1.3.4Value Creation
Sharing experience for a better blue tomorrow is the basis for long-term stakeholder value. Value is defined by the associated benefits for SBM Offshore’s stakeholders and ESG contributions. Sustained value capture is enabled by SBM Offshore’s organization model and business model, and is supported by six business topics and six material topics.
Organization Model
SBM Offshore’s organization model represents the internal mechanisms through which SBM Offshore creates value. Business activities are organized to maximize financial and societal value, benefiting SBM Offshore’s stakeholders.
Ocean Infrastructure
A cash-generating platform that delivers the contractual backlog, comprising SBM Offshore’s operating fleet and turnkey projects. Ocean Infrastructure SBMers:
- drive excellence by providing competitive, high-quality and high-performing products and services;
- grow economic value by being technically and commercially responsible.
Win and Grow
An opportunity-generating platform, dedicated to maintaining a competitive influx of new prospects and businesses, developing innovative execution models and contributing to the energy transition. Win and Grow SBMers:
- unlock new markets for SBM Offshore;
- progress decarbonization and diversify by exploring new partnerships and ocean infrastructure solutions.
Global Resources and Services (GR&S)
GR&S power value creation through top-tier resources, services and processes, working transversely across multiple projects. GR&S SBMers:
- provide expertise across the entire product lifecycle, ensuring clients are offered solutions and services that create value;
- drive excellence by ensuring competitive and high-quality services on time and on budget.
Enabling Functions
The Enabling Functions ensure business delivery through the provision of expertise, solutions, infrastructure and systems. Enabling Functions SBMers:
- drive excellence by leveraging the expertise of a diverse workforce and digital technologies;
- coordinate SBM Offshore’s expertise to ensure seamless end-to-end solutions.
Business Model
SBM Offshore delivers value along the full lifecycle of clients’ ocean infrastructure projects, from technology and business development, to execution, operations and responsible recycling.
Product development
SBM Offshore engages in innovation, research and development (R&D) and product development activities with the aim of:
- developing new technologies and products to capture opportunities in the blue economy;
- lowering the carbon footprint of SBM Offshore’s products and fleet operations;
- improving SBM Offshore’s competitiveness by identifying, developing and offering new technologies and products.
Business development
SBM Offshore prioritizes early engagement with clients. Its business development activities focus on driving sustainable business growth and ensuring a profitable backlog for current and new products and services. SBM Offshore ensures optimum results for clients by offering various financing models:
- Under a lease-and-operate contract, the facility is sold to asset-specific companies to charter and operate the asset for the client throughout its lifecycle. The project debt-financing is arranged at the asset-specific company level and SBM Offshore’s Revolving Credit Facility is generally used to cover working capital requirements during construction.
- Under a build-operate-transfer (BOT) model, SBM Offshore builds and commissions the unit and leases and operates it for a defined period (the start-up phase) before sale to the client. After the sale, SBM Offshore may continue to operate the asset for a defined period under a separate operations and maintenance contract.
- Under a sale‑and‑operate contract, ownership of the asset is transferred to the client over the construction period. A turnkey gross margin is generated during construction, and SBM Offshore may continue to operate the asset for a defined period under a separate operations and maintenance agreement.
- Under a direct sale, the client finances the construction of the unit. A turnkey gross margin is generated during construction, similar to a sale‑and‑operate model. No operation and maintenance scope is included..
Project execution
After SBM Offshore is awarded a contract, the project execution phase begins, during which SBM Offshore executes Engineering, Procurement, Construction and Installation (EPCI). SBM Offshore delivers conceptual studies, basic design and detailed design through in-house engineering resources. Procurement of equipment and services represents a substantial part of the total cost of constructing a floating production system. SBM Offshore has an integrated supply chain, in line with its Fast4Ward principles, partnering with suppliers to execute projects.
While maintaining responsibility for delivery and project management, SBM Offshore outsources most construction activities and has agreements in place with yards that allow delivery of floating production systems through different execution models and local content requirements. The installation of floating facilities is carried out using specialized installation vessels and requires specific engineering expertise and project management skills.
SBM Offshore also provides services ranging from inspection and maintenance of terminals to digital asset-management services.
Asset management
SBM Offshore provides asset operation and maintenance services for its clients. Since uptime performance of the facility directly impacts production volumes, SBM Offshore pursues operational excellence, delivering value to clients. For FPSOs, these services can be based on fixed-lump-sum or reimbursable contracts.
Recycling
At the end of the asset lifecycle, facilities are decommissioned and recycled. For company-owned FPSOs, SBM Offshore manages the asset decommissioning, including disconnection from subsea production and mooring, and works with recycling facilities that have suitable infrastructure, an adequate management system and trained staff, to ensure that internationally-recognized regulations are followed.
