SBM Offshore CEO Bruno Chabas has said the firm is well positioned to weather the current down-turn in oil prices thanks to 90% of its backlog consisting of lease and operate income with dayrates not dependent on oil prices or production levels.
Chabas' comments, in SBM Offshore's year end 2014 update, come as oil prices slipped to their lowest in five years. He said: "[SBM] Management recognizes the anxiety caused in the markets by the sharp decline in the price of oil. At the same time, management would like to emphasize that 90% of the company’s US$21.8 billion backlog, as of the end of September 2014, consists of future lease and operate income with dayrates that are not dependent on oil prices or on production levels, which will continue to generate income and liquidity for many years to come.”
SBM Offshor recently said it was cutting 1200 jobs and relocating its headquarters from Monaco to Rotterdam "in light of market conditions and in order to optimize the company's cost base."
Setting out its recent milestones, the firm said a September production handling agreement with Noble Energy reversed previously taken $109 million write downs incurred on the Thunder Hawk semisubmersible facility in the US Gulf of Mexico.
However, SBM Offshore had reduced the useful life of the Deep Panuke production field centre to eight years, in line with the fixed contract period, resulting in a non-cash impairment charge of approximately $56 million.
SBM Offshore will also take a one-off impairment charge (non-cash) of about $50 million related to a financial asset following a dispute with a US-based client.
The firm has also sold, for $150 million, the diving support and construction vessel (DSCV) SBM Installer to OS Installer, a newly established joint venture between Ocean Yield (75%) and SBM Offshore (25%).
The firm also recently saw the FPSO Cidade de Ilhabela (pictured) go on hire after achieving first oil offshore Brazil and completing a 72-hour continuous production test. SBM Offshore has a 62.25% share in the joint venture, operated by Petrobras.
SBM Offshore also announced that Sietze Hepkema, the firm's Chief Governance and Compliance Officer (CGCO), is to retire on 15 April 2015. Erik Lagendijk, who will join SBM on 2 January, is due to succeed Hepkema. Lagendijk has served 25 years in the financial services industry, including 14 years as General Counsel of AEGON, a Dutch listed international insurance company.
Bruno Chabas, SBM Offshore's CEO, said: “We thank Sietze for his many contributions to the success of the company, particularly in his unwavering commitment to further advancing governance and compliance within SBM Offshore. Given the weight attached to the Chief Governance and Compliance Officer function, we are pleased to have him succeeded by someone as experienced as Erik Lagendijk.”
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