Letter from the Chairman

Dear Shareholders, Article 123-ter of the Consolidated Finance Act made it a requirement for listed companies to publish a ‘Compensation report’ twenty-one days before the Shareholders’ Meeting. Subsequently, Consob Resolution No. 18049 of December 23, 2011, which entered into force on December 31, 2011, introduced Article 84-quater of the Consob Issuers Regulation setting down requirements relating to the publication and content of the report.

In compliance with the applicable legislation, this report comprises two separate sections. The first section, ‘Compensation Policy’, sets out the 2012 Guidelines adopted by Saipem for the compensation of company Directors and Senior Managers with strategic responsibilities, indicating the actors involved in the policy setting process and the procedures employed to implement it.

The second section, Compensation and other information, describes actions carried out in connection with the compensation of Directors and Senior Managers with strategic responsibilities and provides details on compensation actually paid during 2011.

The Compensation and Nomination Committee gave a favourable assessment of the Compensation policy for Directors and Senior Managers with strategic responsibilities adopted by the company in 2011 and of its application, in terms of adequacy and overall consistency. This assessment provided an important point of reference for the definition and assessment of the 2012 Compensation Policy proposal.

The Committee feels that, in light of the current competitive conditions globally in the company’s market areas, the proposed Compensation Policy is consistent with the aim of attracting, retaining and motivating highly skilled management professionals and aligning the interests of management with the priority objective of value creation for the shareholders in the medium-long term. It also believes that the proposed Compensation Policy achieves a fair and correct balance between the challenge of strategic objectives, benchmark market practices, applicable statutory requirements and the need to ensure management is adequately rewarded.

This Compensation Report was approved by the Board of Directors on March 13, 2012. The first section of the report, concerning the 2012 Compensation Policy, is subject to a non-binding resolution of the Shareholders’ Meeting, in accordance with the applicable legislation.

The Compensation and Nomination Committee is of the opinion that this Compensation Report provides a full and comprehensive review of the compensation policies adopted by Saipem and represents a significant step towards transparent communication with shareholders and investors, in compliance with the recommendations set out in the applicable regulations.

March 13, 2012

The Chairman
Compensation and Nomination Committee

Gabriele Galateri di Genola

Firma Gabriele Galateri di Genola