Annual Report 2010 - SBM Offshore

Report of the Board of Management
Operational
Project execution
The Company provides custom built solutions according
to clients’ requirements. Project Risk workshops are
conducted from the proposal phase through to project
completion by experienced personnel to highlight the
novel aspects and assure good Risk Management on
all subjects critical to each project’s success. A key
objective of Project Risk Assessments is to reduce the
variability of Project outcomes/results.
The Company makes HSSE protection a high priority
in the execution of its projects and minimising the
occurrence of HSSE events is addressed by:
• the application of continually upgraded HSSE
standards;
• risk based reviews of operations by HSSE
professionals;
• internal health and safety staff advise line management
as necessary to minimise the level of risk to
employees;
• security issues relating to specific geographical
risks are identified and mitigating plans developed
in accordance with, in the case of the offshore fleet,
the International Ship & Port Facility Security (ISPS)
Code and for onshore locations, in country security
and Journey Management plans.
The technical challenges of each project are
addressed by:
• employing and developing in-house expertise and
external advice when appropriate;
• strict adherence to the Group Management System,
HSSE standards, Corporate Engineering Standards
and Quality Assurance Procedures;
• review by, and compliance with, the requirements of
the relevant Classification Society;
• including provisions in cost estimates and contingencies
for particular commercial, technical, and
execution challenges based on a thorough assessment
of the inherent risks.
Significant technical, commercial and contractual risks
are identified and recorded on a Risk Register by key
personnel and reviewed in workshops.
90 SBM Offshore – Annual Report 2010
Execution risk is controlled through on-going monitoring
during the construction, installation and start-up
phases. A detailed monthly reporting and forecast
procedure is used to anticipate and prevent execution
delays and budget overrun. The consequences
of accidental events encountered in execution are
insured under comprehensive Construction All Risk
(C.A.R.) insurance policies. The financial viability
verification process is being strengthened for clients,
major vendors and subcontractors and a tendering
process is applied to procure quality equipment at
competitive prices.
A key element of the cost control strategy is to own and
control adequate means for the offshore installation of
the floating systems, in the shape of the Company’s
installation vessels. This provides protection from the
non-availability and the cyclically high pricing of third
party contractors. The decision to invest in a new, versatile
installation vessel will enable this strategy to be
pursued in the medium to long-term.
The Company maintains an inventory of tankers for
conversion projects in the future. This allows the
Company to improve the accuracy of the estimated
costs of a future project by using a firm price for the hull
and detailed knowledge of the required refurbishment
and conversion work for the hull.
The Company operates globally from different centres
and the continuity of operations from each of the
principal locations is addressed by plans setting out
appropriate responses to major potential events such
as fire and re-establishing key functions efficiently
including IT. The ability to work from any of the main
execution centres using the same tools and systems is
an important strength.
Production operations
The lease and operation of offshore production units
brings other risks including environmental, performance,
health, security & safety risks, each requiring
identification, assessment and management.
Environmental
No major environmental incident involving FPSOs or
FSOs has occurred anywhere in the world although