Annual Report 2010 - SBM Offshore

Turnkey Systems
A major highlight of 2010 was the completion and
delivery of the FPSO P-57 to Petrobras in Brazil. The
unit was supplied two months early, within budget and
exceeded the high local content requirement with a
substantial amount of work being performed in Brazil.
This is the first FPSO the Company has supplied to
Petrobras on a Turnkey Supply basis. Upon delivery
of the unit, the Company started the three-year operations
contract.
Among other projects, the Company delivered a turret
for BP to the FPSO construction yard in Korea where
integration works were completed for the Skarv FPSO.
The FPSO Okha construction progressed well during
the year and is on schedule for completion in the first
half of 2011, which is slightly behind the original schedule,
but in line with the client’s requirements.
The Company successfully delivered two of the three
semi-submersible drilling rigs in 2010. The third rig is
scheduled for completion in the first half of 2011 at the
construction yard in Abu Dhabi. All three drilling rig projects
have suffered significant cost overruns for which
provisions have been accounted for in full in 2010.
The Company continued Front-End Engineering and
Design (FEED) work as part of the framework arrangement
for the supply of turret mooring systems for a
series of FLNG facilities for Shell with specific focus on
the Prelude field development offshore Australia.
Additionally a FEED contract, which has been conducted
together with Chiyoda from Japan for an
FLNG facility for Petrobras in Brazil, has been completed.
During 2011, the Company expects to provide
Petrobras with a commercial proposal for supply of the
system during 2011 as part of its bidding process.
Turnkey Services
Due to the global downturn in the offshore construction
business, during the year the offshore contracting
part of SBM Offshore’s Services Unit was affected, with
neither of the Company’s installation vessel being
fully utilised. However, the supply and maintenance of
CALM buoy systems, specialised equipment, spare
parts and services, showed an increase during 2010.
The year end Turnkey Services order portfolio covers
about nine months of work, which is normal given the
short/medium term nature of this business.
PAENAL Yard
In Angola, the original joint venture partners (Sonangol
and SBM Offshore) of PAENAL Yard in Porto Amboim,
Angola and Daewoo Shipbuilding & Marine Engineering
(DSME) of South Korea signed an agreement under
which DSME acquired a 30% share in the PAENAL
Joint Venture. The effective shareholdings after the
transaction are Sonangol 40%, SBM Offshore 30%
and DSME 30%.
DSME has also signed a Letter of Agreement with
PAENAL Joint Venture to perform module and associated
FPSO construction and integration works at the
yard for the CLOV FPSO for Total. This contract triggers
the start of Phase II of the yard development which
foresees investment in completion of the quayside
to allow berthing of VLCCs, installation of a heavy lift
crane to lift modules on to the vessel and construction
of module fabrication facilities, as well as the training
of personnel. With the completion of Phase II, the yard
will be fully ready for FPSO topsides process modules
fabrication and integration.
The association with DSME enhances the PAENAL
Joint Venture’s investment capacity for Phase II, as
well as complements the production and construction
expertise of the yard.
Business model
Report of the Board of Management
Although the Company reports under three business
segments: Lease and Operate, Turnkey Systems and
Turnkey Services, it should be noted that the Company
operates as an integrated organisation using the same
project teams for execution of projects, irrespective of
whether they are turnkey supply to a third party client
or are to join the Company’s lease fleet. Operational
experience from the lease fleet units is continuously
used to update the Company’s internal standards
SBM Offshore – Annual Report 2010 51