SBM Offshore Annual Report 2011 - PDF

1.5 Corporate Strategy
1.5.1 Introduction
SBM Offshore’s new Strategic Plan, covering the years 2012-2016 has been developed through its established
Corporate Planning Process. The Company’s Supervisory Board approved the new plan in December 2011.
The strategy draws on extensive external analysis of markets, clients and technology developments as well as
in-depth internal analysis across the Company's main functions. It also takes into account the outcomes of a
number of meetings held with the Company’s Board of Management and Executive Committee. The Plan will
continue to be reviewed annually in relation to significant market developments and any other external events that
may affect the Company and require a revision to aspects of strategy.
Major events around the world have affected local as well as international economies and have a direct impact on
the supply and demand for energy related products and SBM Offshore’s business. The Company has refocused
its product line on core FPSO products, finalised its organisational changes and begun diversifying financing
needs to meet the new challenges it faces.
The balance between global energy supply and demand is affected by worldwide economic growth, the depletion
rates of producing fields, natural disasters, technology development and social unrest.
On the demand side economic growth positively affects the demand for energy and this is expected to increase in
future years.
On the supply side we have see a shift in the world energy mix towards fossil fuels following the terrible
earthquake and tsunami in Japan and the consequent impact on the nuclear industry. This has caused a surge in
demand for LNG imports into Japan and globally increased demand for gas production. Technological advances
in production of shale gas in the US have created an over-supply in North America with relatively low gas prices.
This could become a global trend and affect investments in floating liquefied natural gas (FLNG) production
negatively.
Social unrest in oil and gas producing countries creates uncertainty regarding worldwide oil production capacity.
This is reflected in the price of oil and also encourages investments in more stable countries or offshore locations,
which may be less affected by geopolitical tension.
The most significant impact on worldwide oil and gas production levels comes from the natural depletion of
producing fields, which has been estimated to be as high as 8% per year. The long-term challenge is stabilisation
of supply, which can only be achieved by development of new oil and gas fields. Many of these new fields will be
located in remote offshore locations in deepwater, where FPSOs are the preferred production method.
Our clients have substantially increased their E&P budgets to meet increased demand for oil and gas production
and to cover the increased costs associated with development of deepwater fields. Increasingly, clients are
demanding larger, more complex production facilities constructed and operated using local human resources. The
Company has refocused its organisation to meet these challenges.
A new structure seeks to align seven new execution centres and ensure they have full responsibility and
accountability for their individual performance and for delivering execution improvements, in line with the
Company's principles, rules and guidelines. Furthermore, as part of reorganization, the Company is redefining its
This is a customized selection from the SBM Offshore N.V. Annual Report 2011
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