With two thirds of the world’s cities near a shoreline, the oceans contain the key to our energy future. Knowing how to harness the energy in and below the world’s waters is what positions SBM Offshore as a company with an important role to play in the global energy development. From today’s oil and gas to tomorrow’s wind and wave, we are uniquely positioned to facilitate the energy transition. SBM Offshore believes the oceans will provide the world with safe, sustainable and affordable energy for generations to come. We share our experience to make it happen. This is our story in 2018.
First Generation 3 FPSO goes into operations
The lease and operate contract that commenced in June 2013 marked a major achievement with the delivery and first oil for FPSO Cidade de Paraty offshore Brazil. Paraty was the first in a series of four pre-salt FPSOs and at the time it represented the deepest in SBM Offshore’s operating fleet at 2,140 meters. The FPSO design is what SBM Offshore calls ‘Generation 3’, capable of high production capacity up to 150,000 bopd and with a topsides weight up to 23,000 tons. The four pre-salt FPSO projects delivered illustrate that SBM Offshore’s ‘design one and build several’ concept works and provides added value to clients, while progressing the Company’s standardization efforts.
Thunder Hawk Semi-sub hub begins producing in the Gulf of Mexico (USA)
SBM Offshore’s Thunder Hawk DeepDraft Semi was installed and started production for Murphy Oil in the Gulf of Mexico in July 2009 under a Production Handling Agreement (PHA). In 2014 SBM Offshore signed a PHA with Noble Energy to tie-back the Big Bend and Dantzler fields to Thunder Hawk. The additional tie-backs illustrate the strategic value of the platform to SBM Offshore, while offering the industry a cost effective development solution for the Gulf of Mexico. The Thunder Hawk offers numerous advantages for deepwater, subsea developments including reduced development capital, lower operating costs, an accelerated development schedule.
First Lease & Operate FPSO contract
SBM Offshore pioneered the lease and operate concept for Floating Production Storage and Offloading (FPSO) units based on tanker conversions. The Company leased its first FPSO in 1980, opening up a new opportunity for clients to reduce their CAPEX. Named FPSO II, it was deployed on the Cadlao field offshore The Philippines, where oil production started in August 1981. With the first contract to design, construct, install and operate the unit, SBM Offshore led the way for a new, commercial model for FPSOs, launching the lease and operate market as we know it today. FPSO designs have changed considerably over the years as clients’ needs evolve.
Company presence grows worldwide
In a strategic move to focus on sales and after sales service of buoys and to facilitate closer engagement with clients, the Board of IHC approved the set-up of a separate company. On February 27, 1969, Single Buoy Moorings Inc. was registered in Switzerland. By mid-1969, the Company had grown and was operating from three locations: Rotterdam, Fribourg and Antwerp. The move to Monaco of the Company’s engineering activities took place in 1971 and the Regional Center (RC) remains the heart of SBM Offshore’s technological innovation and the largest RC of the five RCs located around the globe, including Schiedam, Houston, Kuala Lumpur and Rio.
Listing on the Amsterdam stock exchange
SBM Offshore N.V. shares have been listed on the Amsterdam stock exchange since October 11, 1965 originally under the name IHC Holland and later as IHC Caland and finally as SBM Offshore N.V. in 2005. The shares are currently included in the AEX Index of Euronext Amsterdam. Options on the Company’s shares have been traded since July 7, 1993 on the Euronext Amsterdam Derivative Markets.
First order for a single point mooring buoy
SBM Offshore has a long history of innovation. From its shipping origins at the Gusto Shipyard in the Netherlands, IHC (as the Company was first known) secured a contract to supply its single point mooring system (SPM) for Shell’s operations offshore Indonesia in 1959. Instead of the multi buoy systems used at the time, the design for this buoy was a pioneering SPM system on which Shell and SBM Offshore had first begun collaborating in 1958. It proved to be so successful that it went on to be used extensively, opening up new possibilities for the industry. Demand for Catenary Anchor Leg Mooring (CALM) buoy terminals continues today.
MESSAGE FROM THE CEO
This year was busy for our project teams with construction of three projects, including our first Fast4Ward™ FPSO hull. Signing a second hull contract shows confidence in our solution. With financial performance on track and past legacy issues behind us, we are on our way to a bright future.
The Company delivered solid financial results. Directional EBITDA came in close to US$1 bn, supported by good performance in both Lease and Operate and Turnkey. Underlying Directional profit increased 41% year-on-year. An increase in dividend over 2018 results of c. 50%, resulting in c. US$0.37 per share is proposed.
2018 was a year of consolidation and ongoing optimization with a solid asset operational performance and production uptime of 98.0%. Progress was made on transformation programs, such as process safety management and digitalization, as we aim for excellence in operational efficiency and incident prevention.
Activities in 2018 included three first-steel cuts, strengthening our presence and developing our experience in China, winning a joint technology award with Shell in recognition of Turritella FPSO and a positive step in pursuing the energy transition to renewables with ABS design approval for our wind floater.