Mid-term

Business Plan

2020 February 7th, 2018

Contents

Review of Previous Mid-term Business Plan

(2015-2017)

Environment

Result

Activity

Mid-term Business Plan 2020

Outlook of Long Term Energy Consumptions

Current Market

Strategy of Mid-term Business Plan 2020

Target for 2020 - Quantitative Goals

Mission and Vision

APPENDIX

2

Review of Previous Mid-term

Business Plan (2015-2017)

Review of Previous Mid-term Business Plan

(2015-2017) - Environment

Reduced number of projects due to low oil price and political instability in Brazil

4 From ：Number of projects: EMA, “Floating Production Systems Outlook Report 2018 Q1 Executive Summary” *Floating production facility excluding FSO & MOPU

WTI oil price : EIA

12

Number of

Projects*

14

8

10

4

6

0

2

80

100

40

60

0

20

2014

120

WTI Oil price（USD/bbl.）

Previous Mid-term Business Plan

2013 2012 2011 2015 2016 2017

140

Strong increase of net income despite the revenue drop

Review of Previous Mid-term Business Plan

(2015-2017) - Result

5

50

0

100

150

200

Revenue (USD MM)

Target of Previous Mid-term Business Plan Net Profit (USD MM)

Previous Mid-term Business Plan

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

0 2014 2013 2012 2011 2015 2016 2017

Revenue

3,500

Net Profit

100

ROE

10%

Review of Previous Mid-term Business Plan

(2015-2017) - Activity

Action Plans were steadily achieved, and will be evolved into the new Mid-term Business Plan.

6

Enhanced asset management with active resource allocation.

Achieved EPCI and O&M service which enable longer and more stable

production by effective use of accumulated know-how in O&M for each

FEED/EPCI/O&M.

Improved EPCI cost competitiveness and shortened delivery time.

Reduced cost of O&M.

Continued research of technology for seabed mining.

Continued R&D of technology for offshore wind power.

Developed FSRWP®.

Enhanced group cash management for efficient use of funds.

Asset Integrity Enhancement

Strengthened Competitiveness

Execution of R&D

Efficient Organization

Asset Integrity: To provide with design, facility and production service

for long-term safe & steady oil and gas production.

FEED: Front End Engineering Design

EPCI: Engineering, Procurement, Construction & Installation

O&M: Operation & Maintenance

Mid-term Business Plan 2020

Outlook of Long Term Energy Consumption

Oil will stay as an important source of energy, whereas Gas will rise sharply.

8 from ： IEA, “World Energy Outlook 2016” *mtoe: million tonnes of oil equivalent

4,266 4,474 4,630 4,775

2,893 3,141

3,686

4,313

Total energy consumption（mtoe/y）

3,456

1,937

2,259

2040 2030 2020 2014 2040 2030 2020 2014 2040 2030 2020 2014

2040 2030 2020 2014

Renewable energy consumption（mtoe/y） Gas consumption（mtoe/y） Oil consumption（mtoe/y）

2,827

17,865

16,185

14,576

13,684

Current Market

Business conditions have improved and numbers of prospective projects are coming.

9

Bidding & Final Design

Planning

Appraisal

Numbers of projects using floating oil and gas production facilities (as of September 2017)

from ：EMA, “2017 Q4 FPS Report" *Australia & New Zealand includes one project in bidding and final design stage in Pacific.

5 5

4 14

3

10 16

9

2 7

2

Canada

GOM

Brazil

Other S. America & Caribbean

1 6

2

11 24

7

6

11

1 13

1

Southwest Asia & Middle East

Australia & New Zealand

Southeast Asia

China

2 15

6

3 3

6

8 26

9

Africa

Mediterranean

North Sea

48 135

56

World Total

Strategy of Mid-term Business Plan 2020

10

Maximize LIFECYCLE VALUE

GAS R&D Digitalization

Development of new business

Penetrate into gas market Evolution of Asset Integrity

Asset Integrity

Digitalization Continuous investment in R&D

01

02

03

04

LIFECYCLE VALUE : The value which MODEC provides with stakeholders, i.e.,

community, customer, partner and our shareholders through the

whole life of the FPSO, from design to operation.

Strategy of Mid-term Business Plan 2020

1.Evolution of Asset Integrity

11

Evolution of Asset Integrity

IT

Platform

HR

Development

O&M EPCI FEED

Global

Organization

Maximizing Lifecycle Value

Optimization Renewal of ERP Investment in

Next leaders/specialists

Integrated Management System

O&M FEED

KPI management aiming to

maximize lifecycle value

Massive amount of operational data is our key asset of competence.

We will move forward with a digitalization program to enhance the lifecycle value.

Strategy of Mid-term Business Plan 2020

2. Digitalization

12

Reduced maintenance cost

Increased uptime

Optimized FPSO design & EPCI

- Targeting to achieve O&M

automation by applying robotics

Advanced Analytics

FPSO operational data

Enhanced efficiency leveraging IoT

Safe & Steady operation

Strategy of Mid-term Business Plan 2020

3. Penetration into gas market

Expected volume of investment in floating gas related facility

■Considering alliance/collaboration with 3rd parties if necessary.

13

Australasia

Southeast Asia

Europe

South America

North America & the Caribbean

Africa

Middle East

from ：MODEC

Accumulated volume of

market in 2018-2020

South Asia

Strategy of Mid-term Business Plan 2020

4. Continuous investment in R&D

14

Offshore fleet repair

Development and materialization of innovative

in-situ fleet repair method using CFRP

Offshore wind power

Research for low cost

offshore installation

Seabed mining

development

Leading a Japanese

national project

Target for 2020 - Maximize LIFECYCLE VALUE

15

USD 4,000 MM 2 vessels/year

1 vessel

6 vessels in 2018

- expand up to 2020

USD 200 MM

12%

Revenue Award （FPSO）

Award （Gas）

Net Profit

ROE

2020

Digitalization

Mission and Vision

- Commitment to leading the offshore industry

MISSION

MODEC delivers and safely operates high-quality, innovative

floating solutions for the offshore industry.

VISION

To be the global leader in delivering and operating innovative

and reliable floating solutions by cultivating diverse and talented

teams that work with integrity, communicate openly, serve the

community and protect the environment.

16

APPENDIX

Outlook of Oil Price

Both scenario 1 and 2 show steady oil price.

18

2030 2040

73

80

110

125

85

78

Scenario1

Energy demand will increase steadily due to the rise of world

population, growth of living standards and urbanization in

developing countries.

Scenario2

Energy demand will increase but that will be offset by improved

energy efficiency in industry and home, which is enabled by

widespread low-energy-consuming equipment.

from ： IEA, "World Energy Outlook 2016"

2020

Unit：USD/bbl

Continue to accumulate experience

19

y

Charter（fixed） Charter（option） O&M

20

04

20

06

20

08

20

10

20

12

20

14

20

16

20

18

20

20

20

22

20

24

20

26

20

28

20

30

15y

Charter/O&M (as of February 2018)

(1) Petrobras Mero Pilot FPSO Petrobras

(2) FPSO Carioca MV30 Petrobras

(3) FPSO Cidade de Campos dos Goytacazes MV29 Petrobras

1 FPSO Prof. John Evans Atta Mills Tullow

2 FPSO Cidade de Caraguatatuba MV27 Petrobras

3 FPSO Cidade de Itaguaí MV26 Petrobras

4 FPSO Cidade de Mangaratiba MV24 Petrobras

5 FPSO Cidade de São Paulo MV23 Petrobras

6 FPSO Cidade de Angra dos Reis MV22 Petrobras

7 FPSO Cidade de Santos MV20 Petrobras

8 FPSO Cidade de Niterói MV18 Petrobras

9 FSO Rang Dong MV17 JVPC

10 FSO Cidade de Macaé MV15 Petrobras

11 FPSO Cidade do Rio de Janeiro MV14 Petrobras

12 FSO Rong Doi MV12 KNOC

13 FPSO Baobab Ivoirien MV10 CNR

14 FPSO MODEC Venture 11 Santos

(15) FPSO Stybarrow Venture MV16 available

1 FPSO Raroa OMV

2 FPSO Kwame Nkrumah MV21 Tullow

3 FPSO Pyrenees Venture BHPB

4 FPSO Fluminense Shell 15y

17.5y

10y

7y +

5y

10y

7y

8y

20y

9y

9y

12y

15y

20y

20y

20y

20y

10y

20y

21y

22y

7.5y

5y

More than

200 years of

O&M

45＋α

EPCI

5y+

20

Disclaimer

The information contained in this material is based on a set of assumptions and it is not

guaranteed as to its materialization of financial visions or corporate strategies.