1. BW CATCHER BW OFFSHORE’S FIRST NEW-BUILT FPSO
Pioneering the new Nordic Plan construction-all-risks clauses for MOUs
9 April 2015
Jasper Neuteboom, Head of Insurance BW Offshore

2. FPSO Cidade de São Mateus 11 February 2015
April 2015

3. Disclaimer
This Presentation has been produced by BW Offshore Limited ( “BW Offshore”) exclusively for information purposes. This presentation may not be redistributed, in whole or in part, to any other person. This document contains certain forward-looking statements relating to the business, financial performance and results of BW Offshore and/or the industry in which it operates. Forward- looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words “believes”, expects”, “predicts”, “intends”, “projects”, “plans”, “estimates”, “aims”, “foresees”, “anticipates”, “targets”, and similar expressions. The forward-looking statements contained in this Presentation, including assumptions, opinions and views of BW Offshore or cited from third party sources are solely opinions and forecasts which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. None of BW Offshore or any of its parent or subsidiary undertakings or any such person’s officers or employees provides any assurance that the assumptions underlying such forward-looking statements are free from errors nor does any of them accept any responsibility for the future accuracy of the opinions expressed in this Presentation or the actual occurrence of the forecasted developments. BW Offshore assumes no obligation, except as required by law, to update any forward-looking statements or to conform these forward-looking statements to our actual results. No representation or warranty (express or implied) is made as to, and no reliance should be placed on, any information, including projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and, accordingly, neither BW Offshore nor any of its parent or subsidiary undertakings or any such person’s officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document. Actual experience may differ, and those differences man be material. By attending this Presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of BW Offshore and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the businesses of BW Offshore. This presentation must be read in conjunction with the recent Financial Information and the disclosures therein. This announcement is not an offer for sale or purchase of securities in the United States or any other country. The securities referred to herein have not been registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”), and may not be sold in the United States absent registration or pursuant to an exemption from registration under the U.S. Securities Act. BW Offshore has not registered and does not intend to register its securities in the United States or to conduct a public offering of its securities in the United States. Any offer for sale or purchase of securities will be made by means of an offer document that may be obtained by certain qualified investors from BW Offshore. Copies of this Presentation are not being made and may not be distributed or sent into the United States, Canada, Australia, Japan or any other jurisdiction in which such distribution would be unlawful or would require registration or other measures. In any EEA Member State that has implemented Directive 2003/71/EC (together with any applicable implementing measures in any member State, the “Prospectus Directive”), this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive. This Presentation is only directed at (a) persons who are outside the United Kingdom; or (b) investment professionals within the meaning of Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); or (c) persons falling within Article 49(2)(a) to (d) of the Order; or (d) persons to whom any invitation or inducement to engage in investment activity can be communicated in circumstances where Section 21(1) of the Financial Services and Markets Act 2000 does not apply.
April 2015

4. OVERVIEW

5. Global footprint Units Offices Crew centers Belokamenka BW Athena
BW Opal
(sold with BB option)
BW Pioneer
Yùum K’ak’Náab
Catcher (UC)
BW Cidade de Sáo Vicente
BW Joko Tole
Cidade de São
Mateus
Umuroa
Polvo
P-63*
Espoir Ivoirien
Berge Helene
Sendje Berge
Units
Offices
* Operation & Maintenance
Peregrino*
Crew centers
Abo
Azurite
Petroleo Nautipa
April 2015

6. BW CATCHER The outlook for our fleet and business remains strong …
We have a steady and secure cashflow based on long term contracts …
Sound basis for dividend payments and further investments in new assets …

7. Increased complexity FPSO: BWO action
Redundancy: (n + 1)
Safety Culture: analysis/statistics
New-Built vs Conversions: client decides but options (pool & market)
E+P+C: keep the risk in-house
Lessons learned culture: offshore and onshore convene
Core staff: lesser contractor dominated project teams
The complexity and size of new FPSOs are increasing
Average oil production on installed FPSOs increased from ~25,000 bopd in the early 80’s to ~125,000 bopd
More gas developments: more complicated topsides
Deeper waters: mooring changes (turret vs spread-moored)
April 2015

8. Front-end loading
Preparations and project schedule – 2014 vs 2008
Catcher front end engineering (FEED) phase January 2013 – August 2013
Subsequent value engineering and optimization September 2013 – April 2014
Quotations obtained for major subcontracts (hull, turret & mooring, topsides module fabrication, topsides engineering support)
Much higher level of definition achieved for BW Catcher than any previous BWO FPSO project
Reflected in the level of investment in the FEED ~ USD 15 million and more than 50,000 man-hours
Award
April 2015

9. Catcher Area Development
Location: Block 28/9 UK Continental Shelf
4 reservoirs: Catcher (Aug 2010), Varadero (Jan 2011), Burgman (Mar 2011), Carnaby (Jun 2012) - Carnaby is not part of the current initial development
Ownership: 50% Premier Oil, 30% Cairn Energy, 20% MOL
Water depth ~90m

10. Catcher Area Schematic
The Catcher Development comprises of 3 subsea manifolds, one located on each of the fields that form part of the initial development (Catcher, Burgman and Varadero), all with multi-phase metering which are tied back to the FPSO. The FPSO will process oil, gas and water in accordance with the Statement of Requirements. Oil will be stored in the FPSO with oil export from there via shuttle tanker and gas export via pipeline, and all produced water will be re-injected. Provisions will also be made to lift, treat and inject seawater. The subsea manifolds, in field flowlines, mid water arches, flexible risers and gas export pipeline (which forms part of the Fixed Facilities) will be designed and installed by the Fixed Facilities Contractor (not part of BWO scope)

11. BW Catcher Overview Hull: New-Built Hull classed by DNV
Water Depth: feet (91 meters)
Design Life: 20 years (North Sea environment) without dry-docking
Mooring: Turret mooring required (STP)
Production: 95% uptime availability requirement
Production: 60,000 bbls Oil per day
Production: 60 MMscfd gas compression (gas lift + export/import)
Offtake: ,000bbls export parcel, offloading within 24 hours
Topsides: Gas treatment - CO2 removal membranes + TEG GDU
Topsides: Seawater sulfate removal unit
Water Injection: 125,000 bbls per day (seawater + produced water)
Power: 3 x 15MW GTG power generation
Weight: Approx. 10,000 tonnes topsides
POB:

12. Catcher Project Scope & Life Cycle
Topsides Engineering in Singapore
Hull EPC by IHI in Japan
Topsides E+P+C by BWO with fabrication in Singapore
Turret Mooring System EPC by APL
Integration, MC and inshore commissioning in Singapore
Turret Mooring System pre-installation
Transit voyage
Hook-up and commissioning
Start-up, testing and acceptance
Lease and Operate for 7 Years plus options up to 15 years (7 + 8x1)
De-commissioning at the end of field life

13. Model Testing

14. Subcontract Strategy
Objective: to achieve right level of control where BWO’s experience and expertise can best add value and manage the risk and use the right subcontractors that fit the requirements of the project
April 2015

15. FPSO General Arrangement
(as developed during FEED phase)
April 2015

16. STB Buoy & Mooring System Integration Philosophy
Platform to be provided in Hull yard for welding top structure in the integration yard
1. IHI HULL YARD, JAPAN
STP Compartment (incl Turret Monorail & foundation for the main pull-in winch) with arrangement for temp top structure c/w welding platform for later full welding at Integration Yard, Shipside decks & platforms with structural outfitting, STP ventilation system, stairways, MCM, Mating Cone, Turret Buoy Locking Devices, STP Control System & HPUs in STP Utility Room etc.
2. INTEGRATION YARD, SINGAPORE
Swivel Pedestal with integrated manifold decks c/w outfitting, geo-stationary Process Piping & Integration of piping and utilities, Swivel Stack, Pull-in Winch, Dummy Buoy Top, Chemical & Hydraulic Distribution Panels (TBC), TUTUs, EJBs, OJBs, Subsea HPU, EPU & MCS etc.
Temporary Welding location around the circumference of the STP Cylinder- to be provided in Hull yard
3. OFFSHORE ON LOCATION
STP Buoy and Risers/Umbilicals
April 2015

17. BW Catcher: Global Project
Vendors
Fabrication Yards
Integration Yard
Operations Site
April 2015

18. BW Catcher Insurance: considerations
5 locations of construction: construction-all-risks required
BWO’s first new-built: buy-in from existing hull underwriters desired
BWO’s contracts have average 10-year duration: cradle-to-grave approach desired
Lessons learned: seamless transition from project to operations
Consistency in conditions: what connects to BWO’s operations programme?
Loss exposure is same: construction vs. operations
April 2015

19. BW Catcher Insurance: conditions
Thought Process - Options available:
Bespoke
BWO’s BRI conditions (when hull is owned)
Welcar
Other options?
Bespoke: global market buy-in problem
BWO BRI conditions: would require separate CAR in any event/gap risk of transits, lifts, etc./costs considerations
April 2015

20. BW Catcher Insurance: Welcar?
Designed for Field Developers: Scope confined to FPSO and mooring
Top-to-bottom insurance: Recoup losses from subcontractors as project integrated for BWO’s exposure, not redefine subcontracts
Schedule B: Main worry is loss to project, not where damage sits
Schedule B uncertainty: parts or scope?
Warranties + English Law : certainty whilst executing project required
Welcar undesirables: sue & labour limitations, defective parts uncertainty, warranties, sublimits
Welcar: fundamentally different from operations policy
April 2015

21. BW Catcher Insurance: other options?
Nordic Plan 2016 revision: Access to Cefor Working Group. BWO could convey concerns/wants
Plan: Contractual certainty for underwriters and owners
Codified conditions
Agreed document
Intent based
Cefor Form: Integral part of Plan (2016)
BWO: Nordic Plan in hull operations - know the clauses
Cefor Form with special conditions reflects BWO’s operations programme to link construction and operations
April 2015

22. BW Catcher Insurance: options score
WELCAR
PLAN
BESPOKE
BWO BRI
construction-all-risks required  ×
buy-in from BWO’s existing hull underwriters ?
cradle-to-grave approach desired -
seamless transition from project to operations
what connects to BWO’s operations programme?
April 2015

23. Cefor Form: considerations
FPSO: Not getting any cheaper or simpler
BWO: Increased exposure & high FPSO demand; long contracts
Need: Conditions that reflects FPSO construction/ conversion as rounded project
New-Built: No good ‘sailing steel’
Cefor Form : Reflects BWO’s need and input
Recognisable and intent conveying: how the Plan has worked in operations
Shipowner with broker involvement, creating a product!
April 2015

24. Cefor Form: marketability
Conditions: Nordic conditions have traction at Lloyd’s
BWO: London 50% on hull
Cefor-Plan: Norwegian Law - Norwegian claims lead
Lloyd’s community – Joint Rig Committee: time to listen to assureds?
April 2015

25. BW Catcher Insurance: placement
Gard to lead off: claims lead with NHC on BWO fleet
Declarations made: FEED & project structure
Finalise Special Conditions: Cradle-to-grave, as operating FPSO
Roadshow: Visited all hull slip underwriters
‘Business as usual’: Existing underwriters have first right of refusal
Consultation round: Q&A - clarifications
Timing: 1 year = concept (brokers), declarations, Claims leader consults, Cefor Form, (special) conditions, pitching, Q&A, placement
Success: 90% of slip underwriters signed up
April 2015

26. Thank you Cefor!

27. April 2015