3.3 Main Activities in Chronological Order
3.3.1.1 CEO New year's speech
In his new year’s speech, Tony Mace, former CEO of the Company, emphasized that safety is the most important aspect of SBM Offshore’s business and that it strives to avoid incidents wherever it operates: on vessels, in shipyards, at supplier’s locations, in offices, at home and also travelling to and from the workplace.
3.3.2.1 Management appointments
The Company confirmed two new appointments to the Board of Management: that Mr. Bruno Chabas was to be appointed as Chief Operating Officer and a Director in the Board of Management with effect from 1 May 2011 and that Mr. Jean-Philippe Laurès had been appointed as Chief Commercial Officer and a Director in the Board of Management of SBM Offshore N.V. in November 2010.
3.3.2.2 Mitsubishi agreement
A long-term cooperation agreement was signed with Mitsubishi Corporation (Mitsubishi) to jointly pursue FPSO lease and operate projects worldwide. Mitsubishi will be an equity partner with SBM Offshore for the ownership and operation of FPSOs whilst the Company remains responsible for the EPCI supply of these units and will act as the operator on behalf of the partnership.
The agreement with Mitsubishi provides the Company with substantial equity capability for new lease projects, enabling both participants to attract competitive financing from a wide range of sources and providing access to Mitsubishi Corporation’s global business network of more than 200 bases of operations in 80 countries.
The partnership with Mitsubishi supports the Company’s ambitions to grow its portfolio in major markets such as Brazil, where several large FPSO projects are set to be developed in the coming years. The partnership also provides valuable local knowledge and expertise in several other countries identified as potential growth areas.
3.3.2.3 FPSO Espadarte stops production
Production on FPSO Espadarte, which had been on location in the Espadarte field since June 2000, was stopped on 17 February 2011. The FPSO Espadarte (now renamed FPSO Cidade de Ancheita) will undergo major upgrade and life extension works at Keppel shipyard in Singapore before being relocated to the Baleia Azul field in Brazil for another 18 years of lease and operation.
3.3.3.1 COOL™ LNG transfer hose certified
The Company is the first in its industry to fully qualify and certify an offshore LNG transfer system - the Cryogenic Offshore Offloading and Loading (COOL™) system.
More information about The COOL™ system can be found in theTechnology section of this report.
3.3.3.2 Letter of Intent for FPSO OSX-2
The Company announced that it had agreed a Letter of Intent (LOI) with OSX 2 Leasing BV, part of the EBX Group, for the EPCI supply of the FPSO OSX-2. The LOI permitted the Company to start project engineering and procurement activities up to an amount of US$ 25 million.First oil is targeted by Q3 2013.
The FPSO OSX-2 will be chartered by OSX to its customer OGX Petróleo e Gás Ltda. OGX is also a company in the EBX Group. The OXS-2 will be deployed in oil fields in the Campos basin offshore Brazil.
3.3.3.3 5,000 Tonnes crane tested
The Company successfully tested and fulfilled class verification of the 5000T offshore crane operated on the heavy lift vessel “Oleg Strashnov”, which was subsequently handed over to its owner Seaway Heavy Lifting.
3.3.4.1 Diving Support & Construction Vessel (DSCV) ordered
The Company awarded a contract to Keppel Singmarine in Singapore for the detailed design and construction of a multi-purpose Diving Support & Construction Vessel (DSCV). This investment demonstrates the Company’s strategy to grow offshore contracting activities within the Turnkey Services segment by adding a modern vessel with high performance and reliability to its fleet. Delivery is scheduled for the second quarter of 2013. The vessel will be fully owned and operated by SBM Offshore.
3.3.4.2 Letter of Intent for FPSO Xikomba relocation
On behalf of its Joint Venture companies with Sonangol, the Company received a Letter of Intent (LOI) for 12-year lease and operate contracts from ENI Angola SpA for the block 15/06 development offshore Angola. The full scope lease and operate contract was signed in December 2011.
The development plan involves relocation of the existing FPSO Xikomba, which has been operating under contract for ExxonMobil in Angola since 2003. The unit will undergo a major upgrade in order to meet the new project specific requirements. Part of that work will be performed in the PAENAL yard in Angola.
3.3.4.3 CLOV Oil Offloading System order
The Company signed a contract with Total E&P Angola for partial supply and offshore installation work on the Deep Water Oil Loading System for the CLOV FPSO for Block 17 offshore Angola in West Africa.
3.3.4.4 Design Licence fees
The Company received design licence fees from Keppel Fels yard and Jurong Shipyard, both in Singapore, for contracts to construct and deliver three cantilever drilling jack-ups in the GustoMSC CJ70 class with international drilling contractors. In addition the Company has received orders for the supply of associated equipment for these jack-ups.
3.3.5.1 Espadarte disconnected
The FPSO Espadarte was disconnected from the Espadarte field and towed to Rio de Janeiro for clean-up work before continuing its journey to Keppel shipyard in Singapore.
3.3.5.2 Deep Panuke sails to Nova Scotia
The MOPU for Encana was successfully loaded onto the transportation vessel and left Abu Dhabi.
3.3.5.3 Annual Shareholders Meeting of 5 May in Rotterdam
At the annual General Meeting of Shareholders (AGM) distribution of a dividend of US$ 0.71 per share was accepted by the meeting. Shareholders have the option for dividends to be paid in cash or in the form of ordinary shares.
Mr H.C. Rothermund, the Chairman and member of the Supervisory Board was re-appointed for a term of 4 years by the meeting.
Mrs. K.A. Rethy was appointed as a new member of the Supervisory Board for a term of 4 years by the meeting.
3.3.6.1 FPSO Okha
The FPSO Okha departed from the quayside at Keppel shipyard in Singapore on 7 June for sea trials, which lasted about three weeks before it sailed to Australia on 25 June.
3.3.6.2 Turret for Shell's Prelude FLNG
Shell gave the final approval to proceed with construction of the world’s first Floating Liquefied Natural Gas production facility (FLNG) for use in their Prelude field offshore Australia. SBM Offshore received the order to supply the turret mooring system, which will hold this massive floating structure on location offshore.
3.3.7.1 Yme MOPUStorTM
The Yme MOPUstorTMplatform was installed and connected to a storage tank offshore Norway.
3.3.7.3 PTTEP partnership agreement for FLNG facility
SBM Offshore, Linde and PTTEP sign a partnership agreement for the development of a Floating Liquefied Natural Gas (FLNG) facility in the Timor Sea off Northern Australia.
3.3.7.4 Provisions on Yme and Deep Panuke
The two Mobile Production Units (MOPU) for the Deep Panuke and Yme fields were installed at their respective offshore locations in Nova Scotia, Canada and in Norway. The Company announced provisions of US$ 450 million for both facilities, which were accounted for in 2011 half year results.
3.3.7.5 FPSO Cidade de Paraty
The contracts for the 20-year charter and operation of FPSO Cidade de Paraty for the Lula Nordeste development in the pre-salt area, offshore Brazil, were executed with Petrobras and their partners. The Company together with Queiroz Galvão Óleo e Gás S.A (QGOG) had been awarded a Letter of Intent on 28 May 2010 for this work.
3.3.7.6 US$ 1 billion Loan Facility - Financial Close
The Company together with its JV partners confirmed that the Limited Recourse Project Loan had been secured for US$ 1 Billion to finance the construction of the FPSO Cidade de Paraty.
3.3.7.7 Internal Turret Mooring System for BP for QUAD 204 FPSO
BP Exploration Operating Company Ltd confirmed full project sanction for the supply of an internal turret mooring system for the Quad 204 FPSO project by SBM Offshore. The contract consists of engineering, procurement and construction of the turret.
3.3.7.8 FPSO Xikomba
The FPSO Xikomba was disconnected from its offshore field location in Angola and set sail to Keppel shipyard in Singapore to be refurbished and upgraded for relocation to block 15/06 of ENI under a new 12-year lease and operate contract.
3.3.7.9 LPG FSO Nkossa II
The Company received confirmation from Total E&P Congo that the contract for the LPG FSO Nkossa II had been extended for a total of seven years, until November 2018, with options for a further three years.
3.3.8.1 FPSO for Brazil pre-salt area
SBM Offshore and partner QGOG received two Letters of Intent (LOI) from Petrobras for the twenty year charter and operation of FPSO Cidade de Ilhabela for the Guará Norte development in the pre-salt area offshore Brazil. The unit will be owned and operated by a consortium in which SBM Offshore’s shareholding is 62.25%. Delivery of the FPSO is scheduled at 35 months from LOI. Due to finance lease accounting treatment of this project, revenue corresponding to the construction of the asset will be recognised within the Turnkey Systems segment.
The non-discounted total of the revenues payable under this contract to the consortium, excluding escalation and bonus, amounts to approximately US$ 4.5 billion.
3.3.8.2 Management
Mr Tony Mace advised the Supervisory Board that in light of recent events he would not stand for re-election at the next AGM on 16 May 2012. The Supervisory Board decided that it would call an EGM later in the year to propose that Mr Bruno Chabas should take over as CEO with effect from 1 January 2012.
3.3.9.1 Dow Jones Sustainability Index (DJSI)
The Company was selected as a member of the Dow Jones Sustainability World Index (DJSI World). The quality of SBM Offshore’s environmental and social reporting and its capacity to attract and retain talents were highlighted by DJSI’s evaluation.
3.3.9.2 Brazilian yard, quayside and floating crane
SBM Offshore signed a Shareholders’ Agreement with Naval Ventures Corp. (a member of Synergy Group) under which the two companies will cooperate and work together through one or more special-purpose entities in order to fulfil two undertakings: first, to jointly develop and operate a yard and a FPSO integration quayside at Niterói/Brazil for the fabrication and pre-commissioning of topside modules and other systems and equipment related to the offshore oil & gas industry and for FPSO integration and commissioning; second, to jointly upgrade, own and operate a floating crane to provide heavy lift solutions and services in Brazil.
The floating crane will be upgraded to meet the heavy lifting requirements (>500T) for lifting FPSO modules onto the FPSO deck. The heavy lifting capabilities will be unique in Brazil.
The agreement is based on long-term cooperation between the companies, through which they combine their expertise to provide a solution for the increasing high-level local content requirements in Brazil, where several large FPSO projects are set to be developed in the coming years. SBM Offshore will be responsible for the overall project and site management activities, whilst Naval Ventures Corp. will make available the key assets and contribute its shipbuilding and offshore construction expertise.
3.3.9.3 FPSO OSX-2
The tanker for FPSO OSX-2 arrived at Keppel Shipyard in Singapore and refurbishment and conversion works were started.
3.3.9.4 Semi-Submersible drilling rig "Delba III"
The Semi-Submersible drilling rig “Delba III” was handed over to our client Delba offshore Abu Dhabi on 30 September 2011. This rig is the last of three Semi-Submersible drilling rigs, which the Company had contracted to supply, all to Brazilian clients.
3.3.9.5 FPSO Okha
Following successful connection of the FPSO Okha with the existing dis-connectable turret mooring system, first oil production offshore Australia was achieved on 25 September. The Company was contracted by Woodside in 2008 to supply a dis-connectable FPSO to replace the existing Cossack Pioneer FPSO for the Cossack Wanaea Lambert Hermes (CWLH) redevelopment project.
3.3.9.6 FSO Unity
The operating contract on the FSO Unity with Total E&P Nigeria was terminated at the end of the contractual period.
3.3.10.1 Pazflor Offloading System
The Pazflor Offloading System was installed this summer and the first offloading took place on 1 October by transferring crude from the FPSO via the DeepWater CALM buoy to the shuttle tanker. SBM Offshore in consortium with APL supplied and installed the system for Total E&P Angola.
3.3.11.1 First Oil on FPSO Aseng
FPSO Aseng started first oil production for Noble Energy on 6 November 2011 in the Aseng field, offshore Equatorial Guinea two months ahead of schedule. The lease and operate contract is for a period of fifteen years, with provisions for further extensions up to five years. SBM Offshore owns a 60% share of the joint venture companies owning and operating the FPSO.
In addition to serving the Aseng field, the FPSO will provide a liquids hub for Noble Energy’s future developments in the area, with processing capacity for 120,000 barrels of liquids per day, including 80,000 barrels of oil and injection capacity of up to 150,000 barrels per day of water. It will also handle 170 million standard cubic feet per day of gas. The unit has storage capacity for 1.6 million barrels of oil including up to 500,000 barrels of condensate.
3.3.11.2 FPSO OSX-2
The Company signed the conversion, supply and installation contract with OSX for the FPSO OSX-2 for Brazil. This contract is the conclusion of the Letter of Intent received from OSX in March 2011.
3.3.12.1 FPSO Xikomba relocation
The Company signed full scope contracts with ENI Angola for the 12-year charter and operation of FPSO Xikomba for the block 15/06 development, offshore Angola. This order had previously been announced under a Letter of Intent (LOI) on 15 April 2011.
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