2011 Annual Report - SBM Offshore

1 Overview
1.1 Message from the CEO
As I write, I have been with SBM Offshore for ten months, initially as Chief Operating Officer and, since January
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2012, as Chief Executive. One hundred days into the role, this is an apt moment to step back from the routine
detail in the annual report, and share with you my assessment of this business and the strategic path we are
setting for its future.
To lead SBM Offshore is one of the most exciting jobs in the industry. Through the skill of its engineers, and the
Group’s capacity to maintain a constant technological edge, SBM has become synonymous with one of the
energy industry’s most vital asset classes;; the floating production storage and off-loading (FPSO) vessel. The
global trend in oil and, to some degree, gas production is inexorably offshore and into ever more demanding
ocean regions. FPSOs, uniquely, facilitate this shift. SBM has an exceptional opportunity to capitalise on this
industry trend.
This then is our through-cycle strategy;; to secure the business around our primacy in FPSOs. But in the next few
months we must still resolve some profound challenges. To do so we must succeed in working as one team under
a single SBM identity, in an aligned organisation with strong focus on corporate discipline. The executional
difficulties of the legacy Yme project, against which we have had to take several significant provisions, aptly
illustrate the vital need for change. Signally, Yme is not an FPSO – a reminder of the hazards of poor
diversification and divided focus. To my mind such projects equally underline the imperative for SBM in future: to
focus exclusively on our core competence, the FPSO.
The strategic plan that has now been established for the Group can be summarised in three common
sense-steps: to work as one;; to perform;; to shape our own future. It’s worth spelling out the vital need for each
step.
SBM Offshore has grown tremendously in recent years, but an unintended side-effect has been the proliferation
of ways of working as different teams around the Group have driven the business forward. But there is now an
urgent need for organisational consistency and discipline. In particular, a severe challenge is posed by the scale
and nature of risks that have emerged as the Group has helped lead our industry ever further offshore.
The accelerating complexity of facilities;; the scale of investment;; the doubling and tripling of the average FPSO
contract life;; the use of FPSOs as full life-of-field development systems;; all have combined to demand a
Group-wide re-appraisal of organisational structure and risk. All the changes required - including the readiness to
accept a single set of systems across the Group - are what we mean by “working as one”.
Secondly we have set the requirement “to perform”. This is not in any way to disparage our track record. SBM has
an outstanding and admirably long record of consistent delivery for clients in its core FPSO business. I am
stressing that we dare not risk losing that reputation;; rather, we must enhance it. The Group must never be let
down by rogue projects, and the Company as a whole must perform financially, consistently.
Finally, we must “shape our own future”. Complacency is one of the dangers of industry trends being in our
favour. Historically, SBM’s competitive advantages have been the quality of our engineers’ skills and our
leadership in key technologies. So we must continue to recruit the best people and invest in their training.
Additionally, we must identify industry-defining technologies and devote the necessary financial and human
This is a customized selection from the SBM Offshore N.V. Annual Report 2011
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