© SBM Offshore 2015. All rights reserved.

© SBM Offshore 2015. All rights reserved. www.sbmoffshore.com

12/8/2016

© SBM Offshore 2015. All rights reserved. www.sbmoffshore.com 212/8/2016

Our Brazilian Journey

SBM overview SBM Brazil 2014 What are the risks? How to revert this situation?


SBM FPU Lease Fleet Portfolio

CANADA End date of LeaseExcluding extension options

MOPU – Deep Panuke Up to 2021

USA End date of LeaseExcluding extension options

Semi-Sub –Thunder Hawk Up to 2025

FPSO – Turritela Up to 2025

BRAZIL End date of LeaseExcluding extension options

FPSO – Espírito Santo Up to 2024

FPSO – Capixaba Up to 2022

FPSO – Cidade de Anchieta Up to 2030

FPSO – Cidade de Paraty Up to 2033

FPSO – Cidade de Ilhabela Up to 2034

FPSO – Cidade de Maricá Up to 2035

FPSO – Cidade de Saquarema Up to 2035

FPSO – Frade Turn-key

FPSO – P-57 Turn-key

FPSO – OSX-2 Turn-key

MYANMAR End date of LeaseExcluding extension options

FSO – Yetagun Up to 2018

MALAYSIA End date of LeaseExcluding extension options

FPSO – Kikeh Up to 2022

EQUATORIAL GUINEA End date of LeaseExcluding extension options

FPSO – Aseng Up to 2026

CONGO End date of LeaseExcluding extension options

LPG – Nkossa II Up to 2018

ANGOLA End date of LeaseExcluding extension options

FPSO – Mondo Up to 2022

FPSO – Saxi Batuque Up to 2023

FPSO – N’Goma Up tp 2026

Under Construction Lease in Operation Turn-Key (Brazil only)

FPSO – Falcon

FPSO – Brasil

Turn-key projects (Brazil only)

13 FPSOs, 2 FSOs, 1 Semi-Sub, 1 MOPU – 272 years of operationsAverage remaining lease duration: 13.9 years

Laid Up

Positive Local Impact – Annual Footprint (2014)

Built record-breaking 23 modules

over the period of 3 years

Estaleiro BRASA

* Measured by independent consulting firm, using United Nations Methodology


11th and 12th

Rounds

Project Capacity (Barrels/

Day)

1st OIL HULL TOPSIDE/ INTEGRATION

LOCAL CONTENT

ROUND ANP COMMITMENT

CLIENT´S REQUEST

ACHIEVED

P-57 180 kbpd Dez/2010 Keppel Shipyard

Singapore

Dynamac Singapore /

Brasfels

0 0% 65% 68.9%

Cidade de Paraty

120 kbpd Mai/2013 Keppel Shipyard

Singapore

Brasfels 2 30% 65% 72.3%

Cidade de Ilhabela

150 kbpd Sept/2014 SBM / XangiChina

Brasa 2 30% 65% 66.13%

Cidade de Marica

150 kbpd Jan/2016 SBM / Xangi China

Brasa 2 30% 65% 68,78%

Cidade de Saquarema

150 kbpd Mar/2016 SBM / Xangi China

Brasa 2 30% 65% 68,5%

Local content achievements


Experience Matters – the Brazil Case Study

Planning;

Visibility;

Continuity.

Experienced

contractors are able to

deliver projects on time

-10 0 10 20 30 40 50 60

Delivery vs. Schedule (Months)

Non-SBM

Contractors

Issues in the

Market

Balance sheet concerns

Cost overruns

Schedule slip

Performance reliability

SBM delivered 5 out of

8 closest to schedule


Our Journey in Brazil….

1997

Operation

2014/152012/13 2016…2010

RioOffice

P-57 project support

Engineering support

Local Content and local

vendors management

BRASA/ BSL – shipyard for

assembly and integration

Repair Works

Installation Barge / PELICANO

Employees’ numbers

increase

CDI, CDM and CDS

22 modules in Brasa

9 in EBSE

Accountability for P&L

Brownfield and Fleet

Support Product Lines

Engineering Centre

Brazilian Fleet Operation

4 Shorebases

Integration between

project and operations

organizations

Communities

Accountable for all BR

FPSOs

Sustainable basis for

growthFPSO Frade

FPSO Espadarte

FPSO Brasil

FPSO Marlim Sul

FPSO Capixaba

FPSO Cidade de Paraty

FPSO Cidade de Ilhabela

FPSO Cidade de Maricá

FPSO Cidade de Saquarema

RioRegional Centre

BrazilRegional Centre


S-curve of Cidade de Ilhabela, Maricá and Saquarema.

• Repeatability gains (Replicantes)


Product Life ExtensionLeader in FPSO relocation

World class after sales

Operations240+ years of FPSO experience

99%+ production uptimeLargest international FPSO fleet

InstallationDedicated fleetUnparalleled experienceExtensive project capability

ConstructionStrategic partnerships Unrivalled project experience

ProcurementIntegrated supply chainGlobal efficienciesLocal sourcing

Engineering55 years of industry firstsLeading edge technology

SAFE

Delivery Along Full Product Lifecycle


ORIGINAL LC x LC REDUCTION

Round 2: Reduced Bid

Round 1: PSA Original


Proposed approach

o Local Content requirement needs indeed to come down to reasonable levels (ie: valves

5% instead of the current 90%)

o Focus needs to be given to specific areas where Brazil is most competitive (ie: module

fabrication/integration should be incentivised; hull fabrication should not)

o Global Local Content with minimum level for FPSO (ie: 40%) unit would provide a

competitive environment for the market to readjust on a sustainable business outlook

o It is imperative that the market move towards an incentive based approach to LC in order

to ensure costs are reduced and past investments are capitalized

o Pragmatic approach to regulatory reforms are needed (ie: Repetro needs to be

reinstated with reasonable timeframe and reach beyond Operators)

o Tax reforms needed to increase competitiveness of Brazilian supplier base (ie: RJ state

ICMS tax on O&G industry)

o The need to open the market to multiple Operators to allow for faster and more spread

investment in new projects (ie: single operationship law on pre-salt needs to be revoked)

o New government and entities (such as ANP) is in a moment where they are willing to

listen. O&G market needs to unite and provide uniform message of minimum agenda.

o Planning, visibility and continuity are key to allow O&G market to structure itself in a

competitive way (ie: planned and published agenda on gov’t auction rounds)

o Compliance needs to be held as an underlying principle of new business approach

Local Content – Proposed approach

© SBM Offshore 2015. All rights reserved.

Documents

Transcript of © SBM Offshore 2015. All rights reserved.