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

9 April 2015Jasper Neuteboom, Head of Insurance BW Offshore

Pioneering the new Nordic Plan construction-all-risks clauses for MOUs

BW CATCHERBW OFFSHORE’S FIRST NEW-BUILT FPSO

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FPSO Cidade de São Mateus

11 February 2015

April 2015

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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.

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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

OVERVIEW

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Global footprint

Crew centers

OfficesUnits

Sendje Berge

Yùum K’ak’Náab

Belokamenka

Petroleo NautipaAzuriteAbo

Espoir Ivoirien

Cidade de SãoMateus

Polvo

Umuroa

Berge Helene

BW Cidade de Sáo Vicente

BW Pioneer

BW Athena

BW Joko Tole

* Operation & Maintenance

P-63*

Peregrino*

April 2015

BW Opal (sold with BB option)

Catcher (UC)

BW CATCHER

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

April 2015 7

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Front-end loading

■ 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

April 2015

Preparations and project schedule – 2014 vs 2008

Typical 2008 project

BW Offshore 2014 project

0 10 20 30 40 50 60

Tender FEEDNegotiation Project execution

Award

Catcher Area Development

Water depth ~90m

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

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)

BW Catcher Overview Hull: New-Built Hull classed by DNV Water Depth: 299 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: 650,000bbls 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: 120

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

Model Testing

Subcontract StrategyObjective: 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

Topside Group A Modules; All except M50, M40

Topside Group B Module: M50 (WI), M40 (E-house)

Decommissioning BW Offshore

WBS Element

HullMarine & Utilities

Topsides Group A

Topsides Group B

TMS

Onshore Commissioning

Concept Engineering BWO

Project Management

Topside & TMS shipboard Integration

NOV (APL)

Basic & Detail Engineering

BWO

Procurement (tagged items)

Construction & Mechanical Completion

Integration Yard

Offshore Installation

Voyage & Transport to Offshore Site

Offshore Commissioning

Operations & Maintenance

BW Offshore SIS

BW Offshore Commissioning Team (with Vendor Assistance)

BW Offshore Operations

BW Offshore Marine Crew

BW Offshore Commissioning Team (with Yard and Vendor Assistance)

Construction Yard

IHI

BWO + Eng Contractor

EPC

April 2015

FPSO General Arrangement(as developed during FEED phase)

April 2015

STB Buoy & Mooring System Integration Philosophy

2. INTEGRATION YARD, SINGAPORESwivel 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.

1. IHI HULL YARD, JAPANSTP 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.

3. OFFSHORE ON LOCATIONSTP Buoy and Risers/Umbilicals

Temporary Welding location around the

circumference of the STP Cylinder- to be provided in Hull

yard

Platform to be provided in Hull yard for welding

top structure in the integration yard

April 2015

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BW Catcher: Global Project

P63*

April 2015

Operations Site

Integration YardFabrication YardsVendors

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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

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BW Catcher Insurance: conditions

Thought Process - Options available:

1. Bespoke

2. BWO’s BRI conditions (when hull is owned)

3. Welcar

4. Other options?

5. Bespoke: global market buy-in problem

6. BWO BRI conditions: would require separate CAR in any event/gap risk of transits, lifts, etc./costs considerations

April 2015

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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

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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 operationsApril 2015

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BW Catcher Insurance: options score

April 2015

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? ×

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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

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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

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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

Thank you Cefor!

27April 2015