SBM Sustainability Report 2010

Sustainability Report 2010

2 SBM Offshore – Sustainability Report 2010FPSO P-57 in Brazil

Technology Creating

Value

SBM Offshore – Sustainability Report 2010 3 SBM Offshore – CSR Report 2010 3

Technology Creating

Value

4 SBM Offshore – Sustainability Report 2010

Renewable Marine Energy

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91

SBM Offshore's 12 Life-Saving Rules and Message of Corporate Head of HSSE

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40Renewable Energy Introduction

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90

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06

Interview of Tony Mace, CEO of SBM Offshore

Local Investments

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SBM Offshore – Sustainability Report 2010 5

Local Content

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People Reviews and Message of Corporate HR Director

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Supply Chain

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86Local Workforce

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Local Content Introduction by Francis Blanchelande, COO of SBM Offshore

Interviews and Sustainable Initiatives

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Offshore Wind Energy

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Interview with CEO of SBM Offshore

“ The importance of sustainable business to SBM Offshore”

Sustainability is tied up with SBM Offshore’s business strategy as a whole. Concern for its employees is at the centre of the Company’s sustainability strategy. In an interview made by teleconference from the Company’s Dutch headquarters in Schiedam, with SBM Offshore’s CEO Tony Mace in Monaco, he emphasizes that “human capital is the Company’s greatest asset.”

By Yvonne van der Heijden

As an engineering contractor, SBM Offshore has been involved in the design, supply and leasing of offshore energy related equip-ment for over fifty years. Mace explains

that “we aim to manage our operations in a manner that complies with the high-est standards of business practice. We always had a policy of looking after the health and safety of our employees and have broadened this gradually to include subcontractors we do business with.”

Compared to its competitors, accord-ing to Mace, SBM Offshore stands out in developing health, safety, and security Company policies. “We have top of the line procedures in place and we continue to introduce new safety initiatives.” For instance, in 2010, SBM Offshore internally adopted “12 Life-Saving Rules” for all of its more than 5,700 employees worldwide. This scheme identifies twelve types of activities which statistically have caused the most accidents for employees working in the offshore industry; whether those activities take place at work on a platform, office or construction site or driving to work. Mace stated that “these rules range from entering an enclosed space in a construction yard without first checking if the space is safe, to speed-ing while driving or not wearing your seatbelt.”

The training of all personnel also focuses on the ability to look out for oneself. “Of course the Company provides the frame-work and processes for a healthy and safe work environment through safety training, design, equipment, and so on”, notes Mace. “But at the end of the day everybody has to be very much aware of their own safety as well. Eventually, every individual contributes to the over-all achievement of our goal, which is of course to have zero accidents.”

Tony Mace, CEO of SBM

Offshore


Human capital is the Company’s greatest asset

Following the initial development, in line with Angolan wishes to also construct off-shore facilities in Angola, the Company with its Angolan partners started to develop an FPSO integration and construction yard in an area of Angola which has low economic activity and high unemployment. Mace stated that “we were encouraged by the Angolan governmental policy that projects must take place in Angola itself. To show our commitment, we started building the construction yard ‘PAENAL’ in anticipation

Local content is developing into a key ele-ment of SBM Offshore’s growth strategy. Angola is a case in point. “For us, growth in Angola was in the first instance a business opportunity as the country requires Floating Production Storage and Offloading (FPSO) facilities to develop their offshore oil and gas production. SBM Offshore leases and operates these facilities for clients in joint venture with Angolan companies. This combination is the basis for long term local development of personnel working on the facilities offshore and at shore bases, but also the development of the local industries which support these operations. Angolans are continually trained by us in the operation of offshore systems and are gradually turning into a national workforce.”

of potential new projects that will provide work to that yard. We employ Angolans and train them and have seen local industries in the region grow as the yard requires more and more local goods and services. Recently, the yard has managed to obtain a significant contract for work on an offshore project. Consequently, even more Angolans will be hired and trained. This illustrates how we have implemented local content policy and how this is benefi-cial both for us and the host country.”

Reduction of emissionsAccording to Mace, a tough sustainability challenge remains the “further reduction of greenhouse gas emissions from offshore facilities.” SBM Offshore tries to design and develop new technologies to create

Engage national crew Another aspect of SBM Offshore’s sus-tainability strategy is to engage national workers and small businesses in the coun-tries in which it operates. In doing so the Company contributes to the development of local communities. SBM Offshore has local operations in Angola (with almost 50% national crew) and Brazil (with 75% national crew), and will start new facilities with local involvement in Equatorial Guinea and the Canadian province of Nova Scotia in 2011.


greener systems which it can then propose to its clients. Mace commented that in the oil and gas producing sector “an increasing number of our clients are becoming aware of the impact their operations have on the environment and are ready to consider the introduction of systems that are designed to reduce emissions wherever possible.” In addition to developing cleaner systems, SBM Offshore’s R&D Department is also working on the issue of energy shortage, and is looking for solutions in the offshore environment through generating energy from waves and ocean thermal conversion.

MilestoneIn 2010, SBM Offshore reached a milestone when it was included in the Dow Jones Sustainability Index (DJSI). Mace states that “by achieving this, we have shown that we have a strong commitment to conduct business in a sustainable and transparent manner and this has been recognized by the DJSI. This proves that the reporting sys-tem we have developed is up to standard. Being part of this index is special to us also because only a few companies in our sec-tor have been included.”

Code of ConductTo conclude, Mace points out that SBM Offshore has a Code of Conduct which lays out in detail the Company’s responsibilities to its stakeholders and to society and the environment. Mace notes that “all of our employees receive training on how we con-duct business and how employees should behave. The Code of Conduct is a strong pillar that supports SBM Offshore’s sustain-ability strategy.”

Yvonne van der Heijden (1955) has been working as a journalist since 1979.

She writes on economics and takes special interest in social, develop-ment, and sustainability issues. She began her career as a journalist at the parliamentary bureau of daily newspapers in The Hague. In the nineties, she was based for almost a decade in Beijing, China. There she worked as a foreign correspondent for the Dutch business newspaper-Het Financieele Dagblad as well as other publications. Since 1999 she has been a freelance writer based in the Netherlands concerned with topics such as Corporate Social Responsibility, engineering industry, pensions, social security, and China.

Van der Heijden, a Nieman Fellow at Harvard University in 1986, has published two books on China. The first about doing business in China (March 2007) and the second on the 400 year history of Sino-Dutch trade relations (July 2008).

SBM Offshore – Sustainability Report 2010 9SBM Offshore employee on the Yme MOPUstor™


1 The Company, Principles and Practices

18 Introduction 19 Company Profile 21 Corporate Principles and Practices 26 Snapshot 2010 27 Vision, Mission and Code of Conduct 28 Corporate Sustainability Strategy and Reporting transparency 31 Corporate Management Systems and Compliance table 34 People Map of SBM Offshore

2 Health, Safety, Security and Environment (HSSE)

40 SBM Offshore's 12 Life-Saving Rules and Message of Corporate Head of HSSE 44 Introduction 45 Health management 45 Safety management 49 Security management 49 Environmental management

3 Human Resources 58 People Reviews at SBM Offshore and Message of Corporate HR Director 62 Introduction 64 Corporate activities 65 Global workforce 67 Employment and remuneration 70 Performance and Career development


4 Sustainable Initiatives

76 Host country Sustainability, Local Content Introduction by Francis Blanchelande, COO of SBM Offshore 78 Sustainable Initiatives Introduction 80 Local workforce 82 Local investments 84 Local content 86 Supply chain 90 Renewable energy introduction 91 Renewable Marine Energy 92 Offshore Wind Energy

5 Performance Indicators

98 Sustainability Reporting Scope 101 Performance Indicators 111 PwC Assurance Report 112 GRI Index Level C+ 113 Notes


MOPUstor™Tension Leg Platform

FPSO

Semi-Submersible Drilling Rig

Semi-submersible production platform

Our Product LineSBM Offshore designs and provides offshore energy systems on a lease or sale basis to our clients world-wide based on in-house engineering and project management expertise.

Jack-up Drilling Rig

Heavy Lift Crane Vessel

Turret Mooring System

CALM Buoy Terminal

Wind Turbine Installation Vessel


The Company, Principles and Practices

14 SBM Offshore – Sustainability Report 2010Crew members onboard the FPSO Espirito Santo



1The Company, Principles and Practices

18 Introduction 19 Company Profile 21 Corporate Principles and Practices 26 Snapshot 2010 27 Vision, Mission and Code of Conduct 28 Corporate Sustainability Strategy and Reporting transparency 31 Corporate Management Systems and Compliance table 34 People Map of SBM Offshore



Corporate Management Systems and Compliance table

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31

Company Profile

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19

Mission, Vision and Code of Conduct

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27Corporate Sustainability Strategy and Reporting transparency

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28

Corporate Principles and Practices

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21



IntroductionThe Sustainability Report 2010 presents an overview of the Company’s strategy and developments concern-ing Business Sustainability, Health initiatives, Safety and Security measures, Human Resources plan and Environmental protection implementation for the year 2010 as well as key performance measure.

In this year’s report a chapter on the Company’s sustainability strategy has been added to explain the Sustainability Business Objectives replacing the previous two-page commitments and performance overview.

The reporting scope for the key performance indicators has been expanded with new indicators for Human Resources and has been adapted to meet the reporting scope of the Company’s current fleet of leased vessels.

A selection of sustainable initiatives has been included in this report, providing more details on specific subjects which are presented as articles or case studies. Consequently, some more recent initiatives, which are still very early in their development, such as building an orphanage in Angola, CO2 sequestration technology and local content in Equatorial Guinea has not been reported on specifically.

Interviews have been held with key SBM Offshore managers to highlight specific initiatives in their professional field and also to provide an internal personal view on these subjects.

And finally, Yvonne van der Heijden, a Dutch journalist with 30 years of experience in the field of Sustainability in the Netherlands and China, conducted an interview with Tony Mace (CEO of the Company) on the Company’s sustainability strategy and presents her view as an introduction to this Sustainability report.

The Company is proud to present this report in this new style and hopes you find it interesting, helpful and enjoy reading it.



Company Profile

IntroductionSBM Offshore N.V. (SBM Offshore, ‘the Company’) designs and provides offshore energy systems on a lease or sale basis to our clients worldwide based on in-house engineering and project management expertise. The Company’s clients are mainly offshore oil and gas producing companies, both private and government owned. The Company has established its position as a specialised service provider in the middle to upper segment of the floating production industry where it is one of the market leaders. The Company operates globally under the name SBM Offshore with seven operating units. Each operating unit is among one of the leaders in its respective niche market. The Company currently employs over 5,700 people worldwide.

Product lineThe Company’s activities include the engineering, supply and offshore installation of facilities for the production, storage and export of crude oil, gas and Liquefied Natural Gas (LNG). These comprise Floating Production Storage and Offloading systems (FPSOs), Floating Storage and Offloading systems (FSOs), Tension Leg Platforms (TLPs), monohull and semi-submersible Floating Production Units (FPUs), as well as self elevating Mobile Offshore Production Units (MOPUs).

Over 30 years ago, the Company was the first to offer clients an integrated oil and gas service by providing turnkey supply of floating production vessels, as well as leasing options where the Company operates the facil-ity. This concept is now considered as a mainstream production means by the oil industry, particularly in deep and remote waters, and the lease and oper-ate business has become a major component of the Company’s activities.

Included in the product line are all the systems, mostly based on the Single Point Mooring principle, used to

moor crude oil and gas carriers in open seas for the purpose of loading or offloading cargoes. In 2009 SBM Offshore celebrated the 50th anniversary of the first CALM buoy, which was designed and delivered to Shell in 1959. Derived from the same technology are complex mooring systems, which anchor the floating production facilities in oil and gas fields and are the core products of the Company. There are various types of mooring systems such as fixed heading or weath-ervaning, permanent or disconnectable.

In addition to these activities, the Company provides design and engineering services, and for certain oppor-tunities enters into turnkey supply contracts, for crane vessels, pipelay barges and drilling units of all types, such as monohulls, jack-ups and semi-submersibles.

In support of all the above, another steady activ-ity which represents a substantial element in the Company’s business is the provision of specialised services such as maintenance, spare parts, repairs and offshore installation through the Company owned installation vessels. This forms an essential com-plement to the sales of facilities, offering clients a comprehensive and integrated service.

The Company has added the LNG FPSO to its product line to respond to the expected future demand for off-shore production of LNG from stranded gas fields and is also developing renewable energy systems for the marine environment.



OrganisationSBM Offshore currently operates from four main project execution centres with engineering and project man-agement resources located in Schiedam (Netherlands), Monaco (Monaco), Houston (USA) and Kuala Lumpur (Malaysia). The Company has a corporate structure consisting of seven operating units, supported by corporate functions, which all report to the Board of Management. The organisation chart below shows the individual units, their location and their financial report-ing segment.

In addition to these main centres, the Company is present in several countries for regional marketing and sales, local management of offshore operations and construction activities.

In respect of the Company’s activities, including both the supply of facilities on a sale basis and the lease and operate activities, there is a Group Management System defining the Company’s procedures. The Company’s Corporate Engineering Standards ensure a common design approach in the four centres and facili-tate the optimal use of the skills and global resources available for the execution of large and complex projects.

The Company sells or leases offshore facilities

generally by outsourcing all hardware components and construction services. Therefore, it does not own any manufacturing plant, construction yard or shipyard with the exception of a partially owned construction yard in Angola, which will be developed into an FPSO integra-tion facility. One of the Company’s strengths is that it possesses all the engineering, project management and offshore installation competencies in-house to execute large complex systems, without having to rely on external resources, except for the liquefaction tech-nology related to LNG FPSO topsides.

Future focusThe Company’s business direction is characterised by market-oriented technology innovation. The Company is a trendsetter in the development of new, cost effec-tive, technologically fit-for-purpose solutions which optimally respond to clients’ changing needs. Today, the Company’s focus is on providing solutions for ultra-deep water production, arctic environment floating production and Floating LNG (FLNG) developments. The Company is also engaged in development work for renewable energy systems in the marine environ-ment. In order to protect and expand its leading market position, the Company devotes significant atten-tion to research, development, and the protection of Intellectual Property.

19

UnitsUnder lease contracts

SBM Offshore N.V.Netherlands

Corporate FunctionsSchiedam, Marly, Monaco

Turnkey Services

Turnkey Systems

Lease &Operate

Company Organisation Chart



Corporate Principles and Practices

Corporate Governance SBM Offshore N.V. is a limited liability company (“Naamloze Vennootschap”) incorporated under the laws of The Netherlands with its statutory seat in Rotterdam. The Company has a two tier board, a Supervisory Board and a Management Board. Each Board has its specific role and task regulated by the Corporate Governance Code, laws, the articles of association and the Supervisory and Management Board rules.

The Company will submit major changes in the cor-porate governance structure of the Company and in the compliance of the Company with the Corporate Governance Code (CGC) to the General Meeting of Shareholders under a separate agenda item.

Duties of the Board of Management

The Company is managed by the Management Board, under the supervision of the Supervisory Board. Each year the Management Board presents to the Supervisory Board, the operational and financial objec-tives of the Company, the strategy designed to achieve the objectives and the parameters applicable in rela-tion to the strategy. The Operating Plan 2011 which includes the budget has been discussed and approved in the Supervisory Board Meeting of 10 December 2010 and a special session was dedicated to the Company’s strategy on the same day.

Supervisory BoardAs per 1 January 2010, the Supervisory Board con-sisted of five members. At the Annual General Meeting (AGM) of 14 April 2010, Mr. L.J.A.M. Ligthart stepped down as the vice-chairman of the Supervisory Board and chairman of the Audit Committee and Mr. F.J.G.M.

Cremers was appointed to the Supervisory Board and was elected as chairman of the Audit Committee. At an Extraordinary General Meeting of Shareholders held on 6 July 2010 Mr. F.R. Gugen was appointed to the Supervisory Board and was elected chairman of the Appointment and Remuneration Committee, dealing with remuneration matters. At the AGM the Supervisory Board also announced its intention to appoint a sev-enth member of the Supervisory Board taking into account the best practice of ensuring diversity in the composition of the Supervisory Board. A recruitment process for this seventh member of the Supervisory Board is ongoing.

Until the AGM of 14 April 2010, the Supervisory Board had three sub-committees: the Audit Committee, the Remuneration Committee and the Selection and Appointment Committee. The Supervisory Board announced at the AGM of 14 April 2010 that it had resolved to merge the Selection and Appointment and the Remuneration Committees into one single Appointment and Remuneration Committee. In addi-tion, the Supervisory Board resolved to create a new Technical and Commercial Committee to enable the Supervisory Board to have a better understanding of the Company’s exposure to technical risks and to facili-tate its supervisory duties of technical and commercial matters.

Duties of the Supervisory BoardThe Supervisory Board supervises the management of the Company and its businesses by the Management Board, the effectiveness and the integrity of the internal control and risk management systems and procedures implemented by the Management Board and the general conduct of affairs of SBM Offshore and its businesses. The Supervisory Board assists the Management Board with advice in accordance with the best practices of the Code and the Supervisory Board rules. In the performance of its duties the Supervisory Board is guided by the interests of the stakeholders of the Company, and the enterprises connected therewith.

In addition, certain (material) decisions of the Managing Board, as stipulated in the law or articles of association

1010 main clients Lease & OperateMostly major IOCs & NOCs

1stCALM buoy delivered in 1959



or the Rules of the Supervisory Board, need prior approval of the Supervisory Board.

Dutch Corporate Governance CodeThe Company is obliged to comply (or explain any non-compliance) with the Dutch Corporate Governance Code. A report on compliance with the Code can be found in the Corporate Governance section of the Annual Report 2010 which can be downloaded from the Company website http://www.sbmoffshore.com

For more detailed information on Corporate Governance information, please refer to the Company’s 2010 Annual Report.

Code of ConductThe Company has a Code of Conduct which was updated in January 2010 and is posted on the Company’s website. Each year the Supervisory Board, the Board of Management and a wide range of line managers and corporate staff are required to sign backward and forward looking compliance certificates. The Company also has a procedure allowing employ-ees to report alleged irregularities with respect to the Code without jeopardising their employment position. The Board of Management decided to create a free phone or web-based reporting facility which employ-ees will be able to use –anonymously if they wish- in their own language. The facility will be operated by an external provider, People Intouch, and is expected to be launched during the course of 2011 once all forma-lities required in the different jurisdictions where the Company operates, including data protection laws, have been satisfied. The Company has developed a number of anti-corruption initiatives including:

• Guidelines for use of Agents and Commercial Relations with Public Officials;

• Use of standards contracts and anti-corruption clauses in the Company's contracts;

• Creating a Partner and External Relations Management (PERM) Team which performs due diligence on any new Agents, Consultants, Partners, Freight Forwarders and Custom Brokers contracts or relationships;

• Conducting routine internal audit checks to monitor Code of Conduct compliance.

ShareholdersWith reference to the articles of association, all Shareholders are entitled to attend the General Meetings (GM), to address the GM and to vote. At the GM each Ordinary Share with a nominal value of Euro 0.25 each shall confer the right to cast one (1) vote. Each protective preference share with a nominal value of Euro 1.00 each shall confer the right to cast four votes, when issued. Subject to the approval of the amendment of the Articles of Association which will be submitted to shareholders’ approval at the AGM of 5 May 2011, the nominal value of ordinary and protective preference shares shall be the same and each ordinary share or protective preference share (when issued) shall carry the same voting right. Unless otherwise required by the law and articles of association all resolutions shall be adopted by an absolute majority of votes.

The Company maintains active communications with its shareholders on several different occasions, events or meetings in order to keep them informed on the general and specifically financial aspects of the busi-ness. The information is communicated in writing in the Annual Report, in the minutes of meeting of the AGM, in press releases and in presentations for financial ana-lysts and is distributed electronically on the website, via email and in hardcopy format. The Company also addresses shareholders verbally during the AGM, at investor meetings, analyst presentations (which are webcasted), and conference calls.

The Annual Report contains several sections in which the Company presents its financial results and other information on its activities, developments and strategy. The report is audited by an external accounting firm. The Annual Report is printed in hardcopy for distribu-tion and can also be downloaded electronically from the Company’s website.

At the AGM the shareholders in attendance vote on granting discharge to the Board of Management for the conduct of the Company’s businesses and to the Supervisory Board for its supervisory duties during the year under review.

Code of ConductUpdated in 2010



Semi-Submersible Drilling Rig ‘Delba III’ in Abu Dhabi



For more details on Shareholder Information, please refer to the Company’s 2010 Annual Report.

Investor RelationsThe Company has an active investor relations program which consists of providing information to the stake-holders by press releases followed by direct dialogue with the investments community via teleconference calls for the quarterly trading updates and an analyst presentation for full and half year results. Both the conference calls and the analyst presentation are web-casted. Meetings are also held with individual investors at conferences, at the investor’s premises or on Company premises. Telephone calls with investors and analysts are held on a regular basis.

In September 2010, the Company organized two teach-in sessions for financial analysts on lease accounting principles in Amsterdam and in London with the Company’s CFO, Mr. Mark Miles. 19 sell-side analysts attended the presentations on accounting principles of lease contracts. Detailed explanation of the account-ing treatment of leases was deemed necessary as the impact of finance lease accounting in SBM Offshore’s financial statements is increasing. The teach-in presen-tation has been posted on the Company’s website.

A total of 25 road shows and conferences were attended by the Company in the course of 2010.

Stakeholder EngagementThe Company encourages and maintains an open and respectful engagement with all our stakeholders. This takes place at annual shareholders meetings; with our Company employee delegates, our clients and Non Governmental Organisations (NGO).

Main stakeholder groups identified in this report are our employees, clients and business partners, capital providers, shareholders, suppliers and NGOs, local authorities and local host communities in the countries where the Company has a presence.

Dow Jones Sustainability Europe IndexIn September 2010, SBM Offshore was included in the Dow Jones Sustainability Index (DJSI) Europe. The Company has participated for the first time in 2010, successfully becoming one of the four current members of the DJSI Europe Oil Equipment & Services sector. Integration in DJSI is a demonstration of the Company’s commitment to conduct business in a sustainable and responsible manner.

Carbon Disclosure ProjectThe Company participated in the Carbon Disclosure Project (CDP) for the Netherlands in 2009 and 2010 and intends to participate again in 2011. Carbon Disclosure Leadership Index assesses the quality and depth of a company’s response to the annual CDP question-naire for its internal management of data related to GreenHouse Gases (GHG) emissions and understand-ing of the issues that climate change presents to the Company's business.

For 2010, SBM Offshore has reached a CDP carbon disclosure score of 64, improving its 2009 level by 18,5%. This midrange score (between 50 and 70) underlines the ability of the Company to measure its carbon footprint across global operations and its strong commitment to the importance of transparency. In 2010, a new scoring method has been introduced in the Netherlands by CDP to measure carbon performance and the Company’s score is in band C.



Transparantie Benchmark The ”Transparantie Benchmark” is an initiative of the Dutch Ministry of Economic Affairs, launched in 2004 to improve transparency of corporate social responsibility reporting of Dutch companies.

SBM Offshore is involved since the beginning in this initiative as a member of the 500 largest Dutch organi-zations and has improved its score. The Company scores well above its sector average.

2005 2006 20092007 2008

60

50

40

30

20

10

0

SBM Offshore Score Sector average Sector maximum

SBM Offshore's Transparantie Benchmark Score

In 2010, the Transparantie Benchmark scoring system has changed, but SBM Offshore succeeded in keeping almost the same level, 96.4 out of 200 in 2010 com-pared to 48 out of 100 in 2009.



Snapshot 20102010 2009 Movement % Comment

FINANCIAL RESULTSNet profit (US$) 276.0 230.0 46.0 20.0% Turnkey Systems results up;

MOPUstor™ & tankers impairment

Per share (US$) 1.44 1.47 (0.03) (2.0%) Higher minority interest and average number

of shares

Turnover (US$) 3,055.8 2,956.5 99.3 3.4% Turnkey Systems revenues increased

EBIT (US$) 362.4 293.4 69.0 23.5% Turnkey Systems results up;

MOPUstor™ & tankers impairment

EBITDA (US$) 688.4 613.3 75.1 12.2% Much higher Turnkey Systems contribution

Net debt (US$) 1,711.1 1,464.0 247.1 16.9% Lease fleet investments

Capital expenditure (US$) 519.0 655.9 (136.9) (20.9%) Excludes investments in finance leases

New orders (US$) 4,531.9 3,739.9 792.0 21.2% Includes one large FPSO (finance lease)

Backlog (US$) 11,501.5 10,032.3 1,469.2 14.6% Record Level

Share price 31/12 (€) 16.765 13.775 2.99 21.7% _

AEX-index 354.6 335.3 19.3 5.7% _

Market capitalisation (€) 2,827.7 2,265.4 562.3 24.8% Share price rose and new shares issued

Market capitalisation (US$) 3,783.5 3,248.9 534.6 16.5% US$ strengthened against €

HSSFatalities 0 0 0 In line with target

LTIFR Offshore Production 0.10 0.03 0.1 233%TRI Offshore Production 26 17 9.0 52.9% More robust reporting process

TRIFR Offshore Production 0.87 0.59 0.3 47.5% Target of TRIFR < 0.20

LTIFR Onshore Operations 0.06 0.0 0.1 TRI Onshore Operations 6 1 5.0 500% More robust reporting process

TRIFR Onshore Operations 0.18 0.03 0.2 500% In line with target of TRIFR < 0.20

ENVIRONMENTCO2 Emissions from Offshore Production in million of tonnes 1)

2.076 1.824 0.3 13.8% First full year production for Espirito Santo,

more planned Shutdowns in 2009

GHG Emissions from Offshore Production in million of tonnes CO2 equivalent 1)

2.139 1.881 0.3 13.7%

Total hydrocarbon Production in million barrels of oil equivalent

147.8 142.5 5.3 3.7% First full year production for Espirito Santo

HUMAN RESOURCESTotal Employees 5,758 5,389 369 6.8% Increase in permanent employees

Total Offshore Employees 1,829 1,488 341 22.9% In line with changes in the fleet composition

Total Onshore Employees 3,929 3,901 28 0.7% Increase mostly in permanent employees

Contract / Permanent ratio 28.6% 35.8% (0.1) (20.1%) Target is 30%

Offshore Production Training hours per eligible employee

41.7 23.26 18.5 79.4% Training hours for Capixaba's crew

(relocation)

Onshore Operations Training hours per eligbile employee (including PAENAL)

28.3 26.17 2.1 8.1%

1) CO2 Emissions from Offshore Production have been restated for 2009



Vision, Mission, Code of Conduct

Towards Society / Communities: • to support and promote human rights and contribute to social welfare in the communities where we operate;

• to support and promote busi-ness practices free of bribery and corruption.

Towards the Environment: • to minimise the negative impact and risks of our activities on the environment and co-operate with business partners to improve our performance.

Towards Shareholders / Capital providers: • to constantly improve our know-how and efficiency, with the objective to generate returns well above cost of capital;

• to maintain a high degree of transparency and reliability by providing accurate financial and non-financial information;

• to achieve the highest standards of corporate governance;

• to provide EPS growth ahead of the expected EPS growth of the relevant Oil & Gas Industry’s indices.

The Company’s motto is: “Technology Creating Value”.

Vision

The Company’s Vision for the long term is:

“SBM Offshore will be the acknowledged leading company in the development of solutions for offshore energy production and the preferred supplier of these systems on a lease or sale basis”.

MissionThe Corporate Mission reads:

“To provide safe, reliable and inno-vative offshore solutions for the energy industry”.

The mission statement has changed from one focusing solely on the Oil & Gas sector into the broader statement of ‘energy industry’ to also include techno-logies for energy generation from Renewable forms of energy.

Code of Conduct

The expression of this mission statement in a few major objec-tives with respect to the key stakeholders reads as follows:

Towards Clients: • to provide superior products and services through innovative, fit-for-purpose and competitive solutions for the offshore energy industry;

• to design, construct, install, maintain and operate such facilities in a safe and environ-mentally sound manner;

• to provide satisfaction to our clients with reliable products and services so as to create long term relationships.

Towards Employees: • to generate an attitude of enthu-siasm and pride throughout the Company.

Towards Suppliers: • to support fair competition and strive for long-term stability in the relationships;

• to jointly improve social and environmental performance.



Corporate Sustainability Strategy and Reporting TransparencyThis chapter of the Sustainability Report provides more detail on the Company’s Sustainability Business Objectives and transparency in reporting.

The Company’s Sustainability Business Objectives are part of the new Corporate Strategy Plan for the time frame 2011-2015. Following its presentation to the Supervisory Board, this plan has recently been adopted by the Company.

A summary of the Strategy Plan 2011-2015 can be found in the Company’s Annual report 2010.

Transparency of reporting is considered an impor-tant part of the development of the Company’s Sustainability strategy and the Company’s approach towards reporting is highlighted in this chapter.

Sustainability Business Objectives

The Company aims to carry out its activities in such a way that will promote sustainable long term business, develop close interaction with the people, communities and local business in the countries in which it oper-ates and safeguard the environment. Furthermore the Company will endeavour to utilise latest technologies to reduce GreenHouse Gases (GHG) emission where appropriate and aims to develop renewable energy solutions for the offshore and marine environment.

The Company will focus on areas of its operations where it can have a sustainable effect within the supply chain. This includes the following objectives which are included in the Strategic Plan:

• Minimise the Company’s carbon foot print; • Maintain high standards for Health, Safety, Security

and Human Resources; • Serve communities through local content; • Develop and promote renewable energy and

environmental friendly technology. An analysis has been carried out to identify objectives and areas in which the Company can have an impact on sustainable business development and the focus will be on those areas for initiatives and reporting.

Details on the objectives are presented below.

Environment The Company’s objectives are to minimise the negative impact and risks of our activities on the environment and cooperate with business partners to improve our performance. Specific objectives are to reduce the Company’s carbon foot print, per unit of hydrocarbon produced in offshore operations and in absolute terms for onshore activities.

The most substantial part of the Company’s carbon foot print results from GHG emission during operations of the lease fleet. The Company strives to continuously improve the production performance on the facilities to reduce emissions within the existing design limits of the systems.

The onshore activities of the Company consist pri-marily of work in an office environment where the reduction of the carbon foot print can be achieved by actively promoting initiatives to achieve neutral emis-sion offices.

Health Safety and Security (HSS)

The Company will continue to maintain high standards for HSS as described in the Code of Conduct. This is achieved by implementing HSS initiatives that are developed to promote awareness on health, safety and security issues both offshore as onshore. Please refer to section 2 for more detailed information

Minimise Carbon foot print

Maintain high standards for HSSE and HR



Human Resources (HR)The Company will continue to maintain high standards for HR as described in the Code of Conduct.

In addition to ensuring the highest standards of employment for the Company’s employees, continu-ous training and personnel development programmes are also carried out. Please refer to section 3 for more detailed information.

Business Sustainability Host Country SustainabilityThe Company has always operated in countries by engaging the local workforce in its operations. This requires investments in infrastructure (offices, training centres), local training and personnel development pro-grammes. The Company will continue to support and promote these nationalisation plans.

In recent years, the Governments of many of the coun-tries in which the Company operates, have become more demanding specifying higher local content requirements for the construction of the Company’s products. The Company aims to achieve high local content by subcontracting work in the host country where possible or investing in the host country to develop local fabrication facilities as it has done in Angola.

Supply ChainThe main policy towards suppliers is to support fair competition, strive for long term stability in the relation-ships and to jointly improve social and environmental performance as described in the Company’s Code of Conduct.

Develop and promote sustainable technologyThe Company’s clients generally specify the require-ments for a complete oil and gas field development, including the production facility. This leaves relatively little opportunity for the Company to influence the design and supply of production facilities to fur-ther reduce operations-induced GHG emissions.

Nevertheless, within these boundaries, the Company promotes the use of emission-friendly equipment and design during the development of the design of the facility where this can be done in a cost efficient manner.

To reduce the GHG emissions on oil and gas producing facilities, the Company strives to implement emissions-reducing technology at the lowest reasonable costs.

Renewable EnergyThe Company is pursuing several initiatives to leverage its in-house expertise to develop new technology for energy generation from renewable sources. Details of these developments can be found in the Sustainable Energy initiatives’ section of this report.

Reporting TransparencyThe Sustainability Report is issued on a yearly basis concurrently with the Annual Report.

The Sustainability Report will include key indicators which are calculated based on input from existing reporting systems within the Company. The indicators are then compiled and consolidated in an automated, web-based reporting system. Narratives on the impli-cations of these results and the Sustainable initiatives throughout the Company are also detailed in the report. Currently the Company reports at GRI level C+, according to GRI guidelines.

External AssuranceAn external auditor verifies the Sustainability data and provides an external limited assurance. The Sustainability Assurance process consists of an interim verification and the year end assurance procedure. Local verification procedures are part of the work.

Strategic analysis The Dow Jones Sustainability Index (DJSI) World Universe identifies 40 potential candidates in oil and equipment services, but only six are included. In Europe, DJSI STOXX includes 19 potential candi-dates, but only four are included, of which SBM Offshore is one. None of the four are direct competitors of the Company.

Serve local communities

Develop and promote sustainable technology



Disclosure

External reporting consists in participating with the following initiatives: • Dow Jones Sustainability Index (DJSI); • Carbon Disclosure Project (CDP); • Transparantie Benchmark (Initiative of the Dutch

Ministry of Economic Affairs).

Stakeholder dialogue is an area in which the Company facilitates improved dialogue when the stakeholder and the Company agree this forum will add value to achieve the Company’s sustainability objectives.

External reportingDJSI, CDP, Transparantie Benchmark

FPSO Xikomba offshore Angola



completion is expected in 2011 (audits forecasted in March 2011).

Health and SafetyThe Company’s offshore fleet management is com-pliant with the International Safety Management (ISM) standard and the International Ship and Port Facility Security (ISPS) Code, which is a mandatory requirement.

The Company has the objective to attain compliance of its operations with the Occupational Health and Safety Standard (OHSAS) 18001, on a voluntary basis, for all shore bases and operating units to verify Health and Safety practises. Accreditation was obtained in the shorebase in Brazil in 2009 and will be implemented in all other shorebase and operating units during 2011. Audits for all FPSOs in operation in Brazil were carried out successfully in 2010 by ABS Quality Evaluations against OHSAS 18001.

Employment StandardsThe Company seeks to give all its employees the best employment standards as per the Code of Conduct and the Company’s Social Accountability Manual. The Company operates with standards that in most cases exceed international human rights and international labour guidelines.

The Company does not tolerate child or forced labour and does not support or work with companies that sus-tain forced or compulsory labour. This is in compliance with the UN Universal Declaration of Human Rights, the ILO Conventions, and the OECD Guidelines for multi-national enterprises and is addressed in the Company’s Code of Conduct.

Social AccountabilityThe Company is in the process of achieving compli-ance for its global shore bases in accordance with the Social Accountability Manual, based on SA8000 standards. Implementation of the Social Accountability Manual standard was achieved in Brazil in 2009.

Corporate Management Systems & Compliance tableThe Company’s Group Management System (GMS) is built on the following internationally recognised standards: • Quality Management System Standard ISO,

9001:2008; • Environment Management System Standard, ISO

14001:2004; • Occupational Health and Safety Management

System Standard, OHSAS 18001; • SBM Offshore Social Accountability Manual (com-

patible with SA8000 Standard); • MARPOL Regulations 2002; • ISM/ISPS Codes (International Safety Management/

International Ship and Port Facility Security).

Quality ManagementThe GMS defines the Company’s management sys-tem and procedures and are applied consistently in all the project execution centres. All centres have been audited by the American Bureau of Shipping (ABS) in 2009 and are compliant with ISO 9001:2008. It is the intention of the Company to also attain compliance with ISO 9001 for the operating unit SBM-Production Contractors (SBM-PC), which manages the fleet operations.

EnvironmentISO 14001 accreditation is voluntarily applied by the Company. Implementation started in Brazil in 2009 and continues to expand across the fleet. The most recent addition to the fleet in Brazil, FPSO Espirito Santo, commenced oil production in 2009 and the Company has obtained accreditation for this unit to ISO 14001 in 2010. This standard is also being implemented in Angola, where accreditation on all units is ongoing and

Group Management System in line with Standards ISO 9001 :2008ISO 14001 :2004OHSAS 18001



For Equatorial Guinea and Malaysia, the Company’s goal to be compliant in 2010 has not been obtained, due to delays in the implementation as well as auditors availability issues. The Company has the objective to attain certification for all shore bases in 2011.

In 2006, when the Company implemented the SA8000, Social Accountability International (SAI) directed the SA8000 Advisory Board that verification of the standard would not be allowed in Myanmar, until the International Labour Organisation (ILO) lifted its sanc-tions. Therefore, the decision was made to continue the implementation using an in-house Social Accountability Manual, based on the precedent set by the SA8000 Framework. This requires the regular and transparent auditing in Myanmar of the Company’s suppliers and sub suppliers.

The social accountability certificate for Myanmar was issued in February 2010 by Bureau Veritas, following its audits. The status of the implementation and certification of management systems is presented in the Management System Compliance table.

Group Management System in line with Standards SA8000MARPOLISM/ISPS

Topsides of the FPSO Okha



Management System Compliance Table31 December 2010

20112011

2010 2010

20112011

2011

2010

2011

2011

2010

2010

2011

20112011

2011 2010

2011 2011

2011 2011

2011 2011

ISM ISO9001

EXECUTION CENTRESGustoMSC – Schiedam, The Netherlands n/aSBM Atlantia – Houston – USA n/aSBM Malaysia – Kuala Lumpur, Malaysia n/aSingle Buoy Moorings – Monaco n/aSBM Production Contractors (Fleet) – Monaco

ISM OHSAS18001

Social Accountability

SHOREBASESAngolaBrazilEquatorial Guinea MalaysiaMyanmarNigeria

ISM ISPS ISO14001

OHSAS18001

OFFSHORE PRODUCTION FLEETAngola

FPSO KuitoFPSO Xikomba*FPSO SanhaFPSO MondoFPSO Saxi BatuqueBrazil

FPSO EspadarteFPSO BrasilFPSO Marlim SulFPSO CapixabaFPSO Espirito SantoMyanmar

FSO Yetagun

Compliant according to external audits (with date if achieved in 2010)

Target for 2011

No initiatives planned

* Unit expected to be relocated after reconversion



55 differentnationalities

5,758 employees worldwide

USA

Brazil

The Netherlands

MonacoSwitzerland

MalaysiaSingapore

Asia

UAE

West Africa

Angola

People Map of SBM Offshore

The Company, Principles and Practises

Detail of the Riser Turret Mooring of the FPSO Okha showing the flexible production hoses

Health, Safety, Security and Environment

Crew on the deck of an FPSO



Health, Safety, Security and Environment (HSSE) 2 40 SBM Offshore's 12 Life-Saving Rules and Message

of Corporate Head of HSSE 44 Introduction 45 Health management 45 Safety management 49 Security management 49 Environmental management

SBM Offshore's 12 Life-Saving Rules

Page

40

Health

Page

45

Environmental Management

Page

49Safety

Page

45

Security

Page

49



SBM Offshore’s 12 Life-Saving Rules

SBM Offshore employees in

Monaco during the 12 Life-Saving Rules

Workshop



A case Study and message of Corporate Head of HSSE

SBM Offshore’s management delivered a strong message to personnel in 2010. In a fully-supported and endorsed directive, the Company is now implementing a cam-paign where all SBM Offshore employees are verbally briefed on the 12 Life-Saving Rules that aim to further protect the most valuable asset of the Company – the men and women responsible for the success of the Group.

SBM Offshore continually strives to achieve the target of Zero Accidents in its operations both onshore and offshore. During the FPSO Espirito Santo project, SBM Offshore applied the Life-Saving Rules used by Royal Dutch Shell and was impressed with the results obtained. The robust application of the rules fully supports the Company’s existing Zero Accident initiative.

This led to the SBM Offshore management decision to also implement these rules in conjunction with other industry best prac-tice, which resulted in the creation of SBM Offshore’s 12 Life-Saving Rules. The SBM Offshore’s 12 Life-Saving Rules are subsequently being included in the

operations of the Company in the Group offices, the construction yards, and offshore.

The initiative targets work activities where failure to comply with the rules has the highest potential for serious injury or death. Compliance with the SBM Offshore’s 12 Life-Saving Rules is mandatory for eve-ryone in the Group while on business or on site, but the Company encourages all employees to apply these relevant princi-ples in their home life as well.

Training workshops have been held for staff in the Group Execution Centres and

offshore in the fleet, including the Company's vessel, the Dynamic Installer. There is a call to intervention, rendering personnel responsible for their actions, but also accountable to one another.

By the end of the second quarter of 2011, SBM Offshore expects to have trained all onshore and offshore staff worldwide. The key responsibility of the training team is proactively protecting and educating the staff, as well as ensuring compliance. At the heart of the matter is safety and protecting assets, but here, we mean people.

The company encourages all employees to apply these principles in their home life



Stuart Holtby’s MessageIn any professional environment there are hazards and risks which can have dire consequences on the working population and secondary effects on close family that can last a life time. Our goal is to enhance and improve safety within the Group, and the development of the SBM Offshore’s 12 Life-Saving Rules is based upon man-agement and worker input and elements from SBM Offshore’s associates and clients worldwide.

The Rules are best practice in the industry. They are not new, but what the Company is doing emphasizes their importance in keeping personnel on SBM Offshore business safe from harm or injury. By abiding by these simple and sensible procedures, SBM Offshore will maintain the standing it has in the industry for being a Company with personnel who work safely each and every day. The result is a continuous, excellent safety record.

The SBM Offshore’s 12 Life-Saving Rules will continue to underpin the ongoing enhancement and development of the Company Group Management System. They are now a permanent and very essential HSSE positive driver, and they will assist in achieving the ultimate goal of the Company: the accident free workplace.

SBM Offshore’s 12 Life-Saving Rules

Stuart Holtby, Corporate Head

of HSSE

Work with a valid Work Permit

when required

Conduct Atmospheric tests

when required

Verify isolation before work

begins and use the specified

life-protecting equipment

Obtain authorisation before

entering a confined space

Obtain authorisation before

overriding or disabling safety-

critical equipment

Protect yourself against a fall

when working at height

Do not walk under a

suspended load

Do not smoke outside

designated smoking areas

No alcohol or drugs while

working or driving

While driving, do not use your

phone and do not exceed

speed limits

Wear your seat belt

Follow the Travel

Management Plan


SBM Offshore – Sustainability Report 2010 43Standard Safety equipment for climbing to heights



HSSE IntroductionHSSE (Health Safety, Security and Environment) plans when effectively implemented in a work place, should satisfy the key objective of providing a safe working environment. These plans are complemented by com-prehensive safe systems of work and are managed and supervised by competent personnel.

Within SBM Offshore these key HSSE objectives are in place. They are constantly monitored for effectiveness and enhanced where necessary reflecting the develop-ing technology of the Company.

HSSE plans cover the full spectrum of the Company's activities from the onshore offices to the construction yards and on to the fleet of floating production facilities world wide.

Of prime importance to the Company is the manage-ment of health, safety, security and the environment. To ensure that this commitment is constantly reinforced, HSSE initiatives such as TASK (Total Application of Safety Knowledge), and STOP (Safety Training Observation Program) have been implemented and fully underpinned by the SBM Offshore’s 12 Life-Saving Rules.

Yard workers in Singapore preparing for vessel inspection on the

Okha FPSO



Health Management

GeneralThe health of the Company’s workforce is of prime importance and is given significant attention through various initiatives. The Company is proactive in its com-mitment to improve the standard of the implemented health procedures and to mitigate all health risks.

Offshore ProductionAll Company offshore employees must attend regular medical examinations which are dependent upon their age. Health and Well-being programs are in place on the marine units. All marine units are equipped with gymnasium equipment and employees are encouraged to use these facilities.

All Company employees working in areas where malaria is present are advised of the appropriate malaria prevention measures, and are provided with prophylaxis medication. Vaccination recommendations when working in different locations worldwide are avail-able to all employees.

Onshore OperationsIn regard to the health and well-being of the Company’s workforce in addition to the existing health promotion programmes, which have continued, a number of new initiatives have been introduced.

Examples that demonstrate this commitment to provide high levels of health support include the following:

Stress ManagementAppointment in Monaco of a workplace psychologist to assist employees suffering stress-related problems.

Heat StressIn the summer of 2010 the Company supported the Management in the United Arab Emirates construction yards to decrease the working time of employees to reduce the effects of heat stress.

Cool rooms were erected to allow shade for the work-force including the provision of cool water to assist in combating the effects of heat.

Safety Management

GeneralThe Company continues to support and invest in a number of developments to enhance the safety culture both onshore and offshore, with the aim to improve the Health, Safety, Security performance, and enhance Environmental protection.

The Company HSSE Charter defines the foundation for promoting a safe place of work, these are: • competency at all levels; • effective communications; • commitment from management; • commitment from the work force; • a proactive approach to the work taking place.

The Company has built in 2010 on the success of current safety initiatives with improvements and developments of the following programmes which are explained in more detail in this section: • SBM Offshore’s 12 Life-Saving Rules; • Permit-to-Work (Carros); • Total Application of Safety Knowledge (TASK); • Safety Training Observation Program (STOP).

In 2010 a number of Group HSE seminars were held in Monaco to exchange good practices and issues relevant to the Health and Safety of the Company’s employees.

In the Monaco-based execution centre other develop-ments included a new Safety Manual, Office handbook, waste management and also a video relating to safety.

ISO 14001 certification for Dynamic Installer

The Company achieved ISO14001 certification for the Company’s owned installation vessel ‘Dynamic Installer’ on the 15th December 2010, with the

TASKTotal Application

of Safety Knowledge

STOP

Safety Training

Observation Program



management office achieving ISO 14001 certification on the 30th December 2010.

Offshore ProductionOffshore Production recorded an increase in the Total Recordable Incident Frequency Rate (TRIFR) of 0.87 in 2010 compared to 0.59 in 2009 and a Lost Time Incident Frequency Rate (LTIFR) of 0.10 in 2010 com-pared to 0.03 in 2009.

The Offshore fleet operations recorded more incidents than last year. This increase is due to improved report-ing as well as a relatively high level of incidents on the FPSO P-57 during the initial production start–up period, due to the learning curve effect. The Company expects this statistic to improve in the future.

In pursuit of continual improvement, SBM-PC has attained compliance recognition by ABS, on a volun-tary basis in Brazil for Occupational Health and Safety Assessment Series (OHSAS) 18001. The successful implementation in the Brazilian Shore Base and on board the FPSOs managed from this location will be followed by a program to complete compliance to this standard in Angola, and selected areas in the Rest of the World Fleet during 2011.

Compliance to the mandatory International Safety Management (ISM) standard and the International Ship and Port Facility Security (ISPS) Code continues to be the cornerstone for effective fleet management.

Being prepared for any offshore emergency continues to be a priority for the Company. In addition to the extensive documented procedures required to meet ISM certification, the Company’s marine units under-take regular emergency exercises at four levels:(i) marine unit level;(ii) marine unit including shore base;(iii) marine unit including shore base and Monaco Emergency Control Centre;(iv) exercises initiated by other authorities, including clients.

The HSSE support for fleet operations was consoli-dated in 2010 where local HSSE positions were filled by an HSSE Manager and HSSE Engineers in the three main operating locations, Angola, Brazil and the Rest of World.

Onshore OperationsSafety remains a priority across all four project execu-tion centres and shore bases world wide. The following new Initiatives have been taken to further ensure a safe and healthy working environment, see below:

Permit-to-Work (Carros)Safety is a high priority in the Company’s Test Laboratory based in Carros (France) where key activi-ties take place such as (1) prototype validation carried out on seals and (2) operating pressure testing for Swivels.

0.7

0.8

0.9

1.0

0.3

0.4

0.5

0.0

0.1

0.2

0.6

2009 2010

Offshore Production

0.03

0.59

0.10

0.87

LTIFR TRIFR

The calculation methods for LTIFR and TRIFR are explained in the notes on page 113.

A good indicator of safety performance is the elapsed operating time without an LTI. In 2010 certificates were awarded to the fleet for significant LTI free periods, one vessel, the Yetagun in Myanmar reaching 10 years LTI free during 2010.



Continual improvements to the Group Management System (GMS) have now included the development of a Permit-to-Work system to cover activities which are considered high risk or non-routine. Development of the Permit-to-Work system is now complete in Carros and the Company has introduced this into the Laboratory during the latter part of 2010.

To assist the Company in introducing this system, a new training programme has been developed and was implemented in December 2010. This training involved class based theory sessions covering the role and function of the permit-to-work system and the main principles.

A practical session in the Laboratory took place to allow the workforce to become familiar in the use and application of the PTW system.

Safety Training Observation Program (STOP)

During 2010, the Company enhanced safety training by implementing STOP in the following construction yards: GPC in Abu Dhabi and Keppel in Singapore. The SBM-PC fleet continue to apply STOP within the offshore fleet operations.

It has been introduced to over 200 personal on-site including contractors and sub-contractors in order to support SBM Offshore’s commitment to reduce inci-dents and injuries.

STOP stands for the DuPont Safety Training Observation Program. The goal is to train managers, supervisors, team leaders and the work force to elimi-nate incidents and injuries by addressing the safe and unsafe behaviors of people in the workplace. The key to doing this is to modify behavior by observing people as they work and talking with them to encourage safe work practices and eliminate at-risk behaviors.

A person using the STOP system will complete a STOP Observation Card following the observation of an activ-ity that is taking place, these observations may be negative, i.e. activities that need some improvement,

or positive, where the observations illustrate good com-pliance with a procedure, safe working etc. The findings of the cards are discussed with the persons who have been observed. A data base of STOP findings is cre-ated and then analysed for any negative trends, or common negative occurrences, so that the appropriate remedial corrective actions can be put in place to cor-rect the situation.

A review of the program has been carried out during 2010 with possible improvements suggested by the workforce being developed for use in the coming year. The improvements will include up-dating the observa-tion cards to be more user friendly and improvements in the delivery of the training, based on course feedback.

Total Application of Safety Knowledge (TASK)

Another Company safety initiative (TASK) continues to demonstrate the commitment towards improvements in safety at all locations.

The TASK safety initiative is applied on a project in the Conversion Yard and through to start up of produc-tion operations offshore and then continues during the operating phase.

Over the past year a number of TASK themes have been suggested by the workforce to run for a given period of time. These themes typically cover a number of safety subjects, i.e. working at height, Permit to Work, Risk Assessment methods, effective Tool Box Talk sessions etc.

The TASK safety initiative is driven by a TASK Team led by a senior Company Supervisor (TASK team Leader), who will be assisted by persons competent in the par-ticular phase of a FPSO’s evolution, i.e. conversion, sail away, installation, start up and operations

The Company supports this initiative providing materi-als and advice in delivery of these themes.

During the year a Training Specialist has been



appointed by the Company to continue supporting these projects related safety initiatives, as well as other developments in competence based training.

Safety records for the construction yards are provided to the Company by the yards as part of the reporting requirements for construction activities.

The Company believes the recognition of good safety performance is an essential part of the continuation of an effective Management System. There were no fatali-ties resulting from a work-related incident or illness on Company projects at any sub-contractor fabrication yards in 2010. In 2010, 15 certificates were issued by the Company in recognition of significant periods of time worked in the construction yards without an LTI. The Company awards certificates based upon mil-lions of LTI free man hours. Certificates were awarded to the yards ranging from one to eight million LTI free man hours, demonstrating the high safety performance achieved.

Onshore Operations in the offices recorded a TRIFR of 0.18 in 2010 compared to 0.03 in 2009 and 0.06 LTIFR in 2010 compared to 0.00 in 2009. This is mainly due to the more robust incident reporting system intro-duced during 2010 using the Single Incident Reporting System (SIRS) centralised data base and also including the office incidents.

Onshore construction yards activities recorded a TRIFR of 0.32 in 2010 compared to 0.22 in 2009 and an LTIFR of 0.07 in 2010 compared to 0.04 in 2009. Total Recordable Incidents (TRI) has increased in 2010 com-pared to 2009.

The increase can clearly be attributed to a more robust reporting process as mentioned above. A higher presence of the Company’s safety personnel at construction yards has resulted in an increase in the reporting incidents onshore. Even though this is initially a negative trend it does allow the Company to focus on the problem areas and improve results and reduce the amount of people being hurt.

The calculation methods for LTIFR and TRIFR are explained in the notes on page 113.

0.14

0.16

0.18

0.20

0.06

0.08

0.10

0.00

0.02

0.04

0.12

2009 2010

Onshore Operations

0.03

0.00

0.06

0.18

LTIFR TRIFR

0.35

0.15

0.20

0.25

0.00

0.05

0.10

0.30

2009 2010

Subcontractors

0.22

0.07

0.32

LTIFR TRIFR

0.04

15

safety Awards for Yards

1 to 8 million LTI free man hours for yards



Security ManagementGeneral

Security of the Company’s personnel in the operations and countries in which it operates remains a key sub-ject and is given the full attention of management and supervisors alike.

The Company’s Security Policy highlights the Company’s priority to assure the protection of its personnel wherever they may be in the world. The Company’s Corporate Head of HSSE, who reports to the CEO, is directly responsible for the effective execu-tion of this Policy.

World wide security issues for onshore and offshore locations are monitored by the Group Security Manager who is based in Lagos, Nigeria. He issues frequent reports covering security levels and standards around the world to the Company’s managers both onshore and offshore.

Offshore ProductionWithin the lease fleet, the ISPS (International Ship & Port Facility Security Code) is used as the basis of the system and procedures that will safe guard personnel onboard, and for the overall protection of the Company facilities. Security drills, exercises and audits have been carried out during 2010 to ensure that the security pro-cedures in the event of a security incident offshore are well practiced, comprehensive and fit for purpose.

For the operating fleet CSO – Company Security Officers- are designated covering the three main oper-ating areas, Angola, Brazil and Rest of the World.

Onshore OperationsThe Company operates in several countries which are classified as potential high risk with respect to person-nel security. The Company’s Group Security Manager makes regular visits to the Monaco offices to ensure

that security briefings are provided where necessary, that the security files are updated, and to attend secu-rity risk assessment sessions where required. He will hold meetings with management on request where any security related questions have arisen. He has also visited SBM Atlantia during 2010 prior to carrying out a security audit in Mexico for a potential contract. Mid 2010, the Group Security Manager also visited the Brazilian construction yards as part of an external security audit.

Journey management in all of the locations in which the Company operates has continued to receive a high priority throughout 2010.

Discussions were held with risk consultancy companies during 2010 with the objective of agreeing a contract with SBM Offshore for Journey Management support. A contract has been signed with ISOS/Control Risks namely “Travel Security Services” subsequently. Such support covers the monitoring of Group person-nel travel security and whereabouts when on Company business, evacuation co-ordination and the procedures that would come into force should a person have to be hospitalized locally, including medivac support.

Environmental Management

GeneralThe activities carried out by the Company on its own behalf and that of our clients continue to be conducted in the most environmentally sustainable manner to minimize any damage to the local ecosystems.

Offshore ProductionThe Company is aware of the potential environmental impacts associated with the handling of hydrocarbons offshore and is fully committed to safe operations and the protection of the environment. Within the broad scope of environmental aspects related to its opera-tions, special attention is paid to the avoidance of oil

Minimise any damage to the local ecosystems



leakages, to the prevention of unnecessary flaring or emissions to water and air and to minimizing the use of energy and waste outputs.

The Company Policies, Procedures and Codes of Practice tailored for each marine unit provides detailed requirements for the safe and effective control of work, i.e.:

• to comply with local environmental laws; • to comply with MARPOL, the international marine

environmental convention to minimise pollution of the seas;

• to ensure high standard Environmental Management Systems (EMS), meet the requirements of ISO 14001;

• to control and reduce air and water pollution emis-sions and to minimise waste generation;

• to comply with the Company procedures for the safe handling, storage, and disposal of all type of waste including hazardous waste;

• to improve and increase environmental awareness through training and instruction.

The EMS for the fleet of marine units complies with the international ISO 14001 requirements. EMS and strin-gent codes of practices are in place onboard each of the marine units. The Company is committed to identifying potential emission source points, implementing practi-cal preventative measures and tracking emissions which have a direct impact on the environment.

The Company has integrated new environmental reporting criteria within SIRS (the Company’s in house reporting application Single Incident Reporting System) in order to provide more accurate and detailed environ-mental reports on any released effluents. Full year data will be available in 2011.

The Company complies with relevant international oil industry standards, which is illustrated by the plan to have the rest of the fleet covering Rest of the World and Angola with the ISO 14001 standard by the end of 2011 following on from the certification obtained for the Brazilian fleet in 2008 and 2009.

SBM Offshore’s target to be compliant with ISO 14001 standard in 2010 for FPSOs Sanha, Mondo and Saxi Batuque was not achieved due to delays in the imple-mentation as well as ABS availability issues. Audits are planned for March 2011.

In 2011 the objective is to implement the ISO 14001 Standard in the SBM-PC Shore Bases so as to obtain certification. SBM-PC Management System will be updated accordingly to meet onshore environmental requirements.

The primary emission sources for the offshore fleet are the Greenhouse Gases (GHG) from combustion and flaring, which occur during operations. Flaring repre-sents approximately 50% of these emissions. When producing oil and natural gas, carbon dioxide (CO2) and methane (CH4) are usually the most significant components of produced GHG. Emissions associated with the production of energy on the unit, such as steam or electricity required by the unit’s facility has been included in the Company’s emissions records. Main sources of the combustion GHG are emissions from gas usage for boilers and turbines and diesel usage for engines.

Environmental Loss StatisticsThe Company measures all unintentional and inten-tional emissions to land, sea, and air on a regular basis. In 2010, the Offshore Production fleet experi-enced 20 recordable environmental events, of which 15 were contained within the marine unit spaces, without any release to the sea, however there were 5 minor releases to the sea.

The volumes reported are far below the required reporting threshold specified in the International IPIECA / API Standard for Oil and Gas Industry Guidance on Voluntary Sustainability Reporting (IPIECA core indicator ENV-1: Hydrocarbon Spills to the Environment: Number and volume of hydro-carbon liquid spills greater than 1 barrel- 159 litres- that reach the environment).



Top: SBM Offshore workers on the Yme MOPUstor™

Bottom: Muster station on the Yme MOPUstor™



Emissions to Air

The emissions to air as reported by the Company have increased by 14% due to first full year of production for the FPSO Espirito Santo and less planned shut-downs for Angolan FPSOs than occurred in 2009 for flare repairs.

Offshore Production Emissions to Air 2010 2009

CO2 from other sources in metric tonnes 11 Units 12 Units

Change +/- %

BRAZILIncrease in CO2 emissions due to the first full year of production for FPSO Espirito Santo * 857,694 752,314 14%ASIAEmissions are for Yetagun only, which had in 2010 less planned shutdowns than in 2009 5,017 4,393 14%CASPIANMOPU Turkmenistan contract finished 31st July 2009 - 1,552WEST AFRICALess planned shutdowns than in 2009 1,213,519 1,065,392 14%

Total 2,076,230 1,823,651 14%

2.07 million tonnes of CO2 emissions

* level reported in 2009 for Espirito Santo was overestimated and corrected



Onshore Operations

The Company has implemented a series of integrated measures and initiatives aimed to reduce the environ-mental footprint of its Onshore Activities as described below.

Construction SitesIncreasing Environmental performance during fabrica-tion at all constructions sites is ensured by a careful choice of construction yards holding Environmental Management System (EMS) certifications (ISO 14001). This is complemented by constant supervision and monitoring of the implementation of regulatory compli-ance requirements and contractual HSSE standards during the entire project execution phase.

Internal Environmental Audits are carried out when necessary to support the HSSE Management on site. For example, in October 2010 an extensive environ-mental audit was carried out on a construction yard in Norway where the Company is currently finalizing a major project.

OfficesWaste segregation programs have been established in the offices across the Company’s project execution centres. Since December 2009 in the Monaco offices, in line with the local authority (Societe Monegasque d’Assainissement) and with the support of the Monaco Government initiative, the Company has implemented waste segregation programs.

The Schiedam office has a waste management pro-gram, which separates waste into different streams, paper waste and cardboard waste, residual waste, small chemical waste. All IT residual waste is disposed of in a specialized manner.

The Houston office provides an IT computer recy-cling program that is extended to employees private computers.

The Kuala Lumpur office sets specific objectives for its office recycling and efficiency, including reduction tar-gets for energy and paper usage for the upcoming years.

Energy efficiency measures and programs to enhance the employees’ environmental protection awareness, including a Company environmental comprehensive reporting system are being taken into the account for the future.

TravelSBM Offshore continues to promote car sharing for the Monaco employees commuting to the office by supporting the existing car sharing scheme. The Company reimburses 50 % of the car parking fees to all SBM Offshore employees sharing their vehicles with other Monaco workers. This initiative contributes to reducing the global CO2 emissions due to work related travel by car.

SBM Offshore has introduced a TelePresence network in the Company’s offices in 2009 to decrease amount of travel with the added benefit of reducing carbon emissions linked to its onshore activities. TelePresence centres are in Schiedam, Houston, Monaco and Kuala Lumpur.

Success of this initiative has been impressive and so two new TelePresence centres have been opened in 2010 in the Company’s offices in Macae (Brazil) and Luanda (Angola). In 2011, three new centres will open in Monaco, Singapore and Rio de Janeiro.

6 Telepresence centres to decrease number of travels

Human Resources

54 SBM Offshore – Sustainability Report 2010SBM Offshore employees at the yard in Norway

Human Resources


Human Resources


3Human Resources


58 People Reviews at SBM Offshore and Message of Corporate HR Director 62 Introduction 64 Corporate activities 65 Global workforce 67 Employment and remuneration 70 Performance and Career development

Human Resources


People Reviews at SBM Offshore and Message of Corporate HR Director

Page

58

Performance and Career development

Page

70

Employment and remuneration

Page

67Corporate activities

Page

64

Global workforce

Page

65

Human Resources


People Reviews

Left and Right: SBM Offshore

employees on the Yme MOPUstor™

in Norway

Human Resources


A case Study and message of Corporate Human Resources Director

Future-focused, strategic career planning allows SBM Offshore to identify in-house talent who demonstrates the potential to take on greater leadership roles. The Company actively anticipates its own organisational needs to ensure continued growth and success.

In the first half of 2010, seven People Reviews were conducted across the Company in Monaco, Houston, Kuala Lumpur and Marly (in Schiedam, simi-lar sessions have been held for several years). During this first cycle, a total of 711 employees were reviewed. The second cycle is on-going, and the People Reviews process will continue on an annual basis.

This most recent HR initiative includes reviews at the top Executive level and in all of the Company’s offices worldwide, thereby laying the groundwork for the

A new pivotal process called People Reviews was commenced in 2010 in the Company’s worldwide Talent Management system, which was introduced by the Company in 2009. These day-long meet-ings which bring together a group of SBM Executives, Senior Line Managers and HR Managers encourage in-depth discus-sions on strengths, developmental needs and possible future career paths of SBM Offshore employees worldwide.

The goal of People Reviews is to iden-tify personnel who have high potential for growth in the Company for today and tomorrow. Adapted training, internal and international mobility, as well as develop-ment mapping skills are proposed to the individuals reviewed.

The goal is to identify personnel who have high potential for growth in the Company

career development of SBM Offshore employees to support the Company’s growth plans.

Human Resources


Didier Beynet’s Message

Looking towards the future’ is a guid-ing principle of the Company’s Corporate Human Resources Department.

Indeed, the Company has always paid close attention to its employees’ develop-ment through training programs for office staff, on-the-job training for offshore crew and technical education (in training schools) for construction yard personnel.

Two years ago, SBM Offshore launched a corporate Talent Management and Succession Planning Project to face two organisational challenges: generational transitions in management and rapid growth of the Company.

The following year, the People Reviews process was successfully applied to top management with the objective of targeting the next generation of managers. This initia-tive has been progressively implemented throughout the Company.

In an organisation which depends on the innovation of its technology, the purposeful advancement of personnel necessitates a long-term HR perspective; this is the very cornerstone of the Company’s success.

Didier Beynet, Corporate Human

Resources Director

Human Resources

SBM Offshore – Sustainability Report 2010 61View looking down from inside the Yme MOPUstor™ flare stack

Human Resources


The Company equally pursues an employment policy following the principles of equal opportunity, thereby preventing any discrimination on the basis of sex, age, race, religion, political or trade union affiliations, nation-ality or disability.

For reporting purposes, the global workforce is divided into two segments: Onshore Operations and Offshore Production. The workforce is hired under permanent or fixed-term contracts and can be divided by seg-ment, employment type, region, gender, or age. The Company also identifies White Collar and Blue Collar employees.

IntroductionBusiness sustainability includes constructive steward-ship of all our resources, including our people, which are the Company’s greatest asset.

This section provides a look into the Company’s spe-cific HR practices and shows how the Company’s people evolve in their careers. The Company works hard to integrate social balance and equal oppor-tunities and being an international organisation, the preservation of different cultures where the Company operates, is crucial. The Company also believes that social responsibility means investing in the well-being of the staff, maintaining a competitive compensation and benefits package and providing the tools neces-sary for success. This is accomplished with annual performance reviews, personalised training programs, and global talent management.

The intention of Corporate Human Resources (HR), as described by SBM Offshore’s Group Management System, is “to develop and maintain an organisation in line with the Corporate Strategy and ensure that the Company’s Operating Units have the right people in the right position at the right time”. As such, the Company focuses on generating an attitude of enthusiasm and pride throughout the Company and on providing a most favourable environment for professional and personal development with high rewards.

Employment is offered on competitive terms in a safe and healthy working environment with a personnel policy in which the Company makes the best possible use of each person’s skills in a mutually beneficial man-ner. The Company also provides appropriate training to all employees and encourages personal development.

Human capital is the Company’s greatest asset

Human Resources


Employees dedicate a considerable portion of their time, knowledge, and expertise to SBM Offshore. Accordingly, the Company has the following responsibilities: • pursuing a personnel policy in

which the best possible use is made of each person’s skills and personal development is encouraged;

• offering good and competitive terms of employment and safe and healthy working conditions;

• pursuing an employment policy following the principles of equal opportunity, preventing any dis-crimination on the basis of sex, age, race, religion, political or trade union affiliations, national-ity or disability;

• minimizing risks for health and safety incidents by: – implementing internationally

recognized industry stand-ards such as OHSAS 18001;

– providing appropriate training to all relevant personnel;

– developing and using engi-neering and technology know-how to improve health and safety at the facilities we design, build or operate;

– cooperating with clients, project partners and suppliers to improve health and safety performances;

– measuring health and safety performance and communi-cating our progress on a regular basis.

• preventing undesirable conduct such as intimidation, harassment and abuse of authority (further details of SBM Offshore’s Policy Against Harassment are available through the Human Resources department);

• communicating in an honest and clear manner;

• being open to suggestion, ideas and criticism;

• avoiding conflicts of interest between private activities and the employee’s role in the Company’s business, particularly in their relations with clients, competitors and suppliers;

• avoiding disclosure of inside information;

• not asking anyone to break the law;

• preventing, as far as possible, problems of conscience in the performance of their work and striving to find a proper solution to them where these still arise;

• establishing the means for employees to report suspected irregularities;

• applying anti-drug, anti-smoking and anti-alcohol abuse policies (further details of SBM Offshore’s policy against Drug and Alcohol Use at the Workplace and its No Smoking Policy are available through the Human Resources department);

• striving for a good relationship with those who represent SBM Offshore employees;

• providing a clear framework of operating procedures to promote efficiency and to prevent mistakes;

• preserving employee privacy and confidentiality of employee records;

• creating a climate in which employees are encouraged to adhere to this code;

• adhering to applicable national and international human rights standards, including the United Nations Declaration of Human Rights and the OECD Guidelines for Multinational Enterprises;

• adhering to the fundamental ILO conventions regarding child labour, forced labour, non-discrimination, freedom of association and collective bargaining, including among others: – preventing the employment of

children under the minimum age of completing compul-sory schooling and, in any case, the minimum age for employment shall not be less than 15 years old;

– preventing the use of any form of forced labour;

– respecting freedom of association and collective bargaining.

SBM Offshore’s Code of Conduct

Towards Employees

Equal opportunities

Human Resources


Focus on Talent Management & Succession PlanningA series of programmes have been implemented with the Talent Management and Succession Planning process, which lay a solid foundation for the employees and the Company. In 2010, an initiative called People Reviews was introduced (please see more detailed information in article page 58). In addition to the long-established annual Performance Appraisal review, these recent programmes have the purpose of supporting business growth and securing key roles and competencies in line with the SBM Offshore Corporate Strategy.

As a subsequent step to Talent Management, the Company has decided to implement a customised Leadership and Management Development programme. This programme intends to create and maintain a unique SBM Offshore leadership and management culture throughout the Company. The programme will be launched in 2011, starting at the highest Executive Level, with the intention of successively reaching all management levels.

Corporate ActivitiesFurther to the Company reorganisation described in the 2009 Annual Report, the SBM Offshore Executive Management Committee has been created. This Executive Committee is composed of all Board of Management members, each Operating Unit President, as well as the Corporate HR Director and General Counsel.

Under the aegis of the Corporate HR Director, the HR Managers of each Operating Unit meet regularly throughout the year to share their best practices, capi-talise on experiences, consolidate HR policy alignment, and follow-up on Corporate HR projects.

The Lease Fleet HR activities are organised separately under the SBM-PC Operating Unit and specifically provide the adequate crew, their logistics, as well as suitable training, for the offshore activities. All data con-cerning these activities are reported under Worldwide Offshore Fleet.

FPSO Topsides

Human Resources


The Company’s workforce is distributed geographi-cally over the locations of each of the seven Operating Units, construction sites, shore bases and onboard the offshore fleet.

The Company's Marketing, Sales, Treasury & Corporate Functions (MSTC Functions) are spread over the Execution Centres, with a total of 124 employees at the end of the year 2010. In 2009, the Marketing, Sales, Treasury & Corporate functions were indicated under each location, which explains the differences that can be found between 2009 figures below and those reported in SBM Offshore 2009 CSR report.

The headcount in Monaco comprises the aggregate of the following three Operating Units: SBM-MC (Turnkey Systems), SBM-PC (Lease and Operate) and SBM-Services (Turnkey Services).

The workforce in SBM-MC remained similar to 2009, with a total of 1,924 employees. This steady rate is confirmed by a similar level of activity on the construc-tion sites, as well as in the Monaco offices.

The headcount in SBM-PC rose by 10% to 1,850 employees in 2010 compared with 1,675 employees in 2009. The start-up and pre-operating phases of sev-eral production units explain this trend that is mainly related to the shore bases and offshore fleet personnel (belonging to a large extent to the FPSO P-57) of this Operating Unit.

This upward curve was also seen by SBM-Services’ workforce, which increased by 7% to 266 employees in 2010 compared with 249 employees in 2009, due to the increased volume of projects in this Operating Unit.

The Schiedam execution centre’s workforce showed the highest increase with +18% bringing last year’s figure of 523 employees up to 616. This was due to the major projects in progress, including FPSO Cidade de Paraty, while SBM-MSC’s headcount went up by 8% due to increased workload.

In Houston, SBM-Atlantia’s staff numbers grew by 4.5% to 601 employees in 2010 compared with 575 employees in 2009, thereby reflecting the upturn in

2005

2479

685

0

1000

2000

3000

4000

5000

6000

7000

2006 2007 2008 2009 2010

Total Employees over past 5 years with breakdown between contractors and permanent employees

2458

1366

2909

1493

1929

3460

1644

4114

1534

3617

Total number of permanent employees Total number of contract employees

Total Employee Headcount by Location

A Schiedam, NetherlandsB Houston, USAC Kuala Lumpur, MalaysiaD MonacoE Marly, SwitzerlandF Worldwide Offshore FleetG Construction SitesH Shorebases

Total: 5,758

A621

C381

E24

F1,618

G1,121

H211

D1,170

B612

Global Workforce Information

HeadcountThe total headcount is based on all Company employ-ees registered on 31 December 2010 for Onshore Operations and Offshore Production. Headcount, therefore, equals 5,758 employees, an increase of nearly 7% compared to 2009.

4,114 Permanent employees

Human Resources


activity created by several on-going major projects, namely the three drilling rigs and the relocation of FPSO Espadarte to the Baleia Azul field.

In Kuala Lumpur, there was a 10% increase to attain a total workforce of 377 in 2010 compared with 344 in 2009. This increase can be attributed to the execution of large projects this year, particularly related to the supply of the FPSO Aseng.

At year end 2010, the headcount for permanent con-tracts totalled 4,114 employees representing 71% of the Company workforce and the headcount for contract employees totalled 1,644 employees repre-senting 29% of the workforce. The yearly average ratio of contractors to staff was 32%, which was below the maximum desired level of 33%. The reduction of the ratio compared with the 36% of year end 2009 can be explained by the fact that prior years percentage was only a snapshot of the situation at 31December 2009, whereas the yearly average would have been a few points lower. Also, recruitment efforts have been directed at increasing the permanent proportion of employees in order to maintain efficiency and keep core knowledge and expertise in house.

1,644 Contract employees

7% increase in Company employees

compared to previous year

Workforce diversity Over the decades, with its business spreading over 6 continents, the Company has embraced the chal-lenges offered by different environments and adapted to this cultural mosaic. This need for adaption and in-country development has generated flexibility and diversity at all levels of the Company’s workforce. Indeed, the Company has managed to turn this diver-sity into strength, building complementarities and synergies amongst its employees.

The Company’s policy to recruit local-based employ-ees whilst at the same time maintaining competency requirements through training, has led to the employ-ment of more than 55 different nationalities. This is demonstrated in the chart, with a high percentage of French, Dutch, Brazilian, Angolan, American, British and Malaysian nationals, which is a natural consequence of our offices, shore bases and units’ locations. In 2010, the proportion of Angolan nationals has experienced the most significant increase, fol-lowed by the Malaysian nationals. This is due, on the one hand, to the employment of Angolan workers at the PAENAL construction yard, and to the nationalisa-tion programmes onboard the operating fleet, on the other hand.

Absenteeism and turnover The average rate of absenteeism due to normal illness remains steady at 2.6% in 2010 (2.5% in 2009).

Voluntary departures have been the main trigger for the Company’s slight increase in turnover rate, which has risen from 9% in 2009 to 10% in 2010 and can be related to the economic up-turn. Nevertheless, the percentage of turnover remains low compared to the average rate given for similar industries in Europe and the USA. This can be attributed to the Company pro-viding a competitive equitable remuneration package, good working conditions and overall professional satis-faction to its core resource: its employees.

0

700

600

900

800

500

400

300

200

100

Workforce diversity- Permanent Staff

349

528 484

333

51

495

48

818

152 45

338

48

157

268

French

Ang

olan

Dutch

Brazilian

Am

erican

Malaysian

British

Others

South A

frican

Indian

Chinese

Po

lish

Filip

ino

Italian

Human Resources


Employment and Remuneration

Equal opportunitiesAt SBM Offshore, employment conditions are strictly driven by the principle of equal opportunities. The sal-ary scales are in line with a competency matrix and take into account qualifications and professional expe-rience. The Company considers this as an attractive element of the recruitment strategy.

The offshore engineering business has long been male-dominated; however, the Company has adopted a recruitment strategy to increase the percentage of women employees in the onshore segment over the past 15 years. This initiative has been successful to a certain degree, even though the number of graduates coming out of engineering schools and universities are still predominantly male, and this limits the gender ratio in engineering positions. Moreover, the operating crew onboard production units remains very much masculine as is the case for all operators in this area of busi-ness. The total percentage of female/male permanent employees from both Onshore Operations and Offshore Production was 21% women- 79% men in 2010, which is similar to the previous year.

This being said, the feminine population is indeed represented in the Management positions of the SBM Offshore Group, with 15% of these positions being held by women (onshore).

The basic salary ratio of 71% has been obtained by taking the average basic salary earned by female employees and dividing it by the same average earned by male employees. This percentage is satisfactory taking into account the strong technical bias of a large majority of positions in the Company’s field of business with associated higher salary which are filled by a high percentage of male employees (as opposed to higher percentages in the services industry).

Total manhours over 4 years with breakdown between offshore and onshore

2.10%

2.20%

2.30%

2.40%

2.50%

2.60%

2.70%

0

2

4

6

8

10

12

14

2007

3.5

4.9

2008

5.32

5.76

2009

5.79

6.57

2010

6.49

5.95

Absenteeism rate

Total million manhours Onshore Operations (excluding contractors) Total million manhours Offshore Production

0

100

200

300

400

500

0

3%

6%

9%

12%

15%

2007 2008 2009 2010

Total permanent employees turnover over past 4 yearswith breakdown between causes and turnover percentage

Fatalities (death resulting from a work incident)Death (natural causes - non work-related) Turnover due to dismissalTurnover due to voluntary resignationTurnover due to retirementPercentage of permanent employee turnover

15% management positions held

by women onshore

21% of women in permanent workforce

Human Resources


Compensation and BenefitsThe compensation and benefits package offered to the Company’s personnel remains one of the major ele-ments in employee attraction and retention.

During the annual cash remuneration review (basic sal-ary and bonus) of the individual staff members, the key factors of local market, annual inflation and individual performance are taken into account.

Salary benchmarking analysis was performed in 2010 to verify the competiveness of the Company’s com-pensation package compared with peers in the oil and gas industry. The results confirmed that the Company’s remuneration package, where the variable and perfor-mance-related element is high, is well above market average, and remains competitive and attractive to potential new employees.

The Employee Share Ownership Plan, which encour-ages employees to invest in SBM Offshore shares, remains an attractive staff benefit, thanks to a signifi-cant contribution being paid by the Company.

A Restricted and Performance Share Unit Plan is in place and constitutes the Long-Term Incentive Plan for senior staff and other high potential staff.

The Company has an attractive pension benefit system for all its employees. As a multi-national company, it operates various pension schemes depending on the country of activity. The majority are “defined-contribution” plans, with a minor portion being “defined-benefit” plans.

Employee Well-beingConscious of the need to protect its most important asset, the Company is continuously focused on the well-being of its personnel and provides a pleasant work environment. In this respect, several initiatives have been implemented during the past few years across the Company’s Operating Units, namely: • Stress management presentations to managers

(Monaco, Houston, & Schiedam); • Employee care officer consultations available to

employees (Schiedam & Monaco); • Stop smoking campaigns in Monaco; • Fitness rooms in Houston and Monaco; • Organisation of social events at all locations to

favour interaction throughout the organisation; • Bicycle plan in Schiedam; • Life cycle based personnel policy in Schiedam; • SBM Nursery: this Monaco-based professionally-run

nursery and pre-school structure has increased its capacity by 10% at mid-year.

This comes on top of the safe work environment that the Company considers as a priority, as described under the HSSE section.

Attractive compensation package

Focus on Well-being of employees

0

1000

2000

3000

4000

5000

20,0%

20,5%

21,0%

21,5%

22,0%

22,5%

2007 2008 2009 2010

Permanent employees over past 4 years with breakdown between part time/ full time and men / women

Total number of women working full-timeTotal number of women working part-timeTotal percentage of women in permanent workforce

Total number of men working full-time

Total number of men working part-time

Human Resources


SBM Offshore employees on the ‘Delba III’ Drilling Rig in Abu Dhabi

Human Resources


Performance and career development

Employees’ performance reviewTo ensure business continuity, personnel satisfaction and efficiency are key factors on which the Company’s Management maintains a keen focus. To help monitor those crucial indicators, the annual employee perfor-mance appraisal exercise (permanent employees) has proven to be a valuable tool. It is a long-established process at SBM Offshore and has been modernised over the years in order to take into consideration the Company’s strategic objectives and the employee’s career expectations.

All performance appraisals under Onshore Operations are made in accordance with the Company’s Competency System whereby employees are appraised against specific competencies related to their position, as well as the fulfilment of set objectives. This year, emphasis has been placed on the purposeful setting of individual career development objectives, in line with the overall needs of the Company.

Since its successful introduction in 2009, the intranet- based electronic performance appraisal system was extended to all Operating Units in 2010. The tool has proven to be highly beneficial to the process; it enables the punctual tracking of the completion progress, and provides statistics for reporting, training and develop-ment purposes.

The annual performance reviews are one of the sources of valuable input information for the Talent Management and Succession Planning processes.

Offshore Production appraisals are performed for all permanent and contract employees working onboard the production units. All employees are appraised in direct compliance with the offshore work activities and the assessments cover the fields of safety, teamwork and professional competence. This exercise is done via SBM Offshore HR crew management system.

The performance appraisal completion rate remained high this year at 95%, confirming overall awareness of the great importance of this exercise.

Training and developmentDevelopment of competencies of employees through general and specific programmes is crucial to the Company’s business continuity and changing environ-ment. It is also a necessity for employees to be able to picture themselves as part of the Company’s future.

The Company provides a range of training and devel-opment opportunities to enhance the skills of its employees worldwide. The total training days recorded for 2010 was 18,600 days, equal to 148,987 hours, and averages 33 hours of courses per person, represent-ing a 31% increase compared with 2009. This upward trend in training hours is visible for both offshore and onshore.

White Collar StaffTraining is based on the Company’s objectives. The need for training is discussed during the annual Performance Appraisal session and a training plan is developed for execution during the following year. The actual results are closely analysed to identify areas for improvement.

Training covers both internal training, which is per-formed by Company staff or consultants, and external training, which is performed outside the Company’s work centres by specialist training providers.

Training during 2010 was mainly technical-related, followed by managerial- leadership and behavioural training. Attendance at conferences and seminars was high on the agenda, indicating the desire to remain in touch with new developments in specific fields of study. Safety courses, language lessons and computer software trainings were well attended.

Internal training for management continues with the now long-established Gusto Management School. Its programme focuses on specific project management courses with a target group of staff who are envisaged

33 Training hours

per employee in 2010

95% performance appraisals completed in 2010

Human Resources


to have lead, supervisory or managerial positions in the future. For the 2010 session, 24 participants from the Schiedam and Monaco offices attended the pro-gramme, totalling 2,240 hours of customised courses.

As a complementary approach to training and devel-opment, student internship programmes continue to function well and enable judiciously-selected graduates to obtain their first work experience in the Company and, in many cases, successful employment.

Blue Collar Staff

Given the significant technical and safety requirements of the operations onboard the production units and work at construction yards, the Company considers on-the-job training and external courses to be of utmost importance for all its personnel, whether permanent or contractor.

This principle applies not only to long-standing crew and technicians but also to the additional workforce available locally, which needs to familiarize itself with the specifics of the Company’s activities. To meet this need, the Company supports nationalisation programmes, namely in Brazil, Angola & Malaysia, an initiative which is complemented by the PAENAL Construction Yard Training School in Porto Amboim (please see local workforce in sustainable initiatives article page 80)

2005

2479

685

2007 2008 2009 2010

Permanent employees training hours over past 4 years with breakdown between white and blue collar Staff

white collar staff blue collar staff

180,000

160,000

140,000

120,000

100,000

80,000

60,000

40,000

20,000

0

-

-

-

-

-

-

-

-

-

-

2005

2479

685

2007 2008 2009 2010

Performance appraisal offshore and onshore over past 4 years

performance appraisals for permanent employees - Onshore Operations performance appraisals for permanent employees - Offshore Operations

100%

90%

80%

70%

60%

50%

-

-

-

-

-

-

-

-

-

-

-

148,987 Training hours in 2010

Renewable Energy Systems

72 SBM Offshore – Sustainability Report 2010SBM Worker in Abu Dhabi



4Sustainable Initiatives


76 Host country Sustainability, Local Content Introduction by Francis Blanchelande, COO of SBM Offshore 78 Sustainable Initiatives Introduction 80 Local workforce 82 Local investments 84 Local content 86 Supply chain 90 Renewable energy introduction 91 Renewable Marine energy 92 Offshore Wind Energy



Local investments

Page

82

Renewable energy introduction

Page

90

Supply chain

Page

86Local content

Page

84

Local workforce

Page

80



“Because of its multiple projects executed and/or oper-ated in emerging countries, SBM Offshore has always been willing to develop the skills of the national work-ers employed to support the Company's projects and operations, onshore and offshore.

This process has started by implementing 'on the job' training by the Company skilled personnel, then by organising specific technical training in local organisa-tions and then by setting up training schools managed by SBM Offshore’s staff. Finally, some national employ-ees have been sent to foreign technical schools and/or to foreign universities.

After 40 years of this continuous practice, the Company now employs more than 2,000 national managers, engi-neers and skilled personnel. The average percentage of national employment in SBM Offshore worldwide operations is 65%, with peaks up to 95% in specific countries.

One particular example of this successful strategy is the PAENAL yard in Angola: SBM Offshore has been directed in 2007 by the Angolan Authorities to establish in a remote place, Porto Amboim 200 km south of Luanda, an FPSO integration yard and to employ people from the province of Kwanza Sul. After 3 months of establishing the first base, a school was opened in Porto Amboim and started training fisher-men, unskilled workers and unemployed people to become scaffolders, pipe fitters and welders. One year later, the first CALM buoy built in PAENAL was deliv-ered to Chevron Angola: the yard then employed 120 Angolans. Five years later, the PAENAL yard will receive the first FPSO to integrate process modules on board, modules entirely built in the yard: the yard will then employ 600 Angolans.

In 2010 - this is an example of a win win situation between SBM Offshore and its national suppliers – the Company has supplied to Petrobras the FPSO P57, the first Unit to be contracted with a 65% local content.

Not only did SBM Offshore use national suppliers, but in order to enable the use of certain local equipment, the Company modified its design to suit the capabilities of these suppliers. Equipment from these suppliers is now being used on other FPSOs in Brazil.

In certain countries where SBM Offshore operates, the Company also supports or drives Social projects. In Brazil, as an example, we help fund a home for homeless children with drug related problems in poor areas of Rio and promote to give them education: the Company has organised mechanical and electrical courses in Rio, given by its own offshore specialists, and has organised periods of apprenticeship for the best students, with their national suppliers in Macae; the next step is to organise apprenticeship periods on board the Company's FPSOs in Brazil.

Also to be mentioned is another similar initiative with street children in Luanda (Angola), the support (local and from SBM Offshore’s offices) of an orphanage on Sakhalin Island, the distribution of drinkable water mak-ers in Myanmar and the construction of a complete orphanage complex in Lubango (Angola), paid for by the Company, built by a national Contractor with the works supervised by SBM Offshore's staff.

Local content is a policy from emerging countries, is an opportunity for foreign Contractors and is a worldwide success story for SBM Offshore.”

Host country Sustainability

Local Content Introduction by Francis Blanchelande, COO of SBM Offshore



Society provides SBM Offshore the social and physical infra-structure for entrepreneurship. Accordingly, we have the following responsibilities: • not doing business in countries

subject to international and rel-evant national embargoes and respecting the export and import control regulations of countries where we work and operate;

• respecting human rights as formulated in the Universal Declaration of Human Rights;

• not undertaking commercial activities in countries where it is made impossible to adhere to this code;

• not granting a cash gift or non-cash gift for the purpose of obtaining a contract or any improper business advantage;

• In general, the giving of gifts is only acceptable if such practice is not for an improper purpose, if such practice is accepted locally and in the industry as a token of appreciation, and if such practice is in compliance with applicable laws;

• not offering or giving money or anything of value, whether directly or indirectly, to any public official, political party, or candidate to obtain or retain business or to direct business to any person;

• not engaging agents and

commercial representatives in violation of SBM Offshore’s guidelines for the use of agents (further details are contained in Annex I hereto);

• not entering into joint venture or similar relationships that would violate SBM Offshore’s guidelines for commercial rela-tionships with foreign officials (further details are contained in Annex I hereto);

• not engaging in insider trading or other acts prohibited by SBM Offshore’s Regulations Relating to Insider Trading (for further details Code of Conduct);

• preventing security personnel from infringing on the liberty and security of others;

• taking all reasonable measures to avoid involvement or complic-ity in human rights violations in its relationships and interactions with state security forces;

• supporting initiatives that, within the framework of our possibili-ties and aims, contribute to the improvement of social welfare;

• striving for a constructive rela-tionship with non-governmental organizations;

• not accepting any proceeds of crime or terrorism and taking appropriate measures to prevent money-laundering including the reporting of suspicious trans-actions (e.g. high value cash

transactions, payments between unknown entities or through excessive intermediaries, pay-ments made by/ received by suspicious entities or involving high risk counties);

• striving for fair competition by respecting tangible and intellectual property rights of competitors and respecting the relevant competition laws (including the obligation not to engage in bid rigging, price fixing, or other similar arrange-ments designed to improperly undermine competition);

• assessing the social, environ-mental and economical impact of our intended operations prior to the commencement of our operational activities, including the impact on local communities and human rights;

• (in cooperation with or on behalf of our clients) assessing local needs for social, economical and environmental improvements in all areas where we operate, and providing support to local com-munities in order to realize these potential improvements, using our skills and capabilities, within the legal and cultural constraints of these local communities.


Towards Society / Communities


IntroductionForging a path for any business in the twenty-first century requires a global perspective, social con-sciousness, a collaborative attitude and a focus on technological innovation. SBM Offshore pursues all of these goals, and recognises the key role the Company’s stakeholders play in helping to realise them. Stakeholders include host countries around the world with their local content requirements, includ-ing the men and women of local communities that become the Company specialised workforce.

Thanks to these sustainable relationships, the Company has been able to promote economic growth in developing countries through knowledge transfer and infrastructure creation. The Company requires its suppliers to be compliant with the Company’s Code of Conduct. Through strategic partnerships the Company has also engaged in the development of key enabling technologies for more ecological fossil fuels like liquefied natural gas and Renewable Energy like wave energy conversion and offshore wind farms.

The Company is constantly evaluating a wide range of developments and ideas related to its business which could develop into sustainable initiatives if they meet the Company’s strategic sustainability objectives.

In this section of the report a selection of the Company’s sustainable initiatives has been high-lighted as they are on-going, well developed and, in the Company’s view, interesting to focus and report on in more detail. The selection focuses on the following objectives: SBM Offshore’s host country sustainability, the supply chain and Renewable energy.

Workers at the PAENAL yard



AngolaSBM Offshore has been present in Angola since 1968. Over the last four decades, activities have included FPSO leasing, offshore installation and the construc-tion of buoys, steel structures for turrets and topsides modules. A continuous engagement and strong rela-tionships have enabled the Company to promote the local community through job creation and training.

In 1997, SBM Offshore formed a joint venture with Sonangol, the Angolan National Oil Company. From this union came Sonasing, a company established to promote Angolan participation in oil and gas activi-ties, acquire FPSOs and FSOs and charter them to the Angolan oil industry.

Soon thereafter, in 2003, SBM Offshore and Sonangol created their OPS Serviços de Produção de Petróleos Ltd (OPS) joint venture. This second collaboration permitted both companies to operate and manage the Angolan fleet together. OPS also introduced training programmes which provided craft skills, safety training and offshore practical skills to an entirely new genera-tion of Angolan workers.

An expanding pool of skilled local labour was essen-tial to maximise Angolan economical development resulting from the oil and gas sector. With a third joint venture, the Porto Amboim Estaleiros Navais Lda (PAENAL) yard, the companies extended the existing training programme with the creation of a dedicated training facility in addition to the much needed fabri-cation and integration yard. This training school was established in Porto Amboim to train locally hired, primarily unemployed persons. The first training pro-grammes initiated at the school were welding, fitting, rigging and scaffolding.

Newly trained workers begin with structural works. As they progress and gain experience, they move to more skilled labour related to topsides fabrication. The Porto Amboim Training School has a capacity of approxi-mately 150 trainees per year. The courses generally last for twelve weeks for groups of thirty students. Formal competency tests are carried out and certificates are issued to successful graduates. All intakes commence with two weeks of HSE training. Success rate of train-ees is above 80%.

The SBM Offshore, Sonangol and the new partner DSME (Daewoo Shipbuilding & Marine Engineering) announced investments in the development of the PAENAL yard will increase the scope of training, dramatically growing the size of the workforce and a variety of technical skills. PAENAL will become the only yard in Angola capable of fabricating topsides modules with a quayside large enough to accommodate a VLCC and a heavy lift crane to facilitate integration, hook up and commissioning of large FPSOs.

Once fully operational, PAENAL will provide Angolan workers with approximately two million man-hours of work annually. Already, the Porto Amboim Training School has recorded a total of 202,736 hours of training for PAENAL’s employees where the ratio of expatriates to Angolans has remained stable all along its develop-ment at 1:3.

BrazilThe Company signed a first contract with Petrobras in 1996 for the lease and operate contract of FPSO II in Campos Basin. Since this date, SBM Offshore has delivered seven FPSOs to clients, including Chevron and Shell, for operation in this country.

In 2005, the Company organised Competency Assurance training programme comprising a dedicated facility in Macaé, Brazil to support its FPSO operations. SBM Offshore implemented the training programme to achieve its nationalisation targets of over 70% Brazilian employees within its expanding fleet.

The Computer Based Training (CBT) training module, available in Portuguese, provides detailed information about FPSO equipment and operations, but also safety. The Company trains approximately seventy Brazilian employees per year, from the fundamentals of petro-leum production activities to the advanced process simulator course, using its own FPSO process control room simulator. The purpose of the DCS Simulator training centre is to improve operational performance offshore by exposing trainees to a wide variety of simu-lated process upset conditions that demand operator response. This ensures that employees are well pre-pared to properly deal with any situation.

Local Workforce



Moreover, the Brazilian government recently issued laws requiring that apprentices must fill five percent of the technical workforce of every company. SBM Offshore supports the Brazilian Apprentice Program with Casa do Menor a non-governmental organisa-tion which is accredited by the government to deliver basic education. The Company directly sponsors a maintenance course for thirteen apprentices every year. The objectives of the course are to teach basic theory and practice to students in the areas of mechan-ics and electricity. Apprentices are evaluated quarterly against offshore induction programme objectives. The Company offers the top two students an offshore assignment. In 2010, three apprentices expressed their enthusiasm and desire to join the maintenance team.

Equatorial GuineaA very motivated group of young trainees from Equatorial Guinea has been selected by Noble Energy to be part of the nationalisation plan for the FPSO Aseng. SBM Offshore is privileged to be working with them. The trainees are taking English language training in Equatorial Guinea and are becoming familiar with basic oilfield equipment and systems.

The next step is a big change from the Company’s standard national training programmes. The trainees have been assigned to Aberdeen Skills and Enterprise Training Centre (ASET), in Scotland, where they are consolidating their knowledge over an 18-month practi-cal programme. The difference between this centre and usual vocational training colleges is that all the training is Oilfield Practical training with a strong focus on the use of typical Safety Management System tools such as Risk Assessment, Permit to Work, COSHH, and Toolbox Talk. They have already learned the NEBOSH Safety Diploma material. The progress of the train-ees is monitored regularly by the ASET centre Senior Instructor and the SBM Training Department, who also keep the trainees up to date on the progress of the actual FPSO conversion project in Singapore. Aseng‘s trainees from Equatorial Guinea will benefit from 49, 000 training hours.

0

10%

20%

30%

40%

50%

60%

80%

70%

Brazil Angola Malaysia Overall

% of national crew in SBM Offshore fleet at end 2010

Renewable Energy SystemsHost country Sustainability


The PAENAL (Porto Amboim Estaleiros Navais Lda) FPSO integration yard is one of the most significant investments ever made in fabrication in Angola and provides a distinct competitive advantage to its part-ners, SBM Offshore, Sonangol and their new associate DSME (Daewoo Shipbuilding & Marine Engineering). The association with DSME will facilitate the PAENAL Joint Venture’s investment capacity for phase II as well as further improve the production and construction expertise of the yard.

PAENAL is an ambitious and groundbreaking joint venture aimed at further developing Angola’s ability to support its growing offshore oil and gas sector. It will: • Increase the fabrication capacity in Angola; • Provide training and create job opportunities for

Angolan workers; • Offer the capability to build complex topsides mod-

ules and other steel structures; • Provide 490m of quayside with 10m water depth

for Very Large Crude Carrier (VLCC) berthing and a heavy lift crane specially designed for lifting process modules for integration and FPSO com-missioning work;

• Encourage global service companies to establish themselves in Angola.

PAENAL’s development has been planned in two phases allowing for a steady increase in capability and capacity. • Phase I (operating status since 2008): a small mod-

ule and general steelwork fabrication facility. This initial phase comprises a training facility, 80 metres of quayside with a water depth of 7 metres allowing the importation and customs clearance of equip-ment and raw materials directly at PAENAL, as well as the exportation of any products built by PAENAL. PAENAL currently has the capacity to produce between 2-3,000 tonnes per year;

• Phase II: The full phase development encompasses the completion of a 490m deepwater quayside suitable for berthing a VLCC-sized FPSO, the com-pletion and commissioning of a heavy lift crane with a minimum of 2,000 tonnes lifting capacity (designed by SBM-GustoMSC) and the erection of all of the remaining warehouses, pipe shops and storage facilities.

Once the expansion plans are complete, PAENAL will become the only yard in Angola capable of fabricat-ing topsides modules with a quayside large enough to accommodate a VLCC and a heavy lift crane to facili-tate integration, hook up and commissioning of large FPSOs. The ultimate fabrication capacity will then be in the range of 8-10,000 tonnes per year. Through strategic partnerships and secured projects, Phase II is now underway.

The progress of the PAENAL yard demonstrates SBM Offshore’s continuous engagement with the PAENAL Joint Venture partners Sonangol and DSME to benefit the local community through job creation and training (please see article on local workforce page 82).

Once fully operational, PAENAL will provide Angolan workers with approximately two million man-hours of work annually. There are several FPSO prospects identified for offshore oil production in Angola in the next few years but the current fabrication facilities in Angola will be limited to handling only a portion of this workload. The PAENAL yard addresses some of this shortfall in fabrication capacity and provides the opportunity for a substantial increase in the Angolan content around future projects.

The PAENAL yard should encourage other interna-tional contractors and service providers to establish a presence near Porto Amboim. PAENAL provides a sig-nificant stimulus for the local economy by using small and medium-sized companies in the region to serve the needs of the yard. It is anticipated that support ser-vices in the Porto Amboim area will also grow to meet new demands associated with PAENAL activities.

PAENAL is perfectly positioned to serve the growing Angolan offshore sector. It is located approximately 300 km south of Luanda and has direct access to deepwater blocks which are just over 200 nautical miles from the yard.

Since fabrication activity began in 2008, the yard has already successfully completed two shallow water CALM buoys for Cabinda Gulf Oil Company (part of the Chevron Corp.) to form part of the new export terminal offshore Malongo. PAENAL is additionally undertaking

Local Investments

Renewable Energy Systems Host country Sustainability


a number of fabrication projects for Heerema and Technip for developments on Block 31.

But once the expansion of the yard has been com-pleted, PAENAL will have the capacity to accommodate a much larger work scope. The CLOV FPSO will be the first mega FPSO to berth at a quayside in Angola for the integration, hook-up and commissioning of top-sides components also built in Angola. PAENAL intends to launch the project mid-2011 and the CLOV FPSO is expected to arrive at PAENAL yard during 2013.

PAENAL yard in Porto Amboim, Angola

Renewable Energy SystemsHost country Sustainability


In October 2010, SBM Offshore delivered the FPSO P-57 to its client Petrobras, two months ahead of schedule and on budget. With commissioning of the vessel now complete and first oil achieved, SBM Offshore will operate the P-57 for a period of three years.

Since the engineering, procurement and construc-tion contract for the P-57 was signed between SBM Offshore and Petrobras on 01 February 2008, the pro-ject has achieved a number of significant milestones:

• it is the first contractor designed & supplied FPSO to achieve over 65% local content on Brazilian contracts;

• it is the first FPSO sold to Petrobras to be built to SBM specifications;

• it is SBM’s largest ever FPSO and 8th supplied for Brazilian waters;

• it is the first turnkey FPSO to be supplied by SBM Offshore to Petrobras;

• it is the largest FPSO for oil throughput, off the Espirito Santo coast.

Given the success of P-57, both in design and cost, Petrobras has said that the P-57 will serve as a model for the design of future FPSOs intended for use in the Santos Basin pre-salt area.

The FPSO will operate in the Jubarte field, in the Espírito Santo portion of the Campos Basin, 80 km off the Espírito Santo coast. It is anchored at a water depth of 1,260 metres and will produce oil of 17 degrees API. Once on stream, the P-57 will be connected to 22 wells, 15 of which are producers and 7 water injectors. With its ability to process heavy oil, the P-57 will be the first unit of this complexity to operate on the Espírito Santo coast. The P-57 FPSO is a spread moored vessel and has the possibility to offload both forward and aft. With a daily production capacity of 180,000 barrels of oil per day and 2 million cubic metres of gas per day, it is the largest FPSO that SBM Offshore has ever built. The topsides are of an impressive size weighing 14,500 tonnes and the spread mooring arrangement was an achievement in technical design with 21 mooring lines of varying lengths.

In order to complete this complex project, SBM Offshore engaged team members from each of its four global execution centres (Monaco, Schiedam, Houston and Kuala Lumpur) as well as a large Brazilian team in the Rio, Alphaville, Macaé, and Vitória offices.

Between October 2008 and March 2010, the hull was converted from the Accord oil tanker at Keppel Shipyard in Singapore. While the refurbishment of the hull was underway, fabrication of the oil and gas pro-cessing modules (topsides) was completed in Brazil at the UTC Engenharia site in Niteroi and at the BrasFELS shipyard in Angra dos Reis. In April 2010 the P-57 FPSO arrived at the BrasFELS shipyard for the final integration and commissioning phase.

During the development of P-57, SBM Offshore achieved a level of local content surpassing 65%, a first for a contractor-supplied unit in Brazil. To do so, SBM Offshore developed relationships with an extensive list of Brazilian subcontractors, resulting in a substantial amount of local contracts going to Brazilian suppliers and over 5 million local manhours logged on the project. It is SBM Offshore’s strategy to prioritize the procurement of goods and services in Brazil in order to contribute to the expansion of the domestic industry. These efforts resulted in the generation of an estimated 2,000 direct jobs in the country.

The P-57 design was simplified and its equipment standardized pursuant to the highest operating safety standards. This strategy ensured greater efficiency both in project management and in areas of procurement, construction, assembly and testing. Additionally, the new strategy resulted in a lighter, easier-to-maintain platform offering the client significant economic, mana-gerial, and technical gains.

Local Content

Crew member onboard the FPSO Espirito Santo


Local Content

Renewable Energy SystemsSupply Chain


Actively present and producing in 18 countries world-wide, SBM Offshore also works with suppliers from 37 countries. The Company’s principal suppliers are mainly located in Europe, the United States, Singapore and Brazil; 26% of the Company’s volume of business in procured deliverables or services in 2010 has been achieved with developing countries.

Vendor Relationship Management

Suppliers are selected upon compliance with the indus-try standards and market conditions. The Company’s VRM portal is publicly listing the documents required to enter the pre qualification process hence needed for the evaluation of the supplier and proposed equipment.

1. Standard Vendor Qualification Questionnaire 2. ISO certifications3. Quality manual4. HSE manual5. Reference lists6. Organization charts (company and group)7. Brochures, company profile, products

descriptions, etc.8. All QA documentation

(SQR forms, CAR’s, audit, etc.)

VRM product pre qualification confirms that SBM Offshore may start business with the vendors for selected equipment or services. Vendors have been approved as potential candidates to work with the Company.

The prequalified vendors for equipment or services are then referenced in the Supply Chain system tool as approved suppliers.

In December 2010, more than 11,000 products or services had been referenced.

Through the Vendor Relationship Management (VRM) internet portal, the Company manages an internal ven-dor pre qualification process. The Company standards, such as business ethics and insurances, are covered in the Special Terms & Conditions. Those are systematically sent to vendors or suppliers from the bidding stage onwards for each and every project.

Compliance with the Company’s Code of Conduct is mandatory for suppliers, their subcontractors and agents.

During 2010, the Company audited 60 of its suppliers using a product classification system ranking from A (main suppliers, such as construction yards) to D (less critical equipment or service). All Vendors supplying A to C products are submitted to a quality process and A and B criticalities are audited every 3 years. 114 cor-rective action reports were issued in 2010 following these audits.

Supply Chain in focus

SBM Offshore worker onboard the MOPUstor™ in Norway

Supply Chain

Renewable Energy SystemsSupply Chain


SBM Offshore's Code of Conduct subscribes to the United Declaration of Human Rights, the OECD Guidelines for Multinational Enterprises, ILO conventions and the UN Global Compact. Code applies to all employees, agency personnel, officers, and directors of SBM Offshore and its con-trolled subsidiaries (including Joint Ventures). The Company responsibilities to suppliers are described in SBM Offshore's Code of Conduct:

• Selecting suppliers on the basis of generally accepted market considerations;

• Systematically offering host country suppliers, as a mini-mum, a fair chance to provide products and services and mak-ing material effort to enhance their capabilities through guid-ance and transfer of know- how;

• Paying market prices and mak-ing reasonable demands;

• Striving for long-term stability in the relationship, in exchange for value, quality, competitiveness and reliability;

• Paying suppliers on time, according to the agreements made;

• Being open and reliable in all our activities;

• Not accepting cash gifts or any substantial non-cash gifts (including entertainment). In general, gifts may only be made in strict accordance with the employee guidelines;

• Selecting suppliers who do adhere to the applicable national and international standards and to the principles set out in this Code;

• Selecting suppliers that apply sufficient focus to working conditions for their employ-ees in accordance with ILO ( International Labour Organization) conventions;

• Monitoring compliance with this Code by suppliers. In instances where the results of assessments are found to be unsatisfactory, SBM Offshore will engage with the business partner in developing improve-ments to facilitate compliance with these standards. However, if a supplier repeatedly dem-onstrates a lack of interest to improve its standards, SBM Offshore will take appropriate action which could eventu-ally mean withdrawal from the relationship.


Towards Suppliers

Topsides of an FPSO

Supply Chain

Renewable Energy SystemsRenewable Energy


IntroductionAfter more than 50 years of continuous innovation in the handling and processing of hydrocarbons in the off-shore environment, SBM Offshore has put its expertise in the design, installation and operation of marine sys-tems to work for new energy resources, in line with the drive to reduce carbon emissions and to anticipate the changing mix of energy sources.

Already a few years back, the Company had begun an active market entry strategy for both Liquefied Natural Gas (LNG) and Renewable systems in response to the rising importance of alternative energy resources. To enhance the Company’s in-house knowledge, SBM Offshore began to pursue several initiatives including the development of various new technologies focused on natural gas and sustainable energies.

The important resources dedicated to Liquefied Natural Gas solutions have paid off in a leading market posi-tion for the Company in this promising sector. SBM Offshore’s booked progress regarding floating LNG can be found in the Annual Report, section 3 under Product and Technology Development.

The Company’s goal in Renewable Energy is to develop technically robust and commercially sound sustainable energy systems operating in the marine environment where the Company's competitive edge in offshore engineering is greatest. The waters of the world contain an enormous amount of potential energy. Capturing this energy successfully requires extensive knowledge and experience in the offshore environment. Accordingly, fields of potential interest for the Company are wave energy, offshore wind energy and Ocean Thermal Energy Conversion.

Energy generation achieved through these key enabling technologies demonstrates SBM Offshore’s com-mitment to remain at the forefront of offshore energy innovation tomorrow, as the Company continues to strive for energy efficiency in its own operations today.

Renewable Energy



“ Wave Energy Converter - like a snake in the water”

Technology development is the foundation for SBM Offshore’s future and includes a substantial R&D budget. In 2010, as was already the case in 2009, the majority of the R&D budget designated to Renewable Energy continued to fund the Wave Energy Converter (WEC) programme,as the Company believes this offers the greatest potential for bulk electricity supply at com-mercially viable prices.

Wave energy is very much a growing sector. No com-mercial projects have been completed to date, as it is one of the more difficult technologies to master due to the marine environment. The Company is working on a prototype wave energy generator based on emerging power take-off technologies. In 2009, the Company entered into a cooperation agreement with a large industrial player to develop this technology.

The WEC technology will permit the production of clean energy in the future, harnessing the untapped resources of seas. To demonstrate the WEC, a devel-opment programme has been set up with the plan to have an offshore grid-connected prototype in the medium term.

In the Company’s application, the WEC will transfer the energy contained in the movement of seawater caused by waves directly into electrical power, in a high effi-ciency process. By using this technology, more energy can be significantly converted into electricity than is possible with a conventional generator.

SBM Offshore and its industrial partner believe that this combination of converter design and electro-active polymer is a promising approach to leverage the wide spectrum of wave conditions. More impor-tantly, it avoids fatigue and maintenance issues which represent a major cost factor. It is expected that the WEC technology will be of particular interest to the utility companies worldwide aiming to extend their Renewable Energy portfolio.

The growth of the Marine Renewables sector will depend on a complex array of factors including: • Security of supply which includes fossil fuel prices; • Cost of energy development; • Technology development; • Quality and versatility of electricity networks; • Environmental and regulatory requirements.

Nevertheless, SBM Offshore believes that the growing popular and legislative support for Renewable Energy will continue to underpin demand for clean forms of energy to which the Company wishes to respond proactively.

Renewable Marine Energy



“ Oil Industry technology used for Wind Turbine Installation”

Benefitting from a very solid market outlook, the wind energy industry is rapidly expanding to wind farms offshore, primarily in Europe. Even conservative predic-tions indicate that ten years from now, 1,500 turbines will be installed offshore every year, not including the developments outside Europe.

The Company is successfully supporting the develop-ment of the offshore wind industry by transferring its knowledge of offshore construction vessels to the contracting firms building the wind farms in open sea. Multiple orders have been obtained for the design of Jack-up vessels and the delivery of essential equip-ment for these vessels, such as jacking systems and cranes. Jack-ups offer reliable construction facilities for the 20-45 metres water depth range where most of the wind turbines are projected.

Offshore wind farmsTypically, offshore wind farms are developed in a grid of 50-100 units. Speed is critical for the installation of this number of units, especially considering weather window restrictions.

Average sizes of the turbines are: rotor diameters of 80 to 125 metres, turbine weights (nacelle + rotor) of 200-450 tonnes, nacelle elevations 90-110 metres above sea level. It is expected that 3.6 MW and 5 MW machines will be the standard for the coming years, and most new installation equipment is being designed for these sizes.

Currently foundations are bottom fixed, with the major-ity comprising of monopoles. However, gravity-based foundations are also being used; and for deeper water, tripods and jackets are being developed. Turbine instal-lation generally occurs in separate pieces: foundation, transition piece, column, nacelle, rotor/blades.

Equipment for installation and maintenanceThe Company has provided Jack-up technology for oil and gas applications, since the first delivery of the Seashell in 1959. Also, contractors specialised in civil construction in coastal waters have used that tech-nology in the past. This valuable expertise has been recognised by contractors active in the installation of offshore wind farms.

Based on the bright market outlook, many contractors have decided to invest in new, dedicated installation equipment. The specification of the Jack-up units has been tuned to match the exact requirements of wind turbine installations for deck space, payload capacity and stability. And, of course, the lifting capabilities in terms of weight and height of reach are unique for this type of unit.

The recent Gusto-MSC NG9000 unit, with its updated fast continuous jacking systems, and a powerful crane of 800 tonnes with a boom length of 94 metres appears a market favourite. The vessels are self-propelled. They collect the turbines to be installed from the shore base (eight of the larger turbines in one go). Once arrived in the field, they are dynamically positioned when lowering the legs to the seabed. After lifting themselves out of the water, they become a stable construction platform. The specially developed crane is arranged around one of the aft legs to make most efficient use of the deck space.

Over the past years, including 2010, a total of ten con-tracts were placed with the Company for Jack-ups dedicated for installation of offshore wind turbines. Generally these contracts comprise the basic design package for the unit and the supply of jacking systems and cranes. Furthermore, some twelve multi-purpose Jack-ups designed by the Company have found employment in the offshore wind industry.Message COO

Offshore Wind Energy

Renewable Energy


Top: Piping on the FPSO Okha

Bottom: Technician onboard the FPSO Okha in Singapore

FPSO Capixaba at anchorage in Singapore following upgrade for the Cachalote field requirements

The Deep Panuke Production Field Centre in dry dock in Abu Dhabi

5 98 Sustainability Reporting Scope 101 Performance Indicators 111 PwC Assurance Report 112 GRI Index Level C+ 113 Notes

Performance Indicators



Sustainability Reporting Scope

Page

98PwC Assurance Report

Page

111


Page

101


Notes

Page

113

GRI Index Level C+

Page

112

Sustainability Reporting Scope

Reporting SegmentsThe reporting scope is divided into two main seg-ments, Onshore Operations and Offshore Production. Depending on the performance indicators being reported, the segment can be split further.

The results are reported as performance indicators and are presented for both 2009 and 2010 to facilitate com-parison. To highlight medium term trends, the Company has in some cases decided to show multiple years of reporting.

Health, Safety and Security Reporting

Performance indicators are applied to the Company for both Onshore Operations and Offshore Production. Indicators take into account all permanent employees, part-time employees, local employment staff from agencies on the construction sites, offices and onboard the offshore production fleet, i.e. all people working for SBM Offshore.

HSSE incident reporting is registered and managed through the Single Incident Reporting System (SIRS) database for the Company.

SIRS is a reporting system that is used to collect data on all incidents on all units operated by the Company. The system is a web based application and is acces-sible worldwide from all the locations to facilitate data entry.

The Company also reports on any incidents at subcon-tractor’s construction facilities if the incident occurs while working on one of the Company’s projects.

Manhours are calculated in three different ways depending on the segment; Offshore Production, Onshore Operations and Onshore construction.

The Company records manhours for Offshore Production based on the unit POB (Persons on Board). Onshore, the Company personnel record their man-hours, using an internal Time REGistration system (TREG). Onshore construction yard manhours are reported to the Company by the yards themselves as total manhours worked.

The Company uses manhours records and SIRS data to calculate Health and Safety performance indicators.

The safety statistics are reported based on the inci-dent classifications defined by OSHA, (Occupational Safety and Health Administration) International Industry Standard.

The SIRS system will also record an incident that is classed as environmental, i.e. any unwanted release of pollutants to the environment.

In addition to the SIRS monitoring application; the Monthly HSSE Report issued by the Corporate Head of HSSE, consolidates HSSE records and events for the Group, covering onshore and offshore.

Environmental ReportingEnvironmental performance of the 11 production and/or storage units is reported taking into account the follow-ing reporting boundaries: • units in the Company's fleet producing and/or stor-

ing hydrocarbons under lease and operate contracts during 2010;

• units in which the Company exercises full opera-tional management control;

• units in which the Company has full ownership or participates in a Joint Venture (JV) partnership, where the Company controls 50% or more of the shares.

Offshore Production environmental performance results are chosen according to the performance indica-tors relative to GRI. This includes greenhouse gases referred to as GHG, which are N2O, CH4 and CO2, in addition to other non-GHG air emissions, such as CO, NOx, SO2 and VOC. The air emissions calculation from the offshore production units are performed using as



the basis for the calculation the method from the UK offshore operators association (UKOOA).

The Company uses the Greenhouse Gas Protocol (GHG Protocol) method to calculate CO2 equiva-lents. Carbon dioxide equivalency is a quantity that describes, for a given mixture and amount of green-house gas, the amount of CO2 that would have the same global warming potential (GWP), when measured over a specified timescale (generally, 100 years).

For more information on the GHG protocol and country specific calculation methods, please see their website: http://www.ghgprotocol.org/calculation-tools.

Environmental spills to air, water or land for the units are reported.

All reported air emissions exclude flaring, as this factor, related to the produced fluids from the oil/gas reser-voirs, is reported by the Company’s clients.

Unit name

in operation

Country of

operation

Jv partner and

ownership level

Jv ownership title Operational

management

Client

1 FPSO Kuito Angola SBM Offshore 50%

Sonangol 50%

Sonasing Kuito Ltd SBM Offshore Chevron

2 FPSO LPG Sanha Angola SBM Offshore 50%

Sonangol 50%

Sonasing Sanha Ltd SBM Offshore Chevron

3 FPSO Xikomba Angola SBM Offshore 50%

Sonangol 50%

Sonasing Xikomba Ltd SBM Offshore ExxonMobil

4 FPSO Mondo Angola SBM Offshore 50%

Sonangol 50%

Sonasing Mondo Ltd SBM Offshore ExxonMobil

5 FPSO Saxi Batuque Angola SBM Offshore 50%

Sonangol 50%

Sonasing Saxi Batuque

Ltd

SBM Offshore ExxonMobil

6 FPSO Espadarte Brazil SBM Offshore 100% n/a SBM Offshore Petrobras

7 FPSO Brasil Brazil SBM Offshore 51%

MISC Berhad 49%

FPSO Brasil Venture

S.A.

SBM Offshore Petrobras

8 FPSO Marlim Sul Brazil SBM Offshore 100% n/a SBM Offshore Petrobras

9 FPSO Capixaba Brazil SBM Offshore 80%

Star 20%

FPSO Capixaba Venture

S.A.

SBM Offshore Petrobras

10 FPSO Espirito Santo Brazil SBM Offshore 51%

MISC Berhad 49%

Brazilian Deepwater

Production Ltd

SBM Offshore Shell

11 FSO Yetagun Myanmar SBM Offshore 75%

Mitsubishi 25%

South East Shipping

Co.Ltd

SBM Offshore Petronas

Reporting scope for Environmental performance



Performance Reviews / Skills management / Training

In order to ensure people development and optimal dis-tribution of resources within the Group, the Company conducts annual performance reviews for all employ-ees. Globally, the Company uses the Hay Competency system to grade and evaluate all permanent staff.

As a complementary parallel to this long-established annual performance review, the Talent Management and Succession Planning programs have been launched in 2009. A process called “People Reviews” is in place to discuss the strengths, development needs and potential future career paths of SBM employees, taking into account a certain number of criteria, and identify those who have the potential to take on greater leadership roles today and tomorrow. New indicators report on number of people reviewed in 2010.

The total training hours for all Company staff, for both Blue Collar staff and White Collar staff, are included in this report.

Unit name in operation Country of operation

JV partner and ownership level

JV ownership title Operational management

Client

1 FSO LPG Nkossa II Congo (D.R.) SBM Offshore 49% Maersk Ltd 51%

Anchor Storage Ltd Gas Management (Congo) Ltd

Total

2 DeepDraft Semi™ Thunder Hawk*

United States of America

SBM Offshore 100% n/a Murphy Murphy

3 FPSO Kikeh Malaysia SBM Offshore 49%MISC Berhad 51%

Malaysia Deepwater Floating Terminal (Kikeh) Ltd

Malaysia Deepwater Production Contractors Sdn Bhd

Murphy

* not operated by SBM Offshore

Excluded from reporting scope



Human Resource ReportingThe Company’s Human Resource data covers the worldwide workforce and is broken down into seg-ments of operating units, employment type, gender, and age. The performance indicators report the work-force status at year end on the 31st December 2010.

It includes all staff who were assigned on permanent and fixed-term contracts, employee hires and depar-tures, total number of locally-employed staff from agencies and all crew working onboard the offshore production units. The performance indicators continue to report using the categories of White Collar and Blue Collar staff in 2010. White Collar is defined as staff working at the Company’s corporate and engineering offices and four project execution centres. Blue Collar is defined as personnel working in project execution and construction activities onshore at construction yards, as well as offshore personnel employed onboard the offshore production units.

New performance indicators have been added in 2010, reporting on gender equality, seniority, skills manage-ment and lifelong learning processes in place at SBM Offshore.


EconomicShare price

Listed as SBM Offshore N.V. on the Euronext Stock Exchange, Amsterdam 2010 2009Turnover as % of share capital 161.38 193.60Highest share price in € 17.16 15.13Lowest share price in € 11.41 9.16Closing share price in € 16.77 13.78Closing share price in US$ 22.43 19.75

Financial results

In million of US$ (unless stated otherwise) 2010 2009Net Profit 276.0 230.0EBIT 362.4 293.4EBITDA 688.4 613.3Capital expenditure 519.0 656.0Total equity at year end 2,123.4 1816.8Turnover 3,055.8 2,956.5Total assets at year end 5,091.0 4,658.4Shareprice (€) at year end 16.77 13.78AEX-Index at year end 354.6 335.3Market Capitalisation US$ at year end 3,783.0 3,196.80

Production of hydrocarbons2010

Offshore Production by region Units MMbbls Number of

OffloadsBrazil 5 67,274,783 146Asia 1 3,943,024 11West Africa 5 76,588,423 146Total 11 147,806,230 303



Health, Safety, Security (H.S.S.)Occupational health and safety

2010 2009Average absence due to normal illness (percentage days lost through illness per employee) 2.6% 2.5%Total consolidated million manhours SBM Offshore (including Offshore Production Fleet) 12.45 12.36Total consolidated million manhours Onshore Operations (excluding Subcontractors) 6.49 6.57Total consolidated million manhours Offshore Production (excluding installation vessels) 5.95 5.79Lost Time Accident Frequency Onshore Operations 0.06 -Lost Time Accident Frequency Offshore Production 0.1 0.03Death during service (natural causes- non work-related) 2 7Fatalities (death resulting from a work-related incident or illness) 0 0

Subcontractors manhours

Manhours 2010Projects 29,817,880

Exposure hours by location

2010SBM-Monaco 2,431,338SBM-Atlantia 1,308,080SBM-Malaysia 766,047SBM-PC 221,397SBM-Services 422,117SBM-Gusto & SBM-MSC 1,345,171Dynamic Installer 205,047Subcontractors 29,817,880Total 36,517,077



2010 2009HSS ACCIDENT STATISTICS ONSHORE OPERATIONSExposure Hours 6,494,150 6,572,753Fatality FAT 0 0Lost Time Incident LTI 2.00 0Restricted Work Case RWC 1.00 0Medical Treatment Case MTC 3.00 1.00Near Miss NM 1.00 0LTI Days Lost Days Lost 57.00 0Lost Time Incident Severity Rate LTISR 1.76 0Lost Time Incident Frequency Rate LTIFR 0.06 0Total Recordable Incidents TRI 6.00 1.00Total Recordable Incident Frequency Rate TRIFR 0.18 0.03

HSS ACCIDENT STATISTICS OFFSHORE PRODUCTIONExposure Hours 5,950,897 5,795,151Fatality FAT 0 0Lost Time Incident LTI 3 1Restricted Work Case RWC 8 4Medical Treatment Case MTC 15 12Near Miss NM 74 89LTI Days Lost Days Lost 64 91Lost Time Incident Severity Rate LTISR 2.15 3.14Lost Time Incident Frequency Rate LTIFR 0.10 0.03Total Recordable Incidents TRI 26 17Total Recordable Incident Frequency Rate TRIFR 0.87 0.59

HSS ACCIDENT STATISTICS FOR SUBCONTRACTORS (FABRICATION/CONVERSION YARDS) Exposure Hours 29,817,880 34,086,319Fatality FAT 0 -Lost Time Incident LTI 10.00 6.00Restricted Work Case RWC 20.00 16.00Medical Treatment Case MTC 17.00 16.00Near Miss NM 82.00 65.00LTI Days Lost Days Lost 170.00 70.00Lost Time Incident Severity Rate LTISR 1.14 0.41Lost Time Incident Frequency Rate LTIFR 0.07 0.04Total Recordable Incidents TRI 47.00 38.00Total Recordable Incident Frequency Rate TRIFR 0.32 0.22

HSS Accident Statistics



2010Exposure Hours 205,047Fatality FAT 0Lost Time Incident LTI 1Restricted Work Case RWC 0Medical Treatment Case MTC 1Near Miss NM 5LTI Days Lost Days Lost 20Lost Time Incident Severity Rate LTISR 19.51Lost Time Incident Frequency Rate LTIFR 0.9754Total Recordable Incidents TRI 2Total Recordable Incident Frequency Rate TRIFR 1.951

Environmental data Offshore production - Recordable Spills

2010 2009Offshore Production Units 11 12Contained Spills Onboard 15 16External Spills to Environment 5 7

GHG Emissions excluding Flaring

2010Values expressed in millions of tonnes CO2 equivalent CO2 CH4 N2OBRAZILMarlim Sul 0.26 0.002 0.006Brasil 0.15 0.001 0.003Espadarte 0.12 0.001 0.003Capixaba 0.11 0.001 0.002Espirito Santo 0.22 0.001 0.005ASIAYetagun 0.005 0 0WEST AFRICAXikomba 0.17 0.001 0.004Mondo 0.47 0.003 0.011Saxi Batuque 0.24 0.002 0.006Kuito 0.33 0.002 0.008Sanha 0.004 0 0Total 2.08 0.013 0.049

HSS Accident Statistics for Dynamic Installer



Other Atmospheric Emissions excluding Flaring

2010Values expressed in tonnes CO NOx SO2 VOC'sBRAZILMarlim Sul 294 684 19 8Brasil 156 329 3 3Espadarte 138 319 9 4Capixaba 165 541 43 14Espirito Santo 243 531 8 5ASIAYetagun 13 57 6 2WEST AFRICAXikomba 181 382 3 3Mondo 492 1005 3 6Saxi Batuque 256 526 2 3Kuito 377 890 27 12Sanha 10 45 5 1Total 2325 5310 128 61

Values expressed in tonnes 2010 2009Number of Offshore Production Units 11 12N2O 159 148CH4 640 571CO2 2,076,229.8 1,823,651*

* level reported in 2009 for Espirito Santo was overestimated and corrected

Source: DEFRA - Environmental Key Performance Indicators; Reporting Guidelines for UK Business; Chapter 4. Page 28 4.1 Emissions to Air KPI 1 Greenhouse Gases

GHG Emissions Comparison



Values expressed in tonnes 2010 2009Number of Offshore Production Units 11 12CO 2,325 2,409NOx 5,310 5,875SO2 128 212VOC 61 85

Values expressed in tonnes 2010 2009Number of Offshore Production Units 11 12Brazil 857,694 752,314*Caspian - 1,552Asia 5,017 4,393West Africa 1,213,519 1,065,392Total 2,076,230 1,823,651

* Level reported in 2009 for Espirito Santo was overestimated and corrected

2010 2009

Total electrical usage kWh 10,339,123 10,478,068Total tonnes C02 equivalent 4,063 4,113

Calculated using World Resource Institute Greenhouse Gas Protocol: www.ghgprotocol.org/calculation-tools

Non GHG Emissions Comparison

Regional CO2 Emissions

Indirect Energy Consumption



Human Resources (H.R.)Permanent Employees Headcount by Operating Unit and Gender

2010Female Male Total Ratio of females

SBM-Gusto 78 324 402 19%SBM-MSC 5 58 63 8%SBM-Atlantia 150 347 497 30%SBM-Malaysia 104 265 369 28%SBM-Monaco 334 884 1218 27%SBM-Services 41 169 210 20%SBM-PC 113 1124 1237 9%SBM Offshore- MSTC Functions 56 62 118 47%Onshore 91% 66% 72% 27%Offshore 9% 34% 28% 7%Total 881 3233 4,114 21%

MSTC Functions: Marketing, Sales, Treasury and Corporate Functions

Permanent and Contract Employees Headcount by Operating Unit

2010Headcount permanent employees

Headcount contract

employees

Total Headcount employees

Ratio of contract

employeesSBM-Gusto 402 133 535 25%SBM-MSC 63 18 81 22%SBM-Atlantia 497 104 601 17%SBM-Malaysia 369 8 377 2%SBM-Monaco 1218 706 1924 37%SBM-Services 210 56 266 21%SBM-PC 1237 613 1850 33%SBM Offshore- MSTC Functions 118 6 124 5%Blue collar 41% 76% 51% 42%White collar 59% 24% 49% 14%Total 4,114 1,644 5,758 29%



2010Under 30 Years 30-50 Years Above 50 Years

SBM-Gusto 67 267 68SBM-MSC 16 37 10SBM-Atlantia 67 298 132SBM-Malaysia 86 261 22SBM-Monaco 357 724 137SBM-Services 34 137 39SBM-PC 161 682 257SBM Offshore- MSTC Functions 13 79 26Total 801 2485 691

SBM-PC excludes some staff members (total 137 persons) for who data are not available.

Permanent Employees Headcount by Seniority

2010Under 5 Years Between 5 to

10 YearsBetween 10 to

15 YearsAbove 15 Years

SBM-Gusto 220 109 41 32SBM-MSC 28 13 10 12SBM-Atlantia 285 175 27 10SBM-Malaysia 361 4 4 -SBM-Monaco 906 182 66 64SBM-Services 117 54 16 23SBM-PC 745 244 86 25SBM Offshore- MSTC Functions 49 27 18 24Total 2711 808 268 190

SBM-PC excludes some staff members (total 137 persons) for who data are not available.

Permanent Part Time Employees Headcount by Operating Unit

2010% Part Time

employees% Female

Employees% Male

EmployeesSBM-Gusto 20% 50% 50%SBM-MSC 24% 27% 73%SBM-Atlantia 0% 0% 0%SBM-Malaysia 0% 0% 0%SBM-Monaco 2% 91% 9%SBM-Services 3% 100% 0%SBM-PC 0% 100% 0%SBM Offshore- MSTC Functions 10% 100% 0%Total 3% 62% 38%

Permanent Employees Headcount by Age Bracket



Permanent Employees Headcount Turnover by Operating Unit

2010Turnover

headcountTotal headcount Turnover rate

SBM-Gusto 23 402 6%SBM-MSC 3 63 5%SBM-Atlantia 65 497 13%SBM-Malaysia 32 369 9%SBM-Monaco 103 1,218 8%SBM-Services 11 210 5%SBM-PC 160 1,237 13%SBM Offshore- MSTC Functions 18 118 15%Total 415 4,114 10%

Permanent Employees Headcount Turnover by Category

2010Turnover

headcountTotal headcount

PermanentTurnover rate

Voluntary 272 6.6%Dismissal 112 2.7%Retirement 29 0.7%Fatalities non work related 2 0.0%Fatalities work related - 0.0%Total 415 4,114 10.1%

Permanent Employees Turnover by Age Bracket

2010Turnover

HeadcountTotal permanent

headcountTurnover rate

Age <30 87 4,114 10.1%Age 30-50 243Age >50 85Total 415



Employees Training Hours by Operating Unit2010

Total number of training hours

Total training hours per eligible

employeeSBM-Gusto 17,302 43.0SBM-MSC 1,171 18.6SBM-Atlantia 6,261 12.6SBM-Malaysia 4,111 11.1SBM-Monaco 42,538 39.4SBM-Services 5,439 23.1SBM-PC 70,595 40.2SBM Offshore- MSTC Functions 1,570 13.3Offshore 70,563 41.7Onshore 78,424 28.3Total 148,987 32.9

Eligible employee scope includes all permanent employees+ some contractors (Fleet)+ PAENAL staff

Employees Training Hours for Fleet only2010

Total training hours for 2010 68,647Training indicator hours/ eligible employees 42.4

Eligible employee scope includes all permanent employees + some contractors

Permanent Employees Performance Appraisals and skill mapping and developping process

2010Employees headcount eligible to Performance Appraisals 4,243Performance appraisals completed 95.1%Employees headcount eligible to People Review 711People Review indicator 100.0%

All permanent employees are eligible to performance appraisal+ some long term contractors

Women Men Equality

2010% of Women in management position 10%% of Women in management position Offshore 3%% of Women in management position Onshore 15%Ratio basic salary women/ men for Onshore 71%

Donations

In US$ Total Total 438,994.2



To the Board of Management of SBM Offshore N.V.

Assurance report

Report on the Sustainability Report Engagement and responsibilitiesWe have reviewed the Sustainability Report for the year 2010 (hereafter: ‘the Report’) of SBM Offshore N.V., Rotterdam in which the company renders account of its performance related to sustainability in 2010.

Review: limited assurance A review is focused on obtaining limited assurance which does not require exhaustive gathering of evi-dence as in audit engagements. Consequently a review engagement provides less assurance than an audit.

We do not provide any assurance on the assumptions and feasibility of prospective information, such as targets, expectations and ambitions, included in the Report.

The Management Board of SBM Offshore N.V. is responsible for the preparation of the Report. We are responsible for providing an assurance report on the Report.

Reporting criteriaSBM Offshore N.V. developed its reporting criteria on the basis of the G3 Guidelines of the Global Reporting Initiative (GRI) as published in October 2006, as men-tioned in the section titled reporting transparency on page 29 of the Report. The reporting criteria as devel-oped by SBM Offshore N.V. contain certain inherent limitations which may influence the reliability of the information. The Report does not cover all lease units of SBM Offshore N.V. This is adequately disclosed in the section titled ‘Sustainability Reporting Scope’ on page 99 of the Report.

We consider the reporting criteria to be relevant and sufficient for our examination.

Scope and work performed

We planned and performed our work in accordance with Dutch law, including Standard 3410N ‘Assurance engagements relating to sustainability reports’.

Our most important review procedures were: • performing an external environment analysis and

obtaining insight into the branch, relevant social issues, relevant laws and regulations and the characteristics of the organization;

• assessing the acceptability of the reporting policies and consistent application of this, such as assess-ment of the outcomes of the stakeholder dialogue and the reasonableness of estimates made by management, as well as evaluating the overall presentation of the Report;

• reviewing the systems and processes for data gathering, internal controls and processing of other information, such as the aggregation process of data to the information as presented in the Report;

• reviewing internal and external documentation to determine whether the information in the Report is substantiated adequately;

• assessing the application level according to the G3 Guidelines of GRI.

We believe that the evidence obtained from our exami-nation is sufficient and appropriate to provide a basis for our conclusion.

ConclusionBased on our procedures performed, nothing has come to our attention that would cause us to conclude that the Report, in all material respects, does not provides a reliable and adequate presentation of the policy of SBM Offshore N.V. for sustainable development, or of the activities, events and performance of the organization relating to sustainable development during the report-ing year, in accordance with the SBM Offshore N.V. reporting criteria.

Rotterdam, 24 March 2011

PricewaterhouseCoopers Accountants N.V.

Original signed by: A.F. Westerman RA





GRI Index Level C+GRI Page

VISION AND STRATEGY

Sustainability, vision and strategy 1.1 28ORGANISATIONAL PROFILE

Name of organisation 2.1 19Primary products 2.2 12, 19Operational structure 2.3 20Location of HQ 2.4 20Countries of operation 2.5 34Nature of owmership 2.6 22Markets served 2.7 19, 34Scale of reporting organisation 2.8 20, 26, 98Significant changes 2.9 none to reportAwards received 2.10 not reported

REPORT PARAMETRES

Reporting profile 3.1, 3.2, 3.3, 3.4 26, 116Reporting boundaries 3.5, 3.6, 3.7 22, 24, 98 Basis for reporting including JV 3.8 20, 98Re-statements 3.10 52Significant changes 3.11 none to reportGRI tables 3.12 112

GOVERNANCE, COMMITMENTS, AND ENGAGEMENT

Governance 4.1, 4.2, 4.3, 4.4 19-24, 28-30Stakeholder engagement 4.14, 4.15 24, 30

ECONOMICAL PERFORMANCE INDICATORS

Employees EC3 68ENVIRONMENTAL PERFORMANCE INDICATORS

Direct and indirect energy consumption EN3, EN4 106Initiatives and reductions in energy requirements EN6 28-30, 53GHG and non GHG Emissions EN16, EN17, EN20 52, 104-106Number and volume of spills EN23 50, 104

LABOUR PRATICES AND DECENT WORK

Employement LA1, LA2 62-71, 107-110Labour/ Management relations LA4 70Health and Safety LA7, LA8 45-48, 67, 103-104Training and Education LA10, LA11, LA12 58, 70-71, 110Diversity and Equal opportunity LA13, LA14 66-67, 110

SOCIETY

Community S01 22, 76-88



Notes

Note 1 The exposure hours, incidents and frequency rates shown below include all hours recorded on TREG (including SBM-PC) and any incidents recorded at SBM Offices and premises.

Note 2FAT: FatalityLTI: Lost Time IncidentRWC: Restricted Work CaseMTC: Medical Treatment CaseNM: Near MissDays Lost: LTI Days LostLTISR: Lost Time Incident Severity RateLTIFR: Lost Time Incident Frequency RateTRI: Total Recordable IncidentsTRIFR: Total Recordable Incident Frequency Rate

Note 3The Total Recordable Incidents is the sum of the Fatalities, Lost Time, Restricted Work Case and Medical Treatment Case incidents, but exclude First Aid Case and Near Miss Incidents.

TRI = FAT+LTI+RWC+MTCTRIFR = TRI x 200,000 EH

Where:TRI = Total Recordable Incidents200,000 = base for 100 equivalent full-time

workers (Working 40hrs per week, 50 weeks per year)

EH = Exposure Hours, total hours worked by all employees

LTIFR = LTI x 200,000 EH

Where:LTI = the number of Lost Time Incidents200,000 = base for 100 equivalent full-time



LTISR = Days Lost x 200,000 EH

Where:Days Lost = LTI Days Lost200,000 = base for 100 equivalent full-time




Yme MOPUstor™ in Norway

DisclaimerSome of the statements contained in this report that are not historical facts are statements of future expectations and other forward-looking statements based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance, or events to differ materially from those in such statements. Such forward-looking statements are subject to various risks and uncertainties, which may cause actual results and performance of the Company’s business to differ materially and adversely from the forward-looking statements. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this presentation as anticipated, believed, or expected. SBM Offshore NV does not intend, and does not assume any obli-gation, to update any industry information or forward-looking statements set forth in this presentation to reflect subsequent events or circumstances.

SBM Offshore N.V.

Postal addressP.O. Box 313100 AA SchiedamThe Netherlands

Street addressKarel Doormanweg 663115 JD SchiedamThe Netherlands

Telephone +31 (0)10 232 0900Telefax +31 (0)10 232 0999E-mail: [email protected]

www.sbmoffshore.com

Colophon

DesignMattmo Concept | Design, Amsterdam

PrintingB.V. Drukkerij De Eendracht, Schiedam



SBM Sustainability Report 2010

Documents

Transcript of SBM Sustainability Report 2010