2008 Annual Report - SBM Offshore

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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.
44 SBM Offshore Annual Report 2008 / Report of the Board of ManagementIn December, the Company obtained a contract fromWoodside Energy Ltd. for the full scope turnkey supply ofa disconnectable FPSO for the Cossack Wanaea LambertHermes (CWLH development) Joint Venture. The projecthad already started in May 2008 under a Letter of Intentand has progressed satisfactorily since. The FPSO Okhawill replace the existing FPSO Cossack Pioneer, currentlyproducing oil from the CWLH fields offshore Australia, atthe end of 2010. The Company owned FSO Okha has beendisconnected from its mooring offshore north of SakhalinIsland and sailed to Singapore, where the conversion andintegration of the process modules and disconnectableturret will be performed at Keppel shipyard. The FPSO isscheduled for completion in October 2010.In July 2008, a call off frame contract has been obtainedfrom BP Angola in support of a development programmeoffshore Angola. The initial contract call off has been signedfor early engineering and fabrication works to supportenhanced local fabrication capability in the region. Howeverthe call off for the first full FPSO is no longer expectedbefore 2010. Subsequent FPSOs may be called off subjectto future projects sanction.A joint venture company named “Paenal” has been formedwith Sonangol, the national oil company of Angola, todevelop a FPSO integration yard in Angola near the coastaltown of Porto Amboim, south of the capital Luanda.Investment and preliminary development of the yard hadstarted in 2007 and some small fabrication activities havecommenced. Full yard development was pending sanctionand contract award of a FPSO project. In view of the delayin the award of the first FPSO contract (from BP Angola),the full yard development has now been put on hold andin the meantime it is planned to obtain fabrication work tokeep the yard work force occupied. Full yard developmentwill only be re-commenced when an FPSO order has beenobtained.Large Mooring SystemsIn January 2008, a contract was obtained from MISC/PTSCfor the supply of an external turret mooring system for anFPSO to be located offshore Vietnam on the Ruby fieldfor Petronas/Petrovietnam. The project is being executedin the Kuala Lumpur office with delivery of the system inJune 2009.Construction of the internal turret for BP Norge AS for theSkarv development in Norway has commenced at KeppelShipyard with completion scheduled for February 2010. Theturret will then be shipped to Samsung Heavy Industries inKorea for integration by BP into the FPSO hull. It will be thelargest turret in the world in terms of mooring loads and isof the well proven SBM bogie-wheel type design similar tothat supplied for the BP Schiehallion FPSO and other largeunits recently installed on Brazilian deepwater fields.The external turret mooring system for an FSO owned byTanker Pacific Offshore Terminals for operation in the SuTu Vang field offshore Vietnam was delivered to the clienton schedule in April 2008. This was the first turnkey supplycontract fully executed by the Company’s office in KualaLumpur and a major milestone in the development of thatexecution centre.The external turret mooring system for the permanentLPG FSO for the Belanak field, which is operated byConocoPhillips Indonesia Inc was also delivered onschedule. The turret was incorporated in the bow of anew built LPG FSO in South Korea. The turret will behooked-up in the anchoring and riser pattern of the CALMsystem supplied by the Company in 2006 for the mooringof a chartered LPG tanker, used as a temporary storageunit at Belanak.Deepwater Export SystemsDeepwater export CALM buoys moor shuttle tankers for thetransfer of crude from the FPSO by means of two or three
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SBM Offshore N.V.Schiedam (The Neth
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2008 Annual Report - SBM Offshore

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