17SepPlenary 05MaartenvanAller

Contracting trends in the FPSO market
Maarten van Aller, COO Floating Production

Petrofac Integrated Energy Services
14th FPSO Congress, 17 September 2013
Introduction
Petrofac background
Petrofac Floating Production Asset overview
Contract structures
Success factors
Future considerations
Closing remarks
Introducing Petrofac
Petrofac is the largest UK-listed service provider to the international oil & gas industry (FTSE
60), with over 18,000 employees across the world
We have over 30 years experience and a track record of several hundred projects across our
key markets of the Middle East, Africa, CIS, Asia Pacific and UK Continental Shelf
Our capabilities span the oil & gas value chain: subsurface, asset management, field
development, engineering, construction, operations, maintenance and training
We provide these services as standalone offerings but increasingly we offer our capabilities
as integrated services to resource holders to enable them to develop their assets we call this
business Integrated Energy Services (IES)
Whilst IES may deploy capital, we are fundamentally a service company, not an oil company
we dont seek to book reserves
We have been ranked number one EPC contractor for the last 3 years in Oil and Gas Middle
East and completed around 200,000 training days in 2012
Vision and values
Global footprint
Moscow
Aberdeen
Bucharest
Sakhalin
Milan
Woking
Atyrau
London
Abu Dhabi
Baku
Algiers
Houston
Tunis
Villahermosa
Mary
Ahmadi
Delhi
Khobar
Muscat
Bangkok
Doha
Chennai
Lagos
Beijing
Sharjah
Basra
Kuala Lumpur
Singapore
Mumbai
Jakarta
Main operational centers
Other operating locations

Corporate services
4
Financial strength
Petrofac Revenues, $M
Petrofac Share Price Performance

(Since IPO 4/10/2005, GBP Pence)
5,801
9%
4,354
3,330
6,339
1,200.0
1,000.0
3,655
725%
800.0
576%
600.0
2008
2009
2010
2011
2012
Note: all figures presented above are for the groups continuing operations
and are for financial years ended 31 December and interim periods ended
30 June
400.0
80%
71%
19%
200.0
903% share price growth since IPO top

performing FTSE company over this period
Strong balance sheet with $0.3bn gross cash
0.0
Oct - 05
Nov - 06
Dec - 07
Jan - 09
Feb - 10
Mar - 11
Petrofac
Petrofac + Enquest
FTSE 100
FTSE 250
OSX
Source: Bloomberg as of 28th September 2012
Apr - 12
How we built our integrated service capability
Life of asset solutions to support resource holders
Integrated
Energy
Services
Develop
& CoInvest
Engineering,
Construction,
Operations &
Maintenance
Design
Enhance
Production
Build
Operate
Manage
Train
Maintain
Commercial Structures Employed

Engineering, Construction, Operations & Maintenance
Reimbursable
services
e.g. Karachaganak FEED,

Kazakhstan
Cost
plus KPIs
e.g. Duty Holder on Northern

Producer, North Sea
Lump-sum
turnkey
e.g. Yoloten Project,

Turkmenistan
Risk Services
Contracts
e.g. Berantai, Malaysia
Production
Enhancement Contracts
e.g. Ticleni, Romania
Production Sharing
Contracts
e.g. Cendor, Malaysia
Integrated Energy Services
IES track record in integrated service delivery
Acquires stake in
Ohanet field
development,
Algeria
Acquires equity
as development
operator
of Cendor PSC,
Malaysia
Acquires
interest as
operator of
West Don field
and Don SW,
UKCS
Acquires
interest
Sign Ticleni
in
Chergui
gas
PEC, Romania
field, Tunisia
Signs Seven
Energy alliance,
Nigeria
Signs Berantai
RSC, Offshore
Malaysia
Enters service
operator contract
with Dubai
Petroleum
Forms EnQuest
and demerges
Dons
assets
Signs two
PEMEX PECs
Mexico for
Magallanes and
Santuario blocks
Signs Ticleni
PEC, Romania
Signs Greater
Stella Area
development with
Ithaca and
deploys FPF1
Agrees two
further PEMEX
PECs for Pnuco
(onshore) and
Arenque
(offshore) blocks
Agrees strategic
alliance with
Bowleven for
Etinde Permit,
Cameroon
8
IES projects
FPF1,Stella
field, UK (2011)
West Don & Don

SW, UK (2005-2010)
Ticleni, Romania
(2010)
Capacity: 30,000
bpd
12 months from
FDP to first oil
~1000 wells, 900 staff
Chergui, Tunisia
(2007)
Cendor, Malaysia
(2004)
2P reserves: 12m
boe
Magallanes & Santuario,

Mexico (2011)
2x billion bbl fields

+ Pnuco (2012)
>7 billion bbl
+ Arenque (2012)
>1.2 billion bbl
2P reserves:
75.5m bbl
Ohanet, Algeria
(2000-11)
Berantai,
Malaysia (2011)
First RSC contract

Etinde Permit,
Cameroon (2012)
Strategic alliance
Dubai Petroleum
(2006-10)
72 platforms, 420
wells
2P reserves:
100m boe
Petrofac in South East Asia
Active in region since 2004
Over 1400 employees

Offices in Kuala Lumpur, Bangkok, Singapore and Jakarta
Projects / Assets include:
Block PM304 (Cendor) fast-track field development (Malaysia)
Block PM304 (Cendor) fast-track development of West-Desaru with MOPU
Block PM304 (Cendor) phase II (leased FPSO)
Berantai fast-track field development (RSC, Malaysia)
SEPAT early production system (EPC, Malaysia)
Provision of, and operations and maintenance for, the FPSO vessel on Jasmine field (Thailand)
Offshore overhaul & re instatement of Bekok-C facilities (EPC, Malaysia)
Capability development at the Chemical Process Technology Centre (CPTC) (Singapore)
In house Floating Production entity PFP; ownership & lease

10
Contracting issues, trends

and Petrofac contracts
Background: what ARE the issues?

A few examples all well known
Failing existing commercial model new strategies required
Absence of upside; max reward is often base case; eroded during EPC phase
Purchase option based on initial CAPEX; destroys optionality contractor; destroys value in case of CAPEX overrun
Fixed O&M charges; neither realistic or fair
Start up definition often linked to performance; no leverage contractor
Availability / uptime penalties; limited contractor leverage; huge ROI impact
Unguaranteed minimum bill, although being addressed
Risk-reward imbalance between contractor and resource holder: introduction of reservoir

performance based tariffs aligns both parties
Early fixing of lease rate often prior to sufficient definition; frequent underbidding; requires
contractor group discipline. Contractor should be rewarded commensurate with technology
application & technical risk profile
Lease model applicability: 20 years lease vs. short term lease; accounting issues with longer
term lease
Engineering drive vs. commercial drive: beauty vs. efficiency
Residual value position: bespoke FPSO design limits re-deployment without large additional
12
CAPEX; discipline required
Petrofac Floating Production
Initial acquisition 2009 (AH-001)

Petrofac Floating Production established mid 2010, UK
Moved to Singapore office 1st January 2012
5 asset acquisitions so far:
3 FPSO
1 MOPU
1 semi-submersible
Current status:
3 assets on charter
1 asset equity swap with Greater Stella Area field (UKCS)
1 asset available
Lean team of ~ 35 fte: Singapore, KL & UK

13
FPF-1 Leveraging vessel equity for interest in license
Risk Service Contract
FPF-1 FSU: Greater Stella Area, UK
Signed agreement for deployment

of the FPF-1 on the Greater Stella
Area development in the UK
North Sea in November 2011
Sold ~75% share capital in FPF-1
company in return for ~20%
interest in development
Significant modifications and
upgrade works being carried out
on vessel by OPO
Petrofac will provide Duty Holder
service on a life of field contract
Operator: Ithaca
14
Risk service contract: FPSO for fast-track solution

First gas achieved in October 2012 (less
than 21 months from field FID) including
FPSO Berantai topsides upgrade
East
Fortune
BEFORE
FPSO
Berantai
AFTER
Risk Service Contract
Signed RSC with PETRONAS in January

2011 for the Berantai field
PETRONAS retain reserves and price
upsides; Petrofac is reimbursed through
portion of production revenues
Petrofac (as Operator), in partnership
with SapuraKencana, has invested close
to US$1 billion to fast-track the
development
Innovative concept selection and fasttrack/cost-effective project execution
15
FPSO Berantai contracting
Pre-FID investment in donor FPSO

enabled & locked in fast track development
Alignment Operator / FPSO provider
throughout all phases including FEED
FPSO
Berantai
Separate entities for BBC and O&M

contracts; stable BBC terms
Initial target BBC rate; fine-tuning upon

increased scope definition level
RSC Partnership & FPSO co-ownership
with SapuraKencana; shared risk &
responsibilities
16
Reservoir knowledge leverages upside potential
FPSO Jasmine Venture (FPF-003): Thailand
Lease
Acquired vessel in 2011

Lease inclusive of separate
bare boat charter and
operations and
maintenance services
contract from Petrofac
Currently deployed on the
Jasmine field until 2015; X
years likely.
17
Pre-investing in flexible field infrastructure
Scope to be determined
FPSO Cossack Pioneer (FPF-004): available for deployment
Pre-investing in field infrastructure in

readiness for future developments to
enable fast-track total field
development solutions
Petrofac acquired the high specification
FPSO in June 2011 for a specific
development that subsequently stalled
Previously on Cossack Wanaea fields in
Australia
The unit has substantial oil and gas

processing capability
18
Phased field development under PSC
West Desaru: Ocean Legend MOPU bare boat charter to Operator

Production Sharing Contract
PSC: Petrofac as Operator of Block

PM304 (Cendor field): offshore peninsular
Malaysia
Partners: Petrofac, PETRONAS Carigali,
KUFPEC & PetroVietnam
Scope: 3-phase fast-track development,
operations & maintenance
PSC start date: 2004
Cendor Phases 1&2
Irama
West
Desaru
East
Desaru
Cendor
Graben
Cendor
Cendor-2
West Desaru
(Cendor Phase 3)
2.5 kms
19
In summary
Flexibility is key there are various different contracting structures for assets
Commercial innovation
Standalone service offering vs. full lifecycle asset management; bareboat charter vs. time charter
Willingness to put skin in the game

Maintain optionality hence contractor upside
Discipline amongst FPSO providers
Sharing risk & reward

Alignment contractor / resource holder
Definition & early EPC phase, used to develop realistic budget and lease rates
Introduction of upside/production tariffs
20
Thank you
1 International Business Park

03-17 The Synergy
Singapore 609917
Tel: +65 69339700
www.petrofac.com

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Contracting trends in the FPSO market

Maarten van Aller, COO Floating Production

Vision and values

Main operational centers

Other operating locations

Petrofac Share Price Performance

903% share price growth since IPO top

How we built our integrated service capability

Life of asset solutions to support resource holders

Commercial Structures Employed

e.g. Karachaganak FEED,

e.g. Duty Holder on Northern

e.g. Yoloten Project,

e.g. Berantai, Malaysia

e.g. Ticleni, Romania

e.g. Cendor, Malaysia

Integrated Energy Services

IES track record in integrated service delivery

West Don & Don

~1000 wells, 900 staff

Magallanes & Santuario,

2x billion bbl fields

First RSC contract

Petrofac in South East Asia

Active in region since 2004

Over 1400 employees

In house Floating Production entity PFP; ownership & lease

Contracting issues, trends

Background: what ARE the issues?

Risk-reward imbalance between contractor and resource holder: introduction of reservoir

Petrofac Floating Production

Initial acquisition 2009 (AH-001)

Lean team of ~ 35 fte: Singapore, KL & UK

FPF-1 Leveraging vessel equity for interest in license

Risk Service Contract

FPF-1 FSU: Greater Stella Area, UK

Signed agreement for deployment

Risk service contract: FPSO for fast-track solution

Risk Service Contract

Signed RSC with PETRONAS in January

FPSO Berantai contracting

Pre-FID investment in donor FPSO

Separate entities for BBC and O&M

Initial target BBC rate; fine-tuning upon

Reservoir knowledge leverages upside potential

FPSO Jasmine Venture (FPF-003): Thailand

Acquired vessel in 2011

Pre-investing in flexible field infrastructure

FPSO Cossack Pioneer (FPF-004): available for deployment

Pre-investing in field infrastructure in

The unit has substantial oil and gas

Phased field development under PSC

West Desaru: Ocean Legend MOPU bare boat charter to Operator

PSC: Petrofac as Operator of Block

Willingness to put skin in the game

Sharing risk & reward

1 International Business Park

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