The Maintenance, Modifications and

Operations Market By: Jon Dunstan, CEO, EMAS Offshore Limited

The MMO Market 2

Agenda

Introduction to MMO Market

• Market Potential by analysing Fixed and Floating Platforms

• Effect of Oil Prices to MMO Market

• Why is MMO Market Attractive

1

2 What’s the Potential for Offshore Accommodation Services

• Assessing Demand for Offshore Accommodation Services

• Specific Facilities needed for MMO Operations

The MMO Market

1. Introduction to MMO Market

Phases of Oilfield Asset Lifecycle

3

Hydrocarbon

Exploration E&A Drilling

Development Drilling

Construction Operations & Maintenance

Modifications Decommissio

ning

Source: DW World Offshore MMO Forecast 2014-2018.

Capital Investment Phase OPEX Phase Liabilities

The typical life cycle of an offshore platform which demonstrates the occurrence of Maintenance, Modifications and

Operations (MMO):

Operations:

Services that support on-going production

including the supply of labour and raw

materials.

Maintenance:

On-going inspection, repair and upkeep of

installed infrastructure.

Modifications:

Upgrade of existing infrastructure including

the installation of new accommodation and

capacity on the platform deck (offshore) or

processing systems.

Different

Types of

Services

MMO EPC

Engineering & Project Management:

Initiation, implementation, planning of the

project, including design, cost estimation of

the components.

Procurement & Fabrication:

Purchasing, expediting, management/

supervision of fabrication of key

components.

Installation:

Requisitioning vessels capable of

installation work, including scheduling and

factoring conditions for installation.

The MMO Market

1. Introduction to MMO Market

The MMO Market Potential

4 Source: DW World Offshore MMO Forecast 2014-2018 & 2015-2019

Global MMO Expenditure by Region 2009-2018

North

America

Asia

MMO from SLOW to GROW

Asia and North America will continue to

be the market leaders in MMO

expenditure with a combined shared of

~45% over the forecast period from 2015

- 2019

The MMO Market

1. Introduction to MMO Market

The MMO Market Potential

5 Source: DW World Offshore MMO Forecast 2014-2018 & 2015-2019

Addressable MMO Market of $672B, ~$216B in Asia

41% 4%

9%

46%

Modifications

Support Services

Asset Integrity

Asset Services

27%

21%

5% 6%

30%

11% Europe

Asia

Mid East

Africa

N. America

L. America

16%

46%

3%

7%

23%

5%

Europe

Asia

Mid East

Africa

N. America

L. America

Asset Services

(O&M) $307 bn

Modifications

$276 bn

• Global expenditure to total

$672bn (31% growth on

the previous 5-year

period). AsiaPac is the

largest segment of $216B,

accounting for 32%.

• Asset Services (O&M)

‒ AsiaPac, the third

largest Asset Services

segment accounts for

21% of market after N.

America (30%) and

Europe (27%).

• Modifications

‒ AsiaPac, the largest

segment, account for

46% of market

The MMO Market

1. Introduction to MMO Market

Analysing Fixed and Floating Platforms

6 Source: DW World Offshore MMO Forecast 2014-2018 & 2015-2019

Fixed and floating platform production continues to be key to meet growing energy demand.

Total Number of Platforms by Region 2009-2018

North America

Asia

3,663 platforms

• 90% fixed platforms

• 10% floating platforms

2,003 platforms

• 94% fixed platforms

• 6% floating platforms

Middle East

729 platforms

• 99% fixed platforms

• 1% floating platforms

Africa

901 platforms

• 91% fixed platforms

• 9% floating platforms Latin America

707 platforms

• 90% fixed platforms

• 10% floating platforms

• Offshore platform population is

dominated by North America, accounting

for 41%, followed by Asia 22%.

• Global fixed platform population is

dominated by North America (43%) and

Asia (22%), whereas floating platform

population is led by Asia (28%), Africa

(19%) and Latin America (19%).

Norway 96 platforms

• 76% fixed platforms

• 24% floating platforms UK

309 platforms

• 92% fixed platforms

• 8% floating platforms RoWE

355 platforms

• 99% fixed platforms

• 1% floating platforms

The MMO Market

1. Introduction to MMO Market

Effect of Oil Price to MMO Market

7

Asia Offshore MMO Expenditure 2009-2018

Growth not solely driven by oil production

• Fabric maintenance, safety upgrades

and general upkeep required for

production, whether it be 100bbls/ day or

100,000bbls/ day.

• Production enhancements (EOR)

debottle necking.

• Technology upgrades (equipment

obsolescense)

• Tie-backs always need a host-hub.

• New operators produce tail-end

operations and may have different

standards.

Source: DW World Offshore MMO Forecast 2014-2018 & 2015-2019

“DW are forecasting a 12% decline in offshore MMO expenditure compared to 2014. The decline is due to the delay of some

major modifications by operators and a reduction in some aspects of MMO that do not directly impact production.”

The MMO Market

1. Introduction to MMO Market

Why is MMO Attractive

8

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

-40

-20

0

20

40

60

80

100

120

140

160

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Y-o

-y c

ha

ng

e

US

D B

n

MMO Exp Dpwater CAPEX MMO Exp Trend Dpwater CAPEX Trend

MMO Expenditures vs Deepwater CAPEX

Comparison of Y-O-Y Changes

MMO expenditures being OPEX

driven has a steadier trend and is

less dependent on oil price. Most

companies may in fact consider

increasing MMO during dips in

CAPEX investment.

Low Risk and Steadier

Returns

High Risk, High

Reward

EPC being long-term CAPEX

investment driven is subject to

operators’ concerns of cashflow.As

such, it is typically cyclical.

The MMO Market

2. What’s the Potential for Offshore Accommodation Services

Assessing Demand for Offshore Accommodation Services

9

Offshore accommodation is needed through most stages from platform installation (12%) to IRM

(Inspection, Repairs, and Maintenance) & modification (85%) and decommissioning (3%).

Inspection, Repairs and Maintenance

(IRM) 69%

Modification 16%

Platform Installation

12% Decommissioni

ng 3%

Source: Infield, DNV.

• Represents the largest proportion

of aggregated offshore demand in

terms of total demanded vessel

days

• Robust and relatively stable due to

regulatory requirements relating to

repairs and maintenance work on

offshore platforms

Driven by health and safety

legislation

Reduce need to frequently transport crew

members to offshore infrastructure

Accommodation vessels onsite

• Facilitates increased man hours

onsite

• More conducive for IRM work and

upgrading of platforms

• Reduces downtime and loss of

production volume

Typically chartered for • Hook-up and commissioning of

platform installations

• Maintenance, modification and

upgrade work on existing

infrastructure

• Support decommissioning of

infrastructure on depleted fields

Demand by Value Chain

Functions/ Advantages of Accommodation Units

The MMO Market

2. What’s the Potential for Offshore Accommodation Services

Types of Offshore Accommodation Units

10

Jackups/ Liftboats

Supported by legs on

seabed, work area

lifted above water

surface

Limited to shallow

waters

Support drilling

platforms; also used

for offshore wind

farms and wind

turbines

Stability and

capabilities in harsh

weather environment

Competition is

localised and

fragmented

Anchor Barges

Non-propelled non-

DP anchor barge,

moored and require

towage vessels for

transit

Mainly in benign and

shallow waters

Aging anchor barge

fleet – newbuild

vessels have DP

systems

DP Barges Ships/ Monohull

Vessels Semisubs

Self-propelled and

DP capability

Increasing number of

deepwater fields

likely to increase

demand for DP

barges

Only handful

currently in existing

accommodation fleet

Some modern DP

barges with

propulsion are similar

to monohulls as they

have a ship shaped

hull

Relatively recent

development for

offshore

accommodation –

only handful of units

Mobile and enables

quick repositioning

Versatile – also used

for light crane work,

ROV, diving services

etc (cheaper than

semi-subs)

Most modern units

DP-equipped

Compared to

jackups, can operate

in deeper waters;

better stability in

harsh weather and

larger deck spaces

than barges or

monohull vessels

Disadvantage is

lower cargo capacity

due to greater

response to

externally applied

loads; higher

construction costs

Water depth: <100 m

Capacity: 50-450 men

Mobility: Low

Environment: Harsh

Water depth: <300 m

Capacity: 50- 1,000 men

Mobility: Towage Vessels

Environment: Benign

Water depth: Unlimited (DP)

Capacity: 400-1,000 men

Mobility: Towage Vessels

Environment: Benign

Water depth: Unlimited (DP)

Capacity: 200- 600 men

Mobility: High

Environment: Benign

Water depth: <300m/

Unlimited(DP)

Capacity: 200- 800 men

Mobility: Low/Medium

Environment: Harsh

Source: DVB, ODS-Petrodata

The MMO Market

2. What’s the Potential for Offshore Accommodation Services

Types of Accommodation Units for Different Environment Conditions

11 Source: DVB, Prosafe

Harsh Environment

Benign Environment

North Sea (often complex

seabed infrastructure

Australia & certain regions

of Asia

Deep Water Shallow Water Gulf of Mexico (often complex seabed

infrastructure)

Semi-subs

Brazil

Jack-ups

Mono hulls

DP Barges Anchor

Barges

Asia, Middle East, Caspian Asia & West Africa

The MMO Market

3. What’s the Potential for Offshore Accommodation Services

Specific Facilities for needed for MMO/ IRM Operations

12

Deck Space Gangway

Crane Accommodation

1

• Provide maximum possible working area for

safe and efficient operations.

• Gangway with safety and flexibility features.

• “Walk-to-work” safely – Ampelmann’s gangway

eliminates any relative motion by taking instant

measurement of the ship’s motion and then

compensates them by using 6 hydraulic

cylinders.

2

• Crane capacity with good lifting height

capability.

• Onboard and outboard lifts for the loading and

offloading of materials and equipment under a

range of environmental conditions.

• Suitable for lifts to and from supply vessels or

other floating platforms and fixed offshore

structures.

• Designed and outfitted to international offshore

standards, with the highest quality of finish and

range of facilities provided:

- Recreation rooms

- Office and administration

- Hospital

- Mess room

- Galley Equipment

- Swimming pool

- Up to 1000 pax

- FiFi

3 4

The MMO Market 21

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