2008 Annual Report - SBM Offshore

SBM Offshore Annual Report 2008 / Report of the Board of Management43discussions continue with interested parties as the clearintent of SBM Offshore is to withdraw from this Myanmarbased operation at the earliest opportunity taking intoaccount contractual and other obligations. The Companycontinues to declare that it will not enter into any othercontractual commitment in Myanmar as long as the currentregime remains in place. This policy has not changed andno further investment has taken place nor has any newbusiness been contracted.The Company is committed to compliance with SA 8000norms for social accountability for its operations in Myanmar.The FSO Yetagun is operated with a crew consisting of morethan 90% Myanmar nationals, all contracted under directemployment or through exclusive manning agencies. TheCompany seeks to give all employees the best employmentstandards in accordance with the Company Code ofConduct and Social Accountability Policy. The Companyoperates with standards that comply with internationalhuman rights and international labour guidelines. Thiscommitment implies in particular the continuous andtraceable checking in Myanmar of the Company’s suppliersand sub suppliers in relation to forced labour and childlabour in compliance with Social Accountability standardsset-out in the Company’s Social Accountability manual. TheCompany further audits all suppliers and agencies againstthese internal procedures. It is important to note howeverthat the Company cannot currently be audited against theSA 8000 Social Accountability standard due to the ownersof the standard (SAI Inc. of New York) prohibiting its usein Myanmar. Therefore the Company and its suppliersin Myanmar are measured against SBM Offshore’s owninternal Social Accountability standards and procedures– which meet the requirements of SA 8000.Turnkey Supply and Services ActivitiesOngoing work on a number of large turnkey supplycontracts, obtained in 2007 or before, was carried forwardinto 2008. New order intake in this segment of activitiesincreased compared to last year and reached a newrecord high portfolio value at year end of US$ 2.97 billion.The activities in 2008 are described hereafter by type ofproduct or service.Large Production SystemsAt the end of January 2009, FPSO Frade left Dubai fortransit to Brazil and subsequent offshore installation, withfirst oil expected in mid 2009. The Company will operatethe unit offshore for three years after which Chevronwill take over the operations. The FPSO will be mooredin 1,200 metres of water by an internal turret able toaccommodate 33 risers and is capable to handle a dailyproduction capacity of 100,000 barrels of oil, treatment andcompression of 106 million standard cubic feet of gas, andtreatment and injection of 150,000 barrels of water.A new order was obtained at the end of January 2008, fromPetrobras for the supply of the FPSO P-57 for productionon the Jubarte field offshore Brazil. The unit will be capableof handling a daily production capacity of 180,000 barrelsof oil with total gas compression of 71 million standardcubic feet. The delivery of the unit in Brazil, ready forinstallation, is planned for the end of 2010. The VLCCtanker ‘Accord’, from the Company’s inventory, is currentlybeing converted in Keppel shipyard in Singapore, where fivenew modules will also be installed on the deck. On arrivalin Brazil, the remainder of the topsides modules, whichare currently being fabricated at local yards, will be liftedand integrated on the FPSO at BrasFels yard near Rio deJaneiro. The project execution plan is in accordance withthe contractual requirements for Brazilian local contentfabrication. The contract represents a portfolio value of US$1.25 billion, inclusive of three years of operating servicesand represents a major step in the Company’s businessgrowth as this unit is one size up from previously suppliedor leased FPSOs.