2005 Annual Report - SBM Offshore

Report of the Board of Management
Introduction
The year 2005 has been a year of transition through which
Management has refocused its full attention on the oil and
gas activities. At the same time the financial reporting
principles have been adjusted in line with the IFRS
requirements. These changes result in greater transparency
with respect to lease versus sales segmental analysis.
During the year, the market has offered a good number of
opportunities, with an acceleration of the demand during the
last few months. The current business situation is quite
favourable with the number of serious short-term prospects
at a high. The traditional global supply sector for
construction, equipment and engineering resources is
booked close to full capacity. Within SBM Offshore measures
are being taken to overcome the situation and enable more
order intake. One key activity in this respect is to develop an
additional execution centre that will be located in Kuala
Lumpur. Another measure is to optimise the utilisation and
interaction of the Company’s worldwide resources. It is often
the case that one single project be executed by several
Group companies working together.
For this reason, it is more and more difficult to separately
describe the activities and the market of each of the Group
F. Blanchelande, Director
(1949, French)
D. Keller, Managing Director & CEO,
(1946, French)
companies. This annual report presents the narrative part of
the activities of SBM Offshore in a more consolidated form
than in the past and, going forward, reference to the
individual fully-owned companies within SBM Offshore will
tend to disappear.
One major event during the year has been the decision by
Mobil Equatorial Guinea to exercise their purchase option on
an FPSO from the series of three generic units that were
contracted with ExxonMobil affiliates on a lease-and-operate
basis. The decision of ExxonMobil to exercise this purchase
option was driven by the specific characteristics of the field
development and the expected field life. Although this
transaction contributes a significant uplift in this year’s
financial results, it is also clear that the results of the regular
business of the Company have in 2005 been growing
according to the objectives set and announced by
Management, a trend expected to continue in 2006.
In a nutshell, at the time of writing this report, all companies
in the Group are fully occupied and, furthermore, are growing
execution capacity through intensive recruitment. The
perspectives in the market are quite good and Management
is confident that the forecast provided in this report for the
year 2006 is robust and reliable.
D.J. van der Zee, Director,
(1948, Dutch)
M. A. S. Miles, CFO
(1964, British)