2008 Annual Report - SBM Offshore

SBM Offshore Annual Report 2008 / Report of the Board of Management41the Okono and Okpoho fields offshore Nigeria on 16 July2008.The unit is currently laid up in anticipation of a new leasecontract, scrap or sale to a third party.In early June 2008, the Company received a lease andoperate contract from Petrobras for the Company’sexisting FPSO Capixaba for a period of 12 years at theCachalote field offshore Brazil. The FPSO Capixaba willbe disconnected from its current location at the Golfinhofield offshore Brazil and after transfer to Keppel shipyard inSingapore, where the FPSO will be modified and upgradedfor the new application, it will then transfer back to Brazilfor offshore hook up, installation and operation on theCachalote field. The execution schedule extends for aperiod of eight months, from planned disconnection at theGolfinho field in June 2009, to first oil on the Cachalotefield in February 2010. The relocation and upgrade workswill require a significant additional capex investment in theunit resulting in an amended lease contract with a newlease rate which will be payable from the date of start-upon the Cachalote field.In July 2008, the FPSO Tantawan Explorer in Thailand waspurchased by Chevron Offshore Thailand Ltd. at the end ofthe lease and operate contract. The initial lease and operatecontract of the unit started in February 1997 and the unitwas operational under the Company’s management andownership for 4,199 days with a 99.4 % up time. A total of245 billion standard cubic feet of gas was produced andexported via pipeline with associated oil production of 27million barrels of oil with a total of 99 offloads.In October 2008, the FPSO Rang Dong I in Vietnam wasredelivered to the Company by Japan Vietnam PetroleumCompany Ltd. (JVPC) at the end of the ten-year leaseperiod plus a short extension. The unit was disconnectedand decommissioned and is currently laid up. The unitoperated for a total of 3,704 days with an up time of 99.6%.A total of 153 million barrels of oil were produced duringthat period with a total of 377 offloads.In December 2008, the FSO Okha was redelivered to theCompany by Sakhalin Energy Investment Company Ltd.(SEIC) at the end of an extended lease period of over nineyears. The FSO successfully operated during the ‘summer’months at the northern tip of Sakhalin Island as a storageand offloading facility for Sakhalin production for a totalof 1,818 days. Each winter the unit was removed fromlocation as ice formation prohibited safe operation. The FSOwas connected to the seabed by a SALM type mooringarrangement, which was lowered onto the seabed to avoiddamage during the winter months when disconnected.A total of 104 million barrels of oil were stored during thecharter with 171 offloads. The FSO Okha is currently inKeppel shipyard in Singapore for conversion into a FPSO(FPSO Okha) as replacement of the Cossack Pioneer FPSOfor Woodside Energy Limited.At the end of December, FPSO Espirito Santo, jointlyowned by SBM Offshore and MISC, was hooked up tothe mooring lines in the BC-10 field offshore Brazil for afifteen year lease and operate contract with Shell. The leasecommenced on 1 January 2009. The FPSO is designedto produce 100,000 barrels of oil with gravity ranging from16º API to 42º API, and to treat up to 45 million standardcubic feet of gas for injection or export. It is the deepestmoored FPSO of the Company’s fleet and the first turretmoored FPSO in the world using steel catenary risers forfluid transfer.The construction of the Semi-Submersible productionunit Thunder Hawk at the Kiewit yard at Ingleside, Texashas been finalised with the production facilities lifted andsecured on the Semi-Submersible hull, which was shippedfrom Singapore to Texas in the third quarter of 2008.Integration and pre-commissioning of the unit has beencompleted and the unit towed to the field for installationwith first oil production expected mid 2009.