BW OFFSHORE Ltd. Shipowners Experience and Requirements in Procurement and Building process. By Carl K. Arnet, March 2014

Transcription

1 BW OFFSHORE Ltd. Shipowners Experience and Requirements in Procurement and Building process By Carl K. Arnet, March 2014

2 Three numbers to define BW Offshore 16 FPSOs + 1 FSO top tier world-wide 700,000 boe/day like a large independent 99.0% uptime 2013 average March

3 Global footprint Belokamenka BW Athena BW Pioneer Yùum K ak Náab BW Cidade de Sáo Vicente BW Joko Tole Cidade de São Mateus Umuroa Polvo P-63* Peregrino* Units Offices Crew centers Espoir Ivoirien Abo Berge Helene Azurite Sendje Berge Petroleo Nautipa * Operation & Maintenance March

4 Operational highlights 2013 Class-leading HSSEQ performance Lost time injuries (LTI*) of 0.23 Uptime Stable operations Uptime of 99.0% EBITDA of USD million for 2013 First oil on FPSO P-63 (Papa Terra) Project completed 100% 98% 96% 94% 92% 90% Signed extension contract for three units Abo Sendje Berge Polvo EBITDA USD million 150 Reported One-offs Commenced marketing of FPSO Azurite for new projects * Injuries per million man-hours March

5 Orderbook Orderbook of USD 6.9 billion as of 31 December 2013 Total orderbook and clients Whereof USD 3.3 billion are firm contracts 7x revenue (2013) Long term lease contracts with solid counterparties Visible and sustainable revenue Diversified client base Portfolio with solid EBITDA-margins 2013 EBITDA margin of 46% 35% USD 6.9 billion 28% 37% NOC E&P Petrobras March

6 WHAT IS AN FPSO?

7 FPSO in the upstream value chain SEISMIC DRILLING DEVELOPMENT PRODUCTION BUSINESS DEVELOPMENT CONTRACT ENGINEERING PROCUREMENT CONSTRUCTION INSTALLATION COMMISSIONING PRODUCTION DE- COMMISSIONING FPSO: Floating Production Storage and Offloading March

8 The FPSO is an oil platform Flare tower Turret & swivel stack Accommodation Gas compression Heating medium Switchgear room Process plant Helideck Power generation Mooring lines Risers and umbilicals Storage Fiscal metering Offloading hose WELL FLUID OIL, GAS AND WATER SEPARATION GAS COMPRESSION GAS INJECTION/EXPORT WATER INJECTION OIL STORAGE MEETERING OFFLOADING March

9 BUILD PROCESS

10 FPSO project cycle Tender Phase Front End Engineering & Design (FEED) Bid major procurement items & sub contracts Cost & Schedule Estimate Contract negotiations with client Execution Phase Detailed Engineering Major Procurement and Sub-contracting Build New Hull or Convert existing, Build Topsides, & Build Single Point Mooring (Turret) Integrate & Pre-commission Pre-Operations, transport to site, & installation Operations Commission Operate Long term FEED, BUDGET & BID ENGINEER, BUILD OR CONVERT HULL ENGINEER & BUILD TOPSIDES INTEGRATE HULL, TOPSIDES & SPM TRANSPORT & INSTALL COMMISSION & OPERATE March

11 Hull: new vs. converted NEW: New! Long Life. Design exactly what you want More predictable But Cost & Schedule floor Subject to shipyard market USED: Not new! Lifecycle risk. Compromised Design Less predictable & often more complex But Can be cheap and quick Subject to hull availability March

12 Topsides: E+P+C vs. EPC E+P+C: Manage each component yourself Manage your core competence Need substantial resources & competence Keep much of the risk in house But Keep the margin and the risk/reward in house. Build competitive competence EPC: Turnkey to others Rely on other parties for core competence. Need only supervision Shed the risk But Margin & risk/reward is captured by others Others keep building competence we need March

13 Integration & pre-commissioning: Essential core competence of FPSO contractor Right now Singapore shipyards are the best location worldwide for integration: 3 substantial competing shipyards with capacity and decades of experience Unequalled regional resource, procurement & industrial complex Most business friendly possible location March

14 Requirements in Procurement and Building Process

15 Preferred contract strategy: E+P+C In addition, BWO s preference is to have a Competitive Relationship with small numbers of competing key sub-contractors and/or vendors. March

16 Requirements to BWO subcontractors Competitive Bid process is BWO standard approach Approved Subcontractor List is maintained taking the input from Operation Fleet (life-cycle feed back) Clear definition of Scope of Work and applicable specifications when ITT / RFQ package is developed BWO T&C s to be applied in comparison to Subcontractor s T&C s Proven Technology and Track Record are the key words for the selection of suppliers / subcontractors (BWO put innovative approach when designing the facility, but individual element to be proven ) Collaborative working approach Pre-mobilization audit / Kick Off Meeting / Weekly meeting / Quality Surveillance Program we will not let Subcontractor failing to deliver March

17 Cost breakdown: FPSO project with new purpose built FPSO hull Typical modern FPSO will have more than US$ ½ billion in procurement and sub-contracting March

18 Cost definition at project start The following illustrates why the FPSO business remains quite risky and requires substantial competence. Most major cost elements are not firm when a contract is signed with the client. March

19 Sub-contractors & suppliers This is a time snapshot of BWO s most recent biggest suppliers and sub-contractors by order of value. Over the same timeframe, BWO had over 320 suppliers or subcontractors from which it procured in excess of US$1 million. March

20 FINANCE

21 Strong and supportive lending banks BW Offshore refinanced it s main credit facilities in 2010/2011 USD 2.4 billion 7-year credit facility The syndication of the facilities was substantially oversubscribed New credit facility signed in 2013 for BW Joko Tole USD 285 million 5-year credit facility Lending banks March

22 Financing overview USD 2,400 million credit facility ~ maturity March 2018 (LIBOR +200 bps) Remaining term loan of USD 1,001 million (initial amount USD 1,700 million) Semi-annual payment of USD 111 million Drawn USD 310 million on USD 641 million RCF (USD 68 mill LC included in RCF) Full bullet at maturity Umuroa facility ~ maturity October 2015 (LIBOR +200 bps) Remaining term loan of USD 63 million (initial amount USD 130 million) Quarterly instalments (USD 4 mill) and bullet (USD 30 million) BW Joko Tole facility ~ maturity June 2018 (LIBOR +250 bps) Remaining term loan of USD 221 million (initial amount USD 250 million & USD 35 mill LC) Quarterly instalments (initial USD 15 mill reducing to USD 9 million) BWO01 bond ~ maturity March 2017 (NIBOR +425 bps) NOK 500 million (approx USD 90 million) BWO02 bond ~ maturity March 2018 (NIBOR +415 bps) NOK 500 million (approx USD 87 million) BWO03 bond ~ maturity March 2019 (NIBOR bps) NOK 750 million (approx USD 125 million) March

23 CONCLUSIONS

24 Conclusion Successful investments in the FPSO space require: The right client The right project A well defined and specified end product Support from the right banks Selection of the right subcontractors Efficient competition Assembly in an efficient hub (Singapore) Other possibilities: Export financing Equity partners March

25 Q & A

26 March