AGENDA 09:00 09:15 BUSINESS AND TEAM, Carl K. Arnet, CEO 09:15 09:35 FINDING THE RIGHT INVESTMENTS, Claude Louis Rouxel, SVP BD 09:35 10:00 WE BUILD, David Sverre, EVP Projects 10:00 10:20 WE OPERATE, Jon Myran, EVP Operations 10:20 10:40…
BUSINESS AND TEAM Carl K. Arnet, CEO
BW Offshore todayy Employees onshore and offshore Global headcount 1,900 Employing 25 nationalities 31 % Onshore employees Operations in 14 countries 69 % Offshore employees More than 30 projects delivered Onshore - functions…
BW Offshores background g LPG market entry LNG market entry BW Gas listing as pure Leading owner in the LPG, gas carrier company LNG, VLCC, Product Tanker and Offshore segments Leader in crude and Founded by gas shipping markets…
World energy gy demand increasing g Energy demand will continue to grow fueled by fast growing emerging markets Oil and gas will remain the key sources for energy No real alternative to oil in transportation. New oil and gas…
New fields New fields are characterized by being E&P spending growth Largely nationalised Very political Environmentally sensitive They are normally located in Deeper waters Remote areas with limited i f t t infrastructure…
BW Offshore in the upstream p value chain SEISMIC DRILLING DEVELOPMENT PRODUCTION BUSINESS ENGINEERING CONSTRUCTION PRODUCTION DE- DEVELOPMENT PROCUREMENT INSTALLATION COMMISSIONING COMMISSIONING CONTRACT 22 March 2011 9
We invest in p production assets INPUT FOCUS OC S PRESENCE + BUILD OPERATE COMPETENCE Concept Produce, maintain, + development, engineering, sub-contracting train, safety & environment, manning g and FINANCIAL and…
Board of Directors Dr. Helmut Sohmen Carine Smith Ihenacho Chairman Board member - Independent Chairman since 2005 Cand.Jur University of Oslo, Norway, Law degrees from Austrian and American LL.M. from Harvard Law School, USA…
Highly g y experienced p management g Carl K. Arnet Knut Sthre David Sverre Chief Executive Officer Chief Financial Officer EVP Projects M.Sc. from NTNU, Norway Master in Finance Bachelor of Applied Science MBA ffrom NNorwegian i…
FINDING THE RIGHT INVESTMENTS Claude Louis Rouxel, SVP Business Development
FPSO the p preferred solution Floating production units - installed Others 8 3% Semi; 42; 17 % Spar; 18; 8% FPSO; Flexible, safe and proven solution TLP ; 22; 155; 63 9% % Generic and field specific sections Deck…
Market overview Annual growth 5-10% Number of FPSOs globally Most FPSO contracts are extended into the option period alternatively redeployed on profitable new contracts The complexity and size of new FPSOs are increasing…
Flexible p production solutions Operating FPSOs - regions Oil production profile of the FPSO fleet (bbl/d) 3 %1 % 1 % 3% 23 % 10 % 14 % 23 % 22 % West Africa SE Asia / Far East South America North Sea Australia /…
Clients preference p Proven track record, class-leading production, top safety and environmental operations, technical competence and financial strength Oil companies prefer to initiate dialogue at an early stage of field…
Market a et oppo opportunities tu t es Brazil South East Asia 30-40 opportunities 20-30 opportunities Local content Price Limited technology requirements Size of projects Limited local content issues Technology - important All…
Internal evaluation of prospects p p Prior Technical Commercial Portfolio of Project name Operator Country Status Award Reserves Country Score relation risk risk work Draupne- Luno Det Norske- Norway- FPSO Lundin North Sea…
Preparations p for bid Project and concept evaluation in cooperation with client Paid FEED / engineering studies Optimising g concept and clarification of demand Operation input Basic design and cost estimation Subcontracting…
Current opportunities pp Focus FSO Bien Dong for PTSC/PetroVietnam FPSO in West Africa Pursuing 5-10 selected FPSO opportunities Options on existing contracts are normally exercised and often extended past the optional…
Finding g the right g investments Solid demand less competition More complex FPSOs Improved p terms and conditions Final negotiations for new contracts 22 March 2011 22
WE BUILD David Sverre, EVP Projects
Project j division roles Business development phase E i Engineering i conceptt is i fixed fi d Work scopes and execution plan are completed Main subcontractors and suppliers are committed Project team participates in all…
FPSO BW Pioneer accepted p for start-up p The Bureau of Ocean Energy Management, R Regulation l ti and dEEnforcement f t (BOEMRE) today provided the final approval necessary for Petrobras America, Inc. to begin oil and natural…
FPSOs under construction BW Athena at Drydocks World, Dubai Extending vessel by 22 meters and including a section for turret Fabrication of disconnectable buoy at fabrication yard in Sweden Progress 51% at end February and in line…
EPC and management g p projects j P-63/Papa Terra at COSCO Dalian Shipyard, China Structural work and steel renewal, piping and mechanical work ongoing Completing ship yard work in December 2011 Brazilian JV partner (QUIP)…
Integrating g g technology gy We understand the marine environment through years of shipping and production offshore We are specialists in process plant optimization We are a technology user an integrator Effective outsourcing…
Execution strategy gy Outsource saving vs control Continue to maximize outsourcing to save costs Increased BW Offshore decision makers to control Implemented gated control processes for execution Formed new engineering division…
Supply pp y chain strategy gy In project critical procurement we use suppliers based on long term relationships, trust and common understanding of quality We focus on efficient competition World wide sourcing Open process of…
Yard selection and management g Invite qualified yards Extensive site visits and documentation to verify capability and capacity. Currently executing conversions in four different yards Specifically targeted Chinese and Middle…
Installation Complete FPSO value chain Internal installation services to control the full delivery of the FPSO Experience transfer from installation to project to reduce cost Well planned and executed installation is a profitable…
Improvements p to p project j completion p Mechanical completion Physical check of all components of the system Commissioning process Dynamic testing of system Major learning from past projects Payments tied to achieving…
We build Projects performing in line with plan Strengthening all phases of project execution Risk management g and p procurement strategy gy 22 March 2011 34
WE OPERATE Jon Myran, EVP Operations
The cash machine Flare a e Tower o e Steam Boilers Turret & Swivel Stack Accomodation Process Plants Power Generation Gas Compression Water Injection H lid k Helideck Offloading Hose Risers and umbilicals Storage Mooring…
Focus areas Health, Safety, Security, Environment, Quality (HSSEQ) Meet clients expectations Production uptime Asset integrity Crew and competence Efficient local and central support Operational costs and efficiency…
Global footprint p Belokamenka BW Pioneer Endeavor Yum KakNab Ningaloo Vision BW Cidade de So Vicente Umuroa Cidade de So Mateus Polvo Espoir Ivoirien Berge g Helene Sendje Berge Units Offices Crew centers Abo…
Qualityy is the basis for efficient operation p All units meet requirements from Bermuda or Panama flag DNV or ABS class National authorities Operator /clients International standards BW Offshore internal standard BW Offshore…
Performance Excellent HSE performance Production uptime 100 0% 100.0% Lost time incidents (LTI) < 1.0 98.0% Excellent production uptime 96.0% 94.0% 2010 uptime 98 98.7% 7% 92.0% 5 year average uptime 99.0% 90.0% 2005 2006…
Asset integrity g y Ensure integrity of structure and equipment Class and flag requirements Systematic and planned maintenance Condition monitoring and risk based inspection programs 22 March 2011 42
Global p presence and competence p World-wide base of offshore personnel FPSO unit personnel, illustrative 1,300 offshore personnel 25 nationalities 5 international recruitment centers 14 countries t i off operations ti…
Operation p expenditures p Two models fixed or reimbursable Operational rate is adjusted to cover inflation and currency fluctuations Production related consumables and logistics normally covered by client Operational…
Reducing g costs Potential to increase operational efficiency without reducing performance Cost synergies from larger fleet Crew Local offices Purchase / maintenance cost I Insurance OPEX cost levels per FPSO, 2010 Internal…
Improvements p to operation p Streamlining support organisation HSSEQ Integrity management Guidelines, procedures and systems Clear definition of role and responsibilities of operational division in projects Experience transfer…
We operate p Meeting client requirements Class leading HSSEQ and uptime O Operational ti l efficiency ffi i programs 22 March 2011 47
Short coffee break
WE LEASE Knut R. Sthre, CFO
Lease business Financial capability to fund large FPSO projects allows BW Offshore to offer project specific lease structures and alternatives to clients Optimised solution for financial leverage and focus for field owners Legal…
High g and robust cash flow transparency p y Order book Robust counterparties USD 8.2 8 2 billion in re revenue en e USD 5.1 billion in EBITDA 9 8 7 35 % 3.6 6 Petrobras 5 Other NOCs * Options 53 % 4 2.0 Independents ** Firm 3…
Financial status Prosafe Production consolidated from and including Q4 2010 APL division presented as discontinuing business from and including Q3 2010 Total assets USD 3.7 billion with an equity ratio 37.5% USD million 31.12.10…
New financial foundation Refinancing of BW Offshore and Prosafe Productions corporate debt Seven year secured loan of USD 2.4 billion Strong g interest from existing g lending g banks Predictable terms and flexibility for both…
Synergies y g Progress Singapore organisation integrated and relocated Integration of regional offices started Best practice process initiated Alignment of policies, procedures and tools Current realised cost synergies USD 20…
Accretive organic g g growth Annual investment program of USD 500 million Indicative return for new investments A typical BW Offshore FPSO project Unlevered IRR 12 15% 12-15% Levered IRR 24-31% Average FCF yield 20-26%…
Share p price and liquidity q y Number of shareholders increased from 1,200 to 3,000 BW Group ownership reduced from 67% to 47% Increased interest from investors and analysts Status Singapore Stock Exchange listing 22 March…
Dividend p payments y p proposed p The Board of Directors will propose a new dividend policy to the AGM 20-25% of EBITDA Quarterly payments Planned Q1 2011 dividend p payment y in June BW Offshore has as an objective to…
We lease Robust order book Strong financial capabilities Dividend and increased cash yield 22 March 2011 58
SUMMARY Carl K. Arnet, CEO
BW Offshores market position p Presence in all major offshore regions Competence centers in Oslo and Singapore covering all time zones Global network for recruitment and training of personnel Established relationship with quality…
Recognized g FPSO contractor Worlds second largest FPSO company 15 FPSOs & 2 FSOs Proven project execution capabilities performed more than 30 projects since 1982 Technical milestones and achievements The first FPSO in the US…
The investment case BW Offshore has the resources and capabilities to take on new projects in an expanding market Expect significant improvement in value creation for new projects Improved p contracts ((T&Cs)) Pricing and delivery…
Short term g game p plan Secure run rate EBITDA of USD 500 million on current portfolio Ensure ongoing projects perform in line with plan and cost Finalize integration of Prosafe Production and realize synergies of USD 25…
Q&A Picture: Petrobras
Q1 2011: 24 May 2011 Further information: www.bwoffshore.com IR contact: Kristian Flaten, VP Finance & IR kristian.flatenbwoffshore.com 22 March 2011 65
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