareholding plan to
all employees working at our eight other main locations around
the world (Italy, Malaysia, Abu Dhabi, Spain, Germany, The
Netherlands, Portugal and the United States). The employee
participation rates at each location was 40% or higher. Several
of these locations are staffed principally by employees of
businesses acquired in 1999. Extending employee ownership
opportunities to employees who joined our group through the
business combination is a key part of our integration. In 2000,
the General Meeting of our shareholders authorized our board of
directors to extend stock options to employees outside of
France. Approximately 11% of our employees currently hold
options. The Extraordinary General Meeting of our shareholders
on August 24, 2001 delegated authority to our management
board to issue new shares representing up to 1% of our share
capital for the purposes of conducting an employee offering
subsequent to the business combination, including to employees
outside of France. We contemplate conducting this offering to
employees of our principal sites during the first half of the
current year, subject to local regulatory requirements.



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

Today, our workforce of approximately 18,000 is
present in over 50 countries on five continents. The
Technip-Coflexip business combination carried out in 2001 nearly
doubled our staff. Our expansion at the beginning of 1999
through the acquisition of the KTI companies and the MDEU
businesses from the Mannesmann group added 3,600 new
employees to our staff. This addition has enriched our
teams skills in all branches of engineering and
construction and enhanced its internationalization.

Five years ago, more than 50% of our employees
were of French nationality. Today French nationals make up less
than 18% of our expanding our workforce outside of France has
allowed us to develop greater proximity to clients, access
lower-cost engineering talent and meet local-content
requirements of some of our projects financed through subsidized
development loans. Personnel mobility is also emphasized: today
over 800 of our employees are posted away from their country of
origin. In recognition of this fact, we have organized support
services to facilitate geographic and professional mobility and
established a Technip-Coflexip Mobility site on our
intranet dedicated to informing our employees of transfer
opportunities within the group.

The following tables show our year-end number of
employees for the three years ended December 31, 2001, 2000
and 1999 (2000 and 1999 exclude Coflexip and the Deepwater
Division, which were not consolidated at those dates) in terms
of their function and in terms of their geographic location.

|               |  |                         |        |      |  |      |       |  |  |  |       | 
|-------------- |  | ----------------------- | ------ | ---- |  | ---- | ----- |  |  |  | ----- | 
|               |  |                        
|               |  | Year ended December 31,
|               |  |                        
|               |  | 2001                    |        | 2000 |  | 1999
|               |  |                         |        |      |  |     
|Employees      |  |                         | 14,900 |      |  |      | 8,254 |  |  |  | 8,337 | 
|External staff |  |                         | 3,100  |      |  |      | 1,546 |  |  |  | 1,372 | 
|               |  |                         |        |      |  |      |       |  |  |  |       | 
|Total          |  |                         | 18,000 |      |  |      | 9,800 |  |  |  | 9,709 | 
|               |  |                         |        |      |  |      |       |  |  |  |       | 

|                                |  |                         |        |      |  |      |       |  |  |  |       | 
|------------------------------- |  | ----------------------- | ------ | ---- |  | ---- | ----- |  |  |  | ----- | 
|                                |  |                        
|                                |  | Year ended December 31,
|                                |  |                        
|                                |  | 2001                    |        | 2000 |  | 1999
|                                |  |                         |        |      |  |     
|Europe and Russia/ Central Asia |  |                         | 10,961 |      |  |      | 6,758 |  |  |  | 7,041 | 
|Middle East                     |  |                         | 683    |      |  |      | 643   |  |  |  | 515   | 
|Asia/ Pacific                   |  |                         | 1,630  |      |  |      | 1,109 |  |  |  | 853   | 
|America                         |  |                         | 2,545  |      |  |      | 1,059 |  |  |  | 986   | 
|Africa                          |  |                         | 154    |      |  |      | 35    |  |  |  | 20    | 
|Other                           |  |                         | 2,181  |      |  |      | 231   |  |  |  | 314   | 
|                                |  |                         |        |      |  |      |       |  |  |  |       | 
|Total                           |  |                         | 18,000 |      |  |      | 9,800 |  |  |  | 9,709 | 
|                                |  |                         |        |      |  |      |       |  |  |  |       | 

68



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| |                                        
| | ---------------------------------------
| | Development of Skills and
    Expertise

The initial training of our employees is
complemented throughout their professional lives with us by
training courses that enable them to adapt their knowledge in
each area to the evolutions in technology and data processing,
as well as to optimize the ability of each person to manage his
or her work within ever shorter time frames. In each of the last
three years training accounted for an average of approximately
3% of payroll costs compared to a legal minimum in France of
0.8%. One out of every two of our employees worldwide benefits
from training each year.

Our average employee has spent approximately
9 years with us or our predecessor companies, further
contributing to our workforces level of expertise, while
at the same time assuring cohesiveness and the effectiveness of
team performance in carrying out contracts.



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

In recent years we have experienced no
significant strikes or work stoppages by our employees. We
believe that we maintain good relationship 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.

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, 2001, approximately 18% of our employees are
in France where national legislation requires the application of
a 35-hour work week. 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 works council meetings with a delegation of union
representatives. Our management also holds other periodic
consultations with employee representatives. In Italy
approximately 25% of our employees belong 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.

69



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Property, Plant and Equipment

Our principal facilities consist of office space
at our headquarters and our regional Business and Production
Units. We own our office space at our headquarters as well as in
Rome, Italy and Lyon, France, and lease the remainder. We own or
lease fabrication yards and manufacturing facilities in
connection with our Deepwater Divisions surface facilities
operations and our manufacture of flexible pipe and other subsea
products. Overall, our property, plant and equipment amounted to
 982.3 million
at December 31, 2001 of which land and buildings accounted
for approximately
 252.7 million.
Our fleet of offshore construction vessels, described below,
accounted for approximately
 499.7 million.



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

At December 31, 2001, we owned or held under
long-term leases the real property described below.

|                                |  |                                                                                       |  |        |                   | 
|------------------------------- |  | ------------------------------------------------------------------------------------- |  | ------ | ----------------- | 
|Location                        |  | Function                                                                              |  | Status
|                                |  |                                                                                       |  |       
|Paris  La Défense, France      |  | Group Headquarters                                                                    |  |        | Owned             | 
|Paris, France                   |  | CSO Headquarters                                                                      |  |        | Owned             | 
|Boulogne-Billancourt, France    |  | Office space                                                                          |  |        | Leased            | 
|Le Trait, France                |  | Flexible pipe manufacturing plant and office space                                    |  |        | Owned             | 
|Lyon, France                    |  | Office space                                                                          |  |        | Owned             | 
|Aix en Provence, France         |  | Office space                                                                          |  |        | Co-owned          | 
|Rome, Italy                     |  | Office space                                                                          |  |        | Owned             | 
|Aberdeen, Scotland              |  | Office spaces, workshop and warehousing                                               |  |        | Owned             | 
|Newcastle, England              |  | Umbilicals manufacturing plant                                                        |  |        | Leased/Owned      | 
|York, England                   |  | Manufacturing plant and office space                                                  |  |        | Leased            | 
|Tyne Wear, England              |  | Manufacturing plant and office space                                                  |  |        | Owned             | 
|The Hague, Netherlands          |  | Office space                                                                          |  |        | Leased            | 
|Duesseldorf, Germany            |  | Office space                                                                          |  |        | Leased            | 
|Pori, Finland                   |  | Land, manufacturing plant and office space                                            |  |        | Owned             | 
|Saint Petersburg, Russia        |  | Office space                                                                          |  |        | Leased            | 
|Kuala Lumpur, Malaysia          |  | Office space                                                                          |  |        | Leased            | 
|Perth, Australia                |  | Office space                                                                          |  |        | Leased            | 
|Fremantle, Australia            |  | Manufacturing plant and office space                                                  |  |        | Facilities owned/ | 
|                                |  |                                                                                       |  |        | property leased   | 
|Abu Dhabi, United Arab Emirates |  | Office space                                                                          |  |        | Leased            | 
|Vitoria, Brazil                 |  | Office space and flexible pipe &
    umbilicals manufacturing plant                   |  |        | Leased/Owned      | 
|Rio de Janeiro, Brazil          |  | Office space                                                                          |  |        | Owned             | 
|Caracas, Venezuela              |  | Office space                                                                          |  |        | Co-owned          | 
|Houston, Texas                  |  | Land parcel for fitting and umbilicals assembly
    plant                             |  |        | Owned             | 
|Jupiter, Florida                |  | Perry Tritech robotics manufacturing facility
    development center and office space |  |        | Leased/Owned      | 
|Mobile, Alabama                 |  | Rigid piping assembly plant                                                           |  |        | Leased            | 
|Channelview, Texas(1)           |  | Land and office space                                                                 |  |        | Owned             | 
|Houston, Texas                  |  | Office space                                                                          |  |        | Leased            | 
|San Dimas, California           |  | Office space                                                                          |  |        | Leased            | 
|Amelia, Louisiana               |  | Assembly yard and office space                                                        |  |        | Leased            | 



---



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

We also lease regional and representative offices
in: London, England, Luanda, Angola; Bombay and Calcutta, India;
Rio de Janeiro, Brazil; Oslo and Stavanger, Norway;
and Singapore. In addition, we lease industrial space in
Evanton, Scotland and Orkanger, Norway.

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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.



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

We operate fifteen 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 ROVs, together with a range of trenching
and tooling assets. The following table presents information on
our fleet at December 31, 2001.

|                    |  |                 |           |         |  |                        |     |               |  |                               |  |  |        |  |  |  |     | 
|------------------- |  | --------------- | --------- | ------- |  | ---------------------- | --- | ------------- |  | ----------------------------- |  |  | ------ |  |  |  | --- | 
|                    |  |                 |           | Overall |  |                        |     |               |  |                              
|                    |  | Year            |           | length  |  | Total Lifting Capacity |     | Deck Load     |  | Diving                       
|Name                |  | Built/Converted |           | (feet)  |  | (metric tons)          |     | (metric tons) |  | System                       
|                    |  |                 |           |         |  |                        |     |               |  |                              
|Sunrise 2000(1)(2)  |  |                 | 1985/1995 |         |  |                        | 456 |               |  | 120 tons (3 cranes)           |  |  | 6,500  |  |  |  | No  | 
|CSO Deep Blue(1)    |  |                 | 2001      |         |  |                        | 630 |               |  | 400 tons (3 cranes)           |  |  | 10,000 |  |  |  | No  | 
|CSO Apache(1)(3)    |  |                 | 1975/1995 |         |  |                        | 403 |               |  | 85 tons (3 cranes)            |  |  | 150    |  |  |  | No  | 
|CSO Seawell(4)      |  |                 | 1987/N.A. |         |  |                        | 365 |               |  | 130 tons (twin crane)         |  |  | 735    |  |  |  | Yes | 
|CSO Wellservicer(5) |  |                 | 1989/N.A. |         |  |                        | 365 |               |  | 130 tons (twin crane)         |  |  | 1,400  |  |  |  | Yes | 
|CSO Constructor(1)  |  |                 | 1980/N.A. |         |  |                        | 366 |               |  | 225 tons (3 cranes + A frame) |  |  | 2,210  |  |  |  | Yes | 
|CSO Orelia(1)       |  |                 | 1984/N.A. |         |  |                        | 390 |               |  | 200 tons (2 cranes)           |  |  | 1,800  |  |  |  | Yes | 
|CSO Alliance(1)     |  |                 | 1984/N.A. |         |  |                        | 256 |               |  | 140 tons (3 cranes)           |  |  | 1,500  |  |  |  | Yes | 
|CSO Venturer(1)     |  |                 | 1981/1995 |         |  |                        | 422 |               |  | 225 tons (2 cranes)           |  |  | 3,005  |  |  |  | Yes | 
|CSO Marianos(1)     |  |                 | 1987/N.A. |         |  |                        | 295 |               |  | 60 tons                       |  |  | 750    |  |  |  | Yes | 
|Normand Pioneer(6)  |  |                 | 1999      |         |  |                        | 312 |               |  | 150 tons (A frame)            |  |  | 3,450  |  |  |  | No  | 
|PS1(7)              |  |                 | 1983      |         |  |                        | 250 |               |  | 30 & 15 tons (2 cranes)       |  |  | N.A.   |  |  |  | Yes | 
|PS2(7)              |  |                 | 1982      |         |  |                        | 304 |               |  | 50, 30 & 15 tons (3 cranes)   |  |  | N.A.   |  |  |  | Yes | 
|PS3(7)              |  |                 | 1983      |         |  |                        | 304 |               |  | 50 & 5 tons (2 cranes)        |  |  | N.A.   |  |  |  | Yes | 
|M/ V Dove           |  |                 | N.A.      |         |  |                        | 279 |               |  | 300 tons                      |  |  | N.A.   |  |  |  | No  | 



---



|    |                                                                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Owned by Technip-Coflexip or its consolidated
    subsidiaries.                                                                                                                       
|   
|(2) | Chartered to Petrobras until mid 2003.                                                                                                                                                
|   
|(3) | Reelship.                                                                                                                                                                             
|   
|(4) | Leased from Lombard Leasing Facilities Limited
    pursuant to a lease which is extendable on a year-to-year basis.                                                                   
|   
|(5) | Leased from Fitzroy Finance Limited pursuant to a
    long-term capital lease expired in 2001 and extendable on a
    year-to-year basis.                                             
|   
|(6) | Leased from Solstad pursuant to a frame agreement
    for charter of 1,000 days over a five-year period commencing in
    January 1999 with a minimum charge of 180 days
    per year.
|   
|(7) | Owned by SEAMEC, of which we own 58.23%.                                                                                                                                              

The Sunrise 2000 was converted in March
1995 into a deep water flexible pipe laying vessel. We have
chartered the Sunrise 2000 to Petrobras until mid 2003.
We made further improvements to the Sunrise 2000,
completed in 1999, to enhance its ability to lay multiple
pipelines simultaneously in water depths of up to
2,000 meters. Such enhancements have been recognized by
Petrobras by extending our original charter contract with an
increase in charter remuneration.

The CSO Apache is our vessel for
installation of steel pipelines using the reel method. The
vessel can carry a maximum load of approximately
2,700 short tons of steel pipeline up to 16 inches in
diameter. The dynamically positioned ship then lays this
pipeline, which has been welded onshore in one continuous
length, onto the ocean floor through a purpose-built
straightening and tensioning system. This vessel broke the world
record early in 1998 for the installation of rigid reeled steel
pipeline in a water depth of 1,373 meters. We upgraded the
CSO Apache during the winter of 1994/1995 and made
subsequent alterations to her pipelay system in 1997 to enable
her to carry out deepwater pipelaying.

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Our new vessel CSO Deep Blue began
operations in the summer of 2001 after the installation of its
pipelay system in Holland. The CSO Deep Blue is capable
of installation of both rigid and flexible pipe at
2,500 meters water depth. The vessels payload of
8,000 to 10,000 tons, depending on product mix, is
considerably larger than that of most other infield pipelay
vessels, which will easily allow the CSO Deep Blue to
complete large developments in a single mobilization.

As part of our program of maintaining the
worlds most advanced fleet of subsea construction vessels,
we significantly upgraded our vessel CSO Constructor in
2001, expanding its lifting capacity and adding two additional
cranes. In addition, in January 2001, we scrapped our
Flexservice vessel and in December 2001 we sold our M/
V Kitt container carrier vessel.



| |                       
| | ----------------------
| | Diving Support Vessels

Diving support vessels are designed to be support
platforms for subsea operations. In addition to diving
facilities, the decks of these vessels include a large working
space for the storage of equipment and large cranes for the
deployment of hardware onto the seabed. These cranes are often
computer controlled to compensate for the motion of the ship.
Diving support vessels also have sophisticated power management
systems that are linked with their dynamic positioning computer
to ensure that they maintain their position in most weather
conditions. Prior to the development of diving support vessels,
diving systems were deck mounted on traditional construction
barges. Diving support vessels incorporate a saturation diving
system that enables divers to live at worksite-simulated ambient
pressure. As a result, less time is spent at various
decompression stages and more actual diver construction work can
be accomplished than through the use of older methods.

All ten of our diving support vessels are
Class 1, which are the most modern and largest (typically
250 to 350 feet long). Our diving support vessels are rated
for diving operations down to approximately 1,500 feet and
are fitted with saturation diving systems and cranes. Six of our
diving support vessels have cranes with lift capacity in excess
of 100 tons each. These six vessels are CSO Seawell, CSO
Wellservicer, CSO Marianos, CSO Orelia, CSO Alliance and
CSO Venturer. All of our diving support vessels are also fitted
with helicopter landing pads.



| |                          
| | -------------------------
| | Equipment for Subsea Work

We own and operate subsea equipment consisting
principally of multipurpose ROVs, hyberbaric welding spreads,
powered reels and other diving equipment.

We have a fleet of 16 work class and five
observation ROVs (the majority of which are manufactured by the
group, which consists of state-of-the-art-work-class ROVs for
use in conjunction with diver and diverless tasks using
specially developed tooling packages, work class ROVs used
primarily for less complex diverless tasks, and observation and
work class ROVs used for diver surveillance and certain
lightweight construction and inspection work where the use of
divers is not flexible.

As part of our installation activities, we
provide trenching services in regions where pipelines are
required to be buried beneath the seabed. Trenching is performed
almost exclusively in the North Sea where pipeline burial is
required by local regulations and arrangements with the fishing
industry. We have developed our own remote-controlled machines
for trenching flexible pipe and control umbilicals. We also own
a modern plowing spread for the trenching of rigid steel
pipelines. We own three VLSs for the installation of flexible
pipe in deep water. Two of our vessels are already equipped with
VLSs and the third is retained for use on a vessel as needed
within the groups fleet.

We also own two hyperbaric welding spreads. These
spreads enable divers to weld pipelines on the seabed in a dry
environment. The spreads incorporate all the hardware necessary
for underwater lifting and aligning of pipelines prior to
welding, together with all the necessary surface hardware and
software for operating the systems, and include instrumentation
and surveillance systems which monitor the quality of welds and
the safety of personnel.

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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. Some 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
manufacturing from Trefileurope and the Bekaert Group pursuant
to fixed-price supply contracts renewable at the end of each
year. Qualification programs have been undertaken with Bekaert
for the supply of a wider range of wires as Trefileurope
currently remains our only external source for several types of
steel wire. The full qualification program is scheduled for
completion in early 2002 at which time Bekaert should be capable
of delivering the full range of steel wire we use. Should
Trefileurope fail to produce certain steel wire materials or to
make them available to us at reasonable prices prior to
completion of this qualification program, we would need to
develop alternative sources of supply, utilize substitute
materials or pay more for such materials, any of which could
result in temporary business interruptions or adversely affect
the cost of our products.

We purchase certain specialized plastics required
for manufacturing flexible pipe almost exclusively from Atofina,
a subsidiary of TotalFinaElf, which is the indirect corporate
parent of a principal holder of our voting securities. The
purchase contract for such plastics was renewed in 2000. See
Item 7. Major Shareholders and Related Party
Transactions. Should Atofina fail to produce some of these
materials or to make them available to the Group at reasonable
prices, we would need to develop an alternate source of supply
or utilize substitute materials, either of which could result in
temporary business interruptions or adversely affect the cost of
our products. In an effort to diversify its sources, we have
developed certain plastics products with two other major
chemical companies that meet our specifications and that could
provide such an alternative source of supply.

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 certain of our most
essential raw materials.

Insurance Coverage

We obtain appropriate and specialized insurance
to cover construction and financing risks for each project,
umbrella professional liability insurance for the group, and
generally maintain comprehensive insurance covering our assets
and operations at levels which we believe to be appropriate.
Loss or damage to our products during installation is generally
covered by builders all risks insurance that,
in general, is maintained by the customer. We are presently
studying the feasibility of complementary alternative insurance
solutions, to benefit from complementarities in our various
exposure coverages. We are also currently in the process of
integrating our professional liability coverage as a result of
the business combination.

We maintain loss of hire insurance with respect
to some of our vessels and 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 at Le Trait, France, Newcastle,
England, and Vitoria, Brazil.

We do not anticipate difficulty in maintaining
adequate levels of insurance. However, 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.

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Environmental Matters and Other Governmental
Regulation



| |                                                      
| | -----------------------------------------------------
| | Industrial risks related to environmental
    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 numerous
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, 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.

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.

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 Organisation 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, authorised/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. In the absence of any specific
regulation in other geographic locations, our offshore branch
adheres to standards set by the International Marine Contractors
Association and the International Maritime Organisation.

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 we are in compliance with all material environmental
and other government regulations relating to our operations.

A number of our sites are certified to the
ISO 14001 Standard for Environmental Management Systems and
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 Organisation
International Safety Management (ISM) Code and vessels operated
out of Aberdeen (all but the three SEAMEC vessels: PS1, PS2 and
PS3) comply with the Det Norske Veritas SEP (Safety and
Environmental Protection) Class. We have made investments in
plant and

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equipment to reduce consumption of raw materials
used in manufacturing and fabrication processes, as well as to
recycle waste materials and minimize the impact of discharges to
land, air or water.


An organisation with a strong focus on
risk-management, we are committed to delivering a safe workplace
for employees, customers, visitors and local communities. In
2001 the Onshore and Offshore/Downstream segments each delivered
our best Health & Safety performance on record.
However, we deeply regret one fatal accident involving a vehicle
at one of our construction sites and another early in 2002 at a
fabrication yard. We continue to strive for an accident-free
worksite and are steadily introducing OHSAS 18001:1999, a
standard for Occupational Health and Safety Management Systems.
In 2001 we commissioned an independent survey of the Onshore
Branch by Dupont Consulting and the Management Board has
committed to implementing all the recommendations.

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

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 sub-contractors 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 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 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 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 and hazardous materials 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.

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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 7.87% of our
share capital as of December 31, 2001, representing 7.79%
of our voting rights. Our other major shareholders, TotalFinaElf
which, as of December 31, 2001, owned 4.68% of our share
capital, representing 8.34% of our voting rights and Gaz de
France which, as of December 31, 2001, owned 6.36% of our
share capital, representing 12.58% of our voting rights,
acquired their original holdings in Technip in 1965 and 1984,
respectively.

During the period 1984 to 1986, as a result of
depressed conditions in the hydrocarbon and petrochemical
construction market and because we entered into contracts
providing inadequate margins, we experienced serious cash flow
difficulties and subsequently entered into a reorganization
agreement with our shareholders and principal lending banks.
This reorganization agreement involved, among other measures, a
significant reduction in our workforce. Since the reorganization
and subsequent change of management, we have not experienced
similar difficulties.

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 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 subsea
engineering specialist Coflexip. See  The
Technip-Coflexip Business Combination. At the same time,
we listed American depositary shares on the New York Stock
Exchange under the symbol TKP.

As described elsewhere in this prospectus, we
acquired additional significant new subsidiaries and affiliates
in 1999 and 2000. In 2001, prior to our business combination,
Coflexip acquired the businesses making up the Deepwater
Division in a trade sale from Aker Maritime. Today, over
25 wholly owned subsidiaries and 90 other subsidiaries
and affiliates in some 24 countries make up the
Technip-Coflexip group. Our registered and executive offices are
located at Tour Technip-Coflexip, La Défense 6,
92973 Paris La Défense Cedex, France (telephone:
(011-33-1) 47 78 21 21).

We are organized as a société
anonyme under French law. Under our bylaws (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.

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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
Item 3. Key Information  Risk
Factors and elsewhere in this document. You should read
the following discussion together with our audited consolidated
financial statements for the fiscal years ended
December 31, 2001, 2000 and 1999, included in this annual
report.



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

On January 1, 1999, the euro was introduced
as the common legal currency of eleven member states of the
European Union, including France. We have prepared our
Consolidated Financial Statements in French francs and have
adopted the euro as our reporting currency for the periods after
January 1, 1999.

Taken as a whole, our operations are not seasonal
or otherwise cyclical, because of our geographic diversity of
operations and mix of upstream and downstream projects, although
individual contracts 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.



| |                                              
| | ---------------------------------------------
| | The Technip-Coflexip Business
    Combination

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 have 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. For a description of
this minority interest, see  Changes is Scope of
Consolidation-Coflexip Stena Offshore, below. Prior to the
ISIS exchange offer, we had no financial interest in ISIS.

In 2000, their last full financial year prior to
our acquisition of control, Coflexip generated consolidated
revenues of
 1,064.6 million
and net income of
 222.7 million,
and ISIS generated consolidated revenues of
 165.1 million
and net income of
 87.1 million.
ISISs net income in 2000 reflects the significant
contributions under the equity method of its approximately 17.5%
interest in Coflexip (an equity contribution of
 158.5 million)
and 11.3% interest in us (an equity contribution of
 21.3 million).

In Note 2 of our audited consolidated
financial statements included in this annual report at
Item 18 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 twelve months of combined
results. We caution you, however, that the pro forma financial
results are not a substitute for our audited historical
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,
included in this annual report already reflects the full
consolidation of Coflexip, we have not prepared a pro forma
balance sheet.



| |                                      
| | -------------------------------------
| | 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. In addition to
the Technip-Coflexip business combination, we

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describe below the principal changes in our scope
of consolidation occurring between January 1, 1999 and
December 31, 2001.


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

Coflexip Stena Offshore.In April 2000, we acquired a 29.7%
interest in Coflexip, the parent company of the Coflexip Stena
Offshore offshore upstream engineering and construction group.
Following the public exchange offer with a cash election
initiated by us for Coflexip shares on July 3, 2001, we now
hold 98.36% of the share capital and 98.54% of the voting rights
of Coflexip. In 1999, the year prior to our first acquisition,
Coflexip reported net sales of
 1,017.0 million
and net income of
 89.6 million.
We accounted for our interest in Coflexip from April 19,
2000 to September 30, 2001 using the equity method of
accounting. In January 2001, Coflexip significantly expanded its
operations through its cash acquisition of the Deepwater
Division, which reported sales of approximately
 390 million
in 2000.

KTI/MDEU.In March
1999, we finalized our acquisition from Mannesmann AG of the KTI
group of engineering and construction companies and the
engineering divisions of Mannesmann known as MDEU. In 1999,
these businesses generated aggregate consolidated net sales of
 849.1 million
and aggregate operating income of
 7.1 million.

Krebs-Speichim.In
1997, we set up the Krebs-Speichim joint venture through the
combination of an existing business unit with a subsidiary of
Cogema, the French nuclear energy specialist, in order to
improve our market share in the fine chemicals and
pharmaceutical industries. In 1999, Krebs-Speichim and its
consolidated subsidiaries, for which we accounted for under the
proportionate consolidation method, contributed
 75.2 million
to our consolidated net sales. In September 2000, we acquired
from Cogema the 50% of Krebs-Speichim that we did not already
own.

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 multiannual 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,

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including our experience in the businesses and in
the geographical region we operate, and market condition in that
region. For 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, 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

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.

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 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. 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.

Principal
Differences Between U.S. GAAP and French GAAP

The principal difference between U.S. GAAP and
French GAAP that affects us is the difference in accounting for
contract costs and contract bid costs. The treatment of
post-employment benefits and employee stock plans under U.S.
GAAP and French GAAP are also material to our results for the
periods presented. For a summary of differences between the
French GAAP and U.S. GAAP, see Note 29 to
Technip-Coflexips Consolidated Financial Statements
included elsewhere in this prospectus.

Under French GAAP, some General and
Administrative costs are recorded as contract, and are
consequently recorded as a component of Cost of
Sales. 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.

In conformity with French GAAP, prior to 1999 we
recorded reserves to cover potential overruns on contracts
performed in countries we considered to be subject to
geopolitical risk. At year end 1999, we reversed this reserve.
We currently identify individual contracts, which are subject to
risk, including notably geopolitical and country risks, and
record reserves to cover the probability-weighted estimated
risks. Under U.S. GAAP, we would not have been permitted to
record either of these reserves, because they do not fulfill all
of the criteria set forth in SFAS No. 5, Accounting
for Contingencies.

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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.

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 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 record realized and
unrealized exchange gains and losses related to long-term
contract assets and liabilities as operating income. Under U.S.
GAAP, we record such exchange gains and losses as financial
result.

Under French GAAP, we do not record the fair
values of the derivatives instruments related to future
transactions on our contracts. Until December 31, 2000, the
fair values of these derivative instruments were not recorded
under U.S. GAAP. Since January 1, 2001, for U.S. GAAP
purposes, we 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. We recorded the
effect as of January 1, 2001 of the adoption of SFAS
No. 133 as a cumulative effect of change in accounting
principle.

Under French GAAP, goodwill is amortized over a
period ranging from 5 to 25 years, depending on the
activity of the business acquired. Under U.S. GAAP,
goodwill resulting from business combinations initiated after
June 30, 2001 is no longer amortized.

After acquiring the interest in Coflexip, 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). 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

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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.


Recently Issued Accounting
Pronouncements

Accounting for Business Combinations and
Goodwill and Other Intangible Assets.In July 2001, the FASB issued SFAS
No. 141, Business Combinations, and SFAS No. 142,
Goodwill and Other Intangible Assets. SFAS No. 141
establishes accounting and reporting standards for business
combinations and is effective for all business combinations
consummated after June 30, 2001. SFAS No. 141 is not
anticipated to have a material effect on our financial results.
We use the provisions of SFAS No. 141 to account for our
acquisitions of Coflexip and ISIS. SFAS No. 142 establishes
accounting and reporting standards for goodwill and intangible
assets, requiring impairment testing for goodwill and intangible
assets, and the elimination of periodic amortization of goodwill
and certain intangibles.

SFAS No. 142 is effective for fiscal years
beginning after December 15, 2001, although goodwill on
business combinations consummated after July 1, 2001 is not
amortized. Upon adoption, all goodwill and indefinite lived
intangible assets must be tested for impairment and a cumulative
effect adjustment to net income recognized at that time. We
adopted SFAS No. 142 on January 1, 2002 and do not
anticipate that the adoption of SFAS No. 142 will have a
material impact on our results of operations, financial position
or cash flow. We will not reclassify intangible assets in
reported goodwill. At the year ended December 31, 2001, we
recorded amortization of
61.3 million
related to goodwill and indefinite lived assets.

Accounting for Asset Retirement
Obligations In June 2001,
the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 143, Accounting for
Asset Retirement Obligations (SFAS No. 143). SFAS
No. 143 establishes accounting requirements for retirement
obligations associated with tangible long-lived assets,
including (1) the timing of the liability recognition,
(2) initial measurement of the liability,
(3) allocation of asset retirement cost to expense,
(4) subsequent measurement of the liability and
(5) financial statement disclosures. SFAS No. 143
requires that the fair value of a liability for an asset
retirement obligation be recognized in the period in which it is
incurred if a reasonable estimate of fair value can be made. The
associated asset retirement costs are capitalized as part of the
carrying amount of the long-lived asset and depreciated over the
life of the associated fixed asset. An entity shall measure
changes in the liability for an asset retirement obligation due
to passage of time by applying an interest method of allocation
to the amount of the liability at the beginning of the period.
The interest rate used to measure that change shall be the
credit-adjusted risk-free rate that existed when the liability
was initially measured. That amount shall be recognized as an
increase in the carrying amount of the liability and as an
expense classified as an operating item in the statement of
income. SFAS 143 is effective for fiscal years beginning after
June 15, 2002, with early application encouraged.

We expect to adopt SFAS No. 143 on
January 1, 2003 and have not yet determined the impact that
it will have on our results of operations, financial position or
cash flows.

Accounting for the Impairment or Disposal of
Long-Lived Assets In
August 2001, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets
(SFAS No. 144). SFAS No. 144 establishes a single
accounting model for long-lived assets to be disposed of by sale
consistent with the fundamental provisions of SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of. While it supersedes
portions of APB Opinion 30, Reporting the Results of Operations
-Reporting the Effects of Disposal of a Segment of a Business,
and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions, it retains the discontinued operations
presentation, yet it broadens that presentation to include a
component of an entity (rather than a segment of a business).
However, discontinued operations are no longer recorded at net
realizable value and future operating losses are no longer
recognized before they occur. SFAS No. 144 also establishes
criteria for determining when an asset should be treated as held
for sale. SFAS No. 144 is effective for fiscal years
beginning after December 15, 2001 and interim periods
within those fiscal years, with early application encouraged.
The provisions of SFAS No. 144 are generally to be applied
prospectively.

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We adopted SFAS No. 144 on January 1,
2002 and have yet not determined the impact that it will have on
our results of operations, financial position or cash flows.

Segment
Reporting

In June 1998, the Financial Accounting Standards
Board (FASB) issued SFAS No. 131,
Disclosures about Segments of an Enterprise and Related
Information. The objective of this statement 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. Prior to the business combination and
subsequent management reorganization, our operations were
managed in four segments: a production segment, now split
between the Offshore and Onshore/ downstream segments, a
refineries segment and a petrochemicals segment, now included in
our Onshore/ downstream segment, and an industries segment
corresponding to our current Industries segment. Our acquisition
of ISIS has not had a material impact on any of our segments,
beyond increasing our equity interest in Coflexip. Prior to the
Technip-Coflexip business combination, Coflexips
management had determined its reporting segments were based on
geographical location. Substantially all of Coflexips
operations are now accounted for in our Offshore segment. For
the avoidance of doubt, we note that the definition of
geographic zones applied by Coflexip prior to the
Technip-Coflexip business combination does not correspond to the
definition used by the new group. In addition, Coflexips
prior allocation of project revenues to each of its four
regional segments is based on the region of the affiliate which
conducted the project, while our geographic allocation project
revenues reflects the region in which the project is located.

Foreign
Currency

In each of the three years in the period ended
December 31, 2001, approximately 60% of our net sales were
denominated in a currency other than our reporting currency, the
euro. Our principal non-euro currency during this period was the
U.S. dollar, which made up approximately 50% of net sales
and approximately 25% of operating expenses. In 2001,
fluctuations between the euro and other currencies, notably the
dollar, had a positive effect on our consolidated net sales
amounting to approximately
 14.5 million.
In addition to the dollar and euro, other important operating
currencies for us include the Japanese yen, British pound and
Malaysian ringitt. For a detailed description of our exposure to
foreign currencies and currency hedging instruments, see
Item II. Qualitative and Quantitative Disclosures of
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 French francs at the exchange rate prevailing at that date
except for contracts-in-progress accounts and progress payments
received from long-term contract customers

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which are recorded at the contract rate. The
resulting exchange gains or losses are recorded in the income
statement.


Recent Developments and Outlook for
2002

Recent
Developments

In the first months of the current year, we
booked several important contracts into our backlog. In January,
Tukmenneftegas awarded us a
 130 million
contract for the design and construction of a diesel
hydrotreating plant at the Turkmenbashi refinery in
Turkmenistan. Additionally, Saudi Arabian Company (Saudi Aramco)
awarded us a substantial turnkey project for the extension of
the Berri gas complex to treat additional volume of gas
originating from the Quatif field, which is currently under
development. This extension will bring the annual gas treatment
capacity of the complex from 3.5 billion cubic meters to
8.7 billion cubic meters upon completion. The sulfur
recovery capacity of the complex will also be increased from
1,330 metric tons per day to 3,313 metric tons per day. Our
involvement will include project management, engineering
services, sourcing of equipment and materials, construction as
well as startup and commissioning. Also in our Africa/ Middle
East region, the Oman-India Fertilizer Company has awarded our
50/50 joint venture with Snamprogetti a turnkey contract worth
approximately U.S.$ 770 million for the design and
construction of a fertilizer complex in Oman having two
1,750 tons-per-day ammonia plants, two
2,650 tons-per-day urea plants, and two granulation units.
This project, which we believe will be the largest grass-roots
fertilizer plant in the world, builds on Omans gas
resources to develop local industry. This contract will enter
our backlog once financing is finalized, and is expected to be
completed 35 months after the coming into force of the
contract.

Our net sales for the three-month period ended
March 31, 2002 amounted to
 1,075.7 million.
Our pro forma net sales for the comparable period in 2001 were
 1,089.6 million.
The table below describes in percentage terms the breakdown of
our net sales by business segment in each of the three-month
periods ended March 31, 2002 (historical) and 2001 (pro
forma). Our earnings before interest, taxes, depreciation and
amortization amounted to
 72.0 million
in the first quarter of 2002 compared to
 107.5 million
on a pro forma basis for the comparable period in 2001. In the
first quarter of 2002, we recorded a net loss of
 13.3 million,
but had net income before exceptional items and goodwill
amortization of
 16.1 million.
Because our portfolio of contracts is relatively concentrated
and the percentage of completion method of accounting used for
our mainstay multi-year turnkey contracts does not contribute
equally to each quarter during which a contract is executed,
your analysis of our operations should view our quarterly
results in light of other factors including our annual results
and backlog. We also caution you that our quarterly results in
our Offshore segment are somewhat seasonal, with reduced
activity in the North Sea during the first and last quarters of
the year on account of weather conditions.

Net Sales by Business Segment

|                    |       |                    |       |             |  |  |       |      | 
|------------------- | ----- | ------------------ | ----- | ----------- |  |  | ----- | ---- | 
|                    |       |                   
|                    |       | Three Months Ended
|                    |       | March 31,         
|                    |       |                   
|Segment             |       | 2002               |       | 2001       
|                    |       |                    |       |            
|                    |       |                    |       | (pro forma)
|Offshore            |       |                    | 45.2% |             |  |  | 41.0% |     
|Onshore/ Downstream |       |                    | 46.7% |             |  |  | 50.9% |     
|Industries          |       |                    | 8.1%  |             |  |  | 8.1%  |     
|                    |       |                    |       |             |  |  |       |     
|                    | Total |                    |       | 100%        |  |  |       | 100% | 
|                    |       |                    |       |             |  |  |       |     

Our backlog at March 31, 2002 amounted to a
record
 5,555.0 million,
a 12.7% increase over backlog at December 31, 2001. Our
order intake accelerated during the first quarter of 2002 to
 1,703 million,
a 28% increase over the comparable pro forma figure for the
first quarter of 2001.

At the end of January 2002, we issued
convertible/exchangeable bonds in a nominal amount of
 793.5 million
which we applied to the reimbursement of our Coflexip
acquisition financing. See  Liquidity and
Capital Resources, below.

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Outlook

In 2002, we expect that offshore activities in
the North Sea will be stable in the British zone, with a strong
showing by tie-back contracts performed for independent
operators. In the Norwegian zone, the marketing slowdown
experienced in 2001 is likely to result in reduced earnings in
2002. However, numerous calls for bids are currently being
issued, principally by the major exploration and production
groups and focused on large infrastructure projects that we
expect to be awarded in 2002 leading to increased activity in
2003. Building on a market leading position for subsea services
in the Gulf of Mexico achieved in 2001 with our commissioning of
CSO Deep Blue, our level of offshore activity in the Americas
should be strong as we execute SURF and SPAR contracts entered
into backlog in 2001 and local operators continue to develop
additional deepwater fields. We also anticipate that our
activities in the Americas will benefit from margins in Brazil
moving more in line with the rest of the world as more highly
integrated contracts are put to bid and surtaxes on foreign
products are removed. In West Africa, several major calls for
bids which have been delayed, in some cases for several years,
are expected to be opened in 2002, leading to sustained SURF
activity in our Africa/ Middle East zone.

In 2002, we expect that important drivers of our
Onshore/ Downstream activities will be the continued development
of gas resources, particularly through petrochemical projects in
the Middle East (see  Recent
Developments, above) and liquefied natural gas projects
globally, as well as refinery projects motivated by new refinery
product specifications coming into force in Europe and the
United States by 2005.

While our fiscal years 2000 and 2001 benefited
from the completion of major contracts that came into force in
1997 and 1998 (notably Midor in Egypt, Sincor in Venezuela and
OGD II in Nigeria), we were not scheduled to complete any
contract of similar size in the first quarter of 2002. For 2002
taken as a whole, our current expectation is that our Onshore/
Downstream Branch and our Industries Branch will in the
aggregate experience a decline in revenues on the order of 10%,
as a result of the slowdown in order intake experienced in
2000  2001 and the absence of any major contract
scheduled for completion in 2002. As a result of these factors,
we expect the aggregate operating margin for these branches to
fall between 4% and 5% in 2002, as compared to 6% and 7% in the
two preceding years. Overall, we expect our net sales and
earnings before interest, taxes, depreciation and amortization
in 2002 to be largely in line with those achieved on a pro forma
basis in 2001. Over the longer term, we expect that the
accelerated order intake experienced since last fall combined
with the timing of progress and completion of major projects in
our backlog will contribute to both higher revenues and
operating margins for our Onshore/ Downstream Branch and our
Industries Branch in 2003 and 2004.

Our priorities for 2002 are the following:



| |   |                                                                                                                                  
| | - | ---------------------------------------------------------------------------------------------------------------------------------
| |  | Integrate our teams in the Offshore sector and
    throughout the group;                                                         
|
| |  | Develop our anticipated integration synergies
    (global procurement, rationalization of structures and reduction
    of costs);
|
| |  | Successful bidding on at least one major
    deepwater development tender in West Africa; and                                    
|
| |  | Successful bidding on at least one major
    liquefied natural gas project.                                                      

We caution you, however, that there can be no
assurance of our ability to achieve these targets, which are
subject to risks and uncertainties beyond our control. Our
actual results could differ materially as a result of numerous
factors including notably capital expenditures in the oil and
gas industry, price levels of oil and gas, the timing of
development of offshore energy resources, materialization of
construction risks, the strength of competition, interest rate
movements and stability in developing countries.



| |                                  
| | ---------------------------------
| | Technip Stand-alone
    Results

An additional unaudited non-historical measure
which we have prepared to assist in your analysis of our results
of operations for the fiscal year ended December 31, 2001,
are Techip stand-alone financial results of
operations. Our stand-alone results have been calculated for the
fiscal year 2001 as if neither the Technip-Coflexip business
combination nor our related acquisition of ISIS had occurred and
we had continued to account for our interest in Coflexip using
the equity method at the 29.4% level for all twelve months of
the fiscal year. This compares to our audited historical
accounts where we accounted for our interest in Coflexip using
the equity

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method at the 29.4% level through
September 30, 2001, and thereafter using the full
consolidation method with deduction of a 1.64% minority
interest. The table below sets out selected unaudited
stand-alone financial data for 2001, compared to the
corresponding audited Technip financial data for 2000. We note
that our consolidated accounts for 2000 reflects our initial
minority interest in Coflexip only starting April 1, 2000,
as a result of our date of acquisition of this interest and that
our equity interest in 2000 was accounted for at the 29.7% level
rather than at the 29.4% level used in 2001 as the result of
dilution.


|                                                                                  |  |                                  |          |           |  |  |            |  
|--------------------------------------------------------------------------------- |  | -------------------------------- | -------- | --------- |  |  | ---------- | -
|                                                                                  |  | Technip                          |          |          
|                                                                                  |  | stand-alone                    |          | Technip  
|                                                                                  |  | (unaudited)                      |          | (audited)
|Amounts in Millions except per share data                                         |  | 2001                             |          | 2000     
|                                                                                  |  |                                  |          |          
|                                                                                  |  |                                 
|                                                                                  |  | (in million , except shares and
|                                                                                  |  | per share data)                 
|Net sales                                                                         |  |                                  | 3,051.0  |           |  |  | 2,972.0    |  
|Cost of Sales                                                                     |  |                                  | (2,703.0 | )         |  |  | (2,680.8   | )
|                                                                                  |  |                                  |          |           |  |  |            |  
|Gross Margin                                                                      |  |                                  | 348.0    |           |  |  | 291.2      |  
|Research and Development expenses                                                 |  |                                  | (13.3    | )         |  |  | (7.2       | )
|Selling, general and administrative                                               |  |                                  | (111.7   | )         |  |  | (85.1      | )
|                                                                                  |  |                                  |          |           |  |  |            |  
|Operating Income before Depreciation and
    Amortization (EBITDA)                |  |                                  | 223.0    |           |  |  | 198.9      |  
|                                                                                  |  |                                  |          |           |  |  |            |  
|Depreciation and amortization other than goodwill                                 |  |                                  | (19.5    | )         |  |  | (16.3      | )
|                                                                                  |  |                                  |          |           |  |  |            |  
|Operating income before goodwill
    amortization                                 |  |                                  | 203.5    |           |  |  | 182.6      |  
|                                                                                  |  |                                  |          |           |  |  |            |  
|Goodwill amortization                                                             |  |                                  | (41.6    | )         |  |  | (26.7      | )
|                                                                                  |  |                                  |          |           |  |  |            |  
|Operating income                                                                  |  |                                  | 161.9    |           |  |  | 155.9      |  
|                                                                                  |  |                                  |          |           |  |  |            |  
|Financial Result                                                                  |  |                                  | (0.5     | )         |  |  | 5.8        |  
|Non-operating Income (Loss)                                                       |  |                                  | (6.6     | )         |  |  | 93.9       |  
|Income of equity affiliates                                                       |  |                                  | 25.2     |           |  |  | 22.1       |  
|Minority Interest                                                                 |  |                                  | (1.8     | )         |  |  | (1.2       | )
|Income taxes                                                                      |  |                                  | (57.2    | )         |  |  | (62.3      | )
|                                                                                  |  |                                  |          |           |  |  |            |  
|Net Income                                                                        |  |                                  | 121.0    |           |  |  | 214.2      |  
|                                                                                  |  |                                  |          |           |  |  |            |  
|Non-operating Income (Loss)                                                       |  |                                  | 6.6      |           |  |  | (93.9      | )
|Goodwill amortization                                                             |  |                                  | 41.6     |           |  |  | 26.7       |  
|                                                                                  |  |                                  |          |           |  |  |            |  
|Net Income before non-operating income and
    goodwill amortization              |  |                                  | 169.2    |           |  |  | 147.0      |  
|                                                                                  |  |                                  |          |           |  |  |            |  
|Net Income Per Share                                                              |  |                                  | N/A      |           |  |  | 12.85      |  
|Net Income Per ADS(2)                                                             |  |                                  | N/A      |           |  |  | N/A        |  
|Net Income per share (before non-operating income
    and goodwill amortization)  |  |                                  | N/A      |           |  |  | 8.82       |  
|Net Income per ADS(2) (before non-operating
    income and goodwill amortization) |  |                                  | N/A      |           |  |  | N/A        |  
|Number of shares on a fully diluted basis at year
    end(3)                      |  |                                  | N/A      |           |  |  | 16,664,584 |  

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|                                         |  |               |       |              |  |  |       | 
|---------------------------------------- |  | ------------- | ----- | ------------ |  |  | ----- | 
|                                         |  | Technip       |       |             
|                                         |  | stand-alone |       | Technip     
|                                         |  | (unaudited)   |       | (audited)   
|                                         |  | December 31,  |       | December 31,
|                                         |  | 2001          |       | 2000        
|                                         |  |               |       |             
|ASSETS(4)                                |  |               |       |              |  |  |       | 
|Total Non-current Assets                 |  |               | 3,684 |              |  |  | 1,051 | 
|Contracts in Progress                    |  |               | 4,590 |              |  |  | 4,725 | 
|Other Current Assets                     |  |               | 844   |              |  |  | 568   | 
|Cash and Marketable Securities           |  |               | 403   |              |  |  | 563   | 
|                                         |  |               |       |              |  |  |       | 
|                                         |  |               | 9,521 |              |  |  | 6,907 | 
|                                         |  |               |       |              |  |  |       | 
|LIABILITIES AND SHAREHOLDERS
    EQUITY |  |               |       |              |  |  |       | 
|Shareholders Equity                     |  |               | 2,398 |              |  |  | 766   | 
|Minority Interests                       |  |               | 7     |              |  |  | 4     | 
|Provisions                               |  |               | 234   |              |  |  | 233   | 
|Financial Liabilities                    |  |               | 1,140 |              |  |  | 196   | 
|Progress Payments                        |  |               | 4,943 |              |  |  | 4,896 | 
|Other Current Liabilities                |  |               | 799   |              |  |  | 812   | 
|                                         |  |               |       |              |  |  |       | 
|                                         |  |               | 9,521 |              |  |  | 6,907 | 
|                                         |  |               |       |              |  |  |       | 



---



|    |                                                                                                                                                                                                                                                                                                  
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | U.S. dollar amounts are provided for reader
    convenience only, converted at the rate of
    US$1.00 = EUR 1.1234.                                                                                                                                                                             
|   
|(2) | One ADS is equal to one fourth of one ordinary
    share.                                                                                                                                                                                                                                        
|   
|(3) | Does not include the Technip shares held by ISIS
    (1,847,376), nor does it include the dilutive effect of the
    convertible bonds which were issued early 2002.                                                                                                                             
|   
|(4) | The column referring to Technip stand
    alone presents the balance sheet of Technip stand
    alone including also the shares of Coflexip and Isis
    acquired in October through the tender offers financed by equity
    and debt, but before the consolidation of their balance sheets.

Technip-Coflexip Results of Operations for the
Year Ended December 31, 2001 Compared to

the Year Ended December 31,
2000




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

Our consolidated net sales for 2001 were
 3,546.0 million.
This was an increase of 19.3% from net sales in 2000 of
 2,972.0 million
and is largely due to our acquisition of Coflexip, the results
of which have been consolidated since October 1, 2001.
Coflexip contributed
 495.0 million
of consolidated net sales for 2001. On a stand-alone basis, our
consolidated net sales increased 2.7% to
 3,051.0 million
in 2001 compared to 2000. This moderate growth reflects the
slowdown in order intake which took place these past two years,
where we continued, in a highly competitive market, to focus on
expected contract margins rather than volume. Among the largest
contributors to net sales in 2001, as a result of the size and
state of progress on these contracts, were Q-CHEM (Quatar),
Nigeria Train III (Nigeria), Sincor (Venezuela) and La Isla
(Curaçao). Factors affecting the net sales contributed by
Coflexip are discussed below in  Coflexip
Operating and Financial Review and Prospects-Operating
Revenues.

Backlog.Backlog, an
unaudited measure resulting from firm orders received during the
year and previous years, less progress on contracts underway,
was
 4,926 million
at December 31, 2001, compared with
 3,410 million
at December 31, 2000, or the aggregate
 4,770 million
in backlog recorded at the same date by the entities making up
the new group (of which approximately
 3,410 million
was attributable to Technip,
 931 million
was attributable to Coflexip and
 429 million
was attributable to the Deepwater Division).

During 2001, there was noticeable backlog growth
in the Americas, principally in the offshore sector, with this
region representing 33.8% of total group backlog at
December 31, 2001. Coflexip (including the Deepwater
Division) contributed
 1,887.0 million
of our total backlog at December 31, 2001 of which more
than half was in

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the Americas with the remainder principally in
Europe and Russia/ Central Asia. Approximately 34% of our
backlog was for contracts in Africa/ Middle East at the same
date.


Broken down by business segment, at
December 31, 2001, approximately 43.4% of our backlog was
in the Offshore sector, 50.7% was in the Onshore/ Downstream
sector and the remainder was in our Industries sector. Contract
intake in 2001 was driven in the Offshore sector principally by
our Deepwater Divisions provision of deepwater floating
platforms in the Gulf of Mexico and contracts for shallow water
platforms in Iran and Azerbaijan. In the Onshore/ Downstream
sector, backlog was driven principally by a $400 million
ammonium/urea complex in Vietnam and in gas projects valued at
approximately one billion euro in the Arabian Peninsula as well
as new polyolefin projects. Backlog in the Industries sector was
driven by a $100 million fertilizer plant in Brazil, a
nickel/ cobalt production complex in New Caledonia, engineering
and project management services for the Airbus A380 assembly
plant in France as well as the design and construction of
electric plants in Germany and Saudi Arabia.

On a stand-alone basis, our backlog decreased
10.9% to
 3,039 million
at December 31, 2001 compared to December 31, 2000.
Backlog at December 31, 2001 does not include the order
intake of two very large contracts for ethylene complexes in
Iran (onshore/ downstream segment) for which financing has not
yet been confirmed by the client. As a result, our order intake
not yet booked as backlog as of December 31, 2001, amounted
to approximately
 1.5 billion,
compared to approximately
 0.7 billion
at December 31, 2000, and
 0.8 billion
at December 31, 1999.

Net sales by segment.Our Offshore segment accounted for
 722.0 million,
or 20.4% of total revenues in 2001, compared to
 130.0 million
or 4.4% in 2000, a dramatic increase in net sales mainly
attributable to our consolidation of Coflexip as of
October 1, 2001. We account for substantially all revenues
contributed by Coflexip in our Offshore segment. Other factors
contributing to sales in this segment were increased SURF and
Spar activities in North America and South America as well as
sustained activity in the North Sea. Contributing to the level
of SURF activity in the fourth quarter was the commissioning of
our CSO Deep Blue pipe-laying vessel, which was active on
deepwater projects (1,100 meters) in the Gulf of Mexico.
Coflexip contributed
 495.0 million
in the fourth quarter, or 68.6% of our total annual Offshore
segment revenues in 2001. On a stand-alone basis, our Offshore
segment revenues increased 74.6% to
 227.0 million
in 2001 compared to 2000. Major contributors to this growth were
the delivery and start-up of the Elgin Franklin TPG 500 platform
in the North Sea, two important contracts in Nigeria and
significant progress on the Cakerawala field in the territorial
waters of Malaysia and Thailand as well as sustained North Sea
activities.

Our Onshore/ Downstream segment, which is
comprised of activities related to production, refining and
petrochemicals, accounted for
 2,352.0 million,
or 66.3% of total revenues in 2001, compared to
 2,290.9 million
or 77.1% in 2000, an increase in net sales of 2.7%. In 2001,
important contributors to this segment in 2000 were the Midor
refinery in Egypt, the OGD2 gas treatment installations in Abu
Dhabi, the coke calcination plant in Bahrain and the Sincor
complex in Venezuela.

Our Industry segment contributed sales of
 472 million,
or 13.3% of total revenues in 2001 as compared to
 551.1 million,
or 18.5% of total revenues, in 2000, a decrease in net sales of
14.4%. This decrease reflects the completion in 2000 of two
large turnkey contracts.

Net sales by geographic area.During 2001, our operations in Europe
and Russia/ Central Asia generated
 942.0 million
in sales, or 26.6% of total revenues, compared to
 717.7 million,
or 24.1% of total revenues in 2000, an increase of 31.4%,
reflecting primarily the consolidation of Coflexips North
Sea and other European revenues in the last quarter of 2001.
Coflexip operations in Europe and Russia/ Central Asia generated
 230 million
in sales or 24.4% of our total revenues from Europe in 2001. On
a stand-alone basis, our operations in Europe and Russia/
Central Asia decreased 0.7% to
 712.0 million
in 2001 compared to 2000. The principal contributors to sales in
this region in 2001 were Blake (BRITISH GAS), Nugget ABB, Elgin
Franklin (ETPM and TotalFinaElf), Ringhorne (ESSO), RWE
Powerplant in Germany, DOW Chemicals in the Netherlands, Lube
Oil in Turkmenistan, Shah Deniz in Azerbaïdjan as well as
increased sales of umbilicals in the North Sea.

Sales generated from our activities in Africa/
Middle East during 2001 amounted to
 1,209.0 million,
or 34.1% of total revenues, a decrease of 16.5% from reported
revenues in 2000 of
 1,448.3 million
or 48.7% of

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total 2000 revenues. This decrease is a result of
the completion of major projects in Egypt and Nigeria which
resulted in substantial revenues in 2000. Coflexip operations in
Africa/ Middle East were not material in 2001. The principal
contracts contributing to our sales in this region in 2001 were
Kuito 1 E (CABGOC), Train n 3 in Nigeria, Q-CHEM
in Quatar, Haradh in Saudi Arabia and MIDOR in Egypt.


Our operations in Asia Pacific generated sales of
 560.0 million
in 2001, or 15.8% of total revenues, up from
 352.2 million,
or 11.9% of total revenues in 2000, an increase of 59.0%, due to
progress on the Legendre (WOODSIDE) and Bonkot (PTT) contracts,
the CTOC and OPTIMAL contracts in Malaysia, and the PTA CAPCO
contract in Taiwan. Coflexip operations in the Asia Pacific
generated
 32.0 million
in sales in the fourth quarter or 5.7% of our total annual
revenues generated in the Asia Pacific region in 2001.

Sales generated from our activities in the
Americas increased significantly during 2001 and amounted to
 835.0 million,
or 23.5% of total revenues, compared to revenues in 2000 of
 454.5 million.
The principal contracts contributing to our sales in this region
in 2001 were Banjo/Seahawk (WILLIAMS), Nile (BP), American
Accryl and HDPE Chevron in the United States, La Isla in
Curaçao, and COPEBRAS in Brazil. Coflexip operations in the
Americas generated
 223.0 million
in sales in the fourth quarter or 26.7% of our total annual
revenues from the Americas in 2001, mainly from SURF projects in
the Gulf of Mexico and Brazil. On a stand-alone basis, our
operations in the Americas increased 34.7% to
 612.0 million
in 2001 compared to 2000.



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

Our cost of sales was
 3,094.3 million
in 2001, compared to
 2,680.8 million
in 2000. Coflexip contributed cost of sales in 2001 of
 391.1 million
in the fourth quarter or 12.7% of our total annual cost of
sales. On a stand-alone basis, our cost of sales increased 0.8%
to
 2,703.0 million
in 2001 compared to 2000. 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.



| |             
| | ------------
| | Gross Margin

We achieved a gross margin in 2001 amounting to
 451.7 million,
compared to
 291.2 million
during 2000. As a percentage of net sales, gross margin was
12.7% in 2001, compared to 9.8% in 2000. Coflexip contributed
 103.9 million
to our 2001 gross margin. On a stand-alone basis, our gross
margin was 11.4% of sales in 2001 as compared to 9.8% in 2000.
The principal factor accounting for this change was the
completion of major contracts in Venezuela and Africa under
favorable conditions. Factors affecting the gross margin
contributed by Coflexip are discussed below at Coflexip
Operating and Financial Review and Prospects.



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

Our research and development expenses amounted to
 18.3 million
in 2001, compared to
 7.2 million
in 2000. Most of our technology is licensed and applied to a
particular product; therefore it is not accounted for as a
research and development expense. The principal factors
accounting for the increase in internally financed research and
development expenditures is our investment in e-procurement and
other information technology, as well as Coflexips
contribution of
 5.0 million
in expenses in the fourth quarter.



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

Our selling, general and administrative expenses
during 2001 were
 149.0 million
compared to
 85.1 million
incurred in 2000. The increase between the two periods is in
part explained by the consolidation of approximately
 37.3 million
in Coflexip selling, general and administrative expenses in the
fourth quarter. On a stand-alone basis, our selling, general and
administrative expenses increased 31.3% to
 111.7 million,
and amounted to 3.7% of sales. The principal factors accounting
for this increase were our consolidation of Coflexip and
expenditures on computer systems and other production tools.

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| |                            
| | ---------------------------
| | EBITDA and Operating Income

Our earnings before interest, tax, depreciation
and amortization (commonly referred to by the acronym EBITDA)
amounted to
 284.4 million
in 2001 compared to
 198.9 million
in 2000. The growth in EBITDA resulted both from Coflexips
contribution of
 61.6 million
to our EBITDA in the fourth quarter of 2001 and to a 12.1%
increase in our EBITDA on a stand-alone basis to
 223.0 million.

Operating income amounted to
 173.5 million
in 2001, compared to
 155.9 million
the previous year, an increase of 11.3%. The operating margin
(operating income taken as a percent of net sales) declined to
4.9% in 2001 from 5.2% in 2000, primarily as a result of the
non-recurring change described below. Coflexip contributed
operating income for the fourth quarter of 2001 amounting to
 27.3 million
or 15.7% of our total annual operating income for 2001. On a
stand-alone basis, our operating income was
 161.9 million
or 5.3% of sales for 2001.

Our operating income compared to EBITDA reflects
depreciation charges of
 49.6 million
in 2001 compared to approximately
 16.3 million
in 2000, principally as a result of our consolidation of
Coflexips more capital intensive operations starting on
October 1, 2001. Most of our depreciation charges relate to
assets in our Offshore segment. Our EBITDA also excludes
amortization of goodwill resulting from acquisitions, which in
2001 amounted to
 61.3 million
compared to
 26.7 million
the preceding year. This significant increase is principally due
to the acquisitions of ISIS and Coflexip in simultaneous tender
offers in 2001.

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 deep water 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. As a result of the reduced
expectations of future cash flows from the Deepwater Division,
Coflexip recorded 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. Our total goodwill
resulting from acquisitions carried on our balance sheet remains
unchanged at approximately
 2.6 billion,
generating an annual amortization charge of about
 120 million.

Factors affecting EBITDA and operating income
contributed by Coflexip are discussed below at Coflexip
Operating and Financial Review and Prospects-Operating income
and Earnings Before Interest, Tax, Depreciation and
Amortization/ EBITDA.

EBITDA by segment.Below we present EBITDA and EBITDA
margins by business segment for 2001 and 2000. We have defined
segment EBITDA margins as segment EBITDA divided by segment net
sales. We generated an immaterial amount of operating income and
EBITDA from outside these segments in both 2001 and 2000.

Our Offshore segment generated EBITDA of
 86.3 million,
with a segment EBITDA margin of 11.9% in 2001, improved from
segment EBITDA of
 0.1 million,
with a segment EBITDA margin of 0.1% in 2000. Coflexip
contributed EBITDA for 2001 amounting to
 61.6 million
or 71.4% of our Offshore segment EBITDA for the year. On a
stand-alone basis, our Offshore segment EBITDA was
 24.7 million
or 10.9% of segment sales for 2001. The principal sources of
EBITDA for this segment in 2001 were our CTOC contract in
Malaysia and our AMENAM contract in Nigeria. The increase in
segment EBITDA margin is explained by the strong contributions
of these two contracts.

Our Onshore/ Downstream segment generated EBITDA
of
 189.0 million,
with a segment EBITDA margin of 8.0% in 2001, compared to
segment EBITDA income of
 157.1 million,
with a segment EBITDA margin of 6.9% in 2000, an increase in
segment EBITDA of 20.4%. The increase in EBITDA was attributable
to the significant progress made on La Isla in Curaçao,
MIDOR in Egypt, Optimal and PETLIN in Malaysia, Alba in Bahrain
et LNG in Nigeria, as well as the completion under favorable
conditions of our contracts in Venezuela.

Our Industry segment contributed EBITDA of
 9.1 million
with a segment EBITDA margin of 1.9% in 2001, as compared to
segment EBITDA of
 41.7 million
with a segment EBITDA margin of 7.6% in 2000, a

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decrease in segment EBITDA of 78.2%. A major
contributing factor to the decrease in segment EBITDA and margin
was the difficulty encountered on a turnkey contract in Senegal.


EBITDA by geographic zone.Below we present EBITDA and EBITDA
margins by geographic zone for 2001 and 2000. 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
 73.2 million
in 2001 (7.8% EBITDA margin) compared to
 64.2 million
(9.0%) in the preceding year. The reduced margins on increased
activity resulted from a relatively smaller contribution from
turnkey contracts in this region in 2001.

In Africa/ Middle East, we generated EBITDA of
 74.8 million
in 2001 (6.2% EBITDA margin) compared to
 102.9 million
(7.1%) in the preceding year.

In Asia Pacific, we generated EBITDA of
 72.2 million
in 2001 (12.9% EBITDA margin) compared to
 29.3 million
(8.3%) in the preceding year. The increase in EBITDA and EBITDA
margin in this region results from both the sustained demand for
our services and the collection of early completion bonuses
under certain contracts in this region.

In the Americas, we generated EBITDA of
 64.2 million
in 2001 (7.7% EBITDA margin) compared to
 2.5 million
(0.6%) in the preceding year.

This strong improvement results from the
satisfactory progress in 2001 on a contract for which we had
taken provisions in 2000 as well as completion of several other
projects, notably La Isla in Curaçao.



| |                      
| | ---------------------
| | Goodwill Amortization

Amortization of goodwill during 2001 amounted to
 61.3 million,
compared to
 26.7
million in 2000. The increase is mainly due to our commencement
of amortization of goodwill generated by our acquisition of
Coflexip and Isis in October 2001 generating an annual
amortization change of
 81.9 million.
We recorded
 20.4 million
in 2001, reflecting an amortization of this intangible asset
starting in October 2001. The remainder of the goodwill
amortization in 2001 mainly results from amortization of
goodwill arising from our potential acquisition of Coflexip in
2000 for
 22.4 million
and from our acquisition of KTI and MDEU from Mannesmann in 1999
for  8.0
million.



| |                                                                           
| | --------------------------------------------------------------------------
| | Financial Income (loss), Excluding
    Financial Income on Contracts (Net)

We had a net financial loss (excluding financial
income on contracts, which we record under net sales) of
 6.5 million
in 2001, compared to net financial income of
 5.8 million
in 2000. Coflexip contributed
 2.4 million
to our net financial income in 2001. The principal factor
contributing to this decrease was our higher average debt level
in 2001 due primarily to the financing of the cash portion of
our acquisition of Coflexip through debt. Interest expenses on
this acquisition financing amounted to
 9.6 million
for the period. Other factors contributing to this net financial
loss was the consolidation of negative net financial income from
Coflexip and ISIS in the fourth quarter amounting to losses of
 2.4 million
and
 1.2 million,
respectively. This line item does not include financial revenue
on positive cash balances of individual contracts, which we
account for under net sales. In 2001 and 2000 financial revenues
from these sources contributed
 17.0 million
and
 25.0 million,
respectively, to our net sales. Factors affecting Coflexip net
financial income for 2001 are described below at Coflexip
Operating and Financial Review and Prospects 
Coflexip Financial result, non-recurring items and equity income
of investees.



| |                                                  
| | -------------------------------------------------
| | Equity in Income of Unconsolidated
    Affiliates

Our equity in income of unconsolidated affiliates
amounted to
 15.6 million
in 2001, compared to
 22.1 million
in 2000. The principal unconsolidated 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 companies. Coflexip was accounted for
under the equity method from April 2000 until September 30,
2001. Beginning of October 1, 2001 we consolidated its
operations following the successful

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completion of the Coflexip and ISIS exchange
offers. In May 2002, we announced our agreement to sell our 46%
interest in Ipedex for
 6.9 million
euro in a management buy-out.




| |                            
| | ---------------------------
| | Non-operating Income (loss)

We incurred a non-operating loss in 2001 of
 6.6 million
compared to a non-operating income of
 93.9 million
in 2000. 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. Non-operating income in 2000 was
primarily derived from capital gains on our sale of Cogema
shares
( 69.9 million)
and our 29.7% interest in the capital gains on Coflexips
sale of its Cal Dive shares in September 2000
( 39.0 million).



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

Our income tax for 2001 amounted to
 65.5 million,
compared to
 62.3 million
in 2000. Compared to the generally applicable French corporate
income tax rate of 36.23% for 2001 and 36.66% for 2000, our
effective income tax rate in 2001 amounted to 30.31%, and 37.22%
in 2000. Factors affecting Coflexip income tax for 2001 are
described below at Coflexip Operating and Financial Review
and Prospects-Financial result, non recurring items as equity
income of investees.



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

Minority interests in our earnings amounted to
 2.4 million
in 2001, compared to
 1.2 million
in 2000. This difference is not significant compared to the
overall amounts included during these years.



| |           
| | ----------
| | Net Income

Our consolidated net income for 2001 was
 108.1 million,
a decrease of 49.5% compared to net income of
 214.2 million
in 2000. Coflexip contributed
 19.6 million
or 18.1% to our consolidated net income for 2001. On a
stand-alone basis, our consolidated net income for 2001 was
 121.0 million.
Excluding non-operating income and goodwill amortization,
earnings amounted to
 176.0 million
in 2001 and
 147.0 million
in 2000, an increase of 19.7%. Non-recurring items in 2000
included significant one time gains on disposals.

Our net income before non-recurring items and
amortization of goodwill per share on a fully diluted basis was
 6.93 in
2001 compared to fully diluted net income before non-recurring
items and amortization of goodwill per share of
 8.82 in
2000, representing a decrease of 21.4%. Diluted net income
before non-recurring items and amortization of goodwill per
share has been calculated on the basis of net income before
non-recurring items and amortization of goodwill divided by the
number of common shares outstanding as of each year end,
including outstanding options to subscribe to new shares granted
to employees. Per share statistics in 2001 reflect our issuance
of approximately 10 million new Technip-Coflexip shares in
October 2001 in consideration for the Coflexip and ISIS shares
tendered to us in the simultaneous exchange offers we conducted
on these companies.

Technip-Coflexip Results of Operations for the
Year Ended December 31, 2000 Compared to

the Year Ended December 31,
1999




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

Our consolidated net sales for 2000 were
 2,972.0 million.
This was an increase of 6.8% from net sales in 1999 of
 2,782.2 million
and is largely due to revenues from in-progress contracts,
reflecting several major contracts which have entered the
construction phase. Among the largest contributors to net sales
in 2000, as a result of the size and state of progress on these
contracts, were the OGD II gas treatment plant in Abu Dhabi, the
Sincor refinery in Venezuela, the Midor refinery in Egypt, the
Q-Chem petrochemical facility in Qatar and a calcinated coke
plant in Bahrain.

Backlog, resulting from orders received during
the year, less progress on contracts underway, was
 3,410.0 million
at December 31, 2000, compared with
 3,468.2 million
at December 31, 1999, and represents the equivalent of
approximately 14 months of revenues to come (based on
average monthly net sales in 2000).

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During 2000, there was noticeable backlog growth
in the Asia Pacific, which now accounts for 21% of the
Groups total backlog.


Net sales by segment.Our Offshore segment accounted for
 130.0 million,
or 4.4% of total revenues in 2000, more than doubled from
 56.0 million
or 2.0% in 1999. This increase is due to the increased
development of oil fields in the Asia Pacific, Africa and the
Middle East, reflected by several large contracts, including one
of our biggest turnkey projects of the year: an offshore
development in Malaysia. In addition, our acquisition of an
initial 29.7% interest in Coflexip, and the joint pursuit of
contracts through our strategic alliance and initial contract in
Thailand, enabled us to expand into the deep offshore market.
The recent historically high price of oil has generally led to
an increase in exploration activities and the subsequent
development of new oil production facilities, because higher oil
prices make exploration of difficult-to-access oil fields more
economically feasible.

Our Onshore/ Downstream segment, which is
comprised of activities related to production, refining and
petrochemicals, accounted for
 2,290.9 million,
or 77.1% of total revenues in 2000, compared to
 2,121.7 million
or 76.3% of total revenues in 1999, an increase in absolute
terms of 8.0%. This increase is attributable to activities
related to production and petrochemicals. Production activities
have benefitted from the above mentioned increase in the
development of oil fields, in particular with one of our two
biggest turnkey projects of the year: the associated utilities
and the development of a gas field in Hawiyah, Saudi Arabia.
Also, as mentioned before, the recent historically high price of
oil has generally led to an increase in exploration activities
and the subsequent development of new oil production facilities.
The increase in petrochemicals is attributable in part to the
increase in importance of the ethylene sector, reflecting our
increased penetration of the market as a result of our
acquisition of KTI less than two years earlier, and to our
contract for a polyethylene plant in Malaysia. The increase in
both these activities was partially offset by the decline of the
refining activities. With the exception of the hydrogen
sub-sector, which we have strongly developed since our
acquisition of the engineering activities of KTI, we believe
that refining is at a low point in the investment cycle in
Europe after the completion of major projects relating to
achieving conformity with the new European environmental
standards that went into effect on January 1, 2000. Our
remaining European projects in this sector were of a smaller
size. Additionally, a larger portion of the work on a
significant ongoing contract in Egypt, the Midor refinery, was
completed in 1999, leading to considerably more revenue in 1999
compared to 2000.

Our Industry segment contributed sales of
 551.1 million,
or 18.5% of total revenues, in 2000 as compared to
 604.5 million
or 21.7% of total revenues in 1999, a decrease of 8.8%. This
reflects the integration process related to our acquisition of
KTI and MDEU, in which we discontinued non-profitable areas of
business in this segment, particularly in the environmental area.

Net sales by geographic area.During 2000, our operations in Europe
and Russia/ Central Asia generated
 717.0 million
in sales, or 24.1% of total revenues, compared to
 922.9 million,
or 33.1% of total revenues in 1999, a decrease of 22.3%,
reflecting the decline of refining activities in Europe and the
discontinuation of selected activities in the industry sector as
discussed above. The completion of a major refining contract in
Turkmenistan in 1999 also contributed to the higher level of
sales in 1999.

During 2000, our operations in Africa/ Middle
East generated
 1,448.3 million
in sales, or 48.7% of total revenues, compared to
 1,296.8 million
in 1999, or 46.6% of total revenues, an increase of 11.7%. This
increase is due to the rebounding of Middle Eastern oil and gas
projects, reflected in two significant contracts in Saudi
Arabia, while backlog remained constant. Backlog does not
include the order intake of two very large contracts for
ethylene complexes in Iran for which financing has not yet been
confirmed by the client. These positive effects were partially
offset by the timing of progress made on large contracts in
Africa, in particular the Midor refinery in Egypt and on the
Bonny LNG complex in Nigeria.

Our operations in the Asia Pacific generated
sales of
 352.2 million
in 2000, or 11.9% of total revenues, up from
 224.9 million,
or 8.1% of total revenues in 1999, an increase of 56.6%, in part
due to the activities of Technip Singapore, TPGM as well as
Technip KT India, the former acquired from Mannesmann in 1999.
Sales generated from our activities in the Americas have
increased during 2000 and amounted to
 454.5 million,
or 15.3% of total revenues, an increase of 34.6% from reported
revenues in 1999 of
 337.6 million.
This is due principally to the significant milestones reached
with respect to our Venezuelan contracts.

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

Our cost of sales was
 2,638.4 million
in 2000, compared to
 2,469.0 million
in 1999. The major component was external costs consisting of
equipment purchases and subcontracted construction and
engineering work. The increase in these costs was principally
linked to an increased volume of activity. Increased payroll
costs in Europe were partially offset by an increase in
headcount in lower-cost regions, in particular India and
Malaysia, thereby limiting the aggregate increase in payroll
costs. Moderate inflation in the areas where we have a
substantial number of employees, such as the United States and
Europe, helped contain payroll costs.



| |             
| | ------------
| | Gross Margin

We achieved a gross margin in 2000 amounting to
 333.6 million,
compared to
 313.2 million
during 1999. As a percentage of net sales, gross margin was
11.2% in 2000, compared to 11.3% in 1999. The principal factor
accounting for this evolution was the improved results on
projects assumed with our acquisition of KTI and MDEU in 1999,
partially offset by provisions taken against contracts in
Venezuela as a result of the effect of social unrest on
construction activity.



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

Our selling, general and administrative expenses
during 2000 were
 134.7 million
compared to
 129.9 million
incurred in 1999. The 3.7% increase between the two periods is
principally explained by our increased efforts in bidding
activities in 2000 to develop new business. These expenses as a
percentage of net sales remained virtually unchanged at 4.5% in
2000 compared to 4.7% the prior year. We include most of our
operating expenses incurred, including general and
administrative expenses, in Cost of Sales (See
 Principal Differences Between U.S. GAAP
and French GAAP).

Our selling, general and administrative expenses
include expenditures on research and development which during
2000 amounted to
 7.2 million.
During 1999, our expenditures on research and development
amounted to
 10.3 million.
These amounts, which primarily relate to process studies, do not
include research and development undertaken in the course of
executing a client project which we account for as a cost of
sale. Most of our technology is licensed and applied to a
particular product; therefore it is not accounted for as a
research and development expense. The principal factor
accounting for the decrease in internally financed research and
development expenditures is our rationalization of research and
development teams, particularly in the environmental areas,
subsequent to the KTI and MDEU acquisitions.



| |                            
| | ---------------------------
| | EBITDA and Operating Income

Our earnings before interest, tax, depreciation
and amortization (commonly referred to by the acronym EBITDA)
amounted to
 198.9 million
in 2000 compared to
 183.3 million
in 1999. The difference between our operating income and EBITDA
was a depreciation charge of
 16.3 million
in 2000 and of
 22.3 million
in 1999.

Operating income amounted to
 182.6 million
in 2000, compared to
 161.0 million
the previous year, an increase of 13.4%. The operating margin
(operating income taken as a percent of net sales) increased to
6.1% in 2000 from 5.8% in 1999, primarily as a result of the
improved performance of KTI and MDEU, which we acquired from
Mannesmann in 1999, the aggregate operating margin of which
reached 4.8% in 2000, compared to 1.1% in 1999.

EBITDA by segment.Below we present EBITDA and EBITDA
margins by business segment for 2000 and 1999. We have defined
segment EBITDA margins as segment EBITDA divided by segment net
sales. We generated an immaterial amount of operating income and
EBITDA from outside these segments in both 2000 and 1999.

Our Offshore segment generated EBITDA of
 0.1 million,
with a segment EBITDA margin of 0.1% in 2000, compared to
segment EBITDA loss of
 (0.9)
million, with a segment EBITDA margin of (1.5)% in 1999.

Our Onshore/ Downstream segment generated EBITDA
of
 157.1 million,
with a segment EBITDA margin of 6.9% in 2000, compared to
segment EBITDA income of
 158.5 million,
with a segment EBITDA margin of

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7.5% in 1999, a slight decrease in segment EBITDA
of 0.1%. This decrease in EBITDA margin was attributable to
production and refining activities, only partially offset by
petrochemical activities. In production, the principal sources
of EBITDA in 2000 were major contracts in Saudi Arabia, Nigeria
and Abu Dhabi, on which we achieved substantial progress. The
decrease in EBITDA from onshore production activities is
explained by our increased order intake in this area, because
the timing of our revenue and operating expense recognition
results in proportionally more operating income being recognized
at the later stages of a given contract than at its initial
stages. The decreased EBITDA from refining activities in 2000
compared to 1999 reflect both the high contribution of large
refinery projects in Egypt and Turkmenistan and a coke
calcinating plant in Bahrain in 1999, as well as provisions
taken in 2000 against contracts in Venezuela as a result of the
effect of the social unrest on construction activity. The
decrease in EBITDA margin in other parts of our Onshore/
Downstream segment was partly offset by a significant increase
in both EBITDA and EBITDA margin in petrochemical activities.
The increase is principally due to the continued development of
our ethylene activities through our recently acquired subsidiary
KTI and the substantial progress on a large Malaysian contract.


Our Industry segment contributed EBITDA of
 41.7 million
with a segment EBITDA margin of 7.6% in 2000, nearly double
segment EBITDA of
 25.7 million
with a segment EBITDA margin of 4.3% in 1999. A major
contributing factor to the increase in segment EBITDA and EBITDA
margin is our full consolidation of Krebs-Speichim in 2000
subsequent to our acquisition of the 50% of this company which
we did not already own. In 1999, we accounted for this
subsidiary using the proportionate consolidation method. Another
contributing factor to our increased EBITDA and EBITDA margins
in this segment is the improvement in the contract margins of
our recently acquired subsidiary MDEU.

EBITDA by geographic zone.Below we present EBITDA and EBITDA
margins by geographic zone for 2000 and 1999. 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
 64.2 million
in 2000 (9.0% EBITDA margin) compared to
 60.5 million
(6.6%) in the preceding year. These increases are principally
attributable to substantial progress made on contracts nearing
completion in Western Europe and Turkmenistan.

In Africa/ Middle East, we generated EBITDA of
 102.9 million
in 2000 (7.1% EBITDA margin) compared to
 103.8 million
(8.0%) in the preceding year.

In Asia Pacific, we generated EBITDA of
 29.3 million
in 2000 (8.3% EBITDA margin) compared to
 13.1 million
(5.8%) in the preceding year. This increase reflects the high
level of activity on several turnkey contracts entered into in
recent years, notably for petrochemical plants (PVC).

In the Americas, we generated EBITDA of
 2.5 million
in 2000 (0.6% EBITDA margin) compared to
 5.9 million
(1.7%) in the preceding year. The results for this region were
negatively affected by factors including the taking of
provisions to reflect the potential effect of social unrest on
the execution of our contracts in Venezuela.



| |                      
| | ---------------------
| | Goodwill Amortization

Amortization of goodwill during 2000 amounted to
 26.7 million,
compared to
 9.5 million
in 1999. The increase is principally due to our commencement of
amortization of goodwill generated by our partial acquisition of
Coflexip in April 2000 generating an annual amortization charge
of
 22.4 million.
We recorded
 16.8 million
in 2000, reflecting our amortization of this asset starting
April 19, 2000. The remainder of the goodwill amortization
in 2000, and substantially all of the goodwill amortization in
1999, results from amortization of goodwill arising from our
acquisition of KTI and MDEU from Mannesmann in 1999, generating
an annual amortization charge of
 8.0 million
and a small amount from our acquisition of CBS Engineering in
1997.



| |                                                                    
| | -------------------------------------------------------------------
| | Financial Income, Excluding Financial
    Income on Contracts (Net)

Our net financial income, excluding financial
income on contracts, which are recorded under net sales,
decreased to
 5.8 million
in 2000, compared to
 16.6 million
in 1999. The principal factor contributing to this decrease was
increased interest expenses from the cost of credit facilities
entered into for refinancing purposes after completion of our
acquisition of a 29.7% interest in Coflexip for
 659.7 million
and the remaining 50% of

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Krebs-Speichim. This line item does not include
financial revenue on positive cash balances of individual
contracts, which we account for under net sales. In 2000 and
1999 financial revenues from these sources contributed
 25.0 million
and
 19.0 million,
respectively, to our net sales.




| |                                                  
| | -------------------------------------------------
| | Equity in Income of Unconsolidated
    Affiliates

Our equity in income of unconsolidated affiliates
amounted to
 22.1 million
in 2000, compared to
 0.8 million
in 1999. The principal unconsolidated affiliates contributing
income to this item in 2000 were Coflexip with a contribution of
 21.0 million
(not including
 39.0 million
related to non-recurring asset disposals, which we accounted for
as non-operating income) and, to a lesser extent, Ipedex, a
subsidiary, which provides maintenance and operations for oil
and gas companies.



| |                     
| | --------------------
| | Non-operating Income

Non-operating income in 2000 amounted to
 93.9 million
compared to
 59.8 million
in 1999. In 1999, the principal source of non-operating income
was the reversal of a provision for geopolitical risk
( 89.9 million)
and
 3.0 million
of other non-operating income. In 2000, we did not
record further non-operating income in relation to the reversal
of provisions. We generated other non-operating income of
 93.9 million
in 2000, compared to other non-operating income of
 3.0 million
(from sources other than the reversal of provisions) in 1999.
Our non-operating income in 2000 consisted principally of a
capital gain on our sale of our 3.2% stake in Cogema for
 69.9 million,
our proportionate interest of
 39.0 million
in Coflexips sale of its stake in the company Cal Dive,
offset by restructuring costs of
 8.9 million
consisting principally of
 6.8 million
incurred in connection with a restructuring plan under which we
reduced the workforce of two German subsidiaries, TP Germany
GmbH and MSE GmbH acquired from Mannesmann, and
 1.6 million
of restructuring costs relating to the relocation of activities
in Berlin, Düsseldorf and Frankfurt.

Reversal of geopolitical risk provision.Prior to 1999 we maintained a
provision for geopolitical risk in recognition of the potential
country risk, separate from the technical and financial risks
typical of lump-sum turnkey contracts, to which our major
contracts outside of Western Europe were theoretically exposed.
In 1999, we determined that, because our increased geographic
scope of operations subsequent to the acquisition of KTI and
MDEU had substantially diversified our country risk and because
we had never in fact drawn on this geopolitical risk provision
since its establishment, the maintaining of our geopolitical
risk provision was no longer justified. We believe that our
reversal of this provision is consistent with prudent risk
management and brings us in line with our industrys
practices and accounting standards. We reversed the provision
for geopolitical risk at year end 1999, generating pre-tax
non-operating income of
 89.9 million
(or
 57 million
net of tax).



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

Our income tax for 2000 amounted to
 62.3 million,
compared to
 55.9 million
in 1999. The
 55.9 million
income tax amount in 1999 includes the cancellation of a
 32.9 million
tax asset following our reversal of our geopolitical risk
provision. This provision was not deductible for tax purposes
and had resulted in the recording of a tax asset.

Our effective income tax rate was 37.2% in 2000,
significantly higher than our effective rate of 33.8% in 1999
due to the increase of revenues realized in Italy, where the tax
rate is higher than our average tax rate. Both the 2000 and 1999
amounts include the effect of the 10% additional charge
applicable in those years. 1999 also includes a temporary tax of
10% that was no longer in effect in 2000.



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

Minority interests in our earnings amounted to
 1.2 million
in 2000, compared to
 0.2 million
in 1999. This difference is not significant based on the overall
amounts included during these years.

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| |           
| | ----------
| | Net Income

Our consolidated net income for 2000 was
 214.2 million,
an increase of 24.1% compared to net income of
 172.6 million
in 1999. Our net earnings per share on a fully diluted basis
were  12.85
in 2000 compared to fully diluted earnings per share of
 10.75 in
1999, representing an increase of 19.5%. Diluted earnings per
share has been calculated on the basis of net income divided by
the number of common shares outstanding as of each year end,
including outstanding options to subscribe to new shares granted
to employees.

Coflexip Operating Review

Below, we discuss on a stand-alone basis the
operating results of our recently acquired subsidiary Coflexip
for the financial years ended December 31, 2001, 2000 and
1999. We consolidate Coflexips results into our financial
statements starting October 1, 2001, therefore our
consolidated balance sheet at December 31, 2001, fully
reflects the balance sheet of Coflexip, which is not discussed
below. The following discussion should be read in conjunction
with the consolidated financial statements of Coflexip and the
notes thereto included at Item 18 of this
report. Coflexip financial information for 2001 in unaudited.



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

Demand for Coflexips products and services
is generally dependent upon capital expenditures for offshore
development in the oil and gas industry. These offshore
development expenditures are in turn influenced by the prices of
oil and gas, the rate of discovery and development of new oil
and gas reserves in offshore areas, local and international
political and economic conditions and the ability of oil and gas
companies to generate funds for capital expenditures.

Coflexips offshore activities in the North
Sea are seasonal, with the main offshore operations generally
performed during the period from April through October. As a
result, a disproportionate amount of revenues and income
ordinarily are earned during the second and third quarters of
the fiscal year, and losses may be incurred in the first and
fourth quarters. This seasonal effect has been partially offset
by Coflexips growth in other geographic zones and by the
securing of winter contracts for the CSO Apache and DSV
fleet in locations such as Brazil, Asia Pacific, West Africa and
the Gulf of Mexico.

A significant portion of Coflexips
operations is performed pursuant to fixed-price (lump sum)
contracts, a number of which are turnkey contracts, that require
one to three years to complete. Certain of these contracts
provide for progress payments. Coflexip recognizes revenues and
costs with respect to such contracts on a percentage of
completion basis. Adjustments in anticipated revenues and
expenses are made as determined necessary and are reflected in
income. Any such contract may represent a significant percentage
of Coflexips net operating revenues over several reporting
periods, but an immaterial percentage in other periods.



| |                                                          
| | ---------------------------------------------------------
| | Significant Acquisitions and Divestitures
    by Coflexip

Deepwater Division.On January 4, 2001, Coflexip
closed its purchase from Aker Maritime ASA and Aker Maritime
Norge AS of the Deepwater Division for
U.S. $513 million in cash plus the assumption of
U.S. $112 million in net debt. This acquisition price
is still subject to various adjustment mechanisms on the basis
of Deepwater Divisions audited 2000 financial statements,
and Coflexip has lodged a price adjustment claim with Aker
Maritime. See Item 8. Financial
Information  Information on Legal or Arbitral
Proceedings. As the transaction closed in January 2001,
the acquisition has no effect on Coflexips financial
statements for the years ended December 31, 2000 or 1999.
For further information on the acquisition of the Deepwater
Division, see Item 4: Information about
Technip-Coflexip  Other Major Recent
Acquisitions  The Acquisition of the Deepwater
Division from Aker Maritime.

Cal Dive.In
September 2000, Coflexip sold all of its 3,699,788 shares of
common stock of Cal Dive International Inc, a Houston-based
subsea contractor (Cal Dive), in a public
underwritten offering. Coflexip received cash proceeds of
approximately
 214.0 million
and recognized in its 2000 earnings a capital gain of
 167.4 million
before tax and
 128.7 million
after tax.

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Peerless.On
October 25, 1999, Coflexip paid
U.S. $11.3 million for additional shares of Peerless
Shipping and Oilfield Services Ltd to increase its holding from
8.4% to 58.2%. Peerless Shipping and Oilfield Services Ltd,
which subsequently changed its name to Seamec, is an Indian
company listed on the Indian Stock exchange, operating
multi-support vessels for subsea services.

Coflexip Results of Operations

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

the Year Ended December 31,
2000




| |                            
| | ---------------------------
| | Coflexip Operating revenues

Net operating revenues of Coflexip increased
78.0% to
 1,898.8 million
in 2001 compared with
 1,064.6 million
in 2000. This jump comes primarily from the newly acquired
Deepwater Division which contributed
 661.0 million
or 35.0% of the total net operating revenues for 2001. Over the
same period, the revenues of Coflexip excluding the Deepwater
Division increased by 16%, demonstrating a steady increase in
SURF (or subsea, umbilicals, risers and flowlines) activities
throughout Coflexips North Sea and Rest of World regions.
This increase was partially offset by decreases in operating
revenues in Brazil and Asia Pacific. In Brazil, there was a
decrease in sales of flexible risers manufactured in such
country due to the accident in Petrobras
platform P-36. Additionally, the postponement by clients of
new floater tenders in the Gulf of Mexico reduced revenue
opportunities during this period.



| |                   
| | ------------------
| | Deepwater Division

The Deepwater Division contributed
 661,0 million
to sales in 2001 across all geographic zones, equivalent to 35%
of the Coflexip groups sales for the year. Contributing
factors to the Deepwater Divisions 2001 sales included the
Nansen and Boomwang (Kerr McGee), Horn Mountain (BP Vastar
Resources) and Holstein (BP) contracts for the engineering and
construction of SPAR production platforms. The Deepwater
Divisions construction activities, however, were slower
than originally expected despite the contributions of its
contracts Blake (Talisman Energy) in the United Kingdom, and
Combisa (PEMEX), Vastar Process Deck (BP) and Brutus (Shell) in
the United States.



| |                                                                      
| | ---------------------------------------------------------------------
| | Sales by Geographic Zone (not including
    Deepwater Division sales)

North Sea.The
Coflexip group generated 33% of its annual sales (excluding the
contribution of the Deepwater Division), or
 620,0 millions,
in the North Sea, compared to
 506,8 million,
or 48% of its sales, in 2000. This 22% increase in activity
levels is chiefly linked to an increased contribution from the
British sector and a general increase in umbilical sales
throughout the zone, partially offset by a weakening of sales in
the Norwegian sector.

The British sectors increased activity in
2001 was principally due to increased sales from integrated
contracts, where the main contracts in 2001 were Blake (British
Gas), Nuggets (ABB), Kinsale (Marathon), Elgin/Franklin (ETPM
and TotalFinaElf), Otter (TotalFinaElf), Kestrel (Shell), Davy
(BP), Maureen (Aker Maritime) and Hoton (BP).

Notwithstanding the increased contribution from
integrated contracts, sales in the Norwegian sector in 2001
experienced a slight decline compared to 2000, a year which was
marked by the substantial contribution of flexible pipe sales on
the Asgard field development project (STATOIL). The principal
integrated contracts contributing to sales in the Norwegian
sector include Ringhorne (ESSO), Tambar (BP), Snorre B (STATOIL)
and Huldra (STATOIL).

Brazil.The Coflexip
group (excluding the Deepwater Division) generated approximately
9% of group sales, or
 176.3 in
Brazil in 2001, an 11% decline over 2000 sales of
 197.0 million,
or 18% of the total. The principal factor contributing to
reduced sales was the slowdown in sales of flexible pipe
following the capsizing of the P-36 platform in Brazilian
waters. In addition, the decommissioning of Coflexips
vessel Flexservice 1 in December 2000 contributed to a
decline in revenues from chartering to Petrobras compared to
2000 notwithstanding a consistently high utilization rate of
Sunrise 2000.

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Subsequent to the accident on Petrobras
platform P-36, the timetable for the Roncador contract was
pushed back, and deferring to 2002 revenues originally expected
in 2001. These revenues are principally linked to the
manufacturing and installation of flexible pipe.

Asia Pacific.Coflexip generated sales of
 78,2 million
from Asia Pacific in 2001, or 4% of total group sales (excluding
the Deepwater Division), a decline of 7% from sales in 2000,
which amounted to
 84,4 million,
or 8% of the group total. This decline is due chiefly to the
decreased number of integrated contracts in the region. In 2001,
our principal contracts in Asia Pacific included Legendre
(Woodside), Bongkot (Technip) and Echo Yodel (Woodside).

Rest of the World.Coflexips sales in 2001 from the
Rest of the World amounted to
 363,4 million,
or 19% of the group total. This increase of 31% over sales of
 276,4 million
in 2000, or 26% of the group total, was principally the result
of strong growth of integrated contracts in the Gulf of Mexico
including Banjo/ Seahawk (Williams), Nile (BP) and Typhoon
(Chevron) as well as continued progress in sales of umbilicals
in the Rest of the World. The level of activity in West Africa
also contributed to the increase, notably due to the
Kuito 1C (CABGOC) project in Angola. The group was also
active in the Netherlands with the K1A contract for ELF
Petroland, Q4/P6 for Clyde and Hanze F2A for VEBA Oil and
Gas. Partially offsetting these successes, sales in Canada were
significantly lower than the preceding year reflecting the
substantial contribution of the Terra Nova contract in 2000.



| |                                                                                                           
| | ----------------------------------------------------------------------------------------------------------
| | Coflexip Operating income and Earnings
    Before Interest, Tax, Depreciation and Amortization/
    EBITDA

In 2001, Coflexip had an operating loss of
 51.6 million
compared to operating income of
 108.9 million
in 2000, a significant decrease mainly due to a non-recurring
 142.6 million
goodwill amortization charge from the acquisition of the
Deepwater Division, losses of
 27.3 million
associated with a Deepwater Division project for the
refurbishing of a drilling rig and one time expenses of
approximately
 10.2 million
incurred in relation to the tender offer launched by Technip on
Coflexip in July 2001. Excluding the non-recurring amortization
charge, Coflexips operating income rose 17% to
 91.0 million
in 2001.

Coflexips EBITDA increased 9.2% from
 203.7 million
in 2000 to
 222.5 million
in 2001 as a result of the increased level of activity taken on
with the Deepwater Division acquisition. As a percentage of
revenues, however, EBITDA declined to an EBITDA margin of 11.7%
in 2001 compared to a margin of 19.1% in 2000, largely as a
result of the non-recurring events described in the preceding
paragraph and Deepwater Divisions lower average margins.
The EBITDA of Coflexip excluding the Deepwater Division remained
essentially stable at 18.2% in 2001. Excluding only general
corporate expenses, EBITDA increased 11.3% from
 245.3 million
in 2000 to
 273.1 million
in 2001.



| |                   
| | ------------------
| | Deepwater Division

The Deepwater Division contributed negative
EBITDA of
 0.3 million
in 2001, chiefly as a result of significant cost overruns on a
contract for the repair of a drilling rig resulting in a
 27.3 million
loss. The Deepwater Divisions EBITDA was also negatively
affected by weak demand for manufacturing at its yards in the
United States and the United Kingdom, as well as sales costs
tied to the ramping up of commercial activities in the Gulf of
Mexico. These negative factors were partially compensated by the
strong performance of the Deepwater Divisions engineering
businesses, particularly in FEED contracts and SPAR platform
projects.

EBITDA by Geographic Zone (not including
Deepwater Division EBITDA)

North Sea.Coflexip
generated EBITDA of
 154.1 million
in the North Sea in 2001 (an EBITDA margin of 25%),
 22.5 million
higher than EBITDA of
 131.6 million
in 2000 (an EBITDA margin of 26%). This increase is mainly
explained by EBITDA growth in the Norwegian sector, partially
offset by pressure on EBITDA in the British sector from
competition and bad weather conditions. Operating results in the
North Sea were positively affected by the increased sales
volumes of umbilicals, the improved profitability of the Trait
factory and a high rate of capacity utilization of our
construction vessels.

Brazil.Coflexip
generated EBITDA of
 62.1 million
in Brazil in 2001 (EBITDA margin of 35%), an increase over 2000
EBITDA of
 58.0 million
(EBITDA margin of 29%). The improved EBITDA margin reflects

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the significant increase in sales of flexible
pipe manufactured at the Trait factory compared to 2000. This
improvement was slightly offset by a decline in the volumes of
Brazilian-manufactured flexible pipe sold in 2001 following the
capsizing of Petrobras platform P-36 in March 2001.
Notwithstanding the decommissioning of Flexservice 1 in
December 2000, the high rate of capacity utilization on Sunrise
during 2001 allowed this region to generate increased EBITDA
from charter contracts to Petrobras.


Asia Pacific.The
Asia Pacific region contributed EBITDA of
 19.3 million
(EBITDA margin of 25%) in 2001, a decrease of 16% compared to
EBITDA of
 22.9 million
(EBITDA margin of 27%) in 2000. The decrease in integrated
contracts in this region in 2001 was partially offset by the
favourable outcome of several contract disputes concerning
projects completed in earlier periods. EBITDA in 2000 had
benefited from a
 7.2 million
contribution to EBITDA from a project executed prior to 2000.

Rest of World.Coflexip generated EBITDA of
 40.7 millions
in 2001 from its Rest of the World zone (EBITDA margin of 11%)
up from
 32,8 million
in 2000 (EBITDA margin of 12%). This increase is principally due
to the increased activity on integrated contracts and umbilical
sales in the Gulf of Mexico. The high rate of capacity
utilization of our construction fleet in this zone also
contributed to the improved results in 2001. These positive
factors were partially offset by technical difficulties and
weather-linked delays on two projects in Africa and the
Netherlands.

General corporate expenses increased in 2001 to
 50.6 million
compared to
 41.5 million
in 2000 due to the non-recurring expense of
 10.2 million
related to our exchange offer for Coflexip shares.

Depreciation and amortization expense more than
doubled from
 94.9 million
in 2000 to
 274.1 million
in 2001. This increase resulted principally from the goodwill
amortization charge of
 165.8 million
from the purchase of the Deepwater Division (of which
 142.6 million
constitutes a non-recurring goodwill amortization charge taken
after a re-evaluation of this investment based on estimated
future cash flows).

Excluding amortization of acquisition goodwill,
amortization and depreciation amounted to
 103.7 million
in 2001, compared to
 90.7 million
in 2000. This 14% increase results principally from amortization
and depreciation charges related to the Deepwater
Divisions operations and the first amortization charges
related to CSO Deep Blue of which Coflexip took delivery
in 2001. The 2000 depreciation and amortization included a
charge to reflect the adjusted value of certain assets,
including a charge of
 5.2 million
related to the vessel Flexservice 1 and additional charges of
 6.0 million
related to other industrial assets.

Selling, general and administrative expenses
increased 56.5%, or
 58.9 million,
to
 163.2 million
in 2001, compared with
 104.3 million
in 2000. This increase results principally from the contribution
of the Deepwater Division and
 10.2 million
in non-recurring expenses related to our exchange offer for
Coflexip shares.



| |                                                                                  
| | ---------------------------------------------------------------------------------
| | Coflexip Financial result, non-recurring
    items and equity income of investees

The financial result (net interest income plus
foreign exchange gain/loss) amounted to a net loss of
 10.0 million
in 2001 compared with a net income of
 19.6 million
in 2000.

Interest expense increased by
 21.9 million
from
 11.7 million
in 2000 to
 33.6 million
in 2001, mainly because of the debt Coflexip incurred and
assumed in connection with its acquisition of the Deepwater
Division. Coflexips interest expense benefitted from a
lower interest rate environment.

Interest income amounted to
 22.3 million
in 2001, representing a 27.4% decrease over the
 30.7 million
earned in 2000, resulting principally from decreased cash
balances due to financing activities tied to the purchase of the
Deepwater Division and significant capital investments.
Financial income in 2001 included non-recurring income of
 0.3 million,
compared with
 2.0 million
in 2000 resulting from a debt repurchase below par in Brazil.

Capital gains in 2001 were not significant. In
2000, Coflexip made a capital gain of
 10.4 million
from the sale of the CSO Installer and of
 167.4 million
from the sale of 3,699,788 shares of Cal Dive.

The contribution of equity investments to
Coflexip amounted to
 (0.8) million
in 2001 compared with
 2.7 million
in 2000, which reflects the contribution by Cal Dive during
the first three quarters of 2001.

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| |               
| | --------------
| | Coflexip Taxes

The tax charge for the full year 2001 amounted to
 42.8 million,
on a loss before taxes of
 62.6 million.

The tax rate for 2001 was significantly affected
by charges to goodwill amortization due to acquisitions which
were not tax deductible. Excluding the impact of these charges,
the adjusted effective tax rate amounted to 39.6% in 2001
compared to 27.8% in 2000. The effective tax rate in 2000 also
reflects the depreciation of certain differed United States
taxes.

The effective tax rate for 2000 was favorably
influenced by the imposition of a lower tax rate applicable to
the capital gains obtained from the sale of
CSO Installer and the Caldive shares. Excluding the
influence of these factors, the effective tax rate for 2000 was
33.4%



| |                           
| | --------------------------
| | Coflexip Net Income (Loss)

Coflexip had a net loss for 2001 of
 105.3 million
compared with net income of
 222.7 million
in 2000, a decrease of
 328.0 million.
Excluding the non-recurring charges related to losses associated
with a drilling rig contract
( 19.4 million),
expenses related to our exchange offer for Coflexip shares
( 6.5 million)
and the goodwill amortization related to the purchase of the
Deepwater Division
( 142.6 million),
net income for 2001 would have been
 63.2 million.
Excluding such non-recurring items and goodwill amortization,
net income for 2001 would have been
 91.1 million
compared to net income for 2000 excluding non-recurring items
(capital gains associated with the sale of the
CSO Installer and the Caldive shares) and goodwill
amortization, of
 92.8 million.

Coflexip Results of Operations for the Year
Ended December 31, 2000 Compared to

the Year Ended December 31,
1999




| |                            
| | ---------------------------
| | Coflexip Operating revenues

Net operating revenues of Coflexip increased 4.7%
to
 1,064.6 million
in 2000 compared with
 1,017.0 million
in 1999. This increase reflects increased levels of activity in
Brazil due to the strong recovery of sales to Petrobras of
flexible pipe manufactured in Brazil and in France and to the
favorable impact of the depreciation of the Euro, partly offset
by a decrease of activity in Asia Pacific (mainly due to lower
integrated contracting activity in 2000 compared to 1999, which
had benefited from the contribution of major integrated
contracting projects such as Blackback (Esso), Laminaria/
Corallina (Woodside) and Kingfish (Esso)), the North Sea and the
Rest of the World (activity in West Africa decreased in 2000
compared to the high level achieved in 1999, which had benefited
from the contribution of major integrated contracting projects
such as Kuito 1A/IB (Cabgoc) in Angola and Zafiro Gaslift
(Mobil) in Equatorial Guinea).



| |                                                                                                          
| | ---------------------------------------------------------------------------------------------------------
| | Coflexip Operating income and Earnings
    Before Interest, Tax, Depreciation and
    Amortization/EBITDA

In 2000, operating income decreased 21% from
 136.9 million
in 1999 to
 108.9 million,
mainly due to generally harsher market conditions in all
regions, except in Brazil where market conditions have
significantly improved compared with 1999. The harsher market
conditions in the North Sea resulted partly from growing
competitive pressure on prices in the U.K. sector throughout
2000, as well as from the lower contribution of the Le Trait
plant due to decreased flexible pipe supply sales in the North
Sea (partially compensated in 2000 by a higher utilization level
of Coflexips fleet in the sector combined with the
successful conclusion of various commercial disputes related to
projects executed in previous years). In Asia Pacific, there was
a decline of integrated contracting activity in 2000. Decline in
margins in the Rest of the World are attributed primarily to the
decline of activity in West Africa compared to the high level
achieved in 1999 combined with the lower contribution of the
Le Trait plant due to decreased flexible pipe sales in the
Rest of the World area.

Coflexips EBITDA decreased 8.9% from
 221.8 million
in 1999 to
 203.7 million
in 2000 as a result of the decrease in margins in oil
activities, except in Brazil where activity has significantly
increased compared to 1999. Excluding general corporate
expenses, EBITDA decreased 7% from
 263.5 million
in 1999 to
 245.3 million
in 2000.

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General corporate expenses remained stable in
2000 at
 41.5 million
in 2000 compared to
 41.7 million
in 1999.

Depreciation and amortization expense increased
12%, or
 10.0 million,
from
 84.9 million
in 1999 to
 94.9 million
in 2000. This increase resulted principally from the
non-recurring depreciation charge of
 5.2 million
recorded in 2000 on FlexService 1 equipment by
adjusting their net book value to fair market value. In
addition, an impairment loss of
 6.0 million
was recorded on some industrial assets to reflect estimated fair
value.

Selling, general and administrative expenses
decreased 1%, or
 0.9 million,
to
 104.3 million
in 2000, compared with
 105.2 million
in 1999. This decrease results principally from Coflexips
efforts to decrease such costs, partly offset by the impact of
newly acquired subsidiaries and the depreciation of the Euro
against currencies in which a substantial part of
Coflexips expenses are incurred.



| |                                                                                  
| | ---------------------------------------------------------------------------------
| | Coflexip Financial result, non-recurring
    items and equity income of investees

The financial result (net interest income plus
foreign exchange gain/loss) amounted to a net income of
 19.6 million
in 2000 compared with a net income of
 0.6 million
in 1999.

Interest expense decreased by 35.4% from
 18.1 million
in 1999 to
 11.7 million
in 2000, mainly because Coflexips convertible notes ceased
to bear interest in July 1999, following Stena International
B.V.s decision to convert them into shares combined with
an improved cash position in Brazil throughout 2000 compared to
1999. These favorable elements were partly offset by the
depreciation of the Euro against currencies in which a
substantial part of interest expenses are recorded, combined
with the increased contribution of Seamec, which was
consolidated only from October 1999.

Interest income amounted to
 30.7 million
in 2000, representing a 46.2% increase over the
 21.0 million
earned in 1999, resulting principally from a significant
improvement of Coflexips overall cash position and higher
interest rates in Euro. Financial income in 2000 included
non-recurring income of
 2.0 million,
compared with
 2.8 million
in 1999, resulting from the repayment, at a steep discount, of
certain Brazilian debt. Net foreign exchange gain amounted to
 0.7 million
in 2000 compared with a
 2.4 million
loss recorded in 1999, which was mainly due to the negative
impact of the devaluation of the Brazilian currency in January
1999.

In January 2000, a capital gain of
 10.4 million
was recorded on the sale to a third party of CSO
Installer, a flexible pipe laying vessel. In September
2000, a capital gain of
 167.4 million
was recognized on the sale of all 3,699,788 shares of common
stock of Cal Dive owned by Coflexip at a price of
U.S. $52.625 per share.

The contribution of equity investments to
Coflexip amounted to
 2.7 million
in 2000 compared with
 2.6 million
in 1999 representing the contribution of Cal Dive after
goodwill amortization for the first three quarters of 2000.



| |               
| | --------------
| | Coflexip Taxes

The tax charge for the full year 2000 amounted to
 85.8 million,
representing an effective tax rate of 27.8%. The reduction in
the 2000 tax rate from 36.2% in 1999 results principally from
the favorable impact of capital gains recognized on the sale of
CSO Installer and the Cal Dive shares. In both years,
however, the effective tax rate was adversely affected by the
non-deductible additional depreciation charge resulting from the
revaluation of the Stena Offshore vessels and the non-deductible
amortization of the residual goodwill recorded on the purchase
of Stena Offshore. In addition, the contribution of equity
investments is presented after tax. Excluding the impact of
these items, the adjusted effective tax rate amounted to 33.8%
in 2000.



| |                    
| | -------------------
| | Coflexip Net Income

Net income for 2000 amounted to
 222.7 million
compared with
 89.6 million
in 1999, an increase of
 133.1 million.
Excluding the impact of capital gains recorded on the sale of
the CSO Installer and the Cal Dive shares
( 128.7 million),
net income for 2000 would have been
 83.6 million,
a decline of 7% compared to 1999 net income.

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Technip-Coflexip Cash Flows



| |                      
| | ---------------------
| | 2001 compared to 2000

Cash flow from operating activities.We recorded positive cash flow from
operating activities in 2001 of
 112.0 million,
compared to negative cash flow from operating activities of
 (186.6)
million in 2000.

Operating cash flow before changes in working
capital requirements was
 213.2 million
in 2001, compared to
 116.1 million
in 2000. In 2001, amortization and depreciation of tangible and
intangible assets (including goodwill) totaled
 110.9 million,
compared to
 43.0 million
in 2000. 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 due to the
full consolidation of Coflexip after the business combination,
and to a lesser extent due to increased amortization of goodwill
resulting from acquisitions.

Cash flow from operating activities deducts
income of equity affiliates (net of dividends) from net income,
a deduction of
 7.5 million
in 2001 compared to a deduction of
 61.1 million
in 2000. The decrease in 2001 is almost entirely due to the
reduced net earnings of Coflexip during the first three quarters
of 2001 (the period for which we accounted for Coflexip using
the equity method) compared to the prior year, where earnings
benefited from a one-time gain upon sale of Coflexips
interest in CalDive. Cash flow from operating activities also
deducts gain on disposal of fixed and financial assets, which
was
 2.8 million
in 2001, compared to
 82.4 million
in 2000. The principal source of gain upon disposal in 2000 was
our sale of our interest in Cogema.

Changes in working capital requirements had a
negative impact of
 (101.2)
million in 2001 compared to a negative impact of
 (302.7) million
in 2000.

Cash flow from investing activities.Net cash used in investing activities
was
 660.3 million
in 2001, compared to
 419.8 million
in 2000. 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
 702.2 million
in 2000. 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
 40 million)
in the context of the business combination.

Proceeds from the disposal of fixed assets and
investments amounted to
 213.8 million
in 2001 compared to
 176.3 million
in 2000. The principle 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
 232.8 million
in 2001 and
 42.8 million
in 2000. These amounts 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 provided by financing
activities totaled
 763.4 million
in 2001 compared to
 126.0 million
used in financing activities in 2000. This change mainly
resulted from our financing of the purchase of 5,000,000
Coflexip shares in the business combination through a credit
facility initially drawn in the amount of
 1,030 million.
At December 31, 2001, the amount drawn under this facility
was
 944 million.

Other cash used in financing activities resulted
from our payment of a dividend in the aggregate amount of
 50.9 million
based on 2000 operating results.



| |                      
| | ---------------------
| | 2000 compared to 1999

Cash flow from operating activities.We recorded negative cash flow from
operating activities in 2000 of
 186.6 million,
compared to positive cash flow from operating activities of
 207.7 million
in 1999.

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Operating cash flow before changes in working
capital requirements was
 116.1 million
in 2000, compared to
 148.6 million
in 1999. In 2000, amortization and depreciation totaled
 43.0 million,
compared to
 31.8 million
in 1999. The increase is mainly due to the additional goodwill
amortization recorded from our acquisition of Coflexip in April
2000.

Income of equity affiliates of
 61.1 million
was deducted from net income in 2000 compared to a deduction of
 0.8 million
in 1999. The increase in 2000 is almost entirely due to our
interest acquired in Coflexip which accounted for
 60.0 million
(including
 39.0 million
of non-operating revenues) in 2000. The gain on disposal of
fixed assets was
 82.4 million
in 2000, compared to
 5.0 million
in 1999. The increase in this item in 2000 was mainly related to
our sale of Cogema shares.

Changes in working capital requirements had a
negative impact of
 302.7 million
in 2000 compared to a positive impact of
 59.1 million
in 1999. This change corresponded to the reversal of current
provisions for
 124.5 million
in 2000, due to restructurings in our subsidiaries KTI and MDEU
and the end of different contracts acquired in the beginning of
1999 from Mannesmann in the same subsidiaries compared to
 3.8 million
in 1999. The working capital requirement change was also
impacted by the increase in contracts in progress (net of
progress payments on contracts) of
 224.8 million,
principally as a result of extra costs on contracts in Venezuela
due to social unrest, difficult contracts in our subsidiaries
KTI and MDEU, and to larger cash positions on several contracts
due to favorable terms of payment in 1999, compared to the
relatively stable position (positive cash flow of
 24.8 million)
in 1999.

Cash flow from investing activities.Net cash used in investing activities
was
 419.8 million
in 2000, compared to
 23.2 million
in 1999. Total capital expenditures on intangible assets,
property, plant and equipment, and cash paid for acquired
businesses were
 702.2 million
in 2000, compared to
 109.8 million
in 1999. The significant items in 2000 were the purchase of a
29.7% interest in Coflexip for
 659.7 million
and
 21.7 million
for a 50% interest in Krebs-Speichim. In addition, in 2000 we
received a reimbursement of
 63.3 million
from Mannesmann on the purchase price from the acquisition of
KTI/MDEU as a result of an arbitration decision.

Proceeds from disposal of fixed assets and
investments amounted to
 176.3 million
in 2000 compared to
 9.9 million
in 1999. The principle contribution in 2000 was the sale of our
3.2% interest in Cogema for
 151.6 million.

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
 42.8 million
in 2000 and
 140.0 million
in 1999. These amounts represented the cash balances acquired on
the acquisition of Krebs Speichim in 2000 and KTI/MDEU in 1999.

Cash flow from financing activities.Net cash provided by financing
activities totaled
 126.0 million
in 2000 compared to
 64.9 million
used in financing activities in 1999. This change mainly
resulted from an increase in short-term debt of
 190.0 million
in 2000, compared to
 16.6 million
in 1999 in order to finance part of the negative cash flow from
operating activities.

Other cash used in financing activities resulted
from the repurchase of our own shares for
 21.5 million
in 2000, compared to
 20.2 million
in 1999 and from dividends paid of
 45.9 million
in 2000 compared to
 37.8 million
in 1999. Additionally, in 1999, a capital decrease of
 19.7 million
occurred. No capital decrease occurred in 2000 while we received
cash flows from capital increases of
 22.3 million
in 2000, compared to
 12.5 million
in 1999.



| |                  
| | -----------------
| | Intangible Assets

At December 31, 2001, our net intangible
assets amounted to
 2,713.4 million.
They consisted principally of
 2,584.9 million
in goodwill resulting from acquisitions, of which
 2,435.8 million
result from our acquisition of Coflexip. Our other net
intangible assets amounted to
 128.5 million
as of the same date, and chiefly comprise our patents and
trademarks, as well as our e-procurement platform. At
December 31, 2000, our net intangible assets amounted to
 591.9 million,
compared to
 154.8 million
at the preceding year end, the difference being primarily
attributable to goodwill resulting from our initial minority
investment in Coflexip.

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TECHNIP-COFLEXIP LIQUIDITY AND CAPITAL
RESOURCES

We estimate capital expenditures for our fiscal
year 2002 will approximate
 140 million.
Our budgeted investments will be principally
( 120 million)
in the Offshore Segment.

We define our working capital requirement as the
sum of the following: deferred bid costs (net),
inventories, contracts-in-progress,
advances to suppliers, accounts and notes
receivables (net), retirement indemnities, and
other current assets (net); less the sum of
accrued liabilities (except the non-current
portion), progress payments on contracts,
accounts and notes payable and other
creditors. Our definition of working capital requirement
may not be comparable to the definition of working capital
requirement employed by other companies.

Our working capital requirement at
December 31, 2001 was
 (695.7) million,
compared with
 (648.0) at
December 31, 2000, and
 (830.9) million
at December 31, 1999. The increase in working capital from
1999 to 2001 was primarily due to increased overall activity
levels and resulting operating cash flows. Our capital
expenditures and cash paid for acquired businesses for 2001 were
 1,106.9 million,
compared to
 702.2 million
in 2000, and
 109.8 million
in 1999. The increase in 2001 was primarily due to the cash
payment to Coflexip shareholders in the tender offer. Net cash
flow from operating activities in 2001 was
 132.0 million
compared to
 (186.6)
million used by operating activities in 2000 and
 207.7 million
provided in 1999. See  Cash Flows above.
In recent years, our cash flow before changes in working capital
requirements has been substantially positive and has generally
provided us the ability to fund growth internally. Our cash and
cash equivalents increased to
 763.4 million
at the end of 2001 from
 563.0 million
at the end of 2000. See  Technip-Coflexip Cash
Flow, above. Our cash on 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
 6,313.6 million
at December 31, 2001 from
 4,718.0 million
at December 31, 2000.

Contracts-in-progress are valued at cost and
include mainly turnkey or similar contracts. These contracts are
funded by partial payments invoiced to the customers. At
December 31, 2001, progress payments received on ongoing
projects amounted to
 6,472.5 million
compared to
 4,896.1 million
at December 31, 2000.

Our inventories and deferred bid costs at
December 31, 2001 amounted to
 111.9 million
compared to
 7.1 million
at December 31, 2000 and
 4.6 million
at December 31, 1999. The increase in 2001 reflects the
inventory contribution of Coflexip
( 102.9 million)
notably with respect to its flexible piping and other
manufacturing activities.

Our total provisions amounted to
 337.6 million
at December 31, 2001,
 233.1 million
at December 31, 2000 and
 269.8 million
at December 31, 1999, and provide coverage for contract
risks, risks associated with litigation, pension costs and
general business risks. We have unused multicurrency credit
lines of approximately
 350 million
( 180 million
at December 31, 2001) at the reference rate for the drawn
currency plus 0.25%. We believe that these, together with cash
on hand and marketable securities, provide us with adequate
operating liquidity.

Shareholders equity at December 31,
2001, before incorporation of the profit for the year was
 2,214.2 million,
compared to
 766.4 million
at December 31, 2000. In total, shareholders equity
finances our fixed assets and provides a sound financial basis
for the group.

At December 31, 2001, non-current assets
amounted to
 3,806.9 million.
Our fixed assets amounted to
 982.3 million
at this date and consisted principally of our construction fleet
( 499.7 million)
and property used for office space and production. See
Item 4. Information about
Technip-Coflexip  Property, Plant and Equipment.

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, and bore an

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average rate of interest of approximately 4.3% in
2001. An additional
 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
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.


At December 31, 2000 our total financial
debt amounted to
 196.0 million,
of which the non-current portion of our long-term debt totaled
 4.8 million.
At December 31, 1999 our total financial debt amounted to
 21.8 million,
of which the non-current portion of our long-term debt totaled
 6.8 million.
At both dates, substantially all of our financial debt was
denominated in euro or euro-zone currencies.

Our financial debt at December 31, 2001
reflects significant new financial debt that we incurred in
connection with the Coflexip exchange offer and the ISIS
exchange offer and an additional credit facility of
 235 million.
Subsequent to the end of 2001, we reimbursed
 793.5 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. The exchangeable/ convertible
bonds are in a principal amount of
 793.5 million
with a 1% coupon and a 3.25% yield to maturity on
January 1, 2007 assuming no conversion or exchange. For
additional information regarding these bonds please see
Note 22(a) to our consolidated financial statements
included at Item 18 of this report and the
documentation relating to the bonds filed as Exhibit 10.1
to this report. Our financial debt at December 31, 2001,
also reflects the consolidation of approximately
 460.3 million
in financial debt carried on the balance sheets of Coflexip and
the Deepwater Division.

A review of our debt and equity should also
consider contractual obligations and commitments other than
those reflected directly on our balance sheet. These amounts
together with our balance sheet debt are summarized as of
December 31, 2001, in the table below.

|                        |  |                 |         |                 |  |           |       |            |  |  |       |  |  |  |       | 
|----------------------- |  | --------------- | ------- | --------------- |  | --------- | ----- | ---------- |  |  | ----- |  |  |  | ----- | 
|                        |  |                 |         |                
|                        |  |                 |         | Payments due in
|                        |  | Balance as of   |         |                
|Contractual obligations |  | year end 2001   |         | 2002            |  | 2003-2005 |       | After 2005
|                        |  |                 |         |                 |  |           |       |           
|                        |  |                
|                        |  | (in  millions)
|Short Term Debt         |  |                 | 456.7   |                 |  |           | 456.7 |            |  |  | N/A   |  |  |  | N/A   | 
|Long Term Debt          |  |                 | 1,182.2 |                 |  |           |      |            |  |  | 596.4 |  |  |  | 585.8 | 
|Operating Leases        |  |                 | 224.0   |                 |  |           | 44.4  |            |  |  | 99.3  |  |  |  | 80.3  | 
|Capital Leases          |  |                 | 6.6     |                 |  |           | 1.8   |            |  |  | 4.8   |  |  |  |      | 

|                                |  |               |         | 
|------------------------------- |  | ------------- | ------- | 
|                                |  | Balance as of
|Other Commitments               |  | year end 2001
|                                |  |              
|Interest Swap                   |  |               | 122.0   | 
|Foreign Exchange Contracts      |  |               | 926.8   | 
|Guarantees related to contracts |  |               | 1,558.1 | 
|Parent guarantees to clients    |  |               | 5,507.0 | 

At the same date, performance guarantees that we
received from our suppliers and subcontractors in relation to
contracts in progress amounted to
474.0 million.

Guarantees related to contracts

Guarantees related to contracts are mainly made
up of performance bonds, which 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 reminder 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.

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Parent guarantees to clients

Parent guarantees are given in the normal course
of the Groups businesses by Technip-Coflexip Holding or
Coflexip SA 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 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 about
Technip-Coflexip  Geographical and Segment Breakdown
of Not Sales and Backlog  Special Geographic
Considerations.

106



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Item 6.     Directors, Senior
Management and Employees



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

The aggregate amount of compensation that we paid
to members of our supervisory and management boards, as a group
(16 persons in all as of December 31, 2001) for
services in all capacities from the adoption of these bodies on
December 13 through December 31, 2001 was
approximately
 65 thousand.
Part of this amount was in the form of performance-related
bonuses paid to our senior management, based on the level of
achievement specific targets. In addition, on March 31,
2002 members of our management boards had stock options giving
them the right to subscribe to new shares or to purchase
existing shares for 112,000. No jetons de
présence (directors fees) were granted to
the members of our supervisory board for 2001. The compensation
of our officers and key personnel is proposed by the
compensation committee of our supervisory board.

The following table sets forth the total amounts
of compensation paid by us to our board of directors for fiscal
year 2001 through December 13, 2001 when we revised our
corporate structure:

|                                                   |  |                        |           | 
|-------------------------------------------------- |  | ---------------------- | --------- | 
|Members of the Board of Directors                  |  | Amount of Compensation
|                                                   |  |                       
|Daniel Valot                                       |  |                        |  713,330 | 
|Gaz de France represented by Jacques Deyirmendjian |  |                        |  13,720  | 
|ISIS represented by Claude Mandil                  |  |                        |  13,720  | 
|Pierre Vaillaud                                    |  |                        |  13,720  | 
|Olivier Barbaroux                                  |  |                        |  13,720  | 
|Philippe Jeunet                                    |  |                        |  13,720  | 
|Miguel Caparros                                    |  |                        |  13,720  | 
|Jean-Pierre Lamoure                                |  |                        |  13,720  | 
|Bruno Weymuller                                    |  |                        |  13,720  | 
|Christophe de Margerie                             |  |                        |  13,720  | 
|Charles Prévot                                     |  |                        |  13,720  | 

The following table sets forth the total amounts
of compensation paid by us to our management board from
December 13, 2001 to the end of fiscal year 2001:

|                                |  |                        |          | 
|------------------------------- |  | ---------------------- | -------- | 
|Members of the Management Board |  | Amount of Compensation
|                                |  |                       
|D. Valot                        |  |                        |  19,188 | 
|T. Ehret                        |  |                        |  13,649 | 
|D. Burlin                       |  |                        |  13,080 | 
|J. Deseilligny                  |  |                        |  11,247 | 
|C. Giraut                       |  |                        |  7,397  | 



| |                
| | ---------------
| | Share ownership

As of April 1, 2002, no supervisory or
management board member, 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 supervisory and
management boards, as a group, representing 15 persons as
of April 1, 2002 is 31,544 Technip-Coflexip shares.



| |        
| | -------
| | Options

As of March 31, 2002, a total of
609,678 options to purchase new or existing shares were
outstanding (609,678 at December 31, 2001), of which
112,000 were held by members of our management boards with the
remainder held by our employees or executives. No member of our
supervisory board currently holds options on our shares. None of
the individual members of our management or supervisory boards
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.

107



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##### Table of Contents



The following table sets out certain information
relating to the various option plans as of December 31,
2001.

|                                                                                 |  |                |                 |                |  |              |               |              |  |          |               |  |  |  |               |     |  |  |               |    
|-------------------------------------------------------------------------------- |  | -------------- | --------------- | -------------- |  | ------------ | ------------- | ------------ |  | -------- | ------------- |  |  |  | ------------- | --- |  |  | ------------- | ---
|                                                                                 |  |                |                 |               
|                                                                                 |  | 1996/1998 Plan |                 | 1999/2001 Plan
|                                                                                 |  |                |                 |               
|                                                                                 |  |                |                 |                |  |             
|                                                                                 |  | 1997 tranche   |                 | 1998 tranche   |  | 1999 tranche |               | 2000 tranche
|                                                                                 |  |                |                 |                |  |              |               |             
|                                                                                 |  | Subscription   |                 | Purchase       |  | Purchase     |               | Subscription |  | Purchase
|                                                                                 |  | options        |                 | options        |  | options      |               | options      |  | options 
|                                                                                 |  |                |                 |                |  |              |               |              |  |         
|Date of meeting                                                                  |  |                | May 16, 1995    |                |  |              | Apr. 30, 1998 |              |  |          | Apr. 30, 1999 |  |  |  | Apr. 28, 2000 |     |  |  | Apr. 28, 2000 |    
|Date of Board of Directors                                                       |  |                | March 13, 1997  |                |  |              | Apr. 30, 1998 |              |  |          | Apr. 30, 1999 |  |  |  | Dec. 14, 2000 |     |  |  | Dec. 14, 2000 |    
|Number of options authorized(2)                                                  |  |                | 1.1% of capital |                |  |              | 1% of capital |              |  |          | 2% of capital |  |  |  | 1% of capital |     |  |  | 1% of capital |    
|Number of options allocated                                                      |  |                | 178,973         |                |  |              | 138,711       |              |  |          | 315,520       |  |  |  | 493,028       | (1) |  |  | 139,576       | (1)
|Total number of shares available for
    subscription/purchase(3):               |  |                | 173,173         |                |  |              | 133,511       |              |  |          | 307,620       |  |  |  | 489,828       |     |  |  | 139,576       |    
|Of which: Number of shares available to
    directors for subscription/ purchase |  |                | 44,000          |                |  |              | 40,500        |              |  |          | 94,700        |  |  |  | 120,800       | (1) |  |  | 120,800       | (1)
|Of which: Number of directors concerned                                          |  |                | 14              |                |  |              | 14            |              |  |          | 16            |  |  |  | 17            |     |  |  | 17            |    
|Vesting date for exercise of options(4)                                          |  |                | Sept. 14, 1999  |                |  |              | May 1, 2001   |              |  |          | May 1, 2002   |  |  |  | Dec. 15, 2003 |     |  |  | Dec. 15, 2003 |    
|Expiration date(5)(6)                                                            |  |                | March 14, 2002  |                |  |              | Apr. 30 2003  |              |  |          | Apr. 30, 2004 |  |  |  | Dec. 14, 2008 |     |  |  | Dec. 14, 2008 |    
|Subscription/ purchase price per share                                           |  |                |  86.74         |                |  |              |  106.92      |              |  |          |  95.94       |  |  |  |  143.24      |     |  |  |  143.24      |    
|Number of shares subscribed/ purchased at 12/31/01                               |  |                | 106,520         |                |  |              | 36,511        |              |  |          | 23,000        |  |  |  | 0             |     |  |  | 0             |    
|Shares remaining available for subscription/
    exercise at 12/31/01            |  |                | 31,650          |                |  |              | 107,000       |              |  |          | 284,620       |  |  |  | 489,828       |     |  |  | 139,576       |    
|Number of holders per tranche                                                    |  |                | 167             |                |  |              | 160           |              |  |          | 250           |  |  |  | 1,100         | (7) |  |  | 1,100         | (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-Coflexip. 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 5 or 8 years after the grant.      
|   
|(7) | This number includes holders of share
    subscription and share purchase options for tranche 2000 of
    the 1999-2001 Plan.                                                                                                                                                                                                                                                                                                  

Company Savings
Plan.Our Mixed Shareholders
Meeting held on August 24, 2001, granted our management the
authorization to issue an additional 1% of share capital in one
or several steps, and our management has announced its intention
to proceed under this authorization with an offer of shares
reserved for our employees, including employees of our
subsidiaries, in France and elsewhere. These shares are to be
paid solely with cash. Our employees may purchase these shares
solely through our statutory company savings plan.

Directors and Officers

Technip-Coflexip is organized under French law as
a stock corporation (société anonyme) with a
management board (directoire) and a supervisory board
(conseil de surveillance). We adopted our current
two-tier board structure at a mixed Shareholders Meeting
convened on December 13, 2001 following the closing of the
business combination, in execution of an amendment to our
by-laws. The two boards are separate and no individual may
simultaneously serve as a member of both.

Under French law, our management board has
management responsibility for Technip-Coflexip and broad
authority to take actions in our name, within the scope of our
corporate purposes and subject to the authority expressly
reserved by law or our by-laws to the shareholders and the
supervisory board.

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| |                     
| | --------------------
| | Our Management Board

Our management board the Directoire
currently comprises four members. The members, chairman and vice
chairman of the management board are appointed by our
supervisory board. The term of office of the members is
four years.

Meetings of the management board may take place
by personal attendance in France or abroad or by video
conference or conference call. Meetings shall be held
approximately every two weeks. Decisions are required to be
taken by consensus, or in the absence of agreement, by a simple
majority of the members.

The management board has broad power to manage
our business and to act in our name, except for those powers
that are specifically granted to the supervisory board or to the
shareholders by law or our by-laws. The management board will be
responsible for deciding general policy matters and determining
our overall business and financial strategy.

The chairman of our management board oversees our
principal corporate functions, notably finance and audit, human
resources, communications, group strategy, information systems,
legal services, global procurement and our quality, health,
safety and environmental policies.

As of March 31, 2002, the members of our
management board are:

|                          |  |                                                                                 |  |             |      |                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------------------------- |  | ------------------------------------------------------------------------------- |  | ----------- | ---- | ----------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                          |  |                                                                                 |  | Initial     |      |                  
|Name, Age, Citizenship(1) |  | Current Responsibility                                                          |  | Appointment |      | Outside Positions
|                          |  |                                                                                 |  |             |      |                  
|Daniel Valot (57)         |  | Chairman of the
    Management Board                                            |  |             | 2001 |                   |  | Chairman of Technip Far East, Chairman of
    Technip Americas Corp., Chairman of the Supervisory Board of
    Technip Germany, Chairman of the Board of Directors of Technip
    Italy, Permanent representative of Techip-Coflexip on the Board
    of Technip France, Director of Coflexip, Director of Compagnie
    Générale de Géophysique, Director of Petrofina,
    Director of lIFP                                                                                                                                                                        
|                         
|Thomas Ehret (50)         |  | Vice-Chairman of the
    Management Board;
    President of the Offshore Branch |  |             | 2001 |                   |  | Director of Coflexip, of Coflexip Offshore Norge
    Inc., of Coflexip Maritime Inc., of CSO Aker Rauma Offshore Oy,
    of Coflexip Stena Offshore (Nigeria) Ltd., of Coflexip Stena
    Offshore Asia Pacific Pty Ltd, of Coflexip Stena Offshore
    Contracting BV, of Coflexip Stena Offshore Holdings Ltd, of
    Coflexip Stena Offshore Inc., of Coflexip Stena Offshore Pty
    Ltd, of Coflexip UK Stena Offshore Holdings Ltd. Chairman of
    Coflexip Stena Offshore International, of Perry Slingsby Systems
    Inc. Chairman of CSO Aker Maritime Inc.

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|                          |  |                                                                                               |  |             |      |                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------------------------- |  | --------------------------------------------------------------------------------------------- |  | ----------- | ---- | ----------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                          |  |                                                                                               |  | Initial     |      |                  
|Name, Age, Citizenship(1) |  | Current Responsibility                                                                        |  | Appointment |      | Outside Positions
|                          |  |                                                                                               |  |             |      |                  
|Daniel Burlin (59)        |  | President of the Onshore/Downstream Branch                                                    |  |             | 2001 |                   |  | Consultant to the Banque de France, Director of
    Coflexip, of Isis, of Technip Eurocash GEIE, of Technip France,
    of Promotora Dhinesa, of Inversiones 3959, of Technip Americas
    Corp, of Technip CIS, of Technip Italy, of Technip UK Ltd, of
    Technip Upstream Houston, of Technip USA Corp., Representative
    of Technip- Coflexip on the Board of Technip TPS, Member of the
    Management Committee of Ipedex, Manager of TTIL SNC, of TTLG,
    Chairman of Technip Holding Benelux BV, Chairman of COFRI, of
    Abay Engineering, of Technip Capital, of Inversiones Dinsa, of
    Technip International, of Technip Overseas
|                         
|Jean Deseilligny (58)     |  | Senior Executive Vice President, Business and
    Operations of the Onshore/Downstream Branch |  |             | 2001 |                   |  | Manager of Consorcio Contrina SNC, General
    Manager of Technip Middle East FZC, Chairman of Technip Upstream
    Houston, of Technip Geoproduction (M), of Technip Geoproduction
    Norge, Vice-Chairman of Technip Americas Corp., Member of the
    Management Committee of Ipedex, Director of Technip France, of
    Coflexip, of DIT-Harris, of Techip Italy, of Technip
    International, of Technip KT India, of Technip Overseas, of
    Technip Saudi Arabia Ltd, of TPG (UK) Ltd, of Technip
    Geoproduction Nigeria Ltd, Representative of Technip-Coflexip on
    the boards of Techswims and TSKJ-Serviços de Engenharia Lda.    



---



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



| |                                        
| | ---------------------------------------
| | Biographies of our Management
    Board

Daniel Valot.Mr. Valot is Chairman of the Management Board of
Technip-Coflexip. In addition to being the Chief Executive
Officer of Technip-Coflexip, he is the Chairman of Technip
Italy, Technip Americas, Technip Germany and Technip Far East
(Malaysia) and serves on the boards of directors of Technip
France Coflexip, CGG, Petrofina 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).

110



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Thomas M. Ehret.Mr. Ehret, Vice-Chairman of the
Management Board of Technip-Coflexip and President of the
Offshore Branch. Prior to the combination of Technip and
Coflexip, Mr. Ehret was Chief Operating Officer for
Coflexip since February 1998, and Director and Chief Operating
Officer since 1995. Prior to joining Coflexip in 1995,
Mr. Ehret has served as Director and Chief Executive
Officer for Stena Offshore N.V. Group since 1988, where he was a
member of the Stena Group Executive Committee and also served as
Chairman of Stena Drilling and Director of Safe Partners AB and
Northern Marine Management. Prior to 1988, Mr. Ehret held
several senior management positions at Cornex Houlder Ltd., an
engineering and diving company operating in the United Kingdom,
and FMC Europe S.A. and EMC Corporation (USA), a petroleum
equipment group. Mr. Ehret holds a Masters in Sciences
degree in Mechanical Engineering from Arts et
Métiers in Paris and is a member of the Young President
Organization.

Daniel Burlin.Mr. Burlin is the President of the Onshore/Downstream
Branch. He is also a member of Technip-Coflexips Executive
Committee and a former head of our finance department. Prior to
joining Technip in 1991, he worked as a controller at
Saint-Gobain, then at Schlumberger before joining Aerospatiale,
where he successively held the following positions: Financial
Director of the Western Plants of Airplanes Division, Director
of the Finance Department of the Aerospatiale Group in Paris
(1986), then Secretary General of Euromissile (created by
Aerospatiale and Daimler Benz to specialize in the field of
tactical missiles). Mr. Burlin is a graduate of the
Institut dEtudes Supérieures des Techniques
dOrganisation (Institute of Advanced Organizational
Studies) and holds an engineering degree from the
Conservatoire National des Arts et Métiers (the
National Conservatory of Industrial Arts and Crafts) and a
doctorate in management from the University of Paris (Dauphine).

Jean Pierrot
Deseilligny.Mr. Pierrot
Deseilligny is the Senior Executive Vice President, Business and
Operations of the Onshore/Downstream Branch. He was formerly the
Chief Executive Officer of the Middle East and Southwest Asian
operations. Since joining Technip in 1969, his other positions
have included Vice President and Director of Sales (1981-1985),
Vice President of Management and Industry (1986-1989), Operating
Vice President of the International Division and Deputy Director
of Sales (1989-1992) and Chief Executive Officer of the Middle
East Operations (1998-1999). Mr. Pierrot Deseilligny is a
graduate of the Institut dEtudes Politiques de
Paris (Paris Institute of Political Science) and holds a
degree in law.



| |                      
| | ---------------------
| | Our Supervisory Board

Our supervisory board comprises 12 members
appointed by our shareholders. The members are appointed for a
term of four years, which shall terminate at the end of the
ordinary general meeting of our shareholders held in the year
during which the period expires. Pursuant to our bylaws
(statuts), each member of our supervisory board must hold
at least one Technip-Coflexip share.

The supervisory board supervises the management
board and appoints its members including its chairman. Only our
shareholders acting at a general meeting of shareholders may
remove a member of the management board. The supervisory board
fixes the remuneration of the members of the management board.
The supervisory board appoints its own chairman.

Our supervisory board exercises ongoing
supervision of the management of Technip-Coflexip by the
management board and must present its remarks on our financial
accounts and on our management report to the annual general
meeting of our shareholders. In addition to transactions for
which French law requires supervisory board approval, our
by-laws require that our management board notify the supervisory
board for the purposes of debate of the groups annual
investment budget, any major acquisitions (including the related
financing) or disposals, the overall group strategy as presented
by the management board and, at the initiative of the chairman
of the management board, any non ordinary-course operation that
is likely to expose the group to significant risks.

Meetings of the supervisory board are held at
least four times per year. Meetings may be convened by the
supervisory board chairman on his own initiative, at the request
of one third of the members of the supervisory board or at the
request of the chairman or any member of the management board.
Meetings of our supervisory board may take place by personal
attendance or by any means of telecommunications permitted by
law, notably by video conference or conference call.

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Decisions must be taken by a simple majority of
all members entitled to vote whether or not present or
represented without a deciding vote of the chairman. In the case
of a non-majority vote, however, the supervisory boards
chairman holds the deciding vote. Voting by proxy
is permitted.

The majority of the 12 members of our
supervisory board are independent directors under French stock
market regulations, and three are of a nationality other than
French. As indicated in the table below, we have nominated one
member of our supervisory board at the recommendation of each of
TotalFinaElf, Gaz de France and IFP.

As of March 31, 2002, the members of our
supervisory board are:

|                            |                  |             |      |                   |  |                   |               |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                    |                        
|--------------------------- | ---------------- | ----------- | ---- | ----------------- |  | ----------------- | ------------- |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -----------------------
|                            |                  | Initial     |      | Responsibility on |  |                  
|Name, Age, Citizenship(1)   |                  | Appointment |      | Supervisory Board |  | Outside Positions
|                            |                  |             |      |                   |  |                  
|Pierre-Marie Valentin (64)  |                  |             | 2001 |                   |  |                   | Chairman      |  |  | None                                                                                                                                                                                                                                                                                                                                                                                                              
|                           
|Michel Levêque (68)         |                  |             | 2001 |                   |  |                   | Vice-Chairman |  |  | None                                                                                                                                                                                                                                                                                                                                                                                                              
|                           
|Roger Cairns (58)           |                  |             | 2001 |                   |  |                   | Member        |  |  | Chairman and Chief Executive Officer of                                                                                                                                                                                                                                                                                                                                                                           
|                            | (United Kingdom) |             |      |                   |  |                   |               |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                    | Cedar International Plc
|                           
|Miguel Caparros (57)        |                  |             | 2001 |                   |  |                   | Member        |  |  | None                                                                                                                                                                                                                                                                                                                                                                                                              
|                           
|Jean-Pierre Capron (58)     |                  |             | 2001 |                   |  |                   | Member        |  |  | Chairman of the Management Board of Fives-Lille,
    Chairman and Chief Executive Officer of D.M.S., F.C.B., and
    F.C.B. Ciment, Chairman of the Board of Directors of Stein
    Atkinson Stordy Ltd., Director of Le Carbone Lorraine,
    Coparex International, Coflexip, Nordon, Nordon Industries,
    Pierre Guerin SA, EGCI Pillard.                                                                    
|                           
|Jacques Deyirmendjian* (57) |                  |             | 2001 |                   |  |                   | Member        |  |  | Senior Executive Vice President of Gaz de France,
    Director of Cofatec, Cogac, GSO, GDF International, and Gaz
    Inter Président de AFG (Association), Vice-Chairman of the
    Supervisory Board of F.R.A. GAZ                                                                                                                                                                                              
|                           
|Jean-Pierre Lamoure (52)    |                  |             | 2001 |                   |  |                   | Member        |  |  | Director of Institut Français du
    Pétrole, Lapeyre, and subsidiaries of the Soletanche Group;
    President of the Board of Directors of Soletanche SA,
    Soletanche-Bachy, Chairman of the Supervisory Board of Atlantic
    SFDT SA, Member of the Management Board of SEDECO SA, Director
    and Vice Chairman of the National Federation of Public Works
    (Fédération Nationale des Travaux publics).
|                           
|Claude Mandil** (60)        |                  |             | 2001 |                   |  |                   | Member        |  |  | Chairman of Institut Français du
    Pétrole.                                                                                                                                                                                                                                                                                                                                                                     
|                           
|Roger Milgrim (64)          |                  |             | 2001 |                   |  |                   | Member        |  |  | None                                                                                                                                                                                                                                                                                                                                                                                                              
|                            | (United States)  |             |      |                   |  |                   |               |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                    |                        

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|                          |          |             |      |                   |  |                   |        |  |  |                                                                                                                              | 
|------------------------- | -------- | ----------- | ---- | ----------------- |  | ----------------- | ------ |  |  | ---------------------------------------------------------------------------------------------------------------------------- | 
|                          |          | Initial     |      | Responsibility on |  |                  
|Name, Age, Citizenship(1) |          | Appointment |      | Supervisory Board |  | Outside Positions
|                          |          |             |      |                   |  |                  
|Rolf-Erik Rolfsen (61)    |          |             | 2001 |                   |  |                   | Member |  |  | Director of HAG AS (France)                                                                                                 
|                          | (Norway) |             |      |                   |  |                   |        |  |  |                                                                                                                              | 
|Pierre Vaillaud (66)      |          |             | 2001 |                   |  |                   | Member |  |  | Director of TotalFinaElf, and Egis, Member of the
    Supervisory Board of Oddo Pinatton.                                   
|Bruno Weymuller*** (53)   |          |             | 2001 |                   |  |                   | Member |  |  | Executive Vice President, Strategy and Risk
    Assessment of TotalFinaElf, Director of Elf Aquitaine,
    Sanofi-Synthelabo



---



|    |                                                                                  
|--- | ---------------------------------------------------------------------------------
|(1) | Unless noted otherwise, our supervisory board
    members are citizens of France.
|   
|*   | Nominated upon the recommendation of
    Gaz de France.                          
|   
|**  | Nominated upon the recommendation of IFP.                                        
|   
|*** | Nominated upon the recommendation of TotalFinaElf                                



| |                                         
| | ----------------------------------------
| | Biographies of Our Supervisory
    Board

Pierre Marie Valentin.Mr. Valentin is Chairman of the
Supervisory Board of Technip-Coflexip. Mr. Valentin has
been Chairman, President and Chief Executive Officer of Coflexip
since January 1996. Prior to joining Coflexip in 1996,
Mr. Valentin held various positions in the Elf Aquitaine
group from 1964 to 1985, was Chairman and Chief Executive
Officer of Technip from 1985 to 1992 and was Chairman and
Managing Director of United Technologies Carrier Eto from 1992
to 1994. He served in an advisory capacity to the Thomson group
from 1995 to the beginning of 1996.

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 TotalFinaElf, EGIS 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. From 1992 to
1998, Mr. Caparros was an Advisory Director to
Morgan Stanley.

Jean-Pierre Capron.Mr. Capron is currently Chairman
and Chief Executive Officer of Compagnie de Fives-Lille.
Mr. Capron is President of FCB, FCB Ciment and of Stein
Atkinson Stordy Ltd., and director of Coparex International and
La Carbonne Lorraine and member of the Supervisory Board of
Consortium de Réalisation.

Jean-Pierre Lamoure.Mr. Lamoure is the President and Chief Executive Officer of
the Group Solétanche, which he has led since 1989. He also
serves on the Board of Directors of IFP, Lapeyre and different
subsidiaries of the Group Soletanche.

Michel
Lévêque.Mr. Levêque is Vice-Chairman of the Supervisory Board
of Technip-Coflexip. He is also currently Ambassador
of France.

Roger M. Milgrim.Mr. Milgrim is currently a Senior Partner of Paul,
Hastings, Janofsky & Walker LLP and a director of the
Fulbright Association.

Rolf Erik Rolfsen.Mr. Rolfsen is currently a director of UMOE-Mandal AS and
of HAG SA. He is President of the Industrial Foundation
Committee for the Norwegian University of Polytechnic.

Bruno Weymuller.Mr. Weymuller is Executive Vice President of TotalFinaElf,
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 and
Elf Aquitaine.

Claude Mandil.Mr. Mandil is the President and CEO of Institut
Français du Pétrole (IFP). He was Chairman and CEO of
ISIS June 2000 to December 2001 and Delegate Managing Director
of Gaz de France from 1998 to 2000. Prior to these positions,
Mr. Mandil was Director General for Energy and Raw
Materials at

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the Ministry of Industry, Post and
Telecommunications from 1990 to 1998 and simultaneously, from
1996 to 1998, Chairman of the Council of Governors of the
International Energy Agency (IEA). Mr. Mandil, is a
graduate of the Ecole Polytechnique and an
Ingénieur Général au Corps de Mines
(Mining Engineer).


Jacques
Deyirmendjian.Mr. Deyirmendjian
represents Gaz de France where he serves as Managing Director.
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 Vice-President of Gaz de France. In
2000, he was appointed Managing Director, with responsibility
for international affairs and industrial partnerships.
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).



| |                                                
| | -----------------------------------------------
| | Audit, Compensation and Strategy
    Committees

Our supervisory board has established three
committees: the audit committee, the compensation committee and
the strategy committee.

Audit Committee.Our
audit committee is comprised of Messrs. Miguel Caparros,
Roger Milgram, Pierre Marie Valentin (Chair) and Bruno
Weymuller. The audit committee presents its report to our
supervisory board. The audit committee has reviewed our
financial accounts for fiscal year 2001 and presented its
recommendation to the supervisory board to approve the financial
accounts for fiscal year 2001. Our audit committee is
responsible for:



| |   |                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | analysis of our principal internal control
    system, including organization, efficiency and adequacy;                                                                
|
| |  | examining and analyzing the external audit
    reports;                                                                                                                
|
| |  | review of our financial accounts (consolidated
    and non-consolidated) to be presented to our supervisory board;                                                     
|
| |  | review of external communications relating to our
    financial situation; and                                                                                         
|
| |  | review of the Audit Charter at least once a year
    to recommend eventual modifications to our supervisory board in
    conformity with the applicable laws and rules.

Compensation
Committee.Our compensation committee
is comprised of Messrs. Jean-Pierre Capron (Chair) Michel
Leveque, Rolf Erik Rolfson, Pierre Vaillaud and Bruno Weymuller.
The compensation committee presents its report to the
supervisory board. The compensation committee is responsible for
the review of:



| |   |                                                                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | compensation amount and structure for the
    Chairmen of our supervisory and our management boards as well as
    for members of our management board;                                                              
|
| |  | our salary and compensation policies, including
    employee stock option plans and employee shareholding plans;                                                                                                     
|
| |  | the amount and distribution of directors
    fees (jetons de présence) granted to the members of
    our supervisory board; and                                                                                     
|
| |  | recruitment and review of prospective candidates
    for our supervisory board and our management board to facilitate
    nominations and appointments to our boards as well as the
    renewal of board memberships.

Strategy Committee.Our strategy committee is comprised of Messrs. Roger Cains,
Jean-Pierre Capron, Jacques Deyirmendjian, Jean-Pierre Lamoure,
Claude Mandil, Pierre Vaillaud and Pierre Marie Valentin (Chair).

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The strategy committee presents its report to our
supervisory board. The strategy committee is responsible for
reviewing:




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



| |                            
| | ---------------------------
| | Executive Committee (COMEX)

Our executive committee comprises 13 members
appointed by the management board. The Executive
Committees role is to assist the management board in its
decisions. The executive committee serves a forum for the
exchange of information at the level of our main managers and
meets once a month to prepare decisions for the management
board. Patrick Picard acts as secretary to the Group Executive
Committee.

In addition to matters of common interest and in
particular coordination issues among our different Business
Units, the Executive Committee is required to deliberate on the
following matters:



| |   |                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------
| |  | acquisitions and sales of assets or companies;                                                       
|
| |  | strategic pluri-annual programs;                                                                     
|
| |  | commercial and investment budgets;                                                                   
|
| |  | appointment of top staff and line managers;                                                          
|
| |  | major decisions regarding the preparation and
    follow-up of executive committee level contracts;
|
| |  | decisions regarding the pursuit of legal
    proceedings;                                            
|
| |  | salary and incentive policies within the Group;
    and                                              
|
| |  | share subscription plans and/or option plans and
    employee offers.                                

115



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##### Table of Contents



The Members of our executive committee are:

|                              |                  |           |      |                                |  |                                                                                                                                        |                                                                                                  
|----------------------------- | ---------------- | --------- | ---- | ------------------------------ |  | -------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------
|                              |                  | Initially |      |                               
|Name, Age, Citizenship(1)     |                  | Appointed |      | Position with Technip-Coflexip
|                              |                  |           |      |                               
|Daniel Valot (57)             |                  |           | 2001 |                                |  | Chairman and Chief Executive Officer                                                                                                  
|                             
|Thomas Ehret (50)             |                  |           | 2001 |                                |  | Vice Chairman of the Management Board and
    President of the Offshore Branch                                                        
|                             
|Daniel Burlin (59)            |                  |           | 2001 |                                |  | President of the Onshore/Downstream Branch                                                                                            
|                             
|Jean Pierrot Deseilligny (58) |                  |           | 2001 |                                |  | Senior Executive Vice President, Business and
    Operations of the Onshore/Downstream Branch                                         
|                             
|Samson Alev (57)              |                  |           | 2001 |                                |  | Chairman and Chief Executive Officer Technip
    France, Managing Director of the Western Europe and CIS
    Onshore/Downstream Branch
|                             
|David Cassie (45)             |                  |           | 2001 |                                |  | Senior Vice President North Sea, Canada, Caspian
    Region                                                                           
|                              | (United Kingdom) |           |      |                                |  |                                                                                                                                        | Offshore Branch                                                                                  
|                             
|Anne Decressac (44)           |                  |           | 2001 |                                |  | Senior Vice President of Human Resources and
    Communications                                                                       
|                             
|Svein Eggen (51)              |                  |           | 2001 |                                |  | Senior Vice President and Deputy C.E.O. of the
    Atlantic                                                                           
|                              | (Norway)         |           |      |                                |  |                                                                                                                                        | Region Offshore Branch                                                                           
|                             
|Nicola Greco (51)             |                  |           | 2001 |                                |  | Chief Executive Officer and Managing Director of
    Technip                                                                          
|                              | (Italy)          |           |      |                                |  |                                                                                                                                        | Italy, Chief Executive Officer for South and East
    Europe and Africa Onshore/Downstream Branch
|                             
|Dominique Henri (46)          |                  |           | 2001 |                                |  | Chairman and Chief Executive Officer of
    Coflexip SA, as well as Senior Executive Vice-President of
    Strategy                   
|                             
|Leonello Pari (57)            |                  |           | 2001 |                                |  | Senior Vice-President of Global Procurement                                                                                           
|                              | (Italy)          |           |      |                                |  |                                                                                                                                        |                                                                                                  
|                             
|Kevin Wood (46)               |                  |           | 2001 |                                |  | Senior Vice-President of Business Development                                                                                         
|                              | (United Kingdom) |           |      |                                |  |                                                                                                                                        |                                                                                                  
|                             
|Xavier Jacob (60)             |                  |           | 2001 |                                |  | Senior Vice President of Project Management                                                                                           



---



|    |                                                                           
|--- | --------------------------------------------------------------------------
|(1) | Unless noted otherwise, our executive officers
    are citizens of France.



| |                                           
| | ------------------------------------------
| | Biographies of our Executive
    Committee

Anne Decressac.Mrs. Decressac is the Senior Vice President of Human
Resources and Communications and previously head of the
Personnel Division. Prior to joining Technip in 1984,
Mrs. Decressac was responsible for trade union and labor
relations and recruitment and training at Creusot Loire
Enterprises. Mrs. Decressac is a graduate of the Institut
dEtudes Politiques de Paris (Paris Institute of Political
Science).

Samson Alev.Mr. Alev is currently the Chairman and Chief Executive
Officer of Technip France and Chief Executive Officer for
Western Europe and CIS Onshore/Downstream Branch. Since joining
Technip in 1983, he has held progressively more senior
positions, including Vice President of Oil and Gas Processing,
Executive Project Director for the Leuna Refinery Project and
Chief Executive Officer of Western Europe/Russia/CIS. He has
thirty years of experience in engineering and construction for
refining and petrochemical clients. Mr. Alev is a graduate
of the Institut National des Sciences Appliquées (National
Institute for Applied Sciences) where he obtained a graduate
degree in chemical engineering and the Ecole Nationale
Supérieure du Pétrole et des Moteurs (National School
of Petroleum and Motors) where he obtained a graduate degree in
Petroleum and Chemical Engineering.

Nicola Greco.Mr. Greco is Chief Executive Officer and Managing Director
of Technip Italy, a company for which he has worked since 1974.
He is also Chief Executive Officer for the South and East Europe
and Africa Onshore/Downstream Branch. He has held numerous
positions of responsibility, including Start-up Assistance

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##### Table of Contents



Group Leader, Head of Expediting and Inspection,
Head of Public Works and Infrastructure and Deputy General
Manager. He was appointed Managing Director of Technip Italy in
1994 and its Chief Executive Officer in 1995. Mr. Greco
holds a graduate degree in chemical engineering.


David Cassie.Mr. David Cassie is the Senior Executive Vice President of
the North Sea, Canada and Caspian Regions. Mr. Cassie has
over 20 years experience in the offshore oil and gas industry,
and is a Chartered Quantity Surveyor. David Cassie began his
career in 1979 with hook up and commissioning companies
Construction John Brown and Press & Worley Offshore. He
then joined Britoil, before moving to the subsea sector of the
industry with Wharton Williams in 1985. Mr. Cassie joined
Stena Offshore as Commercial Manager where he has undertaken a
number of posts, including Managing Director, for the merged
company Coflexip Stena Offshore. He took his current position in
June 2001. In April 2002 David was appointed a member of the
IMCA Council, the international trade association representing
offshore, marine and underwater engineering companies.

Svein Eggen.Mr. Svein Eggen is the Senior Executive Vice President for
the Atlantic Region. His career began with Aker Maritime ASA in
Norway where he held numerous positions until becoming Managing
Director (1984-88). From 1988-90, he was Executive Vice
President of Aker Offshore A.S., responsible for corporate
staff, finance, strategy and sales. In 1990 he moved to the Aker
A.S. parent company responsible for engineering and fabrication
business. When Aker Maritime was formed in 1996, he became
President & CEO. In June 1997, with Akers
expansion in the United States, Svein moved to Houston, Texas as
President & CEO of Aker, Maritime, Inc. Following the
acquisition of the Deepwater Division of Aker Maritime by
Coflexip Stena Offshore in January 2001, Mr. Eggen became
President & CEO of Aker Maritime, Inc. He became of
member of the Executive Committee of Coflexip Stena Offshore in
January 2001.

Dominique Henri.Mr. Dominique Henri is Senior Vice-President of Strategy
for Technip-Coflexip, as well as Chairman & CEO of
Coflexip SA. He started his career as a civil servant in the
French administration, holding various positions in the oil
industry. From 1991 to 1997, he was Managing Director of Technip
Geoproduction. In 1998 he joined Coflexip Stena Offshore and, in
December of the same year, became Vice-President in charge of
Strategy and Development. Mr. Henri is a graduate from
Ecole Normale Supérieure and belongs to the Corps
des Mines.

Xavier Jacob.Mr. Jacob is the Senior Vice President for Project
Management of Technip-Coflexip. He has acquired over thirty
years of engineering experience since first joining Technip in
1968, including fifteen years in oil refining, gas processing
and petrochemical project management. Prior to his current post,
Mr. Jacob served as Head of Computer Systems and
Organization (1981-1982), Senior Executive Vice President of
Engineering, Procurement, Construction and Information Systems
(1987-1998) and Senior Vice President of Corporate Planning and
Technology (1998-2000). Mr. Jacob is a graduate in
engineering of the Institut de Génie Chimique
(Institute of Chemical Engineering) and holds a masters in
chemical engineering from Purdue University.

Leonello Pari.Mr. Pari is Senior Vice-President of Global Procurement.
During his career with Technip, he has served as Head of the
Construction Subcontracting Department (1985-1988), Head of the
Construction Department (1988-1993) and senior Vice President
for Project Implementation and Construction (1994-1997).
Mr. Pari holds a graduate degree in mechanical engineering.

Kevin Wood.Mr. Kevin Wood is Group Senior Vice President Business
Development. Mr. Wood joined Stena Offshore in 1989 to
establish and manage a Joint Venture shipowning company with an
Asian partner. Subsequently Mr. Wood was the Managing
Director of Stena Offshore and later Coflexip Stena
Offshores Asia Pacific operations. In April 1998, he
joined the executive committee of CSO, where he was Senior Vice
President of CSOs North America, North Sea and Asia
Pacific Operations.

See  Directors and
Officers  Biographies of our Management Board
for detailed biographies of the five members of our executive
committee who are also members of our management board.



| |          
| | ---------
| | Employees

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

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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 March 31, 2002. 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 by-laws. See
Item 10. Additional Information-By-Laws
(Statuts) and Shareholders Meetings and
Voting Rights  Double Voting Rights.

The following table sets forth certain
information regarding the ownership of Technip-Coflexips
outstanding shares and American depositary shares as of
March 31, 2002.

|                   |  |                      |            |             |  |        |        |  |  |  |        | 
|------------------ |  | -------------------- | ---------- | ----------- |  | ------ | ------ |  |  |  | ------ | 
|                   |  |                     
|                   |  | As of March 31, 2002
|                   |  |                     
|                   |  |                      |            | % of        |  | % of  
|                   |  |                      |            | Shares      |  | Voting
|Shareholder        |  | Shares               |            | Outstanding |  | Rights
|                   |  |                      |            |             |  |       
|IFP                |  |                      | 2,102,806  |             |  |        | 8.67%  |  |  |  | 7.9%   | 
|Gaz de France      |  |                      | 1,698,114  |             |  |        | 7.00%  |  |  |  | 12.7%  | 
|TotalFinaElf Group |  |                      | 1,000,100  |             |  |        | 4.12%  |  |  |  | 6.5%   | 
|Employees          |  |                      | 589,986    |             |  |        | 2.43%  |  |  |  | 2.4%   | 
|Other              |  |                      | 18,875,221 |             |  |        | 77.78% |  |  |  | 70.5%  | 
|                   |  |                      |            |             |  |        |        |  |  |  |        | 
|Total              |  |                      | 24,266,227 |             |  |        | 100.0% |  |  |  | 100.0% | 
|                   |  |                      |            |             |  |        |        |  |  |  |        | 

In addition, we hold 2,470,971 Technip-Coflexip
shares directly and indirectly, of which we expect to cancel the
1,847,376 shares held by our subsidiary ISIS following the
proposed merger between us and ISIS.



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

For information on shares held in the United
States, see Item 9. The Offer and Listing 
Price History of Shares.

Related Party Transactions

As set out in the Memorandum of Understanding,
dated July 2, 2001, we entered into an agreement with IFP
and ISIS, in the context of the public exchange offer on ISIS
shares. On November 7, 2001, IFP and ISIS finalized their
commitments pursuant to which ISIS will exchange its
1,436,622 shares of Compagnie Générale de
Géophysique for 511,253 shares of Technip-Coflexip
held by IFP. ISIS and IFP may exercise these
exchange commitments for a period of 12 months as of
October 11, 2002 and October 11, 2003, respectively.
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. Our most
important commercial activities with non-consolidated entities
in 2001 were with Ipedex, a 46%-owned subsidiary which we
reflect on in our accounts using the equity method.
Ipedexs net sales to us or our consolidated subsidiaries
in 2001 amounted to
 17.1 million.

In 1974, our subsidiary Coflexip signed a
licensing contract with IFP, which as a result of the business
combination holds approximately 7.9% of our shares. This
contract stipulates that Coflexip has the right to use certain
IFP technologies and knowhow held by IFP in exchange for the
payment of royalties. This contract does not expire until
Coflexip ceases to manufacture and sell products based on IFP
technology and knowhow. In 2001, royalties to IFP under this
contract amounted to
 2.9 million.

At December 31, 2001, we had no outstanding
loans to directors or senior management.

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##### Table of Contents






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 management board, ratification of this recommendation by
our supervisory board 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 9. The Offer and the Listing 
Description of Our Shares and Share Capital. Our
commitment to the creation of shareholder value includes
specific attention to the amount and regularity of dividend
distributions. With the acquisition of Coflexip in 2001 and the
companys new asset base, (a fleet of vessels,
manufacturing plants and fabrication yards), which will require
a higher level of capital spending, the pay-out ratio of the
Company will be progressively lowered over several years to a
level between the former dividend policy of Technip (which was
34-38%) and that of Coflexip (which was 18-23%).

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 2001, we propose to pay a
dividend of
 3.30 per
share
( 4.95
including the French avoir fiscal on or about
June 28, 2002. 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   |  | Net Income  |      |         
|                               |  |            |      | per ADS    |  |          |      | per Share  |  | before      |      |         
|                               |  |            |      | Including  |  | Dividend |      | Including  |  | Exceptional |      | Pay-    
|                               |  | Dividend   |      | Avoir      |  | per      |      | Avoir      |  | Items per   |      | Out     
|Year to which Dividend Related |  | per ADS(1) |      | fiscal (1) |  | Share    |      | fiscal (1) |  | Share       |      | Ratio(2)
|                               |  |            |      |            |  |          |      |            |  |             |      |         
|                               |  | U.S.$      |      | U.S.$      |  |         |      |           |  |            |      | %       
|1995                           |  |            |     |            |  |          |     |            |  |             | 1.37 |          |  |  | 2.06 |  |  |  | 4.07  |  |  |  | 33.7 | %
|1996                           |  |            |     |            |  |          |     |            |  |             | 1.60 |          |  |  | 2.40 |  |  |  | 4.85  |  |  |  | 33.0 | %
|1997                           |  |            |     |            |  |          |     |            |  |             | 2.21 |          |  |  | 3.32 |  |  |  | 5.60  |  |  |  | 39.5 | %
|1998                           |  |            |     |            |  |          |     |            |  |             | 2.45 |          |  |  | 3.68 |  |  |  | 6.51  |  |  |  | 37.6 | %
|1999                           |  |            |     |            |  |          |     |            |  |             | 3.00 |          |  |  | 4.50 |  |  |  | 10.75 |  |  |  | 27.9 | %
|2000                           |  |            |     |            |  |          |     |            |  |             | 3.30 |          |  |  | 4.95 |  |  |  | 12.85 |  |  |  | 25.7 | %
|2001(3)                        |  |            | 0.74 |            |  |          | 1.10 |            |  |             | 3.30 |          |  |  | 4.95 |  |  |  | 7.25  |  |  |  | 45.5 | %



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Each American Depository Share (ADS)
    represents one-fourth an ordinary share. Translated solely for
    convenience into U.S. dollars at the noon buying rate of
     1.00 =
    U.S.$ 1.12 on December 31, 2001, 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.
|   
|(2) | The pay-out ratio is equal to the dividend per
    share, not including the French avoir fiscal, divided by
    net income per outstanding share (based on net income before
    exceptional items).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(3) | Dividend proposed to our General
    Shareholders Meeting on June 13, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

The declaration and amount of dividends to be
paid on the shares in respect of any period are subject to the
decision by our shareholders at an ordinary general meeting.
Pursuant to French law, payment of dividends must be made within
nine months following the end of the fiscal year to which they
relate.

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Under French law and our by-laws
(statuts), our unconsolidated statutory net income in
each fiscal year, as increased or reduced, as the case may be,
by any profit or loss of 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 by-laws
(statuts).

Pursuant to our by-laws (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
supervisory board 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. See Item 10. Additional
Information  Taxation  French
Taxation  Taxation of Dividends and
 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
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. 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 accordance with the price adjustment
mechanisms stipulated in the contract, an independent auditor
will assess this claim before it is payable. The selection of
the auditor and the scope of his mission have been determined by
an arbitral ruling on April 30, 2002. Should this procedure
reduce the purchase price of the Deepwater Division, we would
make a corresponding adjustment to the balance sheet reflecting
the revised acquisition goodwill. We expect the adjustment to be
determined during fiscal year 2002.

On December 21, 2001, ITP filed a complaint
with the Tribunal de Commerce de Versailles against
Coflexip, Coflexip Stena Offshore Limited and Coflexip Stena
Offshore seeking damages based on alleged breaches of several
confidentiality agreements entered into between 1993 and 1998
related to the ETAP contract for Shell (preparation of the
Girassol bid for Elf). In addition, ITP brought an action in
Edinburgh, Scotland against Coflexip seeking
£ 2.5 million in damages for infringement of a
patent related to pipe-in-pipe technologies.
Coflexip has opposed both actions and requested that the
European Patent Office declare the disputed patent invalid. We
believe that these allegations are unfounded and that our
exposure is not material. Consequently, we have made no
provisions in relation to these actions.

In May 2001, Mannesmann Seiffert/ Energie, a
German subsidiary of Technip-Coflexip, initiated arbitration
proceedings against Siemens claiming a price adjustment of
 36 million.
The claim relates to a significant increase in the 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. An
arbitration panel has been constituted and we expect it to hear
the case at the end of 2002.

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Significant Changes

For information on our unaudited sales for the
three month period ended March 31, 2001, see
Item 5. Operating and Financial Review and
Prospects  Recent Developments.




Item 9.     The
Offer and Listing

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 Share in |       | Price Per ADS in
|                  |  |                   |       | U.S. $(1)       
|                  |  |                    |       |                 
|Calendar Period   |  | High               |       | Low              |  | High |       | Low
|                  |  |                    |       |                  |  |      |       |    
|1997              |  |                    | 123.3 |                  |  |      | 70.4  |     |  |  |     |  |  |  |     | 
|1998              |  |                    | 133.4 |                  |  |      | 59.5  |     |  |  |     |  |  |  |     | 
|1999              |  |                    | 116.0 |                  |  |      | 70.0  |     |  |  |     |  |  |  |     | 
|2000              |  |                    | 163.0 |                  |  |      | 100.0 |     |  |  |      |  |  |  |      | 
|First Quarter     |  |                    | 128.6 |                  |  |      | 100.0 |     |  |  |     |  |  |  |     | 
|Second Quarter    |  |                    | 139.5 |                  |  |      | 108.0 |     |  |  |     |  |  |  |     | 
|Third Quarter     |  |                    | 159.9 |                  |  |      | 122.0 |     |  |  |     |  |  |  |     | 
|Fourth Quarter    |  |                    | 163.0 |                  |  |      | 126.0 |     |  |  |     |  |  |  |     | 
|2001              |  |                    | 187.0 |                  |  |      | 95.9  |     |  |  |      |  |  |  |      | 
|First Quarter     |  |                    | 168.0 |                  |  |      | 132.0 |     |  |  |     |  |  |  |     | 
|Second Quarter    |  |                    | 187.0 |                  |  |      | 141.7 |     |  |  |     |  |  |  |     | 
|Third Quarter     |  |                    | 167.3 |                  |  |      | 95.9  |     |  |  |     |  |  |  |     | 
|Fourth Quarter(2) |  |                    | 150.3 |                  |  |      | 120.0 |     |  |  | 33.6 |  |  |  | 27.9 | 
|2002              |  |                    |       |                  |  |      |       |     |  |  |      |  |  |  |      | 
|First Quarter     |  |                    | 158.9 |                  |  |      | 131.5 |     |  |  | 35.2 |  |  |  | 29.0 | 
|Monthly amounts   |  |                    |       |                  |  |      |       |     |  |  |      |  |  |  |      | 
|December          |  |                    | 150.3 |                  |  |      | 128.7 |     |  |  | 33.7 |  |  |  | 28.6 | 
|January           |  |                    | 153.5 |                  |  |      | 131.5 |     |  |  | 34.2 |  |  |  | 29.1 | 
|February          |  |                    | 147.6 |                  |  |      | 131.6 |     |  |  | 31.8 |  |  |  | 29.0 | 
|March             |  |                    | 158.9 |                  |  |      | 144.5 |     |  |  | 35.2 |  |  |  | 31.4 | 
|April             |  |                    | 162.9 |                  |  |      | 152.3 |     |  |  | 36.3 |  |  |  | 34.0 | 
|May               |  |                    | 160.4 |                  |  |      | 127.5 |     |  |  | 36.8 |  |  |  | 29.7 | 



---



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

On May 31, 2002 the last reported sales
price of our shares on Euronext Paris was
 129.5 per
share and the last reported sales price of our ADSs on the New
York Stock Exchange was $30.00 per ADS.

121



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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 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 will be traded over a common Euronext
platform, with central clearinghouse, settlement and custody
structures. 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 Paris has been listed on
Euronext Paris. In October 2001, Euronext announced that it was
acquiring LIFFE, Londons derivatives market. This
acquisition became effective in December 2001. Following an
agreement entered between Euronext and the LIFFE, Euronext has
agreed to migrate its entire derivative operations to
LIFFEs CONNECT 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
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 five markets (including derivations). 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. In addition, securities of some other companies are
traded on a non-regulated over-the-counter market, the
Marché Libre OTC.

The Premier
Marché

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 French business day
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. 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.

Euronext Paris places securities listed on the
Premier Marché in one of two categories, depending
on their trading volume. Our shares are placed in the category
known as Continu, which includes the most actively traded
securities. The minimum yearly trading volume required for a
security to be in Continu for a company already listed on
a regulated market of Euronext Paris is 2,500 trades; i.e., 10
trades per business day.

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 some limited circumstances, including the
occurrence of unusual trading activity in a security. In
addition, in exceptional cases, the CMF and the COB may require
Euronext Paris to suspend trading.

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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 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 regulations, any sale of securities traded on
a deferred settlement basis during the month of a dividend
payment date is deemed to occur after the dividend has been
paid. If the sale takes place before, but during the month of, a
dividend payment date, 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
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.

Selling Shareholders

Not applicable.

Dilution

Not applicable.

Expenses of the Issue

Not applicable.




Item 10.     Additional
Information

Share capital

Not applicable.

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

123



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adjustments, consisting of U.S.$ 513 million
in case and an assumption of a net debt of U.S.$ 112
million. The transaction, which closed on January 4, 2001,
is financed with Coflexips own resources and by new credit
lines. As a result of this acquisition, we have substantially
broadened our strength in floating production architectures for
offshore developments, this allowing us to undertake projects
with a larger scope on an integrated basis for offshore field
development projects worldwide. We have also significantly
strengthened our resources in field architecture as well as
conceptual and detailed engineering, improving its ability to
offer global solution to oil and gas operators. In addition, we
are currently engaged in arbitration proceedings seeking a price
reduction of our purchase price of the Deepwater Division, see
Item 8. Financial Information  Information
on Legal or Arbitration Proceedings.


Senior Credit
Facilities

On September 28, 2001, we executed an
agreement regarding senior credit facilities with J.P. Morgan
plc and CDC IXIS, as lead arrangers, and Chase Manhattan Bank
and CDC IXIS, as underwriters. This agreement was subsequently
amended on October 8 and 9, 2001. The financing consisted
of several tranches: Tranche A, a revolving credit facility
in a maximum principal amount of
 880,000,000;
Tranche B, a 364-day revolving credit facility in a maximum
principal amount of
 150,000,000;
and Tranche C, a revolving credit facility in a maximum
principal amount of U.S.$ 70,000,000. Currently, we have
outstanding borrowings of
 387
million under Tranche A and $ 70 million under
Tranche C. See Note 22(a) to our consolidated financial
statements included at Item 18 of this report.

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. 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.



| |                                    
| | -----------------------------------
| | The Memorandum of
    Understanding

In order to facilitate the business combination
of Technip and Coflexip, which was carried out as a tender offer
by us for the outstanding shares of both Coflexip and its major
shareholder, ISIS, on July 2, 2001, we entered into a
memorandum of understanding with ISIS and its controlling
shareholder IFP. On July 25, 2001, we amended the
memorandum of understanding. The memorandum of understanding, as
so amended, is described below.

In the memorandum of understanding, we agreed:



| |   |                                                                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | to make this exchange offer, the French exchange
    offer and the ISIS exchange offer,                                                                                                                      
|
| |  | to list our shares on the New York Stock Exchange
    in the form of American depositary shares and                                                                                                          
|
| |  | to convene an extraordinary general meeting of
    our shareholders to approve the capital increase necessary to
    complete this exchange offer, the French exchange offer and the
    ISIS exchange offer.

Subject to limited exceptions, ISIS agreed in the
memorandum of understanding not to tender its Coflexip shares in
our exchange offer or in any other competing offer for Coflexip
shares or otherwise transfer or dispose of its Coflexip shares
until the completion of our Coflexip exchange offer and our ISIS
exchange offer.

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ISIS agreed in the memorandum of understanding to
continue to hold the 1,808,359 Technip shares that it owns,
which, based on the number of our shares outstanding at the date
of the memorandum of understanding, represented approximately
11.2% of our outstanding share capital and 17.9% of our voting
rights, as well as any securities that it may receive in respect
of our shares, until the completion of our Coflexip exchange
offer and our ISIS exchange offer.

IFP agreed in the memorandum of understanding to
tender in our ISIS exchange offer all of the ISIS shares that it
owns within five trading days following the commencement of the
ISIS exchange offer. IFP had the right to terminate its
obligations to tender if circumstances arose that could have led
to a change in our control, including an offer for our shares,
unless the tender offer had been solicited by us with the
consent of IFP. Additionally, IFP had the right to terminate its
obligation to tender in the French exchange offer in the event a
competing offer were to be filed with the CMF, unless the
minimum condition of our ISIS exchange offer had previously been
met.

IFP also agreed that, except as described below,
it will not sell or otherwise dispose of our shares for the six
months following the completion of the ISIS exchange offer. Upon
expiration of that period, IFP may sell our shares provided that:

IFP retains a number of our shares equal to or
greater than the number required for IFP to make the exchange of
CGG (Compagnie Générale Géophysique)
shares described below; and for the one-year period beginning
six months after the completion of the ISIS exchange offer, IFP
will notify us of its intention to sell our shares and the terms
of the sale, upon which notification we will have 15 trading
days to find a third party buyer. IFP is not required to notify
us of stock exchange sales representing no more than 0.2% of our
outstanding share capital over any 30-day period.

IFP further agreed:



| |   |                                                                                                                                                                                                                                                                                 
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | to enter into an agreement with ISIS to purchase
    all of the Axens shares held by ISIS no later than five trading
    days following the settlement date of the ISIS exchange offer;                                                                                         
|
| |  | to enter into an agreement with ISIS to purchase
    from ISIS for a price of
     205
    million, less the purchase price for the Axens shares, all of
    the shares of ISISs newly created subsidiary; and                                                                
|
| |  | to enter into an agreement with ISIS regarding
    the CGG shares held by ISIS. For a description of the agreement
    entered into regarding the CGG shares held by ISIS, see
    Item 7. Major Shareholders and Related Party
    Transactions  Related Party Transactions.

ISIS agreed in the memorandum of understanding to
contribute all of its assets, except for the Axens shares,
Coflexip shares, CGG shares and our shares currently held by
ISIS, to its newly created subsidiary upon completion of the
ISIS exchange offer. ISIS also agreed that it and its subsidiary
will each hold shareholders meetings to approve this
contribution no later than 15 trading days after the completion
of the ISIS exchange offer. We agreed to vote all of the ISIS
shares that we will hold at that time in favor of the
contribution. Accordingly, following the completion of the ISIS
exchange offer this contribution was approved at the
shareholders meetings of ISIS and its newly created
subsidiary.

ISIS agreed in the memorandum of understanding to
hold its CGG shares for at least one-year after the publication
of the closing notice announcing the final results of our ISIS
exchange offer, which occurred on October 11, 2001. For the
one-year period beginning one year after the publication of the
closing notice announcing the final results of our ISIS exchange
offer, ISIS may require IFP to purchase all of the CGG shares
that it holds for a fixed exchange ratio of 2.81 CGG shares for
each of our shares held by IFP. If the market price of our
shares is greater than
 165.60,
the market price of CGG shares is greater than
 59.00 and
the ratio between our share price and CGGs share price is
between 2.52 and 3.09, ISIS will be required to exercise this
option. Thereafter, for the one-year period beginning on the
second anniversary of the publication of the closing notice
announcing the final results of the ISIS exchange offer, IFP may
require ISIS to sell all of the CGG shares that ISIS holds to
IFP for the same fixed exchange ratio of 2.81 CGG shares for
each of our shares. If the market price of our shares is greater
than
 165.60,
the market price of CGG shares is greater than
 59.00 and
the ratio between our shares price and CGGs shares price
is between 2.52 and 3.09, IFP will be required to exercise this
option. In either event, IFP will have the option of delivering
in lieu of our shares the cash equivalent of our

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shares as of the date of exercise. For a period
of three years following the date of the announcement of the
results of the ISIS exchange offer, ISIS may require IFP to
purchase all of the CGG shares that it owns for a fixed ratio of
2.81 CGG shares for each of our shares held by IFP if IFP does
not make available to ISIS the sums that ISIS, in its capacity
as a CGG shareholder, is required or requested to invest or lend
to CGG, whether in the form of new equity, a shareholder loan or
otherwise.


The completion of the ISIS exchange offer will
result in cross-holdings of shares between ISIS and
Technip-Coflexip. We have agreed to study with ISIS possible
methods to unwind these cross-holdings as soon as possible and,
in any event, within the one-year period required by French law.
The memorandum of understanding provides that if no solution has
been implemented before June 30, 2002, we will each seek
the approval of our shareholders for a merger between ISIS and
ourselves to be completed no later than the first anniversary of
the completion of the ISIS exchange offer. On April 15,
2002, we concluded a merger agreement with ISIS which will be
proposed for ratification at our respective shareholder meetings
in June 2002. IFP agreed in the memorandum of understanding to
vote in favor of the merger.

The material contracts described above are
attached as exhibits to this annual report on Form 20-F
filed with the U.S. Securities and Exchange Commission.

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, both E.U. and non-E.U.
residents must file a déclaration administrative, or
administrative notice, with French authorities in connection
with the acquisition of a controlling interest or an increase of
controlling interest in any French company. Under existing
administrative rulings, ownership of 20% or more of a listed
companys share capital or voting rights is regarded as a
controlling interest, but a lower percentage may be held to be a
controlling interest in certain circumstances (depending upon
such factors as the acquiring partys intentions, its
ability to elect directors or financial reliance by the French
company on the acquiring party).



| |                  
| | -----------------
| | 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.

By-Laws (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 Tour Technip, La
Défense 6, 170, Place Henri Régnault, 92973 Paris La
Défense Cedex 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 and Malaysia.

126



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

As of October 11, 2001, our corporate name
is Technip-Coflexip. Our corporate governance
comprises of a two-tiered structure consisting of a supervisory
board (conseil de surveillance) and a management board
(directoire).

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

All research, engineering services, and
construction of complex industrial sites, 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 us or by any other individual
or entity.

The registration, acquisition, obtention, direct
or indirect use, sale or purchase of all brands, processes,
patents, and licences for the use of a patent.

The direct or indirect participation by us 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 organisation 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 management board is required to act within
the limits of our corporate purpose and within the powers
endowed to both the supervisory board and the shareholders
meeting pursuant to French law. The limitations in our corporate
objects, however, will not bind third parties in transactions
with Technip-Coflexip unless they have knowledge of such
limitations or could not have ignored such limitation. Our
corporate purpose can be amended by an extraordinary general
meeting of shareholders.

In this section, we summarize material
information concerning our share capital, together with material
provisions of applicable French law and our bylaws
(statuts) as amended by our shareholders on
December 13, 2001. An unofficial English translation of our
bylaws (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 bylaws (statuts) in French from the
registrar (Greffe) of the Commercial Register of
Nanterre, France. Please refer to those full documents for
additional details.

Directors



| |                                                                                            
| | -------------------------------------------------------------------------------------------
| | Supervisory Boards 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 member of the Management or
Supervisory Board are subject to a special approval procedure,
in accordance with article L. 225-86 et seq. of the
French Commercial Code. In addition, pursuant to the Law of
May 15, 2001, any

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agreement entered into between the Company and
any of its shareholder holding more than 5% 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, is subject to the same procedure. The member of
the Management or Supervisory Board or the company concerned
must (i) inform the Supervisory Board of the agreement and
(ii) obtain its approval before the transaction is
consummated. The Chairman of the Supervisory Board must inform
the statutory auditors of the existence of such agreement and
the 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
Supervisory Board, nor in the vote of the Shareholders
Meeting.




| |                                                   
| | --------------------------------------------------
| | Supervisory Boards power to vote
    compensation

The Supervisory Board determines the remuneration
of each member of the Management Board.

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



| |                                                                                        
| | ---------------------------------------------------------------------------------------
| | Borrowing powers exercisable by the members
    of the Management or Supervisory Boards

In accordance with article L. 225-91 of the
French Commercial Code, members of the Management or Supervisory
Board other than a legal entity may not borrow money or obtain a
guarantee from the Company. Any such loan or guarantee would be
void and may not be relied upon by third parties.



| |                                                                                                  
| | -------------------------------------------------------------------------------------------------
| | Age requirements for members of the
    Management Board and members of the Supervisory
    Board

In accordance with article L. 225-60 of the
French Commercial Code and the provisions of our status,
members of the Management Board may not be more than
65 years old.

In accordance with article L. 225-70 of the
French Commercial Code and our status, none of our
members of the Supervisory Board may be more than 70 years
old.

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
management board. 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 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 an
increase of nominal value requires the unanimous consent of all
the shareholders unless effected by capitalization of reserves,
profit or share premium. However, where the increase results
from the incorporation of reserves, profits or share premium,
only a simple majority is required. Our shareholders may
delegate to our management board 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). Each time our shareholders vote for a capital
increase or decide to delegate to our management board the right
to effect a capital increase, 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 management board the right to effect any reserved capital
increase.

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| |                                   
| | ----------------------------------
| | 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 a repurchase and
cancellation of our shares.

The history of our issued share capital since
year-end 1996 is described below:

|                               |                                 |               |            |               |   |  |      |      |  
|------------------------------ | ------------------------------- | ------------- | ---------- | ------------- | - |  | ---- | ---- | -
|                               |                                 | Number of     |            | Share        
|                               |                                 | Shares Issued |            | Capital      
|                               |                                 |               |            |              
|                               |                                 |               |            |             
|                               |                                 |               |            | (in millions)
|                               |                                 |               |            |              
|Shares as of December 31, 1996 |                                 |               | 16,270,324 |               |   |  | 49.6 |     
|                               | 1997 increase(a)                |               |            | 146,560       |   |  |      | 0.4  |  
|                               | Subscription to equity issue(b) |               |            | 115,665       |   |  |      | 0.4  |  
|Shares as of December 31, 1997 |                                 |               | 16,532,549 |               |   |  | 50.4 |     
|                               | 1998 increase(a)                |               |            | 128,190       |   |  |      | 0.4  |  
|                               | Subscription to equity issue(b) |               |            | 93,136        |   |  |      | 0.3  |  
|                               | Decrease in capital(c)          |               |            | (977,876      | ) |  |      | (3.0 | )
|Shares as of December 31, 1998 |                                 |               | 15,775,999 |               |   |  | 48.1 |     
|                               | 1999 increase(a)                |               |            | 124,140       |   |  |      | 0.4  |  
|                               | Subscription to equity issue(b) |               |            | 96,675        |   |  |      | 0.3  |  
|                               | Decrease in capital(c)          |               |            | (238,277      | ) |  |      | (0.7 | )
|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)          |               |            | 0             |   |  |      | 0    |  
|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)          |               |            | 0             |   |  |      | 0    |  
|Shares as of December 31, 2001 |                                 |               | 26,713,448 |               |   |  | 81.5 |     






|    |                                                                                                 
|--- | ------------------------------------------------------------------------------------------------
|(a) | This increase results from exercised stock
    options.                                         
|   
|(b) | This increase results from a new equity issuance
    reserved for employees of Technip-Coflexip.
|   
|(c) | Decrease in capital by cancellation of treasury
    shares.                                     
|   
|(d) | This increase results from our exchange offers
    for Coflexip and ISIS.                       

Shareholders Meetings and Voting
Rights



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

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

Ordinary general meetings of shareholders are
required for matters such as:



| |   |                                                                           
| | - | --------------------------------------------------------------------------
| |  | electing, replacing and removing directors;                               
|
| |  | appointing independent auditors;                                          
|
| |  | approving the annual accounts;                                            
|
| |  | declaring dividends or authorizing dividends to
    be paid in shares; and
|
| |  | issuing debt securities.                                                  

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



| |   |                                                                                                 
| | - | ------------------------------------------------------------------------------------------------
| |  | changing our name or 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 Technip-Coflexip.                                                   



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

French company law requires our management board
to convene an annual ordinary general meeting of shareholders
for approval of the annual 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 du Commerce). Our management board may also
convene an ordinary or extraordinary shareholders meeting
upon proper notice at any time during the year. If our
management board fails to convene a shareholders meeting,
our independent auditors may call the meeting. In a bankruptcy,
our liquidator or court-appointed agent may also call a
shareholders meeting in some instances. Our supervisory
board may convene any shareholders meeting any time during
the year. Our shareholders meeting may also be convened by
the majority shareholders 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, which
is published in the Bulletin des Annonces Légales
Obligatoires, or BALO. The preliminary notice
must first be sent to the COB. The COB also recommends that the
preliminary notice should be published in a newspaper of
national circulation in France. 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.

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

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
management and/or supervisory boards and various other matters
even though these actions have not been included on the agenda.
Additional resolutions to be submitted for approval by the
shareholders at the meeting

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may be proposed to the management board 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 in cases of emergency.                                                                                                                                       

The management board 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 the management board relating to the agenda for the
meeting. The management board 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 bylaws (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 at least five days
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. The holder must deposit this certificate
at the place specified in the notice of the meeting at least
five days 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 years confers on the shareholder the right to two votes.
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 bylaws (statuts), which must be approved
at an extraordinary shareholders meeting. As of
December 31, 2001, 2,509,790 of our shares carried double
voting rights, representing approximately 9.36% of our
outstanding shares and approximately 18.74% 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.

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. A shareholder that is a corporation may
grant proxies to a legal representative. Pursuant to law
n° 2001-420 of May 15, 2001 relating to new
economic regulations (which we refer to as the Law of
May 15, 2001), the accredited financial intermediary
of non-French resident shareholders may transfer the vote or the
power of this shareholder 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 by the management board 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.

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| |       
| | ------
| | 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 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 adjourned. When an adjourned 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 adjourned meeting may
be discussed and voted upon.



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

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 is counted as a vote
against the resolution submitted to a shareholder vote.

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.



| |                                                                    
| | -------------------------------------------------------------------
| | Financial Statements and Other
    Communications with Shareholders

In connection with any shareholders
meeting, we must provide a set of documents including our Annual
Report 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 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.



| |          
| | ---------
| | 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 bylaws (statuts).
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 bylaws
(statuts).

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| |              
| | -------------
| | Legal Reserve

French company law provides that French
sociétés anonymes such as Technip-Coflexip 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. As of
December 31, 2001, our legal reserve was
 5,040,000.
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 management board
may propose a dividend for approval by the shareholders at the
annual general meeting of shareholders. 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 management board may distribute interim dividends
for a minimum amount of
 0.76
(FRF 5) per share, to the extent of the distributable
profits for the period covered by the interim income statement.
Our management board 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

If a priority dividend is paid in full, 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 the management board
in which the distribution of interim dividends is approved. The
actual dividend payment date is decided by the shareholders in
an ordinary general meeting.



| |                  
| | -----------------
| | 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.

Changes in Share Capital



| |                           
| | --------------------------
| | Increases in Share Capital

As provided by French company law, our share
capital may be increased only with the shareholders
approval at an extraordinary general meeting following a
recommendation of the management board. Increases in our share
capital may be effected by any of the following means:



| |   |                                                        
| | - | -------------------------------------------------------
| |  | issuing additional shares;                             
|
| |  | increasing the nominal value of existing shares;
    or
|
| |  | creating a new class of equity securities.             

Increases in share capital by issuing additional
securities may be effected by issuing securities for any of the
following contributions:



| |   |                                                           
| | - | ----------------------------------------------------------
| |  | cash;                                                     
|
| |  | assets contributed in kind;                               
|
| |  | conversion of debt securities previously issued;          
|
| |  | capitalization of profits, reserves or share
    premiums;

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| |   |                                                                                            
| | - | -------------------------------------------------------------------------------------------
| |  | subject to various conditions, in satisfaction of
    debt incurred by Technip-Coflexip; or
|
| |  | any combination of the above.                                                              

Decisions to increase the share capital through
the capitalization of reserves, profits and/or share premium
require the approval of an extraordinary general meeting, acting
under the quorum and majority requirements applicable to
ordinary shareholders meetings. Increases effected by an
increase in the nominal value of shares require unanimous
approval of the shareholders, unless effected by capitalization
of reserves, profits 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.

The shareholders may delegate the right to carry
out any increase in share capital (other than for an in-kind
contribution) to our management board, provided that the
increase has been previously authorized by the shareholders. Our
management board may further delegate this right to our Chairman
and Chief Executive Officer. Whenever the shareholders approve a
capital increase or approve the delegation to our management
board the right to implement a capital increase, they must also
consider whether an additional capital increase should be
reserved for the employees of Technip-Coflexip and its
subsidiaries or whether to delegate to our management board the
right to carry out a reserved capital increase.



| |                           
| | --------------------------
| | Decreases in Share Capital

Under French company law, any decrease in our
share capital requires approval by our shareholders entitled to
vote at an extraordinary general meeting. In the case of a
capital reduction, other than a reduction to absorb losses or a
reduction as part of a program to purchase our own shares, all
holders of shares must be offered the possibility to participate
in a reduction. Our share capital may be reduced either by
decreasing the nominal value of the outstanding share capital or
by reducing the number of outstanding shares. Holders of each
class of shares must be treated equally unless each affected
shareholder agrees otherwise.



| |                                   
| | ----------------------------------
| | Preemptive Subscription
    Rights

Under French company law, if we issue for cash
specific securities under which rights are granted, 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 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-thirds majority of the shares entitled to
vote at an extraordinary general meeting may vote to waive
preemptive subscription rights with respect to any particular
offering. French law requires that our management board and our
independent 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
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.

Form, Holding and Transfer of Shares



| |               
| | --------------
| | Form of Shares

Our bylaws (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
certificates. Certificates may, however, be issued if they are
to be held outside of France. French law also permits shares
owned by any person who is not a resident of France to be held
on the shareholders behalf in a collective account

134



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or in several individual accounts by an
intermediary. We maintain a share account with Euroclear France
S.A. for all shares in registered form, which is administrated
by BNP Paribas. 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 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, 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 bylaws (statuts) permit, in
accordance with the applicable legislation, the use of the
procedure known as titres au porteur identifiables,
according to which Euroclear will, upon the Companys
request, disclose 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 by a financial intermediary.



| |                   
| | ------------------
| | Transfer of Shares

Our bylaws (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 0.3% on transactions up to
 153,000
and at a rate of 0.15% 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 the nominal
value of 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, 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 listed company in France, such as
Technip-Coflexip, or that increases or decreases its
shareholding or voting rights above or below any of those
percentages, must notify the company within 15 calendar 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 CMF, within five trading days of the date it crosses
the threshold.

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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, the COB and the CMF within 15 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 intends to continue its purchases,
to acquire control of the company in question or to seek
nominations to the management board. The CMF 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 12 of our bylaws
(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 more than 1% of our share capital or
voting rights must notify us within 5 calendar 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 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. These requirements also
apply to registered intermediaries which hold shares on behalf
of shareholders who are not French residents.

Under CMF regulations, and subject to limited
exemptions granted by the CMF, any person or persons acting in
concert who come to own more than 33?% 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 of that
company. We must publish in the BALO, no later than 15 days
after the annual ordinary general meeting of shareholders,
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 CMF with a written notice. The CMF 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 CMF.

In order to permit holders or intermediaries to
give the required notice, the Company must publish in the BALO,
not later than 15 calendar days after the annual ordinary
general meeting of shareholders, information with respect to the
total number of voting rights outstanding as of the date of such
meeting. In addition, if the number of outstanding voting rights
changes by 5% or more between two annual ordinary general
meetings, the Company must publish in the BALO, within 15
calendar days of such change, the number of voting rights
outstanding and transmit such information to the CMF with a
written notice. The CMF publishes the total number of voting
rights so notified to all listed companies in a weekly notice
(avis) mentioning the date each number was last updated.

If any person fails to comply with the legal
notification requirement, 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 at the request of the Chairman of our
management board, or any shareholder; after consultation with
the COB, and may be subject to a
 18,000
fine.

If the accredited intermediary which holds shares
on behalf of a shareholder who is not a French resident does not
comply with the above mentioned legal notification requirement,
the voting rights of the shares for which the accredited
intermediary is registered cannot be exercised until such date
as the notification requirement has been met and the payment of
the corresponding dividend is postponed until such date.

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In addition, if the accredited intermediary
knowingly fails to comply with such notification requirement, a
court located in the jurisdiction of the headquarters of the
Company may, at the request of the Company or one or several
shareholders representing at least 5% of the capital stock of
the Company, deprive the shares in excess of the relevant
threshold of voting rights, and possibly dividends, for a period
not to exceed 5 years.



| |                           
| | --------------------------
| | Purchase of Our Own Shares

Under French law, we may not issue shares to
ourselves. However, we may, either directly or through a
financial intermediary acting on our behalf, purchase our issued
and outstanding shares for one of three purposes:



| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. | To reduce our share capital 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.                                                                                                                                                                                                                                                                                                                                                            
|
| | 3. | To acquire up to 10% of our share capital in
    connection with a corporate share repurchase program, provided
    our shares are listed on a regulated market, such as the
    Premier Marché. To acquire our shares for this
    purpose, we first must file an information memorandum (Note
    dinformation) that has received the approval, or visa,
    of the COB and obtain our shareholders approval at an
    ordinary general meeting.

We may not cancel more than 10% of our
outstanding share capital over any 24-month period. In addition,
we may not repurchase pursuant to a profit-sharing or stock
option plan or a share repurchase program an amount of shares
that would result in Technip-Coflexip 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 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
December 13, 2001, our shareholders authorized the
management board to repurchase over the following 18 months
up to 10% of our total outstanding share capital.

This share repurchase program was registered on
November 16, 2001 with the COB in a Note
dinformation under visa number 00-1317.

Trading In Our Shares

Under Règlement no 90-04
of the COB, 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 valid:



| |   |                                                                                                                                                                                                                                                                                       
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | trades must be executed on behalf of the company
    by only one intermediary or if the issuer uses its share
    purchase 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.                                                                                                                            

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If a companys shares are continuously
quoted (cotation en continu), 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, 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. This last
    requirement applies only to trades in shares, such as ours, that
    are admitted on the Deferred Settlement Service
    (Service de Règlement Différé).        

Prescriptions regarding volume of purchases do
not apply to purchase of stock for issuer by an authorized
investment firm (prestataire de services
dinvestissement) in conformity with a code of
ethics (charte de déontologie) that has
been approved by the COB. A first code of ethics was adopted by
the Association Française des entreprises
dinvestissement (AFEI) and approved by the COB
on February 13, 2001.

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.

After making an initial purchase of our own
shares, we must file monthly reports with the COB and the CMF
that contain specified information about subsequent
transactions. The CMF makes this information publicly available.

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.

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.

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.

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Subject to specific conditions, foreign states,
international organizations and a number of foreign public
bodies are not considered French residents for these purposes.

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.



| |                      
| | ---------------------
| | Taxation of Dividends

In France, companies may only pay dividends out
of income remaining after tax has been paid. When shareholders
resident in France receive dividends from French companies, they
are generally entitled to a tax credit, known as the avoir
fiscal.

The amount of the avoir fiscal 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
|
| |  | 25% of the dividend paid for the other
    shareholders who use the avoir fiscal in 2001, and 15% of
    the dividend paid for such other shareholders who will use the
    avoir fiscal as of January 1, 2002.                     

In addition, if the distribution of dividends by
us gives rise to the précompte, shareholders
entitled to the avoir fiscal at the rate of 25%, and then
15%, will generally be entitled to an additional amount of
avoir fiscal equal to:



| |   |                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------
| |  | 50% of the précompte paid in cash by
    the company for shareholders entitled to use the avoir
    fiscal at the rate of 25%; and
|
| |  | 70% of the précompte paid in cash by
    the company for shareholders entitled to use the avoir
    fiscal at the rate of 15%.    

As indicated below, the précompte is
a tax which is paid by French companies when they distribute
dividends out of certain profits (see paragraph below relating
to the précompte) and such dividend carry an
avoir fiscal.

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 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, a holder who is a non-French
resident is subsequently 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.

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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
    Austria
    Belgium
    Bolivia
    Brazil
    Burkina Faso
    Cameroon
    Canada
    Estonia
    Finland
    Gabon |  | Germany(1)
    Ghana
    Iceland
    India
    Israel
    Italy
    Ivory Coast
    Japan
    Latvia
    Lithuania
    Luxembourg |  | Malaysia
    Mali
    Malta
    Mauritius
    Mexico
    Namibia
    Netherlands
    New Zealand
    Niger
    Norway
    Pakistan |  | Senegal
    Singapore
    South Korea
    Spain
    Sweden
    Switzerland
    Togo
    Turkey
    Ukraine
    United Kingdom
    United States of America |  | Venezuela
    French Territoires
    dOutre-Merand
    Others
    Mayotte
    New Caledonia
    Saint-Pierre et
    Miquelon



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | According to a common statement of the French and
    German tax authorities dated July 13, 2001, German resident
    holders other than individuals are no longer entitled to the
    avoir fiscal for dividends paid as of
    January 1, 2001. As regards German resident individuals, a
    supplementary agreement to the tax treaty between France and
    Germany was signed by the French Republic and the Federal
    Republic of Germany on December 20, 2001, which provides
    that German resident holders, including German resident
    individual holders, should no longer be entitled to the
    avoir fiscal. Such supplementary agreement has not
    yet been adopted but, when adopted, should apply retroactively
    as of January 1, 2002.

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                                                    
|
| |  | a refund equal to 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 American depositary shares, as opposed to
shares. Accordingly, this discussion of treaty benefits does not
apply to American depositary shareholders.

If these arrangements apply to a shareholder, 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
wishing to receive the avoir fiscal. In other
countries and territories, individual residents may receive the
avoir fiscal but corporate entities may not.



| |              
| | -------------
| | The Précompte

A French company must generally pay an
equalization tax known as the précompte to the
French tax authorities if it distributes 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.

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A shareholder that is not a French resident for
French tax purposes may generally obtain a refund of the amount
of any précompte we actually pay in cash, net of
applicable withholding tax, in two cases:



| |   |                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------
| |  | if the shareholder is entitled to the benefits 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.                



| |                    
| | -------------------
| | 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 the
material U.S. federal income tax and French tax
consequences of owning and disposing of our shares or American
depositary shares and applies to you if you are the beneficial
owner of shares or American depositary shares and all of the
following five points apply to you:



| |    |                                                                                                            
| | -- | -----------------------------------------------------------------------------------------------------------
| | 1. | You own, directly or indirectly or through
    attribution, less than 10% of our outstanding share capital,
|
| | 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 certain other entities organized
    in or under the laws of the United States or any state thereof,



| |     |                                                                                                   
| | --- | --------------------------------------------------------------------------------------------------
| | (c) | an estate whose income 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
    U.S.-France income tax treaty under the limitation on
    benefits article of that treaty,
|
| | 4. | You hold your shares or American depositary
    shares of Technip-Coflexip 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

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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 the shares
or American depositary shares.


Special rules may apply to U.S. expatriates,
insurance companies, tax-exempt organizations, financial
institutions, persons subject to the alternative minimum tax,
securities broker-dealers, persons holding their
Technip-Coflexip shares or Technip-Coflexip American depositary
shares as part of a straddle, hedging transaction or conversion
transaction, persons who acquired their Technip-Coflexip shares
pursuant to the exercise of employee stock options or similar
derivative securities or otherwise as compensation, among
others. Those special rules, except certain rules applicable to
certain tax-exempt investors, are not discussed in this annual
report. Furthermore, this discussion is based upon U.S. and
French law and practice. This summary is subject to any changes
or changes in interpretation to U.S. or French law or
practice occurring after the date hereof. 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 own 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 receive dividends from French companies, they
are generally entitled to a tax credit, known as the avoir
fiscal.

The amount of the avoir fiscal 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
|
| |  | 25% of the dividend paid for the other
    shareholders who use the avoir fiscal in 2001, and 15% of
    the dividend paid for such other shareholders who will use the
    avoir fiscal as of January 1, 2002.                     

In addition, if the distribution of dividends by
us gives rise to the précompte, shareholders
entitled to the avoir fiscal at the rate of 25%, and then
15%, will generally be entitled to an additional amount of
avoir fiscal equal to:



| |   |                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------
| |  | 50% of the précompte paid in cash by
    the company for shareholders entitled to use the avoir
    fiscal at the rate of 25%; and
|
| |  | 70% of the précompte paid in cash by
    the company for shareholders entitled to use the avoir
    fiscal at the rate of 15%.    

As indicated below, the précompte is
a tax which is generally paid by French companies when they
distribute dividends out of certain profits (see paragraph below
relating to the précompte) and such dividends carry
an avoir fiscal.

Under French domestic law, French companies must
normally deduct a 25% French withholding tax from dividends paid
to non-residents and shareholders who are not resident in France
are not eligible for the avoir fiscal.

Under the U.S.-France income tax treaty, this
withholding tax is reduced to 15% 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 some other requirements are satisfied.

Additional provisions 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

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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,                                                                                                                    
|
| | 2. | you are a U.S. corporation, other than a
    regulated investment company,                                                                                                                                                                                                
|
| | 3. | you are a U.S. corporation which is a
    regulated investment company, provided that less than 20% of
    your shares 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.

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 the 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. 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,                                     
|
| | (c) | you own all the rights attached to the full
    ownership of the 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.                                                                                                            

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, you
may also be entitled to a payment from the French Treasury equal
to the avoir fiscal, which you may claim 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.

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

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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. These entities are not entitled to the full avoir
fiscal. However, these entities may claim a partial avoir
fiscal equal to 30/85 of the gross avoir fiscal, less
withholding tax on this amount, provided they own, directly or
indirectly, less than 10% of our capital and they satisfy the
filing requirements specified in the IRS regulations.

The avoir fiscal or partial avoir
fiscal and any French withholding tax refund 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.

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 income when payment is
received by you (or the depositary, if you hold American
depositary shares), to the extent they are paid or deemed paid
out of our current or accumulated earnings and profits as
calculated for U.S. federal income tax purposes. Dividends
paid by us will not give rise to the dividends received
deduction generally allowed to U.S. corporations with
respect to dividends received from other U.S. corporations.
They will generally 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, for U.S. federal
income tax purposes, be equal to the U.S. dollar value of
the euro 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 do not convert any such foreign
currency that is received by you into U.S. dollars on the
date you receive it, you will have a basis in that foreign
currency equal to its U.S. dollar value on the date of
receipt. Any gain or loss resulting from currency fluctuations
during the period from the date the dividend is includible in
your gross income to the date this payment is converted into
U.S. dollars will be treated as U.S. source ordinary
income or loss. You may also be required to recognize foreign
currency gain or loss if you receive a refund under the
U.S.-France income tax treaty of tax withheld in excess of the
treaty rate. This foreign currency gain or loss generally will
be U.S. source ordinary income or loss.

To the extent that any distributions paid exceed
our current and accumulated earnings and profits as calculated
for U.S. federal income tax purposes, the distribution will
be treated as follows:



| |   |                                                                                                                                                                                                                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | first, as a tax-free return of capital, which
    will cause a reduction in the adjusted basis of your shares or
    American depositary shares in Technip-Coflexip. This adjustment
    will increase the amount of gain, or decrease the amount of
    loss, which you will recognize if you later dispose of those
    shares or American depositary shares; and
|
| |  | second, the balance of the distribution in excess
    of the adjusted basis will be taxed as capital gain recognized
    on a sale or exchange.                                                                                                                                                                                                                    

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.

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The
Précompte

A French company must generally pay an
equalization tax known as the précompte to the
French tax authorities if it distributes 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 may generally obtain a refund from the French
tax authorities of any précompte paid by us with
respect to dividends distributed to you. Under the U.S.-France
income tax treaty, the amount of the précompte
refunded to U.S. residents is reduced by the 15%
withholding tax applicable to dividends and by the partial
avoir fiscal, if any. You are 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 before the end of the 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 in the year you receive it.
It will generally 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 be equal to the U.S. dollar
value of the euro on the date the précompte is
includible in income, regardless of whether the payment is in
fact converted into U.S. dollars. Any gain or loss
resulting from currency exchange fluctuations during the period
from the date the dividend is includible in your gross income to
the date this payment is converted into U.S. dollars will
be treated as U.S. source ordinary income or loss.



| |                          
| | -------------------------
| | 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
exchange 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 exchanged 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
exchange your shares or American depositary shares in the same
manner as you would if you were to sell or exchange any other
shares or American depositary shares held as capital assets, in
an amount equal to the difference between the amount realized
for the share or American depositary share and your basis in the
share or American depositary share. 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 in 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.



| |                                              
| | ---------------------------------------------
| | 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. If we were characterized as a PFIC for any taxable year,
you would suffer adverse tax consequences. These consequences
may include

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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.


You should consult your own tax advisor regarding
the potential application of the PFIC rules to your ownership of
our 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 the shares or American depositary shares
    in conducting a business through a permanent establishment or
    fixed base in France, or you held the 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, exchange, redemption or disposal of your shares or
American depositary shares may be subject to information
reporting to the IRS. U.S. federal backup withholding tax
may be imposed at a current rate of 30% on specified payments to
persons that fail to furnish required information. 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 filing the appropriate claim for a
refund with the IRS and furnishing any required information.

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.

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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 assets, liabilities or
commitments. Fair value calculations are presented in
Note 26 to the Technip-Coflexip consolidated financial
statements included in this prospectus and are set out in the
table below.

Cash Management

Cash surpluses are almost entirely denominated in
euro and U.S. dollars (or Malaysian ringgit which had a
fixed exchange rate with the U.S. dollar as of
December 31, 2001 or Brazilian real, or Norge crown). 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
special-purpose vehicle (EEIG Eurocash) to manage centrally our
cash and hedging, with the exception of cash held by our
Malaysian, Singaporian, Saudi Arabian, Brazilian subsidiaries
and other Coflexip foreign subsidiaries. Each participating
subsidiary transfers its cash surplus to EEIG Eurocash and
requests cash when needed. Cash flow forecasts are centrally
analyzed on a regular basis by EEIG Eurocash.

Debt Management

We have limited financial debt
( 1,638.9 million,
 196 million
and
 21.8 million
at December 31, 2001, 2000 and 1999, respectively).

On December, 2001 our short term debt included
the following:



| |   |                                                                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |  184.5 million
    of outstanding commercial paper issued on the French market with
    a yearly average floating interest rate of 4.34% and an average
    maturity of less than three months,
|
| |  |  222.1 million
    of aggregate installments due within one year related to two
    credit facilities, and                                                                                     
|
| |  |  50.1 million
    of bank overdrafts and other short term credits.                                                                                                                             

The Technip-Coflexip credit facility obtained for
the U.S. and French Coflexip exchange offers was initially used
for
 1,030 million.
As of December 31, 2001, the outstanding amount was
 944 million
(including
 174 million
classified as part of the short-term debt); this outstanding
amount includes:



| |   |                                                                                
| | - | -------------------------------------------------------------------------------
| |  | Installment A:
     869 million
    (after a
     11 million
    prepayment),
|
| |  | Installment C: U.S.$70 million (drawn
    subsequent to the acquisition),      
|
| |  | Installment B: unused after a
     150 million
    initial use and repayment. 

Coflexip credit facility, obtained for the
Aker Maritime Deepwater Division acquisition, had
U.S.$350 million outstanding as of December 31, 2001.
Additionally, the Coflexip debt used for the
Sunrise 2000 project was U.S.$18.7 million as
of December 31, 2001.

As of December 31, 2001
Technip-Coflexips unused multicurrency banking credit
lines were
 350 million.

At the end of January 2002, Technip-Coflexip
issued a
 793.5 million
bond convertible into new shares and/or exchangeable for
existing shares. In mid-February 2002, the bond proceeds, net of
the issuance costs, were used to partially prepay the
Installment A under the Coflexip acquisition credit
facility.

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Currently, the Coflexip acquisition credit
facility is made of two unused installments, A and C, with
respectively
 387 million
and U.S.$70 million authorized amounts.

Fair Value of On Balance-Sheet Financial
Instruments

We report marketable securities included in cash
and cash equivalents at market prices in the Technip-Coflexip
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. For the three years ended December 31,
2001, sales denominated in non-euro currencies were
approximately 60% of our total net sales, of which more than 80%
were denominated in U.S. dollars. Approximately 25% of our
operating expenses during this period were denominated in U.S.
dollars and significant amounts were also denominated in
Japanese yen, British pound, 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 Technip-Coflexip consolidated financial
statements included in this prospectus).

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.

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The tables below present the maturities and fair
value of our hedging instruments as of December 31, 2001,
and December 31, 2000, 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, 2001

|                                       |        |                                      |       |       |  |         |      |            |  |      |     |         |  |       |     |       |  |  |     |     |  |  |   |   |  |  |       |       |  |  |       |       |  
|-------------------------------------- | ------ | ------------------------------------ | ----- | ----- |  | ------- | ---- | ---------- |  | ---- | --- | ------- |  | ----- | --- | ----- |  |  | --- | --- |  |  | - | - |  |  | ----- | ----- |  |  | ----- | ----- | -
|                                       |        |                                      |       |       |  |         |      |           
|                                       |        | Maturing in year ending December 31, |       |       |  |         |      |           
|                                       |        |                                      |       |       |  |         |      | Fair value
|Foreign Exchange contracts             |        | 2002                                 |       | 2003  |  | 2004(2) |      | 2005       |  | 2006 |     | 5 years |  | Total |     | Total
|                                       |        |                                      |       |       |  |         |      |            |  |      |     |         |  |       |     |      
|                                       |        |                                     
|                                       |        | (In millions of EUR)                
|Sell currency, buy national currencies |        |                                      |       |       |  |         |      |            |  |      |     |         |  |       |     |       |  |  |     |     |  |  |   |   |  |  |       |       |  |  |       |      
|                                       | U.S.$  |                                      |       | 624.8 |  |         |      | 65.1       |  |      |     | 4.7     |  |       |     | 1.8   |  |  |     | 1.7 |  |  |   |  |  |  |       | 698.1 |  |  |       | (15.8 | )
|                                       | JPY    |                                      |       | 2.9   |  |         |      |           |  |      |     |        |  |       |     |      |  |  |     |    |  |  |   |  |  |  |       | 2.9   |  |  |       | 0.3   |  
|                                       | GBP    |                                      |       | 22.5  |  |         |      |           |  |      |     |        |  |       |     |      |  |  |     |    |  |  |   |  |  |  |       | 22.5  |  |  |       | (0.4  | )
|                                       | AED    |                                      |       | 2.0   |  |         |      |           |  |      |     |        |  |       |     |      |  |  |     |    |  |  |   |  |  |  |       | 2.0   |  |  |       | (0.1  | )
|                                       | Others |                                      |       | 12.5  |  |         |      |           |  |      |     |        |  |       |     |      |  |  |     |    |  |  |   |  |  |  |       | 12.5  |  |  |       | (1.4  | )
|                                       |        |                                      |       |       |  |         |      |            |  |      |     |         |  |       |     |       |  |  |     |     |  |  |   |   |  |  |       |       |  |  |       |      
|Total                                  |        |                                      | 664.7 |       |  |         | 65.1 |            |  |      | 4.7 |         |  |       | 1.8 |       |  |  | 1.7 |     |  |  |  |   |  |  | 738.0 |       |  |  | (17.4 | )    
|                                       |        |                                      |       |       |  |         |      |            |  |      |     |         |  |       |     |       |  |  |     |     |  |  |   |   |  |  |       |       |  |  |       |      
|Buy currency, sell national currencies |        |                                      |       |       |  |         |      |            |  |      |     |         |  |       |     |       |  |  |     |     |  |  |   |   |  |  |       |       |  |  |       |      
|                                       | U.S.$  |                                      |       | 70.8  |  |         |      |           |  |      |     |        |  |       |     |      |  |  |     |    |  |  |   |  |  |  |       | 70.8  |  |  |       | 1.0   |  
|                                       | JPY    |                                      |       | 4.6   |  |         |      | 6.4        |  |      |     |        |  |       |     |      |  |  |     |    |  |  |   |  |  |  |       | 11.0  |  |  |       | (0.4  | )
|                                       | GBP    |                                      |       | 13.2  |  |         |      | 0.8        |  |      |     |        |  |       |     |      |  |  |     |    |  |  |   |  |  |  |       | 13.9  |  |  |       | 0.2   |  
|                                       | Others |                                      |       | 2.6   |  |         |      |           |  |      |     |        |  |       |     |      |  |  |     |    |  |  |   |  |  |  |       | 2.6   |  |  |       | 0.0   |  
|                                       |        |                                      |       |       |  |         |      |            |  |      |     |         |  |       |     |       |  |  |     |     |  |  |   |   |  |  |       |       |  |  |       |      
|Total                                  |        |                                      | 91.1  |       |  |         | 7.2  |            |  |      |    |         |  |       |    |       |  |  |    |     |  |  |  |   |  |  | 98.3  |       |  |  | 0.8   |      
|                                       |        |                                      |       |       |  |         |      |            |  |      |     |         |  |       |     |       |  |  |     |     |  |  |   |   |  |  |       |       |  |  |       |      
|Sell/buy foreign currencies            |        |                                      | 69.4  |       |  |         | 21.1 |            |  |      |    |         |  |       |    |       |  |  |    |     |  |  |  |   |  |  | 90.5  |       |  |  | (0.8  | )    
|                                       |        |                                      |       |       |  |         |      |            |  |      |     |         |  |       |     |       |  |  |     |     |  |  |   |   |  |  |       |       |  |  |       |      
|Total                                  |        |                                      | 69.4  |       |  |         | 21.1 |            |  |      |    |         |  |       |    |       |  |  |    |     |  |  |  |   |  |  | 90.5  |       |  |  | (0.8  | )    
|                                       |        |                                      |       |       |  |         |      |            |  |      |     |         |  |       |     |       |  |  |     |     |  |  |   |   |  |  |       |       |  |  |       |      

As of December, 2000

|                                       |        |                                      |       |       |  |      |       |            |  |      |   |         |  |       |   |       |  |  |   |   |  |  |   |   |  |  |       |       |  |  |      |      |  
|-------------------------------------- | ------ | ------------------------------------ | ----- | ----- |  | ---- | ----- | ---------- |  | ---- | - | ------- |  | ----- | - | ----- |  |  | - | - |  |  | - | - |  |  | ----- | ----- |  |  | ---- | ---- | -
|                                       |        |                                      |       |       |  |      |       |           
|                                       |        | Maturing in year ending December 31, |       |       |  |      |       |           
|                                       |        |                                      |       |       |  |      |       | Fair value
|Foreign Exchange contracts             |        | 2001                                 |       | 2002  |  | 2003 |       | 2004       |  | 2005 |   | 5 years |  | Total |   | Total
|                                       |        |                                      |       |       |  |      |       |            |  |      |   |         |  |       |   |      
|                                       |        |                                     
|                                       |        | (In millions of EUR)                
|Sell currency, buy national currencies |        |                                      |       |       |  |      |       |            |  |      |   |         |  |       |   |       |  |  |   |   |  |  |   |   |  |  |       |       |  |  |      |     
|                                       | U.S.$  |                                      |       | 328.6 |  |      |       | 173.1      |  |      |   |        |  |       |   |      |  |  |   |  |  |  |   |  |  |  |       | 501.7 |  |  |      | 17.9 |  
|                                       | GBP    |                                      |       | 7.3   |  |      |       |           |  |      |   |        |  |       |   |      |  |  |   |  |  |  |   |  |  |  |       | 7.3   |  |  |      | 0.2  |  
|                                       | AED    |                                      |       | 10.8  |  |      |       |           |  |      |   |        |  |       |   |      |  |  |   |  |  |  |   |  |  |  |       | 10.8  |  |  |      | 2.3  |  
|                                       | Others |                                      |       | 0.5   |  |      |       |           |  |      |   |        |  |       |   |      |  |  |   |  |  |  |   |  |  |  |       | 0.5   |  |  |      | 0.0  |  
|                                       |        |                                      |       |       |  |      |       |            |  |      |   |         |  |       |   |       |  |  |   |   |  |  |   |   |  |  |       |       |  |  |      |     
|Total                                  |        |                                      | 347.2 |       |  |      | 173.1 |            |  |      |  |         |  |       |  |       |  |  |  |   |  |  |  |   |  |  | 520.3 |       |  |  | 20.4 |     
|                                       |        |                                      |       |       |  |      |       |            |  |      |   |         |  |       |   |       |  |  |   |   |  |  |   |   |  |  |       |       |  |  |      |     
|Buy currency, sell national currencies |        |                                      |       |       |  |      |       |            |  |      |   |         |  |       |   |       |  |  |   |   |  |  |   |   |  |  |       |       |  |  |      |     
|                                       | U.S.$  |                                      |       | 20.6  |  |      |       | 2.9        |  |      |   |        |  |       |   |      |  |  |   |  |  |  |   |  |  |  |       | 23.5  |  |  |      | (0.5 | )
|                                       | Others |                                      |       | 2.7   |  |      |       | 0.2        |  |      |   |        |  |       |   |      |  |  |   |  |  |  |   |  |  |  |       | 2.9   |  |  |      | (0.1 | )
|                                       |        |                                      |       |       |  |      |       |            |  |      |   |         |  |       |   |       |  |  |   |   |  |  |   |   |  |  |       |       |  |  |      |     
|Total                                  |        |                                      | 23.3  |       |  |      | 3.1   |            |  |      |  |         |  |       |  |       |  |  |  |   |  |  |  |   |  |  | 26.4  |       |  |  | (0.6 | )   
|                                       |        |                                      |       |       |  |      |       |            |  |      |   |         |  |       |   |       |  |  |   |   |  |  |   |   |  |  |       |       |  |  |      |     
|Sell/buy foreign currencies            |        |                                      | 3.8   |       |  |      | 2.5   |            |  |      |  |         |  |       |  |       |  |  |  |   |  |  |  |   |  |  | 6.3   |       |  |  | 0.1  |     
|                                       |        |                                      |       |       |  |      |       |            |  |      |   |         |  |       |   |       |  |  |   |   |  |  |   |   |  |  |       |       |  |  |      |     
|Total                                  |        |                                      | 3.8   |       |  |      | 2.5   |            |  |      |  |         |  |       |  |       |  |  |  |   |  |  |  |   |  |  | 6.3   |       |  |  | 0.1  |     
|                                       |        |                                      |       |       |  |      |       |            |  |      |   |         |  |       |   |       |  |  |   |   |  |  |   |   |  |  |       |       |  |  |      |     

Interest Risk

We require that our cash invested in marketable
securities remains very liquid. Therefore, most cash is invested
in floating rate investments.

We usually do not enter into interest rate
derivative contracts, except when interest rate markets offer
attractive conditions. As a result, as of December 31,
2001, most of our debt was linked to floating interest rates.
Only debt of U.S.$109 million related to the Coflexip
credit facility obtained for the Aker Maritime Deepwater
Division was covered by an interest rate swap, which converted
the U.S.$ LIBOR rate into a U.S.$ fixed rate through the
June 30, 2006 maturity date.

149



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##### Table of Contents



At the end of January 2002, Technip-Coflexip
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 a 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.$186 million notional amount forward interest rate
agreement to convert the U.S.$ LIBOR rate into a U.S.$ fixed
rate for the period from July through December 2002.




Item 12.     Description
of Securities to be Registered

Not applicable.

150



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##### 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.

151



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##### Table of Contents






PART III




Item 15.     [Reserved.]






Item 16.     [Reserved.]







Item 17.     Financial
Statements


Not applicable.




Item 18.     Financial
Statements

TECHNIP-COFLEXIP

|                                                                                                                                         |  |      |      | 
|---------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ---- | 
|                                                                                                                                         |  | Page
|                                                                                                                                         |  |     
|Technip-Coflexip Independent Auditors Report                                                                                            |  |      | F-2  | 
|Technip-Coflexip Consolidated Statements of
    Income for the Years Ended December 31, 1999, 2000 and 2001                              |  |      | F-3  | 
|Technip-Coflexip Consolidated Balance Sheets as
    of December 31, 1999, 2000 and 2001                                                  |  |      | F-4  | 
|Technip-Coflexip Consolidated Statements of Cash
    Flows for the Years Ended December 31, 1999, 2000 and 2001                          |  |      | F-6  | 
|Technip-Coflexip Consolidated Statements of
    Changes in Stockholders Equity for the Years Ended
    December 31, 1999, 2000 and 2001 |  |      | F-7  | 
|THE COFLEXIP STENA OFFSHORE GROUP                                                                                                       
|Consolidated Balance Sheet as of
    December 31, 2001 (unaudited)                                                                       |  |      | F-59 | 
|Consolidated Statement of Operations for the year
    ended December 31, 2001 (unaudited)                                                |  |      | F-60 | 
|Consolidated Statement of Shareholders
    Equity as of December 31, 2001 (unaudited)                                                   |  |      | F-61 | 
|Consolidated Statement of Cash Flows for the year
    ended December 31, 2001 (unaudited)                                                |  |      | F-62 | 
|Notes to the Consolidated Financial Statements
    (unaudited)                                                                           |  |      | F-63 | 
|Report of Independent Auditors                                                                                                           |  |      | F-86 | 
|Financial Highlights                                                                                                                     |  |      | F-87 | 
|Consolidated Balance Sheets for the years ended
    December 31, 2000 and 1999                                                           |  |      | F-88 | 
|Consolidated Statements of Income for the years
    ended December 31, 2000, 1999 and 1998                                               |  |      | F-89 | 
|Consolidated Statements of Shareholders
    Equity as of December 31, 2000, 1999 and 1998                                               |  |      | F-90 | 
|Consolidated Statements of Cash Flows for the
    years ended December 31, 1998, 1999 and 2000                                           |  |      | F-91 | 
|Notes to Consolidated Financial Statements                                                                                               |  |      | F-92 | 




Item 19.     Exhibits



|    |                                                                                                                                                                                                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.1 | By-laws, as amended, of Technip-Coflexip                                                                                                                                                                                                                                                                                                           
|   
|4.1 | Share Purchase Agreement dated October 27,
    2000, between Coflexip and Aker Maritime ASA and Aker Maritime
    Norge (incorporated by reference to Exhibit 2 to
    Coflexips Annual Report on Form 20-F (Commission File
    No. 0-22714) filed on June 18, 2001)                                                                             
|   
|4.2 | Credit Facilities for Technip arranged by J.P.
    Morgan plc and CDC IXIS, with Chase Manhattan International
    Limited as Facility Agent (incorporated by reference to
    Exhibit 10.1 to Post-Effective Amendment No. 2 to
    Technips Registration Statement on Form F-4
    (Registration No. 333-13808) filed on September 27,
    2001)

152



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##### Table of Contents





|     |                                                                                                                                                                                                                                                                                     
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.3  | English translation of the Memorandum of
    Understanding, dated July 2, 2001, by and among Technip,
    ISIS and Institut Français du Pétrole(incorporated by reference to Exhibit 3 of amendment
    No. 2 to the Statement on Schedule 13D filed by
    Technip on July 3, 2001)
|    
|8.1  | Subsidiaries of Technip-Coflexip (see
    Note 28 to the Consolidated Financial Statements)                                                                                                                                                                                         
|    
|10.1 | Offering Circular (Note dinformation
    definitive) dated January 22, 2002, relating to the
    issue and listing on the Premier Marché of Euronext
    Paris S.A. of bonds convertible into new shares and/or
    exchangeable for existing shares of Technip-Coflexip           

153



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INDEX TO FINANCIAL STATEMENTS

|                                                                                                            |  |      |      | 
|----------------------------------------------------------------------------------------------------------- |  | ---- | ---- | 
|                                                                                                            |  | Page
|                                                                                                            |  |     
|TECHNIP-COFLEXIP                                                                                           
|Report of Independent Auditors                                                                              |  |      | F-2  | 
|Consolidated Income Statements for each of the
    three years in the period ended December 31, 2001        |  |      | F-3  | 
|Consolidated Balance Sheets as of
    December 31, 2001, 2000 and 1999                                      |  |      | F-4  | 
|Consolidated Statements of Cash Flows for each of
    the three years in the period ended December 31, 2001 |  |      | F-6  | 
|Consolidated Statements of Changes in
    Shareholders Equity as of December 31, 2001,
    2000 and 1999   |  |      | 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-60 | 
|Consolidated Statement of Operations for the year
    ended December 31, 2001 (unaudited)                   |  |      | F-61 | 
|Consolidated Statement of Shareholders
    Equity as of December 31, 2001 (unaudited)                      |  |      | F-62 | 
|Consolidated Statement of Cash Flows for the year
    ended December 31, 2001 (unaudited)                   |  |      | F-63 | 
|Notes to the Consolidated Financial Statements
    (unaudited)                                              |  |      | F-64 | 
|Report of Independent Auditors                                                                              |  |      | F-86 | 
|Financial Highlights                                                                                        |  |      | F-87 | 
|Consolidated Balance Sheets for the years ended
    December 31, 2000 and 1999                              |  |      | F-88 | 
|Consolidated Statements of Income for the years
    ended December 31, 2000, 1999 and 1998                  |  |      | F-89 | 
|Consolidated Statements of Shareholders
    Equity as of December 31, 2000, 1999 and 1998                  |  |      | F-90 | 
|Consolidated Statements of Cash Flows for the
    years ended December 31, 1998, 1999 and 2000              |  |      | F-91 | 
|Notes to Consolidated Financial Statements                                                                  |  |      | F-92 | 

F-1



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TECHNIP-COFLEXIP






REPORT OF INDEPENDENT AUDITORS


Barbier, Frinault & Autres

Ernst & Young Network


41, rue Ybry


92576 Neuilly-sur-Seine Cedex


To the Shareholders and the Board of Directors of
TECHNIP-COFLEXIP

We have audited the accompanying consolidated
balance sheets of Technip-Coflexip (formerly Technip) and its
subsidiaries (Technip-Coflexip) as of
December 31, 2001, 2000, and 1999, and the related
consolidated statements of income, changes in shareholders
equity and cash flows, for each of the three years in the period
ended December 31, 2001, all expressed in euro
(). These
financial statements are the responsibility of the management of
Technip-Coflexip. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with
generally accepted auditing standards in France and in the
United States of America. 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 respect, the
consolidated financial position of Technip-Coflexip as of
December 31, 2001, 2000 and 1999, and the result of its
operations and its cash flows for each of the three years in the
period ended December 31, 2001 in conformity with generally
accepted accounting principles in France.

Without calling into question the opinion
expressed above, we draw your attention to the following:



| |   |                                                                                                                                                                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | as discussed in Note 12 (a), Technip-Coflexip
    reversed in 1999 the provision for geopolitical risks, which was
    no longer estimated to be necessary;                                                                                                                                                                    
|
| |  | as a result of the material changes in the scope
    of consolidation resulting from the acquisition of a majority
    interest in Coflexip during the fiscal year, the consolidated
    financial statements for the year ended December 31, 2001
    are not directly comparable with those of the preceding fiscal
    year.

Accounting practices used by Technip-Coflexip in
preparing the accompanying financial statements conform with
generally accepted accounting principles in France, but do not
conform with accounting principles generally accepted in the
United States of America. A description of these differences and
a complete reconciliation of consolidated net income and
shareholders equity to United States of America generally
accepted accounting principles is set forth in Notes 29 to 31 of
the Notes to the Consolidated Financial Statements.

The United States Dollar amounts are presented in
the accompanying financial statements for the convenience of the
reader and are arithmetically correct on the basis disclosed in
Note 1.

Neuilly-sur-Seine, France,

April 12, 2002, except for Notes 29 to 31
for which the date is May 14, 2002


BARBIER FRINAULT & AUTRES

ERNST & YOUNG Network


Represented by René Proglio

F-2



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##### Table of Contents



TECHNIP-COFLEXIP






CONSOLIDATED INCOME STATEMENTS


|                                                                                     |  |      |   |                                                           |  |      |            |      |  |     |            |   |  |  |            |   |  |  |            |  
|------------------------------------------------------------------------------------ |  | ---- | - | --------------------------------------------------------- |  | ---- | ---------- | ---- |  | --- | ---------- | - |  |  | ---------- | - |  |  | ---------- | -
|                                                                                     |  |      |   |                                                          
|                                                                                     |  |      |   | For the year ended December 31,                          
|                                                                                     |  |      |   |                                                          
|                                                                                     |  |      |   |                                                           |  |     
|                                                                                     |  |      |   | 2001                                                      |  |     
|                                                                                     |  |      |   |                                                           |  | 2000 |            | 1999
|                                                                                     |  | Note |   | U.S.$*                                                    |  | EUR  |            | EUR  |  | EUR
|                                                                                     |  |      |   |                                                           |  |      |            |      |  |    
|                                                                                     |  |      |   |                                                          
|                                                                                     |  |      |   | (Amounts in millions of euro, except as otherwise stated)
|Net sales                                                                            |  |      | 3 |                                                           |  |      | 3,156.3    |      |  |     | 3,546.0    |   |  |  | 2,972.0    |   |  |  | 2,782.2    |  
|Cost of Sales                                                                        |  |      |   |                                                           |  |      | (2,754.3   | )    |  |     | (3,094.3   | ) |  |  | (2,680.8   | ) |  |  | (2,507.8   | )
|                                                                                     |  |      |   |                                                           |  |      |            |      |  |     |            |   |  |  |            |   |  |  |            |  
|GROSS MARGIN                                                                         |  |      |   |                                                           |  |      | 402.0      |      |  |     | 451.7      |   |  |  | 291.2      |   |  |  | 274.4      |  
|Research and Development expenses                                                    |  |      |   |                                                           |  |      | (16.3      | )    |  |     | (18.3      | ) |  |  | (7.2       | ) |  |  | (10.3      | )
|Selling, general and administrative expenses                                         |  |      |   |                                                           |  |      | (132.6     | )    |  |     | (149.0     | ) |  |  | (85.1      | ) |  |  | (80.8      | )
|                                                                                     |  |      |   |                                                           |  |      |            |      |  |     |            |   |  |  |            |   |  |  |            |  
|OPERATING INCOME BEFORE DEPRECIATION AND
    AMORTIZATION                            |  |      |   |                                                           |  |      | 253.1      |      |  |     | 284.4      |   |  |  | 198.9      |   |  |  | 183.3      |  
|Depreciation and amortization other than goodwill                                    |  |      |   |                                                           |  |      | (44.1      | )    |  |     | (49.6      | ) |  |  | (16.3      | ) |  |  | (22.3      | )
|                                                                                     |  |      |   |                                                           |  |      |            |      |  |     |            |   |  |  |            |   |  |  |            |  
|OPERATING INCOME BEFORE GOODWILL
    AMORTIZATION                                    |  |      |   |                                                           |  |      | 209.0      |      |  |     | 234.8      |   |  |  | 182.6      |   |  |  | 161.0      |  
|Goodwill amortization                                                                |  |      |   |                                                           |  |      | (54.6      | )    |  |     | (61.3      | ) |  |  | (26.7      | ) |  |  | (9.5       | )
|                                                                                     |  |      |   |                                                           |  |      |            |      |  |     |            |   |  |  |            |   |  |  |            |  
|OPERATING INCOME                                                                     |  |      | 4 |                                                           |  |      | 154.4      |      |  |     | 173.5      |   |  |  | 155.9      |   |  |  | 151.5      |  
|Financial result                                                                     |  |      | 6 |                                                           |  |      | (5.8       | )    |  |     | (6.5       | ) |  |  | 5.8        |   |  |  | 16.6       |  
|Income of equity affiliates                                                          |  |      |   |                                                           |  |      | 13.9       |      |  |     | 15.6       |   |  |  | 22.1       |   |  |  | 0.8        |  
|Reversal of geopolitical risks provision                                             |  |      |   |                                                           |  |      |           |      |  |     |           |   |  |  |           |   |  |  | 89.9       |  
|Other non-operating income (loss)                                                    |  |      |   |                                                           |  |      | (5.9       | )    |  |     | (6.6       | ) |  |  | 93.9       |   |  |  | 3.0        |  
|                                                                                     |  |      |   |                                                           |  |      |            |      |  |     |            |   |  |  |            |   |  |  |            |  
|Total non-operating income                                                           |  |      | 7 |                                                           |  |      | (5.9       | )    |  |     | (6.6       | ) |  |  | 93.9       |   |  |  | 92.9       |  
|                                                                                     |  |      |   |                                                           |  |      |            |      |  |     |            |   |  |  |            |   |  |  |            |  
|INCOME BEFORE INCOME TAX AND MINORITY
    INTERESTS                                  |  |      |   |                                                           |  |      | 156.6      |      |  |     | 176.0      |   |  |  | 277.7      |   |  |  | 261.8      |  
|Income tax                                                                           |  |      | 8 |                                                           |  |      | (58.3      | )    |  |     | (65.5      | ) |  |  | (62.3      | ) |  |  | (89.0      | )
|Minority interests                                                                   |  |      |   |                                                           |  |      | (2.1       | )    |  |     | (2.4       | ) |  |  | (1.2       | ) |  |  | (0.2       | )
|                                                                                     |  |      |   |                                                           |  |      |            |      |  |     |            |   |  |  |            |   |  |  |            |  
|NET INCOME                                                                           |  |      |   |                                                           |  |      | 96.2       |      |  |     | 108.1      |   |  |  | 214.2      |   |  |  | 172.6      |  
|                                                                                     |  |      |   |                                                           |  |      |            |      |  |     |            |   |  |  |            |   |  |  |            |  
|Number of shares considered for earnings per
    share computation                   |  |      | 9 |                                                           |  |      | 25,387,550 |      |  |     | 25,387,550 |   |  |  | 16,664,584 |   |  |  | 16,050,827 |  
|Diluted earnings before non-operating income and
    goodwill amortization per share |  |      | 9 |                                                           |  |      | 6.17       |      |  |     | 6.93       |   |  |  | 8.82       |   |  |  | 5.56       |  
|Diluted earnings per share                                                           |  |      | 9 |                                                           |  |      | 3.79       |      |  |     | 4.26       |   |  |  | 12.85      |   |  |  | 10.75      |  



---



|  |                                                                                                                                                                                                                                                          
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | For the convenience of the reader, the financial
    statements as of and for the year ended December 31, 2001
    have been translated into U.S. dollars (U.S.$) at the rate of
     1.00 =
    U.S.$ 0.8901 on December 31, 2001. (See
    Note 1(a)).

The accompanying notes are an integral part of
these Consolidated Financial Statements.

F-3



---



##### Table of Contents



TECHNIP-COFLEXIP






CONSOLIDATED BALANCE SHEETS


|                                          |  |      |    |                                      |  |      |          |      |  |     |          |  |  |  |         |  |  |  |         | 
|----------------------------------------- |  | ---- | -- | ------------------------------------ |  | ---- | -------- | ---- |  | --- | -------- |  |  |  | ------- |  |  |  | ------- | 
|                                          |  |      |    |                                     
|                                          |  |      |    | As of December 31,                  
|                                          |  |      |    |                                     
|                                          |  |      |    |                                      |  |     
|                                          |  |      |    | 2001                                 |  | 2000 |          | 1999
|                                          |  |      |    |                                      |  |      |          |     
|                                          |  | Note |    | U.S.$*                               |  | EUR  |          | EUR  |  | EUR
|                                          |  |      |    |                                      |  |      |          |      |  |    
|                                          |  |      |    |                                     
|                                          |  |      |    | (Amounts in millions of euro, except
|                                          |  |      |    | as otherwise stated)                
|ASSETS                                    |  |      |    |                                      |  |      |          |      |  |     |          |  |  |  |         |  |  |  |         | 
|Intangible assets, net                    |  |      | 11 |                                      |  |      | 2,415.2  |      |  |     | 2,713.4  |  |  |  | 591.9   |  |  |  | 154.8   | 
|Property, plant and equipment, net        |  |      | 12 |                                      |  |      | 874.3    |      |  |     | 982.3    |  |  |  | 162.1   |  |  |  | 172.4   | 
|Other investments and loans, net          |  |      | 13 |                                      |  |      | 93.4     |      |  |     | 104.9    |  |  |  | 18.4    |  |  |  | 98.4    | 
|Equity affiliates                         |  |      | 14 |                                      |  |      | 5.5      |      |  |     | 6.2      |  |  |  | 278.3   |  |  |  | 6.2     | 
|                                          |  |      |    |                                      |  |      |          |      |  |     |          |  |  |  |         |  |  |  |         | 
|TOTAL NON-CURRENT ASSETS                  |  |      |    |                                      |  |      | 3,388.4  |      |  |     | 3,806.8  |  |  |  | 1,050.7 |  |  |  | 431.8   | 
|Contracts-in-progress                     |  |      | 15 |                                      |  |      | 5,619.7  |      |  |     | 6,313.6  |  |  |  | 4,718.0 |  |  |  | 4,155.2 | 
|Inventories and deferred bid costs, net   |  |      | 16 |                                      |  |      | 99.6     |      |  |     | 111.9    |  |  |  | 7.1     |  |  |  | 4.6     | 
|Advances to suppliers                     |  |      |    |                                      |  |      | 87.2     |      |  |     | 98.0     |  |  |  | 108.4   |  |  |  | 130.2   | 
|Accounts and notes receivable, net        |  |      | 17 |                                      |  |      | 539.3    |      |  |     | 605.9    |  |  |  | 289.3   |  |  |  | 254.3   | 
|Other current assets, net                 |  |      | 18 |                                      |  |      | 372.2    |      |  |     | 418.1    |  |  |  | 170.0   |  |  |  | 209.5   | 
|                                          |  |      |    |                                      |  |      |          |      |  |     |          |  |  |  |         |  |  |  |         | 
|RECEIVABLES AND OTHER CURRENT ASSETS, NET |  |      |    |                                      |  |      | 911.5    |      |  |     | 1,024.0  |  |  |  | 459.3   |  |  |  | 463.8   | 
|Marketable securities                     |  |      |    |                                      |  |      | 133.3    |      |  |     | 149.8    |  |  |  | 186.5   |  |  |  | 360.8   | 
|Cash                                      |  |      |    |                                      |  |      | 546.2    |      |  |     | 613.6    |  |  |  | 376.6   |  |  |  | 658.6   | 
|                                          |  |      |    |                                      |  |      |          |      |  |     |          |  |  |  |         |  |  |  |         | 
|CASH AND CASH EQUIVALENTS                 |  |      | 19 |                                      |  |      | 679.5    |      |  |     | 763.4    |  |  |  | 563.1   |  |  |  | 1,019.4 | 
|                                          |  |      |    |                                      |  |      |          |      |  |     |          |  |  |  |         |  |  |  |         | 
|TOTAL CURRENT ASSETS                      |  |      |    |                                      |  |      | 7,397.5  |      |  |     | 8,310.9  |  |  |  | 5,855.9 |  |  |  | 5,773.2 | 
|                                          |  |      |    |                                      |  |      |          |      |  |     |          |  |  |  |         |  |  |  |         | 
|TOTAL ASSETS                              |  |      |    |                                      |  |      | 10,785.9 |      |  |     | 12,117.7 |  |  |  | 6,906.6 |  |  |  | 6,205.0 | 
|                                          |  |      |    |                                      |  |      |          |      |  |     |          |  |  |  |         |  |  |  |         | 



---



|  |                                                                                                                                                                                                                                                              
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | For the convenience of the reader, the financial
    statements as of and for the year ended December 31, 2001
    have been translated into U.S. dollars (U.S.$) at the rate
    of
     1.00 =
    U.S. $0.8901 on December 31, 2001. (See
    Note 1(a)).

The accompanying notes are an integral part of
these Consolidated Financial Statements.

F-4



---



##### Table of Contents



TECHNIP-COFLEXIP






CONSOLIDATED BALANCE
SHEETS (continued)


|                                               |  |      |    |                                         |  |      |          |      |  |     |          |   |  |  |         |   |  |  |         |  
|---------------------------------------------- |  | ---- | -- | --------------------------------------- |  | ---- | -------- | ---- |  | --- | -------- | - |  |  | ------- | - |  |  | ------- | -
|                                               |  |      |    |                                        
|                                               |  |      |    | As of December 31,                     
|                                               |  |      |    |                                        
|                                               |  |      |    |                                         |  |     
|                                               |  |      |    | 2001                                    |  |     
|                                               |  |      |    |                                         |  | 2000 |          | 1999
|                                               |  | Note |    | U.S.$*                                  |  | EUR  |          | EUR  |  | EUR
|                                               |  |      |    |                                         |  |      |          |      |  |    
|                                               |  |      |    |                                        
|                                               |  |      |    | (Amounts in millions of euro, except as
|                                               |  |      |    | otherwise stated)                      
|LIABILITIES AND SHAREHOLDERS
    EQUITY       |  |      |    |                                         |  |      |          |      |  |     |          |   |  |  |         |   |  |  |         |  
|Common stock: EUR 3.05 nominal value,          |  |      |    |                                         |  |      | 72.5     |      |  |     | 81.5     |   |  |  | 48.9    |   |  |  | 48.1    |  
|26,713,448 shares as of December 31,
    2001, |  |      |    |                                         |  |      |          |      |  |     |          |   |  |  |         |   |  |  |         |  
|16,029,305 shares as of December 31,
    2000, |  |      |    |                                         |  |      |          |      |  |     |          |   |  |  |         |   |  |  |         |  
|15,758,537 shares as of December 31,
    1999, |  |      |    |                                         |  |      |          |      |  |     |          |   |  |  |         |   |  |  |         |  
|Paid-in-surplus                                |  |      |    |                                         |  |      | 1,429.1  |      |  |     | 1,605.5  |   |  |  | 64.5    |   |  |  | 43.0    |  
|Retained earnings                              |  |      |    |                                         |  |      | 588.7    |      |  |     | 661.5    |   |  |  | 498.2   |   |  |  | 371.5   |  
|Cumulative translation adjustment              |  |      |    |                                         |  |      | 11.7     |      |  |     | 13.1     |   |  |  | (0.2    | ) |  |  | (1.3    | )
|Treasury shares and shares held by subsidiary  |  |      |    |                                         |  |      | (227.4   | )    |  |     | (255.5   | ) |  |  | (59.2   | ) |  |  | (37.7   | )
|Net income                                     |  |      |    |                                         |  |      | 96.2     |      |  |     | 108.1    |   |  |  | 214.2   |   |  |  | 172.6   |  
|                                               |  |      |    |                                         |  |      |          |      |  |     |          |   |  |  |         |   |  |  |         |  
|SHAREHOLDERS EQUITY                           |  |      | 20 |                                         |  |      | 1,970.8  |      |  |     | 2,214.2  |   |  |  | 766.4   |   |  |  | 596.2   |  
|MINORITY INTERESTS                             |  |      |    |                                         |  |      | 19.0     |      |  |     | 21.4     |   |  |  | 3.4     |   |  |  | 2.3     |  
|Commitments and Contingencies                  |  |      | 25 |                                         |  |      |          |      |  |     |          |   |  |  |         |   |  |  |         |  
|Retirement indemnities                         |  |      |    |                                         |  |      | 71.3     |      |  |     | 80.1     |   |  |  | 65.8    |   |  |  | 61.4    |  
|Accrued liabilities                            |  |      | 21 |                                         |  |      | 229.2    |      |  |     | 257.5    |   |  |  | 167.3   |   |  |  | 208.4   |  
|Long term debt                                 |  |      |    |                                         |  |      | 1,052.3  |      |  |     | 1,182.2  |   |  |  | 4.8     |   |  |  | 6.8     |  
|Short term debt                                |  |      |    |                                         |  |      | 406.5    |      |  |     | 456.7    |   |  |  | 191.2   |   |  |  | 15.0    |  
|                                               |  |      |    |                                         |  |      |          |      |  |     |          |   |  |  |         |   |  |  |         |  
|Total Financial debt                           |  |      | 22 |                                         |  |      | 1,458.8  |      |  |     | 1,638.9  |   |  |  | 196.0   |   |  |  | 21.8    |  
|Progress payments on contracts                 |  |      | 15 |                                         |  |      | 5,761.2  |      |  |     | 6,472.5  |   |  |  | 4,896.1 |   |  |  | 4,580.5 |  
|Accounts and notes payable                     |  |      |    |                                         |  |      | 686.1    |      |  |     | 770.8    |   |  |  | 562.9   |   |  |  | 530.9   |  
|Other creditors                                |  |      | 23 |                                         |  |      | 589.5    |      |  |     | 662.3    |   |  |  | 248.7   |   |  |  | 203.5   |  
|                                               |  |      |    |                                         |  |      |          |      |  |     |          |   |  |  |         |   |  |  |         |  
|TOTAL LIABILITIES                              |  |      |    |                                         |  |      | 8,796.1  |      |  |     | 9,882.1  |   |  |  | 6,136.8 |   |  |  | 5,606.5 |  
|                                               |  |      |    |                                         |  |      |          |      |  |     |          |   |  |  |         |   |  |  |         |  
|TOTAL LIABILITIES & SHAREHOLDERS
    EQUITY   |  |      |    |                                         |  |      | 10,785.9 |      |  |     | 12,117.7 |   |  |  | 6,906.6 |   |  |  | 6,205.0 |  
|                                               |  |      |    |                                         |  |      |          |      |  |     |          |   |  |  |         |   |  |  |         |  



---



|  |                                                                                                                                                                                                                                                              
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | For the convenience of the reader, the financial
    statements as of and for the year ended December 31, 2001
    have been translated into U.S. dollars (U.S.$) at the rate
    of
     1.00 =
    U.S.$ 0.8901 on December 31, 2001.
    (See Note 1(a)).

The accompanying notes are an integral part of
these Consolidated Financial Statements.

F-5



---



##### Table of Contents



TECHNIP-COFLEXIP






CONSOLIDATED STATEMENTS OF CASH
FLOWS


|                                                                                                                       |                   |                                 |         |       |   |      |          |       |   |  |         |       |   |  |         |       |  
|---------------------------------------------------------------------------------------------------------------------- | ----------------- | ------------------------------- | ------- | ----- | - | ---- | -------- | ----- | - |  | ------- | ----- | - |  | ------- | ----- | -
|                                                                                                                       |                   |                                
|                                                                                                                       |                   | For the year ended December 31,
|                                                                                                                       |                   |                                
|                                                                                                                       |                   |                                 |         |      
|                                                                                                                       |                   | 2001                            |         |      
|                                                                                                                       |                   |                                 |         | 2000  |   | 1999
|                                                                                                                       |                   | U.S.$*                          |         | EUR   |   | EUR  |          | EUR  
|                                                                                                                       |                   |                                 |         |       |   |      |          |      
|                                                                                                                       |                   |                                
|                                                                                                                       |                   | (Amounts in millions of euro,  
|                                                                                                                       |                   | except as otherwise stated)    
|CASH FLOW FROM OPERATING ACTIVITIES:                                                                                   |                   |                                 |         |       |   |      |          |       |   |  |         |       |   |  |         |      
|Net income                                                                                                             |                   |                                 | 96.2    |       |   |      | 108.1    |       |   |  | 214.2   |       |   |  | 172.6   |      
|Minority interests                                                                                                     |                   |                                 | 2.1     |       |   |      | 2.4      |       |   |  | 1.2     |       |   |  | 0.2     |      
|                                                                                                                       |                   |                                 |         |       |   |      |          |       |   |  |         |       |   |  |         |      
|Net income before minority interest                                                                                    |                   |                                 | 98.3    |       |   |      | 110.5    |       |   |  | 215.4   |       |   |  | 172.8   |      
|Adjustments to reconcile income before
    minority interest to net cash provided by
    (used in) operating activity: |                   |                                 |         |       |   |      |          |       |   |  |         |       |   |  |         |      
|Amortization of intangible assets and goodwill                                                                         |                   |                                 | 61.7    |       |   |      | 69.3     |       |   |  | 28.1    |       |   |  | 10.0    |      
|Depreciation of property, plant and equipment                                                                          |                   |                                 | 37.0    |       |   |      | 41.6     |       |   |  | 14.9    |       |   |  | 21.8    |      
|Income of equity affiliates, net of dividends                                                                          |                   |                                 | (6.7    | )     |   |      | (7.5     | )     |   |  | (61.1   | )     |   |  | (0.8    | )    
|(Decrease) increase in non-current provisions, net                                                                     |                   |                                 | 1.9     |       |   |      | 2.1      |       |   |  | 1.2     |       |   |  | (50.2   | )    
|Net (gain) on disposal of fixed asset and
    investments                                                              |                   |                                 | (2.5    | )     |   |      | (2.8     | )     |   |  | (82.4   | )     |   |  | (5.0    | )    
|Net changes in operating assets and
    liabilities:                                                                   |                   |                                 |         |       |   |      |          |       |   |  |         |       |   |  |         |      
|Decrease (increase) in advances to suppliers                                                                           |                   |                                 | 9.3     |       |   |      | 10.4     |       |   |  | 31.4    |       |   |  | (35.2   | )    
|Decrease (increase) in contracts-in-progress                                                                           |                   |                                 | (238.0  | )     |   |      | (267.4   | )     |   |  | (314.4  | )     |   |  | (974.7  | )    
|Decrease (increase) in accounts and notes
    receivables                                                              |                   |                                 | 45.5    |       |   |      | 51.1     |       |   |  | (3.5    | )     |   |  | (14.1   | )    
|Decrease (increase) in other current assets                                                                            |                   |                                 | (110.7  | )     |   |      | (124.4   | )     |   |  | (26.6   | )     |   |  | 11.5    |      
|Increase (decrease) in current provisions                                                                              |                   |                                 | (5.4    | )     |   |      | (6.1     | )     |   |  | (124.5  | )     |   |  | (3.8    | )    
|Increase (decrease) in progress payments on
    contracts                                                              |                   |                                 | 154.1   |       |   |      | 173.1    |       |   |  | 89.6    |       |   |  | 999.5   |      
|Increase (decrease) in accounts payables and
    other creditors                                                       |                   |                                 | 55.3    |       |   |      | 62.1     |       |   |  | 45.3    |       |   |  | 75.9    |      
|                                                                                                                       |                   |                                 |         |       |   |      |          |       |   |  |         |       |   |  |         |      
|Net cash provided by (used in) operating
    activities                                                                |                   |                                 | 99.8    |       |   |      | 112.0    |       |   |  | (186.6  | )     |   |  | 207.7   |      
|CASH FLOW FROM INVESTING ACTIVITIES:                                                                                   |                   |                                 |         |       |   |      |          |       |   |  |         |       |   |  |         |      
|Capital expenditures (property, plant and
    equipment)                                                               |                   |                                 | (39.5   | )     |   |      | (44.4    | )     |   |  | (14.0   | )     |   |  | (8.2    | )    
|Capital expenditures (intangibles)                                                                                     |                   |                                 | (20.0   | )     |   |      | (22.5    | )     |   |  | (1.4    | )     |   |  | (0.5    | )    
|Proceeds from disposal of fixed assets                                                                                 |                   |                                 | 1.8     |       |   |      | 2.0      |       |   |  | 20.3    |       |   |  | 0.6     |      
|Acquisition of investments                                                                                             |                   |                                 | (925.7  | )     |   |      | (1,040.0 | )     |   |  | (686.8  | )     |   |  | (101.1  | )    
|KTI/MDEU price reduction                                                                                               |                   |                                 |        |       |   |      |         |       |   |  | 63.3    |       |   |  | (63.3   | )    
|Proceeds from disposal of investments                                                                                  |                   |                                 | 188.5   |       |   |      | 211.8    |       |   |  | 156.0   |       |   |  | 9.3     |      
|Increase (decrease) from changes in scope of
    consolidation**                                                       |                   |                                 | 207.2   |       |   |      | 232.8    |       |   |  | 42.8    |       |   |  | 140.0   |      
|                                                                                                                       |                   |                                 |         |       |   |      |          |       |   |  |         |       |   |  |         |      
|Net cash provided by (used in)
    investing activities                                                                |                   |                                 | (587.7  | )     |   |      | (660.3   | )     |   |  | (419.8  | )     |   |  | (23.2   | )    
|CASH FLOW FROM FINANCING ACTIVITIES:                                                                                   |                   |                                 |         |       |   |      |          |       |   |  |         |       |   |  |         |      
|Increase in short-term debt                                                                                            |                   |                                 | 3.9     |       |   |      | 4.4      |       |   |  | 190.0   |       |   |  | 16.6    |      
|Decrease in short-term debt                                                                                            |                   |                                 | (73.3   | )     |   |      | (82.3    | )     |   |  | (13.8   | )     |   |  | (10.4   | )    
|Increase in long-term debt                                                                                             |                   |                                 | 985.4   |       |   |      | 1,107.1  |       |   |  |        |       |   |  | 4.7     |      
|Decrease in long-term debt                                                                                             |                   |                                 | (187.0  | )     |   |      | (210.1   | )     |   |  | (2.0    | )     |   |  |        |      
|Increase in loans                                                                                                      |                   |                                 | (13.3   | )     |   |      | (14.9    | )     |   |  | (3.2    | )     |   |  | (10.1   | )    
|Decrease in loans                                                                                                      |                   |                                 | (0.1    | )     |   |      | (0.1     | )     |   |  |        |       |   |  |        |      
|Repurchase of own shares                                                                                               |                   |                                 | (1.4    | )     |   |      | (1.6     | )     |   |  | (21.5   | )     |   |  | (20.2   | )    
|Increase (decrease) in minority interests                                                                              |                   |                                 | 1.6     |       |   |      | 1.8      |       |   |  | 0.1     |       |   |  | (0.5    | )    
|Parent companys equity:                                                                                               |                   |                                 |         |       |   |      |          |       |   |  |         |       |   |  |         |      
|                                                                                                                       | capital increases |                                 |         | 8.9   |   |      |          | 10.0  |   |  |         | 22.3  |   |  |         | 12.5  |  
|                                                                                                                       | paid dividends    |                                 |         | (45.3 | ) |      |          | (50.9 | ) |  |         | (45.9 | ) |  |         | (37.8 | )
|                                                                                                                       | capital decreases |                                 |         |      |   |      |          |      |   |  |         |      |   |  |         | (19.7 | )
|                                                                                                                       |                   |                                 |         |       |   |      |          |       |   |  |         |       |   |  |         |      
|Net cash provided by (used in) financing
    activities                                                                |                   |                                 | 679.4   |       |   |      | 763.4    |       |   |  | 126.0   |       |   |  | (64.9   | )    
|Net effect of exchange rate changes                                                                                    |                   |                                 | (13.1   | )     |   |      | (14.8    | )     |   |  | 24.1    |       |   |  | 38.3    |      
|                                                                                                                       |                   |                                 |         |       |   |      |          |       |   |  |         |       |   |  |         |      
|Net increase (decrease) in cash and
    cash equivalents                                                               |                   |                                 | 178.4   |       |   |      | 200.3    |       |   |  | (456.3  | )     |   |  | 157.9   |      
|Cash and cash equivalent at the beginning of the
    year                                                              |                   |                                 | 501.1   |       |   |      | 563.1    |       |   |  | 1,019.4 |       |   |  | 861.5   |      
|Cash and cash equivalent at the end of the
    year                                                                    |                   |                                 | 679.5   |       |   |      | 763.4    |       |   |  | 563.1   |       |   |  | 1,019.4 |      
|                                                                                                                       |                   |                                 |         |       |   |      |          |       |   |  |         |       |   |  |         |      
|Increase in shareholders equity related to
    the Coflexip and Isis acquisitions                                     |                   |                                 | 1,391.7 |       |   |      | 1,563.6  |       |   |  |        |       |   |  |        |      
|Cash paid for income taxes                                                                                             |                   |                                 | (58.1   | )     |   |      | (65.3    | )     |   |  | (41.2   | )     |   |  | (22.2   | )    
|Interest paid                                                                                                          |                   |                                 | (14.6   | )     |   |      | (16.4    | )     |   |  | (7.3    | )     |   |  | (3.0    | )    






|   |                                                                                                                                                                                                                                                              
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|*  | For the convenience of the reader, the financial
    statements as of and for the year ended December 31, 2001
    have been translated into U.S. dollars (U.S.$) at the rate
    of
     1.00 =
    U.S. $0.8901 on December 31, 2001. (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-COFLEXIP






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 |       | equity       
|                                            |  |                                                           |            |        |  |         |      |          |  |             |         |               |  |        |       |              
|                                            |  |                                                          
|                                            |  | (Amounts in millions of euro, except as otherwise stated)
|As of December 31, 1998                     |  |                                                           | 15,775,999 |        |  |         | 48.1 |          |  |             | 31.2    |               |  |        | 322.4 |               |  |  | (5.5 | ) |  |  | (17.5  | )    |  |  | 105.4  |   |  |  | 484.1   |  
|                                            |  |                                                           |            |        |  |         |      |          |  |             |         |               |  |        |       |               |  |  |      |   |  |  |        |      |  |  |        |   |  |  |         |  
|Capital increase                            |  |                                                           | 220,815    |        |  |         | 0.7  |          |  |             | 11.8    |               |  |        |       |               |  |  |      |   |  |  |        |      |  |  |        |   |  |  | 12.5    |  
|Appropriation of net income 1998            |  |                                                           |            |        |  |         |      |          |  |             |         |               |  |        | 67.6  |               |  |  |      |   |  |  |        |      |  |  | (105.4 | ) |  |  | (37.8   | )
|Foreign currency translation                |  |                                                           |            |        |  |         |      |          |  |             |         |               |  |        |       |               |  |  | 4.2  |   |  |  |        |      |  |  |        |   |  |  | 4.2     |  
|Capital decrease                            |  |                                                           | (238,277   | )      |  |         | (0.7 | )        |  |             |         |               |  |        | (19.0 | )             |  |  |      |   |  |  |        |      |  |  |        |   |  |  | (19.7   | )
|Net income                                  |  |                                                           |            |        |  |         |      |          |  |             |         |               |  |        |       |               |  |  |      |   |  |  |        |      |  |  | 172.6  |   |  |  | 172.6   |  
|Treasury shares                             |  |                                                           |            |        |  |         |      |          |  |             |         |               |  |        |       |               |  |  |      |   |  |  | (20.2  | )    |  |  |        |   |  |  | (20.2   | )
|Other                                       |  |                                                           |            |        |  |         |      |          |  |             |         |               |  |        | 0.5   |               |  |  |      |   |  |  |        |      |  |  |        |   |  |  | 0.5     |  
|                                            |  |                                                           |            |        |  |         |      |          |  |             |         |               |  |        |       |               |  |  |      |   |  |  |        |      |  |  |        |   |  |  |         |  
|As of December 31, 1999                     |  |                                                           | 15,758,537 |        |  |         | 48.1 |          |  |             | 43.0    |               |  |        | 371.5 |               |  |  | (1.3 | ) |  |  | (37.7  | )    |  |  | 172.6  |   |  |  | 596.2   |  
|                                            |  |                                                           |            |        |  |         |      |          |  |             |         |               |  |        |       |               |  |  |      |   |  |  |        |      |  |  |        |   |  |  |         |  
|Capital increase                            |  |                                                           | 270,768    |        |  |         | 0.8  |          |  |             | 21.5    |               |  |        |       |               |  |  |      |   |  |  |        |      |  |  |        |   |  |  | 22.3    |  
|Appropriation of net income 1999            |  |                                                           |            |        |  |         |      |          |  |             |         |               |  |        | 126.7 |               |  |  |      |   |  |  |        |      |  |  | (172.6 | ) |  |  | (45.9   | )
|Foreign currency translation                |  |                                                           |            |        |  |         |      |          |  |             |         |               |  |        |       |               |  |  | 1.1  |   |  |  |        |      |  |  |        |   |  |  | 1.1     |  
|Net income                                  |  |                                                           |            |        |  |         |      |          |  |             |         |               |  |        |       |               |  |  |      |   |  |  |        |      |  |  | 214.2  |   |  |  | 214.2   |  
|Treasury shares                             |  |                                                           |            |        |  |         |      |          |  |             |         |               |  |        |       |               |  |  |      |   |  |  | (21.5  | )    |  |  |        |   |  |  | (21.5   | )
|                                            |  |                                                           |            |        |  |         |      |          |  |             |         |               |  |        |       |               |  |  |      |   |  |  |        |      |  |  |        |   |  |  |         |  
|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                                  |  |                                                           |            |        |  |         |      |          |  |             |         |               |  |        |       |               |  |  |      |   |  |  |        |      |  |  | 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 | )(a) |  |  | 108.1  |   |  |  | 2,214.2 |  
|                                            |  |                                                           |            |        |  |         |      |          |  |             |         |               |  |        |       |               |  |  |      |   |  |  |        |      |  |  |        |   |  |  |         |  
|As of December 31, 2001(in millions U.S.$*) |  |                                                           | 26,713,448 |        |  |         | 72.5 |          |  |             | 1,429.1 |               |  |        | 588.7 |               |  |  | 11.7 |   |  |  | (227.4 | )(a) |  |  | 96.2   |   |  |  | 1,970.8 |  
|                                            |  |                                                           |            |        |  |         |      |          |  |             |         |               |  |        |       |               |  |  |      |   |  |  |        |      |  |  |        |   |  |  |         |  






|    |                                                                                                                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Treasury shares as of December 31, 2001
    represent 623,595 shares
    ( 61.7 million)
    and shares held by its subsidiary Isis as of December 31,
    2001 represent 1,847,376 shares
    ( 193.8 million).                                           
|   
|*   | For the convenience of the reader, the financial
    statements as of and for the year ended December 31, 2001
    have been translated into U.S. dollars (U.S.$) at the rate
    of
     1.00 =
    U.S.$ 0.8901 on December 31, 2001. (See
    Note 1(a)).

The accompanying notes are an integral part of
these Consolidated Financial Statements.

F-7



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##### Table of Contents



TECHNIP-COFLEXIP






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

The consolidated financial statements of
Technip-Coflexip (formerly Technip) for the 2001 fiscal year are
not comparable to those for the 2000 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 consolidated in the Technip-Coflexip financial
statements.

The impact of such change in scope of
consolidation is further described in Note 2 and identified
in the other notes to the consolidated financial statements when
significant.

The Technip-Coflexip net sales in 2001 include
activity of the former Technip for twelve months of 2001 and
activity of Coflexip for three months (fourth quarter 2001). The
net income of Technip-Coflexip in 2001 includes Coflexip and
Isis income since October 1, 2001.

(b) Operational branches

Following the acquisition of Coflexip, the Group
reorganized its operational segments. The Group is now organized
in three Branches as follows:



| |   |                                                                                                                                                                                                                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The Offshore Branch (Technip-CSO:
    Creative Solutions Offshore), which includes the former Coflexip
    business units (including the Deepwater Division acquired from
    Aker Maritime early 2001) and the offshore business units from
    the former Technip.                                                                                      
|
| |  | The Onshore/ Downstream Branch
    (Technip-PRO: Petrochemicals, Refining, Onshore),
    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 (Technip-LCI:
    Life sciences, Chemicals and Industries), 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-Coflexip
will report on the basis of four regions:



| |   |                             
| | - | ----------------------------
| |  | Europe, Russia-Central Asia,
|
| |  | Africa, Middle-East,        
|
| |  | Asia Pacific, and           
|
| |  | Americas.                   

(c) Nature of business and operating
cycle

Technip-Coflexips principal business
includes the following:



| |   |                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------
| |  | Lump-sum or cost-to-costs engineering services
    contracts performed over a short period;                           
|
| |  | Engineering, manufacturing, installation and
    commissioning services contracts lasting approximately
    12 months;

F-8



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##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)




| |   |                                                                                                                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Turnkey projects related to complex industrial
    facilities with engineering, procurement, construction and
    start-up, in respect of industrial performances and a
    contractual schedule. Average duration of these contracts is
    three years but can vary from one contract to another.

(d) Reclassifications

Certain reclassifications have been made to the
prior year statements to conform to the current year
presentation.

Note 1  Summary of significant
accounting principles

(a) Basis of
presentation

The consolidated financial statements of
Technip-Coflexip, and its consolidated subsidiaries
(Technip-Coflexip, 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 approved by the decree date June 22, 1999
of the French Comité de la Réglementation
Comptable.

For the convenience of the reader, the financial
statements as of and for the year ended December 31, 2001
have been translated into U.S. Dollars at the noon buying
rate in New York City on December 31, 2001 for cable
transfers in Euro, as certified for custom purposes by the
Federal Reserve Bank of New York, of
 1.00 =
U.S. $0.8901. 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-Coflexips
voting rights exceed 50% are consolidated. Significant jointly
controlled entities are consolidated using the proportionate
consolidation method.

The equity method of accounting 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-Coflexips consolidated subsidiaries and related
percentage of control by Technip-Coflexip as of
December 31, 2001 is provided in Note 28.

(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 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. Actual
results could differ from those estimates.

F-9



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##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


(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
    management 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.



| |                
| | ---------------
| | 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.

(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.

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

F-10



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##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


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.

(f) Translation to reporting
currency

The income statements 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.

Exchange rate differences attributable to loans
and forward exchange agreements in foreign currencies that are
designated as a hedge of the net assets of a foreign subsidiary
are recorded directly to shareholders equity, together
with the corresponding translation difference on the hedged net
assets.

(g) Intangible assets

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 expensed, except for those costs incurred
in connection with the development of computer systems such as
the E-Procurement platform, which are amortized over three 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.

The carrying value of intangible assets is
reviewed periodically. When events or changes in circumstances
indicate that there may be impairment, additional non-recurring
amortization is recorded to reduce the intangible asset to its
estimated net realizable value.

(h) Property, plant and
equipment

Property, plant and equipment are carried at
their acquisition 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-Coflexip 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.

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 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.

(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.

F-11



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##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


(j) Deferred bid costs

Costs directly attributable to obtaining future
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 income statements 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 highly 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 income statement 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;
|
| |  | 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);
|
| |  | as 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 determined on the weighted-average basis.

(m) Receivables

Receivables are stated at their nominal value. A
provision for doubtful accounts is recorded if receivables are
expected to be uncollectable, based on an analysis of aging
schedule.

F-12



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##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


(n) Advances to
suppliers

Advance payments made to suppliers under
long-term 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 valued at
their market value at closing date. Changes in fair value, both
unrealized gains and unrealized losses, are recognized in each
periods income statement.

(p) Retirement indemnities and Accrued
liabilities

Accrued liabilities are recorded in compliance
with French Règlement 2000-6 based on the
analysis of related exposure.

Foreseeable losses on contracts:an allowance is made 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 operates, such as administration rules and regulations,
could sometimes cause the Company to use assumptions in order to
measure related obligations.

Expenses to complete
contracts:at the time of sale 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:



| |   |                                                                                       
| | - | --------------------------------------------------------------------------------------
| |  | retirement indemnities, which are to be paid at
    retirement date, and              
|
| |  | deferred wages indemnities, which are to be paid
    when employees leave the company.

The actuarial estimation is based on usual
parameters such as future wage and salary increases, life
expectancy, turnover of staff, rate of return on investment.

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

F-13



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##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


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
being charged to income statement over the duration of the
contract.

On certain occasions, the Company may buy foreign
currency options during the tender period.

Forward exchange contracts are used to hedge firm
contractual commitments and identified forecasted flows on
ongoing contracts not previously hedged using an insurance
contract or to adjust the hedging position during the life of a
previously hedged contract.

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s subsidiary enters into forward
exchange contracts with banks or with the Group treasury
company, Technip Eurocash G.E.I.E.

The Company 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. As a result,
related unrealized gains or losses are not recorded in the
balance sheet. Realized exchange gain or loss arising from a
foreign currency instrument designated as a hedge is recorded in
the consolidated statement of income when the underlying
transaction occurs.

Except for certain interest rate swaps, all
financial instruments and the related underlying transactions
have a maturity of less than two years.

(s) Research and
development

Research and development costs are expensed when
incurred and classified as operating expenses. However, they are
deferred in the balance sheet when technical feasibility and
return of investment can be demonstrated.

(t) Financial result

Financial result on long term contracts is
recorded as 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 income

Non-operating income relates to income and
expenses arising from assets disposals and restructuring
operations.

(v) Diluted earnings per
share

Diluted earnings per share has been calculated on
the basis of the number of common stock outstanding as of each
year-end including outstanding options to subscribe new shares
granted to employees and after deduction of existing shares held
by subsidiaries.

Note 2  Changes in scope of
consolidation: significant acquisitions and
divestitures



| |                                         
| | ----------------------------------------
| | For the year ended December 31,
    2001

In August 2001, Technip launched two public
offers on Coflexip and Isis, in order to take the control of
Coflexip, in which Technip already held a 29.4% interest
(initially 29.7%).

F-14



---



##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


(a) Purchase of 99.05% of interest in
Isis

As a result of the exchange public offer launched
in the beginning of July 2001, Technip finalized the purchase of
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 Geophysique CGG) and shares of
private companies with estimated sales value of
 205 million.

In consideration of two exchange promises signed
by Isis and Institut Français du Petrole (IFP)
in September 30, 2001, the CGG shares held by Isis will be
sold to IFP in a 36-month period beginning December 31,
2001. These shares are recorded at their historical book value
( 73.1 million).

The balance sheets of Isis as of
September 30, 2001 and December 31, 2001 used for
Technip-Coflexip 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-Coflexip,
     31.7 million,
    Coflexip,
     56.2 million
    and CGG,
     73.1 million.

The difference between the purchase price and the
shareholders equity at the date of acquisition of Isis by
Technip-Coflexip amounted to
 450.2 million
[749-(301.7 x 99.05%)] and was fully allocated to
Technip-Coflexip and Coflexip shares.

(b) Purchase of 52.47% of interest in
Coflexip

Technip has held since April 2000 a 29.4%
(initially 29.7%) interest in Coflexip. As a result of the
exchange public offers launched in the beginning of July 2001,
Technip finalized at the beginning of October 2001, the
additional purchase of a 52.47% interest in Coflexip. 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 issuance of new Technip shares based on the exchange
ratio of 9 Technip shares for 8 Isis shares. This
transaction created 5,504,436 new Technip (renamed
Technip-Coflexip) shares
( 814.6 million).

The global purchase price of Coflexip shares
obtained at the end of the public offers on Coflexip (52.47%)
amounted to
 1,838.3 million,
including net purchase costs of
 28.7 million.

F-15



---



##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


Coflexip balance sheets as of September 30,
2001 and December 31, 2001 used for Technip-Coflexip
consolidation purposes are detailed as follows.

|                                               |  |                    |         |              |  |  |         | 
|---------------------------------------------- |  | ------------------ | ------- | ------------ |  |  | ------- | 
|                                               |  | September 30,      |         | December 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 equivalent                       |  |                    | 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 | 
|                                               |  |                    |         |              |  |  |         | 



---



|    |                                               
|--- | ----------------------------------------------
|(*) | Before purchase price allocation and unaudited

The following information is presented below:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the 2001 Coflexip income statement including the
    Aker Deepwater Division goodwill amortization of
     142.6 million
    at the end of the year; and                                                                                                                                                                                                                                                                                                                    
|
| |  | the 2001 4th quarter Coflexip income statement
    used by Technip-Coflexip for consolidation purposes is presented
    below. It is not affected by the exceptional amortization 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
    future cash flows.

|                                                          |  |                    |         |                  |  |  |       |  
|--------------------------------------------------------- |  | ------------------ | ------- | ---------------- |  |  | ----- | -
|                                                          |  | 2001               |         | 2001            
|                                                          |  | (12 month)         |         | (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-16



---



##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


The difference between the purchase price and the
shareholders equity at the date of acquisition of 69.1% of
Coflexip (16.6% through the acquisition of Isis (see
Note 2(a) ) and 52.5% as described
above) by Technip-Coflexip is detailed as follows after
allocation to identified assets and liabilities:

|                                                                                     |              |  |  |             |   |  |         |         |  
|------------------------------------------------------------------------------------ | ------------ |  |  | ----------- | - |  | ------- | ------- | -
|                                                                                     |              |  |  | In millions
|                                                                                     |              |  |  | of EUR     
|                                                                                     |              |  |  |            
|Creation of 5,504,436 Technip-Coflexip 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 accounted 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     |  |  |             |   |  |         | 2,048.0 |  
|                                                                                     |              |  |  |             |   |  |         |        

This goodwill, which is not deductible for tax
purposes, has been allocated to the Offshore branch.

For Technip-Coflexip, the unaudited proforma
consolidated statements of income for 2000 and 2001 have been
prepared assuming that the purchase of Coflexip described above
was made at the beginning of each period presented. Considered
as immaterial, Isis activity is not included. Pro forma figures
for 2000 may differ from pro forma figures previously
published due to the use of estimates before the transaction
closed.

|                                                  |  |                             |         |             |  |           |         |           |  |          |       |      |  |  |         |   |  |  |         |  
|------------------------------------------------- |  | --------------------------- | ------- | ----------- |  | --------- | ------- | --------- |  | -------- | ----- | ---- |  |  | ------- | - |  |  | ------- | -
|                                                  |  |                             |         |             |  |          
|                                                  |  |                             |         | Unaudited  
|                                                  |  | Technip-Coflexip Historical |         |            
|                                                  |  | 2001                        |         | Adjustments |  | Pro forma |         | Pro forma
|                                                  |  | (12 months)                 |         | 2001        |  | 2001      |         | 2000     
|                                                  |  |                             |         |             |  |           |         |          
|                                                  |  | Technip                     |         |             |  | Technip-  |         | Technip-  |  | Technip-
|                                                  |  | former perimeter            |         | Coflexip    |  | Coflexip  |         | Coflexip  |  | Coflexip
|                                                  |  |                             |         |             |  |           |         |           |  |         
|                                                  |  |                            
|                                                  |  | In millions of EUR         
|Net sales                                         |  |                             | 3,051.0 |             |  |           | 1,898.8 |           |  |          |      |      |  |  | 4,949.8 |   |  |  | 4,426.6 |  
|Operating income before
    goodwill amortization |  |                             | 203.5   |             |  |           | 118.9   |           |  |          | (14.2 | )    |  |  | 308.2   |   |  |  | 355.1   |  
|Goodwill amortization                             |  |                             | (41.6   | )           |  |           | (170.5  | )         |  |          | 96.3  | (a)  |  |  | (115.8  | ) |  |  | (118.3  | )
|Operating income                                  |  |                             | 161.9   |             |  |           | (51.6   | )         |  |          | 82.1  |      |  |  | 192.4   |   |  |  | 236.8   |  
|Financial result                                  |  |                             | (0.5    | )(e)        |  |           | (10.0   | )         |  |          | (41.3 | )(b) |  |  | (51.8   | ) |  |  | (43.5   | )
|Non operating income                              |  |                             | (6.6    | )           |  |           |        |           |  |          | 2.8   |      |  |  | (3.8    | ) |  |  | 227.7   |  
|Income of equity affiliates                       |  |                             | 25.2    |             |  |           | (0.8    | )         |  |          | (24.0 | )(c) |  |  | 0.4     |   |  |  |        |  
|Income tax                                        |  |                             | (57.2   | )           |  |           | (42.8   | )         |  |          | 19.5  |      |  |  | (80.5   | ) |  |  | (98.8   | )
|Minority interests                                |  |                             | (1.8    | )           |  |           | (0.1    | )         |  |          | (1.7  | )    |  |  | (3.6    | ) |  |  | (8.6    | )
|                                                  |  |                             |         |             |  |           |         |           |  |          |       |      |  |  |         |   |  |  |         |  
|Net income                                        |  |                             | 121.0   |             |  |           | (105.3  | )         |  |          | 37.4  | (d)  |  |  | 53.1    |   |  |  | 195.3   |  
|                                                  |  |                             |         |             |  |           |         |           |  |          |       |      |  |  |         |   |  |  |         |  
|Diluted pro forma earning per share               |  |                             |         |             |  |           |         |           |  |          |       |      |  |  | 2.09    |   |  |  | 7.60    |  

F-17



---



##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)




---



|    |                                                                                                                                                                                                                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | 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



|    |                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------
|(b) | 12 months interest expense related to the credit
    facility financing the public offer on Coflexip



|    |                                                                                                                                                                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(c) | Reversal of 12 months income from equity
    affiliate from Coflexip                                                                                                                                                                                                                          
|   
|(d) | Net income before non-operating income and
    goodwill amortization amounts to
     172.7 million
    (53.1 + 115.8 + 3.8)                                                                                                                                                                  
|   
|(e) | For proforma purposes, the financial result of
    Technip former perimeter does not include the
     9.6 million
    interest expenses related to the Credit Facility on Q4 (see
    Note 6(c)). These interest expenses are included in the
    proforma Adjustments 2001 column (see (b)).



| |                                         
| | ----------------------------------------
| | For the year ended December 31,
    2000

(c) Purchase of 29.7% of interest in
Coflexip

On April 19, 2000, Technip-Coflexip acquired
29.7% of Coflexips shares for a purchase price of
 659.7 million
(including net purchase costs of
 2.9 million).
Coflexip was accounted for under the equity method in 2000 and
during the first nine months of 2001. The resulting goodwill
amounted to
 447 million
and is being amortized over 20 years.

Summarized consolidated balance sheet and income
statements as of December 31, 2000 are as follows:

|                                     |  |             |         | 
|------------------------------------ |  | ----------- | ------- | 
|                                     |  | 12/31/00   
|                                     |  |            
|                                     |  | In millions
|                                     |  | of EUR     
|Cash and cash equivalent             |  |             | 598.8   | 
|Other current assets                 |  |             | 442.4   | 
|Investments & other assets           |  |             | 3.8     | 
|Property, plant, ships and equipment |  |             | 502.2   | 
|Intangible assets                    |  |             | 52.0    | 
|                                     |  |             |         | 
|Total assets                         |  |             | 1,599.2 | 
|                                     |  |             |         | 
|Net operating revenues               |  |             | 1,064.5 | 
|Operating income                     |  |             | 108.8   | 
|Net income                           |  |             | 222.7   | 
|Current liabilities                  |  |             | 575.8   | 
|Long term liabilities                |  |             | 117.4   | 
|Shareholders equity                 |  |             | 906.0   | 
|                                     |  |             |         | 
|Total liabilities and net equity     |  |             | 1,599.2 | 
|                                     |  |             |         | 

Technips share in the 2000 net income of
Coflexip amounts to
 60 million.
In order to reflect the fact that this net income includes a
significant portion arising from a non-recurring transaction,
the Company decided to split in the 2000 income statement its
share into the following components:



| |   |                                                                                                                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a
     39 million
    amount recorded under the Other non-operating income
    line item of the income statement which refers to the net gain
    resulting from the sale of a major Coflexip investment in the
    second semester of 2000 (see Note 7);
|
| |  | the remaining
     21 millions
    portion recorded under the Income of equity
    affiliates line item of the income statement.                                                                                                                         

F-18



---



##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


(d) Krebs-Speichim

In September 2000, Technip-Coflexip (formerly
Technip) acquired at a purchase price of
 21.7 million
the remaining 50% of Krebs-Speichim, which had been accounted
for under the proportionate consolidation method. Since
September 2000, Krebs-Speichim is consolidated. The resulting
goodwill approximately amounts to
 13 million
and is amortized over 20 years.



| |                                         
| | ----------------------------------------
| | For the year ended December 31,
    1999

(e) KTI/MDEU

On March 3, 1999, Technip completed the
acquisition of both the Energy and Environmental business and
Petrochemicals and Refinery business of Mannesmann Demag AG
(Mannesmann) referred to as the MDEU and KTI
divisions, respectively. Accordingly, Technip acquired 100% of
the outstanding capital stock of the corresponding companies:
Technip Germany, EHR, MSE and MSI for the former MDEU
subsidiaries and TP Benelux BV, KTI Belgium, KTI Spa and Technip
USA for the former KTI division.

According to the Purchase Agreement signed as of
December 18, 1998, operational control of these companies
was given to Technips representatives effective
January 1, 1999. As a consequence, the Companys 1999
financials statements include twelve months of operations of the
acquired companies.

Technip has recorded this acquisition using the
purchase method of accounting and, accordingly, the final
purchase price amounting to
 82.8 million
takes into account the price reduction of
 63.3 million
(which was paid to Technip in February 2000) as a result of
price adjustment procedures defined in the Purchase Agreement
relating to this acquisition. The final purchase price has been
allocated to assets acquired and liabilities assumed based on
estimated fair values at the date of acquisition, as follows:

|                              |  |             |        |  
|----------------------------- |  | ----------- | ------ | -
|                              |  | In millions
|                              |  | of EUR     
|Cash                          |  |             | 140.0  |  
|Other current assets          |  |             | 249.1  |  
|Contracts-in-progress         |  |             | 325.2  |  
|Fixed assets                  |  |             | 25.2   |  
|Residual goodwill             |  |             | 159.5  |  
|Progress payment on contracts |  |             | (314.7 | )
|Other current liabilities     |  |             | (192.7 | )
|Financial debt                |  |             | (2.8   | )
|Accrued liabilities           |  |             | (268.8 | )
|Pension reserve               |  |             | (37.2  | )
|                              |  |             |        |  
|Purchase price                |  |             | 82.8   |  
|                              |  |             |        |  

The residual goodwill is amortized over its
expected useful life, which is 20 years.

Had KTI/MDEU been consolidated beginning
January 1, 1998, pro forma net sales for the Company would
have been
 2,487.3 million,
pro forma operating income would have been
 127.6 million,
pro forma net income would have been
 116.3 million
and diluted earning per share would have been
 7.18
(unaudited).

F-19



---



##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


Note 3  Business and
geographical segment information

(a) Information by business
segment

Technip Coflexip has three operational segments:
Offshore, Onshore/ Downstream and Industries, which are defined
as follows:



| |   |                    
| | - | -------------------
| |  | Offshore           
|
| |  | Onshore/ Downstream
|
| |  | Industries         

Segment results used by the Company to measure
segment profitability is the operating income before
depreciation and amortization (EBITDA).

F-20



---



##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


Note: 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 months activity plus
Coflexips activity from October 1, 2001.

|                                                                            |  |                    |         |            |  |            |         |           |  |       |       |  |  |  |       |  |  |  |          | 
|--------------------------------------------------------------------------- |  | ------------------ | ------- | ---------- |  | ---------- | ------- | --------- |  | ----- | ----- |  |  |  | ----- |  |  |  | -------- | 
|                                                                            |  |                    |         | Onshore /  |  |            |         |           |  |      
|                                                                            |  | Offshore           |         | Downstream |  | Industries |         | Corporate |  | Total
|                                                                            |  |                    |         |            |  |            |         |           |  |      
|                                                                            |  |                   
|                                                                            |  | In millions of EUR
|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 (EBITDA)          |  |                    | 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 | 
|2000                                                                        |  |                    |         |            |  |            |         |           |  |       |       |  |  |  |       |  |  |  |          | 
|Net sales                                                                   |  |                    | 130.0   |            |  |            | 2,290.9 |           |  |       | 551.1 |  |  |  |      |  |  |  | 2,972.0  | 
|Operating income before depreciation and
    amortization (EBITDA)          |  |                    | 0.1     |            |  |            | 157.1   |           |  |       | 41.7  |  |  |  |      |  |  |  | 198.9    | 
|Backlog as of December 31                                                   |  |                    | 260.0   |            |  |            | 2,742.0 |           |  |       | 408.0 |  |  |  |      |  |  |  | 3,410.0  | 
|Capital expenditures (property, plant and
    equipment)                    |  |                    | 1.0     |            |  |            | 12.2    |           |  |       | 0.8   |  |  |  |      |  |  |  | 14.0     | 
|Segment assets                                                              |  |                    | 787.0   |            |  |            | 4,861.0 |           |  |       | 707.0 |  |  |  | 551.6 |  |  |  | 6,906.6  | 
|1999                                                                        |  |                    |         |            |  |            |         |           |  |       |       |  |  |  |       |  |  |  |          | 
|Net sales                                                                   |  |                    | 56.0    |            |  |            | 2,121.7 |           |  |       | 604.5 |  |  |  |      |  |  |  | 2,782.2  | 
|Operating income before depreciation and
    amortization (EBITDA)          |  |                    | (0.9    | )          |  |            | 158.5   |           |  |       | 25.7  |  |  |  |      |  |  |  | 183.3    | 
|Backlog as of December 31                                                   |  |                    | 50.9    |            |  |            | 3,084.2 |           |  |       | 333.1 |  |  |  |      |  |  |  | 3,468.2  | 
|Capital expenditures (property, plant and
    equipment)                    |  |                    |        |            |  |            | 8.2     |           |  |       |      |  |  |  |      |  |  |  | 8.2      | 
|Segment assets                                                              |  |                    | 280.6   |            |  |            | 4,155.7 |           |  |       | 809.9 |  |  |  | 958.8 |  |  |  | 6,205.0  | 

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.

F-21



---



##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


(b) Information by geographical
segment

Technip-Coflexip has activity in four major
geographical areas.

Note: 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 months activity plus
Coflexips activity from October 1, 2001.

|                                                          |  |                    |       |          |  |         |         |         |  |          |       |       |  |  |         |  |  |  |       |  |  |  |         | 
|--------------------------------------------------------- |  | ------------------ | ----- | -------- |  | ------- | ------- | ------- |  | -------- | ----- | ----- |  |  | ------- |  |  |  | ----- |  |  |  | ------- | 
|                                                          |  | Europe,            |       | Middle   |  |         |         |         |  |          |       |      
|                                                          |  | Russia, and        |       | East and |  | Asia    |         |         |  |          |       |      
|                                                          |  | Central Asia(*)    |       | Africa   |  | Pacific |         | America |  | Seas(**) |       | Total
|                                                          |  |                    |       |          |  |         |         |         |  |          |       |      
|                                                          |  |                   
|                                                          |  | In millions of EUR
|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   | 
|2000                                                      |  |                    |       |          |  |         |         |         |  |          |       |       |  |  |         |  |  |  |       |  |  |  |         | 
|Net sales                                                 |  |                    | 717.0 |          |  |         | 1,448.3 |         |  |          | 352.2 |       |  |  | 454.5   |  |  |  |      |  |  |  | 2,972.0 | 
|Operating income before depreciation and
    amortization |  |                    | 64.2  |          |  |         | 102.9   |         |  |          | 29.3  |       |  |  | 2.5     |  |  |  |      |  |  |  | 198.9   | 
|Backlog as of December 31                                 |  |                    | 590.6 |          |  |         | 1,754.8 |         |  |          | 728.7 |       |  |  | 335.9   |  |  |  |      |  |  |  | 3,410.0 | 
|Property, plant and equipment, net                        |  |                    | 154.2 |          |  |         |        |         |  |          | 4.9   |       |  |  | 3.0     |  |  |  |      |  |  |  | 162.1   | 
|1999                                                      |  |                    |       |          |  |         |         |         |  |          |       |       |  |  |         |  |  |  |       |  |  |  |         | 
|Net sales                                                 |  |                    | 922.9 |          |  |         | 1,296.8 |         |  |          | 224.9 |       |  |  | 337.6   |  |  |  |      |  |  |  | 2,782.2 | 
|Operating income before depreciation and
    amortization |  |                    | 60.5  |          |  |         | 103.8   |         |  |          | 13.1  |       |  |  | 5.9     |  |  |  |      |  |  |  | 183.3   | 
|Backlog as of December 31                                 |  |                    | 693.6 |          |  |         | 2,011.6 |         |  |          | 416.2 |       |  |  | 346.8   |  |  |  |      |  |  |  | 3,468.2 | 
|Property, plant and equipment, net                        |  |                    | 167.2 |          |  |         |        |         |  |          | 3.1   |       |  |  | 2.1     |  |  |  |      |  |  |  | 172.4   | 



---



|    |                               
|--- | ------------------------------
|(*) | of which net sales for France:

 2001:
 88.5 million,


 2000:
 89.2 million,


 1999:
 111.3 million,




|     |         
|---- | --------
|(**) | Vessels.

(c) Major Customers

|                                                                    |  |                    |         |      |  |      |         |  |  |  |         | 
|------------------------------------------------------------------- |  | ------------------ | ------- | ---- |  | ---- | ------- |  |  |  | ------- | 
|                                                                    |  | 2001               |         | 2000 |  | 1999
|                                                                    |  |                    |         |      |  |     
|                                                                    |  |                   
|                                                                    |  | In millions of EUR
|Total Net Sales                                                     |  |                    | 3,546.0 |      |  |      | 2,972.0 |  |  |  | 2,782.2 | 
|in which the major customers represent the
    following share (a): |  |                    |         |      |  |      |         |  |  |  |         | 
|Customer A                                                          |  |                    | X%      |      |  |      | X%      |  |  |  | 11.5%   | 
|Customer B                                                          |  |                    | X%      |      |  |      | X%      |  |  |  | 11.5%   | 



---



|    |                                               
|--- | ----------------------------------------------
|(a) | X% means less than 10% of the total net sales.

F-22



---



##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


Note 4  Operating
income

Operating income is stated after accounting for
the following items:

(a) Amortization and
depreciation

|                                      |  |                    |       |          |  |          |       |   |  |  |       |  
|------------------------------------- |  | ------------------ | ----- | -------- |  | -------- | ----- | - |  |  | ----- | -
|                                      |  | 12/31/01           |       | 12/31/00 |  | 12/31/99
|                                      |  |                    |       |          |  |         
|                                      |  |                   
|                                      |  | In millions of EUR
|Amortization of intangible assets (*) |  |                    | (8.0  | )        |  |          | (1.4  | ) |  |  | (0.5  | )
|                                      |  |                    |       |          |  |          |       |   |  |  |       |  
|Depreciation of:                      |  |                    |       |          |  |          |       |   |  |  |       |  
|Buildings                             |  |                    | (8.7  | )        |  |          | (4.8  | ) |  |  | (5.3  | )
|Vessels                               |  |                    | (14.2 | )        |  |          |      |   |  |  |      |  
|Machinery and equipment               |  |                    | (6.5  | )        |  |          | (1.5  | ) |  |  | (5.0  | )
|Office fixtures and furniture         |  |                    | (12.2 | )        |  |          | (8.0  | ) |  |  | (7.7  | )
|Other                                 |  |                    |      |          |  |          | (0.6  | ) |  |  | (3.8  | )
|                                      |  |                    |       |          |  |          |       |   |  |  |       |  
|Total depreciation                    |  |                    | (41.6 | )        |  |          | (14.9 | ) |  |  | (21.8 | )
|                                      |  |                    |       |          |  |          |       |   |  |  |       |  
|Total depreciation and amortization   |  |                    | (49.6 | )        |  |          | (16.3 | ) |  |  | (22.3 | )
|                                      |  |                    |       |          |  |          |       |   |  |  |       |  



---



|    |                                
|--- | -------------------------------
|(*) | Excluding goodwill amortization

(b) Research and Development
expenses

Research and Development expenses amounted to
 18.3 million,
 7.2 million
and
 10.3 million
in 2001, 2000 and 1999, respectively.

Reimbursable external financing of Research and
Development activities received and recorded as liabilities in
the balance sheet amount to
 13.7 million,
 5.1 million
and
 4.4 million
as of December 31, 2001, 2000 and 1999, respectively.

(c) Financial result from ongoing
contracts

As described in Note 1(t),
financial income and expenses arising from ongoing turnkey
contracts are included in net sales for
 17 million,
 25 million
and
 19 million
for the years ended December 31, 2001, 2000 and 1999,
respectively.

Note 5  Payroll and staff
(unaudited)

Technip-Coflexip has a workforce of about 18,000
people, in 52 countries, including an average of 3,100
external staff integrated in operating teams.

Note 6  Financial
result

|                                                                 |  |                    |       |          |  |          |      |   |  |  |      |  
|---------------------------------------------------------------- |  | ------------------ | ----- | -------- |  | -------- | ---- | - |  |  | ---- | -
|                                                                 |  | 12/31/01           |       | 12/31/00 |  | 12/31/99
|                                                                 |  |                    |       |          |  |         
|                                                                 |  |                   
|                                                                 |  | In millions of EUR
|Dividends from investments(a)                                    |  |                    | 0.9   |          |  |          | 4.7  |   |  |  | 4.3  |  
|Net income on sales of securities                                |  |                    | 9.2   |          |  |          | 0.4  |   |  |  | 3.9  |  
|Interest expenses(b)(c)                                          |  |                    | (26.5 | )        |  |          | (8.3 | ) |  |  | (1.4 | )
|Interest income(b)                                               |  |                    | 4.5   |          |  |          | 7.5  |   |  |  | 10.1 |  
|Changes in provisions related to unconsolidated
    subsidiaries |  |                    | (0.8  | )        |  |          | 0.5  |   |  |  | (0.2 | )
|Others                                                           |  |                    | 6.2   |          |  |          | 1.0  |   |  |  | (0.1 | )
|                                                                 |  |                    |       |          |  |          |      |   |  |  |      |  
|Financial result                                                 |  |                    | (6.5  | )        |  |          | 5.8  |   |  |  | 16.6 |  
|                                                                 |  |                    |       |          |  |          |      |   |  |  |      |  

F-23



---



##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)




---



|    |                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Including
     3.1 million
    and
     2.9 million
    dividends from Cogema in 2000 and 1999, respectively.                                                                           
|   
|(b) | As described in Note 1(t),
    interest expense and income recorded in the financial
    result do not include the financial result arising from
    ongoing contracts (see Note 4(c) ).



|    |                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------
|(c) | Of which
     (9.6)
    million linked to the financing of Coflexip acquisition in the
    fourth quarter 2001.

Note 7  Non-operating
income

|                                                                |  |                    |      |          |  |          |      |   |  |  |      |  
|--------------------------------------------------------------- |  | ------------------ | ---- | -------- |  | -------- | ---- | - |  |  | ---- | -
|                                                                |  | 12/31/01           |      | 12/31/00 |  | 12/31/99
|                                                                |  |                    |      |          |  |         
|                                                                |  |                   
|                                                                |  | In millions of EUR
|Dilution of the percentage of interest in
    Coflexip(a)       |  |                    | (2.7 | )        |  |          |     |   |  |  |     |  
|Gain on sales of consolidated investments(b)                    |  |                    | 2.8  |          |  |          | 1.1  |   |  |  | 0.5  |  
|Gain on sales of unconsolidated investments(c)                  |  |                    |     |          |  |          | 69.9 |   |  |  | 3.9  |  
|Gain on sales of investments from Coflexip(d)                   |  |                    |     |          |  |          | 39.0 |   |  |  |     |  
|Restructuring costs(e)                                          |  |                    | (3.1 | )        |  |          | (8.9 | ) |  |  | (2.0 | )
|Change in the accrued liabilities for
    geopolitical risks(f) |  |                    |     |          |  |          |     |   |  |  | 89.9 |  
|Other(g)                                                        |  |                    | (3.6 | )        |  |          | (7.2 | ) |  |  | 0.6  |  
|                                                                |  |                    |      |          |  |          |      |   |  |  |      |  
|Non-operating income                                            |  |                    | (6.6 | )        |  |          | 93.9 |   |  |  | 92.9 |  
|                                                                |  |                    |      |          |  |          |      |   |  |  |      |  



---



|    |                                                                                                                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Following removal of options at Coflexip in 2001,
    the percentage of interest held by Technip varies from 29.7% as
    of December 31, 2000 to 29.4% as of December 31, 2001.
    The impact of this variation is about
     (2.7) million.



|    |                                                                       
|--- | ----------------------------------------------------------------------
|(b) | In 2001, this item mainly corresponds to the sale
    of Chemoproject.



|    |                                                                                                                                                  
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------
|(c) | Relates in 2000 to the net gain resulting from
    sales of shares in Cogema for
     151.6 million
    with a book value of
     81.7 million.



|    |                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|(d) | In 2000, corresponds to Coflexips
    non-operating income of which Technip held a 29.7% interest and
    which is accounted for under the equity method.



|    |                                                                                                                                                                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(e) | In 2000, includes
     6.8 million
    in restructuring costs for MSE and TP Germany GmbH as
    described in Note 21(a) and
     1.6 million
    in costs relating to the relocation of activities in Berlin,
    Düsseldorf and Frankfurt. In 2001, this caption mainly
    concerns restructuring costs of EHR GmbH.



|    |                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|(f) | The reversal of provision is about
     89.9 million.
    After deducting income tax for
     32.9 million,
    the net impact represents
     57.0 million.



|    |                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(g) | Includes non-recurring items such as net
    gain/loss on sales of tangible assets and other expenses such as
     4.0 million
    in consulting fees in 2001 relating to unsuccessful acquisition
    projects and internal projects.

F-24



---



##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


Note 8  Income tax

The principles described in
Note 1(q) result in the following:

(a) Analysis of income tax
expense

|                                                                            |                   |                    |       |          |   |          |       |       |   |  |       |       |  
|--------------------------------------------------------------------------- | ----------------- | ------------------ | ----- | -------- | - | -------- | ----- | ----- | - |  | ----- | ----- | -
|                                                                            |                   | 12/31/01           |       | 12/31/00 |   | 12/31/99
|                                                                            |                   |                    |       |          |   |         
|                                                                            |                   |                   
|                                                                            |                   | In millions of EUR
|Current income tax                                                          |                   |                    | (77.7 | )        |   |          | (56.9 | )     |   |  | (50.8 | )    
|                                                                            | French companies  |                    |       | (20.2    | ) |          |       | (19.7 | ) |  |       | (31.0 | )
|                                                                            | Foreign companies |                    |       | (57.5    | ) |          |       | (37.2 | ) |  |       | (19.8 | )
|Deferred income tax(*)                                                      |                   |                    | 12.5  |          |   |          | (5.4  | )     |   |  | (37.6 | )    
|                                                                            | French companies  |                    |       | (6.4     | ) |          |       | 5.8   |   |  |       | (37.6 | )
|                                                                            | Foreign companies |                    |       | 18.9     |   |          |       | (11.2 | ) |  |       |      |  
|                                                                            |                   |                    |       |          |   |          |       |       |   |  |       |      
|Total income tax expense before tax on net
    gain on sales of investments |                   |                    | (65.2 | )        |   |          | (62.3 | )     |   |  | (88.4 | )    
|                                                                            |                   |                    |       |          |   |          |       |       |   |  |       |      
|Tax on the net gain on sales of investments                                 |                   |                    | (0.3  | )        |   |          |      |       |   |  | (0.6  | )    
|                                                                            |                   |                    |       |          |   |          |       |       |   |  |       |      
|Total income tax expense                                                    |                   |                    | (65.5 | )        |   |          | (62.3 | )     |   |  | (89.0 | )    
|                                                                            |                   |                    |       |          |   |          |       |       |   |  |       |      



---



|    |                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(*) | In 1999, the deferred income tax of
     32.9 million
    has been directly attributed to the reversal of the geopolitical
    provision in non-operating income.



|    |                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | Reconciliation between the provision for
    income tax before tax on the net gain on sales of investments
    and pre-tax accounting income before gain on sales of
    investments

In 2001, the reconciliation between total income
tax expense and pre-tax income is based on pre-tax income before
gain on sales of investments and includes the non-deductible
part of goodwill depreciation. In 2000 and 1999,
reclassifications have been made to conform to the 2001
presentation.

|                                                                            |  |                    |        |          |  |          |        |   |  |  |        |  
|--------------------------------------------------------------------------- |  | ------------------ | ------ | -------- |  | -------- | ------ | - |  |  | ------ | -
|                                                                            |  | 12/31/01           |        | 12/31/00 |  | 12/31/99
|                                                                            |  |                    |        |          |  |         
|                                                                            |  |                   
|                                                                            |  | In millions of EUR
|Net income                                                                  |  |                    | 108.1  |          |  |          | 214.2  |   |  |  | 172.6  |  
|Minority interests                                                          |  |                    | 2.4    |          |  |          | 1.2    |   |  |  | 0.2    |  
|Income tax before tax on the social net gain on
    sales of investments    |  |                    | 65.2   |          |  |          | 62.3   |   |  |  | 55.5   |  
|Income tax related to the reversal of the
    geopolitical provision        |  |                    |       |          |  |          |       |   |  |  | 32.9   |  
|Less: income of equity affiliates(a)                                        |  |                    | (15.6  | )        |  |          | (61.1  | ) |  |  | (0.8   | )
|Less: non deductible goodwill amortization                                  |  |                    | 57.8   |          |  |          | 21.8   |   |  |  | 5.8    |  
|Less: gain on sales of investments                                          |  |                    | (2.8   | )        |  |          | (71.0  | ) |  |  | (4.4   | )
|                                                                            |  |                    |        |          |  |          |        |   |  |  |        |  
|Pre-tax income before gain on sales of
    investments                      |  |                    | 215.1  |          |  |          | 167.4  |   |  |  | 261.8  |  
|                                                                            |  |                    |        |          |  |          |        |   |  |  |        |  
|French income tax rate                                                      |  |                    | 36.23% |          |  |          | 36.66% |   |  |  | 36.66% |  
|Theoretical income tax(b)                                                   |  |                    | 77.9   |          |  |          | 61.4   |   |  |  | 96.0   |  
|Extraordinary tax                                                           |  |                    |       |          |  |          | 0.7    |   |  |  |       |  
|Additional tax(c)                                                           |  |                    |       |          |  |          |       |   |  |  | 2.9    |  
|Difference between French and foreign tax rates                             |  |                    | 0.8    |          |  |          | 3.6    |   |  |  | 2.2    |  
|Permanent differences                                                       |  |                    | (7.2   | )        |  |          | 2.2    |   |  |  | (6.7   | )
|Others                                                                      |  |                    | (6.3   | )        |  |          | (5.6   | ) |  |  | (6.0   | )
|                                                                            |  |                    |        |          |  |          |        |   |  |  |        |  
|Total income tax expense before tax on net
    gain on sales of investments |  |                    | 65.2   |          |  |          | 62.3   |   |  |  | 88.4   |  
|                                                                            |  |                    |        |          |  |          |        |   |  |  |        |  
|Effective tax rate                                                          |  |                    | 30.31% |          |  |          | 37.22% |   |  |  | 33.76% |  



---



|    |                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | In 2000, includes
     60.0 million
    interest in Coflexip divided between non-operating income for
     39.0 million
    and income of equity affiliates for
     21.0 million
    as described in Note 7(d).

F-25



---



##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)




|    |                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------
|(b) | In 2000 and 1999, French tax rate includes
    additional 10% tax rate. In 2001, this additional 10% tax rate
    has been eliminated.



|    |                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------
|(c) | This temporary additional tax rate applicable for
    French companies was about 10% in 1999. It has been eliminated
    in 2000.

(c) Deferred tax assets and
liabilities

As of December 31, 2001, 2000 and 1999, the
deferred tax assets and liabilities in the balance sheets were
as follows:

|                            |  |                    |        |          |  |          |       |   |  |  |      |  
|--------------------------- |  | ------------------ | ------ | -------- |  | -------- | ----- | - |  |  | ---- | -
|                            |  | 12/31/01           |        | 12/31/00 |  | 12/31/99
|                            |  |                    |        |          |  |         
|                            |  |                   
|                            |  | In millions of EUR
|Deferred tax assets(a)      |  |                    | 90.1   |          |  |          | 21.6  |   |  |  | 23.4 |  
|Deferred tax liabilities(b) |  |                    | (135.8 | )        |  |          | (15.4 | ) |  |  | (2.6 | )
|                            |  |                    |        |          |  |          |       |   |  |  |      |  
|Net deferred tax asset      |  |                    | (45.7  | )        |  |          | 6.2   |   |  |  | 20.8 |  
|                            |  |                    |        |          |  |          |       |   |  |  |      |  



---



|    |                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The increase of the deferred tax assets from
    December 31, 2000 to December 31, 2001 mainly results
    from the consolidation of Coflexip for
     68.0 million.



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | The increase of the deferred tax liabilities from
    December 31, 2000 to December 31, 2001 results from
    Coflexips consolidation of
     49.4 million,
    of which
     36.8 million
    relates to differences between accounting and tax depreciation.
    Additionally, Technip-Coflexip recognized
     64.5 million
    of deferred tax in the purchase price allocation at the time of
    the acquisition of Coflexip in October 2001
    (Note 2(b) ).

Until December 31, 1999, deferred tax
liabilities were recorded as a reduction of deferred tax assets
(see Note 18). As of December 31, 2000,
deferred tax liabilities are reclassified in the liability
section.

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 having not yet been subject to taxation and
to differences between accumulated depreciation and capital
allowance on owned assets, except for 1999 where deferred tax
liabilities are mainly made of unrealized exchange gains.

(d) Tax losses carried
forward

Tax losses carried forward recorded and not yet
utilized approximately amount to
 100.5 million
as of December 31, 2001, and mainly come from KTI/MDEU and
from Aker Maritime ASAs Deepwater Division. These tax
losses carried forward will principally expire after 2004.

Unrecorded deferred tax assets principally relate
to tax losses carried forward on MSE, a German subsidiary
acquired in 1999, which amount to
 50.0 million
as of December 31, 2001. Considering the financial and
commercial forecasts of MSE, Technip-Coflexip decided not to
recognize this deferred tax asset in its consolidated financial
statements.

F-26



---



##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


Note 9  Diluted net income per
share

The diluted net income per share has been
determined in accordance with Note 1(v).

|                                                                                                  |                                      |          |        |          |   |          |        |        |  |  |        |        | 
|------------------------------------------------------------------------------------------------- | ------------------------------------ | -------- | ------ | -------- | - | -------- | ------ | ------ |  |  | ------ | ------ | 
|                                                                                                  |                                      | 12/31/01 |        | 12/31/00 |   | 12/31/99
|                                                                                                  |                                      |          |        |          |   |         
|Net income (in millions of EUR)                                                                   |                                      |          | 108.1  |          |   |          | 214.2  |        |  |  | 172.6  |       
|                                                                                                  |                                      |          |        |          |   |          |        |        |  |  |        |       
|Net income before non operating income and
    goodwill amortization (in millions of EUR)         |                                      |          | 176.0  |          |   |          | 147.0  |        |  |  | 89.2   |       
|                                                                                                  |                                      |          |        |          |   |          |        |        |  |  |        |       
|Number of shares (in thousands):                                                                  |                                      |          |        |          |   |          |        |        |  |  |        |       
|                                                                                                  | Issued shares as of December 31      |          |        | 26,714   |   |          |        | 16,029 |  |  |        | 15,759 | 
|                                                                                                  | Stock options (subscription options) |          |        | 521      |   |          |        | 636    |  |  |        | 292    | 
|                                                                                                  | Technip shares held by Isis          |          |        | (1,847   | ) |          |        |       |  |  |        |       | 
|                                                                                                  |                                      |          |        |          |   |          |        |        |  |  |        |       
|                                                                                                  |                                      |          | 25,388 |          |   |          | 16,665 |        |  |  | 16,051 |       
|                                                                                                  |                                      |          |        |          |   |          |        |        |  |  |        |       
|Diluted net income per share (in euros)                                                           |                                      |          | 4.26   |          |   |          | 12.85  |        |  |  | 10.75  |       
|Diluted net income per share before non operating
    income and goodwill amortization (in euros) |                                      |          | 6.93   |          |   |          | 8.82   |        |  |  | 5.56   |       



|          |                                                                                                                                    
|--------- | -----------------------------------------------------------------------------------------------------------------------------------
|Note 10  | Compensation of the members of the
    Conseil dadministration, of the Conseil
    de surveillance and of the
    Directoire

The aggregate amount of compensation paid by
Technip-Coflexip as a group to its administrators from the
beginning of 2001 to December 13, 2001, when the Company
was transformed to a company with Directoire and
Conseil de Surveillance,
was  850,000.

The members of Conseil de
Surveillance have not received any compensation from their
assignment during 2001.

From December 13, 2001 to December 31,
2001, the aggregate amount of compensation paid by
Technip-Coflexip as a group to the members of
Directoire
was  64,600.

Note 11  Intangible assets,
net

Intangible assets are detailed as follows:

|                                 |  |                    |         |          |  |          |       |   |  |  |       |  
|-------------------------------- |  | ------------------ | ------- | -------- |  | -------- | ----- | - |  |  | ----- | -
|                                 |  | 12/31/01           |         | 12/31/00 |  | 12/31/99
|                                 |  |                    |         |          |  |         
|                                 |  |                   
|                                 |  | In millions of EUR
|Other Intangible assets          |  |                    | 149.1   |          |  |          | 4.6   |   |  |  | 3.2   |  
|Accumulated amortization         |  |                    | (20.6   | )        |  |          | (4.2  | ) |  |  | (2.8  | )
|                                 |  |                    |         |          |  |          |       |   |  |  |       |  
|Other intangible assets, net (a) |  |                    | 128.5   |          |  |          | 0.4   |   |  |  | 0.4   |  
|                                 |  |                    |         |          |  |          |       |   |  |  |       |  
|Goodwill                         |  |                    | 2,687.6 |          |  |          | 636.8 |   |  |  | 173.0 |  
|Accumulated amortization         |  |                    | (102.7  | )        |  |          | (45.3 | ) |  |  | (18.6 | )
|                                 |  |                    |         |          |  |          |       |   |  |  |       |  
|Goodwill, net (b)                |  |                    | 2,584.9 |          |  |          | 591.5 |   |  |  | 154.4 |  
|                                 |  |                    |         |          |  |          |       |   |  |  |       |  
|Intangible assets, net           |  |                    | 2,713.4 |          |  |          | 591.9 |   |  |  | 154.8 |  
|                                 |  |                    |         |          |  |          |       |   |  |  |       |  



---

(a)  Intangible assets



| |                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Historically, intangible assets (represented by
    the fond de commerce) were amortized over
    5 years.                                                                                                                           
|
| | In January 2001, Coflexip Stena Offshore as a
    group purchased the Aker Maritime Deepwater division. As a part
    of the purchase price allocation, Coflexip identified patents
    and trademarks of
     51.4 million,
    to be

F-27



---



##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)




| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | amortized over 10 years. These patents and
    trademarks were also recorded as part of the purchase accounting
    of Coflexip. This valuation and life has been maintained within
    the Technip-Coflexip consolidated accounts.                                                                                                                                                                                                                                             
|
| | In October 2001, as a result of the public offers
    on Coflexip and Isis (see Note 2 (a) and
    (b)), Technip-Coflexip holds 98.36% of Coflexip
    Stena Offshore as of December 31, 2001. As a part of the
    purchase price allocation, Technip identified intangible assets
    of patents and trademarks, other than the ones from the
    acquisition of the division Mer Profonde Aker Maritime
    ASA, for
     59.4 million,
    to be amortized over 10 years.
|
| | At the end of November 2001, Technip-Coflexip
    purchased software for its E-Procurement platform. The purchase
    price of the software was
     19.7 million,
    to be amortized over three years (see Note 1
    (g)).                                                                                                                                                                                                                                                  

(b)  Goodwill, net

|                        |  |                    |         |          |  |          |       |  |  |  |       | 
|----------------------- |  | ------------------ | ------- | -------- |  | -------- | ----- |  |  |  | ----- | 
|                        |  | 12/31/01           |         | 12/31/00 |  | 12/31/99
|                        |  |                    |         |          |  |         
|                        |  |                   
|                        |  | In millions of EUR
|KTI/MDEU                |  |                    | 135.6   |          |  |          | 143.6 |  |  |  | 151.6 | 
|Coflexip (April 2000)   |  |                    | 408.1   |          |  |          | 430.5 |  |  |  |      | 
|Coflexip (October 2001) |  |                    | 2,027.7 |          |  |          |      |  |  |  |      | 
|Others                  |  |                    | 13.5    |          |  |          | 17.4  |  |  |  | 2.8   | 
|                        |  |                    |         |          |  |          |       |  |  |  |       | 
|Net                     |  |                    | 2,584.9 |          |  |          | 591.5 |  |  |  | 154.4 | 
|                        |  |                    |         |          |  |          |       |  |  |  |       | 



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The goodwill represents the difference between
    the purchase price of an acquisition and the fair value of its
    net assets, if the purchase method of accounting is used. This
    goodwill is amortized over a period that is dependent upon the
    activities of the acquired company (see Note 1
    (g)).                                                                                                                                                                                                                   
|
| | The goodwill calculated in 1999 in relation to
    the purchase of KTI/MDEU from Mannesmann represented
     159.5 million,
    gross, (see Note 2 (e)), 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
     447.3 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. As described in
    Note 2 (b),the purchase of this
    additional percentage interest has created additional goodwill
    of
     2,048 million,
    amortized over 25 years, or
     81.9 million
    per year. Amortization expense from October 1, 2001 to
    December 31, 2001, was
     20.4 million.

F-28



---



##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


Note 12  Property, plant and
equipment, net

|                         |  |                    |      |           |  |         |        |           |  |            |        |        |  |       |        |   |  |  |       |   |  |  |       |   |  |  |         |  
|------------------------ |  | ------------------ | ---- | --------- |  | ------- | ------ | --------- |  | ---------- | ------ | ------ |  | ----- | ------ | - |  |  | ----- | - |  |  | ----- | - |  |  | ------- | -
|                         |  |                    |      |           |  |         |        | Machinery |  | Office     |        |        |  |      
|                         |  |                    |      |           |  |         |        | and       |  | fixtures & |        |        |  |      
|                         |  | Lands              |      | Buildings |  | Vessels |        | equipment |  | furniture  |        | Others |  | Total
|                         |  |                    |      |           |  |         |        |           |  |            |        |        |  |      
|                         |  |                   
|                         |  | In millions of EUR
|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   |  
|                         |  |                    |      |           |  |         |        |           |  |            |        |        |  |       |        |   |  |  |       |   |  |  |       |   |  |  |         |  
|Gross value              |  |                    | 60.4 |           |  |         | 103.2  |           |  |            |       |        |  |       | 31.6   |   |  |  | 86.6  |   |  |  | 18.0  |   |  |  | 299.8   |  
|Accumulated depreciation |  |                    |     |           |  |         | (33.9  | )         |  |            |       |        |  |       | (27.1  | ) |  |  | (63.4 | ) |  |  | (13.3 | ) |  |  | (137.7  | )
|                         |  |                    |      |           |  |         |        |           |  |            |        |        |  |       |        |   |  |  |       |   |  |  |       |   |  |  |         |  
|Total December 31, 2000  |  |                    | 60.4 |           |  |         | 69.3   |           |  |            |       |        |  |       | 4.5    |   |  |  | 23.2  |   |  |  | 4.7   |   |  |  | 162.1   |  
|                         |  |                    |      |           |  |         |        |           |  |            |        |        |  |       |        |   |  |  |       |   |  |  |       |   |  |  |         |  
|Gross value              |  |                    | 60.4 |           |  |         | 105.6  |           |  |            |       |        |  |       | 46.8   |   |  |  | 74.6  |   |  |  | 22.4  |   |  |  | 309.8   |  
|Accumulated depreciation |  |                    |     |           |  |         | (33.1  | )         |  |            |       |        |  |       | (35.9  | ) |  |  | (52.7 | ) |  |  | (15.7 | ) |  |  | (137.4  | )
|                         |  |                    |      |           |  |         |        |           |  |            |        |        |  |       |        |   |  |  |       |   |  |  |       |   |  |  |         |  
|Total December 31, 1999  |  |                    | 60.4 |           |  |         | 72.5   |           |  |            |       |        |  |       | 10.9   |   |  |  | 21.9  |   |  |  | 6.7   |   |  |  | 172.4   |  
|                         |  |                    |      |           |  |         |        |           |  |            |        |        |  |       |        |   |  |  |       |   |  |  |       |   |  |  |         |  

As of December 31, 2000 and 1999, tangible
assets mainly included land and building primarily used for
administration (subsidiaries headquarters) and other tangible
assets (office furnitures and fixtures and information
equipment).

The increase in 2001 comes from acquisition of
the Coflexip tangible assets with a net value of
 689.1 million
as of December 31, 2001. The tangible assets mainly include
vessels of
 499.7 million
and machinery and equipment for
 186.2 million,
net value after Coflexip purchase price allocation.

Note 13  Other investments and
loans, net

|                                   |  |                    |       |          |  |          |       |   |  |  |      |  
|---------------------------------- |  | ------------------ | ----- | -------- |  | -------- | ----- | - |  |  | ---- | -
|                                   |  | 12/31/01           |       | 12/31/00 |  | 12/31/99
|                                   |  |                    |       |          |  |         
|                                   |  |                   
|                                   |  | In millions of EUR
|Investments at historical costs(a) |  |                    | 85.8  |          |  |          | 12.9  |   |  |  | 96.3 |  
|Valuation allowance                |  |                    | (5.8  | )        |  |          | (4.6  | ) |  |  | (6.1 | )
|                                   |  |                    |       |          |  |          |       |   |  |  |      |  
|Net value                          |  |                    | 80.0  |          |  |          | 8.3   |   |  |  | 90.2 |  
|                                   |  |                    |       |          |  |          |       |   |  |  |      |  
|Loans related to investments       |  |                    | 7.8   |          |  |          | 15.0  |   |  |  | 11.3 |  
|Valuation allowance                |  |                    | (4.9  | )        |  |          | (10.4 | ) |  |  | (7.9 | )
|                                   |  |                    |       |          |  |          |       |   |  |  |      |  
|Net value                          |  |                    | 2.9   |          |  |          | 4.6   |   |  |  | 3.4  |  
|                                   |  |                    |       |          |  |          |       |   |  |  |      |  
|Security deposits                  |  |                    | 1.6   |          |  |          | 2.4   |   |  |  | 1.7  |  
|Treasury bonds                     |  |                    | 1.6   |          |  |          | 1.8   |   |  |  | 1.6  |  
|Others                             |  |                    | 18.8  |          |  |          | 1.3   |   |  |  | 1.5  |  
|                                   |  |                    |       |          |  |          |       |   |  |  |      |  
|Other investments and loans, net   |  |                    | 104.9 |          |  |          | 18.4  |   |  |  | 98.4 |  
|                                   |  |                    |       |          |  |          |       |   |  |  |      |  



---



|    |                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Unconsolidated investments as of
    December 31, 1999 are mainly made of Technips shares
    in Cogema for 3.5%, representing a net value of
     86.3 million.
    These shares were sold in 2000.



| |                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Unconsolidated 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.
    These shares are part of a memorandum of understanding between
    Technip-Coflexip and Institut Français du Pétrole.

F-29



---



##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


Note 14  Equity
affiliates

Equity affiliates are analyzed as follows:

|                     |       |                  |      |                    |  |          |      |          |  |          |       |          |  |  |     |     |  |  |       |       |  |  |     |     | 
|-------------------- | ----- | ---------------- | ---- | ------------------ |  | -------- | ---- | -------- |  | -------- | ----- | -------- |  |  | --- | --- |  |  | ----- | ----- |  |  | --- | --- | 
|                     |       | 12/31/01         |      | 12/31/00           |  | 12/31/99 |      | 12/31/01 |  | 12/31/00 |       | 12/31/99
|                     |       |                  |      |                    |  |          |      |          |  |          |       |         
|                     |       |                  |      |                   
|                     |       | Percentage owned |      | In millions of EUR
|Ipedex               |       |                  | 46.0 | %                  |  |          | 46.0 | %        |  |          | 46.0  | %        |  |  | 3.2 |     |  |  | 3.6   |       |  |  | 3.1 |    
|TPL International(a) |       |                  |     |                    |  |          |     |          |  |          | 100.0 | %        |  |  |    |     |  |  |      |       |  |  | 1.6 |    
|Tipiel               |       |                  | 36.9 | %                  |  |          | 36.9 | %        |  |          | 36.9  | %        |  |  | 2.5 |     |  |  | 2.0   |       |  |  | 1.0 |    
|TpL Arabia           |       |                  | 40.0 | %                  |  |          | 40.0 | %        |  |          | 40.0  | %        |  |  | 0.5 |     |  |  | 0.4   |       |  |  | 0.5 |    
|Coflexip(b)          |       |                  |     |                    |  |          | 29.7 | %        |  |          |      |          |  |  |    |     |  |  | 272.3 |       |  |  |    |    
|                     |       |                  |      |                    |  |          |      |          |  |          |       |          |  |  |     |     |  |  |       |       |  |  |     |    
|                     | Total |                  |      |                    |  |          |      |          |  |          |       |          |  |  |     | 6.2 |  |  |       | 278.3 |  |  |     | 6.2 | 
|                     |       |                  |      |                    |  |          |      |          |  |          |       |          |  |  |     |     |  |  |       |       |  |  |     |    



---



|    |                                                                                                                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | TPL International was sold in 2000.                                                                                                                                                                                                      
|   
|(b) | The Group acquired a 29.7% interest in Coflexip
    in April 2000 (see Note 2 (c)). As a
    result of the additional acquisition of Coflexip shares in the
    beginning of October 2001, Coflexip is consolidated (see
    Note 2 (b)).

Note 15 
Contracts-in-progress

Contracts-in-progress relate to ongoing turnkey
and FOB contracts and ongoing contracts including installation
or commissioning operations, which are recorded as described in
Note 1 (k).

|                           |  |                   |         |          |  |          |         |  |  |  |         | 
|-------------------------- |  | ----------------- | ------- | -------- |  | -------- | ------- |  |  |  | ------- | 
|                           |  | 12/31/01          |         | 12/31/00 |  | 12/31/99
|                           |  |                   |         |          |  |         
|                           |  |                  
|                           |  | In million of EUR
|Contracts-in-progress, net |  |                   | 6,313.6 |          |  |          | 4,718.0 |  |  |  | 4,155.2 | 
|                           |  |                   |         |          |  |          |         |  |  |  |         | 

As of December 31, 2001,
contracts-in-progress include accumulated margins recognized on
ongoing contracts. Previously, these margins were recorded in
the item Accounts and notes receivables. A similar
reclassification has been made in 2000 and 1999.

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
 6,472.5 million,
 4,896.1 million
and
 4,580.5 million
as of December 31, 2001, 2000 and 1999, respectively.

Note 16  Inventories and
deferred bid costs, net

|                                            |  |                    |       |          |  |          |     |  |  |  |     | 
|------------------------------------------- |  | ------------------ | ----- | -------- |  | -------- | --- |  |  |  | --- | 
|                                            |  | 12/31/01           |       | 12/31/00 |  | 12/31/99
|                                            |  |                    |       |          |  |         
|                                            |  |                   
|                                            |  | In millions of EUR
|Raw materials                               |  |                    | 51.2  |          |  |          |    |  |  |  |    | 
|Work in progress                            |  |                    | 40.1  |          |  |          |    |  |  |  |    | 
|Finished goods and merchandise              |  |                    | 21.2  |          |  |          | 0.4 |  |  |  | 0.3 | 
|Less: valuation allowance                   |  |                    | (9.3  | )        |  |          |    |  |  |  |    | 
|                                            |  |                    |       |          |  |          |     |  |  |  |     | 
|Inventories, net                            |  |                    | 103.2 |          |  |          | 0.4 |  |  |  | 0.3 | 
|                                            |  |                    |       |          |  |          |     |  |  |  |     | 
|Deferred bid costs, net(a)                  |  |                    | 8.7   |          |  |          | 6.7 |  |  |  | 4.3 | 
|                                            |  |                    |       |          |  |          |     |  |  |  |     | 
|Inventories and deferred bid costs,
    net |  |                    | 111.9 |          |  |          | 7.1 |  |  |  | 4.6 | 
|                                            |  |                    |       |          |  |          |     |  |  |  |     | 



---



|    |                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Costs directly linked to the awarding of future
    contracts, the signature of which can be reasonably expected,
    are deferred and capitalized in the balance sheet.

F-30



---



##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


Note 17  Accounts and notes
receivable, net

|                                             |  |                    |       |          |  |          |       |   |  |  |       |  
|-------------------------------------------- |  | ------------------ | ----- | -------- |  | -------- | ----- | - |  |  | ----- | -
|                                             |  | 12/31/01           |       | 12/31/00 |  | 12/31/99
|                                             |  |                    |       |          |  |         
|                                             |  |                   
|                                             |  | In millions of EUR
|Other receivables on contracts               |  |                    | 597.1 |          |  |          | 280.9 |   |  |  | 244.6 |  
|Retention                                    |  |                    | 7.3   |          |  |          | 6.8   |   |  |  | 6.9   |  
|Doubtful receivables                         |  |                    | 42.0  |          |  |          | 51.7  |   |  |  | 61.7  |  
|Valuation allowance                          |  |                    | (40.5 | )        |  |          | (50.1 | ) |  |  | (58.9 | )
|                                             |  |                    |       |          |  |          |       |   |  |  |       |  
|Total accounts and notes receivable,
    net |  |                    | 605.9 |          |  |          | 289.3 |   |  |  | 254.3 |  
|                                             |  |                    |       |          |  |          |       |   |  |  |       |  

The Groups main clients include major oil
and gas or petrochemical companies. The maturity of receivables
corresponds to the operating cycle of the contracts. Each client
financial situation is periodically reviewed and any potential
risks are recorded as a reserve.

Note 18  Other current assets,
net

|                                          |  |                    |       |          |  |          |       |     |  |  |       |  |  |  |       | 
|----------------------------------------- |  | ------------------ | ----- | -------- |  | -------- | ----- | --- |  |  | ----- |  |  |  | ----- | 
|                                          |  |                    |       |          |  |         
|                                          |  | 12/31/01           |       | 12/31/00 |  | 12/31/99
|                                          |  |                    |       |          |  |         
|                                          |  | Gross              |       | Net      |  | Net      |       | Net
|                                          |  |                    |       |          |  |          |       |    
|                                          |  |                   
|                                          |  | In millions of EUR
|Deferred tax assets (see Note 8
    (c))  |  |                    | 90.1  |          |  |          | 90.1  |     |  |  | 21.6  |  |  |  | 20.8  | 
|Value added tax                           |  |                    | 47.9  |          |  |          | 47.9  |     |  |  | 29.8  |  |  |  | 33.6  | 
|Prepaid income tax and other current tax  |  |                    | 48.5  |          |  |          | 48.5  |     |  |  | 42.7  |  |  |  | 18.7  | 
|Advances to non-consolidated subsidiaries |  |                    | 8.5   |          |  |          | 6.1   |     |  |  | 6.2   |  |  |  | 0.7   | 
|Joint venture associates current-account  |  |                    | 21.1  |          |  |          | 18.6  |     |  |  | 8.1   |  |  |  | 27.3  | 
|KTI/MDEU price reduction (a)              |  |                    |      |          |  |          |      |     |  |  |      |  |  |  | 63.3  | 
|Receivables from suppliers                |  |                    | 3.5   |          |  |          | 3.5   |     |  |  | 1.2   |  |  |  | 4.8   | 
|Receivables from personnel                |  |                    | 2.8   |          |  |          | 2.8   |     |  |  | 3.8   |  |  |  | 3.8   | 
|Dividends to be received on investments   |  |                    |      |          |  |          |      |     |  |  | 1.0   |  |  |  | 0.5   | 
|Prepaid expenses                          |  |                    | 33.6  |          |  |          | 30.8  |     |  |  | 15.8  |  |  |  | 6.4   | 
|Indemnities to be received                |  |                    | 19.4  |          |  |          | 19.4  |     |  |  | 6.1   |  |  |  |      | 
|Funds in escrow                           |  |                    | 66.0  |          |  |          | 66.0  |     |  |  |      |  |  |  |      | 
|Unrealized exchange losses                |  |                    | 9.6   |          |  |          | 9.6   |     |  |  | 13.5  |  |  |  | 8.2   | 
|Others                                    |  |                    | 82.8  |          |  |          | 74.8  |     |  |  | 20.2  |  |  |  | 21.4  | 
|                                          |  |                    |       |          |  |          |       |     |  |  |       |  |  |  |       | 
|Total Other current assets, net           |  |                    | 433.8 |          |  |          | 418.1 |     |  |  | 170.0 |  |  |  | 209.5 | 
|                                          |  |                    |       |          |  |          |       |     |  |  |       |  |  |  |       | 



---



|    |                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The purchase price related to the KTI/MDEU
    acquisition has been subject to a reduction of
     63.3 million
    paid in February 2000.

F-31



---



##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


Note 19  Cash and cash
equivalents

(a) Marketable securities 
Cash equivalents

|                                            |  |                      |       |          |  |          |       |  |  |  |       | 
|------------------------------------------- |  | -------------------- | ----- | -------- |  | -------- | ----- |  |  |  | ----- | 
|                                            |  | 12/31/01             |       | 12/31/00 |  | 12/31/99
|                                            |  |                      |       |          |  |         
|                                            |  |                     
|                                            |  | (In millions of EUR)
|Historical cost                             |  |                      | 149.8 |          |  |          | 186.1 |  |  |  | 351.7 | 
|Unrealized gains                            |  |                      |      |          |  |          | 0.4   |  |  |  | 9.1   | 
|                                            |  |                      |       |          |  |          |       |  |  |  |       | 
|Market value at the closing date            |  |                      | 149.8 |          |  |          | 186.5 |  |  |  | 360.8 | 
|                                            |  |                      |       |          |  |          |       |  |  |  |       | 
|Detailed analysis of marketable securities: |  |                      |       |          |  |          |       |  |  |  |       | 
|Treasury bonds                              |  |                      |      |          |  |          |      |  |  |  | 0.9   | 
|Mutual funds                                |  |                      | 51.0  |          |  |          | 89.9  |  |  |  | 203.5 | 
|Certificates of deposit                     |  |                      | 97.8  |          |  |          | 95.3  |  |  |  | 148.5 | 
|Others                                      |  |                      | 1.0   |          |  |          | 1.3   |  |  |  | 7.9   | 
|                                            |  |                      |       |          |  |          |       |  |  |  |       | 
|Total marketable securities                 |  |                      | 149.8 |          |  |          | 186.5 |  |  |  | 360.8 | 
|                                            |  |                      |       |          |  |          |       |  |  |  |       | 

(b) Cash

|              |  |                      |       |          |  |          |       |  |  |  |       | 
|------------- |  | -------------------- | ----- | -------- |  | -------- | ----- |  |  |  | ----- | 
|              |  | 12/31/01             |       | 12/31/00 |  | 12/31/99
|              |  |                      |       |          |  |         
|              |  |                     
|              |  | (In millions of EUR)
|Time deposits |  |                      | 76.0  |          |  |          | 104.6 |  |  |  | 367.2 | 
|Bank accounts |  |                      | 537.6 |          |  |          | 272.0 |  |  |  | 291.4 | 
|              |  |                      |       |          |  |          |       |  |  |  |       | 
|Total Cash    |  |                      | 613.6 |          |  |          | 376.6 |  |  |  | 658.6 | 
|              |  |                      |       |          |  |          |       |  |  |  |       | 

Note 20  Shareholders
equity

(a) Parent companys common stock
breakdown and changes

As of December 31, 2001,
Technip-Coflexips common stock included 26,713,448 shares
outstanding of
 3.05 par
value. The changes from December 31, 1998 can be analyzed
as follows:

|                                         |  |             |            |              |  |  |      |  
|---------------------------------------- |  | ----------- | ---------- | ------------ |  |  | ---- | -
|                                         |  | No. of      |            |             
|                                         |  | shares      |            | Common      
|                                         |  | outstanding |            | stock       
|                                         |  |             |            |             
|                                         |  |             |            | (In millions
|                                         |  |             |            | of EUR)     
|Common stock as of December 31,
    1998 |  |             | 15,775,999 |              |  |  | 48.1 |  
|1999 increase(1)                         |  |             | 124,140    |              |  |  | 0.4  |  
|Employee subscription(2)                 |  |             | 96,675     |              |  |  | 0.3  |  
|Decrease in capital(3)                   |  |             | (238,277   | )            |  |  | (0.7 | )
|                                         |  |             |            |              |  |  |      |  
|Common stock as of December 31,
    1999 |  |             | 15,758,537 |              |  |  | 48.1 |  
|2000 increase(1)                         |  |             | 143,840    |              |  |  | 0.4  |  
|Employee subscription(2)                 |  |             | 126,928    |              |  |  | 0.4  |  
|                                         |  |             |            |              |  |  |      |  
|Common stock as of December 31,
    2000 |  |             | 16,029,305 |              |  |  | 48.9 |  
|2001 increase(1)                         |  |             | 118,420    |              |  |  | 0.4  |  
|Exchange Public Offer increase(4)        |  |             | 10,565,723 |              |  |  | 32.2 |  
|                                         |  |             |            |              |  |  |      |  
|Common stock as of December 31,
    2001 |  |             | 26,713,448 |              |  |  | 81.5 |  
|                                         |  |             |            |              |  |  |      |  



---



|    |                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------
|(1) | These increases result from the exercise of stock
    option plans granted to employees as described in
    Note 20(d).

F-32



---



##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)




|    |                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Employee subscription: conditions of such
    transaction were authorized by the shareholders meeting
    held on April 30, 1998 and implemented each year by the
    Board of Directors (April 13, 1999 and April 7, 2000)                                                                                                                                                                                  
|   
|(3) | The Company has a stock repurchase program under
    which stock repurchased may be retired. In October 1998, the
    Board of Directors was authorized by the Shareholders
    meeting to repurchase up to 10% of the total outstanding shares
    with a maximum unit price of
     129.6
    within an 18 months period. As a result of the above
    authorization, 238,277 shares were retired in 1999.
|   
|(4) | Following the success of the two exchange public
    offers on, respectively, Coflexip shares, and Isis shares, in
    July 2001, Technip-Coflexip made, on October 11, 2001,
    to 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.                                                         

The Company owns 623,595, 617,281 and 454,231
treasury shares as of December 31, 2001, 2000 and 1999,
respectively.

(b) Technip-Coflexips
shareholders as of December 31

|                                                  |  |          |        |          |  |          |        |  |  |  |        | 
|------------------------------------------------- |  | -------- | ------ | -------- |  | -------- | ------ |  |  |  | ------ | 
|                                                  |  | 12/31/01 |        | 12/31/00 |  | 12/31/99
|                                                  |  |          |        |          |  |         
|IFP                                               |  |          | 7.9%   |          |  |          |       |  |  |  |       | 
|ISIS                                              |  |          |       |          |  |          | 11.3%  |  |  |  | 12.1%  | 
|Gaz de France                                     |  |          | 6.4%   |          |  |          | 10.6%  |  |  |  | 11.1%  | 
|Total Fina Elf Group                              |  |          | 4.7%   |          |  |          | 6.2%   |  |  |  | 5.1%   | 
|Elf                                               |  |          |       |          |  |          |       |  |  |  | 1.3%   | 
|Employees                                         |  |          | 2.5%   |          |  |          | 3.5%   |  |  |  | 3.0%   | 
|Treasury shares and shares held by subsidiary (*) |  |          | 9.2%   |          |  |          | 3.9%   |  |  |  | 2.9%   | 
|Others                                            |  |          | 69.3%  |          |  |          | 64.5%  |  |  |  | 64.5%  | 
|                                                  |  |          |        |          |  |          |        |  |  |  |        | 
|Total                                             |  |          | 100.0% |          |  |          | 100.0% |  |  |  | 100.0% | 
|                                                  |  |          |        |          |  |          |        |  |  |  |        | 



---



|    |                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------
|(*) | December 31, 2001 balance includes: 623,595
    treasury shares and 1,847,376 shares held by subsidiary, or a
    total amount of 2,470,971 shares.

(c) Cumulative translation
adjustments

Cumulative translation adjustments reflect the
exchange differences arising from the translation of the
financial statements of foreign subsidiaries as described in
Note 1 (f).

(d) Executive Stock Option
Plans

The 1996 stock option plan, was authorized by the
shareholders meeting held on May 16, 1995 and
implemented by the Board of Directors on March 14, 1996,
March 13, 1997 and April 30, 1998. These options are
valid up to five years from the date of grant.

The 1998 stock option plan was authorized by the
shareholders 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 be granted using 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-33



---



##### Table of Contents



TECHNIP-COFLEXIP


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.

|                                        |  |                                            |            |                |  |         |            |         |  |         |            |       |  |  |            |   |  |  |            |   |  |  |           |  
|--------------------------------------- |  | ------------------------------------------ | ---------- | -------------- |  | ------- | ---------- | ------- |  | ------- | ---------- | ----- |  |  | ---------- | - |  |  | ---------- | - |  |  | --------- | -
|                                        |  |                                           
|                                        |  | Number of subscription or purchase options
|                                        |  |                                           
|                                        |  |                                            |            |                |  |        
|                                        |  | Plan 1996/1998                             |            | Plan 1999/2001 |  |        
|                                        |  |                                            |            |                |  |        
|                                        |  | 1st                                        |            | 2nd            |  | 3rd     |            | 1st     |  | 2nd     |            |      
|                                        |  | 1996(a)                                    |            | 1997(b)        |  | 1998(c) |            | 1999(d) |  | 2000(e) |            | Total
|                                        |  |                                            |            |                |  |         |            |         |  |         |            |      
|December 31, 1996                       |  |                                            | 158,342    |                |  |         |           |         |  |         |           |       |  |  |           |   |  |  |           |   |  |  | 158,342   |  
|                                        |  |                                            |            |                |  |         |            |         |  |         |            |       |  |  |            |   |  |  |            |   |  |  |           |  
|Options exercised                       |  |                                            |           |                |  |         |           |         |  |         |           |       |  |  |           |   |  |  |           |   |  |  |          |  
|Options cancelled                       |  |                                            |           |                |  |         |           |         |  |         |           |       |  |  |           |   |  |  |           |   |  |  |          |  
|Options granted (subscription)          |  |                                            |           |                |  |         | 178,973    |         |  |         |           |       |  |  |           |   |  |  |           |   |  |  | 178,973   |  
|                                        |  |                                            |            |                |  |         |            |         |  |         |            |       |  |  |            |   |  |  |            |   |  |  |           |  
|December 31, 1997                       |  |                                            | 158,342    |                |  |         | 178,973    |         |  |         |           |       |  |  |           |   |  |  |           |   |  |  | 337,315   |  
|                                        |  |                                            |            |                |  |         |            |         |  |         |            |       |  |  |            |   |  |  |            |   |  |  |           |  
|Options exercised                       |  |                                            | (1,000     | )              |  |         |           |         |  |         |           |       |  |  |           |   |  |  |           |   |  |  | (1,000    | )
|Options cancelled                       |  |                                            |           |                |  |         |           |         |  |         |           |       |  |  |           |   |  |  |           |   |  |  |          |  
|Options granted (purchase)              |  |                                            |           |                |  |         |           |         |  |         | 138,711    |       |  |  |           |   |  |  |           |   |  |  | 138,711   |  
|                                        |  |                                            |            |                |  |         |            |         |  |         |            |       |  |  |            |   |  |  |            |   |  |  |           |  
|December 31, 1998                       |  |                                            | 157,342    |                |  |         | 178,973    |         |  |         | 138,711    |       |  |  |           |   |  |  |           |   |  |  | 475,026   |  
|                                        |  |                                            |            |                |  |         |            |         |  |         |            |       |  |  |            |   |  |  |            |   |  |  |           |  
|Options exercised                       |  |                                            | (39,350    | )              |  |         | (11,400    | )       |  |         |           |       |  |  |           |   |  |  |           |   |  |  | (50,750   | )
|Options cancelled                       |  |                                            |           |                |  |         |           |         |  |         |           |       |  |  |           |   |  |  |           |   |  |  |          |  
|Options granted (purchase)              |  |                                            |           |                |  |         |           |         |  |         |           |       |  |  | 315,520    |   |  |  |           |   |  |  | 315,520   |  
|                                        |  |                                            |            |                |  |         |            |         |  |         |            |       |  |  |            |   |  |  |            |   |  |  |           |  
|December 31, 1999                       |  |                                            | 117,992    |                |  |         | 167,573    |         |  |         | 138,711    |       |  |  | 315,520    |   |  |  |           |   |  |  | 739,796   |  
|                                        |  |                                            |            |                |  |         |            |         |  |         |            |       |  |  |            |   |  |  |            |   |  |  |           |  
|Options exercised                       |  |                                            | (105,692   | )              |  |         | (31,423    | )       |  |         | (1,400     | )     |  |  | (2,200     | ) |  |  |           |   |  |  | (140,715  | )
|Options cancelled                       |  |                                            | (400       | )              |  |         | (5,800     | )       |  |         | (5,200     | )     |  |  | (7,900     | ) |  |  |           |   |  |  | (19,300   | )
|Options granted (granted)               |  |                                            |           |                |  |         |           |         |  |         |           |       |  |  |           |   |  |  | 139,576    |   |  |  | 139,576   |  
|Options granted (subscription)          |  |                                            |           |                |  |         |           |         |  |         |           |       |  |  |           |   |  |  | 493,028    |   |  |  | 493,028   |  
|                                        |  |                                            |            |                |  |         |            |         |  |         |            |       |  |  |            |   |  |  |            |   |  |  |           |  
|December 31, 2000                       |  |                                            | 11,900     |                |  |         | 130,350    |         |  |         | 132,111    |       |  |  | 305 420    |   |  |  | 632 604    |   |  |  | 1,212,385 |  
|                                        |  |                                            |            |                |  |         |            |         |  |         |            |       |  |  |            |   |  |  |            |   |  |  |           |  
|Options exercised (purchase)            |  |                                            |           |                |  |         |           |         |  |         | (25,111    | )     |  |  | (20,800    | ) |  |  |           |   |  |  | (45,911   | )
|Options exercised (subscription)        |  |                                            | (11,900    | )              |  |         | (98,700    | )       |  |         |           |       |  |  |           |   |  |  |           |   |  |  | (110,600  | )
|Options cancelled (purchase)            |  |                                            |           |                |  |         |           |         |  |         |           |       |  |  |           |   |  |  | (3,200     | ) |  |  | (3,200    | )
|Options cancelled (subscription)        |  |                                            |            |                |  |         |            |         |  |         |            |       |  |  |            |   |  |  |            |   |  |  |           |  
|Options granted (purchase)              |  |                                            |           |                |  |         |           |         |  |         |           |       |  |  |           |   |  |  |           |   |  |  |          |  
|Options granted (subscription)          |  |                                            |           |                |  |         |           |         |  |         |           |       |  |  |           |   |  |  |           |   |  |  |          |  
|                                        |  |                                            |            |                |  |         |            |         |  |         |            |       |  |  |            |   |  |  |            |   |  |  |           |  
|December 31, 2001 (purchase)            |  |                                            |           |                |  |         |           |         |  |         | 107,000    |       |  |  | 284,620    |   |  |  | 139,576    |   |  |  | 531,196   |  
|December 31, 2001
    (subscription)    |  |                                            |           |                |  |         | 31,650     |         |  |         |           |       |  |  |           |   |  |  | 489,828    |   |  |  | 521,478   |  
|                                        |  |                                            |            |                |  |         |            |         |  |         |            |       |  |  |            |   |  |  |            |   |  |  |           |  
|Technip-Coflexip treasury shares        |  |                                            |            |                |  |         |            |         |  |         |            |       |  |  |            |   |  |  |            |   |  |  |           |  
|Dedicated to the purchase options plans |  |                                            |            |                |  |         |            |         |  |         |            |       |  |  |            |   |  |  |            |   |  |  | (531,196  | )
|Maturity date                           |  |                                            | 03.14.2001 |                |  |         | 03.13.2002 |         |  |         | 04.30.2003 |       |  |  | 04.30.2004 |   |  |  | 12.14.2008 |   |  |  |           |  



---



|    |                                                                                     
|--- | ------------------------------------------------------------------------------------
|(a) | Options utilizable with deferred payment of
    2 years and 6 months from 03.14.1996
|   
|(b) | Options utilizable with deferred payment of
    2 years and 6 months from 03.13.1997
|   
|(c) | Options utilizable with deferred payment of
    3 years from the 04.30.1998         
|   
|(d) | Options utilizable with deferred payment of
    3 years from the 04.30.1999         
|   
|(e) | Options utilizable with deferred payment of
    3 years from the 12.14.2000         

(e) Distributable retained
earnings

The distributable retained earnings of the parent
company, amounts approximately to
 250 million,
after estimated taxation, as of December 31, 2001.

F-34



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##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


(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
 5.1 million
at December 31, 2001.

Note 21  Accrued
liabilities

The principles on which accrued liabilities are
estimated are described in Note 1 (p).

|                                    |  |                    |       |          |  |          |       |  |  |  |       | 
|----------------------------------- |  | ------------------ | ----- | -------- |  | -------- | ----- |  |  |  | ----- | 
|                                    |  | 12/31/01           |       | 12/31/00 |  | 12/31/99
|                                    |  |                    |       |          |  |         
|                                    |  |                   
|                                    |  | In millions of EUR
|Accrued contingencies:              |  |                    |       |          |  |          |       |  |  |  |       | 
|Foreseeable losses on contracts     |  |                    | 4.8   |          |  |          | 6.2   |  |  |  | 43.0  | 
|Contingencies related to contracts  |  |                    | 53.2  |          |  |          | 33.4  |  |  |  | 32.5  | 
|Territoriality contingencies        |  |                    | 35.5  |          |  |          | 35.4  |  |  |  | 35.4  | 
|Provision for dry docking long term |  |                    | 14.7  |          |  |          |      |  |  |  |      | 
|Other                               |  |                    | 14.7  |          |  |          | 6.6   |  |  |  | 2.9   | 
|                                    |  |                    |       |          |  |          |       |  |  |  |       | 
|Sub-total                           |  |                    | 122.9 |          |  |          | 81.6  |  |  |  | 113.8 | 
|Accrued expenses:                   |  |                    |       |          |  |          |       |  |  |  |       | 
|Expenses to complete contracts      |  |                    | 128.2 |          |  |          | 71.2  |  |  |  | 74.0  | 
|Restructuring(a)                    |  |                    | 4.6   |          |  |          | 9.7   |  |  |  | 14.9  | 
|Other                               |  |                    | 1.8   |          |  |          | 4.8   |  |  |  | 5.7   | 
|                                    |  |                    |       |          |  |          |       |  |  |  |       | 
|Sub-total                           |  |                    | 134.6 |          |  |          | 85.7  |  |  |  | 94.6  | 
|                                    |  |                    |       |          |  |          |       |  |  |  |       | 
|Accrued liabilities                 |  |                    | 257.5 |          |  |          | 167.3 |  |  |  | 208.4 | 
|                                    |  |                    |       |          |  |          |       |  |  |  |       | 



---

(a)  Restructuring:



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Following the acquisition of KTI/MDEU, the
    Company recorded a pre-tax reserve of
     24.5 million
    in conjunction with a restructuring plan under which it would
    reduce by 392 persons the number of the employees of two German
    subsidiaries, TP Germany GmbH and MSE GmbH. The main components
    of this plan have been agreed by the Comité
    dentreprise and the labor union of the two companies
    on September and July 1999, respectively.
|
| | This pre-tax reserve is mainly made up of
    severance costs
    ( 10.4 million)
    and redeployment costs
    ( 11.1 million),
    which resulted from an agreement signed in September 1999 with
    the BQG, a German government administration in charge of
    redeployments, and are to be expensed over a maximum period of
    24 months.                                                                                                                      
|
| | In 2000, Technip and the BQG issued an amendment
    to this plan under which 110 additional persons will have to
    leave the Company over a 24 months period. As a result, the
    Company recorded a
     6.8 million
    reserve mainly to cover related severance and redeployment costs.                                                                                                                                                                           
|
| | As of December 31, 2001, 2000 and 1999, the
    remaining portion of this provision amounts to
     3.2 million,
     2.1 million
    and
     9.7 million.                                                                                                                                                                                                                                                                                                             

F-35



---



##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


Note 22  Financial
debt

(a) Analysis by nature

|                                    |  |                    |         |          |  |          |       |  |  |  |      | 
|----------------------------------- |  | ------------------ | ------- | -------- |  | -------- | ----- |  |  |  | ---- | 
|                                    |  | 12/31/01           |         | 12/31/00 |  | 12/31/99
|                                    |  |                    |         |          |  |         
|                                    |  |                   
|                                    |  | In millions of EUR
|Bank borrowings and credit lines(i) |  |                    | 1,394.9 |          |  |          |      |  |  |  | 10.9 | 
|Commercial paper short term         |  |                    | 184.5   |          |  |          | 190.0 |  |  |  |     | 
|Bank overdrafts                     |  |                    | 33.9    |          |  |          |      |  |  |  | 2.0  | 
|Refundable Advances                 |  |                    | 6.1     |          |  |          | 5.1   |  |  |  | 4.4  | 
|Joint venture associates            |  |                    |        |          |  |          | 0.5   |  |  |  | 3.5  | 
|Employees profit sharing            |  |                    | 0.1     |          |  |          | 0.2   |  |  |  | 0.6  | 
|Accrued interest payable            |  |                    | 3.9     |          |  |          |      |  |  |  |     | 
|Other                               |  |                    | 15.5    |          |  |          | 0.2   |  |  |  | 0.4  | 
|                                    |  |                    |         |          |  |          |       |  |  |  |      | 
|Financial debt(ii)                  |  |                    | 1,638.9 |          |  |          | 196.0 |  |  |  | 21.8 | 
|                                    |  |                    |         |          |  |          |       |  |  |  |      | 
|Financial debt short term(iii)      |  |                    | 456.7   |          |  |          | 191.2 |  |  |  | 15.0 | 
|Financial debt long term            |  |                    | 1,182.2 |          |  |          | 4.8   |  |  |  | 6.8  | 



---



|    |                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------
|(i) | Bank borrowings and credit lines as of
    December 31, 2001, which represent
     1,394.9 million,
    mainly include:



| |    |                                                                                                                                                                          
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. | A credit line put in place to finance the
    purchase public offer on Coflexip shares, with an outstanding
    balance of
     944 million
    as of December 31, 2001.



| |                                                                                               
| | ----------------------------------------------------------------------------------------------
| | The financial characteristics of this credit line
    were as follows as of December 31, 2001:



| |   |                                                                                                                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The A and C installments were reimbursable in ten
    semesters, beginning June 30, 2002.                                                                                                                                                                              
|
| |  | The installment D with an authorized amount of
    approximately
     235 million
    is reimbursable in one term: December 31, 2003.                                                                                                                                 
|
| |  | The installment B originally authorized for
     50 million
    and not used, is reimbursable at the latest September 27,
    2002.                                                                                                                                   
|
| |  | The margin applicable over the Euribor, or the
    Libor of the U.S. dollar if the case arises, fluctuate
    following the long term rating of Technip-Coflexip. Considering
    its A- current rating, the margin is 0.375% per year on the A
    and C installments.



| |                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------
| | Initially used for an amount of
     1,030 million
    in October 2001, this credit line also had the following
    modifications:



| |   |                                                                                                                                 
| | - | --------------------------------------------------------------------------------------------------------------------------------
| |  | Reimbursement of the installment B for
     150 million,                                                                       
|
| |  | Reimbursement of a part of the installment A for
     11 million,                                                              
|
| |  | Drawing down on the installment C for
     75 million
    in order to refinance a part of Coflexips debt of
    US$70 million.



| |                                                                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | This credit line is together with common
    guarantees from Technip-Coflexips main subsidiaries for
    this type of financing. However, this credit line is not
    guaranteed by the Groups assets.



| |    |                                                    
| | -- | ---------------------------------------------------
| | 2. | A syndicated credit facility for
    US$350 million



| |                                                                                                                                                                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In January 2001, Coflexip, before the public
    offer with Technip in October 2001, finalized the acquisition of
    the Deepwater Division of Aker Maritime ASA for an amount of
    US$513 million and has assumed a US$142 million of
    debt. To finance this transaction, Coflexip used cash of

F-36



---



##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)




| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | approximately US$285 million and borrowed
    US$370 million through a one-year maturity credit facility.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| | This short term credit facility 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 the installment C of the credit
    line of US$70 million borrowed by Technip-Coflexip,
    reimbursable in 5 years. As of December 31, 2001 the
    syndicated credit facility of US$350 million has been fully
    used and US$75 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.



| |    |                                                                                                                                                                                                                                                                                                                             
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 3. | A credit line was used to finance the Sunrise
    2000 project, which is US$18.7 million as of
    December 31, 2001 (US$23.7 million as of
    December 31, 2000 and US$29.7 as of December 31,
    1999), to which was added an unused credit line of
    US$7.5 million for the improvement work of the Sunrise
    2000.



|     |                                                                                                                     
|---- | --------------------------------------------------------------------------------------------------------------------
|(ii) | Modification of the financial debt and of the
    credit lines subsequent to the closing as of December 31,
    2001



| |                                                                                                                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | At the end of January 2002, Technip-Coflexip
    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.
    This debenture loan was used in mid-February 2002 to partially
    reimburse the credit facility mentioned above.
|
| | The OCEANE offer, which received the COB final
    visa on January 22, 2002, has the following characteristics:                                                                                                                                                                                                                        



| |   |                                                                                                                                                                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The coupon payable on January 1 of each year
    is 1% per year. The reimbursement date is fixed as of
    January 1, 2007 for bonds not converted into shares until
    this date;                                                                                           
|
| |  | Issued at a price of
     170, the
    bond reimbursement price as of January 1, 2007 is
     190.07 in
    the case of conversion or absence of exchange. In the case of
    non-conversion or exchange, the actuarial yield rate for the
    bondholder is 3.25% per year.



| |                                                                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | After partial reimbursement by the bond issuance
    product, Technip-Coflexip has partially cancelled the credit
    facility used as of December 31, 2001 for an amount of
     944 million.
    As of December 31, 2001, this credit facility includes:



| |   |                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the installment A with a new authorized amount of
     387 million,
    reimbursable in five semi-annual terms; the first term is
    December 31, 2004,          
|
| |  | the installment C, which amount remains unchanged
    at US$70 million, remains reimbursable in ten semi-annual
    equal terms, the first one is on June 30, 2002.



|      |                                                                                             
|----- | --------------------------------------------------------------------------------------------
|(iii) | The financial short term debt which represents
     456.7 million
    is broken as follows:



| |   |                                                                              
| | - | -----------------------------------------------------------------------------
| |  | short term part installment A of the credit line
    for
     174.0 million,
|
| |  | short term part of Coflexip debt for
     48.1 million,                     
|
| |  | commercial paper for
     184.5 million,                                    
|
| |  | bank overdrafts and others for
     50.1 million.                           

(iv) Analysis by average interest rate:



| |   |                                                                                           
| | - | ------------------------------------------------------------------------------------------
| |  | Coflexips purchase credit facility
    rate                                       3.8873%
|
| |  | 2001 commercial paper rate (average maturity
    3 months)                   4.3467%      

F-37



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##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


(b) Analysis by currency

|                                  |  |                    |         |          |  |          |        |   |  |  |       |  
|--------------------------------- |  | ------------------ | ------- | -------- |  | -------- | ------ | - |  |  | ----- | -
|                                  |  | 12/31/01           |         | 12/31/00 |  | 12/31/99
|                                  |  |                    |         |          |  |         
|                                  |  |                   
|                                  |  | In millions of EUR
|Euro                              |  |                    | 1,189.7 |          |  |          | 190.0  |   |  |  |      |  
|French Franc                      |  |                    |        |          |  |          | 6.0    |   |  |  | 8.5   |  
|US Dollar                         |  |                    | 432.8   |          |  |          |       |   |  |  | 4.6   |  
|Belgian Franc                     |  |                    |        |          |  |          |       |   |  |  | 0.5   |  
|German Mark                       |  |                    |        |          |  |          |       |   |  |  | 7.6   |  
|Czech Crown                       |  |                    |        |          |  |          |       |   |  |  | 0.6   |  
|Great Britain Pound               |  |                    | 8.3     |          |  |          |       |   |  |  |      |  
|Others                            |  |                    | 8.1     |          |  |          |       |   |  |  |      |  
|                                  |  |                    |         |          |  |          |        |   |  |  |       |  
|Financial debt                    |  |                    | 1,638.9 |          |  |          | 196.0  |   |  |  | 21.8  |  
|Less: amounts due within one year |  |                    | (456.7  | )        |  |          | (191.2 | ) |  |  | (15.0 | )
|                                  |  |                    |         |          |  |          |        |   |  |  |       |  
|Long-term debt                    |  |                    | 1,182.2 |          |  |          | 4.8    |   |  |  | 6.8   |  
|                                  |  |                    |         |          |  |          |        |   |  |  |       |  

(c) Annual maturities of long term
debt

|                     |  |             |         | 
|-------------------- |  | ----------- | ------- | 
|                     |  | 12/31/01   
|                     |  |            
|                     |  | In millions
|                     |  | of EUR     
|2003                 |  |             | 204.6   | 
|2004                 |  |             | 199.7   | 
|2005                 |  |             | 192.1   | 
|2006                 |  |             | 584.8   | 
|2007 and after       |  |             | 1.0     | 
|                     |  |             |         | 
|Total long-term debt |  |             | 1,182.2 | 
|                     |  |             |         | 

(d)  Unused credit
lines

As of December 31, 2001, the Company entered
into an agreement with nine banks for
 350 million
multi-currency credit lines. The rate is currency reference rate
plus 0.20% per year.

F-38



---



##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


Note 23  Other
creditors

|                                      |  |                    |       |          |  |          |       |  |  |  |       | 
|------------------------------------- |  | ------------------ | ----- | -------- |  | -------- | ----- |  |  |  | ----- | 
|                                      |  | 12/31/01           |       | 12/31/00 |  | 12/31/99
|                                      |  |                    |       |          |  |         
|                                      |  |                   
|                                      |  | In millions of EUR
|Payroll costs                         |  |                    | 66.9  |          |  |          | 57.6  |  |  |  | 34.9  | 
|Social security charges               |  |                    | 18.4  |          |  |          | 21.1  |  |  |  | 15.9  | 
|Income and value added taxes          |  |                    | 294.1 |          |  |          | 95.0  |  |  |  | 72.4  | 
|Deferred income                       |  |                    | 4.4   |          |  |          | 5.0   |  |  |  | 1.9   | 
|Debts on fixed assets                 |  |                    | 9.9   |          |  |          | 1.0   |  |  |  | 3.1   | 
|Unrealized exchange gains             |  |                    | 14.2  |          |  |          | 7.6   |  |  |  | 9.7   | 
|Ongoing projects accruals             |  |                    | 63.5  |          |  |          | 21.5  |  |  |  | 9.5   | 
|Fees accruals                         |  |                    | 2.1   |          |  |          | 4.8   |  |  |  | 2.3   | 
|Current-accounts on ongoing contracts |  |                    |      |          |  |          | 15.5  |  |  |  | 40.4  | 
|Debt covered by a guarantee           |  |                    | 66.0  |          |  |          |      |  |  |  |      | 
|Subsidies                             |  |                    | 6.7   |          |  |          |      |  |  |  |      | 
|Other                                 |  |                    | 116.1 |          |  |          | 19.6  |  |  |  | 13.4  | 
|                                      |  |                    |       |          |  |          |       |  |  |  |       | 
|Other creditors                       |  |                    | 662.3 |          |  |          | 248.7 |  |  |  | 203.5 | 
|                                      |  |                    |       |          |  |          |       |  |  |  |       | 

Note 24  Related party
transactions

The principal related party transactions between
Technip-Coflexip, its shareholders, its subsidiaries or its
equity affiliates are limited to those with Ipedex, a 46% equity
affiliate of Technip-Coflexip, specialized in technical
assistance and acting as a subcontractor in some of
Technip-Coflexips contracts. These purchases from Ipedex,
which are in the normal course of Companys businesses,
amounted to
 17.1 million
in 2001.

In 1974, Coflexip signed a partnership and
research agreement with IFP. This agreement stipulates that
Coflexip has access to the IFP technology and some of its
patents after paying royalties. This contract will come to an
end when Coflexip stops producing and selling goods for these
technologies. The 2001 royalties were
 2.9 million
( 2.9 million
in 2000 and
 2.7 million
in 1999).

Technip-Coflexip, Isis and IFP signed on
July 2, 2001 a memorandum of understanding
(M.O.U.) modified by an additional clause on
July 25, 2001. According to this M.O.U., IFP, a 52.8%
shareholder of Isis, agreed (i) to contribute its Isis
shares to the Technip-Coflexip offer on Isis, and (ii) to
keep for six months beginning from the date the public offers
were closed, all of the Technip-Coflexip shares it received in
exchange. The M.O.U. also includes a provision for the transfer
of Isis non-listed investments to IFP, as well as the disposal
of the CGG shares held by Isis, if certain conditions are met.

Note 25  Commitments and
contingencies

(a) Capital leases and operating
leases

The Group rents various equipment, vessels and
buildings, mainly under leasing contracts that will end during
the next ten years. Then the Group will be required to replace
or change them.

F-39



---



##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


As of December 31 2001, the present value of
minimum future payments in respect of these leases is as follows:

|                                     |  |                    |      |           |  |  |       | 
|------------------------------------ |  | ------------------ | ---- | --------- |  |  | ----- | 
|                                     |  | Capital            |      | Operating
|                                     |  | lease              |      | lease    
|                                     |  |                    |      |          
|                                     |  |                   
|                                     |  | In millions of EUR
|For the year ended December 31, 2002 |  |                    | 1.8  |           |  |  | 44.4  | 
|2003                                 |  |                    | 1.9  |           |  |  | 41.6  | 
|2004                                 |  |                    | 1.9  |           |  |  | 30.8  | 
|2005                                 |  |                    | 1.0  |           |  |  | 26.9  | 
|2006                                 |  |                    |     |           |  |  | 24.2  | 
|2007 and thereafter                  |  |                    |     |           |  |  | 56.1  | 
|                                     |  |                    |      |           |  |  |       | 
|Total                                |  |                    | 6.6  |           |  |  | 224.0 | 
|Less interest                        |  |                    | (1.1 | )         |  |  |      | 
|                                     |  |                    |      |           |  |  |       | 
|Total current net value              |  |                    | 5.5  |           |  |  | 224.0 | 
|                                     |  |                    |      |           |  |  |       | 

In 2001, 2000 and 1999, no new leasing contracts
have been subscribed by the Group.

(b) Commitments

The Group gives and receives commitments within
the normal life of its activity:

|                             |  |                    |         |          |  |          |         |  |  |  |         | 
|---------------------------- |  | ------------------ | ------- | -------- |  | -------- | ------- |  |  |  | ------- | 
|                             |  | 12/31/01           |         | 12/31/00 |  | 12/31/99
|                             |  |                    |         |          |  |         
|                             |  |                   
|                             |  | In millions of EUR
|Commitments given            |  |                    | 1,558.1 |          |  |          | 1,233.3 |  |  |  | 1,021.3 | 
|Commitments received         |  |                    | 474.0   |          |  |          | 387.5   |  |  |  | 419.1   | 
|Non-matured discounted notes |  |                    |        |          |  |          | 2.0     |  |  |  | 5.4     | 

Commitments given mainly represent guarantees
given by financial institutions to clients in connection with
ongoing contracts, in order to (i) secure advance
payments from customers or (ii) provide customers
with additional assurance in case of delay in delivery or
failure of the Company in performing its contractual obligations.

As of December 31, 2001, parent company
bonds given by the parent company to clients to cover the good
performance of the specified contracts amounted to
 5,507 million.

Commitments received mainly relate to similar
guarantees obtained from suppliers or subcontractors in
connection with ongoing sub-contracts.

(c) Contingencies

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 or results of operations of the
Company.

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. In accordance with the
price adjustment mechanisms stipulated in the contract, an
independent auditor will assess this claim

F-40



---



##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


before it is finalized. The selection of the
auditor and the scope of his assignment are currently the
subject of an arbitral proceeding between Aker Maritime and
Coflexip. The Company expects to conclude this proceeding during
fiscal year 2002. 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.

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 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.

Other pending
litigation: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.

Siemens subcontracting on Peterhead contract:Mannesmann Seiffert/ Energie, a German
subsidiary of Technip-Coflexip, 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 for
high-pressure connection piping at the Peterhead electrical
power plant built by Siemens for Scottish Electric. An
arbitration panel has been set-up and Technip-Coflexip expects
it to hear the case at the end of 2002.

Environmental matters:

The Company is subject to various laws and
regulations relating to environmental matters in countries in
which it operates. Local, national and international laws and
regulations relating to the handling, transport and disposal of
hazardous materials and the protection of the environment also
govern its activity.

The Company could potentially be held liable for
releases of fuel oil and hazardous materials from offshore oil
platforms, pipelines, storage tanks and other installations that
it has engineered, constructed or installed, or are in process.

Accordingly, the Company adopted policies and
procedures in the area of pollution control, to prevent material
environment or other damage, and to limit the financial
liability, which could result from such events. As a matter of
illustration, Technip seeks to negotiate its contracts to
include a cap for potential environmental damages and requires
indemnity agreements from its customers and sub-contractors
requiring such persons to indemnify it up to an agreed amount
for certain claims and liabilities relating to environmental
damages. In addition, Technip maintains liability insurance for
environmental risks the Company believes to be appropriate and
in line with industry practice.

As a result, the Company believes it is in
compliance with all material environment and other regulations
relating to its operations.

Note 26  Market related
exposure

(a) Currency risk

As indicated in Note 1 (r),
Technip-Coflexip uses financial instruments to manage its
exposure to currency and interest rate risks incurred in the
normal course of its business. The Group does not use financial
instruments for trading or speculative purposes. The
counterparties of the Groups financial instruments are
major financial institutions.

F-41



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##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


The primary financial instruments used to manage
its exposure to currency risks are as follows:

|                                            |  |                         |       |            |  |               |       |            |  |  |       |  |  |  |      |  
|------------------------------------------- |  | ----------------------- | ----- | ---------- |  | ------------- | ----- | ---------- |  |  | ----- |  |  |  | ---- | -
|                                            |  |                        
|                                            |  | Year ended December 31,
|                                            |  |                        
|                                            |  |                         |       |           
|                                            |  | 2001                    |       | 2000      
|                                            |  |                         |       |           
|                                            |  | Nominal value           |       | Fair value |  | Nominal value |       | Fair value
|                                            |  |                         |       |            |  |               |       |           
|                                            |  |                        
|                                            |  | In millions of EUR     
|Sell currency, buy national
    currencies: |  |                         |       |            |  |               |       |            |  |  |       |  |  |  |      |  
|USD                                         |  |                         | 702.9 |            |  |               | (17.0 | )          |  |  | 501.7 |  |  |  | 17.9 |  
|JPY                                         |  |                         | 2.9   |            |  |               | 0.2   |            |  |  |      |  |  |  |     |  
|GBP                                         |  |                         | 22.7  |            |  |               | (0.4  | )          |  |  | 7.3   |  |  |  | 0.2  |  
|AED                                         |  |                         | 2.0   |            |  |               | (0.1  | )          |  |  | 10.8  |  |  |  | 2.3  |  
|Others                                      |  |                         | 7.5   |            |  |               |      |            |  |  | 0.5   |  |  |  |     |  
|                                            |  |                         |       |            |  |               |       |            |  |  |       |  |  |  |      |  
|Total                                       |  |                         | 738.0 |            |  |               | (17.3 | )          |  |  | 520.3 |  |  |  | 20.4 |  
|                                            |  |                         |       |            |  |               |       |            |  |  |       |  |  |  |      |  
|Buy currency, sell national
    currencies: |  |                         |       |            |  |               |       |            |  |  |       |  |  |  |      |  
|USD                                         |  |                         | 70.7  |            |  |               | 1.0   |            |  |  | 23.5  |  |  |  | (0.5 | )
|JPY                                         |  |                         | 11.0  |            |  |               | (0.4  | )          |  |  |      |  |  |  |     |  
|GBP                                         |  |                         | 13.9  |            |  |               | 0.2   |            |  |  |      |  |  |  |     |  
|Others                                      |  |                         | 2.7   |            |  |               |      |            |  |  | 2.9   |  |  |  | (0.1 | )
|                                            |  |                         |       |            |  |               |       |            |  |  |       |  |  |  |      |  
|Total                                       |  |                         | 98.3  |            |  |               | 0.8   |            |  |  | 26.4  |  |  |  | (0.6 | )
|                                            |  |                         |       |            |  |               |       |            |  |  |       |  |  |  |      |  
|Sell/Buy foreign currencies:                |  |                         | 90.5  |            |  |               | (0.8  | )          |  |  | 6.3   |  |  |  | 0.1  |  



---



|    |                                                                                                                                                                                                                                                                            
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Some of the Groups billings to its clients
    are expressed in currencies different from those in which
    contracts expenses are incurred. The resulting exposure is
    hedged through the most efficient financial instruments
    available on the domestic markets.

Technip-Coflexip use these financial instruments
to manage its exposure on operations principally denominated in
U.S. dollar.

(b) Interest rate risk

As of December 31, 2001, a part of the
variable rate debt of the Group is covered by swaps guaranteeing
fix rates for about
 122 million.
This debt is principally linked to the acquisition of Aker
Maritime ASAs Deepwater Division.

(c) Credit risk

A significant portion of the Companys
activity is concentrated with a limited number of customers
since the worldwide market is dominated by a small number of
major oil and gas companies. The Company performs ongoing credit
evaluations of its ongoing contracts financial position.

Note 27  Subsequent
events

(a) Issuance of a convertible
debenture loan (OCEANE)

In January 2002, Technip-Coflexip issued a
debenture loan for an amount of
 793.5 million,
for which the characteristics are described in
Note 22(a).

(b) Merger with Isis

Subject to the achievement of ongoing procedures,
and the authorization of the Boards, the legal merger between
Technip-Coflexip and Isis will be completed in 2002.

F-42



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##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


Note 28  Main consolidated
companies and equity investees

|                                               |  |                   |  |                     |     | 
|---------------------------------------------- |  | ----------------- |  | ------------------- | --- | 
|                                               |  |                   |  | December 31st, 2001
|Consolidated companies                         |  | Country           |  | % control          
|                                               |  |                   |  |                    
|Technip-Coflexip                               |  | France            |  |                     | 100 | 
|Technip France                                 |  | France            |  |                     | 100 | 
|TPL  Technologie Progetti Lavori SpA          |  | Italy             |  |                     | 100 | 
|Technip Italy SpA                              |  | Italy             |  |                     | 100 | 
|TPG UK                                         |  | UK                |  |                     | 100 | 
|Technip TPS                                    |  | France            |  |                     | 100 | 
|Technip Iberia                                 |  | Spain             |  |                     | 100 | 
|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 | 
|KT India                                       |  | India             |  |                     | 100 | 
|Technip Upstream Houston (ex. CBS Engineering) |  | USA               |  |                     | 100 | 
|Technip USA                                    |  | USA               |  |                     | 100 | 
|Technip Benelux BV                             |  | Netherlands       |  |                     | 100 | 
|Technip Americas                               |  | USA               |  |                     | 100 | 
|Technip Holding Benelux Group                  |  | Netherlands       |  |                     | 100 | 
|Technip KTI SpA                                |  | Italy             |  |                     | 100 | 
|Technip Germany                                |  | Germany           |  |                     | 100 | 
|EHR                                            |  | Germany           |  |                     | 100 | 
|MSE                                            |  | Germany           |  |                     | 100 | 
|MSI                                            |  | Germany           |  |                     | 100 | 
|Technip Eurocash GEIE                          |  | France            |  |                     | 100 | 
|IG Spa                                         |  | Italy             |  |                     | 100 | 
|Technip Singapour                              |  | Singapore         |  |                     | 100 | 
|Technip Middle East                            |  | Emirates          |  |                     | 100 | 
|UTC                                            |  | Brasil            |  |                     | 100 | 
|Technip Portugal                               |  | Portugal          |  |                     | 70  | 
|Technip CIS                                    |  | Russia            |  |                     | 70  | 
|Technip Net                                    |  | Netherlands       |  |                     | 67  | 
|Technip Angola                                 |  | Angola            |  |                     | 60  | 
|Technip Tianchen                               |  | China             |  |                     | 60  | 
|Technip India                                  |  | India             |  |                     | 50  | 
|BRI-Technip (Q-CHEM)                           |  | Qatar             |  |                     | 50  | 
|Ipedex SNC                                     |  | France            |  |                     | 46  | 
|TP Saudi Arabia                                |  | Saudi Arabia      |  |                     | 40  | 
|Contrina SNC/CCSV/CCV                          |  | France/ Venezuela |  |                     | 36  | 
|Technip Geoproduction Malaysia                 |  | Malaysia          |  |                     | 30  | 
|UCIFZC (Amenam)                                |  | Emirates          |  |                     | 50  | 
|Madecos (TSKJ/LNG)                             |  | Portugal          |  |                     | 25  | 
|DIN S.A. / Dit Harris                          |  | Venezuela         |  |                     | 20  | 

F-43



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##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


|                                            |  |                  |  |                     |     | 
|------------------------------------------- |  | ---------------- |  | ------------------- | --- | 
|                                            |  |                  |  | December 31st, 2001
|Consolidated companies                      |  | Country          |  | % control          
|                                            |  |                  |  |                    
|Coflexip                                    |  | France           |  |                     | 100 | 
|Cofleximmo                                  |  | France           |  |                     | 100 | 
|Coflexip Stena Offshore Deep Water          |  | France           |  |                     | 100 | 
|Angoflex                                    |  | France           |  |                     | 100 | 
|Coflexip Stena Offshore International       |  | France           |  |                     | 100 | 
|Coflexip Développement                      |  | France           |  |                     | 100 | 
|Coflexip Stena Offshore N.V                 |  | Netherlands      |  |                     | 100 | 
|Coflexip Stena Offshore Contracting B.V     |  | Netherlands      |  |                     | 100 | 
|Coflexip Stena Offshore Holdings Ltd.       |  | UK               |  |                     | 100 | 
|Coflexip Stena Offshore Ltd.                |  | UK               |  |                     | 100 | 
|Coflexip Stena Offshore Ships One Ltd.      |  | UK               |  |                     | 100 | 
|Coflexip Stena Offshore Ships Three Ltd.    |  | UK               |  |                     | 100 | 
|Northern Coasters Ltd.                      |  | UK               |  |                     | 100 | 
|Technical Diving Services Ltd.              |  | UK               |  |                     | 100 | 
|Anchortech Ltd.                             |  | UK               |  |                     | 100 | 
|Coflexip U.K. Stena Offshore Holdings Ltd.  |  | UK               |  |                     | 100 | 
|Coflexip U.K. Ltd.                          |  | UK               |  |                     | 100 | 
|Perry Slingsby Ltd.                         |  | UK               |  |                     | 100 | 
|DUCO Ltd.                                   |  | UK               |  |                     | 100 | 
|Captain Frank McNulty and sons              |  | UK               |  |                     | 90  | 
|Genesis Oil and Gas Consultants Ltd         |  | UK               |  |                     | 100 | 
|McNulty Offshore Ltd                        |  | UK               |  |                     | 90  | 
|Coflexip International Norge AS             |  | Norway           |  |                     | 100 | 
|Coflexip Stena Offshore Norge A/S           |  | Norway           |  |                     | 100 | 
|Coflexip Stena Offshore A/S                 |  | Norway           |  |                     | 100 | 
|Coflexip Stena Offshore U.S.A. Holding Inc. |  | USA              |  |                     | 100 | 
|Coflexip Stena Offshore Services Inc.       |  | USA              |  |                     | 100 | 
|R.J. Brown Deepwater, Inc                   |  | USA              |  |                     | 100 | 
|DUCO Inc.                                   |  | USA              |  |                     | 100 | 
|Coflexip Maritime Inc                       |  | USA              |  |                     | 100 | 
|CSO Aker Maritime Inc                       |  | USA              |  |                     | 100 | 
|CSO Aker Engineering Inc                    |  | USA              |  |                     | 100 | 
|CSO Aker Marine Contractors Inc             |  | USA              |  |                     | 100 | 
|Deep Oil Technology Inc                     |  | USA              |  |                     | 50  | 
|Genesis Oil and Gas Consultants Inc         |  | USA              |  |                     | 100 | 
|Gulf Marine Fabricators Inc                 |  | USA              |  |                     | 100 | 
|Spars International Inc                     |  | USA              |  |                     | 50  | 
|Perry Slingsby, Inc.                        |  | USA              |  |                     | 100 | 
|Coflexip Stena Offshore Newfoundland        |  | Canada           |  |                     | 100 | 
|Stena Offshore (Jersey) Ltd.                |  | Jersey           |  |                     | 100 | 
|Coflexip Stena Offshore (Mauritius) Ltd.    |  | Maurice          |  |                     | 100 | 
|Flexservice N.V                             |  | Dutch Antilles   |  |                     | 100 | 
|Sunflex Offshore N.V                        |  | Dutch Antilles   |  |                     | 100 | 
|Flexone N.V.                                |  | Dutch Antilles   |  |                     | 100 | 
|Brasflex                                    |  | Brasil           |  |                     | 100 | 
|Brasflex Overseas                           |  | Virgin islands   |  |                     | 100 | 
|Sea Oil                                     |  | British Antilles |  |                     | 100 | 
|Flexibras                                   |  | Brasil           |  |                     | 100 | 

F-44



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##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


|                                                           |  |           |  |                     |     | 
|---------------------------------------------------------- |  | --------- |  | ------------------- | --- | 
|                                                           |  |           |  | December 31st, 2001
|Consolidated companies                                     |  | Country   |  | % control          
|                                                           |  |           |  |                    
|Sigma                                                      |  | Brasil    |  |                     | 100 | 
|Marflex                                                    |  | Brasil    |  |                     | 100 | 
|Coflexip Stena Offshore Asia Pacific PTY Ltd               |  | Australia |  |                     | 100 | 
|Coflexip Stena Offshore PTY Ltd.                           |  | Australia |  |                     | 100 | 
|Coflexip Stena Offshore Aker Maritime Pty Ltd              |  | Australia |  |                     | 100 | 
|Coflexip Stena Offshore Oil and Gas Pty Ltd                |  | Australia |  |                     | 100 | 
|Genesis Oil and Gas Consultants Pty Ltd                    |  | Australia |  |                     | 100 | 
|South East Asia Marine Engineering &
    Construction Ltd. |  | India     |  |                     | 58  | 
|Coflexip Stena Offshore Aker Rauma Inc                     |  | Finland   |  |                     | 100 | 
|Mantyluoto Works OY                                        |  | Finland   |  |                     | 100 | 
|PI Rauma OY                                                |  | Finland   |  |                     | 50  | 
|CSO Singapour                                              |  | Singapore |  |                     | 100 | 



|          |                                                                                               
|--------- | ----------------------------------------------------------------------------------------------
|Note 29  | 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 30.

(a) Contract costs
accounting

As described in Note 1 (k),
some General and Administrative costs are considered as contract
costs and are consequently recorded as a Cost of
Sales component.

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.

As described in Note 1 (f), under
French GAAP, monetary assets and liabilities denominated in a
foreign currency are translated into Euros 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.

F-45



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##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


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, realized and unrealized
exchange gains and losses related to long-term contracts
assets and liabilities are recorded in operating income.

Under U.S. GAAP, such exchange gains and losses
are recorded as a financial result.

Under French GAAP, the fair values of the
derivatives instruments related to future transactions are not
recorded. Until December 31, 2000, the fair values of such
derivatives were not recorded under U.S. GAAP.

Since January 1, 2001, for U.S. GAAP
purposes, the fair value of the derivative instruments including
certain derivative instruments embedded is 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 value. 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 31(g)
for additional information on the impact of the adoption.

(d) Pension Obligations

Under French GAAP, pension and other than pension
postemployment 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-Coflexip 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
defines conditions to classify such plans as compensatory or
non-compensatory. If a plan is deemed to be compensatory, APB
Opinion No. 25 requires that compensation arising from such
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
at the grant date and the employee exercise price. Compensation
expense for compensatory stock based plans is recognized over
the vesting period.

(f) Reserve for geopolitical
risks

Under French GAAP, the Company had recorded
reserves to cover potential overruns on contracts performed in
countries the Company considers to be subject to sudden
worsening of their environment. These reserves were reversed at
1999 year-end.

Under U.S. GAAP, such reserves would not be
recorded as they do not meet all of the criteria set forth in
SFAS No. 5.

F-46



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##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


(g) Consolidation 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, as described in
Note 2 (e).

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.

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 as described in
Note 2 (e).

Such allocation to acquired technology and
know-how has been evaluated to be
 10 million,
mainly consisting into of ethylene furnace technology, and is
being amortized over its expected useful life of 10 years.

Had KTI/MDEU been consolidated starting
January 1, 1999, the Companys sales and net income
under US GAAP in 1999 would have been respectively
 2,804.5 million
and
 108.1 million.
Related basic and diluted earning per share would have been
respectively
 7.03 and
 7.00.

(h) 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
various country regulations where it operates, the Company
identifies the contracts, which could be subject to such
uncertainty, and accrues 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.

(i) 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 prorata 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 prorata interest in the joint ventures
is provided in Note 31 (a).

(j) Cogema share
exchange

The Company subscribed in 1997 to Cogemas
capital increase through an exchange of its shares in SGN. Under
French GAAP, this securities exchange has been accounted for
under the carryover basis (Cogemas shares are accounted
for at the carrying value of SGNs shares) and no gain was
recorded at the date of exchange.

Under U.S. GAAP, APB No. 29 requires
that an exchange of securities as described above be recorded at
fair value. As a result, the gain resulting from this
transaction has been recognized at the exchange date.

F-47



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##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


(k) 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.

(l) Research and
development

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.

(m) Goodwill
amortization

Under French GAAP, goodwill is amortized over a
period ranging from 5 to 25 years, depending on the
activity of the business acquired.

Under U.S. GAAP, goodwill resulting from
business combinations initiated after June 30, 2001 is no
longer amortized.

(n) 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.

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
 5,910.9 million,
 4,412.0 millions
and
 3,899.2 millions
as of December 31, 2001, 2000 and 1999, respectively.

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.

(o) Presentation of Consolidated
Income Statements



| |   |                                            
| | - | -------------------------------------------
| |  | Operating expenses/ revenues classification

Under French GAAP, certain items, such as
Restructuring Costs, Consulting Fees and
Reversal of geopolitical risks provision in 1999,
have been recorded below the Operating income
section in the Consolidated Income Statements.

Under U.S. GAAP, these items would be
classified as operating expenses/ revenues.

F-48



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##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)




| |   |                                            
| | - | -------------------------------------------
| |  | General and Administrative costs accounting

As described in Note 29 (a),
some General and Administrative expenses are classified as
contract costs and consequently recorded within Cost of Sales
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
Income Statements would be modified by
 (59.0)
million,
 (46.7)
million and
 (46.9)
million for the years ended December 31, 2001, 2000 and
1999, respectively.



| |   |                                           
| | - | ------------------------------------------
| |  | Goodwill amortization for equity investees

Under French GAAP, goodwill amortization includes
amortization of acquisition goodwill for equity investees.

Under U.S. GAAP, 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
 17.0 million,
 25.0 million
and
 19.0 million
in the years ended December 31, 2001, 2000 and 1999,
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.

(p) 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 the years presented, this difference is
not material.

For long-term lump sum turnkey projects started
after July 1, 2001, the French GAAP and US GAAP accounting
is the same.

F-49



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##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


Note 30  Reconciliation to US
GAAP

(a) Net Income

|                                                                 |  |                         |       |                    |  |      |       |      |  |  |       |   |  |  |       |  
|---------------------------------------------------------------- |  | ----------------------- | ----- | ------------------ |  | ---- | ----- | ---- |  |  | ----- | - |  |  | ----- | -
|                                                                 |  |                        
|                                                                 |  | Year ended December 31,
|                                                                 |  |                        
|                                                                 |  | 2001                    |       | 2001               |  | 2000 |       | 1999
|                                                                 |  |                         |       |                    |  |      |       |     
|                                                                 |  | In millions             |       |                   
|                                                                 |  | of US$                  |       | In millions of EUR
|Net Income as reported in the Consolidated
    Income Statements |  |                         | 96.2  |                    |  |      | 108.1 |      |  |  | 214.2 |   |  |  | 172.6 |  
|Contract costs accounting                                        |  |                         | 2.3   |                    |  |      | 2.6   |      |  |  | (4.3  | ) |  |  | 8.1   |  
|Contract bid costs                                               |  |                         | 1.1   |                    |  |      | 1.2   |      |  |  | 5.6   |   |  |  | (5.9  | )
|Foreign currency transactions and derivatives
    instruments    |  |                         | (14.1 | )                  |  |      | (15.9 | )    |  |  | 5.1   |   |  |  | (7.6  | )
|Pension obligations                                              |  |                         | 0.8   |                    |  |      | 0.9   |      |  |  | (1.2  | ) |  |  | 0.9   |  
|Stock based compensation                                         |  |                         | (8.4  | )                  |  |      | (9.4  | )    |  |  | (4.5  | ) |  |  | (2.9  | )
|Amortization of goodwill                                         |  |                         | 18.2  |                    |  |      | 20.5  |      |  |  |      |   |  |  |      |  
|Reserve for geopolitical risks                                   |  |                         |      |                    |  |      |      |      |  |  |      |   |  |  | (89.9 | )
|Acquisition of KTI/MDEU                                          |  |                         | (0.6  | )                  |  |      | (0.7  | )    |  |  | (0.7  | ) |  |  | 0.7   |  
|Cogemas shares exchange                                         |  |                         |      |                    |  |      |      |      |  |  | (19.4 | ) |  |  | (1.0  | )
|Coflexip gain on disposition of Cal Dive                         |  |                         | 1.2   |                    |  |      | 1.4   |      |  |  | (28.0 | ) |  |  |      |  
|                                                                 |  |                         |       |                    |  |      |       |      |  |  |       |   |  |  |       |  
|Total U.S. GAAP adjustments before tax
    effect                |  |                         | 96.7  |                    |  |      | 108.7 |      |  |  | 166.8 |   |  |  | 75.0  |  
|Tax effects of the above adjustments                             |  |                         | 3.9   |                    |  |      | 4.4   |      |  |  | (1.9  | ) |  |  | 34.6  |  
|Cumulative effect of SFAS No. 133 adoption,
    net of tax       |  |                         | 1.5   |                    |  |      | 1.7   |      |  |  |      |   |  |  |      |  
|                                                                 |  |                         |       |                    |  |      |       |      |  |  |       |   |  |  |       |  
|Net income under U.S. GAAP                                       |  |                         | 102.1 |                    |  |      | 114.8 |      |  |  | 164.9 |   |  |  | 109.6 |  
|                                                                 |  |                         |       |                    |  |      |       |      |  |  |       |   |  |  |       |  

(b) Shareholders
equity

|                                                                         |  |                         |         |                    |  |      |         |      |  |  |       |   |  |  |       |  
|------------------------------------------------------------------------ |  | ----------------------- | ------- | ------------------ |  | ---- | ------- | ---- |  |  | ----- | - |  |  | ----- | -
|                                                                         |  |                        
|                                                                         |  | Year ended December 31,
|                                                                         |  |                        
|                                                                         |  | 2001                    |         | 2001               |  | 2000 |         | 1999
|                                                                         |  |                         |         |                    |  |      |         |     
|                                                                         |  | In millions             |         |                   
|                                                                         |  | of US$                  |         | In millions of EUR
|Shareholders equity as reported in the
    Consolidation Balance Sheets |  |                         | 1,970.9 |                    |  |      | 2,214.2 |      |  |  | 766.4 |   |  |  | 596.2 |  
|Contract costs accounting                                                |  |                         | (7.3    | )                  |  |      | (8.2    | )    |  |  | (10.8 | ) |  |  | (6.5  | )
|Contract bid costs                                                       |  |                         | (16.9   | )                  |  |      | (19.0   | )    |  |  | (20.2 | ) |  |  | (25.8 | )
|Foreign currency transactions and derivatives
    instruments            |  |                         | (15.2   | )                  |  |      | (17.1   | )    |  |  | 10.8  |   |  |  | 5.7   |  
|Pension obligations                                                      |  |                         | (1.3    | )                  |  |      | (1.5    | )    |  |  | (2.4  | ) |  |  | (1.2  | )
|Acquisition of KTI/MDEU                                                  |  |                         | 4.4     |                    |  |      | 4.9     |      |  |  | 5.6   |   |  |  | 6.3   |  
|Territoriality contingencies                                             |  |                         | 31.5    |                    |  |      | 35.4    |      |  |  | 35.4  |   |  |  | 35.4  |  
|Cogemas shares exchange                                                 |  |                         |        |                    |  |      |        |      |  |  |      |   |  |  | 19.4  |  
|Foreign currency translation adjustment                                  |  |                         | (0.2    | )                  |  |      | (0.2    | )    |  |  | (0.2  | ) |  |  | (0.1  | )
|Coflexip gain on disposition of Cal Dive                                 |  |                         | (23.7   | )                  |  |      | (26.6   | )    |  |  | (28.0 | ) |  |  |      |  
|Amortization of goodwill                                                 |  |                         | 18.2    |                    |  |      | 20.5    |      |  |  |      |   |  |  |      |  
|                                                                         |  |                         |         |                    |  |      |         |      |  |  |       |   |  |  |       |  
|Total U.S. GAAP adjustments before tax
    effect                        |  |                         | 1,960.4 |                    |  |      | 2,202.4 |      |  |  | 756.6 |   |  |  | 629.4 |  
|Tax effects of the above adjustments                                     |  |                         | 15.1    |                    |  |      | 17.0    |      |  |  | 8.3   |   |  |  | 10.2  |  
|Cumulative effect of SFAS No. 133 adoption,
    net of tax               |  |                         | 7.9     |                    |  |      | 8.9     |      |  |  |      |   |  |  |      |  
|                                                                         |  |                         |         |                    |  |      |         |      |  |  |       |   |  |  |       |  
|Shareholders equity under
    U.S. GAAP                                 |  |                         | 1,983.4 |                    |  |      | 2,228.3 |      |  |  | 764.9 |   |  |  | 639.6 |  
|                                                                         |  |                         |         |                    |  |      |         |      |  |  |       |   |  |  |       |  

F-50



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##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)




---



|  |                                                                                                                                                                                                                                                          
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | For the convenience of the reader, the financial
    statements as of and for the year ended December 31, 2001
    have been translated into U.S. dollars (U.S.$) at the rate
    of  1.00 =
    U.S. $0.8901 on December 31, 2001. (See
    Note 1(a)).

The reconciliation of U.S. GAAP
shareholders equity from December 31, 2000 to
December 31, 2001, is as follows:

|                                                          |  |             |         |  
|--------------------------------------------------------- |  | ----------- | ------- | -
|                                                          |  | In millions
|                                                          |  | of EUR     
|                                                          |  |            
|U.S. GAAP shareholders equity at
    December 31, 2000   |  |             | 764.9   |  
|Net U.S. GAAP income for 2001                             |  |             | 114.8   |  
|Additional paid-in capital (stock based
    compensation) |  |             | 9.4     |  
|Dividends paid                                            |  |             | (50.9   | )
|Capital increase                                          |  |             | 1,573.6 |  
|Foreign currency translation adjustment                   |  |             | 13.3    |  
|Treasury stock                                            |  |             | (196.3  | )
|Cumulative effect of SFAS No. 133, net of tax             |  |             | (0.5    | )
|                                                          |  |             |         |  
|U.S. GAAP shareholders equity at
    December 31, 2001   |  |             | 2,228.3 |  
|                                                          |  |             |         |  

(c) Net sales

|                                                  |  |                         |         |                    |  |      |         |      |  |  |         |   |  |  |         |  
|------------------------------------------------- |  | ----------------------- | ------- | ------------------ |  | ---- | ------- | ---- |  |  | ------- | - |  |  | ------- | -
|                                                  |  |                        
|                                                  |  | Year ended December 31,
|                                                  |  |                        
|                                                  |  | 2001                    |         | 2001               |  | 2000 |         | 1999
|                                                  |  |                         |         |                    |  |      |         |     
|                                                  |  |                         |         |                   
|                                                  |  | In millions             |         | In millions of EUR
|                                                  |  | of US$                  |         |                   
|Net sales under French GAAP                       |  |                         | 3,156.3 |                    |  |      | 3,546.0 |      |  |  | 2,972.0 |   |  |  | 2,782.2 |  
|Contract costs accounting                         |  |                         | 2.3     |                    |  |      | 2.6     |      |  |  | (4.3    | ) |  |  | 8.1     |  
|Contract bid costs                                |  |                         | 1.1     |                    |  |      | 1.2     |      |  |  | 7.5     |   |  |  | (7.7    | )
|Foreign currency transactions                     |  |                         | 12.9    |                    |  |      | 14.5    |      |  |  | 39.3    |   |  |  | 20.1    |  
|Interest income and expenses on ongoing contracts |  |                         | (15.1   | )                  |  |      | (17.0   | )    |  |  | (25.0   | ) |  |  | (19.0   | )
|                                                  |  |                         |         |                    |  |      |         |      |  |  |         |   |  |  |         |  
|Net sales under U.S. GAAP                         |  |                         | 3,157.5 |                    |  |      | 3,547.3 |      |  |  | 2,989.5 |   |  |  | 2,783.7 |  
|                                                  |  |                         |         |                    |  |      |         |      |  |  |         |   |  |  |         |  

(d) Operating Income

|                                     |  |                         |       |                    |  |      |       |      |  |  |       |   |  |  |       |  
|------------------------------------ |  | ----------------------- | ----- | ------------------ |  | ---- | ----- | ---- |  |  | ----- | - |  |  | ----- | -
|                                     |  |                        
|                                     |  | Year ended December 31,
|                                     |  |                        
|                                     |  | 2001                    |       | 2001               |  | 2000 |       | 1999
|                                     |  |                         |       |                    |  |      |       |     
|                                     |  |                         |       |                   
|                                     |  | In millions             |       | In millions of EUR
|                                     |  | of US$                  |       |                   
|Operating income under French GAAP   |  |                         | 154.4 |                    |  |      | 173.5 |      |  |  | 155.9 |   |  |  | 151.5 |  
|Contract costs accounting            |  |                         | 2.3   |                    |  |      | 2.6   |      |  |  | (4.3  | ) |  |  | 8.1   |  
|Contract bid costs                   |  |                         | 1.1   |                    |  |      | 1.2   |      |  |  | 5.6   |   |  |  | (5.9  | )
|Pension obligations                  |  |                         | 0.8   |                    |  |      | 0.9   |      |  |  | (1.2  | ) |  |  | 0.9   |  
|Stock based compensation             |  |                         | (8.4  | )                  |  |      | (9.4  | )    |  |  | (4.5  | ) |  |  | (2.9  | )
|Consolidation of KTI/MDEU            |  |                         | (0.6  | )                  |  |      | (0.7  | )    |  |  | (0.7  | ) |  |  | 0.7   |  
|Amortization of goodwill             |  |                         | 33.2  |                    |  |      | 37.3  |      |  |  | 16.8  |   |  |  |      |  
|Restructuring costs                  |  |                         | (2.8  | )                  |  |      | (3.1  | )    |  |  | (8.9  | ) |  |  | (2.0  | )
|Consulting fees                      |  |                         |      |                    |  |      |      |      |  |  | (4.0  | ) |  |  |      |  
|Other                                |  |                         | (3.2  | )                  |  |      | (3.6  | )    |  |  | (3.0  | ) |  |  | 0.5   |  
|                                     |  |                         |       |                    |  |      |       |      |  |  |       |   |  |  |       |  
|Operating income under
    U.S. GAAP |  |                         | 176.8 |                    |  |      | 198.7 |      |  |  | 151.7 |   |  |  | 150.9 |  
|                                     |  |                         |       |                    |  |      |       |      |  |  |       |   |  |  |       |  

F-51



---



##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


Note 31  Additional
information



|    |                                                                   
|--- | ------------------------------------------------------------------
|(a) | Combined information concerning pro rata
    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, 2001, 2000 and 1999.

|                                    |  |                         |         |      |  |      |         |   |  |  |         |  
|----------------------------------- |  | ----------------------- | ------- | ---- |  | ---- | ------- | - |  |  | ------- | -
|                                    |  |                        
|                                    |  | Year ended December 31,
|                                    |  |                        
|                                    |  | 2001                    |         | 2000 |  | 1999
|                                    |  |                         |         |      |  |     
|                                    |  |                        
|                                    |  | (In millions of EUR)   
|Balance sheet data:                 |  |                         |         |      |  |      |         |   |  |  |         |  
|Non-current assets                  |  |                         | 1.0     |      |  |      |        |   |  |  | 0.5     |  
|Current assets                      |  |                         | 2,010.9 |      |  |      | 1,499.3 |   |  |  | 1,118.9 |  
|Non-current liabilities             |  |                         | 2.6     |      |  |      |        |   |  |  | 1.3     |  
|Current liabilities                 |  |                         | 2,009.3 |      |  |      | 1,499.3 |   |  |  | 1,118.1 |  
|Income statement data:              |  |                         |         |      |  |      |         |   |  |  |         |  
|Net Sales                           |  |                         | 559.8   |      |  |      | 734.6   |   |  |  | 607.7   |  
|Cost of sales                       |  |                         | (540.2  | )    |  |      | (706.4  | ) |  |  | (546.6  | )
|                                    |  |                         |         |      |  |      |         |   |  |  |         |  
|Gross Margin                        |  |                         | 19.6    |      |  |      | 28.2    |   |  |  | 43.1    |  
|Operating Income                    |  |                         | 19.5    |      |  |      | 28.2    |   |  |  | 38.4    |  
|Cash flow data:                     |  |                         |         |      |  |      |         |   |  |  |         |  
|Cash flow from operating activities |  |                         | (47.8   | )    |  |      | (13.5   | ) |  |  | 128.7   |  
|Cash flow from investing activities |  |                         | (0.1    | )    |  |      | (1.2    | ) |  |  | (1.3    | )
|Cash flow from financing activities |  |                         | (1.4    | )    |  |      | (0.5    | ) |  |  | 1.2     |  



|    |                     
|--- | --------------------
|(b) | Comprehensive income

The following information is presented under
French GAAP.

|                                                         |  |                         |       |      |  |      |       |   |  |  |       |  
|-------------------------------------------------------- |  | ----------------------- | ----- | ---- |  | ---- | ----- | - |  |  | ----- | -
|                                                         |  |                        
|                                                         |  | Year ended December 31,
|                                                         |  |                        
|                                                         |  | 2001                    |       | 2000 |  | 1999
|                                                         |  |                         |       |      |  |     
|                                                         |  |                        
|                                                         |  | (In millions of EUR)   
|Net income                                               |  |                         | 108.1 |      |  |      | 214.2 |   |  |  | 172.6 |  
|Other comprehensive income, net of tax:                  |  |                         |       |      |  |      |       |   |  |  |       |  
|Changes in cumulative translation adjustment             |  |                         | 13.3  |      |  |      | 1.1   |   |  |  | 4.2   |  
|                                                         |  |                         |       |      |  |      |       |   |  |  |       |  
|Total Comprehensive income                               |  |                         | 121.4 |      |  |      | 215.3 |   |  |  | 176.8 |  
|                                                         |  |                         |       |      |  |      |       |   |  |  |       |  
|Accumulated other comprehensive income, end of
    year: |  |                         |       |      |  |      |       |   |  |  |       |  
|Cumulative translation adjustment                        |  |                         | 13.1  |      |  |      | (0.2  | ) |  |  | (1.3  | )

F-52



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##### Table of Contents



TECHNIP-COFLEXIP


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,  
|                                    |                                               |                          
|                                    |                                               | 2001                      |       | 2001 |  | 2000 |       | 1999
|                                    |                                               |                           |       |      |  |      |       |     
|                                    |                                               | U.S.$                     |       | EUR  |  | EUR  |       | EUR 
|                                    |                                               |                          
|                                    |                                               | (In millions of,         
|                                    |                                               | except per share amounts)
|Net income before cumulative effect |                                               |                           | 100.6 |      |  |      | 113.1 |      |  |  | 164.9 |       |  |  | 109.6 |     
|Net income                          |                                               |                           | 102.2 |      |  |      | 114.8 |      |  |  | 164.9 |       |  |  | 109.6 |     
|Basic earnings per share:           |                                               |                           |       |      |  |      |       |      |  |  |       |       |  |  |       |     
|                                    | Before cumulative effect of SFAS No. 133      |                           |       | 6.00 |  |      |       | 6.74 |  |  |       | 10.84 |  |  |       | 7.12 | 
|                                    | Cumulative effect of SFAS No. 133, net of tax |                           |       | 0.09 |  |      |       | 0.10 |  |  |       |      |  |  |       |     | 
|                                    | Net income                                    |                           |       | 6.09 |  |      |       | 6.84 |  |  |       | 10.84 |  |  |       | 7.12 | 
|Diluted earnings per share:         |                                               |                           |       |      |  |      |       |      |  |  |       |       |  |  |       |     
|                                    | Before cumulative effect of SFAS No. 133      |                           |       | 5.93 |  |      |       | 6.67 |  |  |       | 10.73 |  |  |       | 7.10 | 
|                                    | Cumulative effect of SFAS No. 133, net of tax |                           |       | 0.09 |  |      |       | 0.10 |  |  |       |      |  |  |       |     | 
|                                    | Net income                                    |                           |       | 6.02 |  |      |       | 6.77 |  |  |       | 10.73 |  |  |       | 7.10 | 

Reconciliation of basic and diluted numbers of
shares used for the determination of earnings per share under
U.S. GAAP:

|                                         |  |                |        |      |  |      |        |  |  |  |        | 
|---------------------------------------- |  | -------------- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|                                         |  | 2001           |        | 2000 |  | 1999
|                                         |  |                |        |      |  |     
|                                         |  |               
|                                         |  | (In thousands)
|Basic number of shares under U.S. GAAP   |  |                | 16,770 |      |  |      | 15,210 |  |  |  | 15,387 | 
|Stock options dilutive effect            |  |                | 192    |      |  |      | 164    |  |  |  | 59     | 
|                                         |  |                |        |      |  |      |        |  |  |  |        | 
|Diluted number of shares under U.S. GAAP |  |                | 16,962 |      |  |      | 15,374 |  |  |  | 15,446 | 
|                                         |  |                |        |      |  |      |        |  |  |  |        | 



|    |                                                      
|--- | -----------------------------------------------------
|(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-53



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##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


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
 9.4 million,
 1.3 million
and
 1.3 million
for the years ended December 31, 2001, 2000 and 1999.

|                  |  |           |           |          |  |  |       | 
|----------------- |  | --------- | --------- | -------- |  |  | ----- | 
|                  |  |           |           | Weighted
|                  |  |           |           | average 
|                  |  | Number of |           | exercise
|                  |  | shares    |           | price   
|                  |  |           |           |         
|                  |  |           |           | (in EUR)
|December 31, 1998 |  |           | 555,141   |          |  |  | 77.4  | 
|                  |  |           |           |          |  |  |       | 
|Granted           |  |           | 315,520   |          |  |  | 95.2  | 
|Exercised         |  |           | (124,140  | )        |  |  | 49.2  | 
|                  |  |           |           |          |  |  |       | 
|December 31, 1999 |  |           | 746,521   |          |  |  | 90.0  | 
|                  |  |           |           |          |  |  |       | 
|Granted           |  |           | 632,604   |          |  |  | 143.2 | 
|Exercised         |  |           | (147,440  | )        |  |  | 66.9  | 
|Forfeited         |  |           | (19,300   | )        |  |  | 95.7  | 
|                  |  |           |           |          |  |  |       | 
|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 | 
|                  |  |           |           |          |  |  |       | 

The options outstanding at December 31, 2001
expire in various years through 2008.

Information about the 1,052,674 stock options
outstanding at December 31, 2001 is summarized as follows:

|               |  |                     |           |           |  |             |     |  |  |  |        | 
|-------------- |  | ------------------- | --------- | --------- |  | ----------- | --- |  |  |  | ------ | 
|               |  |                    
|               |  | Options outstanding
|               |  |                    
|               |  |                     |           | Weighted  |  |            
|               |  |                     |           | average   |  |            
|               |  | Number              |           | remaining |  | Number     
|Exercise price |  | outstanding         |           | life      |  | exercisable
|               |  |                     |           |           |  |            
|(in EUR)       |  |                     |           |           |  |            
|85-110         |  |                     | 423,270   |           |  |             | 1.9 |  |  |  | 31,650 | 
|110-145        |  |                     | 629,404   |           |  |             | 7.0 |  |  |  |       | 
|               |  |                     |           |           |  |             |     |  |  |  |        | 
|               |  |                     | 1,052,674 |           |  |             | 4.9 |  |  |  | 31,650 | 
|               |  |                     |           |           |  |             |     |  |  |  |        | 



| |   |                               
| | - | ------------------------------
| |  | 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-Coflexip 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:

|                               |  |      |   |      |  |      |         |  |  |  |        | 
|------------------------------ |  | ---- | - | ---- |  | ---- | ------- |  |  |  | ------ | 
|                               |  | 2001 |   | 2000 |  | 1999
|                               |  |      |   |      |  |     
|Number of shares               |  |      |  |      |  |      | 126,928 |  |  |  | 96,675 | 
|Proceeds on sales              |  |      |  |      |  |      | 12.8    |  |  |  | 6.4    | 
|Average cost of treasury sales |  |      |  |      |  |      | 100.93  |  |  |  | 65.8   | 

F-54



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##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


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, 2000 and 1999 is
 3.2 million
and
 1.6 million,
respectively. No compensation has been recorded for the period
ended December 31, 2001.

Technip-Coflexip 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:

|                                     |  |                    |       |      |  |      |       |   |  |  |       |  
|------------------------------------ |  | ------------------ | ----- | ---- |  | ---- | ----- | - |  |  | ----- | -
|                                     |  |                   
|                                     |  | As of December 31,
|                                     |  |                   
|                                     |  | 2001               |       | 2000 |  | 1999
|                                     |  |                    |       |      |  |     
|U.S. GAAP net income                 |  |                    | 114.8 |      |  |      | 164.9 |   |  |  | 109.6 |  
|Impact of fair value method          |  |                    | (6.8  | )    |  |      | (2.6  | ) |  |  | (2.8  | )
|Pro forma U.S. GAAP net income       |  |                    | 108.0 |      |  |      | 162.3 |   |  |  | 106.8 |  
|Pro forma basic earnings per share   |  |                    | 6.44  |      |  |      | 10.67 |   |  |  | 6.94  |  
|Pro forma diluted earnings per share |  |                    | 6.37  |      |  |      | 10.56 |   |  |  | 6.91  |  

The fair value of Technip-Coflexip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,
|                      |  |             
|                      |  | 2001         |     | 2000 |  | 1999
|                      |  |              |     |      |  |     
|Expected life (years) |  |              | N/A |      |  |      | 8.0  |   |  |  | 4.7 |  
|Interest rate         |  |              | N/A |      |  |      | 4.8  | % |  |  | 4.5 | %
|Volatility            |  |              | N/A |      |  |      | 11.8 | % |  |  | 12  | %
|Dividend yield        |  |              | N/A |      |  |      | 2.1  | % |  |  | 2.1 | %

(f) Pension plan and other cost
retirement benefits other than pension plans

In accordance with the laws and practices of each
country, Technip-Coflexip 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.

F-55



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##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


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
|                                                   |  |                      |       |               
|                                                   |  | 2001                 |       | 2000           |  | 1999 |       | 2001 |  | 2000 |       | 1999
|                                                   |  |                      |       |                |  |      |       |      |  |      |       |     
|                                                   |  |                     
|                                                   |  | (In millions of EUR)
|Change in benefit obligation:                      |  |                      |       |                |  |      |       |      |  |      |       |      |  |  |      |   |  |  |      |   |  |  |      |  
|Benefit Obligation at beginning of
    year        |  |                      | 115.3 |                |  |      | 108.9 |      |  |      | 28.9  |      |  |  | 1.0  |   |  |  | 1.1  |   |  |  | 1.1  |  
|Service cost                                       |  |                      | 6.7   |                |  |      | 5.0   |      |  |      | 5.3   |      |  |  |     |   |  |  |     |   |  |  |     |  
|Interest cost                                      |  |                      | 4.6   |                |  |      | 5.4   |      |  |      | 5.1   |      |  |  | 0.1  |   |  |  |     |   |  |  | 0.1  |  
|Plan participants contributions                    |  |                      |      |                |  |      | 0.5   |      |  |      |      |      |  |  |     |   |  |  |     |   |  |  |     |  
|Acquisitions/ disposals                            |  |                      | 8.8   |                |  |      | 0.9   |      |  |      | 75.4  |      |  |  |     |   |  |  |     |   |  |  |     |  
|Curtailments/ Settlements                          |  |                      | 0.2   |                |  |      |      |      |  |      | (0.7  | )    |  |  |     |   |  |  |     |   |  |  |     |  
|Actuarial (gain)                                   |  |                      | (1.2  | )              |  |      | (0.8  | )    |  |      |      |      |  |  |     |   |  |  |     |   |  |  |     |  
|Benefits paid                                      |  |                      | (3.9  | )              |  |      | (4.6  | )    |  |      | (5.1  | )    |  |  | (0.1 | ) |  |  | (0.1 | ) |  |  | (0.1 | )
|                                                   |  |                      |       |                |  |      |       |      |  |      |       |      |  |  |      |   |  |  |      |   |  |  |      |  
|Benefit Obligation at end of year                  |  |                      | 130.5 |                |  |      | 115.3 |      |  |      | 108.9 |      |  |  | 0.9  |   |  |  | 0.9  |   |  |  | 1.1  |  
|Change in plan assets:                             |  |                      |       |                |  |      |       |      |  |      |       |      |  |  |      |   |  |  |      |   |  |  |      |  
|Fair value of plan assets at beginning of
    year |  |                      | 48.2  |                |  |      | 44.2  |      |  |      | 3.6   |      |  |  |     |   |  |  |     |   |  |  |     |  
|Actual return on plan assets                       |  |                      | (2.2  | )              |  |      | 3.4   |      |  |      | 2.3   |      |  |  |     |   |  |  |     |   |  |  |     |  
|Group contribution                                 |  |                      | 0.3   |                |  |      | 1.7   |      |  |      | 3.1   |      |  |  |     |   |  |  |     |   |  |  |     |  
|Plan participants contributions                    |  |                      |      |                |  |      | 0.5   |      |  |      |      |      |  |  |     |   |  |  |     |   |  |  |     |  
|Benefits paid                                      |  |                      | (0.9  | )              |  |      | (1.6  | )    |  |      | (1.6  | )    |  |  |     |   |  |  |     |   |  |  |     |  
|Acquisitions and disposals                         |  |                      |      |                |  |      |      |      |  |      | 36.8  |      |  |  |     |   |  |  |     |   |  |  |     |  
|                                                   |  |                      |       |                |  |      |       |      |  |      |       |      |  |  |      |   |  |  |      |   |  |  |      |  
|Fair value of plan assets at end of
    year       |  |                      | 45.4  |                |  |      | 48.2  |      |  |      | 44.2  |      |  |  |     |   |  |  |     |   |  |  |     |  
|Funded status of the plan                          |  |                      | 85.1  |                |  |      | 67.1  |      |  |      | 64.6  |      |  |  | 0.9  |   |  |  | 1.0  |   |  |  | 1.1  |  
|Unrecognized actuarial (gains) or losses           |  |                      | (4.3  | )              |  |      | 0.2   |      |  |      | (0.7  | )    |  |  |     |   |  |  |     |   |  |  |     |  
|                                                   |  |                      |       |                |  |      |       |      |  |      |       |      |  |  |      |   |  |  |      |   |  |  |      |  
|Accrued (prepaid) benefit cost                     |  |                      | 80.8  |                |  |      | 67.3  |      |  |      | 63.9  |      |  |  | 0.9  |   |  |  | 1.0  |   |  |  | 1.1  |  
|                                                   |  |                      |       |                |  |      |       |      |  |      |       |      |  |  |      |   |  |  |      |   |  |  |      |  

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:

|                                                                |  |      |      |      |  |      |      |  |  |  |      | 
|--------------------------------------------------------------- |  | ---- | ---- | ---- |  | ---- | ---- |  |  |  | ---- | 
|                                                                |  | 2001 |      | 2000 |  | 1999
|                                                                |  |      |      |      |  |     
|Projected Benefit Obligation                                    |  |      | 86.2 |      |  |      | 71.5 |  |  |  | 71.4 | 
|Accumulated Benefit Obligation                                  |  |      | 74.4 |      |  |      | 69.6 |  |  |  | 68.5 | 
|Fair Value of Plan Assets with ABO in excess of
    Plan Assets |  |      | 41.0 |      |  |      | 43.9 |  |  |  | 39.3 | 

F-56



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##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


|                                     |  |                    |      |                |  |      |      |      |  |      |      |      |  |  |     |  |  |  |   |  |  |  |     | 
|------------------------------------ |  | ------------------ | ---- | -------------- |  | ---- | ---- | ---- |  | ---- | ---- | ---- |  |  | --- |  |  |  | - |  |  |  | --- | 
|                                     |  |                    |      |               
|                                     |  | Pension Benefits   |      | Other Benefits
|                                     |  |                    |      |               
|                                     |  | 2001               |      | 2000           |  | 1999 |      | 2001 |  | 2000 |      | 1999
|                                     |  |                    |      |                |  |      |      |      |  |      |      |     
|                                     |  |                   
|                                     |  | In millions of EUR
|Annual cost under U.S. GAAP:         |  |                    |      |                |  |      |      |      |  |      |      |      |  |  |     |  |  |  |   |  |  |  |     | 
|Service cost                         |  |                    | 6.7  |                |  |      | 5.0  |      |  |      | 5.3  |      |  |  |    |  |  |  |  |  |  |  |    | 
|Expected interest cost               |  |                    | 4.6  |                |  |      | 5.4  |      |  |      | 5.1  |      |  |  | 0.1 |  |  |  |  |  |  |  | 0.1 | 
|Expected return on plan assets       |  |                    | (3.5 | )              |  |      | (3.2 | )    |  |      | (3.0 | )    |  |  |    |  |  |  |  |  |  |  |    | 
|Effects of settlements/ curtailments |  |                    | 0.2  |                |  |      |     |      |  |      | (0.7 | )    |  |  |    |  |  |  |  |  |  |  |    | 
|                                     |  |                    |      |                |  |      |      |      |  |      |      |      |  |  |     |  |  |  |   |  |  |  |     | 
|Net periodic benefit cost            |  |                    | 8.0  |                |  |      | 7.2  |      |  |      | 6.7  |      |  |  | 0.1 |  |  |  |  |  |  |  | 0.1 | 
|                                     |  |                    |      |                |  |      |      |      |  |      |      |      |  |  |     |  |  |  |   |  |  |  |     | 

Annual cost under French GAAP for pension
benefits plans are as follows:

|                              |  |                    |     |      |  |      |     |      |  |      |     |      |  |  |     |  |  |  |   |  |  |  |     | 
|----------------------------- |  | ------------------ | --- | ---- |  | ---- | --- | ---- |  | ---- | --- | ---- |  |  | --- |  |  |  | - |  |  |  | --- | 
|                              |  | 2001               |     | 2000 |  | 1999 |     | 2001 |  | 2000 |     | 1999
|                              |  |                    |     |      |  |      |     |      |  |      |     |     
|                              |  |                   
|                              |  | In millions of EUR
|Annual Cost under French GAAP |  |                    | 3.4 |      |  |      | 4.8 |      |  |      | 5.2 |      |  |  | 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 2001 and later, 1.3% in 2000 and 1.3% in 1999. 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
|                                           |  |                    |      |               
|                                           |  | 2001               |      | 2000           |  | 1999 |      | 2001 |  | 2000 |      | 1999
|                                           |  |                    |      |                |  |      |      |      |  |      |      |     
|                                           |  |                   
|                                           |  | In millions of EUR
|Accrued benefit liability (including MLA)  |  |                    | 86.5 |                |  |      | 72.1 |      |  |      | 67.7 |      |  |  | 1.0 |  |  |  | 1.0 |  |  |  | 1.1 | 
|Prepaid benefit cost                       |  |                    | (5.7 | )              |  |      | (4.8 | )    |  |      | (3.8 | )    |  |  |    |  |  |  |    |  |  |  |    | 
|                                           |  |                    |      |                |  |      |      |      |  |      |      |      |  |  |     |  |  |  |     |  |  |  |     | 
|Net amount accrued for under
    U.S. GAAP |  |                    | 80.8 |                |  |      | 67.3 |      |  |      | 63.9 |      |  |  | 1.0 |  |  |  | 1.0 |  |  |  | 1.1 | 
|                                           |  |                    |      |                |  |      |      |      |  |      |      |      |  |  |     |  |  |  |     |  |  |  |     | 

The net accruals included as of December 31,
2001, 2000 and 1999 in the accompanying consolidated balance
sheets can be compared with balances determined under
U.S. GAAP as follows:

|                                                                                                                                                |  |                      |      |                |  |      |      |      |  |      |      |      |  |  |     |  |  |  |     |  |  |  |      |  
|----------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------- | ---- | -------------- |  | ---- | ---- | ---- |  | ---- | ---- | ---- |  |  | --- |  |  |  | --- |  |  |  | ---- | -
|                                                                                                                                                |  |                      |      |               
|                                                                                                                                                |  | Pension Benefits     |      | Other Benefits
|                                                                                                                                                |  |                      |      |               
|                                                                                                                                                |  | 2001                 |      | 2000           |  | 1999 |      | 2001 |  | 2000 |      | 1999
|                                                                                                                                                |  |                      |      |                |  |      |      |      |  |      |      |     
|                                                                                                                                                |  |                     
|                                                                                                                                                |  | (In millions of EUR)
|Net amount accrued for under U.S. GAAP
    (before prepaid costs)                                                                               |  |                      | 86.5 |                |  |      | 72.1 |      |  |      | 67.7 |      |  |  | 1.0 |  |  |  | 1.0 |  |  |  | 1.1  |  
|Excess funding of plans recognized in income only
    when paid back to the Company                                                             |  |                      | (5.7 | )              |  |      | (4.8 | )    |  |      | (3.8 | )    |  |  |    |  |  |  |    |  |  |  |     |  
|Impact of transition obligation of prior service
    cost and of actuarial gains recognized with a different timing
    under local regulations |  |                      | (1.7 | )              |  |      | (7.3 | )    |  |      | (6.6 | )    |  |  |    |  |  |  |    |  |  |  | (0.8 | )
|                                                                                                                                                |  |                      |      |                |  |      |      |      |  |      |      |      |  |  |     |  |  |  |     |  |  |  |      |  
|Net amount accrued for in consolidated
    financial statements                                                                                 |  |                      | 79.1 |                |  |      | 64.8 |      |  |      | 61.1 |      |  |  | 1.0 |  |  |  | 1.0 |  |  |  | 0.3  |  
|                                                                                                                                                |  |                      |      |                |  |      |      |      |  |      |      |      |  |  |     |  |  |  |     |  |  |  |      |  

F-57



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##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)




|    |                       
|--- | ----------------------
|(g) | Derivative instruments

As described in Note 29 (c),
Technip-Coflexip 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-Coflexip 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-Coflexip enters into derivative financial instruments to
manage its exposure to fluctuations in foreign currency exchange
rates. All derivative instruments held by Technip-Coflexip are
economic hedge of existing or anticipated commercial
transactions. For more information on Technip-Coflexips
derivatives 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) Recently issued accounting
pronouncements

In June 2001, the Financial Accounting Standards
Board issued Statement of Financial Accounting Standards
No. 141 (SFAS No. 141), Business Combinations,
and Statement of Financial Accounting Standards No. 142
(SFAS 142), Goodwill and Other Intangible Assets.
SFAS No. 141 requires the use of the purchase method of
accounting for all business combinations initiated after
June 30, 2001. Additionally, it is likely that more
intangible assets will be recognized under SFAS No. 141
than its predecessor, APB Opinion (APB) No. 16, although in
some instances previously recognized intangibles will be
included as part of goodwill. SFAS No. 141 requires that
upon adoption of SFAS No. 142, that companies reclassify
the carrying amounts of certain intangible assets and goodwill
based on the criteria of SFAS No. 141. The Company adopted
SFAS No. 141 on July 1, 2001 and recorded the
acquisition of Coflexip and Isis based on the provisions of SFAS
No. 141.

Under SFAS No. 142, goodwill will no longer
be amortized, but will be tested for impairment on an annual
basis and whenever indicators of impairment arise. Additionally,
goodwill on equity method investments will no longer be
amortized; however, it will continue to be tested for impairment
in accordance with APB No. 18, The Equity Method of
Accounting for Investments in Common Stock. Under
SFAS 142, intangible assets with indefinite lives will not
be amortized. Instead they will be carried at the lower cost or
market value and tested for impairment at least annually. All
other recognized intangible assets will continue to be amortized
over their estimated useful lives.

SFAS No. 142 is effective for fiscal years
beginning after December 15, 2001, although goodwill on
business combinations consummated after July 1, 2001 is not
amortized. Upon adoption, all goodwill and indefinite lived
intangible assets must be tested for impairment and a cumulative
effect adjustment to net income

F-58



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##### Table of Contents



TECHNIP-COFLEXIP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)


recognized at that time. At the year ended
December 31, 2001, the Company recorded amortization of
 61.3 million
related to goodwill and indefinite lived assets. The Company
adopted SFAS No. 142 on January 1, 2002 and does not
anticipate that the adoption of SFAS No. 142 will have a
material impact on its results of operations, financial position
or cash flow. The Company will not reclassify intangible assets
in reported goodwill.

In June 2001, the Financial Accounting Standards
Board issued Statement of Financial Accounting Standards
No. 143, Accounting for Asset Retirement Obligations
(SFAS No. 143). SFAS No. 143 establishes accounting
requirements for retirement obligations associated with tangible
long-lived assets, including (1) the timing of the
liability recognition, (2) initial measurement of the
liability, (3) allocation of asset retirement cost to
expense, (4) subsequent measurement of the liability and
(5) financial statement disclosures. SFAS No. 143
requires that the fair value of a liability for an asset
retirement obligation be recognized in the period in which it is
incurred if a reasonable estimate of fair value can be made. The
associated asset retirement costs are capitalized as part of the
carrying amount of the long-lived asset and depreciated over the
life of the associated fixed asset. An entity shall measure
changes in the liability for an asset retirement obligation due
to passage of time by applying an interest method of allocation
to the amount of the liability at the beginning of the period.
The interest rate used to measure that change shall be the
credit-adjusted risk-free rate that existed when the liability
was initially measured. That amount shall be recognized as an
increase in the carrying amount of the liability and as an
expense classified as an operating item in the statement of
income. SFAS 143 is effective for fiscal years beginning after
June 15, 2002, with early application encouraged.

The Company expects to adopt SFAS No. 143 on
January 1, 2002 and has not yet determined the impact that
it will have on its results of operations, its financial
position or its cash flows.

In August 2001, the Financial Accounting
Standards Board issued Statement of Financial Accounting
Standards No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets (SFAS No. 144). SFAS
No. 144 establishes a single accounting model for
long-lived assets to be disposed of by sale consistent with the
fundamental provisions of SFAS No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of. While it supersedes portions of APB
Opinion 30, Reporting the Results of
Operations  Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions, it retains
the discontinued operations presentation, yet it broadens that
presentation to include a component of an entity (rather than a
segment of a business). However, discontinued operations are no
longer recorded at net realizable value and future operating
losses are no longer recognized before they occur. SFAS
No. 144 also establishes criteria for determining when an
asset should be treated as held for sale. SFAS No. 144 is
effective for fiscal years beginning after December 15,
2001 and interim periods within those fiscal years, with early
application encouraged. The provisions of SFAS No. 144 are
generally to be applied prospectively.

The Company adopted SFAS No. 144 on
January 1, 2002 and has yet not determined the impact that
it will have on its results of operations, financial position or
cash flows.

F-59



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##### 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-60



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##### 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-61



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##### 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-62



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##### 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-63



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##### 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-64



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##### 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-65



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##### 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-66



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##### 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-67



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##### 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-68



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##### 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-69



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##### 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-70



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##### 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.

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THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (continued)

Included in cost of operations is an amount of
EUR 25,070 thousand in 2001 representing repairs and
maintenance expense.

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 |  
|                                                                   |  |              |         |  

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##### 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

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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.

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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-75



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##### 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-76



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##### 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-77



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##### 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-78



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##### 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.

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 | )

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THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (continued)

|                                                                                                                     |  |              |            |  
|-------------------------------------------------------------------------------------------------------------------- |  | ------------ | ---------- | -
|                                                                                                                     |  | 2001        
|                                                                                                                     |  | Unaudited   
|                                                                                                                     |  |             
|                                                                                                                     |  | In thousands
|                                                                                                                     |  | of EUR      
|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 |  
|                                       |  |              |        |  

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.

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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (continued)

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.

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   | )
|                                 |  |                                                         |         |        |  |         |         |         |  |       |        |              |  |       |         |   |  |  |         |  |  |  |         |   |  |  |           |  

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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (continued)

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.

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).

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THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (continued)

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.

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 complaine 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

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THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (continued)

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             | 
|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             | 

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THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (continued)

|                                                          |  |                                     |  |               |      | 
|--------------------------------------------------------- |  | ----------------------------------- |  | ------------- | ---- | 
|                                                          |  |                                     |  | Percentage of
|                                                          |  |                                     |  | interest in  
|Consolidated Companies                                    |  | Location                            |  | consolidation
|                                                          |  |                                     |  |              
|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  | 
|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  | 

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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP






REPORT OF INDEPENDENT AUDITORS


To the Board of Directors and Shareholders of
Coflexip, S.A.

We have audited the accompanying consolidated
balance sheets of Coflexip, S.A. and subsidiaries as of
December 31, 2000 and 1999, and the related consolidated
statements of income, shareholders equity and cash flows
for each of the three years in the period ended
December 31, 2000. These financial statements are the
responsibility of the Groups management. 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 the United States and
France. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts 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 statements presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, based on our audits, the
consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial
position of Coflexip, S.A. and subsidiaries at December 31,
2000 and 1999, and the consolidated results of their operations
and their cash flows for each of the three years in the period
ended December 31, 2000, in conformity with accounting
principles generally accepted in France and in the United States.

Ernst & Young Audit

Represented by John Mackey

Paris, France

March 21, 2001


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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP






FINANCIAL HIGHLIGHTS


(in thousands except per share data and number
of employees)


|                                           |  |        |           |      |  |      |           |         |  |  |           |  |  |  |           | 
|------------------------------------------ |  | ------ | --------- | ---- |  | ---- | --------- | ------- |  |  | --------- |  |  |  | --------- | 
|                                           |  | 2000   |           | 2000 |  | 1999 |           | 1998   
|                                           |  |        |           |      |  |      |           |        
|                                           |  | USD(1) |           | EUR  |  | EUR  |           | EUR (2)
|INCOME STATEMENT                           |  |        |           |      |  |      |           |         |  |  |           |  |  |  |           | 
|Net operating revenues                     |  |        | 978,753   |      |  |      | 1,064,556 |         |  |  | 1,017,026 |  |  |  | 1,143,681 | 
|Operating income                           |  |        | 100,079   |      |  |      | 108,853   |         |  |  | 136,931   |  |  |  | 149,726   | 
|Income before income taxes                 |  |        | 283,666   |      |  |      | 308,534   |         |  |  | 140,531   |  |  |  | 155,584   | 
|Net income                                 |  |        | 204,748   |      |  |      | 222,697   |         |  |  | 89,610    |  |  |  | 96,558    | 
|Diluted Earnings per share(3)              |  |        | 10.84     |      |  |      | 11.79     |         |  |  | 4.93      |  |  |  | 5.49      | 
|Diluted Earnings per ADS(3)                |  |        | 5.42      |      |  |      | 5.90      |         |  |  | 2.46      |  |  |  | 2.74      | 
|                                           |  |        |           |      |  |      |           |         |  |  |           |  |  |  |           | 
|BALANCE SHEET                              |  |        |           |      |  |      |           |         |  |  |           |  |  |  |           | 
|Share capital                              |  |        | 27,487    |      |  |      | 29,897    |         |  |  | 29,750    |  |  |  | 24,157    | 
|Shareholders equity                       |  |        | 833,003   |      |  |      | 906,029   |         |  |  | 699,280   |  |  |  | 469,005   | 
|Long-term debt (excluding current portion) |  |        | 44,642    |      |  |      | 48,556    |         |  |  | 61,895    |  |  |  | 132,510   | 
|Total long-term assets                     |  |        | 513,056   |      |  |      | 558,034   |         |  |  | 533,432   |  |  |  | 470,150   | 
|Total assets                               |  |        | 1,470,298 |      |  |      | 1,599,193 |         |  |  | 1,336,010 |  |  |  | 1,127,847 | 
|                                           |  |        |           |      |  |      |           |         |  |  |           |  |  |  |           | 
|Backlog (unaudited)                        |  |        | 855,961   |      |  |      | 931,000   |         |  |  | 472,000   |  |  |  | 861,000   | 
|Dividend per share                         |  |        | 1.07      |      |  |      | 1.16      |         |  |  | 1.16      |  |  |  | 1.16      | 
|Number of employees(4) (unaudited)         |  |        | 4,214     |      |  |      | 4,214     |         |  |  | 3,829     |  |  |  | 4,039     | 



---



|    |                                                                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | U.S. dollar equivalent are provided for
    reader convenience at August 22, 2001 exchange rate of
    EUR 1 = USD 0.9194 (see Note 1 of the
    consolidated statements). No representation is made that the
    French franc or euro could have been, or could be, converted
    into U.S. dollars at this or any other rate.
|   
|(2) | 1998 balances were restated from French francs to
    Euros using the exchange rate as of January 1, 1999:
    EUR 1 = FF 6.55957.                                                                                                                                                                                             
|   
|(3) | On a diluted basis, the average number of shares
    was: 18,891,262 in 2000 (37,782,524 ADS), 18,754,551 in
    1999 (37,509,102 ADS), 18,433,712 (36,867,424 ADS) in
    1998.                                                                                                                                               
|   
|(4) | Includes the sub-contracted workforce
    (1,462 persons in 2000, 1,184 persons in 1999 and
    1,349 persons in 1998) (unaudited).                                                                                                                                                                                            

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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP






CONSOLIDATED BALANCE SHEETS


(Amounts in thousands, except per Share
data)


|                                                                              |  |              |           |      |  |      |           |  |  |  |           | 
|----------------------------------------------------------------------------- |  | ------------ | --------- | ---- |  | ---- | --------- |  |  |  | --------- | 
|                                                                              |  |             
|                                                                              |  | December 31,
|                                                                              |  |             
|                                                                              |  | 2000         |           | 2000 |  | 1999
|                                                                              |  |              |           |      |  |     
|                                                                              |  | USD (1)      |           | EUR  |  | EUR 
|ASSETS                                                                        |  |              |           |      |  |      |           |  |  |  |           | 
|Current assets                                                                |  |              |           |      |  |      |           |  |  |  |           | 
|Cash and cash equivalents                                                     |  |              | 550,519   |      |  |      | 598,781   |  |  |  | 404,479   | 
|Trade accounts receivable (Note 3)                                            |  |              | 177,435   |      |  |      | 192,990   |  |  |  | 203,573   | 
|Contracts-in-progress (Note 4)                                                |  |              | 66,819    |      |  |      | 72,677    |  |  |  | 66,300    | 
|Inventories (Note 5)                                                          |  |              | 73,383    |      |  |      | 79,816    |  |  |  | 63,338    | 
|Deferred income taxes (Note 11)                                               |  |              | 29,490    |      |  |      | 32,075    |  |  |  | 28,652    | 
|Prepaid expenses and other current assets                                     |  |              | 59,596    |      |  |      | 64,820    |  |  |  | 36,236    | 
|                                                                              |  |              |           |      |  |      |           |  |  |  |           | 
|Total current assets                                                          |  |              | 957,242   |      |  |      | 1,041,159 |  |  |  | 802,578   | 
|                                                                              |  |              |           |      |  |      |           |  |  |  |           | 
|Investments in and advances to companies under
    the equity method (Note 6) |  |              |          |      |  |      |          |  |  |  | 41,288    | 
|Other long-term investments and receivables                                   |  |              | 3,466     |      |  |      | 3,770     |  |  |  | 4,103     | 
|                                                                              |  |              |           |      |  |      |           |  |  |  |           | 
|Investments and other assets                                                  |  |              | 3,466     |      |  |      | 3,770     |  |  |  | 45,391    | 
|                                                                              |  |              |           |      |  |      |           |  |  |  |           | 
|Property, plant, vessels and equipment
    (Note 7)                           |  |              | 461,759   |      |  |      | 502,240   |  |  |  | 438,774   | 
|                                                                              |  |              |           |      |  |      |           |  |  |  |           | 
|Intangible assets (Note 8)                                                    |  |              | 47,831    |      |  |      | 52,024    |  |  |  | 49,267    | 
|                                                                              |  |              |           |      |  |      |           |  |  |  |           | 
|Total assets                                                                  |  |              | 1,470,298 |      |  |      | 1,599,193 |  |  |  | 1,336,010 | 
|                                                                              |  |              |           |      |  |      |           |  |  |  |           | 
|LIABILITIES AND SHAREHOLDERS
    EQUITY                                      |  |              |           |      |  |      |           |  |  |  |           | 
|Current liabilities Bank overdrafts                                           |  |              | 7,009     |      |  |      | 7,623     |  |  |  | 5,767     | 
|Current portion of long-term debt (Note 9)                                    |  |              | 25,826    |      |  |      | 28,090    |  |  |  | 37,477    | 
|Trade accounts payable                                                        |  |              | 74,867    |      |  |      | 81,430    |  |  |  | 75,417    | 
|Advance billings on contracts (Note 4)                                        |  |              | 85,902    |      |  |      | 93,433    |  |  |  | 71,022    | 
|Other current liabilities (Note 12)                                           |  |              | 335,742   |      |  |      | 365,176   |  |  |  | 318,133   | 
|                                                                              |  |              |           |      |  |      |           |  |  |  |           | 
|Total current liabilities                                                     |  |              | 529,346   |      |  |      | 575,752   |  |  |  | 507,816   | 
|                                                                              |  |              |           |      |  |      |           |  |  |  |           | 
|Long-term debt (Note 9)                                                       |  |              | 44,642    |      |  |      | 48,556    |  |  |  | 61,895    | 
|Deferred income taxes (Note 11)                                               |  |              | 19,399    |      |  |      | 21,099    |  |  |  | 27,391    | 
|Other long-term liabilities (Note 12)                                         |  |              | 43,908    |      |  |      | 47,757    |  |  |  | 39,628    | 
|                                                                              |  |              |           |      |  |      |           |  |  |  |           | 
|Total long-term liabilities                                                   |  |              | 107,949   |      |  |      | 117,412   |  |  |  | 128,914   | 
|                                                                              |  |              |           |      |  |      |           |  |  |  |           | 
|Common stock                                                                  |  |              |           |      |  |      |           |  |  |  |           | 
|EUR 1.60 par value at December 31,
    2000;                                  |  |              |           |      |  |      |           |  |  |  |           | 
|EUR 1.60 par value at December 31,
    1999 and                               |  |              |           |      |  |      |           |  |  |  |           | 
|FRF 10 (EUR 1.52) at
    December 31, 1998;                                   |  |              |           |      |  |      |           |  |  |  |           | 
|Authorized and issued:                                                        |  |              |           |      |  |      |           |  |  |  |           | 
|18,685,759 shares at December 31,
    2000                                    |  |              |           |      |  |      |           |  |  |  |           | 
|18,593,693 shares at December 31,
    1999;                                   |  |              |           |      |  |      |           |  |  |  |           | 
|15,846,195 shares at December 31, 1998;(Note 13)                              |  |              | 27,487    |      |  |      | 29,897    |  |  |  | 29,750    | 
|Additional paid-in capital and treasury stock                                 |  |              | 260,420   |      |  |      | 283,250   |  |  |  | 281,306   | 
|Retained earnings                                                             |  |              | 290,705   |      |  |      | 316,190   |  |  |  | 246,335   | 
|Net income for the year                                                       |  |              | 204,748   |      |  |      | 222,697   |  |  |  | 89,610    | 
|Foreign currency translation adjustment                                       |  |              | 49,643    |      |  |      | 53,995    |  |  |  | 52,279    | 
|                                                                              |  |              |           |      |  |      |           |  |  |  |           | 
|Total shareholders equity                                                    |  |              | 833,003   |      |  |      | 906,029   |  |  |  | 699,280   | 
|                                                                              |  |              |           |      |  |      |           |  |  |  |           | 
|TOTAL LIABILITIES AND SHAREHOLDERS
    EQUITY                                |  |              | 1,470,298 |      |  |      | 1,599,193 |  |  |  | 1,336,010 | 
|                                                                              |  |              |           |      |  |      |           |  |  |  |           | 



---



|    |                                                                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | U.S. dollar equivalent are provided for
    reader convenience at August 22, 2001 exchange rate of
    EUR 1 = USD 0.9194 (see Note 1 of the
    consolidated statements). No representation is made that the
    French franc or euro could have been, or could be, converted
    into U.S. dollars at this or any other rate.

See notes to consolidated financial statements

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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP






CONSOLIDATED STATEMENTS OF INCOME


|                                                                                             |  |                                               |            |      |  |      |            |         |  |  |            |   |  |  |            |  
|-------------------------------------------------------------------------------------------- |  | --------------------------------------------- | ---------- | ---- |  | ---- | ---------- | ------- |  |  | ---------- | - |  |  | ---------- | -
|                                                                                             |  |                                              
|                                                                                             |  | Years ended December 31,                     
|                                                                                             |  |                                              
|                                                                                             |  |                                               |            |     
|                                                                                             |  | 2000                                          |            | 1999 |  | 1998
|                                                                                             |  |                                               |            |      |  |     
|                                                                                             |  | USD (1)                                       |            | EUR  |  | EUR  |            | EUR (2)
|                                                                                             |  |                                              
|                                                                                             |  | (amounts in thousands, except per share data)
|Net operating revenues                                                                       |  |                                               | 978,753    |      |  |      | 1,064,556  |         |  |  | 1,017,026  |   |  |  | 1,143,681  |  
|Cost of operations                                                                           |  |                                               | (695,556   | )    |  |      | (756,532   | )       |  |  | (690,026   | ) |  |  | (804,265   | )
|Depreciation and amortization                                                                |  |                                               | (87,233    | )    |  |      | (94,880    | )       |  |  | (84,878    | ) |  |  | (93,781    | )
|Selling, general and administrative expenses                                                 |  |                                               | (95,885    | )    |  |      | (104,291   | )       |  |  | (105,191   | ) |  |  | (95,909    | )
|                                                                                             |  |                                               |            |      |  |      |            |         |  |  |            |   |  |  |            |  
|OPERATING INCOME                                                                             |  |                                               | 100,079    |      |  |      | 108,853    |         |  |  | 136,931    |   |  |  | 149,726    |  
|                                                                                             |  |                                               |            |      |  |      |            |         |  |  |            |   |  |  |            |  
|Interest and other financial income                                                          |  |                                               | 28,189     |      |  |      | 30,660     |         |  |  | 21,051     |   |  |  | 17,943     |  
|Interest and other financial expense                                                         |  |                                               | (10,798    | )    |  |      | (11,745    | )       |  |  | (18,071    | ) |  |  | (19,712    | )
|Net foreign exchange gains/(losses)                                                          |  |                                               | 639        |      |  |      | 695        |         |  |  | (2,416     | ) |  |  | 1,270      |  
|Other income                                                                                 |  |                                               | 9,562      |      |  |      | 10,400     |         |  |  |           |   |  |  | 463        |  
|Capital gain on sale of Caldive (Note 2)                                                     |  |                                               | 153,908    |      |  |      | 167,400    |         |  |  |           |   |  |  |           |  
|Equity income of investees (Note 6)                                                          |  |                                               | 2,457      |      |  |      | 2,672      |         |  |  | 2,573      |   |  |  | 5,894      |  
|Minority interest                                                                            |  |                                               | (369       | )    |  |      | (401       | )       |  |  | 463        |   |  |  |           |  
|                                                                                             |  |                                               |            |      |  |      |            |         |  |  |            |   |  |  |            |  
|INCOME BEFORE INCOME TAXES                                                                   |  |                                               | 283,666    |      |  |      | 308,534    |         |  |  | 140,531    |   |  |  | 155,584    |  
|                                                                                             |  |                                               |            |      |  |      |            |         |  |  |            |   |  |  |            |  
|Income taxes (Note 11)                                                                       |  |                                               | (78,919    | )    |  |      | (85,837    | )       |  |  | (50,921    | ) |  |  | (59,026    | )
|                                                                                             |  |                                               |            |      |  |      |            |         |  |  |            |   |  |  |            |  
|NET INCOME                                                                                   |  |                                               | 204,748    |      |  |      | 222,697    |         |  |  | 89,610     |   |  |  | 96,558     |  
|                                                                                             |  |                                               |            |      |  |      |            |         |  |  |            |   |  |  |            |  
|Earnings per share (see Note 14) in
    circulation:                                         |  |                                               |            |      |  |      |            |         |  |  |            |   |  |  |            |  
| Basic Earnings per share in
    circulation                                                |  |                                               | 10.98      |      |  |      | 11.94      |         |  |  | 5.47       |   |  |  | 6.13       |  
| Diluted Earnings per share in
    circulation                                              |  |                                               | 10.84      |      |  |      | 11.79      |         |  |  | 4.93       |   |  |  | 5.49       |  
|Average number of shares and share equivalents
    outstanding (see Note 14) in circulation: |  |                                               |            |      |  |      |            |         |  |  |            |   |  |  |            |  
| On common shares                                                                           |  |                                               | 18,645,182 |      |  |      | 18,645,182 |         |  |  | 16,386,682 |   |  |  | 15,751,894 |  
| On a diluted basis                                                                         |  |                                               | 18,891,262 |      |  |      | 18,891,262 |         |  |  | 18,754,551 |   |  |  | 18,433,712 |  






|    |                                                                                                                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | U.S. dollar equivalents are provided for
    reader convenience at August 22, 2001 exchange rate of
    EUR 1 = USD 0.9194 (see Note 1 of the
    consolidated statements). No representation is made that the
    French franc or euro could have been, or could be, converted
    into U.S. dollars at this or any other rate.
|   
|(2) | 1998 balances were restated from French francs to
    Euros using the exchange rate as of January 1, 1999:
    EUR 1 = FF 6.55957.                                                                                                                                                                                              

See notes to consolidated financial statements

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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP






CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY


|                                                          |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               |        |   |  |  |         |   |  |  |         |   |  |  |         |  
|--------------------------------------------------------- |  | -------------------------------------------------------- | ---------- | ------ |  | ---------- | ------ | -------- |  | ------------ | ------- | ------------- |  | ------------- | ------ | - |  |  | ------- | - |  |  | ------- | - |  |  | ------- | -
|                                                          |  |                                                          |            |        |  |            |        |          |  |              |         | Accumulated   |  |              
|                                                          |  | Number                                                   |            |        |  | Additional |        |          |  |              |         | other         |  | Total        
|                                                          |  | of shares                                                |            | Common |  | paid-in    |        | Treasury |  | Retained     |         | comprehensive |  | shareholders
|                                                          |  | issued                                                   |            | stock  |  | capital    |        | stock    |  | earnings (d) |         | income        |  | equity       
|                                                          |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |              
|                                                          |  |                                                         
|                                                          |  | (amounts in thousands of euros, unless stated otherwise)
|Balance at January 1, 1998                                |  |                                                          | 15,821,032 |        |  |            | 24,119 |          |  |              | 176,366 |               |  |               | (2,066 | ) |  |  | 187,278 |   |  |  | 25,421  |   |  |  | 411,118 |  
|                                                          |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               |        |   |  |  |         |   |  |  |         |   |  |  |         |  
|Comprehensive income:                                     |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               |        |   |  |  |         |   |  |  |         |   |  |  |         |  
|Net income                                                |  |                                                          |           |        |  |            |       |          |  |              |        |               |  |               |       |   |  |  | 96,558  |   |  |  |        |   |  |  | 96,558  |  
|Translation adjustment                                    |  |                                                          |           |        |  |            |       |          |  |              |        |               |  |               |       |   |  |  |        |   |  |  | (21,996 | ) |  |  | (21,996 | )
|                                                          |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               |        |   |  |  |         |   |  |  |         |   |  |  |         |  
|Comprehensive income                                      |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               |        |   |  |  |         |   |  |  |         |   |  |  | 74,562  |  
|                                                          |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               |        |   |  |  |         |   |  |  |         |   |  |  |         |  
|Treasury stock sold (net)                                 |  |                                                          |           |        |  |            |       |          |  |              |        |               |  |               | 591    |   |  |  |        |   |  |  |        |   |  |  | 591     |  
|Effect of share issuance (note 13)                        |  |                                                          | 25,163     |        |  |            | 38     |          |  |              | 693     |               |  |               |       |   |  |  |        |   |  |  |        |   |  |  | 731     |  
|Dividends paid (a)                                        |  |                                                          |           |        |  |            |       |          |  |              |        |               |  |               |       |   |  |  | (17,997 | ) |  |  |        |   |  |  | (17,997 | )
|                                                          |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               |        |   |  |  |         |   |  |  |         |   |  |  |         |  
|Balance at December 31, 1998(thousands of Euros)(e)       |  |                                                          | 15,846,195 |        |  |            | 24,157 |          |  |              | 177,059 |               |  |               | (1,475 | ) |  |  | 265,839 |   |  |  | 3,425   |   |  |  | 469,005 |  
|                                                          |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               |        |   |  |  |         |   |  |  |         |   |  |  |         |  
|Comprehensive income:                                     |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               |        |   |  |  |         |   |  |  |         |   |  |  |         |  
|Net income                                                |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               |        |   |  |  | 89,610  |   |  |  |         |   |  |  | 89,610  |  
|Translation adjustment                                    |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               |        |   |  |  |         |   |  |  | 48,854  |   |  |  | 48,854  |  
|                                                          |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               |        |   |  |  |         |   |  |  |         |   |  |  |         |  
|Comprehensive income                                      |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               |        |   |  |  |         |   |  |  |         |   |  |  | 138,464 |  
|                                                          |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               |        |   |  |  |         |   |  |  |         |   |  |  |         |  
|Treasury stock sold (net)                                 |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               | 554    |   |  |  |         |   |  |  |         |   |  |  | 554     |  
|Effect of share issuance (note 13)                        |  |                                                          | 2,747,498  |        |  |            | 5,593  |          |  |              | 105,168 |               |  |               |        |   |  |  | (1,196  | ) |  |  |         |   |  |  | 109,565 |  
|Dividends paid (b)                                        |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               |        |   |  |  | (18,308 | ) |  |  |         |   |  |  | (18,308 | )
|                                                          |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               |        |   |  |  |         |   |  |  |         |   |  |  |         |  
|Balance at December 31, 1999(thousands of Euros)          |  |                                                          | 18,593,693 |        |  |            | 29,750 |          |  |              | 282,227 |               |  |               | (921   | ) |  |  | 335,945 |   |  |  | 52,279  |   |  |  | 699,280 |  
|                                                          |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               |        |   |  |  |         |   |  |  |         |   |  |  |         |  
|Comprehensive income:                                     |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               |        |   |  |  |         |   |  |  |         |   |  |  |         |  
|Net income                                                |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               |        |   |  |  | 222,697 |   |  |  |         |   |  |  | 222,697 |  
|Translation adjustment                                    |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               |        |   |  |  |         |   |  |  | 1,716   |   |  |  | 1,716   |  
|                                                          |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               |        |   |  |  |         |   |  |  |         |   |  |  |         |  
|Comprehensive income                                      |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               |        |   |  |  |         |   |  |  |         |   |  |  | 224,413 |  
|                                                          |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               |        |   |  |  |         |   |  |  |         |   |  |  |         |  
|Treasury stock sold (net)                                 |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               | 107    |   |  |  |         |   |  |  |         |   |  |  | 107     |  
|                                                          |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               |        |   |  |  |         |   |  |  |         |   |  |  |         |  
|Effect of share issuance (note 13)                        |  |                                                          | 92,066     |        |  |            | 147    |          |  |              | 1,837   |               |  |               |        |   |  |  | 1,248   |   |  |  |         |   |  |  | 3,232   |  
|Dividends paid (c)                                        |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               |        |   |  |  | (21,003 | ) |  |  |         |   |  |  | (21,003 | )
|                                                          |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               |        |   |  |  |         |   |  |  |         |   |  |  |         |  
|Balance at December 31, 2000(thousands of Euros)          |  |                                                          | 18,685,759 |        |  |            | 29,897 |          |  |              | 284,064 |               |  |               | (814   | ) |  |  | 538,887 |   |  |  | 53,995  |   |  |  | 906,029 |  
|                                                          |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               |        |   |  |  |         |   |  |  |         |   |  |  |         |  
|Balance at December 31, 2000(thousands of U.S dollars)(f) |  |                                                          | 18,685,759 |        |  |            | 27,487 |          |  |              | 261,168 |               |  |               | (748   | ) |  |  | 495,453 |   |  |  | 49,643  |   |  |  | 833,003 |  
|                                                          |  |                                                          |            |        |  |            |        |          |  |              |         |               |  |               |        |   |  |  |         |   |  |  |         |   |  |  |         |  



---



|    |                                                                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | With respect to 1997 financial year, the
    COFLEXIPs Annual Shareholders Meeting held on
    May 27, 1998 decided to pay a cash dividend of
    FRF 7.50 (EUR 1.14337) per share (dividend paid on
    15,740,449 shares).



|    |                                                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | With respect to 1998 financial year, the
    COFLEXIPs Annual Shareholders Meeting held on
    June 2, 1999 decided to pay a cash dividend of
    EUR 1.16 per share (dividend paid on 15,782,873 shares).



|    |                                                                                                                                                                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(c) | With respect to 1999 financial year, the
    COFLEXIPs Annual shareholders meeting held on
    May 30, 2000 decided to pay a cash dividend of
    EUR 1.16 per share (dividends paid on 18,087,630 shares at
    EUR 1.16, and on 454,546 shares at EUR 0,04767 due to
    the conversion of redeemable notes in December 1999).



|    |                                                                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(d) | Retained earnings include legal and other
    non-distributable reserves in an amount of EUR 3,166
    thousand at December 2000, EUR 2,606 thousand at December
    1999 and EUR 2,603 thousand at December 31, 1998.



|    |                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------
|(e) | 1998 balances were restated from French francs to
    Euros using the exchange rate as of January 1, 1999:
    EUR 1 = FF 6.55957.



|    |                                                                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(f) | U.S. dollar equivalent are provided for
    reader convenience at August 22, 2001 exchange rate of
    EUR 1 = USD 0.9194 (see Note 1 of the
    consolidated statements). No representation is made that the
    French franc or euro could have been, or could be, converted
    into U.S. dollars at this or any other rate.

F-90



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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP






CONSOLIDATED STATEMENTS OF CASH
FLOWS


|                                                                                                         |  |                         |          |      |  |      |          |         |  |  |         |   |  |  |         |  
|-------------------------------------------------------------------------------------------------------- |  | ----------------------- | -------- | ---- |  | ---- | -------- | ------- |  |  | ------- | - |  |  | ------- | -
|                                                                                                         |  |                        
|                                                                                                         |  | Year ended December 31,
|                                                                                                         |  |                        
|                                                                                                         |  | 2000                    |          | 2000 |  | 1999 |          | 1998   
|                                                                                                         |  |                         |          |      |  |      |          |        
|                                                                                                         |  | USD (1)                 |          | EUR  |  | EUR  |          | EUR (2)
|                                                                                                         |  |                        
|                                                                                                         |  | (amounts in thousands) 
|CASH FLOWS FROM OPERATING ACTIVITIES                                                                     |  |                         |          |      |  |      |          |         |  |  |         |   |  |  |         |  
|Net income                                                                                               |  |                         | 204,748  |      |  |      | 222,697  |         |  |  | 89,610  |   |  |  | 96,558  |  
|Depreciation and amortization                                                                            |  |                         | 87,233   |      |  |      | 94,880   |         |  |  | 84,878  |   |  |  | 78,665  |  
|Depreciation of Australian plant                                                                         |  |                         |         |      |  |      |         |         |  |  |        |   |  |  | 15,116  |  
|(Gain) on sale of assets                                                                                 |  |                         | (9,829   | )    |  |      | (10,691  | )       |  |  | (533    | ) |  |  | (663    | )
|(Gain) on sale of CALDIVEs shares                                                                       |  |                         | (156,195 | )    |  |      | (169,888 | )       |  |  |        |   |  |  |        |  
|Deferred income taxes                                                                                    |  |                         | (9,603   | )    |  |      | (10,445  | )       |  |  | (9,842  | ) |  |  | (4,736  | )
|Minority interest                                                                                        |  |                         | 369      |      |  |      | 401      |         |  |  | (463    | ) |  |  |        |  
|Equity income of investees                                                                               |  |                         | (2,457   | )    |  |      | (2,672   | )       |  |  | (2,573  | ) |  |  | (5,894  | )
|Increase/(decrease) in other long-term liabilities                                                       |  |                         | 6,941    |      |  |      | 7,550    |         |  |  | (2,056  | ) |  |  | 4,765   |  
|Increase/ decrease in operating assets and
    liabilities (net of effect from acquisition of business): |  |                         |          |      |  |      |          |         |  |  |         |   |  |  |         |  
|Decrease/(increase) in trade accounts receivable                                                         |  |                         | 10,135   |      |  |      | 11,023   |         |  |  | 8,643   |   |  |  | (7,533  | )
|Net decrease/(increase) in contracts-in-progress
    and advance billings on contracts                   |  |                         | 15,001   |      |  |      | 16,316   |         |  |  | 45,905  |   |  |  | 44,078  |  
|(Increase)/decrease in inventories                                                                       |  |                         | (12,399  | )    |  |      | (13,486  | )       |  |  | 8,488   |   |  |  | 4,553   |  
|(Increase)/decrease in prepaid expenses and other
    current assets                                     |  |                         | (26,276  | )    |  |      | (28,580  | )       |  |  | 28,857  |   |  |  | (21,455 | )
|Increase/(decrease) in bank overdrafts                                                                   |  |                         | 1,681    |      |  |      | 1,828    |         |  |  | 7,287   |   |  |  | (41,524 | )
|Increase/(decrease) in trade accounts and notes
    payable                                              |  |                         | 5,729    |      |  |      | 6,231    |         |  |  | (20,128 | ) |  |  | 1,709   |  
|Increase/(decrease) in other current liabilities                                                         |  |                         | 42,055   |      |  |      | 45,742   |         |  |  | (24,121 | ) |  |  | 45,606  |  
|                                                                                                         |  |                         |          |      |  |      |          |         |  |  |         |   |  |  |         |  
|NET CASH PROVIDED BY OPERATING
    ACTIVITIES                                                            |  |                         | 157,131  |      |  |      | 170,906  |         |  |  | 213,952 |   |  |  | 209,245 |  
|                                                                                                         |  |                         |          |      |  |      |          |         |  |  |         |   |  |  |         |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                                                     |  |                         |          |      |  |      |          |         |  |  |         |   |  |  |         |  
|Purchases of property, plant, vessels
    and equipment                                                  |  |                         | (136,739 | )    |  |      | (148,726 | )       |  |  | (83,487 | ) |  |  | (65,725 | )
|Cash paid for acquired businesses                                                                        |  |                         | (13,965  | )    |  |      | (15,189  | )       |  |  | (11,480 | ) |  |  |        |  
|Cash of acquired businesses                                                                              |  |                         | 102      |      |  |      | 111      |         |  |  | 547     |   |  |  |        |  
|Net advances repaid by (made to) affiliates                                                              |  |                         |         |      |  |      |         |         |  |  |        |   |  |  | 826     |  
|Acquisitions of other long-term investments and
    additions to long-term receivables                   |  |                         | (847     | )    |  |      | (921     | )       |  |  | (1,520  | ) |  |  | (1,661  | )
|Disposals of other long-term investments and
    collections of long-term receivables                    |  |                         | 291      |      |  |      | 316      |         |  |  | 2,293   |   |  |  | 6,810   |  
|Proceeds from sale of assets                                                                             |  |                         | 14,026   |      |  |      | 15,256   |         |  |  | 1,075   |   |  |  | 2,959   |  
|Proceeds from sale of CALDIVEs shares                                                                   |  |                         | 196,454  |      |  |      | 213,676  |         |  |  |        |   |  |  |        |  
|                                                                                                         |  |                         |          |      |  |      |          |         |  |  |         |   |  |  |         |  
|NET CASH PROVIDED BY (USED IN) INVESTING
    ACTIVITIES                                                  |  |                         | 59,322   |      |  |      | 64,523   |         |  |  | (92,572 | ) |  |  | (56,791 | )
|                                                                                                         |  |                         |          |      |  |      |          |         |  |  |         |   |  |  |         |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                                                     |  |                         |          |      |  |      |          |         |  |  |         |   |  |  |         |  
|Repayment of long-term debt                                                                              |  |                         | (36,246  | )    |  |      | (39,423  | )       |  |  | (8,279  | ) |  |  | (25,886 | )
|Issuance of long-term debt                                                                               |  |                         | 11,757   |      |  |      | 12,788   |         |  |  | 40,149  |   |  |  | 10,793  |  
|Increase in common stock                                                                                 |  |                         | 2,972    |      |  |      | 3,232    |         |  |  | 2,190   |   |  |  | 731     |  
|Dividends paid by Coflexip S.A.                                                                          |  |                         | (19,310  | )    |  |      | (21,003  | )       |  |  | (18,308 | ) |  |  | (17,997 | )
|Treasury stock sold                                                                                      |  |                         | 98       |      |  |      | 107      |         |  |  | 554     |   |  |  | 591     |  
|                                                                                                         |  |                         |          |      |  |      |          |         |  |  |         |   |  |  |         |  
|NET CASH (USED) IN PROVIDED BY
    FINANCING ACTIVITIES                                                  |  |                         | (40,729  | )    |  |      | (44,299  | )       |  |  | 16,306  |   |  |  | (31,768 | )
|                                                                                                         |  |                         |          |      |  |      |          |         |  |  |         |   |  |  |         |  
|Effects of exchange rate changes on cash                                                                 |  |                         | 2,916    |      |  |      | 3,172    |         |  |  | 23,688  |   |  |  | (16,094 | )
|                                                                                                         |  |                         |          |      |  |      |          |         |  |  |         |   |  |  |         |  
|NET INCREASE IN CASH AND CASH
    EQUIVALENTS                                                            |  |                         | 178,641  |      |  |      | 194,302  |         |  |  | 161,374 |   |  |  | 104,592 |  
|                                                                                                         |  |                         |          |      |  |      |          |         |  |  |         |   |  |  |         |  
|Cash and cash equivalents at beginning of year                                                           |  |                         | 371,878  |      |  |      | 404,479  |         |  |  | 243,105 |   |  |  | 138,513 |  
|                                                                                                         |  |                         |          |      |  |      |          |         |  |  |         |   |  |  |         |  
|CASH AND CASH EQUIVALENTS AT END OF
    YEAR                                                             |  |                         | 550,519  |      |  |      | 598,781  |         |  |  | 404,479 |   |  |  | 243,105 |  
|                                                                                                         |  |                         |          |      |  |      |          |         |  |  |         |   |  |  |         |  
|Supplemental disclosures of cash flow information:                                                       |  |                         |          |      |  |      |          |         |  |  |         |   |  |  |         |  
|Cash paid during the period for:                                                                         |  |                         |          |      |  |      |          |         |  |  |         |   |  |  |         |  
|Interest                                                                                                 |  |                         | 8,264    |      |  |      | 8,988    |         |  |  | 19,923  |   |  |  | 21,095  |  
|Income taxes                                                                                             |  |                         | 61,268   |      |  |      | 66,639   |         |  |  | 63,331  |   |  |  | 69,936  |  
|                                                                                                         |  |                         |          |      |  |      |          |         |  |  |         |   |  |  |         |  






|    |                                                                                                                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | U.S. dollar equivalents are provided for
    reader convenience at August 22, 2001 exchange rate of
    EUR 1 = USD 0.9194 (see Note 1 of the
    consolidated statements). No representation is made that the
    French franc or euro could have been, or could be, converted
    into U.S. dollars at this or any other rate.
|   
|(2) | 1998 balances were restated from French francs to
    Euros using the exchange rate as of January 1, 1999:
    EUR 1 = FF 6.55957.                                                                                                                                                                                              

See notes to consolidated financial statements

F-91



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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP






NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS


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 accounting principles applied by Coflexip,
S.A. (Coflexip) and its subsidiaries (together, the
Group) are in conformity with accounting principles
generally accepted in France and in the United States.

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. The financial information expressed in
U.S. dollars is presented solely for the convenience of the
reader and is translated from Euros at the noon-buying rate in
New York City for cable transfers in Euros as certified for
customs purposes by the Federal Reserve Bank of New York on
August 22, 2001, which was USD 0.9194 for each EURO.
No representation is made that the French franc or euro could
have been, or could be, converted into U.S. dollars at this
or any other rate.

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.

Transition to
the Euro

On January 1, 1999, with the arrival of the
European Economic and Monetary Union, eleven countries of the
European Union adopted the Euro as their common legal currency.
The Euro is currently used for foreign currency exchanges and
non-cash transactions, although the national currencies will
continue to be legal tender during a transition period until
they are withdrawn on July 1, 2002 at the latest.

In view of the use of the Euro in financial
market transactions, and in order to facilitate analysis of the
Groups financial information, the Group considers that the
Euro is the appropriate currency in which to publish its
consolidated financial statements.

The Consolidated Financial Statements for 1998
and prior years were originally drawn up in French francs, and
those statements, as well as the financial information drawn
from them, have been translated into Euros for purposes of this
document at the rate of FRF 6.55957 = EUR 1.00, the
applicable legal rate established on December 31, 1998. The
Euro did not exist during any of these periods, and the
conversion rate used may not reflect the French franc/Euro
exchange rate that would have applied if the Euro had existed at
such times.

F-92



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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

Although the Groups financial statements
depict the same trends as would have been shown had the
financial statements been prescribed in French francs, they may
not be comparable directly to the financial statements of
companies in other countries which are also presented in Euro.
Prior to the adoption of the Euro, the currencies of other
countries fluctuated as against the French franc. Therefore, for
periods prior to January 1, 1999 a comparison, taking into
account actual fluctuations in exchange rates, of the
Groups financial statements and those of another Group
that had historically used a reporting currency other than the
French franc could appear much different than the same
comparison based on the Groups financial statements and
the financial statements of such other Group as restated in Euro.

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.

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.

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.

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.

F-93



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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

Property,
plant, vessels and equipment

Property, plant, vessels and equipment are stated
at cost. 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 15  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. Drydocking expenses on vessels are amortized evenly
over the anticipated period between drydockings.

Intangible
assets

Goodwill, representing the excess of the purchase
price over the fair value of net assets of businesses acquired,
relates principally to the acquisition of Stena Offshore which
is being amortized on a straight-line basis over 20 years.

Impairment of long-lived assets

Long-lived assets (tangible 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. Impairment
is determined for each group of autonomous assets by comparing
the undiscounted cash flows they are expected to generate based
upon managements expectations for future economic and
operating conditions. Should the above comparison indicate that
an asset is impaired, the write-down recognized is equivalent to
the difference between the carrying value and estimated future
discounted cash flows.

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.

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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

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.

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.

Stock options

Pursuant to SFAS No 123 Accounting for
Stock-Based Compensation, the Group has elected to follow
Accounting Principles Board Opinion (APB) No 25
Accounting for Stock Issued to Employees and related
interpretations in accounting for its stock options and adopt
the disclosure only provisions of SFAS 123.

Recent accounting pronouncements

In June 1998, the Financial Accounting Standards
Board issued SFAS N. 133, Accounting for Derivative
Instruments and Hedging Activities, which establishes
accounting and reporting standards for derivative instruments
and hedging activities. It requires the Group to recognize all
derivatives as either assets or liabilities in the balance sheet
and measure those instruments at fair value.

It further provides criteria for derivative
instruments to be designated at fair value, cash-flow or foreign
currency hedges, and establishes accounting standards for
reporting changes in the fair value of the derivative
instruments. Upon adoption, the Group will be required to adjust
hedging instruments to fair value in the balance sheet and
recognize the offsetting gains or losses as adjustments to be
reported in net income or other comprehensive income, as
appropriate.

The group will adopt FAS 133 in 2001.
Management does not believe the adoption of SFAS 133 will have a
material effect on the Groups results of operations or
financial position. as presented under U.S. GAAP.

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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

Note 2  Acquisitions and
Disposal

Acquisitions for the year ended
December 31, 2000

On March 2000, the Group acquired a 100% interest
in Perry Slingsby for a price of EUR 12,748 thousand
(£7,800 thousand). The non allocated goodwill amounts to
EUR 4,872 thousand (£3,041 thousand).

On May 2000, the group acquired a 100% interest
in RJ Brown for a price of EUR 2,397 thousand (U.S.$2,300
thousand). The non allocated goodwill amounts to EUR 1,988
thousand (U.S.$1,850 thousand).

These acquisitions were accounted for using the
purchase method of accounting. accordingly, the results of these
companies have been recorded in the Groups consolidated
statements since the date of acquisition.

Disposal for the year ended December 31,
2000

In September 2000, the Group sold its stake
(3,699,788 shares) in CAL DIVE international Inc, a
Houston-based subsea contractor Cal Dive. The Group
recorded a capital gain of EUR 167,4 million before
tax and EUR 128,7 million after tax.

In January 2000, the Group recorded a capital
gain of EUR 10.4 million on the sale of CSO Installer,
a flexible pipe laying vessel.

Acquisitions for the year ended
December 31, 1999

On October 25, 1999, the Group acquired a
49.8 per cent interest in Peerless Shipping &
Oilfield Services Ltd. (PSOS), increasing its ownership to
58.2%, for a price of EUR 11,48 million.

This acquisition was accounted for using the
purchase method of accounting and, accordingly, the results of
this company have been recorded in the Groups consolidated
statements since the date of acquisition.

Disposal for
the year ended December 31, 1999

No significant disposal has been recorded in 1999.

Note 3  Trade accounts
receivable

|                                      |  |                     |         |      |  |  |         |  
|------------------------------------- |  | ------------------- | ------- | ---- |  |  | ------- | -
|                                      |  |                    
|                                      |  | December 31,       
|                                      |  |                    
|                                      |  | 2000                |         | 1999
|                                      |  |                     |         |     
|                                      |  |                    
|                                      |  | In thousands of EUR
|Trade accounts receivable             |  |                     | 195,908 |      |  |  | 205,330 |  
|Less: allowance for doubtful accounts |  |                     | (2,918  | )    |  |  | (1,757  | )
|                                      |  |                     |         |      |  |  |         |  
|Trade accounts receivable 
    net   |  |                     | 192,990 |      |  |  | 203,573 |  
|                                      |  |                     |         |      |  |  |         |  

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 35,250 thousand at
December 31, 2000, and EUR 28,057 thousand at
December 31, 1999 (EUR 0 of the 2000 balance,
EUR 32,387 thousand of the 1999 balance relating to exports
from France is guaranteed by the French government export agency
COFACE). Due to the individual significance of certain

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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

long-term contracts, receivables from other
customers may represent a significant portion of trade accounts
receivable at any given time.

Receivables expected to be collected after one
year amounted to EUR 1,064 thousand at December 31,
2000 and EUR 2,311 thousand at December 31, 1999.

Note 4  Contracts-in-progress,
advance billings on contracts

|                                |  |                     |        |              |  |  |        | 
|------------------------------- |  | ------------------- | ------ | ------------ |  |  | ------ | 
|                                |  |                     |        | Advance     
|                                |  | Contracts           |        | billings    
|                                |  | in Progress         |        | on contracts
|                                |  |                     |        |             
|                                |  |                    
|                                |  | In thousands of EUR
|December 31, 2000               |  |                     |        |              |  |  |        | 
|Percentage of completion method |  |                     | 68,737 |              |  |  | 85,469 | 
|Completed contract method       |  |                     | 3,940  |              |  |  | 7,964  | 
|                                |  |                     |        |              |  |  |        | 
|Total                           |  |                     | 72,677 |              |  |  | 93,433 | 
|                                |  |                     |        |              |  |  |        | 
|December 31, 1999               |  |                     |        |              |  |  |        | 
|Percentage of completion method |  |                     | 59,111 |              |  |  | 67,506 | 
|Completed contract method       |  |                     | 7,189  |              |  |  | 3,516  | 
|                                |  |                     |        |              |  |  |        | 
|Total                           |  |                     | 66,300 |              |  |  | 71,022 | 
|                                |  |                     |        |              |  |  |        | 

Amounts billable over one year were
EUR 1,618 thousand as of December 31, 1999 and zero as
of December 31, 2000.

Note 5  Inventories

|                           |  |                     |         |      |  |  |         |  
|-------------------------- |  | ------------------- | ------- | ---- |  |  | ------- | -
|                           |  |                    
|                           |  | December 31,       
|                           |  |                    
|                           |  | 2000                |         | 1999
|                           |  |                     |         |     
|                           |  |                    
|                           |  | In thousands of EUR
|Raw materials              |  |                     | 45,399  |      |  |  | 42,904  |  
|Work in progress           |  |                     | 19,947  |      |  |  | 8,933   |  
|Finished goods             |  |                     | 25,665  |      |  |  | 27,459  |  
|Less: valuation allowances |  |                     | (11,195 | )    |  |  | (15,958 | )
|                           |  |                     |         |      |  |  |         |  
|Net inventories            |  |                     | 79,816  |      |  |  | 63,338  |  
|                           |  |                     |         |      |  |  |         |  



|         |                                                                     
|-------- | --------------------------------------------------------------------
|Note 6  | Investments in and Advances to Companies under
    the Equity Method

The Group holds no investments accounted for
under the equity method as of December 31, 2000. In
September, The Group sold all of its 3,699,788 shares of
common stock of Cal Dive International Inc and realized a
capital gain of EUR 167.4 million before tax and
EUR 128.7 million after tax.

Investments in and advances to companies under
the Equity method as at December 31, 1999 and 1998
consisted of a 23.6 per cent interest in Cal Dive
(25.5% at December 1999 and 1998), a Houston based subsea
contractor which provides subsea construction and installation
services to the offshore oil and gas industry.

Groups equity in Cal Dives net income
was EUR 2,672 thousand for 2000, EUR 2,573 thousand
for 1999 and EUR 3,852 thousand for 1998.

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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

Summarized financial information derived from Cal
Dives financial statement was as follows:

|                                               |  |              |          |  
|---------------------------------------------- |  | ------------ | -------- | -
|                                               |  | 1999        
|                                               |  |             
|                                               |  | In thousands
|                                               |  | of EUR      
|Financial position:                            |  |              |          |  
|Current assets                                 |  |              | 83,201   |  
|Property, plant, vessels and equipment         |  |              | 134,038  |  
|Other assets                                   |  |              | 21,024   |  
|                                               |  |              |          |  
|Total assets                                   |  |              | 238,263  |  
|                                               |  |              |          |  
|Current liabilities                            |  |              | 43,621   |  
|Long term obligations                          |  |              | 194,642  |  
|                                               |  |              |          |  
|Total liabilities and shareholders
    equity |  |              | 238,263  |  
|                                               |  |              |          |  
|Results of operations:                         |  |              |          |  
|Net operating revenues                         |  |              | 151,023  |  
|Cost of sales                                  |  |              | (116,071 | )
|                                               |  |              |          |  
|Net income                                     |  |              | 15,856   |  
|                                               |  |              |          |  

The carrying value of investments in companies
accounted for using the equity method exceeded the Groups
equity in their net assets by EUR 13,092 thousand at
December 31, 1999. This difference was amortized on a
straight line basis over respectively 6.7 years for the
portion allocated to vessels and 20 years for the
unallocated portion.

No dividends were received from companies
accounted for under equity method in 2000 and 1999.

The market value of our investment in Cal Dive
amounted to Euro 121,992 thousand at December 31, 1999.

Note 7  Property, plant,
vessels and equipment

|                                |  |                                      |         |               |  |           |       |             |  |                |         |        |  |  |        |   |  |  |         |   |  |  |           | 
|------------------------------- |  | ------------------------------------ | ------- | ------------- |  | --------- | ----- | ----------- |  | -------------- | ------- | ------ |  |  | ------ | - |  |  | ------- | - |  |  | --------- | 
|                                |  |                                     
|                                |  | For the year ended December 31, 2000
|                                |  |                                     
|                                |  | Balance at                           |         | Business      |  |           |       | Changes in  |  | Balance at    
|                                |  | beginning                            |         | acquisitions  |  | Additions |       |             |  | exchange rates |         | end of
|                                |  | of period                            |         | and disposals |  | at cost   |       | Retirements |  | and transfers  |         | period
|                                |  |                                      |         |               |  |           |       |             |  |                |         |       
|                                |  |                                     
|                                |  | In thousands of EUR                 
|Cost                            |  |                                      |         |               |  |           |       |             |  |                |         |        |  |  |        |   |  |  |         |   |  |  |           | 
|Land                            |  |                                      | 6,026   |               |  |           |      |             |  |                |        |        |  |  |       |   |  |  | 237     |   |  |  | 6,263     | 
|Buildings and land improvements |  |                                      | 81,394  |               |  |           |      |             |  |                | 1,183   |        |  |  | (5     | ) |  |  | 433     |   |  |  | 83,005    | 
|Vessels                         |  |                                      | 369,017 |               |  |           |      |             |  |                | 13,623  |        |  |  | (631   | ) |  |  | 2,329   |   |  |  | 384,338   | 
|Machinery and equipment         |  |                                      | 326,288 |               |  |           | 3,464 |             |  |                | 17,624  |        |  |  | (2,800 | ) |  |  | 15,815  |   |  |  | 360,391   | 
|Assets under construction       |  |                                      | 52,072  |               |  |           |      |             |  |                | 106,991 |        |  |  | (3,806 | ) |  |  | (16,267 | ) |  |  | 138,990   | 
|Other assets                    |  |                                      | 55,217  |               |  |           | 23    |             |  |                | 10,940  |        |  |  | (2,217 | ) |  |  | 650     |   |  |  | 64,613    | 
|                                |  |                                      |         |               |  |           |       |             |  |                |         |        |  |  |        |   |  |  |         |   |  |  |           | 
|Total cost                      |  |                                      | 890,014 |               |  |           | 3,487 |             |  |                | 150,361 |        |  |  | (9,459 | ) |  |  | 3,197   |   |  |  | 1,037,600 | 
|                                |  |                                      |         |               |  |           |       |             |  |                |         |        |  |  |        |   |  |  |         |   |  |  |           | 
|Accumulated depreciation        |  |                                      |         |               |  |           |       |             |  |                |         |        |  |  |        |   |  |  |         |   |  |  |           | 
|Buildings and land improvements |  |                                      | 39,357  |               |  |           |      |             |  |                | 10,913  |        |  |  | (650   | ) |  |  | 219     |   |  |  | 49,839    | 
|Vessels                         |  |                                      | 159,560 |               |  |           |      |             |  |                | 39,649  |        |  |  | (588   | ) |  |  | (240    | ) |  |  | 198,381   | 
|Machinery and equipment         |  |                                      | 213,938 |               |  |           |      |             |  |                | 31,803  |        |  |  | (2,638 | ) |  |  | (1,735  | ) |  |  | 241,368   | 
|Other assets                    |  |                                      | 38,385  |               |  |           |      |             |  |                | 7,642   |        |  |  | (1,477 | ) |  |  | 1,222   |   |  |  | 45,772    | 
|                                |  |                                      |         |               |  |           |       |             |  |                |         |        |  |  |        |   |  |  |         |   |  |  |           | 
|Total accumulated depreciation  |  |                                      | 451,240 |               |  |           |      |             |  |                | 90,007  |        |  |  | (5,353 | ) |  |  | (534    | ) |  |  | 535,360   | 
|                                |  |                                      |         |               |  |           |       |             |  |                |         |        |  |  |        |   |  |  |         |   |  |  |           | 
|Net book value                  |  |                                      |         |               |  |           |       |             |  |                |         |        |  |  |        |   |  |  |         |   |  |  | 502,240   | 
|                                |  |                                      |         |               |  |           |       |             |  |                |         |        |  |  |        |   |  |  |         |   |  |  |           | 

F-98



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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

|                                |  |                                      |         |               |  |           |        |             |  |                |        |        |  |  |         |   |  |  |         |   |  |  |         | 
|------------------------------- |  | ------------------------------------ | ------- | ------------- |  | --------- | ------ | ----------- |  | -------------- | ------ | ------ |  |  | ------- | - |  |  | ------- | - |  |  | ------- | 
|                                |  |                                     
|                                |  | For the year ended December 31, 1999
|                                |  |                                     
|                                |  | Balance at                           |         | Business      |  |           |        | Changes in  |  | Balance at    
|                                |  | beginning                            |         | acquisitions  |  | Additions |        |             |  | exchange rates |        | end of
|                                |  | of period                            |         | and disposals |  | at cost   |        | Retirements |  | and transfers  |        | period
|                                |  |                                      |         |               |  |           |        |             |  |                |        |       
|                                |  |                                     
|                                |  | In thousands of EUR                 
|Cost                            |  |                                      |         |               |  |           |        |             |  |                |        |        |  |  |         |   |  |  |         |   |  |  |         | 
|Land                            |  |                                      | 4,966   |               |  |           |        |             |  |                | 667    |        |  |  | (24     | ) |  |  | 417     |   |  |  | 6,026   | 
|Buildings and land improvements |  |                                      | 76,193  |               |  |           | 21     |             |  |                | 2,800  |        |  |  | (2      | ) |  |  | 2,379   |   |  |  | 81,391  | 
|Vessels                         |  |                                      | 291,751 |               |  |           | 32,986 |             |  |                | 9,004  |        |  |  |        |   |  |  | 26,428  |   |  |  | 360,169 | 
|Machinery and equipment         |  |                                      | 271,382 |               |  |           | 4,703  |             |  |                | 12,217 |        |  |  | (8,914  | ) |  |  | 45,888  |   |  |  | 325,276 | 
|Assets under construction       |  |                                      | 23,185  |               |  |           |        |             |  |                | 50,140 |        |  |  | (1,558  | ) |  |  | (19,695 | ) |  |  | 52,072  | 
|Other assets                    |  |                                      | 44,071  |               |  |           | 130    |             |  |                | 10,525 |        |  |  | (6,232  | ) |  |  | 6,636   |   |  |  | 55,130  | 
|                                |  |                                      |         |               |  |           |        |             |  |                |        |        |  |  |         |   |  |  |         |   |  |  |         | 
|Total cost                      |  |                                      | 711,548 |               |  |           | 37,840 |             |  |                | 85,353 |        |  |  | (16,730 | ) |  |  | 62,053  |   |  |  | 880,064 | 
|                                |  |                                      |         |               |  |           |        |             |  |                |        |        |  |  |         |   |  |  |         |   |  |  |         | 
|Accumulated depreciation        |  |                                      |         |               |  |           |        |             |  |                |        |        |  |  |         |   |  |  |         |   |  |  |         | 
|Buildings and land improvements |  |                                      | 34,186  |               |  |           |        |             |  |                | 4,823  |        |  |  |        |   |  |  | 345     |   |  |  | 39,354  | 
|Vessels                         |  |                                      | 107,508 |               |  |           |        |             |  |                | 31,184 |        |  |  | (127    | ) |  |  | 12,147  |   |  |  | 150,712 | 
|Machinery and equipment         |  |                                      | 166,855 |               |  |           |        |             |  |                | 37,278 |        |  |  | (6,090  | ) |  |  | 14,883  |   |  |  | 212,926 | 
|Other assets                    |  |                                      | 31,342  |               |  |           |        |             |  |                | 5,542  |        |  |  | (2,245  | ) |  |  | 3,659   |   |  |  | 38,298  | 
|                                |  |                                      |         |               |  |           |        |             |  |                |        |        |  |  |         |   |  |  |         |   |  |  |         | 
|Total accumulated depreciation  |  |                                      | 339,891 |               |  |           |        |             |  |                | 78,827 |        |  |  | (8,462  | ) |  |  | 31,034  |   |  |  | 441,290 | 
|                                |  |                                      |         |               |  |           |        |             |  |                |        |        |  |  |         |   |  |  |         |   |  |  |         | 
|Net book value                  |  |                                      |         |               |  |           |        |             |  |                |        |        |  |  |         |   |  |  |         |   |  |  | 438,774 | 
|                                |  |                                      |         |               |  |           |        |             |  |                |        |        |  |  |         |   |  |  |         |   |  |  |         | 

Included above are buildings recorded under
capital leases for a total cost EUR 13,989 thousand at
December 31, 2000, and 1999 and a net book value of
EUR 4,347 thousand at December 31, 2000
(EUR 4,804 thousand at December 31, 1999).

Vessels include capital leases for a total cost
of EUR 129,850 thousand at December 31, 2000
(EUR 126,285 thousand at December 31, 1999) and a net
book value of EUR 4,217 thousand at December 31, 2000
(EUR 27,771 thousand at December 31, 1999).

Machinery and equipment include assets recorded
under capital leases for a total cost of EUR 4,068 thousand
at December 31, 2000 (EUR 7,630 thousand at
December 31, 1999) and a net book value of EUR 0
thousand at December 31, 2000 (EUR 408 thousand at
December 31, 1999).

Included in cost of operations is an amount of
EUR 21,148 thousand in 2000 and EUR 19,374 thousand in
1999 representing repairs and maintenance expense.

Due to the uncertain outlook in the oil services
market in Asia-Pacific region, the Group elected in 1998 to
cease production at its flexible pipe plant in Freemantle.
Therefore, the plant was fully depreciated for an amount of
EUR 15.1 million in 1998.

During 2000, the Group determined that certain
industrial assets were impaired based upon current production
levels and market requirements. A comprehensive review of the
assets indicated that the related carrying values were greater
than their estimated future cash flows. Accordingly, during the
year ended December 31, 2000, an impairment loss of
EUR 6.0 million was recorded to reflect such assets at
their estimated fair value. Fair value was calculated in
accordance with SFAS 121 on the basis of discounted future
cash flows.

A non-recurring charge of
EUR 5.2 million in 2000 was recorded on the
Flexservice 1 vessel and equipment to reflect its market
value.

F-99



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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

Note 8  Intangible
assets

|                                                |  |                     |         |      |  |  |         |  
|----------------------------------------------- |  | ------------------- | ------- | ---- |  |  | ------- | -
|                                                |  |                    
|                                                |  | December 31,       
|                                                |  |                    
|                                                |  | 2000                |         | 1999
|                                                |  |                     |         |     
|                                                |  |                    
|                                                |  | In thousands of EUR
|Goodwill                                        |  |                     | 80,830  |      |  |  | 73,056  |  
|Patents, trademarks and other intangible assets |  |                     | 3,709   |      |  |  | 5,771   |  
|                                                |  |                     |         |      |  |  |         |  
|Total                                           |  |                     | 84,539  |      |  |  | 78,827  |  
|Less: accumulated amortization                  |  |                     | (32,515 | )    |  |  | (29,560 | )
|                                                |  |                     |         |      |  |  |         |  
|Intangible assets  net                         |  |                     | 52,024  |      |  |  | 49,267  |  
|                                                |  |                     |         |      |  |  |         |  

Goodwill is primarily attributable to the
acquisition of Stena Offshore in 1994.

Note 9  Long-Term
Debt

The analysis of long-term debt is presented as
follows:

Analysis of long-term debt by
currency

|                                                                   |  |                     |         |      |  |  |         |  
|------------------------------------------------------------------ |  | ------------------- | ------- | ---- |  |  | ------- | -
|                                                                   |  |                    
|                                                                   |  | December 31,       
|                                                                   |  |                    
|                                                                   |  | 2000                |         | 1999
|                                                                   |  |                     |         |     
|                                                                   |  |                    
|                                                                   |  | In thousands of EUR
|French franc                                                       |  |                     | 6,822   |      |  |  | 7,969   |  
|U.S. dollar                                                        |  |                     | 46,438  |      |  |  | 59,853  |  
|Pound sterling                                                     |  |                     |        |      |  |  | 6,288   |  
|Australian dollar                                                  |  |                     | 6,917   |      |  |  | 10,686  |  
|Other currencies                                                   |  |                     | 16,469  |      |  |  | 14,576  |  
|                                                                   |  |                     |         |      |  |  |         |  
|Total                                                              |  |                     | 76,646  |      |  |  | 99,372  |  
|                                                                   |  |                     |         |      |  |  |         |  
|Less: amounts due within one year (excluded
    convertible notes) |  |                     | (28,090 | )    |  |  | (37,477 | )
|                                                                   |  |                     |         |      |  |  |         |  
|Long-term debt                                                     |  |                     | 48,556  |      |  |  | 61,895  |  
|                                                                   |  |                     |         |      |  |  |         |  

Analysis of long-term debt by annual
maturities

|                    |  |              |        | 
|------------------- |  | ------------ | ------ | 
|                    |  | December 31,
|                    |  | 2000        
|                    |  |             
|                    |  |             
|                    |  | In thousands
|                    |  | of EUR      
|2001                |  |              | 28,090 | 
|2002                |  |              | 15,732 | 
|2003                |  |              | 14,473 | 
|2004                |  |              | 12,318 | 
|2005                |  |              | 5,543  | 
|2006 and thereafter |  |              | 490    | 
|                    |  |              |        | 
|Total               |  |              | 76,646 | 
|                    |  |              |        | 

F-100



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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

Analysis of long-term debt by interest
rate

|                                                                            |  |                     |        |      |  |  |        | 
|--------------------------------------------------------------------------- |  | ------------------- | ------ | ---- |  |  | ------ | 
|                                                                            |  |                    
|                                                                            |  | December 31,       
|                                                                            |  |                    
|                                                                            |  | 2000                |        | 1999
|                                                                            |  |                     |        |     
|                                                                            |  |                    
|                                                                            |  | In thousands of EUR
|Below 7.5%                                                                  |  |                     | 17,079 |      |  |  | 3,359  | 
|7.5 to 10%                                                                  |  |                     | 6,533  |      |  |  | 9,309  | 
|10% and over                                                                |  |                     | 9,739  |      |  |  | 6,725  | 
|Variable rates (effective rate December 31,
    2000  7.88%; 1999  6.98%) |  |                     | 43,295 |      |  |  | 79,979 | 
|                                                                            |  |                     |        |      |  |  |        | 
|Total                                                                       |  |                     | 76,646 |      |  |  | 99,372 | 
|                                                                            |  |                     |        |      |  |  |        | 

Variable rates are generally based on inter-bank
offered rates in the currency concerned. In 1999, under the
variable rates line are some debts in an amount of
EUR 24,885 thousand at December 31, 1999 that have
been hedged at rates, excluding margin, ranging from 5.79% to
6.37%. At December 31, 2000, this amount of EUR 16,120
thousand has been reclassified in fixed rates under 7.5%.

The weighted average interest rate on bank
overdrafts was 6.39% at December 31, 2000 (7.94% at
December 31, 1999).

Analysis by type of debt

|                          |  |                     |        |           |  |       |        |         |  |           |        |       |  |  |        |  |  |  |       |  |  |  |        | 
|------------------------- |  | ------------------- | ------ | --------- |  | ----- | ------ | ------- |  | --------- | ------ | ----- |  |  | ------ |  |  |  | ----- |  |  |  | ------ | 
|                          |  |                    
|                          |  | At December 31,    
|                          |  |                    
|                          |  |                     |        |          
|                          |  | 2000                |        | 1999     
|                          |  |                     |        |          
|                          |  | Secured             |        | Unsecured |  | Total |        | Secured |  | Unsecured |        | Total
|                          |  |                     |        |           |  |       |        |         |  |           |        |      
|                          |  |                    
|                          |  | In thousands of EUR
|Capital lease obligations |  |                     | 6,663  |           |  |       |       |         |  |           | 6,663  |       |  |  | 13,901 |  |  |  |      |  |  |  | 13,901 | 
|Bank                      |  |                     | 53,411 |           |  |       | 14,696 |         |  |           | 68,107 |       |  |  | 76,616 |  |  |  | 8,855 |  |  |  | 85,471 | 
|Other                     |  |                     |       |           |  |       | 1,876  |         |  |           | 1,876  |       |  |  |       |  |  |  |      |  |  |  |       | 
|                          |  |                     |        |           |  |       |        |         |  |           |        |       |  |  |        |  |  |  |       |  |  |  |        | 
|Total                     |  |                     | 60,074 |           |  |       | 16,572 |         |  |           | 76,646 |       |  |  | 90,517 |  |  |  | 8,855 |  |  |  | 99,372 | 
|                          |  |                     |        |           |  |       |        |         |  |           |        |       |  |  |        |  |  |  |       |  |  |  |        | 

At December 31, 2000, the outstanding amount
due under the facility in place with a syndicate of Banks in
order to finance the Sunrise 2000 represents
USD 23,672 thousand (USD 29,665 thousand at
December 31, 1999).

In addition, the amount outstanding under the
USD 10 million credit facility added in 1999 to
finance the upgrade of the Sunrise 2000 amounts to
USD 8 million.

At December 31, 2000, the outstanding amount
due under the facility set up with a syndicate of Banks to
finance the Australian plant amounted to AUD 11,600
(AUD 16,480 thousand at December 31, 1999).

In 2000, the Group refinanced part of its
existing debt in India with a bank through
INR 450 million facility secured by the SEAMEC 1
and SEAMEC 2 vessels. At December 31, 2000, the
outstanding amount due under this facility represents
INR 250 million.

At December 31, 2000, obligations under
capital lease agreements of the Group are secured by cash
deposits in an amount of EUR 2,523 thousand (EUR 2,425
thousand at December 31, 1999) and related to the
CSO Wellservicer. These cash deposits are included
in other long-term investments and receivables.

In addition, at December 31, 2000, the Group
had EUR 75,006 thousand of available borrowings under
long-term credit facilities as well as a further
EUR 100,226 thousand available under short-term facilities.

F-101



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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

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.

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:

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.

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,
|                              |  |                
|                              |  |                 |         |                    
|                              |  | 2000            |         | 1999               
|                              |  |                 |         |                    
|                              |  | Carrying or     |         |                     |  | Carrying or |        |           
|                              |  | Notional        |         | Estimated           |  | Notional    |        | Estimated 
|                              |  | Amount          |         | Fair value          |  | Amount      |        | Fair value
|                              |  |                 |         |                     |  |             |        |           
|                              |  |                 |         |                     |  |            
|                              |  |                 |         | In thousands of EUR |  |            
|Balance-sheet instruments     |  |                 |         |                     |  |             |        |            |  |  |         |  |  |  |         |  
|Long-term debt                |  |                 | 76,646  |                     |  |             | 77,260 |            |  |  | 99,372  |  |  |  | 100,180 |  
|Off balance-sheet instruments |  |                 |         |                     |  |             |        |            |  |  |         |  |  |  |         |  
|Interest rate swaps           |  |                 | 16,120  |                     |  |             | 26     |            |  |  | 44,058  |  |  |  | (3      | )
|Currency forwards             |  |                 | 178,677 |                     |  |             | 6,171  |            |  |  | 201,110 |  |  |  | 3,641   |  
|Currency options              |  |                 | 17,195  |                     |  |             | 128    |            |  |  |        |  |  |  |        |  

F-102



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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

Note 11  Income
taxes

The provision for income taxes consists of:

|                      |  |                         |         |      |  |      |        |   |  |  |        |  
|--------------------- |  | ----------------------- | ------- | ---- |  | ---- | ------ | - |  |  | ------ | -
|                      |  |                        
|                      |  | Year ended December 31,
|                      |  |                        
|                      |  | 2000                    |         | 1999 |  | 1998
|                      |  |                         |         |      |  |     
|                      |  |                        
|                      |  | In thousands of EUR    
|Current income taxes  |  |                         |         |      |  |      |        |   |  |  |        |  
|French                |  |                         | 46,935  |      |  |      | 15,385 |   |  |  | 13,337 |  
|Foreign               |  |                         | 49,347  |      |  |      | 45,378 |   |  |  | 50,425 |  
|                      |  |                         |         |      |  |      |        |   |  |  |        |  
|                      |  |                         | 96,282  |      |  |      | 60,763 |   |  |  | 63,762 |  
|                      |  |                         |         |      |  |      |        |   |  |  |        |  
|Deferred income taxes |  |                         |         |      |  |      |        |   |  |  |        |  
|French                |  |                         | 2,757   |      |  |      | (3,024 | ) |  |  | 746    |  
|Foreign               |  |                         | (13,202 | )    |  |      | (6,818 | ) |  |  | (5,482 | )
|                      |  |                         |         |      |  |      |        |   |  |  |        |  
|                      |  |                         | (10,445 | )    |  |      | (9,842 | ) |  |  | (4,736 | )
|                      |  |                         |         |      |  |      |        |   |  |  |        |  
|Total                 |  |                         | 85,837  |      |  |      | 50,921 |   |  |  | 59,026 |  
|                      |  |                         |         |      |  |      |        |   |  |  |        |  

Under the law enacted in December 2000, the
French tax rate has decreased from 40% to 37.76%. This decrease
applies to income for years ended after 31 December 1999.
The impact of this lower percentage is a decrease on current
taxes of EUR 496 thousand.

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 comprise the following significant components:

|                                           |  |                         |         |      |  |      |        |   |  |  |        |  
|------------------------------------------ |  | ----------------------- | ------- | ---- |  | ---- | ------ | - |  |  | ------ | -
|                                           |  |                        
|                                           |  | Year ended December 31,
|                                           |  |                        
|                                           |  | 2000                    |         | 1999 |  | 1998
|                                           |  |                         |         |      |  |     
|                                           |  |                        
|                                           |  | In thousands of EUR    
|Profit in inventory                        |  |                         | 2,296   |      |  |      | (403   | ) |  |  | (1,322 | )
|Long-term contracts and related provisions |  |                         | (4,021  | )    |  |      | (9,131 | ) |  |  | (1,630 | )
|Net operating loss carry-forward           |  |                         | (5,207  | )    |  |      | (937   | ) |  |  | 1,055  |  
|Capital leases                             |  |                         | 220     |      |  |      | 1,107  |   |  |  | 2,352  |  
|Other                                      |  |                         | (3,733  | )    |  |      | (478   | ) |  |  | (5,191 | )
|                                           |  |                         |         |      |  |      |        |   |  |  |        |  
|Deferred income taxes                      |  |                         | (10,445 | )    |  |      | (9,842 | ) |  |  | (4,736 | )
|                                           |  |                         |         |      |  |      |        |   |  |  |        |  

F-103



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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

The Groups tax expense varies from the
French statutory tax rate as a result of the following factors:

|                                                                                      |  |                         |         |      |  |      |         |   |  |  |         |  
|------------------------------------------------------------------------------------- |  | ----------------------- | ------- | ---- |  | ---- | ------- | - |  |  | ------- | -
|                                                                                      |  |                        
|                                                                                      |  | Year ended December 31,
|                                                                                      |  |                        
|                                                                                      |  | 2000                    |         | 1999 |  | 1998
|                                                                                      |  |                         |         |      |  |     
|                                                                                      |  |                        
|                                                                                      |  | In thousands of EUR    
|Statutory tax rate (1)                                                                |  |                         | 116,502 |      |  |      | 56,212  |   |  |  | 64,832  |  
|Equity income of investees                                                            |  |                         | (1,009  | )    |  |      | (1,029  | ) |  |  | (2,456  | )
|Non deductible depreciation and amortization
    charge                               |  |                         | 4,682   |      |  |      | 4,205   |   |  |  | 4,741   |  
|Adjustments for foreign income taxes different
    from the French statutory tax rate |  |                         | (7,549  | )    |  |      | (10,934 | ) |  |  | (14,740 | )
|Sale of Cal Dives shares at a reduced tax
    rate                                   |  |                         | (24,510 | )    |  |      |        |   |  |  |        |  
|Effect of the cease of operations in the
    Australian plant                         |  |                         | (893    | )    |  |      | (2,058  | ) |  |  | 9,117   |  
|Other items  net                                                                     |  |                         | (1,386  | )    |  |      | 4,525   |   |  |  | (2,468  | )
|                                                                                      |  |                         |         |      |  |      |         |   |  |  |         |  
|Effective tax                                                                         |  |                         | 85,837  |      |  |      | 50,921  |   |  |  | 59,026  |  
|                                                                                      |  |                         |         |      |  |      |         |   |  |  |         |  



---



|    |                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------
|(1) | The statutory tax rate in France was 37.76% at
    December 31, 2000 (40% at December 31, 1999 and 41.67%
    at December 31, 1998).

Analysis of the net deferred tax liabilities and
assets is as follows:

|                                                                                      |  |                     |        |      |  |  |        |  
|------------------------------------------------------------------------------------- |  | ------------------- | ------ | ---- |  |  | ------ | -
|                                                                                      |  |                    
|                                                                                      |  | December 31,       
|                                                                                      |  |                    
|                                                                                      |  | 2000                |        | 1999
|                                                                                      |  |                     |        |     
|                                                                                      |  |                    
|                                                                                      |  | In thousands of EUR
|Gross deferred tax assets                                                             |  |                     |        |      |  |  |        |  
|Profit in inventory                                                                   |  |                     | 1,563  |      |  |  | 3,648  |  
|Long-term contracts                                                                   |  |                     | 25,487 |      |  |  | 19,170 |  
|Capital leases                                                                        |  |                     | 824    |      |  |  | 1,044  |  
|Net operating loss carry-forwards                                                     |  |                     | 10,260 |      |  |  | 4,122  |  
|Difference between accumulated depreciation and
    capital allowance on owned assets |  |                     | 892    |      |  |  | 1,229  |  
|Employee benefit                                                                      |  |                     | 1,835  |      |  |  | 1,987  |  
|Other                                                                                 |  |                     | 9,874  |      |  |  | 41     |  
|                                                                                      |  |                     |        |      |  |  |        |  
|Gross deferred tax assets                                                             |  |                     | 50,735 |      |  |  | 31,241 |  
|                                                                                      |  |                     |        |      |  |  |        |  
|Less: valuation allowance                                                             |  |                     | (2,795 | )    |  |  | (2,589 | )
|                                                                                      |  |                     |        |      |  |  |        |  
|Total deferred tax assets, net                                                        |  |                     | 47,940 |      |  |  | 28,652 |  
|                                                                                      |  |                     |        |      |  |  |        |  
|Deferred tax liabilities                                                              |  |                     |        |      |  |  |        |  
|Difference between accumulated depreciation and
    capital allowance on owned assets |  |                     | 22,525 |      |  |  | 17,001 |  
|Capital leases                                                                        |  |                     | 6,097  |      |  |  | 5,789  |  
|Long-term contracts                                                                   |  |                     | 6,349  |      |  |  | 4,053  |  
|Other                                                                                 |  |                     | 1,993  |      |  |  | 548    |  
|                                                                                      |  |                     |        |      |  |  |        |  
|Gross deferred tax liability                                                          |  |                     | 36,964 |      |  |  | 27,391 |  
|                                                                                      |  |                     |        |      |  |  |        |  
|Net deferred tax                                                                      |  |                     | 10,976 |      |  |  | 1,261  |  
|                                                                                      |  |                     |        |      |  |  |        |  
|Reflected on consolidated balance sheet
    Current deferred tax assets, net          |  |                     | 32,075 |      |  |  | 28,652 |  
|Current deferred tax liabilities                                                      |  |                     |       |      |  |  |       |  
|Long term deferred tax liability, net                                                 |  |                     | 21,099 |      |  |  | 27,391 |  
|                                                                                      |  |                     |        |      |  |  |        |  
|Net deferred tax assets
    (liabilities)                                             |  |                     | 10,976 |      |  |  | 1,261  |  
|                                                                                      |  |                     |        |      |  |  |        |  

F-104



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

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.

Note 12  Other
liabilities

Other current liabilities consist of the
following:

|                                                             |  |                     |         |      |  |  |         | 
|------------------------------------------------------------ |  | ------------------- | ------- | ---- |  |  | ------- | 
|                                                             |  |                    
|                                                             |  | December 31,       
|                                                             |  |                    
|                                                             |  | 2000                |         | 1999
|                                                             |  |                     |         |     
|                                                             |  |                    
|                                                             |  | In thousands of EUR
|Income and other taxes payable and accrued
    payroll costs |  |                     | 110,596 |      |  |  | 85,252  | 
|Accrued contract costs and provisions                        |  |                     | 160,109 |      |  |  | 173,038 | 
|Accrued payables                                             |  |                     | 53,793  |      |  |  | 47,183  | 
|Suppliers of fixed assets                                    |  |                     | 6,985   |      |  |  | 7,528   | 
|Other creditors                                              |  |                     | 33,693  |      |  |  | 5,132   | 
|                                                             |  |                     |         |      |  |  |         | 
|Other current liabilities                                    |  |                     | 365,176 |      |  |  | 318,133 | 
|                                                             |  |                     |         |      |  |  |         | 

Other long-term liabilities consist of the
following:

|                               |  |                     |        |      |  |  |        | 
|------------------------------ |  | ------------------- | ------ | ---- |  |  | ------ | 
|                               |  |                    
|                               |  | December 31,       
|                               |  |                    
|                               |  | 2000                |        | 1999
|                               |  |                     |        |     
|                               |  |                    
|                               |  | In thousands of EUR
|Government research grants     |  |                     | 6,268  |      |  |  | 6,095  | 
|Provision for drydocking       |  |                     | 8,612  |      |  |  | 1,977  | 
|Employee profit sharing scheme |  |                     | 7,322  |      |  |  | 6,501  | 
|Retirement indemnities         |  |                     | 912    |      |  |  | 490    | 
|Minority interests             |  |                     | 13,000 |      |  |  | 13,306 | 
|Other liabilities              |  |                     | 11,643 |      |  |  | 11,259 | 
|                               |  |                     |        |      |  |  |        | 
|Other long-term liabilities    |  |                     | 47,757 |      |  |  | 39,628 | 
|                               |  |                     |        |      |  |  |        | 

The activity in dry-docking liability accounts
for 1998, 1999 and 2000 was as follows:

|                             |  |  |         |  
|---------------------------- |  |  | ------- | -
|Balance at January 1, 1998   |  |  | 4,455   |  
|Accruals                     |  |  | 6,912   |  
|Expenditures                 |  |  | (6,836  | )
|Translation adjustment       |  |  | 38      |  
|Balance at January 1, 1999   |  |  | 4,569   |  
|Accruals                     |  |  | 9,002   |  
|Expenditures                 |  |  | (12,033 | )
|Translation adjustment       |  |  | 439     |  
|Balance at January 1, 2000   |  |  | 1,977   |  
|Accruals                     |  |  | 13,931  |  
|Expenditures                 |  |  | (7,132  | )
|Translation adjustment       |  |  | (164    | )
|Balance at December 31, 2000 |  |  | 8,612   |  

F-105



---



##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

Note 13  Common stock and
redeemable notes

Coflexip S.A.s common stock at
December 31, 2000 is made up of 18,685,759 fully paid
ordinary shares, each with a par value of EUR 1.60 compared
to 18,593,693 fully paid ordinary shares, each with a par value
of EUR 1.60 at December 31, 1999 and 15,846,195 fully
paid ordinary shares, each with a par value of FRF 10
(EUR 1.52) at December 31, 1998.

In 1998, 1999, 2000, Coflexips shares of
common stock increased as the result of the following:

25,163 fully paid ordinary shares, as the result
of stock option exercise, issued during 1998 increased
Coflexips shares of common stock from FRF 158,210,320
(EUR 24,119,008) in 1997 to FRF 158,461,950
(EUR 24,157,369) in 1998.

2,747,498 fully paid ordinary shares issued
during 1999 increased Coflexips shares of common stock
from FRF 158,461,950 (EUR 24,157,369) in 1998 to
FRF 195,146,609.24 (EUR 29,749,908.80) in 1999:

2,227,272 as the result of the conversion of the
convertible notes

454,546 as the result of the reimbursement of
redeemable notes

65,680 as the result of stock option exercise

92,066 fully paid ordinary shares as the result
of stock-option exercise issued during 2000, increased the
shares of common stock from FRF 195,146,609.24
(EUR 29,749,908.80) to FRF 196,112,870.69
(EUR 29,897,241.40).

Stock options

Under APB No 25, Coflexip
recognizes no compensation expense related to employee stock
options. Had compensation costs been determined as prescribed by
SFAS No 123, Coflexips net earnings
and earnings per share would have been reduced to pro forma
amounts indicated below:

|                              |  |                      |         |      |  |      |        |  |  |  |        | 
|----------------------------- |  | -------------------- | ------- | ---- |  | ---- | ------ |  |  |  | ------ | 
|                              |  | 2000                 |         | 1999 |  | 1998
|                              |  |                      |         |      |  |     
|                              |  |                     
|                              |  | In thousands of EUR,
|                              |  | except per share    
|Pro forma net income          |  |                      | 222,272 |      |  |      | 89,413 |  |  |  | 95,608 | 
|Pro forma earnings per share: |  |                      |         |      |  |      |        |  |  |  |        | 
|Basic EPS                     |  |                      | 11.92   |      |  |      | 5.46   |  |  |  | 6.07   | 
|Diluted EPS                   |  |                      | 11.76   |      |  |      | 4.92   |  |  |  | 5.44   | 

The weighted average per share fair value of the
individual options granted during 2000, 1999 and 1998 were as
follows on the date of grant:

| |  |                  |   |      |  |      |      |  |  |  |      | 
| |  | ---------------- | - | ---- |  | ---- | ---- |  |  |  | ---- | 
| |  | 2000             |   | 1999 |  | 1998
| |  |                  |   |      |  |     
| |  |                 
| |  | In EUR per share
| |  |                  |  |      |  |      | 3.95 |  |  |  | 7.38 | 

The fair value of these options was estimated at
the date of grant, using a Black & Scholes option pricing
model with the following average assumptions:

|                                               |  |      |   |      |  |      |       |  |  |  |      | 
|---------------------------------------------- |  | ---- | - | ---- |  | ---- | ----- |  |  |  | ---- | 
|                                               |  | 2000 |   | 1999 |  | 1998
|                                               |  |      |   |      |  |     
|Risk-free interest rate                        |  |      |  |      |  |      | 5.34% |  |  |  | 5.0% | 
|Dividend yield                                 |  |      |  |      |  |      | 20%   |  |  |  | 20%  | 
|Volatility factor of the expected market price |  |      |  |      |  |      | 0.46  |  |  |  | 0.44 | 
|Weighted average expected life                 |  |      |  |      |  |      | 5     |  |  |  | 8    | 

F-106



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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

The Black-Scholes option valuation model was
developed for use in estimating the fair value of traded
options, which have no vesting restrictions and are fully
transferable. In addition, the option valuation model requires
the input of highly subjective assumptions including the
expected stock price volatility. Because Coflexips
employee stock options have characteristics significantly
different from those of traded options, and because the changes
in the subjective input assumptions can materially affect the
fair value estimate, in managements opinion, the existing
models do not necessarily provide a reliable single measure of
the fair value of its employee stock options.

A summary of Coflexips stock option
activity, and related information for the years ended
December 31 follows:

|                                |  |            |         |                |  |            |        |                |  |            |         |                |  |  |        |  |  |  |         |   |  |  |         | 
|------------------------------- |  | ---------- | ------- | -------------- |  | ---------- | ------ | -------------- |  | ---------- | ------- | -------------- |  |  | ------ |  |  |  | ------- | - |  |  | ------- | 
|                                |  |            |         |                |  |           
|                                |  | 2000       |         | 1999           |  | 1998      
|                                |  |            |         |                |  |           
|                                |  |            |         | Weighted       |  |            |        | Weighted       |  |            |         | Weighted      
|                                |  |            |         | average        |  |            |        | average        |  |            |         | average       
|                                |  | Number     |         | exercise price |  | Number     |        | exercise price |  | Number     |         | exercise price
|                                |  | of options |         | per share      |  | of options |        | per share      |  | of options |         | per share     
|                                |  |            |         |                |  |            |        |                |  |            |         |               
|Outstanding  Beginning of year |  |            | 609,568 |                |  |            | EUR 63 |                |  |            | 570,366 |                |  |  | EUR 56 |  |  |  | 536,259 |   |  |  | EUR  36 | 
|Granted                         |  |            |        |                |  |            |       |                |  |            | 127,386 |                |  |  | EUR 77 |  |  |  | 123,400 |   |  |  | EUR 124 | 
|Exercised                       |  |            | (95,391 | )              |  |            | EUR 35 |                |  |            | (85,450 | )              |  |  | EUR 33 |  |  |  | (44,058 | ) |  |  | EUR  30 | 
|Forfeited                       |  |            | (9,201  | )              |  |            | EUR 60 |                |  |            | (2,734  | )              |  |  | EUR 47 |  |  |  | (45,235 | ) |  |  | EUR  33 | 
|                                |  |            |         |                |  |            |        |                |  |            |         |                |  |  |        |  |  |  |         |   |  |  |         | 
|Outstanding  end of year       |  |            | 504,976 |                |  |            | EUR 68 |                |  |            | 609,568 |                |  |  | EUR 63 |  |  |  | 570,366 |   |  |  | EUR  56 | 
|                                |  |            |         |                |  |            |        |                |  |            |         |                |  |  |        |  |  |  |         |   |  |  |         | 

In connection with these stock option plans,
Coflexip held 49,615 of its shares at December 31, 2000,
53,042 at December 31, 1999 and 70,763 at December 31,
1998, respectively.

The following table summarizes information
concerning outstanding and exercisable options at
December 31, 2000 (contractual life in year, exercise price
in euros):

|         |  |          |      |          |  |             |        |             |  |             |      |  |  |  |         |  |  |  |         | 
|-------- |  | -------- | ---- | -------- |  | ----------- | ------ | ----------- |  | ----------- | ---- |  |  |  | ------- |  |  |  | ------- | 
|         |  |          |      |          |  | Remaining   |        |             |  |            
|         |  | Year     |      | Exercise |  | contractual |        | Number      |  | Number     
|         |  | of grant |      | price    |  | life        |        | outstanding |  | exercisable
|         |  |          |      |          |  |             |        |             |  |            
|Plan 7   |  |          | 1994 |          |  |             | 31.25  |             |  |             | 0.47 |  |  |  | 15,200  |  |  |  | 15,200  | 
|Plan 8   |  |          | 1994 |          |  |             | 31.65  |             |  |             | 0.96 |  |  |  | 0       |  |  |  | 0       | 
|Plan 9.1 |  |          | 1996 |          |  |             | 28.81  |             |  |             | 5.43 |  |  |  | 105,200 |  |  |  | 105,200 | 
|Plan 9.2 |  |          | 1997 |          |  |             | 47.35  |             |  |             | 6.43 |  |  |  | 138,790 |  |  |  | 92,526  | 
|Plan 9.3 |  |          | 1998 |          |  |             | 123.70 |             |  |             | 7.44 |  |  |  | 120,400 |  |  |  | 40,133  | 
|Plan 10  |  |          | 1999 |          |  |             | 76.61  |             |  |             | 8.96 |  |  |  | 125,386 |  |  |  | 0       | 

Stock-options generally vest from two to four
years from the date of grant. The weighted average remaining
contractual life of those options is 6.9 years.



| |                 
| | ----------------
| | Redeemable Notes

In connection with its acquisition of Stena
Offshore on December 15, 1994, Coflexip S.A. issued
redeemable notes to Stena International B.V. in an
aggregate principal amount of USD 20,000 thousand
(EUR 17,142 thousand). The redeemable notes bore interest
at the rate of 8.25% per annum with semi-annual payments and
were redeemed in exchange for 454,546 ordinary shares of
Coflexip S.A. on December 15, 1999.

The interest charge for 1999 was included in the
consolidated income statement in an amount of EUR 1,461
thousand (EUR 1,231 thousand for 1998) within the caption
interest and other financial expense.

F-107



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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)



| |                  
| | -----------------
| | Convertible Notes

In connection with its acquisition of Stena
Offshore on December 15, 1994, Coflexip S.A. issued
convertible notes to Stena International B.V. in an aggregate
principal amount of USD 98,000 thousand (EUR 76,941
thousand). The convertible notes bore interest at the rate of
7.75% per annum with semi-annual payments and were converted
into 2,227,272 ordinary shares of Coflexip S.A. at the
holders option at any time between December 15, 1996
and December 15, 1999.

On October 13,1999, Stena International B.V.
converted its convertible notes into 2,227,272 ordinary shares
of Coflexip S.A.

The interest charge in 1999 was included in the
income statement in an amount of EUR 3,399 thousand
(EUR 6,754 thousand in 1998) under the line interest
and other financial expense.

Note 14  Earnings Per
Share

The following table sets forth the computation of
basic and diluted earnings (loss) per share:

|                                                                                                                         |  |                     |            |      |  |      |            |  |  |  |            | 
|------------------------------------------------------------------------------------------------------------------------ |  | ------------------- | ---------- | ---- |  | ---- | ---------- |  |  |  | ---------- | 
|                                                                                                                         |  | 2000                |            | 1999 |  | 1998
|                                                                                                                         |  |                     |            |      |  |     
|                                                                                                                         |  |                    
|                                                                                                                         |  | In thousands of EUR
|Numerator:                                                                                                               |  |                     |            |      |  |      |            |  |  |  |            | 
|Numerator for basic earnings per
    share  Net income available to common stockholders                                 |  |                     | 222,697    |      |  |      | 89,610     |  |  |  | 96,558     | 
|Net effect of dilutive securities:                                                                                       |  |                     |            |      |  |      |            |  |  |  |            | 
|Redeemable Notes: interests at the rate of 8.25%
    (net of tax)                                                        |  |                     |           |      |  |      | 877        |  |  |  | 718        | 
|Convertible Notes: interests at the rate of 7.75%
    (net of tax)                                                       |  |                     |           |      |  |      | 2,039      |  |  |  | 3,939      | 
|                                                                                                                         |  |                     |            |      |  |      |            |  |  |  |            | 
|                                                                                                                         |  |                     |           |      |  |      | 2,916      |  |  |  | 4,657      | 
|                                                                                                                         |  |                     |            |      |  |      |            |  |  |  |            | 
|Numerator for diluted earnings per
    share  Net income available to common stockholders
    after assumed conversions |  |                     | 222,697    |      |  |      | 92,526     |  |  |  | 101,215    | 
|Denominator:                                                                                                             |  |                     |            |      |  |      |            |  |  |  |            | 
|Denominator for basic earnings per share in
    circulation                                                             |  |                     |            |      |  |      |            |  |  |  |            | 
|Weighted-average shares                                                                                                  |  |                     | 18,645,182 |      |  |      | 16,386,682 |  |  |  | 15,751,894 | 
|Effect of dilutive securities:                                                                                           |  |                     |            |      |  |      |            |  |  |  |            | 
|Stock options                                                                                                            |  |                     | 246,080    |      |  |      | 188,043    |  |  |  |           | 
|Redeemable Notes                                                                                                         |  |                     |           |      |  |      | 434,621    |  |  |  | 454,546    | 
|Convertible Notes                                                                                                        |  |                     |           |      |  |      | 1,745,205  |  |  |  | 2,227,272  | 
|                                                                                                                         |  |                     |            |      |  |      |            |  |  |  |            | 
|Dilutive potential common shares                                                                                         |  |                     | 246,080    |      |  |      | 2,367,869  |  |  |  | 2,681,818  | 
|                                                                                                                         |  |                     |            |      |  |      |            |  |  |  |            | 
|Denominator for diluted earnings (loss) per
    share  Adjusted weighted-average shares and assumed
    conversions     |  |                     | 18,891,262 |      |  |      | 18,754,551 |  |  |  | 18,433,712 | 
|                                                                                                                         |  |                     |            |      |  |      |            |  |  |  |            | 
|Basic Earnings per share in circulation (in Euros)                                                                       |  |                     | 11.94      |      |  |      | 5.47       |  |  |  | 6.13       | 
|                                                                                                                         |  |                     |            |      |  |      |            |  |  |  |            | 
|Diluted Earnings per share in circulation (in
    Euros)                                                                 |  |                     | 11.79      |      |  |      | 4.93       |  |  |  | 5.49       | 
|                                                                                                                         |  |                     |            |      |  |      |            |  |  |  |            | 

F-108



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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

Note 15  Research and
Development

Included in other operating expenses is net
research and development expense as follows:

|                                       |  |                     |        |      |  |      |        |   |  |  |        |  
|-------------------------------------- |  | ------------------- | ------ | ---- |  | ---- | ------ | - |  |  | ------ | -
|                                       |  | 2000                |        | 1999 |  | 1998
|                                       |  |                     |        |      |  |     
|                                       |  |                    
|                                       |  | In thousands of EUR
|Research and development expenditures  |  |                     | 19,884 |      |  |      | 19,373 |   |  |  | 17,818 |  
|Government grants recognized in income |  |                     | (437   | )    |  |      | (135   | ) |  |  | (55    | )
|                                       |  |                     |        |      |  |      |        |   |  |  |        |  
|Net research and development expense   |  |                     | 19,447 |      |  |      | 19,238 |   |  |  | 17,763 |  
|                                       |  |                     |        |      |  |      |        |   |  |  |        |  

Note 16  Personnel
(unaudited)

The number of personnel employed by Coflexip S.A.
and consolidated subsidiaries during the year was as follows:

|                         |  |      |       |      |  |      |       |  |  |  |       | 
|------------------------ |  | ---- | ----- | ---- |  | ---- | ----- |  |  |  | ----- | 
|                         |  | 2000 |       | 1999 |  | 1998
|                         |  |      |       |      |  |     
|France                   |  |      | 959   |      |  |      | 869   |  |  |  | 919   | 
|Brazil                   |  |      | 768   |      |  |      | 724   |  |  |  | 710   | 
|United States of America |  |      | 339   |      |  |      | 222   |  |  |  | 255   | 
|United Kingdom           |  |      | 1,847 |      |  |      | 1,669 |  |  |  | 1,773 | 
|Norway                   |  |      | 157   |      |  |      | 143   |  |  |  | 153   | 
|Asia Pacific             |  |      | 144   |      |  |      | 202   |  |  |  | 229   | 
|                         |  |      |       |      |  |      |       |  |  |  |       | 
|Total                    |  |      | 4,214 |      |  |      | 3,829 |  |  |  | 4,039 | 
|                         |  |      |       |      |  |      |       |  |  |  |       | 

The number of employees includes the
sub-contracted workforce, 1,462 in 2000, 1,184 in 1999 and 1,349
persons in 1998.

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 four reportable segments: North
Sea, Brazil, Asia Pacific, 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 18% of net operating
revenues in 2000, 13% in 1999, 20% in 1998. Two other customers
accounted for 10% and 7% in 2000, 12% and 8% in 1999 and 8% each
in 1998.

F-109



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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

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.

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, 2000
|                                 |  |                                            
|                                 |  |                                             |         | Asia   |  | Rest of |         |       |  | Consolidated
|                                 |  | North Sea                                   |         | Brazil |  | Pacific |         | World |  | Eliminations |        | Total
|                                 |  |                                             |         |        |  |         |         |       |  |              |        |      
|                                 |  |                                            
|                                 |  | In thousands of EUR                        
|Revenues from external customers |  |                                             | 506,803 |        |  |         | 196,995 |       |  |              | 84,377 |       |  |  | 276,381 |  |  |  |        |   |  |  | 1,064,556 |  
|Intersegment revenues            |  |                                             | 7,400   |        |  |         |        |       |  |              |       |       |  |  | 4,549   |  |  |  | (11,948 | ) |  |  |          |  
|                                 |  |                                             |         |        |  |         |         |       |  |              |        |       |  |  |         |  |  |  |         |   |  |  |           |  
|Total Revenues                   |  |                                             | 514,202 |        |  |         | 196,995 |       |  |              | 84,377 |       |  |  | 280,930 |  |  |  | (11,948 | ) |  |  | 1,064,556 |  
|                                 |  |                                             |         |        |  |         |         |       |  |              |        |       |  |  |         |  |  |  |         |   |  |  |           |  
|Segment Profit and Loss EBITDA   |  |                                             | 131,635 |        |  |         | 57,975  |       |  |              | 22,878 |       |  |  | 32,783  |  |  |  |         |   |  |  | 245,271   |  
|                                 |  |                                             |         |        |  |         |         |       |  |              |        |       |  |  |         |  |  |  |         |   |  |  |           |  
|General Corporate Expenses (1)   |  |                                             |         |        |  |         |         |       |  |              |        |       |  |  |         |  |  |  |         |   |  |  | (41,538   | )
|                                 |  |                                             |         |        |  |         |         |       |  |              |        |       |  |  |         |  |  |  |         |   |  |  |           |  
|Segment Profit and Loss EBITDA   |  |                                             |         |        |  |         |         |       |  |              |        |       |  |  |         |  |  |  |         |   |  |  | 203,733   |  
|                                 |  |                                             |         |        |  |         |         |       |  |              |        |       |  |  |         |  |  |  |         |   |  |  |           |  
|Depreciation                     |  |                                             |         |        |  |         |         |       |  |              |        |       |  |  |         |  |  |  |         |   |  |  | (94,880   | )
|                                 |  |                                             |         |        |  |         |         |       |  |              |        |       |  |  |         |  |  |  |         |   |  |  |           |  
|Operating income                 |  |                                             |         |        |  |         |         |       |  |              |        |       |  |  |         |  |  |  |         |   |  |  | 108,853   |  
|                                 |  |                                             |         |        |  |         |         |       |  |              |        |       |  |  |         |  |  |  |         |   |  |  |           |  



---



|    |                                                                                              
|--- | ---------------------------------------------------------------------------------------------
|(1) | Excluding depreciation of goodwill relative to
    the acquisition of Stena Offshore in 1994.

|                                 |  |                                             |         |        |  |         |         |       |  |              |         |       |  |  |         |  |  |  |         |   |  |  |           |  
|-------------------------------- |  | ------------------------------------------- | ------- | ------ |  | ------- | ------- | ----- |  | ------------ | ------- | ----- |  |  | ------- |  |  |  | ------- | - |  |  | --------- | -
|                                 |  |                                            
|                                 |  | For the year ended and at December 31, 1999
|                                 |  |                                            
|                                 |  |                                             |         | Asia   |  | Rest of |         |       |  | Consolidated
|                                 |  | North Sea                                   |         | Brazil |  | Pacific |         | World |  | Eliminations |         | Total
|                                 |  |                                             |         |        |  |         |         |       |  |              |         |      
|                                 |  |                                            
|                                 |  | In thousands of EUR                        
|Revenues from external customers |  |                                             | 506,067 |        |  |         | 129,920 |       |  |              | 116,740 |       |  |  | 264,299 |  |  |  |        |   |  |  | 1,017,026 |  
|Intersegment revenues            |  |                                             | 18,273  |        |  |         | 394     |       |  |              | 108     |       |  |  | 5,463   |  |  |  | (24,238 | ) |  |  |          |  
|                                 |  |                                             |         |        |  |         |         |       |  |              |         |       |  |  |         |  |  |  |         |   |  |  |           |  
|Total Revenues                   |  |                                             | 524,340 |        |  |         | 130,314 |       |  |              | 116,848 |       |  |  | 269,762 |  |  |  | (24,238 | ) |  |  | 1,017,026 |  
|                                 |  |                                             |         |        |  |         |         |       |  |              |         |       |  |  |         |  |  |  |         |   |  |  |           |  
|Segment Profit and Loss EBITDA   |  |                                             | 138,892 |        |  |         | 44,598  |       |  |              | 23,256  |       |  |  | 56,780  |  |  |  |        |   |  |  | 263,526   |  
|                                 |  |                                             |         |        |  |         |         |       |  |              |         |       |  |  |         |  |  |  |         |   |  |  |           |  
|General Corporate Expenses (1)   |  |                                             |         |        |  |         |         |       |  |              |         |       |  |  |         |  |  |  |         |   |  |  | (41,717   | )
|                                 |  |                                             |         |        |  |         |         |       |  |              |         |       |  |  |         |  |  |  |         |   |  |  |           |  
|Segment Profit and Loss EBITDA   |  |                                             |         |        |  |         |         |       |  |              |         |       |  |  |         |  |  |  |         |   |  |  | 221,809   |  
|                                 |  |                                             |         |        |  |         |         |       |  |              |         |       |  |  |         |  |  |  |         |   |  |  |           |  
|Depreciation                     |  |                                             |         |        |  |         |         |       |  |              |         |       |  |  |         |  |  |  |         |   |  |  | (84,878   | )
|                                 |  |                                             |         |        |  |         |         |       |  |              |         |       |  |  |         |  |  |  |         |   |  |  |           |  
|Operating income                 |  |                                             |         |        |  |         |         |       |  |              |         |       |  |  |         |  |  |  |         |   |  |  | 136,931   |  
|                                 |  |                                             |         |        |  |         |         |       |  |              |         |       |  |  |         |  |  |  |         |   |  |  |           |  



---



|    |                                                                                              
|--- | ---------------------------------------------------------------------------------------------
|(1) | Excluding depreciation of goodwill relative to
    the acquisition of Stena Offshore in 1994.

F-110



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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

|                                 |  |                                             |         |        |  |         |         |       |  |              |         |       |  |  |         |  |  |  |         |   |  |  |           |  
|-------------------------------- |  | ------------------------------------------- | ------- | ------ |  | ------- | ------- | ----- |  | ------------ | ------- | ----- |  |  | ------- |  |  |  | ------- | - |  |  | --------- | -
|                                 |  |                                            
|                                 |  | For the year ended and at December 31, 1998
|                                 |  |                                            
|                                 |  |                                             |         | Asia   |  | Rest of |         |       |  | Consolidated
|                                 |  | North Sea                                   |         | Brazil |  | Pacific |         | World |  | Eliminations |         | Total
|                                 |  |                                             |         |        |  |         |         |       |  |              |         |      
|                                 |  |                                            
|                                 |  | In thousands of EUR                        
|Revenues from external customers |  |                                             | 550,671 |        |  |         | 231,043 |       |  |              | 154,403 |       |  |  | 207,564 |  |  |  |         |   |  |  | 1,143,681 |  
|Intersegment revenues            |  |                                             | 18,800  |        |  |         | 3,402   |       |  |              | 332     |       |  |  | 13,176  |  |  |  | (35,710 | ) |  |  |          |  
|                                 |  |                                             |         |        |  |         |         |       |  |              |         |       |  |  |         |  |  |  |         |   |  |  |           |  
|Total Revenues                   |  |                                             | 569,471 |        |  |         | 234,445 |       |  |              | 154,735 |       |  |  | 220,740 |  |  |  | (35,710 | ) |  |  | 1,143,681 |  
|                                 |  |                                             |         |        |  |         |         |       |  |              |         |       |  |  |         |  |  |  |         |   |  |  |           |  
|Segment Profit and Loss EBITDA   |  |                                             | 153,214 |        |  |         | 56,695  |       |  |              | 38,034  |       |  |  | 34,737  |  |  |  |        |   |  |  | 282,680   |  
|                                 |  |                                             |         |        |  |         |         |       |  |              |         |       |  |  |         |  |  |  |         |   |  |  |           |  
|General Corporate Expenses (1)   |  |                                             |         |        |  |         |         |       |  |              |         |       |  |  |         |  |  |  |         |   |  |  | (39,173   | )
|                                 |  |                                             |         |        |  |         |         |       |  |              |         |       |  |  |         |  |  |  |         |   |  |  |           |  
|Segment Profit and Loss EBITDA   |  |                                             |         |        |  |         |         |       |  |              |         |       |  |  |         |  |  |  |         |   |  |  | 243,507   |  
|                                 |  |                                             |         |        |  |         |         |       |  |              |         |       |  |  |         |  |  |  |         |   |  |  |           |  
|Depreciation                     |  |                                             |         |        |  |         |         |       |  |              |         |       |  |  |         |  |  |  |         |   |  |  | (93,781   | )
|                                 |  |                                             |         |        |  |         |         |       |  |              |         |       |  |  |         |  |  |  |         |   |  |  |           |  
|Operating income                 |  |                                             |         |        |  |         |         |       |  |              |         |       |  |  |         |  |  |  |         |   |  |  | 149,726   |  
|                                 |  |                                             |         |        |  |         |         |       |  |              |         |       |  |  |         |  |  |  |         |   |  |  |           |  



---



|    |                                                                                              
|--- | ---------------------------------------------------------------------------------------------
|(1) | Excluding depreciation of goodwill relative to
    the acquisition of Stena Offshore in 1994.

Measurement of segment profit or loss by
location of subsidiary:

The following tables present net operating
revenues, operating income and identifiable assets by
geographical zone (by location of subsidiary):

|                                     |  |                                             |         |           |  |         |         |         |  |              |         |              |  |       |        |  |  |  |         |   |  |  |          |   |  |  |           |  
|------------------------------------ |  | ------------------------------------------- | ------- | --------- |  | ------- | ------- | ------- |  | ------------ | ------- | ------------ |  | ----- | ------ |  |  |  | ------- | - |  |  | -------- | - |  |  | --------- | -
|                                     |  |                                            
|                                     |  | For the year ended and at December 31, 2000
|                                     |  |                                            
|                                     |  |                                             |         | Asia      |  | Rest of |         |         |  | Consolidated
|                                     |  | France                                      |         | North Sea |  | Brazil  |         | Pacific |  | World        |         | Eliminations |  | Total
|                                     |  |                                             |         |           |  |         |         |         |  |              |         |              |  |      
|                                     |  |                                            
|                                     |  | In thousands of EUR                        
|Revenues from unaffiliated customers |  |                                             | 164,413 |           |  |         | 516,951 |         |  |              | 119,908 |              |  |       | 77,198 |  |  |  | 186,086 |   |  |  |          |   |  |  | 1,064,556 |  
|Revenues between geographic zones    |  |                                             | 110,003 |           |  |         | 93,038  |         |  |              | 5,246   |              |  |       | 643    |  |  |  | 7,131   |   |  |  | (216,061 | ) |  |  |           |  
|                                     |  |                                             |         |           |  |         |         |         |  |              |         |              |  |       |        |  |  |  |         |   |  |  |          |   |  |  |           |  
|Net operating revenues               |  |                                             | 274,416 |           |  |         | 609,989 |         |  |              | 125,154 |              |  |       | 77,841 |  |  |  | 193,217 |   |  |  | (216,061 | ) |  |  | 1,064,556 |  
|                                     |  |                                             |         |           |  |         |         |         |  |              |         |              |  |       |        |  |  |  |         |   |  |  |          |   |  |  |           |  
|Operating income                     |  |                                             |         |           |  |         |         |         |  |              |         |              |  |       |        |  |  |  |         |   |  |  |          |   |  |  |           |  
|(before corporate expenses)          |  |                                             | 64,055  |           |  |         | 71,833  |         |  |              | 22,883  |              |  |       | 5,656  |  |  |  | (11,188 | ) |  |  |          |   |  |  | 153,239   |  
|General corporate expenses(1)        |  |                                             |         |           |  |         |         |         |  |              |         |              |  |       |        |  |  |  |         |   |  |  |          |   |  |  | (44,386   | )
|                                     |  |                                             |         |           |  |         |         |         |  |              |         |              |  |       |        |  |  |  |         |   |  |  |          |   |  |  |           |  
|Operating income                     |  |                                             |         |           |  |         |         |         |  |              |         |              |  |       |        |  |  |  |         |   |  |  |          |   |  |  | 108,853   |  
|                                     |  |                                             |         |           |  |         |         |         |  |              |         |              |  |       |        |  |  |  |         |   |  |  |          |   |  |  |           |  
|Equity income of investee            |  |                                             |         |           |  |         |         |         |  |              |         |              |  |       |        |  |  |  | 2,672   |   |  |  |          |   |  |  | 2,672     |  
|                                     |  |                                             |         |           |  |         |         |         |  |              |         |              |  |       |        |  |  |  |         |   |  |  |          |   |  |  |           |  
|Tangible assets                      |  |                                             | 180,955 |           |  |         | 188,906 |         |  |              | 95,111  |              |  |       | 23,054 |  |  |  | 14,214  |   |  |  |          |   |  |  | 502,240   |  
|                                     |  |                                             |         |           |  |         |         |         |  |              |         |              |  |       |        |  |  |  |         |   |  |  |          |   |  |  |           |  



---



|    |                                                                                              
|--- | ---------------------------------------------------------------------------------------------
|(1) | Including depreciation of goodwill relative to
    the acquisition of Stena Offshore in 1994.

F-111



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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

|                                     |  |                                             |         |       |  |        |         |         |  |         |        |              |  |              |         |  |  |  |         |  |  |  |          |   |  |  |           |  
|------------------------------------ |  | ------------------------------------------- | ------- | ----- |  | ------ | ------- | ------- |  | ------- | ------ | ------------ |  | ------------ | ------- |  |  |  | ------- |  |  |  | -------- | - |  |  | --------- | -
|                                     |  |                                            
|                                     |  | For the year ended and at December 31, 1999
|                                     |  |                                            
|                                     |  |                                             |         | North |  |        |         | Asia    |  | Rest of |        |              |  | Consolidated
|                                     |  | France                                      |         | Sea   |  | Brazil |         | Pacific |  | World   |        | Eliminations |  | Total       
|                                     |  |                                             |         |       |  |        |         |         |  |         |        |              |  |             
|                                     |  |                                            
|                                     |  | In thousands of EUR                        
|Revenues from unaffiliated customers |  |                                             | 153,946 |       |  |        | 541,109 |         |  |         | 65,546 |              |  |              | 115,962 |  |  |  | 140,463 |  |  |  |         |   |  |  | 1,017,026 |  
|Revenues between geographic zones    |  |                                             | 140,839 |       |  |        | 78,998  |         |  |         | 4,448  |              |  |              | 1,020   |  |  |  | 5,319   |  |  |  | (230,624 | ) |  |  |          |  
|                                     |  |                                             |         |       |  |        |         |         |  |         |        |              |  |              |         |  |  |  |         |  |  |  |          |   |  |  |           |  
|Net operating revenues               |  |                                             | 294,785 |       |  |        | 620,107 |         |  |         | 69,994 |              |  |              | 116,982 |  |  |  | 145,782 |  |  |  | (230,624 | ) |  |  | 1,017,026 |  
|                                     |  |                                             |         |       |  |        |         |         |  |         |        |              |  |              |         |  |  |  |         |  |  |  |          |   |  |  |           |  
|Operating income                     |  |                                             |         |       |  |        |         |         |  |         |        |              |  |              |         |  |  |  |         |  |  |  |          |   |  |  |           |  
|(before corporate expenses)          |  |                                             | 33,525  |       |  |        | 123,062 |         |  |         | 8,823  |              |  |              | 13,558  |  |  |  | 2,528   |  |  |  |         |   |  |  | 181,496   |  
|General corporate expenses (1)       |  |                                             |         |       |  |        |         |         |  |         |        |              |  |              |         |  |  |  |         |  |  |  |          |   |  |  | (44,565   | )
|                                     |  |                                             |         |       |  |        |         |         |  |         |        |              |  |              |         |  |  |  |         |  |  |  |          |   |  |  |           |  
|Operating income                     |  |                                             |         |       |  |        |         |         |  |         |        |              |  |              |         |  |  |  |         |  |  |  |          |   |  |  | 136,931   |  
|                                     |  |                                             |         |       |  |        |         |         |  |         |        |              |  |              |         |  |  |  |         |  |  |  |          |   |  |  |           |  
|Equity income of investees           |  |                                             |         |       |  |        |         |         |  |         |        |              |  |              |         |  |  |  | 2,573   |  |  |  |          |   |  |  | 2,573     |  
|                                     |  |                                             |         |       |  |        |         |         |  |         |        |              |  |              |         |  |  |  |         |  |  |  |          |   |  |  |           |  
|Tangible assets                      |  |                                             | 109,405 |       |  |        | 179,902 |         |  |         | 94,948 |              |  |              | 38,682  |  |  |  | 15,837  |  |  |  |          |   |  |  | 438,774   |  
|                                     |  |                                             |         |       |  |        |         |         |  |         |        |              |  |              |         |  |  |  |         |  |  |  |          |   |  |  |           |  



---



|    |                                                                                              
|--- | ---------------------------------------------------------------------------------------------
|(1) | Including depreciation of goodwill relative to
    the acquisition of Stena Offshore in 1994.

|                                     |  |                                             |         |       |  |        |         |         |  |         |         |              |  |              |         |  |  |  |         |  |  |  |          |   |  |  |           |  
|------------------------------------ |  | ------------------------------------------- | ------- | ----- |  | ------ | ------- | ------- |  | ------- | ------- | ------------ |  | ------------ | ------- |  |  |  | ------- |  |  |  | -------- | - |  |  | --------- | -
|                                     |  |                                            
|                                     |  | For the year ended and at December 31, 1998
|                                     |  |                                            
|                                     |  |                                             |         | North |  |        |         | Asia    |  | Rest of |         |              |  | Consolidated
|                                     |  | France                                      |         | Sea   |  | Brazil |         | Pacific |  | World   |         | Eliminations |  | Total       
|                                     |  |                                             |         |       |  |        |         |         |  |         |         |              |  |             
|                                     |  |                                            
|                                     |  | In thousands of EUR                        
|Revenues from unaffiliated customers |  |                                             | 144,021 |       |  |        | 581,550 |         |  |         | 156,000 |              |  |              | 152,637 |  |  |  | 109,473 |  |  |  |         |   |  |  | 1,143,681 |  
|Revenues between geographic zones    |  |                                             | 112,758 |       |  |        | 82,960  |         |  |         | 3,244   |              |  |              | 8,258   |  |  |  | 12,992  |  |  |  | (220,212 | ) |  |  |          |  
|                                     |  |                                             |         |       |  |        |         |         |  |         |         |              |  |              |         |  |  |  |         |  |  |  |          |   |  |  |           |  
|Net operating revenues               |  |                                             | 256,779 |       |  |        | 664,510 |         |  |         | 159,244 |              |  |              | 160,895 |  |  |  | 122,465 |  |  |  | (220,212 | ) |  |  | 1,143,681 |  
|                                     |  |                                             |         |       |  |        |         |         |  |         |         |              |  |              |         |  |  |  |         |  |  |  |          |   |  |  |           |  
|Operating income                     |  |                                             |         |       |  |        |         |         |  |         |         |              |  |              |         |  |  |  |         |  |  |  |          |   |  |  |           |  
|(before corporate expenses)          |  |                                             | 51,054  |       |  |        | 106,178 |         |  |         | 25,495  |              |  |              | 6,180   |  |  |  | 2,840   |  |  |  |         |   |  |  | 191,747   |  
|General corporate expenses(1)        |  |                                             |         |       |  |        |         |         |  |         |         |              |  |              |         |  |  |  |         |  |  |  |          |   |  |  | (42,021   | )
|                                     |  |                                             |         |       |  |        |         |         |  |         |         |              |  |              |         |  |  |  |         |  |  |  |          |   |  |  |           |  
|Operating income                     |  |                                             |         |       |  |        |         |         |  |         |         |              |  |              |         |  |  |  |         |  |  |  |          |   |  |  | 149,726   |  
|                                     |  |                                             |         |       |  |        |         |         |  |         |         |              |  |              |         |  |  |  |         |  |  |  |          |   |  |  |           |  
|Equity income of investees           |  |                                             | 2,042   |       |  |        |        |         |  |         |        |              |  |              |        |  |  |  | 3,852   |  |  |  |         |   |  |  | 5,894     |  
|                                     |  |                                             |         |       |  |        |         |         |  |         |         |              |  |              |         |  |  |  |         |  |  |  |          |   |  |  |           |  
|Tangible assets                      |  |                                             | 138,729 |       |  |        | 185,728 |         |  |         | 29,337  |              |  |              | 2,065   |  |  |  | 15,798  |  |  |  |         |   |  |  | 371,657   |  
|                                     |  |                                             |         |       |  |        |         |         |  |         |         |              |  |              |         |  |  |  |         |  |  |  |          |   |  |  |           |  



---



|    |                                                                                              
|--- | ---------------------------------------------------------------------------------------------
|(1) | Including depreciation of goodwill relative to
    the acquisition of Stena Offshore in 1994.

Note 18  Commitments and
contingencies

Performance
guarantees and contract warranties

Contract performance guaranteed by the Group by
way of bank guarantees amounted to EUR 88,615 thousand in
2000 and 86,129 thousand in 1999.

The total warranties directly issued by the Group
on commercial contracts amounted to EUR 1,261,967 thousand
at December 31, 2000 (EUR 1,435,646 thousand at
December 31, 1999).

Other financial warranties issued by the Group
amounted EUR 94,289 thousand at December 31, 2000
(EUR 129,162 thousand at December 31, 1999).

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.

F-112



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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

Rental

Rental expense in 2000 was EUR 13,615
thousand (including rental expenses of vessels for a total
amount of EUR 7,353) compared with EUR 21,115 thousand
in 1999.

At December 31, 2000 minimum rental
commitments under all capital leases and operating leases for
future years are as follows:

|                                                |  |                     |        |           |  |  |        | 
|----------------------------------------------- |  | ------------------- | ------ | --------- |  |  | ------ | 
|                                                |  | Capital             |        | Operating
|                                                |  | leases              |        | leases   
|                                                |  |                     |        |          
|                                                |  |                    
|                                                |  | In thousands of EUR
|2001                                            |  |                     | 1,811  |           |  |  | 8,949  | 
|2002                                            |  |                     | 1,794  |           |  |  | 8,442  | 
|2003                                            |  |                     | 1,830  |           |  |  | 9,459  | 
|2004                                            |  |                     | 1,867  |           |  |  | 2,615  | 
|2005                                            |  |                     | 971    |           |  |  | 946    | 
|2006 and thereafter                             |  |                     |        |           |  |  | 524    | 
|                                                |  |                     |        |           |  |  |        | 
|Total minimum lease payments                    |  |                     | 8,273  |           |  |  | 30,935 | 
|Less: amounts representing interest             |  |                     | (1,670 | )         |  |  |       | 
|                                                |  |                     |        |           |  |  |        | 
|Present value of net minimum lease
    payments |  |                     | 6,583  |           |  |  |       | 
|                                                |  |                     |        |           |  |  |        | 

During 1998, 1999 and 2000, no new capital lease
obligation was incurred. These obligations are included in
Issuance of long-term debt and the related assets in
Purchases of property, plant, vessels and equipment
in the Consolidated Statements of Cash Flows.

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. Fourth quarter 1998 operating income was
reduced by EUR 21.7 million as a consequence.

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.

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 2,899 thousand in 2000, EUR 2,720 thousand in 1999
and EUR 2,597 thousand in 1998.

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

F-113



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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

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 15,373 thousand in 2000, EUR 24,525
thousand in 1999 and EUR 41,145 thousand in 1998.

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 8,288 thousand in 2000.

Note 20  Customer Backlog
(Unaudited)

The Group had firm unfilled customer orders
(backlog) for its products and services of
approximately EUR 931 million,
EUR 472 million and EUR 861 million at
December 31, 2000, at December 31, 1999 and at
December 31, 1998, respectively. An order is generally
completed within one to three calendar years following the year
in which it is placed.

Note 21  Subsequent
Events

On January 5, 2001, the Group acquired the
Aker Maritime Deepwater Division for U.S.$513 million in
cash plus the assumption of U.S.$112 million in net debt.
The acquisition price is still subject to various price
adjustment mechanisms. The acquisition will be accounted for as
a purchase.

To finance this acquisition, the Group expended
approximately U.S.$285 million of cash and borrowed
U.S.$370 million in bank debt pursuant to a short term
credit agreement the Group expects to refinance on a long term
basis. Price adjustment apart, the Group does not expect to
occur any other material costs than interests on the acquisition
debt.

In March 2001, the Petrobras platform P36 in the
Roncador field sank. This accident has no impact on the 2000
accounts. However, backlog figures include a
EUR 169.8 million amount related to this project. It
is impossible at this stage, to assess the effect this accident
could have on the execution timetable of this project.

Note 22  List of principal
consolidated subsidiaries and equity accounted
companies

|                                          |  |                              |  |               |     | 
|----------------------------------------- |  | ---------------------------- |  | ------------- | --- | 
|                                          |  |                              |  | Percentage of
|                                          |  |                              |  | interest in  
|Consolidated Companies                    |  | Location                     |  | consolidation
|                                          |  |                              |  |              
|Coflexip                                  |  | Paris, France                |  |               | 100 | 
|Cofleximmo                                |  | Paris, France                |  |               | 100 | 
|Coflexip Stena Offshore Deep Water        |  | Paris, France                |  |               | 100 | 
|Coflexip Stena Offshore International     |  | Boulogne Billancourt, France |  |               | 100 | 
|Coflexip Développement                    |  | 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 | 
|Northern Coasters Ltd                     |  | Aberdeen, United Kingdom     |  |               | 100 | 
|Technical Diving Services Ltd             |  | Aberdeen, United Kingdom     |  |               | 100 | 
|Anchortech 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 | 

F-114



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##### Table of Contents



THE COFLEXIP STENA OFFSHORE GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

|                                                          |  |                                     |  |               |      | 
|--------------------------------------------------------- |  | ----------------------------------- |  | ------------- | ---- | 
|                                                          |  |                                     |  | Percentage of
|                                                          |  |                                     |  | interest in  
|Consolidated Companies                                    |  | Location                            |  | consolidation
|                                                          |  |                                     |  |              
|DUCO Ltd                                                  |  | Newcastle, United Kingdom           |  |               | 100  | 
|Coflexip Stena Offshore Norge A/S                         |  | Oslo, Norway                        |  |               | 100  | 
|Coflexip Stena Offshore A/S                               |  | 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  | 
|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  | 
|South East Asia Marine Engineering &
    Construction Ltd |  | Calcutta, India                     |  |               | 58.2 | 

F-115



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##### 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-COFLEXIP



| |     |                 
| | --- | ----------------
| | By: | /s/ Daniel Valot

| |                                         
| | ----------------------------------------
| |                                         
| | Name: Daniel Valot                      
| | Title:  Chairman of the Management Board

Date: June 11, 2002



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##### Table of Contents



Exhibits



|1.1  |  | By-laws, as amended, of Technip-Coflexip.                                                                                                                                                                                                                                                                                   
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|4.1  |  | Share Purchase Agreement dated October 27, 2000, between Coflexip and
Aker Maritime ASA and Aker Maritime Norge (incorporated by reference to
Exhibit 2 to Coflexips Annual Report on Form 20-F (Commission File No.
0-22714) filed on June 18, 2001).                                                                     
|    
|4.2  |  | Credit Facilities for Technip arranged by J.P. Morgan plc and CDC IXIS,
with Chase Manhattan International Limited as Facility Agent (incorporated
by reference to Exhibit 10.1 to Post-Effective Amendment No. 2 to
Technips Registration Statement on Form F-4 (Registration No. 333-13808)
filed on September 27, 2001).
|    
|4.3  |  | English translation of the Memorandum of Understanding, dated July 2,
2001, by and among Technip, ISIS and Institut Français du Pétrole
(incorporated by reference to Exhibit 3 of amendment No. 2 to the
Statement on Schedule 13D filed by Technip on July 3, 2001).                                                      
|    
|8.1  |  | Subsidiaries of Technip-Coflexip (see Note 29 to the Consolidated
Financial Statements).                                                                                                                                                                                                                                    
|    
|10.1 |  | Offering Circular (Note dinformation definitive) dated January 22, 2002,
relating to the issue and listing on the Premier Marchéof Euronext Paris
S.A. of bonds convertible into new shares and/or exchangeable for existing
shares of Technip-Coflexip.