Prospectus - SBM Offshore

limits on the claim period, some warranties and indemnities may give rise to unexpected liabilities, which
could adversely affect the Group's business, results and financial condition.
(p) Adverse weather conditions, catastrophic events, pandemic diseases and other unpredictable events
may adversely affect the Group's (offshore) facilities, people, equipment, cargo or property.
Adverse weather conditions, catastrophic events, pandemic diseases and other similarly unpredictable events,
may reduce the number of workable days and therefore prevent the Group and its employees from being able
to conduct their activities. For instance, the travel restrictions implemented as a result of the H1N1 pandemic
in 2009 interrupted the Kuala Lumpur operations. Work in Houston has been disrupted in the past by
hurricanes and tropical storms, and adverse weather conditions were among the contributing factors that
resulted in the progress of the work offshore and commissioning of the Yme Platform for start-up of the
system being significantly slower than anticipated. Climatic conditions could also affect in some instances the
Group's ability to install or operate safely vessels offshore and catastrophic events like the Icelandic volcanic
eruption, Japanese tsunami or other events with a global impact. Such events are impossible to predict. Should
they occur, they may adversely affect the Group's property, financial assets, trading positions and employees.
If the Group's business continuity plans do not fully address such events or cannot be implemented under the
circumstances, the Group may incur losses. Unforeseen events can also lead to lower revenue or increased
operating costs, such as increases in fixed employee costs not recovered by corresponding increases in
revenues due to an inability to deliver products and services on time, and can result in higher insurance
premiums. Insurance coverage for certain unforeseeable risks may also be unavailable, or may only be
available at unacceptably high premiums. Should they materialise, these risks may have an adverse effect on
the Group's business, results and financial condition.
(q) The Group's internal control systems may not adequately identify all risks and the Group may not
properly assess the impact such risks may have.
Risks can manifest themselves in many ways, including business interruption, poor performance, IT system
malfunctions or failures, non-performance from partners or subcontractors, breach of applicable laws and
regulations, human errors, employee misconduct or internal and external fraud. Timely identification,
assessment and, if necessary, treatment of risks as they materialise is critical to the performance of the Group,
as is the consistent and disciplined implementation of internal control systems and risk management across the
Group as a whole.
The experience on the Deep Panuke mobile offshore production unit (MOPU) and the Yme MOPU with oil
storage capacity (MOPUstor), together with a general recognition of the accelerating complexity of facilities
and projects the Group undertakes, the increasing scale of investment, the increasing average FPSO contract
life, and the use of FPSOs as full life-of-field developments, have prompted a reappraisal of the Group's
organisational structure, internal control systems and risk management, and has resulted in the adoption of a
new risk management approach under the " Work as One, Perform and Shape the Future " strategy, which is
intended to identify and, where necessary, remedy shortcomings in the management of these risks.
(r) If the Group fails to complete a project on time, misses a required performance standard or
otherwise fails to adequately perform on projects, the Group may incur a loss on that project.
The Group usually commits to its customers that it will complete projects by a scheduled date and that a
project, when completed, will achieve specified performance standards. If the project is not completed by the
scheduled date, or it fails to meet required performance standards, or fails to perform other contractual
obligations, the Group may be liable to pay compensation or damages for breach of contract, incur significant
additional costs, or incur a loss or penalties (both contractual penalties and as a result of civil liability), and
payment of the Group's invoices may be delayed. In addition, the customer may have the right in certain
circumstances to terminate the agreement. Performance of projects can also be affected by a number of factors
beyond the Group's control, including unavoidable delays from governmental action or failure to act, public
opposition, inability to obtain financing, adverse weather conditions, unavailability of materials, changes in the
project scope of services requested by customers, industrial accidents, environmental hazards and disasters,
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