2002 Annual Report - SBM Offshore

DEVELOPMENTS 2002
OFFSHORE OIL AND GAS ACTIVITIES
All IHC Caland offshore companies have been fully
occupied during the whole year 2002 and capacities
had to be augmented. Net profits of the offshore
division increased by 55% to € 103.1 million. New
orders decreased by 1.5% to € 1621 million and the
backlog increased by 33% to € 4134 million.
The orders received for four more FPSO’s on lease and
operate basis, including the most recent order from
Petrobras in January 2003, confirm that this business has
definitely become the main activity of the Group. Our
continued efforts over the past years to further develop
and improve technology and project management
especially for this market segment, are paying off. All of
our offshore activities, in F(P)SO’s on lease and operate
basis, in F(P)SO’s on sales basis, and in sales of facilities,
components and services developed well.
A view of the Shell EA FPSO connected to SBM’s jacket/soft
yoke system.
The Group’s leading role in the global FPSO market
increasingly generates economies of scale in design,
engineering and construction. For a period of time
during the year, the Group had six FPSO’s simultaneously
in execution, in addition to a large number of
other projects as detailed later in the Group companies’
report. This extraordinary workload was only manageable
due to the fact that most of the units were similar to
FPSO’s already delivered or under construction, thereby
reducing the engineering and construction manhours
required, and streamlining fabrication. Nevertheless,
capacity in the three main operating centres in Monaco,
Schiedam and Houston had to be augmented by a large
number of temporary, contracted staff, particularly in
the engineering and construction departments.
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The acquisition of Ocean Design Associates, a fifty man
firm, has reinforced our centre in Houston. Houston has
become the most important deepwater offshore oil and
gas centre in the world. We are now able to offer
improved service to Houston-based clients.
F(P)SO’s on lease and operate basis
At the start of 2002, the fleet of FPSO’s/FSO’s in
operation consisted of twelve units and construction was
in progress for an additional three FPSO’s. Since then the
Group received orders for another four systems on a
lease and operate basis. They include two (generic) units
similar to the Yoho FPSO (Nigeria), both to commence
production in 2003 for ExxonMobil fields in West Africa,
and an LPG unit which will come on stream in 2005 only,
for Chevron/Cabgoc on the Sanha field. The latter order
represents an important technical breakthrough, as it
will be the first time that a single facility combines gasfractionation
process, liquefaction, storage and export
functions. This project, as well as one of the generic
FPSO’s above, is being executed under the Group’s
partnership with Sonangol, the Angolan national oil
company. The last order was received in the first days of
2003 from Petrobras, for an FPSO on Marlim Sul field
(Brazil). First oil is planned mid 2004. As one unit (FPSO
II) has been decommissioned and two new FPSO’s
commenced production, the fleet at the end of 2002
consisted of thirteen units in operation.
An artist’s impression of the Sanha LPG FPSO under
construction in Japan. Charter to commence early 2005.
Taking into account the further prospects of new orders,
it is clear that the Company’s growth is mainly generated
from the lease and operate segment of the business. In
order to mitigate the financing and balance sheet
constraints which this implies at Group level, SBM
Group will endeavour to take all possible measures such
as executing projects with suitable partners, utilising
supplier construction financing as is the case with the
Sanha new-built FPSO, and above all to obtain