1.2.1Markets and Activities
SBM Offshore is committed to a strategy that is compatible with the transition to net zero by 2050. SBM Offshore provides floating production solutions to the offshore energy industry, both in hydrocarbon and renewable market segments. SBM Offshore’s main activities to date are the design, supply, installation, operation and life extension of Floating Production Storage and Offloading (FPSO) vessels. These are either leased to clients or supplied on a turnkey sale basis. SBM Offshore is also active in the alternative energy market and the research and development of products for future energy markets.
In order to maintain its leading position in its core markets, SBM Offshore focuses on:
- Leveraging SBM Offshore’s experience and business model to manage sustainable business and address material topics.
- Transformation programs to increase return for customers: emissionZERO®, focusing on the decarbonization of products; and Digital Transformation, to optimize SBM Offshore’s ways of working and create new services.
- Innovation in line with energy transition ambitions: renewable energy, ammonia, hydrogen, carbon capture and sustainable energy storage.
Market Segmentation
Hydrocarbon Energy
FPSO
SBM Offshore delivers FPSOs that process well fluids into stabilized crude oil for temporary storage on board, before being transferred to a shuttle tanker for export from the field. Oil and gas enhanced recovery systems − such as water injection, gas injection, chemical injection and gas lift systems − are used to improve efficiency and production levels. SBM Offshore’s latest FPSO designs include CO2 removal from gas streams for reinjection into the well offshore.
SBM Offshore always takes a disciplined and selective approach to market opportunities, focusing on the main FPSO markets of South America and West Africa that provide both relatively low break-even prices and low GHG-emission intensity. SBM Offshore is also looking to develop business in other adjacent regions.
Key to sustainable growth, enabling affordable and sustainable hydrocarbon energy, are SBM Offshore’s Fast4Ward® and emissionZERO® programs, of which further detail is provided in sections 2.1.4 and 2.1.7.
Other Products and Services
SBM Offshore delivers tailored solutions for the mooring of floating assets: flexible flowline and subsea structure installation works. SBM Offshore, together with its joint venture partner, owns and operates a dedicated multi-purpose deepwater construction vessel, the Normand Installer. SBM Offshore also has dedicated product lines to provide specific floating equipment and products, such as Turret Mooring Systems (TMS) and offshore (off)loading terminals.
Turrets and Mooring Systems
SBM Offshoreis the recognized technology provider for Turrets and Mooring Systems (TMS). SBM Offshore provides the offshore industry with a complete range and variety of solutions delivered through a full EPCI product lifecycle.
Terminals
The Catenary Anchor Leg Mooring (CALM) or Single Point Mooring (SPM) terminal is a floating buoy that performs the dual function of keeping a tanker moored and transferring fluids while allowing the ship to weathervane. SBM Offshore provides full lifecycle solutions for terminals, including design, engineering, construction, installation and aftersales services.
New Energies
Floating Offshore Wind (FOW)
Floating Offshore Wind provides for new possibilities for wind power production locations. Floating offshore wind turbines enable access to deeper water than conventional fixed-bottom wind turbines. This reduces visibility from shore and expands the viable area for wind energy development, potentially to areas with higher and steadier wind characteristics. The FOW market is developing worldwide, in anticipation of future commercial projects. SBM Offshore has successfully delivered Provence Grand Large, its first pilot project in 2023, leveraging its experience in EPCI for floating solutions and mooring systems. SBM Offshore is also co-developing floating offshore wind projects and securing seabed rights and relevant permits, together with partners.
Future Energy Markets
New technologies are developing to facilitate the energy transition. Solar PV, wind energy, hydrogen-based technology, bio-fuels and Carbon Capture Utilization and Storage (CCUS) are recognized and envisioned as the frontiers of development. SBM Offshore is investing in the research and development of products within selected segments that support the energy transition. For example, SBM Offshore is working on providing offloading solutions for carbon dioxide and the development of terminals to adapt for future fluids such as ammonia.
SBM Offshore has continued the development of its wave energy conversion technology. The technology has been developed and tested in SBM Offshore’s own R&D Laboratory in France. The next step is to identify opportunities to commercialize the technology.
SBM Offshore – part of THE Energy Industry and Local community
SBM Offshore aims to be an energy transition company, reducing carbon in its operations and developing alternative energy solutions. SBM Offshore embraces the Paris Agreement and strives to be a leader in transparency. Along the way, there are many questions that SBM Offshore cannot answer on its own, thus it is working with, and listening to, others.
SBM Offshore has been actively involved in technology development in the energy industry by cooperating with its value chain business partners and working with other companies, universities, class societies, etc. For instance, SBM Offshore is among the 24 participants in the Joint Industry Projects (JIP) for Anchoring and Mooring Design of Floating Photovoltaics.
Moreover, SBM Offshore is seeking to understand and contribute to the mitigation of the challenges faced by local communities and has carried out social activities in the respective regions where it operates, (see section 2.2).
Current, near-term and future impacts on SBM Offshore’s activities
In 2023, the global macro-economic fundamentals remain challenging, with core inflationary pressures and geopolitical tensions on the rise. Amidst geopolitical strife and rapid technological advancement, the energy transition and the demand for lower-emission solutions have been accelerating. More and more countries are focusing on energy source diversification and self-sufficiency. Many structural measures are being taken, especially in the EU, to accelerate renewable development. For floating offshore wind, up to 2023, the installed capacity is around 275MW globally. The forecast for the cumulative installed capacity by 2030 is in the range of 6-12GW. Given the most intensive construction activities will mainly come in the last three years of the decade, the lower part of the range is the most likely scenario at this stage.
In addition, there is an increasing focus across most sectors on Environmental, Social and Governance (ESG) targets. Companies are repositioning and adjusting their strategies towards operating in a carbon-neutral environment, using the ESG framework.
Moreover, the importance of energy availability, security and affordability came to the forefront during the recent energy crisis, highlighting the need to maintain the supply of hydrocarbons. During 2023, there were seven FPSO awards in the market, four of which were in SBM Offshore’s key regions of South America and West Africa.
Macro trends
According to the United Nations’ world population projection, by 2050, world population will surpass 9.7 billion people, with around 68% of the total population living in big cities close to the oceans. Global energy demand is set to grow in the coming decades. While oil and natural gas will still play a key role in the primary energy mix, renewable energy is increasing its share and governments are raising their decarbonization targets. The demand for new oil and natural gas projects is expected to continue to grow until the end of the decade, as geopolitical tensions have underlined fragilities and dependencies in the energy system, after which it should slightly decline until 2050. Geopolitical events make energy supply and demand inherently volatile. Section 1.4.3 presents climate change scenarios which provide insight into various possible developments relating to decelerated and accelerated energy transition paths. Section 1.4.2 provides further detail on geopolitical risks.
SBM Offshore expects that, in the coming years, there will be a need for its capabilities to deliver sizeable deepwater projects across the energy mix. GHG emissions of deep water is highly competitive compared to the rest of the oil supply. As such deepwater oil should be part of the energy transition set of solutions.
SBM Offshore’s success will depend on partnering with other companies similarly committed to its energy transition strategy and activities, with a focus on the lifecycle value of projects, from early client engagement to the end of field recycling phases.