2008 Annual Report - SBM Offshore

SBM Offshore Annual Report 2008 / Report of the Board of Management63starts, for all converted units, with environmental studies,stringent hull selection and refurbishment procedures andcontinues with the formal interrogation of the design ofprocess facilities to prove safety, reliability and operability.All units presently owned by the Company have certifiedservice lives that extend far beyond their contractualcommitments.Once in service the general integrity of the fleet is maintainedthrough the application of:• strict operating procedures and preventivemaintenance programmes;• careful selection and intensive training of high-qualitypersonnel and direct employment of all positions ofresponsibility aboard the units;• continuous survey programme of Hull and Topsidesby the Classification Society;• management system accreditation by theClassification Society and compliance with therequirements of the International Safety Management(ISM) Code 2002.Pollution insurance is purchased for the maximum availablecover from a Protection & Indemnity Club and indemnitieseffectively capping the exposure are usually obtained fromclients. All of the offshore units are also insured undercomprehensive Hull and Machinery insurance packagesprotecting against loss or damage to the unit itself.Windstorm insurance for the Gulf of Mexico is currentlylimited in availability. On this subject the lease contract forthe Thunder Hawk platform provides for a combinationof procured insurance and / or self insurance by the fieldproducers, but given current market circumstances theCompany is exposed on its equity share to an incidentinvolving total loss or similar extensive damage. Thisexposure is expected to decrease over time.PerformanceLease rates may not be paid or only partially paid by clientsif units do not perform as per the contract requirements.System availability is assured by a mature design process,reliability and maintainability (RAM) modelling, verifiedconstruction and planned, preventive maintenance aswell as condition-based monitoring. The Company hasoperated F(P)SOs for over 168 vessel years with a totaloperating downtime of less than 1%, which is well belowthe typical contractual allowance. Insurance cover for lossof earnings is contracted only if considered appropriate oras is sometimes required in relation to debt obligations.Offshore Health & SafetyThe Company has a duty of care to protect personnel withinits operations from the potential health hazards posed byhydro-carbon processing and by toxic substances. Internalexpertise and a management system in this area aresupported by the preparation of vessel-specific OperationalSafety Case studies.In particular, asbestos is covered by a strict policy onboardthe F(P)SOs. Units in operation have an asbestos registerrecording the material type and location of any asbestos,while any work in the vicinity of asbestos material is onlyexecuted by a licensed asbestos removal contractor. Unitsare converted to F(P)SOs as asbestos-free, i.e. all knownasbestos is removed during the conversion period.Further, codes of practice covering benzene and mercurymanagement apply onboard F(P)SOs.Crisis managementThe Management System includes Emergency ContingencyPlanning which describes the procedures for respondingefficiently in a predetermined way to an emergency onboard an offshore unit.