1 Business Environment

1.1 At a Glance

1.1.1 Message from the CEO

In 2023, at SBM Offshore, we delivered value to our stakeholders, adapted the organization to serve the energy transition in a pragmatic way, and remained on track to meet our 2050 net zero target. We take a holistic view of the energy trilemma and understand the benefits of strategic partnering in this complex world energy environment.    

Our expertise in traditional oil and gas deepwater floating systems can be applied to alternative energies, such as floating offshore wind, hydrogen and ammonia. Nevertheless, we remain selective in project pursuit, targeting the ones bringing value to all involved. We see the importance of prudent decision-making, focusing not just on immediate outcomes but on the long-term value each project brings. Reducing emissions requires resourcefulness, demanding that we align our efforts to the evolving needs of the market with efficient solutions. This approach ensures that our resources are allocated across the lifecycle of our products, aligning our core competencies to our overall growth.

The slow progression of the floating offshore wind market, for example, does not minimize the innovation we are undertaking and the things we are learning in order to open new horizons for floating wind and sustainable energy solutions. The Provence Grand Large pilot windfarm, where three floating wind units were successfully hooked up in October, is a testament to our thoughtful advancement of the offshore energy transition, our capacity to make innovative ideas come true and our EPCI capabilities.

The transition also includes transforming our conventional business of Floating Production Storage and Offloading (FPSO) assets. Through our emissionZERO^® program, our new FPSOs are operating with reduced carbon intensity – achieving between 8-12 kg of CO₂/barrel of oil equivalent (boe) by reducing carbon emissions. Likewise, the Mitsubishi Heavy Industries partnership signed in September permits FPSO carbon capture technology developments to be onboarded to our future units estimated to bring a further direct reduction in carbon emissions of up to 70%. These new-generation solutions will take us and the industry to the next level of decarbonization, reducing greenhouse gas emissions and minimizing the impact our activities have on the climate.

Active in both alternative energy developments and decarbonization efforts, SBM Offshore is on track to meet our 2030 targets, cutting our CO₂ emissions intensity/bopd by 50%. These ambitions are founded upon the challenges set out in the Paris Agreement for decarbonization of the world economy. When considering energy security, fossil fuels are needed and new investments are essential to offset production decline in aging assets. It is not a question of what kind of energy sources we develop, but how – especially when looking at new oil supply.

Within the oil and gas industry, deepwater developments are both economical and environmentally resilient. Offshore deepwater developments are considered the lowest in average GHG intensity, at 10 kg/boe, and amongst the most competitive, at an average breakeven price of US$40 per barrel.  As such, deepwater field developments should be the preferred future supply of oil going forward. Project financing remains challenging, but we secured the full US$3.2 billion required for FPSOs Almirante Tamandaré and Alexandre de Gusmão, de-risking their execution and paving the way for new financing models to emerge. In short, there is a strong market for FPSOs, the core product of our company’s own transition, because this is where energy demand meets reliability and greenhouse gas efficiency, evidenced by a strong Pro-forma Directional backlog of US$30.3 billion at year end.

We navigated several challenges in 2023, such as supply chain disruptions, cost overruns caused by delays, and lingering COVID-19 impacts. I thank our teams for their many actions to mitigate these challenges, demonstrating our company value of ownership to keep us on track to deliver. A new, centralized multi-disciplinary Corporate & Business Solutions Center (CBSC) was launched to improve synergies, reduce costs and reinforce innovation and continuous improvement. Rightsizing our organization has led to sustained efforts in knowledge transfer and has demonstrated our agility as our support functions adopted new ways of working. Continuous improvements in Turnkey offered opportunities for lessons learned to be directly applied to concurrent projects under execution across our network of yards. Specifically on our Target Excellence commitments, we will never become complacent in protecting our people or the environment. Even though we had strong safety performance in 2023, we continue to focus on any incidents with potential for serious injury or fatality.

In our Operations, we celebrated the first oil of both FPSO Prosperity and FPSO Sepetiba. As demonstrated by FPSO Prosperity's gas system commissioning less than a month after first oil, the product vision of Fast4Ward^® has proven to be best-in-class, accelerating our time-to-market abilities and incorporating industry-leading environmental management systems. The overall performance of the fleet continues to be good from an efficiency, uptime and emissions standpoint, drawing on our digital know-how and reaping the rewards of our digital journey, with our recently launched data platform, SBM+. I am especially proud of the success of our Guyanese operations, with production levels above nameplate capacity, the progress of our forth unit FPSO ONE GUYANA, the sale of FPSO Liza Unity and the FEED award for the Whiptail development project. It is a privilege to accompany the growth there and the integrated operations ambition shared with our client, ExxonMobil Guyana, and other industry partners. 

There are numerous complexities and perspectives on the challenges and the appropriate solutions to address the energy transition. By sharing our experience, SBM Offshore is achieving visible progress in our industry, executing pacesetting projects through our expertise and innovation. Our resolve is to navigate these challenges with integrity and transparency, demonstrating responsible stewardship in our operations and reporting. With the trust and confidence of our stakeholders, and the steadfast commitment of our people, I am confident that SBM Offshore will continue to build a future of sustained success, providing responsible energy solutions for generations to come.

It has been a huge privilege to serve the company as CEO for the last 12 years. I have had the honor of leading a team of dedicated people who supported me in transforming this organization. Today, the Group has a well-established vision, purpose and structure, with a leading market position and strong growth prospects in the industry. I am especially proud that SBM Offshore has a leadership team which makes an internal succession possible, and am extremely pleased to hand over my responsibilities to Øivind Tangen, who, I am sure, will successfully guide the company to achieve its ambitious energy transition targets.

Company Highlights

1.1.2 2023 In Brief

1.1.3 Overall View

SBM Offshore believes the oceans will provide the world with safe, sustainable and affordable energy for generations to come. SBM Offshore shares its experience to make it happen.

The challenge in delivering safe, sustainable and affordable energy is well recognized, particularly by SBM Offshore’s stakeholders, with whom SBM Offshore works on the energy transition − teaming up on areas important to them, called material topics. These topics are the basis for SBM Offshore’s objectives and strategy, and are the criteria against which it measures its performance. The table below shows the connection between these elements and where they are explained in the rest of the Annual Report.

1. As per January 22, 2024.
2. New Material topic as per August 2023. Details can be found in section 2.1.12.

1.2 Business Context

1.2.1 Markets 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.

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.

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.

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.

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.

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.

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 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).

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.

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.

1.2.2 Stakeholders and Material Topics

SBM Offshore takes an inclusive approach to stakeholder engagement, as per its stakeholder engagement policy. It recognizes its main stakeholders as: employees, clients, suppliers, shareholders and lenders (banks), regulators, class society organisations, yards, partners, local communities and non-governmental organizations (NGOs).

Conscious of the importance of a consistent and effective interaction with its stakeholders, SBM Offshore engages and listens to their feedback. Example engagements and outcomes are mentioned in the table below. In order to provide a comprehensive identification, evaluation and management of SBM Offshore’s material impacts, stakeholder engagement is a key part of its due diligence and its materiality assessment.

Example engagements during 2023

In 2023, SBM Offshore updated the materiality assessment in compliance with the GRI Standard and ran a double materiality assessment to anticipate the European Sustainability Reporting Standard (ESRS) requirements, mandatory for Annual Report 2024.

In this assessment, two dimensions of materiality were considered. Firstly, the Impact Materiality in accordance with GRI Standard, in which the actual, potential, positive and adverse impacts of SBM Offshore’s business on people and the environment were assessed to determine material topics. Secondly, the Financial Materiality, i.e. assessing how environmental, social and governance topics generate risks or opportunities with (potential) material financial effects for SBM Offshore.

Management and supervisory board members are consulted on the outcomes of this process, with the management board validating the outcomes of the materiality assessment and using them as the basis for SBM Offshore’s strategy and performance management. Furthermore, the topics are addressed in the risk management approach of SBM Offshore, with information on significant risks to the business explained in section 1.4.2. Definition of the impacts are described in chapter 2 and the materiality process and topic definitions are explained in section 5.1.2.

The impact materiality brought changes compared to 2022: the material topic ’Decommissioning’ was added; ’Retaining & Developing Employees’ changed into ’Employee Wellbeing’ and ’Economic Performance’ into ’Economic Impact’, reflecting the broader stakeholder approach and the focus on impact that SBM Offshore has taken. Definitions of the Material Topics are mentioned in section 5.1.2.

The Energy Transition is critical in the light of climate change. At the same time, it can provide a source of future economic value. Emissions, both air and ocean-related, and particularly greenhouse gas (GHG) emissions, dominate concerns on this topic. In this report, any content related to Energy Transition and Emission material topics cover Climate Change-related disclosures. SBM Offshore considers these topics as foundational in its strategy and business model. There are further explanations in the strategy and climate sections of this report.

The industry has inherent safety and compliance risks owing to the physical nature of the business (safety) and geographical location (compliance). Ethics and Compliance and Employee Health, Safety and Security are therefore material and are prerequisites to being in business. Process Safety Management and Occupational Safety Management are critical topics in ensuring high safety standards and mitigating the risk of hazardous accidents.

Human Rights are considered material to SBM Offshore considering its global presence, including in countries with potential exposure to Human Rights risks.

When it comes to Economic Impact, SBM Offshore’s integrated business model is seen as a strength. At the same time, it allows SBM Offshore to fund a responsible energy transition and impact projects in countries of operation.

Operational Excellence and Quality drive predictability, which is especially sought after in CAPEX- and resource-intensive projects with a global footprint. The same applies for fleet operation services and managing a global supply chain.

Employee Wellbeing is a material topic because large resource-intense projects such as offshore field developments rely heavily on employee engagement and experience. Experienced staff increase efficiency and reduce risk in projects. In times of high work-load, during the execution of several large energy infrastructure projects simultaneously, attention must be paid to employees’ physical and mental health, as well as work-life balance.

Market Positioning is seen as a driver for future economic performance and is a key enabler in attracting and retaining talent. Strong ranking in ESG ratings are supportive of this.

Innovation matters as a source of future value-enabling alternative energy transition technologies. Digitalization brings efficiency, new businesses and ways of working and mitigates the challenge of attracting talent to the industry.

Decommissioning is about the safe and sustainable shutting down of end-of-life assets and responsible recycling. The associated waste streams and potential financial impacts of responsible recycling make this a new material topic as per August 2023. SBM Offshore expects disclosures to grow in the coming period.

The financial materiality assessment confirmed the topics that were material from an impact perspective.

SBM Offshore applies – where appropriate – its influence in line with its vision and mission, to advance on safe, sustainable and affordable energy, navigating through the energy transition, as explained in section 1.3. The following engagement took place during the year:

1. Co-chairing the IOGP FPSO Decommissioning Expert Group on Responsible Recycling (no cost or coverage).

2. Participation in the consultation process for the ESRS to drive the harmonization of various standards and regulations (no cost or coverage).

3. Advocacy on Human Rights through Building Responsibly – such as co-development of Worker Welfare Principles to serve as the global standard on worker welfare for the engineering and construction industry and development of supply chain screening tools (associate membership contribution US$10,000).

4. Provided input to guidelines issued by the IOGP Energy Transition Committee (no cost or coverage).

5. Provided input to IOGP Guidelines for design & operation to minimize/avoid flaring sources (no cost or coverage).

6. Membership of IMCA Environmental Sustainability Committee, with recommendations made to the code of practice on Environmental Sustainability and input into the self-assessment tool (membership contribution GBP27,500).

7. Membership of Transparency International, contributing to its research on ’Whistleblowing Frameworks 2023’ as well as input into the anti-corruption working group (membership contribution EUR5,000).

8. Membership of the International Chamber of Commerce (ICC) Netherlands, contributing to the program design of the Closing Conference of the Week of Integrity and providing input on guidelines issued by the ICC (membership contribution EUR3,916.50).

9. Taking part in the IOGP Process Safety Sub-Committee, providing input into implementing Process Safety Fundamentals, and Process Safety Indicators Guidelines (no cost or coverage).

10. Chairing revision of IOGP guidelines for Process Safety Barrier definition and involvement in a new guideline for Process Safety in Design, to be delivered next year (no cost or coverage).

11. Participant in the Joint Industry Projects (JIP) for Anchoring and Mooring Design of Floating Photovoltaics (no cost or coverage).

As per its Anti-Bribery and Corruption Policy, SBM Offshore prohibits company political contributions. SBM Offshore does not participate in party political activity nor will it make political contributions of anything of value.

1.3 Strategy and Value Creation

1.3.1 Vision and Values

Safe, sustainable and affordable energy for generations to come will require renewable energy and cleaner forms of fossil energy. SBM Offshore is committed to this, by embedding climate-change-related actions without interrupting the essential supply of energy needed to support societies. The contribution and participation of global energy companies and service providers such as SBM Offshore are essential to achieving a responsible energy transition. Many people, especially in less developed economies, depend on the experience and resources of those companies. This is where SBM Offshore’s products can play a role. SBM Offshore is partnering with others for this purpose, sharing experience to make it happen.

SBM Offshore’s core values reflect its long history of industry leadership. They are the essence of SBM Offshore, defining who each SBMer is and how SBM Offshore works. The values create the company culture, which guides each employee to help achieve SBM Offshore’s vision wherever SBM Offshore operates around the world.

SBMers act professionally and in an ethical, honest and reliable manner. Transparency, doing the right thing and consistency are essential to the way SBM Offshore behaves towards all of its stakeholders.

SBMers respect and care for each other and for the community. Employees value teamwork and diversity. SBM Offshore listens to all its stakeholders. Health, safety, security and the environment are paramount in everything SBM Offshore does.

SBMers have an entrepreneurial mindset in everything they do. They deliver innovative and fit-for-purpose solutions with passion. In doing so, SBM Offshore aims to exceed its clients’ expectations and proactively achieve sustainable growth through balancing risks and rewards.

SBMers are all accountable for delivering on their commitments and pursuing SBM Offshore’s objectives with energy and determination. Quality is of the essence. SBMers say what they do and do what they say.

1.3.2 Mission and Strategy

SBM Offshore underpins its mission and strategy framework by an understanding of mega trends and associated scenario-planning.

SBM Offshore’s mission is to enable the energy transition by leveraging SBM Offshore’s unique capabilities in floating solutions, thus contributing to the growth and creation of sustainable, long-term value for its stakeholders. SBM Offshore is committed to a responsible energy transition, reducing emissions of oil and gas while developing cleaner solutions from alternative energies.

In order to do so, it has set targets and indicators in three main areas: grow free cashflow over the period, ensure a steady flow of new contracts within SBM Offshore’s core business and position SBM Offshore in the alternative energy market.

In line with its vision and mission, SBM Offshore’s strategy aims to enable the energy transition, addressing material impacts:

• Environmental – focusing on energy transition towards net zero.

• Social – creating a safe and inclusive environment where people inspire and empower each other.

• Governance – carrying out values-based actions to achieve high ethical standards.

SBM Offshore manages its performance through a balanced scorecard framework – aligned with long-term (>6 years), medium-term (2-6 years) and short-term (1 year) planning cycles. It is funded and resourced, as explained in this report, and is approved by the Management Board and the Supervisory Board.

1.3.3 Value Creation

Supplying safe, sustainable and affordable energy from the oceans is the basis for long-term stakeholder value, which is supported by the 12 material topics, forming the basis for sustained value creation. Value is defined by the results achieved on the material topics, the associated benefits for SBM Offshore’s stakeholders and the impact. The value is delivered through SBM Offshore’s value platforms, defined below, and by assigning resources to activities along the project lifecycle (business model). The outputs from the business model create value for stakeholders and have SDG contributions. For detail on the value created and preserved, and the impacts potentially leading to value erosion, refer to sections 1.4.2, 1.4.3 and chapter 2.

At SBM Offshore, there is a belief that there is a value-premium for investing in the future. Business activities are organized to maximize financial and societal value, benefiting SBM Offshore’s stakeholders.

SBM Offshore sustains value through value platforms. SBM Offshore has simplified its approach by consolidating two former platforms ’Transition the Core’ and ’New Energies’ into one, ’Transition’, to facilitate a singular focus on the energy transition. This leaves two platforms, Ocean Infrastructure and Transition.

• The Ocean Infrastructure value platform covers SBM Offshore’s existing operations and assets under construction. Supported by lifecycle learning and digital tools, the operating fleet has become increasingly efficient, with a lower carbon footprint, and a leading uptime and safety track record. This platform is based around the contractual backlog, which provides cash-flow visibility up to 2050. It is evolving, with new generations of lower emission products set to be added.

• The Transition value platform is dedicated to further enablement of the energy transition and business transformation. SBM Offshore seeks to be a leading supplier and operator of floating energy solutions with a focus on competitiveness through Fast4Ward^® and reducing the carbon footprint of future assets through emissionZERO^®. This platform aims to deliver new and improved value propositions to market. As such, SBM Offshore is investing in alternative energy technology development, especially in floating offshore wind, energy storage, alternative energy sources (e.g. hydrogen, ammonia) and in facilitating the Carbon Capture and Storage value chain. Transition also covers activities that leverage SBM Offshore’s operational data, digital solutions, and expertise to continue to deliver value to its customers. 

SBM Offshore’s business model is structured around the above value platforms to ensure safety, cost optimization, product transformation and growth.

SBM Offshore adds value along the full lifecycle of clients’ ocean infrastructure projects, including operations and maintenance services. SBM Offshore also provides energy distribution solutions, such as CALM terminals and digital solutions, through its Smart Digital Services offering.

SBM Offshore engages in Research and Development (R&D). Business Development works on early market opportunities and Product Development on further improvement of SBM Offshore’s solutions and the commercial management of prospects. After commercial success, the Project Execution phase begins, during which SBM Offshore executes Engineering, Procurement, Construction and Installation (EPCI). Specific to the renewable energy business is the co-development of Floating Offshore Wind projects and securing seabed rights and relevant permits in cooperation with the client.

Engineering and design delivers conceptual studies, basic design and detailed design through in-house 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 provides operation and maintenance services for its clients. This activity creates value for clients, as the uptime performance of the facility directly impacts the amount of energy produced. For FPSOs, these services can be based on fixed-lump-sum or reimbursable contracts.

At the end of the lifecycle, facilities are decommissioned and recycled. For FPSOs, SBM Offshore applies the Hong Kong Convention rules and the principles of the EU Ship Recycling Regulation − or equivalent standards should EU Ship Recycling Regulation not be applicable − to recycle its units, using certified and regularly audited recycling yards.

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 the asset for the client throughout its lifecycle. The project debt-financing is arranged at the asset-specific company level, based on the facility’s contract and value (which is based on construction costs and a margin). SBM Offshore’s Revolving Credit Facility is generally used to cover working capital requirements during construction, in addition to periodic drawdowns under the project debt-financing. SBM Offshore tends to optimize debt-financing in asset-specific companies on a ’non-recourse’ basis, in order to optimize return on equity and achieve an appropriate balance of risk allocation. Upon acceptance of the facility by the client, generally upon start of production, the parent guarantee is released and the project debt becomes non-recourse to the parent.

• Under a direct sale, the construction is financed by the client, and a margin is generated from the turnkey sale.

• Under a hybrid of the two above, such as the build-transfer-operate (BTO) model, SBM Offshore builds and commissions the unit and operates it during a defined period (the crucial start-up phase). The transfer of ownership to the client then occurs at the end of the construction period.

1.4 Impact, Risk and Opportunity Management

SBM Offshore seeks business opportunities, whilst managing risks and adverse impacts. Sections 1.2 and 2.1 describe the impacts and section 1.3 provides detail on business activities and associated opportunities. This chapter describes the risk appetite and approach of SBM Offshore to understand and act on potential adverse impacts.

1.4.1 Risk Appetite

The Risk Appetite Statement 2023 sets the guidance and boundaries for the activities conducted by SBM Offshore in pursuit of its strategic objectives, aligned with its material topics. It provides guidelines in terms of the amount of risk that SBM Offshore is willing to accept in protection or pursuit of value. In line with the Dutch Corporate Governance Code, the Management Board reviews the Risk Appetite Statement annually to ensure that SBM Offshore maintains the balance between risk and opportunity while creating value for its stakeholders. Each Risk Appetite Statement has underlying metrics which are measured on a quarterly basis and results are presented to the Audit Committee.

The significant parts of SBM Offshore’s Risk Appetite Statement, and their mapping against Material Topics, are displayed below.

1.4.2 Significant Impacts, Risks and Opportunities to the Business

As SBM Offshore delivers on its opportunities and manages its risk appetite, it faces business risks with potential financial consequences, described in the table below. These risks are linked with SBM Offshore’s material topics, as per its risk breakdown structure and the risk appetite mentioned above. The outcomes of risk management processes and tooling are used in the double materiality assessment explained in section 1.2.2.

Key opportunities for the business are related to the energy transition and flow from the reduction of emissions, the growth of alternative energies, innovation and decommissioning of aging assets. These opportunities are incorporated in SBM Offshore’s strategy and explained under section 1.3.2. The financial performance resulting from this strategy is detailed in chapter 4.

The key processes to manage impacts, risks and opportunites are:

• Internal Risk Management and Control System (see section 3.5.1).

• HSSE risk identification.

• Human Rights Due Diligence, as part of supplier and yard qualifications.

• Environmental and Social Due Diligence, as part of project financing.

• Alignment with clients' Environmental Impact Assessments.

• Client Relationship and Opportunity Management Process.

For further details on the approach to impacts, risks and opportunities, please refer to sections 2.1 and 3.5.1.

1.4.3 Climate Change Impact, Risk and Opportunity

SBM Offshore’s ambitions as an energy transition company are founded on the physical and transitional challenges that climate change brings. SBM Offshore is committed to a responsible transition in which energy stays affordable to society, while addressing climate change impacts from greenhouse gas emissions from more traditional forms of energy. SBM Offshore applies these insights to its strategy development and actions as part of its Enterprise Risk Management process. The sections below cover the mitigation of significant risks relating to climate change and portfolio risk, as explained in section 1.4.2.

Climate change management is discussed at Management Board level, in particular as part of the energy transition and emissions material topics. At regular performance management meetings, the performance of New Energies and the emissionZERO^® transformation program is reviewed. On a quarterly basis, progress on the UN SDGs are discussed, including climate-change-related company targets. Climate change risk and opportunities are also discussed as per the risk-management cycle described in section 3.5. Outcomes of these meetings are, for example, the risk appetite statement mentioned in section 1.4.1, the long-term goals described in section 2.2 and the climate change ambitions and scenarios described in this paragraph. Furthermore, climate change mitigation measures and KPI’s, including GHG emission targets, are embedded in the remuneration of the management bodies, as can be read in section 3.3.2.

During 2023, SBM Offshore started to deploy climate change awareness workshops: Climate Fresk. To date, approximately 200 employees have participated in Climate Fresk workshops, including SBM Offshore’s Management Board and Executive Committee. In December, 9 Sustainability Ambassadors were trained to be Climate Fresk workshop facilitators, extending the potential reach for climate change awareness within SBM Offshore.

SBM Offshore is committed to a strategy and actions compatible with its ambition to achieve net zero by no later than 2050, including emissions in scope 1, scope 2 and scope 3 – downstream leased assets. SBM Offshore has established the following intermediate targets: by 2030, SBM Offshore targets net zero scope 1 and 2 emissions¹, and for scope 3 – downstream leased assets; a 50% reduction of GHG intensity² and zero routine flaring³ (2.1.7). This strategy has been approved by SBM Offshore’s Management Board and Supervisory Board.

SBM Offshore envisages applying a science-based approach, using key frameworks, such as below, or equivalent:

1. Assess the impact on the business using frameworks from the Task Force on Climate-Related Financial Disclosures (TCFD).

2. Set targets, using guidance from the Science Based Targets initiative.¹

3. Measure performance, based on guidance from the Greenhouse Gas Protocol and the EU Taxonomy.

4. Disclose performance, leveraging above standards to disclose in this report and the CDP Benchmark.

The transition path towards its net zero ambitions is supported by:

1. SBM Offshore’s emissionZERO^® program.

2. Development of new technologies and projects targeting new energies.

3. The optimization of energy use and emissions of downstream leased assets (FPSO) up to end of contract.

4. Deployment of green energy in SBM Offshore office locations.

5. Balancing residual emissions in office locations without access to green energy.

6. Continuous engagement with value chain partners to co-create solutions.

Furthermore, the decommissioning of downstream leased assets at end-of-contract will affect the transition path.

Information on ambitions, achievements and future developments that support the above path can be found in sections 2.1.7 , 2.1.9 and 2.2.

The above actions mainly relate to the time-frame up to 2030, due to the pressure-build on global climate goals. As per explanation under section 1.2.1, the demand for energy continues to grow. The composition of the energy mix, in particular beyond 2030, is uncertain. Even scenarios aligned with a well-below 2 degrees and 1.5 degrees global warming future still seem to require fossil energy to fulfill global energy demand towards and beyond 2050. Although a global mediation mechanism to allow for selection of the lowest emission energy sources does not yet exist, SBM Offshore − supported by external views − sees deepwater oil and gas projects as an affordable, low carbon intensity source of energy going forward. Any residual emissions − after avoidance and reduction of emissions − would have to be balanced for a net-zero future. This can be done through, for instance, carbon capture and storage or nature-based solutions. The timing and required means for balancing scope 3 emissions in particular are dependent on the reduction and balancing measures SBM Offshore’s value chain partners will take, which will require industry-wide commitments and collaboration. SBM Offshore is ready to engage and provide solutions for a net zero future.

With regard to financial resources allocated to the above path and associated actions − OPEX and CAPEX − the EU Taxonomy disclosure in section 5.1.5 provides further detail, explaining investments in new energies and related technology. Non-eligible activities relate mainly to the oil and gas business. R&D OPEX related to this business is largely allocated to initiatives that increase energy efficiency and lower emissions. More significant CAPEX will be needed, from the readiness of the emissionZERO^® FPSO onwards (targeted 2025). For this to materialize, SBM Offshore is dependent on investment decisions taken by its clients.

The above approach supports SBM Offshore in the framing of targets and actions in light of the global guidance from the Paris Agreement. These ambitions reflect the current understanding of the business and are subject to further development in the future.

SBM Offshore looks at various climate-change scenarios to future-proof its ambition and transition path. The scenarios are based on International Energy Agency (IEA) and Intergovernmental Panel on Climate Change (IPCC) data, as explained in section 5.1.4. In order to cover transitional and physical risks, the below scenarios are relevant:

1. The IEA Stated Policies Scenario (STEPS), a climate change scenario that falls short of meeting the Paris Agreement goals − i.e. a >2 degrees scenario.

2. The IEA Net Zero Emissions (NZE) scenario, a climate action scenario providing for strong commitment towards targets, as per the Paris Agreement, i.e. a 1.5 degrees scenario.

• Key risks are: mainly physical in nature with potential weather-related disruptions to the construction and operation of FPSOs and renewable energy projects. Even if the demand for hydrocarbons stays almost flat compared to current levels, funding these projects might become more challenging.

• Key opportunities are: the need for resilient ocean energy solutions owing to increased weather events and a continued demand for FPSOs.

The bottom-line impact of the scenario is an improvement in revenue potential through a stronger FPSO demand outlook and an opportunity for resilient energy production solutions and projects.

• Key risks are: the decrease in demand and access to funding for FPSOs with a traditional emissions profile; insufficient internal resources to address the energy transition; and increasing carbon taxes.

• Key opportunities are: the development of new, cleaner solutions that address the energy transition and the ability to attract new investors supporting SBM Offshore’s sustainability agenda. A carbon price would also lead to a more favorable business case for emissionZERO^® products.

The bottom-line impact of the scenario for SBM Offshore’s traditional markets could be significant if unmitigated and, as such, it is covered by scenario planning under SBM Offshore’s Group Strategy Development and Performance Management approach.

Climate change impact assessments are also undertaken for client projects, in close co-operation with project lenders and external consultants, and provide insight into the physical and transitional risks of these projects. Examples of the physical risk metrics used are the exposure to flooding in yards under different climate scenarios and the number of storms in offshore locations. Transitional risk metrics examine the exposure to oil and gas supply/demand changes under various scenarios and the potential impact of carbon pricing.

Today the world seems to be moving away from the NZE scenario by IEA − where meeting a 1.5-degree path is becoming increasingly challenging, global demand for hydrocarbons is still firm and renewable energy projects are facing headwinds. This challenges the emission reduction path required for a 1.5-degree-aligned future, with the UN currently projecting above 2.5 degrees warming should there be no further mitigation.

Related to the risks described below, SBM Offshore sees changes in the financing landscape. For instance, the Export Credit Agencies (ECA's) in Europe are decreasing their support for the oil and gas industry, potentially increasing the cost of capital for energy supply. As per the below mitigation, SBM Offshore has engaged with clients on alternative commercial models and with potential lenders on the appetite for future projects.

SBM Offshore also sees the risk of delay in product development materializing, mostly in offshore wind. Some companies in the industry have faced financial setbacks due to price inflation and countries’ lower appetite for subsidies. SBM Offshore is keeping a selective approach to its New Energies pillar and future offshore wind business, focusing on viable projects with a scale that drives the affordability of renewable energy.

The graph and tables below provide further detail. Any financial risks are described further in section 4.3.27. Scenarios are part of an ongoing process to challenge perspectives on future business environment, rather than to predict outcomes.

1. Aiming for 100% sourcing of green energy by 2030 and considering investments in certified projects to balance any residual GHG emissions from scope 1 and 2, reaching a ‘net zero’ level on total GHG emissions – all related to the scope of office and shorebase-related emissions. SBM Offshore monitors development versus 2016. For 2016 GHG volumes please see here.
2. Reduce GHG intensity of scope 3 downstream leased assets by 50% by 2030, compared to 2016 as a base year. The base year is a representative year for SBM Offshore’s business and follows base year selection guidance by the Science Based Target initiative. For 2016 GHG volumes please see here.
3. Routine flaring of gas considered as flaring during normal oil production operations in the absence of sufficient facilities or amenable geology to re-inject the produced gas, utilize it on-site, or dispatch it to a market. Applies to GHG emissions from scope 3 downstream leased assets.
4. In March 2022, SBTi released its policy to pause target commitments and validations for fossil fuel companies while development of the framework continues. As such, SBM Offshore awaits further updates to consider submission of targets for validation. Untill that point, SBM Offshore uses SBTi's generic net zero target setting guidance.

2 Performance Review and Impact

Overall impact

SBM Offshore is making progress on its ambitions and longer-term objectives explained in section 1.1.3. Examples are the milestones reached in net zero product development (explained in detail in sections 2.1.7 and 2.1.10), the achievement of Human Rights initiatives in key regions, living up to its zero tolerance commitment on misconduct and its ability to finance new projects.

SBM Offshore faces dilemmas on topics material to the business (1.2.2) and significant risks to the business (1.4.2). A key dilemma is balancing the need for affordable energy against global ambitions on climate change. The trade-offs are carefully balanced, while taking a course compatible with net zero (1.4.3). SBM Offshore is well aware of its responsibility to work with its value chain partners to address emissions.

Other challenges include Human Rights, the safety of employees, ensuring a diverse workforce, risks of fraud and bribery and impacts through potential events harming the environment. The strain on people, associated with resource-intense, high-stakes projects, have a risk of inducing physical and mental fatigue in employees in this industry.

This chapter explains SBM Offshore’s approach to the above dilemmas and outcomes over the past year and the steps planned for the future.

2.1 Performance Review

This section explains how SBM Offshore has dealt with potential and actual impacts on the environment and society, focusing on Material Topics. Impacts on the UN Sustainable Development Goals and local impacts are explained in section 2.2.

The execution of this work is delegated to the business and functions as mentioned in this section, with performance management supervised by the Management Board, explained in chapter 3. An overview of policies and key processes governing each material topic is provided in section 5.1.2.

Going forward, SBM Offshore will further enhance the relevance, transparency, comprehensiveness and comparability of information disclosed about its material impacts, risks and opportunities, in accordance with the Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS) requirements, which are due to be complied with in the 2024 Annual Report. The ESG table in section 5.4 contains references to ESRS, whilst GRI remains the reporting framework applied over 2023.

2.1.1 Ethics and Compliance

In all the communities in which it operates, SBM Offshore is committed to conducting its business honestly, ethically and lawfully. Integrity is vital to maintaining the trust and confidence of stakeholders in SBM Offshore’s long-term value creation. SBM Offshore does not tolerate bribery, corruption, fraud, or violations of trade sanctions, anti-money laundering or anti-competition laws, or any other illegal or unethical conduct in any form.

SBM Offshore’s aim is to enable its employees and business partners to make the right decisions, with commitment to integrity at all levels. Therefore, all employees, and those working for or on behalf of SBM Offshore, must embrace and act in accordance with the Core Values of SBM Offshore (see section 1.3.1), the Code of Conduct and SBM Offshore’s compliance policies and procedures. The Code of Conduct, which builds on SBM Offshore’s Core Values, is a guide for behavior and reflects the commitment of SBMers to lead the business responsibly, beyond compliance with rules.

For further details on SBM Offshore’s management approach, its purpose and its assessment, refer to sections 1.4.1, 3.5.2 and 5.2.5.

SBM Offshore uses a single and integrated platform to manage compliance tasks. All staff, including the Management Board and Executive Committee, are required to complete their assigned compliance tasks. The platform is continuously improved and uses data to predict and avoid compliance risks. It allows SBM Offshore to standardize and automate processes where possible, aiming for a high level of quality, effectiveness and efficiency.

The compliance platform includes the following tools:

• Compliance e-Learning, with training hours and completion ratio data available by employee target group.

• Automated continuous monitoring of third parties (due diligence process).

• Registration and approval of charitable contributions and sponsorships.

• Gifts, hospitality and entertainment registration and approval.

• Annual compliance statements of designated staff.

As part of performance management processes, SBM Offshore sets, monitors and reports on compliance KPIs. Quarterly compliance reports − including follow-up to action for improvement − are discussed with the Management Board and the Audit Committee of the Supervisory Board.

In 2023, SBM Offshore continued to promote a speak-up culture and adherence to the Code of Conduct through:

• Code of Conduct e-Learning for all staff (including Management Board), including speak up and non-retaliation.

• Tailored speak up and investigation training for HR leaders.

• Psychological safety part of the Executive Leadership Program.

• Tailored training for functions with higher exposure to compliance risks, such as Supply Chain Management.

• Improvement of global geographical presence of the compliance team.

• Organization and focus on business needs and priorities.

• Expanded reach offshore through the Compliance Ambassadors Program.

• No confirmed instances of corruption occurred during 2023.

More on how SBM Offshore manages ethics and compliance can be found on its website and for further information about its performance, refer to section 5.2.5.

The number of employees eligible to file the Annual Compliance Statement in 2023 was lower than in 2022 (4,625 employees in 2023 versus 4,936 in 2022). The number of compliance training courses completed in 2023 decreased comparing with 2022, due to less face-to-face trainings was done (7,613 training courses in 2023 versus 11,960 in 2022).

1. Designated Staff reflects all onshore staff and offshore leadership.

1. Including Code of Conduct, theme based e-Learning courses and annual compliance statements.

1. An employee can have attended multiple face-to-face trainings.
2. An employee can have completed multiple Compliance e-Learning courses.

1. Training on relevant Compliance topics for risk based target audiences.

In 2024, SBM Offshore aims to continue to drive initiatives to establish, develop and promote a compliance culture as well as policies and procedures with respect to business conduct matters.

• Promoting a speak-up culture and responsible business conduct.

• Updating compliance policies and processes.

• Upgrading digital tools.

• Increase monitoring and reporting capabilities by progressing to data-driven compliance.

• Applying a risk-based approach to third-party due diligence and monitoring.

2.1.2 Employee Health, Safety and Security

Due to the nature of its business, SBM Offshore is committed to safeguarding the health, safety and security of its employees, contractors, subcontractors and assets, as well as minimizing the impact of SBM Offshore’s activities on local ecosystems and proactively protecting the environment.

In line with SBM Offshore’s HSSE Human Rights and Process Safety Policy statement endorsed by the Management Board, SBM Offshore defines its HSSE requirements related to its hazard exposure in compliance with applicable legal requirements and ISO standards, as well as international oil and gas practices.

SBM Offshore is continuing the journey towards ’Target Excellence’, with the objectives of No Harm, No Defects, No Leaks. For the No Harm goal, SBM Offshore expects employees and contractors to intervene in unsafe acts, unsafe conditions and non-compliance with the Life Saving Rules, to stop work if they feel anything is unsafe and report any interventions and incidents.

To manage, prevent and mitigate potential negative health and safety impacts, SBM Offshore applies controls and safeguards based on a lifecycle hazard management process and an integrated management system, the Global Enterprise Management System (GEMS). The hazard management process applicable to all SBM Offshore projects consists in, first, working in the hazard identification, then selecting and conducting actions to eliminate the hazard or, if elimination is not reasonably practicable, reducing risks to acceptable levels following the hierarchy of controls approach and, later, monitoring, reviewing and recording the lessons learned. SBM Offshore delivers specialized training to ensure process effectiveness.

Promoting and supporting employee health and wellbeing is at the heart of SBM Offshore, being part of one of SBM Offshore’s core values, ’Care’. At SBM Offshore, Health and Wellbeing is managed as a Group function, reporting directly to the Group HSSEQ & Sustainability Director. This ensures the embedding of the topic in day-to-day operations and culture. More on employee wellbeing is explained in section 2.1.5.

SBM Offshore assesses company HSSE performance through a set of indicators. The following table provides the targets set for 2023 and the performance achieved:

1. In November 2023 a fatality happened on FPSO KIKEH. Until the disclosure of this annual report, the incident was still under investigation to define the work or non-work relatedness. As such, the TRIFR results presented in this report do not include this event. Regardless of the outcome of the investigation, interim actions and recommendations were defined and implemented.
2. For employees.

SBM Offshore continued to expand HSSE initiatives in 2023, including:

• Implemented the Serious Injuries and Fatalities (SIF) Prevention program and its related initiatives.

• Continued rolling out the Hazards and Effects Management Process (HEMP) in operation and execution scopes. The HEMP is the name of SBM Offshore’s approach to managing the risk of Major Accident Hazards (MAHs) and their associated potential Major Accident Events (MAEs) associated with the operations of the fleet. The HEMP runs throughout the lifecycle of an asset.

• Completed the roll-out of the Incident Management/Corrective Action Preventive Action (IM/CAPA) module in the new Company ERP system, to upgrade the existing system.

• Maintained security controls on SBM Offshore’s activities.

• Maintained compliance with certification requirements on shore bases and offshore units.

  Organized the company-wide Life Day.

• Continued the implementation of the MedFit Program, a medical examination program administered by SBM Offshore in partnership with International SOS.

• Increased health and wellbeing awareness, training and health programs, including on preventable diseases.

Following the 2022 Health and Wellbeing Survey that served to understand baseline wellbeing levels and risks, SBM Offshore kicked off the Wellbeing Matters Program. The program addresses feedback from the survey and is focused around mental health, presentism, work-life balance, job stress and workplace injury/illness. The Wellbeing Matters Program offers various sources of support for employees’ physical and mental health and wellbeing, such as Employee Assistance Program (EAP), occupational health services and company instructions and training in fatigue management and mental health.

In the journey to Target Excellence, SBM Offshore has engaged with workers and representatives to improve HSSE standards and ways of working – through Inherent Safety Design, a solid Permit to Work system and the Safety Leadership program across SBM Offshore.  

The following graph shows that SBM Offshore’s Total Recordable Injury Frequency Rate has remained below the International Association of Oil and Gas Producers’ (IOGP) average since 2018¹. This is part of SBM Offshore’s journey towards its aim to be top 10% in the IOGP benchmark by 2030.

SBM Offshore has defined the following 2024 targets:

• Zero serious injuries or fatalities.

• TRIFR < 0.12.

• Number of PSE Tier 1 with more then 3 severity points equal or below 2.

SBM Offshore has planned the following key initiatives for 2024:

• Progress in Occupational Safety with the SIF prevention program and its related initiatives.

• Drive improvements on Process Safety tools, procedures and practices.

• Maintain security controls on SBM Offshore’s activities.

• Maintain compliance with certification requirements on shore bases and offshore units.

• Organize the company-wide Life Day.

• Continue increasing health and wellbeing awareness, training and related programs, with a special focus on supporting employee mental health and addressing workplace stress.

As part of the Wellbeing Matters Program, SBM Offshore will focus in 2024 on:

• Establishing wellbeing champions in each company location, and train and communicate to support employees and the wellbeing agenda.

• Developing training material (e-Learning) on fatigue management and mental health.

• Roll out the Wellbeing Survey to continuously improve in supporting employees’ health and wellbeing.

1. For this graph normalized per 1 million exposure hours; includes IOGP Contributing Members (maximum, average, minimum).

2.1.3 Human Rights

SBM Offshore uses United Nations Guiding Principles on Business and Human Rights (UNGPs), International Labour Organization (ILO) Conventions and best practices as a guide to embed human rights within SBM Offshore to achieve no harm to its own workforce and workers in the value chain.

Human Rights targets and performance align with SBM Offshore’s adoption of the United Nations Sustainable Development Goals (SDGs) and are in line with SBM Offshore’s risk appetite (section 1.4.1). Potential human rights risks are captured in SBM Offshore’s risk management system.

SBM Offshore has published Human Rights Standards and a Modern Slavery Statement since 2020, in which SBM Offshore expresses its commitment on issues such as – amongst others – forced labor, working and living conditions, living wage and freedom of association. In 2023, SBM Offshore updated its Human Rights Standards, further strengthening commitments on access to grievance mechanisms and subsequent grievance resolution.

The above commitments and standards are embedded in SBM Offshore’s corporate values, Code of Conduct, Health Safety, Security and Environment (HSSE), Human Rights and Process Safety policy, and its Supply Chain Charter. Policies and standards set out the principles that SBM Offshore expects to be upheld by its employees, contracted workers, suppliers of any tier and business partners wherever in the world SBM Offshore operates.

During 2023, governance of human rights fell under the Group HSSEQ & Sustainability Director, part of the Executive Committee. The functional ownership of human rights sits within the group sustainability team, which is responsible for the:

• Continuous improvement of internal procedures and guidelines;

• Engagement with internal and external stakeholders;

• Assessment and addressing of human rights risks in the operations, yards and supply chain;

• Planning, implementation and monitoring of response actions;

• Setting of targets and assessment of the effectiveness of the results.

Key to SBM Offshore’s approach to human rights is the due dilligence process, as shown in the illustration below, which is supported by a performance management process with action trackers, dashboards and reporting to senior management.

Human rights actions and targets aim to address the impacts, risks and opportunities identified, in accordance with SBM Offshore’s human rights risk appetite defined in section 1.4.1. Regular assessments, due diligence and reports of potential human rights violations are the main sources of impacts, risks and opportunities identification. These are captured in SBM Offshore’s risk management system. In its regular assessment and due diligence processes SBM Offshore strives to include direct consultations with own workers and workers in the value chain.

SBM Offshore acknowledges that, despite having firm human rights policies, some activities carried out by some of its subcontractors have sometimes not met the desired standard, especially in places where local regulations differ from international standards. To uncover and remedy such activities, SBM Offshore conducts human rights assessments and due diligence in its own operations and within its supply chain, aligning with its risk appetite.

SBM Offshore’s due diligence approach on human rights leads to an understanding of salient issues and their recording in a company-wide tool for risk management, mitigation and prevention. As part of human rights assessments, SBM Offshore tracks progress on corrective actions of the identified human rights issues through specific action plans. SBM Offshore has identified and maintained its four salient issues: forced labor; overtime, pay and fines; accommodation; mental health and wellbeing.

Due diligence screening, as part of significant investments in its construction and supply chain activities, resulted in the following key outcomes in 2023.

• 8 yards, with whom SBM Offshore is considering pursuing commercial activities , underwent desktop due diligence screening.

• 9 ESG audits against the IFC Performance Standards were conducted by a third-party assessment consultancy related to the financing of several projects. The resulting social action was merged with the ongoing worker welfare action plans.

• SBM Offshore is currently monitoring worker welfare action plans for 5 yards with ongoing construction activities and no new worker welfare due diligence assessments were completed this year. The findings from the assessment were aligned with SBM Offshore’s Salient Issues and Human Rights Standards including:

  • indicators of forced labor (as defined by ILO) mostly in relation to payment of recruitment fees, excessive overtime, and limited rest periods;

  • substandard living conditions.

• Following the assessments and audits, SBM Offshore worked collaboratively with the yards to develop action plans related to prevention, mitigation and remedy, to close out on issues. Some examples of topics identified and closed out include:

  • identification of recruitment fees in the Asia-Pacific area of SBM Offshore’s supply chain. As a result, corresponding action plans have been developed in collaboration with construction yards with the aim of preventing or eliminating the risks of this type of forced labor;

  • identification that yard workers had to pay for their own medical checks, as a result the yard agreed to cover the initial health check for all workers on the yard;

  • findings that workers’ contracts and offer letters were not provided in the workers’ native language: the yard now translates all offer letters and contracts in a language understable to workers;

  • some subcontractors retained passports of the workers. The yards now ensure that all workers including workers in their supply chain possess their personal ID and passports.

During 2023, 100% of suppliers signed the SBM Offshore Supply Chain Charter. As part of embedding human rights into business, SBM Offshore developed qualification questionnaires in four languages (English, French, Portuguese and Chinese).

SBM Offshore performs a desktop human rights risk assessment for all new suppliers from criticality D and above, based on SBM Offshore’s Human Rights Standards. Based on the outcome, SBM Offshore engages with suppliers for understanding, to raise awareness, aiming for improvement. In case of potential risks, identified during qualification, SBM Offshore reaches out to individual suppliers. Non-qualification will be a result of continued potential high risk to and if it considers there is a continued potential high risk to human rights.

In 2023, 90.4% of new suppliers underwent screening based on forementioned procedures. 460 new suppliers were assessed, using the desktop human rights questionnaire, of which:

• 83% were categorized as potential low-risk;

• 14% were categorized as potential medium-risk;

• 3% were categorized as potential high-risk;

• 0% were confirmed as actual high risk, and therefore 0 terminated agreements.

After detailed assessment and engagement took place, two suppliers remain categorized as potential high risk temporarily. SBM Offshore is engaging with them on the implementation of an action plan.

Furthermore, SBM Offshore undertook an impact assessment for Guyana (see textbox).

SBM Offshore’s  Speak Up Line, managed by an independent third party, is available 24 hours a day, 365 days a year, supports multiple languages and allows anonymous and confidential reporting and any appropriate follow-up. This process is foundational to SBM Offshore’s grievance mechanism. SBM Offshore tracks and monitors progress on corrective actions through specific action plans. Furthermore, SBM Offshore tracks the awareness, trust and effectiveness of its measures and grievance mechanisms based on progress and the feedback that SBM Offshore receives from stakeholders.

One of the actions taken, based on feedback, was the improvement of the accessibility of grievance mechanisms to subcontracted workers, who may not use or distrust conventional channels. In 2023, SBM Offshore continues to use alternative channels at a yard site, such as hotlines, available to all workers.

Another issue raised through the grievance mechanism at a yard was related to workers paying fees to a third party to procure visas for their relatives. The visas, however, were not procured. After engagement by SBM Offshore, the yard's management intervened and ensured repayment to the workers.

In early 2021, SBM Offshore took action when a third-party assessment of one of its suppliers in South America revealed issues related to indicators of forced labor. As part of the due diligence process, SBM Offshore engaged with the supplier, and a third-party human rights expert. The team communicates regularly to guide and oversee the implementation of a remediation plan.

By mid 2023, most remediation activities were completed. This included assisting the supplier in establishing competence and training procedures, implementing scheduling policies, digital time recording, and payment systems to ensure both wellbeing and training opportunities for their workers. To close the assessment, a close-out audit was conducted to gather feedback from the workers. This project provided valuable insight into SBM Offshore’s supply chain and demonstrated its approach of effective remediation practices.

SBM Offshore set a target for 2023 to deliver two worker welfare initiatives per region that contribute to remedying human rights impacts aligned with SBM Offshore’s Human Rights Standards, including current salient issues. SBM Offshore is pleased to report that it was able to achieve the target. Some examples of results include: removal of abusive termination procedures in Brazil; provision of paid health checks in China; and improved personal protection equipment distribution in Singapore.

SBM Offshore actively promotes human rights training and awareness through classroom sessions, webinars, and safety moments. In 2023, SBM Offshore provided a specialized awareness session on human rights as part of Life Day, with 1,695 SBMers attending this online session worldwide. Additionally, 91% of target employees have completed online training on business and human rights. In December, 348 own workforce, value chain workers attended the Worker Welfare Day training.

SBM Offshore teams up with others to make a meaningful contribution, with the following initiatives being key:

• Active member of Building Responsibly, to raise the bar in promoting the rights and welfare of workers across the industry.

• Continuous dialogue with its customers, other contractors, and suppliers to ask for collaboration and support in addressing human rights issues.

• In 2023, SBM Offshore worked with other companies to improve the rights and welfare of migrant workers in its supply chains, which is central to responsible business conduct and a just transition. As a first step, the companies drafted a set of principles and guidelines in consultation with suppliers and civil society organizations. The aim is to improve accommodation and transport for migrant workers, drive the ’employer pays’ principle and implement effective grievance mechanisms. The next step is to pilot the principles and guidelines in fabrication yards in Singapore.

SBM Offshore continues to progress on its human rights journey and the need to strengthen certain parts of its internal work processes. This includes performing further due diligence on medium-risk suppliers, in-depth analysis for regional suppliers and developing professionals within different disciplines that have the competency and confidence to communicate SBM Offshore’s human rights expectations in a compelling way.

SBM Offshore will prepare for any requirements in the light of the Corporate Sustainability Due Diligence Directive (CSDDD) which is expected to become effective in 2026.

2.1.4 Operational Excellence and Quality

SBM Offshore recognizes that in order to be a high-performance company, it must strive for excellence. SBM Offshore maintains a dedicated Operational Excellence organization at Group level, incorporating resources with diverse expertise in operational, technical and process fields.

Key performance indicators for Operational Excellence and Quality include: uptime of the fleet, delivery of projects, performance of the supply chain, costs of non-quality and certifications.

2.1.4.1 Operational Excellence and Quality

Operational Excellence and Quality includes themes such as ’Operational Governance’ (section 3.7) and ’Target Excellence’ focusing on ’No Harm, No Defects, No Leaks’. This creates an environment to share SBM Offshore’s experiences by leveraging collective knowledge, improving organizational learning and fostering collaboration.

The topic of Operational Excellence is embedded in SBM Offshore’s projects, supply chain and fleet operations, and supported by the Operational Excellence Function and the Quality and Regulatory Function.

SBM Offshore remains committed to full compliance with all applicable laws and regulations. SBM Offshore delivers products and services meeting regulatory requirements and applicable specifications and requirements imposed by relevant stakeholders, by:

• Promoting a quality and compliance culture.

• Maintaining SBM Offshore’s certification to the ISO 9001:2015 Standard.

• Providing systematic identification of applicable regulatory requirements and ensuring their implementation.

• Achievement and maintenance of conformity, compliance and acceptance of SBM Offshore’s products and services.

• Supporting continuous improvement of business processes and ways of working.

A key aim of the Operational Excellence function is to create a culture of continuous improvement within SBM Offshore. The function works in close collaboration with the Product Lines, Global Resources and Services and Operations organizations – for instance on the analysis of past performance and definition of lessons learned. These feed improvement of business processes and tools within the organization.

Through the above, SBM Offshore mitigates risks related to project execution, process safety, human capital, changes in laws and regulations and operational risks such as loss of integrity of aging assets, loss of certificate of class and disruption to the supply chain.

During 2023, all SBM Offshore’s offshore facilities were accepted by all relevant authorities and regulators, with all related permits, licenses, authorizations, notifications and certificates duly granted and maintained. Offshore facilities have also remained in Class at all times, as required from both statutory and insurance perspectives. SBM Offshore incurred one operational fine that exceeded the threshold for the category of fines considered ‘significant’ (see section 5.2.5).

Furthermore, SBM Offshore actively promoted ’Target Excellence’ through – amongst others – workfront engagements, stand downs at yards, vessels and offices. SBM Offshore is proud of:

• Renewal of SBM Offshore’s ISO 9001:2015 certification.

• Effective use of independent third parties for inspection, verification and assurance services related to Execute and Operate activities.

• Development and launch of the ’Quality Journey’ program.

• Organization of a global ’World Quality Week’.

• The further improvement of the Learning from Performance process within Projects, and Fleet Operations.

• Implementation of applicable lessons learned in the tendering and the set-up for future FPSO projects.

• Further digitalization of project and function performance dashboards.

The outcomes in SBM Offshore’s projects, supply chain and fleet are described in the following sections. In 2024, SBM Offshore will build on this and put focus on the delivery of the ’Quality Journey’ program.

2.1.4.2 Projects

SBM Offshore continues to focus on the development of its portfolio of floating solutions to deliver the best projects aligned with customer needs, building on SBM Offshore’s technology expertise and track record. The success of projects is determined by performance against a budgeted schedule, cost and quality within the HSSE and Target Excellence approaches mentioned in sections 2.1.2 and 2.1.4. KPIs are set accordingly and managed through SBM Offshore’s Project Directorate and Project Dashboards.

The management approach remains based on (i) an early engagement with customers; (ii) standardization in product design and execution in order to improve competitiveness, quality and time to market and to reduce emissions; and (iii) an increasing focus on the energy transition, using SBM Offshore’s core competencies to develop affordable, low-carbon solutions in the  FPSO as well as in the renewable and other alternative energy markets.

In early 2023, the COVID-19 pandemic situation improved, with the lifting of all restrictions in China.

The main challenges in 2023 for SBM Offshore were the high workload of the main vendors (equipment and bulk) and construction yards leading to increased schedule pressure from the yards. Project teams maintained their focus on project delivery and safe operations, while working together, across time zones, with customers, yards and suppliers, to limit delivery delays. SBM Offshore is grateful to all the project stakeholders for making this happen.

• FPSO Sepetiba – The FPSO safely produced first oil at the end of 2023 with a zero-flaring target in less than 60 days, which has still to be achieved. The FPSO was formally on hire as of January 2, 2024. Petrobras will lease the FPSO for 22.5 years, under a contract signed in 2019.

• FPSO Prosperity – The vessel is the first that SBM Offshore is delivering under the long-term FPSO supply agreement signed with ExxonMobil in 2019. The FPSO safely started production in November 2023 with gas-injection start-up in an industry record time. Awarded the SUSTAIN-1 notation by the American Bureau of Shipping.

• FPSO Almirante Tamandaré – The topsides modules lifting campaign is progressing along with their integration. The  FPSO delivery continues to be on track for 2024 and the client is expecting first oil from the field in early 2025.

• FPSO Alexandre de Gusmão – Detailed engineering and supply chain activities are almost complete. The hull has been outfitted with riser balconies and mooring porches and left drydock end-June 2023 for final outfitting and topsides integration. Topsides fabrication in Brazil is complete and under completion in China. First oil is expected in 2025.

• FPSO ONE GUYANA – Detailed engineering and supply chain activities are under completion in the Schiedam office. The hull has been outfitted with riser balconies and mooring porches and will leave drydock beginning-2024 for final outfitting and topsides integration. Topsides fabrication in Singapore and China is on-going and will be completed by mid-2024.

• FPSO Jaguar – SBM Offshore started the Front-End Engineering Design (FEED) phase for ExxonMobil Guyana on the Whiptail development project, ExxonMobil Guyana’s sixth FPSO. This project is subject to Guyana government approvals and project sanction and release of the second phase of work by the client. SBM Offshore will design and construct the FPSO using its industry-leading Fast4Ward^® program, allocating SBM Offshore’s seventh new-build MPF hull combined with several standardized topsides modules. The FPSO will be designed to produce 250,000 barrels of oil per day, will have associated gas treatment capacity of 540 million cubic feet per day and water injection capacity of 300,000 barrels per day. First oil is expected in 2027.

• In 2023, two Fast4Ward^® MPF hulls were delivered: MPF B in CMHI for FPSO Almirante Tamandaré and MPF 4 at SWS for FPSO Alexandre de Gusmão.

• Two MPF hulls are under fabrication: MPF 5 at SWS for FPSO Jaguar and MPF C in CMHI for a future potential FPSO project.

Following successful installation of the Turret Mooring System (TMS) modules on to the Johan Castberg FPSO, SBM Offshore has been supporting its client Equinor to progress the turret integration activities in Norway, and this year has seen the successful installation of the swivel stack, a specialized product developed by SBM Offshore to transfer fluids from the wells to the production facility onboard.

In addition to supporting SBM Offshore’s own FPSO Projects, providing expertise on mooring system designs, the TMS product line also started a FEED for a turret moored FSO for the Trion project.

SBM Offshore has installed its first pilot project in floating offshore wind. The three floaters for the Provence Grand Large project, jointly owned by EDF Renewables and Maple Power, will account for approximately 10% of the globally installed floating wind electricity generation capacity in 2023. This is the first floating offshore wind project installed in France and the first project worldwide using tension leg mooring technology, which has minimal motion and seabed footprint. This technology enhances electricity generation and reduces maintenance costs. It is also the first floating wind project financed by commercial banks. Lessons learned have been integrated into SBM Offshore’s Float4Wind^® concept, which is optimized for mass production and competitiveness for large offshore floating wind farms.

As part of its offshore installation services, SBM Offshore successfully and safely concluded several offshore operations, including the Coral FLNG hook-up, the mooring installation campaign for FPSO Prosperity for ExxonMobil Guyana, the installation three floaters for the Provence Grand Large project and other projects.

SBM Offshore will continue to standardize its products in line with the Fast4Ward^® program while seeking to produce environmentally friendlier solutions in line with its emissionZERO^® program. In addition, SBM Offshore will continue to fine-tune its product offering to offer competitive and industrialized solutions to the floating offshore wind and other alternative energy markets. SBM Offshore is in the energy transition business and will continue to develop new products to serve its mission by leveraging SBM Offshore’s unique capabilities in floating solutions.

2.1.4.3 Supply Chain

SBM Offshore’s supply chain activities are a key contributor to Quality and Operational Excellence in its projects and operations. The Supply Chain department’s ambition is to provide the best value to SBM Offshore’s overall goals and objectives. SBM Offshore expects its suppliers to act responsibly, in line with the Code of Conduct and its Supply Chain Charter. The latter provides expectations and guidance to address environmental, social and governance related impacts – in line with SBM Offshore’s material topics.  The supplier qualification process adopts a risk-based approach in assessing suppliers for SBM Offshore’s business needs as well as screening for environment and social risks such as climate targets and human rights. 

In order to achieve these ambitions and standards, SBM Offshore has set the following targets for its supply chain activities.

• Strengthen the performance of the Supply Chain function on a global scale to include all areas of business.

• Incorporate a strategic mindset into tendering activities.

• Optimize resource management and include regional talent to retain a Product Lifecyle approach.

• Continually seek environmentally sound solutions.

• Digitize and modernize ways of working using current tools/systems.

To address the above, SBM Offshore defined six pillars in 2022 that enable Supply Chain to continue to address the above topics. The supply chain organization contributes to SBM Offshore’s strategy as described in section 1.3.2 and is part of the Global Resources and Services organization explained in section 1.3.3.

The supply chain organization has continued developing further around six strategic pillars described below to enhance the resilience of the function as a whole.

Strengthened the performance of the function on a global scale to include Projects, Operations and non-Project-related business with the following activities:

• Implemented a new inspections process for main and sub-suppliers on projects for effective quality control to minimize non-conformity and carry-over work in the construction yards. 

• Implemented new global supplier qualification process to reduce time taken to qualify while adopting a global risk-based approach towards the qualification of new suppliers.

• Diagnosis of a global supplier performance assessment methodology and process which will drive SBM Offshore towards a more automated and efficient solution.

• Implemented revamped post-order management processes to remove inefficiencies and address the three key aspects of cost, quality and schedule.

• Driven key global issues such as data capabilities, human rights and sustainability goals within the Supply Chain community.

• Strategic early engagement with suppliers combined with development and implementation of new ways of working during the proposal phase of SBM Offshore’s projects to enable a structured, transparent and strategic approach to Supply Chain inputs into its tenders.

• Joint product workshops with key suppliers on supply chain efficiencies, new technology and energy transition initiatives.

• Optimized resource management on SBM Offshore’s projects to maximize utilization of skill-sets, for example by using its piping procurement hub in India and incorporating in-house quality control personnel into project organization.

• Further alignment with the Product Line organization with dedicated capabilities for FPSOs, and renewable projects, and strengthening post-order management capabilities.

• Partnership with an industry leader in predictive inventory management to achieve >90% inventory accuracy in warehouses supporting SBM Offshore’s operating fleet.

• Worked with key suppliers to co-develop technologies for carbon capture.

• Analyzed scope 3 emissions disclosures from product manufacturers for SBM Offshore’s FPSOs and worked with them to explore avenues to reduce GHG emissions.

• Supported renewable product focus for development of new energy projects.

• Tracked CO₂ emissions for international freight shipments for SBM Offshore’s operating fleet.

• Utilized regional supply chain skills and market knowledge by continuing to develop local talent in Bangalore (India), Rio de Janeiro (Brazil) and Shanghai (China).

• Major contribution to the design and implementation of SBM Offshore’s global ERP system.

• Worked with the external supply chain community to support digital-twin objectives.

• Modernized data management and reporting tools to increase reporting accuracy and monitor performance across all aspects of Supply Chain’s support to the business.

• 884 new suppliers were qualified in 2023 of which 100% have signed SBM Offshore’s Supply Chain Charter.

• 90.4% of the new suppliers qualified were screened for Human Rights.

• Approximately 68% of reduction in supplier qualification duration since October 2022 using the new supplier qualification process and modernized digital tools.

Supply Chain will continue its evolution towards a value-added globalized function to achieve and maintain high standards of performance across all areas of its business including, but not limited to, supporting human rights, climate change measures, digitalization, quality assurance and quality control, resource and talent management across all SBM Offshore’s centers, enterprise management systems, supplier performance and qualification assessments, and energy transition measures.

2.1.4.4 Fleet

The ‘Ocean Infrastructure’ value platform encompasses a fleet of 15 FPSOs and 1 semi-submersible unit, geographically distributed across the globe. To support the energy transition, the fleet aims to provide traditional hydrocarbon energy with the lowest possible carbon emissions during the production phase. The fleet adheres to, and applies, the management approach of the wider SBM Offshore organization. Key to this are policies, commitments and mechanisms described in sections 2.1.2 and 2.1.4. There is a sharp focus on continuous improvement. This is achieved by identifying learning opportunities and embedding the resultant lessons into SBM Offshore’s corporate memory; the Group Enterprise Management System (GEMS) and Group Technical Standards (GTS).

An experienced workforce comprising of more than 3,600 personnel ensures the safe, reliable and efficient operation of SBM Offshore’s offshore assets, generating predictable and sustainable revenue and operating cash-flows for the business.

The SBM Offshore fleet had the following historic performance:

• Over 7.2 billion barrels of production cumulatively to date.

• 10,840 oil offloads cumulatively to date.

• 388.4 cumulative contract years of operational experience¹.

SBM Offshore employs a proactive, risk-based approach to asset management, leveraging digital reliability and integrity solutions to automate surveillance, enabling a more optimized deployment of resources and increased efficiency and availability of safety, production and marine systems. To ensure that SBM Offshore’s activities have a positive and sustainable impact on the local communities in which SBM Offshore is present, the fleet has several programs, aligned to the UN Sustainable Development Goals, focused on wellbeing and personnel development, emission reduction and protecting the environment.

There has been an exceptionally high volume of activity in 2023 due to a number of integrity campaigns performed across the fleet. These campaigns leveraged a large external workforce and this, combined with the type of activities performed, has, in part, led to higher incident rates in the fleet this year.

The majority of these incidents have been relatively minor in nature and the number of events with potential for significant injury or Process Safety consequence have reduced as a result of ongoing focus on leading activities targeting areas of most risk.

Initiatives and developments to enhance operational safety, process safety, quality and efficiency were progressed throughout the year:

• Ongoing deployment of the health and wellbeing program.

• Maintained focus on Process Safety Management, barrier management and enhanced Marine Safety.

• Development and piloting of an enhanced Operational Assurance Program.

• Implementation of a revised online Competence Assurance System.

• In 2023, two new units were delivered:

  • FPSO Prosperity joined the fleet in Guyana, achieving first oil on November 14, 2023.

  • FPSO Sepetiba joined the fleet on January 2, 2024, achieving first oil on December 31, 2023.

• In Brazil, decommissioning of FPSO Capixaba continued, the unit is scheduled to depart Brazilian waters early in 2024.

• In Angola, SBM Offshore signed two Share Purchase Agreements with its partner Sonangol EP for the acquisition of Sonangol’s equity shares in the lease and operating entities related to FPSOs N’goma, Saxi Batuque and Mondo.

• In Guyana, SBM Offshore and ExxonMobil Guyana implemented a new integrated operating model:

  • On May 2, 2023, SBM Offshore announced it has signed a 10-year Operations and Maintenance Enabling Agreement with Esso Exploration & Production Guyana Ltd. for the operation and maintenance of the fleet of FPSOs in Guyana.

  • A transformation program was established to develop and implement an integrated operating model supported by fully defined and sustainable organization construct, processes and tools.

  • This strategy supports SBM Offshore’s long-term business vision in Guyana, enabling SBM Offshore to perform local and sustainable investments in people and infrastructure as well as to deploy its digital and operational technologies to the Guyana fleet.

• In Porto, the Operations tactical center, implemented in 2022, became more established in 2023 with continued growth and increased remote support capabilities.

• The Digital Function has been consolidated to facilitate development of digital solutions and to unlock synergies in IT and Digital Ecosystem across the full product life-cycle.

• The deployment of SBM Offshore’s new ERP system continued in Guyana. The system is now generating structured data that is used to identify further efficiency and performance improvement opportunities.

• SBM Offshore’s 5-year Robotics Program, initiated in 2022, now has a dedicated team that has worked on three initiatives this year, of which one is in co-development with its client. The program aims to create a new technical discipline that will develop and deploy robotics technology in the fleet, following three key objectives: improve human safety, optimize working practices and enhance asset integrity.

• A new Brownfield Project Services (BPS) product line was formed to provide the following services in support of SBM Offshore’s and its clients’ fleets:

  • Brownfield project execution

  • Fleet support services

  • Production optimization feasibility studies

  • Shutdown management and planning

  • Decommissioning and responsible recycling services

BPS will leverage SBM Offshore’s project execution expertise to serve the needs of its growing fleet. Benefits already realized include significant production increases on FPSOs Liza Destiny and Liza Unity through debottlenecking assessments and upgrades. BPS is also conducting tank repair works onboard FPSO Cidade de Anchieta.

As offshore installations age, the original coating systems become less effective, leading to an increase in the integrity scope over time. Capacity to accommodate resources onboard is limited and maintaining the integrity of aging assets is a major challenge for the industry. Production on FPSO Mondo was shut in for 5 months to perform integrity inspections and repair scope that had accumulated through the COVID-19 period.

SBM Offshore is implementing the Pro-active Integrity Program for the fleet to avoid reoccurrence and to instill a strong integrity culture in which SBM Offshore prioritizes compliance with inspection schedules, implementation of new technologies and corrosion prevention.

The new Asset Management Philosophy introduced in 2022 was further developed in 2023 based on initial feedback. The main purpose is defined as providing maximum availability of the Production, Marine and Safety systems on SBM Offshore's assets, by ensuring reliability and integrity through the lines of defense model as follows:

1. Predict: leveraging digital and artificial intelligence solutions to perform surveillance and early identification of potential anomalies.

2. Prevent: enriched asset management tools to improve the quality and efficiency of maintenance and inspection activities.

3. Recover: robust anomaly management and response to ensure that recovery from events is addressed and in the shortest possible time.

4. Improve: continuous improvement through feedback of operational experience into the design process for new builds and the operating fleet.

The main strategic focus in 2023 was to optimize the maintenance and inspection workload offshore in order to free up resources to perform hull and piping integrity inspection and fabric maintenance campaigns on all assets. The optimization resulted in a 30% reduction in maintenance work orders and a positive trend of compliance with the class hull inspection program can be observed.

SBM Offshore commits to the safe and environmentally sound recycling of assets at the end of their lifecycle, performed in full compliance with SBM Offshore’s Responsible Recycling Policy, applying – amongst others – the principles of the EU Ship Recycling Regulation 1257/2013 or equivalent.

During 2023, two projects were in progress; the decommissioning and preparing for recycling of FPSO Capixaba and the recycling of the Deep Panuke MOPU PFC. Details on these projects and the management approach to decommissioning are provided in section 2.1.12.

New Fast4Ward^® assets will join the fleets in Brazil and Guyana, leading to growth offshore and onshore:

• In Guyana, FPSO Prosperity has arrived and preparations are ongoing for the arrival of FPSO ONE GUYANA in 2025. SBM Offshore continues to expand and embed its presence in-country, working with the local community on several social and environmental projects.

• In Brazil, the three new assets (FPSO Sepetiba, FPSO Almirante Tamandaré and FPSO Alexandre de Gusmão) will be supported from the Rio office and preparations are already in place for FPSO Sepetiba in 2023.

SBM Offshore will continue to develop digital solutions to enhance its surveillance and predictive capabilities. These digital solutions are being utilized to reduce the scope required to maintain the reliability of SBM Offshore’s assets. This will enable more resources to be deployed on integrity inspection, fabric maintenance and repair scopes. In parallel, proactive actions are being taken to reduce corrosion on SBM Offshore’s assets and consequently reduce the overall fabric maintenance and repair scopes.

SBM Offshore has set long-term targets for emission reduction in downstream leased assets that will support SBM Offshore’s contributions to climate change mitigation and path to net zero, as explained in sections 1.4.3 and 2.1.7. One of the commitments is to engage with clients and joint venture partners to ensure the fleet is aligned with a path towards net zero, as per SDG 7 commitment explained in section 2.2.

1. The cumulative contract years of operational experience is calculated based on the number of days in operations from first oil for each unit until the last day that SBM Offshore has operated and continue to operate, divided by 365.

2.1.5 Employee Wellbeing

SBM Offshore sees the wellbeing of its workforce as a core driver for personal growth and business performance. Skill retention and the professional growth of employees are required to deliver against the energy transition. At the same time, SBM Offshore is aware that its activity has inherent risks and impacts on health, safety and wellbeing. Moreover, in times of uncertainty and volatility, it is key to ensure the competitiveness of SBM Offshore’s workforce through efficient management of its geographical footprint. SBM Offshore strives to understand and manage its impacts – both positive and adverse – on SBM Offshore’s employees’ wellbeing through the application of the following key levers:

• The HR cycle.

• Strategic workforce planning.

• Measuring employee engagement and perception through employee surveys.

• HSSE management.

• Running a diversity and inclusion (D&I) program.

• Participation in a health check program and actions taken for mental health and wellbeing.

In 2023, SBM Offshore focused on talent acquisition and continuous employee development. With its mission to decarbonize oil and gas production and develop new technologies for future solutions, SBM Offshore is working hard to attract, retain and develop employees who are motivated to contribute to the energy transition. Committed to training its leaders, SBM Offshore is preparing employees for the challenges ahead and ensuring their skills match the competencies needed to fulfil ambitions through functional and leadership training programs. With an emphasis on managing capacity, through both permanent employment and an increasing percentage of flexible workforce, SBM Offshore is adopting an agile way to adapt to business needs. The Corporate Business Solutions Center (CBSC) opened in 2023 to increase the efficiency and productivity of part of the enabling functions.

SBM Offshore recognizes that a company’s working environment and culture contribute to organizational success and has included employee wellbeing as a materiality topic in 2023. The Wellbeing Matters Program, also deployed in 2023, is a holistic framework to support employees’ physical and mental health and wellbeing, further explained in section 2.1.2.

SBM Offshore listens to the voice of its employees through the enablement of continuous feedback and the building of follow-up plans throughout the employment lifecycle on topics such as wellbeing, diversity and inclusion, career perspective and personal development.

SBM Offshore was able to recruit 1,178 new staff, particularly in Brazil, Guyana, and Portugal. New joiners are successfully prepared for their jobs through local onboarding. Digital and in-person leadership training courses were held to improve management skills, based on SBM Offshore’s ’RISE’ leadership program. Further learning programs were developed and introduced, focused on increasing functional competencies in key business functions. Sustainability programs continued to be a focus area, in line with SBM Offshore’s commitment to sustainability and providing valuable insights into climate action.

The creation of the CBSC resulted in a total decrease of around 120 supporting positions in Monaco, the Netherlands and Switzerland. SBM Offshore made sure both the severance package and the psychological support given to the affected individuals would minimize as much as possible the impact it had on their wellbeing.

SBM Offshore’s global community of Diversity and Inclusion Ambassadors organized a number of events, both specific to the context of their location and as part of the quarterly global campaigns, driving awareness on topics such as gender equity, sexual orientation (LGBTQIA+) and cultural celebrations. The Diversity and Inclusion Policy was promoted throughout the employee experience, as SBM Offshore is explicitly committed to providing equal opportunities for all and does not tolerate discrimination. SBM Offshore views and experiences its diverse workforce as a competitive advantage, enabling SBM Offshore to attract the best talent and integrate different views into its global operations. In this regard, SBM Offshore recruits, employs and promotes people solely on the basis of their qualifications and competence for the position. In 2023, SBM Offshore developed and piloted an initiative to promote women in engineering disciplines and to encourage younger generations to take an interest in the energy transition business, as part of SBM Offshore’s SDG 10, Reducing Inequalities for All. SBM Offshore will scale up this initiative in 2024 and will continue to prioritize the Diversity and Inclusion (D&I) program, dedicated to cultivating an inclusive workplace.

• Workforce increased by 5% to 7,416.

• 158,227 online applications for jobs reviewed: 8,709 retained for the recruitment process.

• Proportion of flexible workers in the workforce at 23% in 2023.

• 40 average training hours per employee.

• SBM Offshore had a turnover rate of 13%.

• SBMers achieved an overall engagement score of 81% in the engagement survey 2023. 82% of SBM Offshore’s own workforce that responded to the survey expressed satisfaction in their job.

• The gender pay gap SBM Offshore achieved is 0.96 globally in 2023.

• 112 people engaged in local Unconscious Biases Awareness sessions.

With the continuing digitalization of people management systems, the aim will be to reinforce workforce planning and better anticipate and prepare for future demands. Digital tools will be further rolled out to support virtual reality and e-Learning training programs, leveling up SBM Offshore’s approach to both onshore and offshore employees, and garnering employee experience insights to further aid recruitment and retention efforts. SBM Offshore will further its ambitions to gather the voice of employees to strengthen feedback processes, in particular from candidates, recently onboarded staff and personnel exiting the organization.

2.1.6 Economic Impact

SBM Offshore’s primary business segments are: Lease and Operate; and Turnkey. Although financial results are presented per segment, activities between business segments are closely related. In addition to reporting under International Financial Reporting Standards (IFRS) guidelines, SBM Offshore’s Directional reporting methodology was introduced to reflect Management’s view of SBM Offshore and how it monitors and assesses financial performance. This chapter of the Annual Report presents numbers based on directional reporting.

SBM Offshore provides Directional Revenue and Directional EBITDA guidance, which is updated in the event of material change, if any. Economic performance is a result of all company activities, governed as per sections 3.1 and executed as per the Management Approach sections in chapter 2.

Economic performance is measured through profitability, cashflow, backlog and the financial position of SBM Offshore.

Directional revenue for full-year 2023 came in at US$4,532 million, an increase of 38% compared with 2022. This increase is mainly driven by the Turnkey segment increasing to US$2,578 million (US$1,525 million in 2022) mostly due to the sale of FPSO Liza Unity, completed in November 2023 and the start of FPSO FEED work for the Whiptail development project partially offset by the partial divestment on two projects at the beginning of 2022 (FPSO Almirante Tamandaré and FPSO Alexandre de Gusmão), which allowed SBM Offshore to recognize Directional revenue for all the EPCI related work performed on these projects up to divestment date in the year 2022 to the extent of the partners' ownership in lessor related SPVs and the completion of FPSO Liza Unity project in February 2022. Directional Lease and Operate revenue was US$1,954 million an increase versus US$1,763 million in the prior period. This reflects mainly FPSO Prosperity joining the fleet upon successful delivery of the EPCI project during the last quarter 2023, an increase in reimbursable scopes and an improved performance of the fleet, partially offset by FPSO Capixaba, which finished production in 2022.

Directional EBITDA amounted to US$1,319 million in 2023 compared with US$1,010 million in 2022. This increase is driven by the Turnkey segment with the sale of FPSO Liza Unity (completed in November 2023 with recognition of associated margin on the asset sale) partially offset by:

• (i) some prior-period positive one-off impacts;

• (ii) the completion of FPSO Liza Unity project in February 2022;

• (iii) a reduced level of progress on FPSO Almirante Tamandaré and FPSO Alexandre de Gusmão during the current year, consistent with the commencement of topsides’ integration; and

• (iv) impacts linked to pressure on the global supply chain and the consequences of the pandemic.

As a result, Directional Turnkey EBITDA increased from US$7 million in the year-ago period to US$296 million in the current year

Directional Lease and Operate EBITDA increased from US$1,080 million in 2022 to US$1,124 million in 2023 mostly explained by the same drivers as for the Directional Lease and Operate revenue, partially offset by additional non-recurring maintenance costs on the fleet under operation and some prior-period positive one-off impacts including some insurance recoveries.

The other non-allocated costs charged to Directional EBITDA amounted to US$(101) million in 2023, a US$(24) million increase compared with the US$(77) million in the year-ago period, which is mainly explained by the implementation of an optimization plan related to the SBM Offshore’s support functions’ activities (including US$11 million of restructuring costs), and continuing investment in the SBM Offshore’s digital initiatives.

2023 Directional net income attributable to shareholders stood at US$524 million, an increase compared with US$115 million in the previous year mainly driven by the strong operating performance translated in the increase of Directional EBITDA.

Thanks to the strong contribution of the fleet and the proceeds received from FPSO Liza Unity sale, SBM Offshore generated US$1,616 million of Directional net cash flows from operating activities over 2023.

These operating cash flows, drawdowns on project financing, the RCF, the MPF RCF hull financing, the settlements of interest rate swaps related to the financing of FPSO Almirante Tamandaré and FPSO Alexandre de Gusmão, the funding loan agreement received from CMFL in relation to FPSO Cidade de Ilhabela, together with some of the SBM Offshore’s existing cash was primarily used to: (i) invest in the five FPSOs under construction over the period, and some initial scope for the FPSO for the Whiptail development project and the two Fast4Ward^® new build multi-purpose hulls, (ii) repay the project loan following the FPSO Liza Unity sale, (iii) pay dividends to shareholders; and (iv) service the SBM Offshore’s non-recourse debt and interest in accordance with the respective repayment schedules.

As a result, Directional cash and cash equivalents decreased from US$615 million at year-end 2022 to US$563 million at year-end 2023.

The Pro-forma Directional backlog, which is presented on a pro-forma basis in section 4.1.4, slightly decreased to US$30.3 billion at December 31, 2023, compared with US$30.5 billion at year-end 2022.

This slight decrease was mainly the result of (i) the signed 10-year OMEA for the Guyana FPSO fleet and (ii) the awarded initial scope to begin FEED activities and secure a Fast4Ward^® hull for the FPSO for the Whiptail development project partially offset by the turnover for the period, which consumed US$4.5 billion of backlog. SBM Offshore’s pro-forma Directional backlog provides cash flow visibility of 27 years, up to 2050.

SBM Offshore’s Directional financial position has remained strong as a result of the cash flow generated by the fleet and the successful adaptation of the Turnkey segment to a more competitive and unpredictable market.

Directional shareholders equity increased from US$1,078 million at year-end 2022 to US$1,448 million at year-end 2023. This was primarily due to (i) a positive net result of US$524 million in 2023; (ii) an increase of the hedging reserves; partially offset by (iii) dividends distributed to the shareholders decreasing equity by US$197 million.

It should be noted that under Directional policy, the contribution to profit and equity of the substantial FPSO program under construction will largely materialize in the coming years, subject to project execution performance, in line with the generation of associated operating cash flows.

Directional net debt increased to US$6,654 million from US$6,082 million at year-end 2022. While the Lease and Operate segment continues to generate strong operating cash flow together with the net cash proceeds from the sale of FPSO Liza Unity, SBM Offshore drew on project financing, the Revolving Credit Facility RCF, and the new Revolving Credit Facility for MPF hull financing to fund continued investments in growth.

Almost half of SBM Offshore’s debt as of December 31, 2023 consisted of non-recourse project financing (US$3.3 billion) in special purpose investees. The remainder (US$3.8 billion) mainly comprised of (i) borrowings to support the on-going construction of four FPSOs, which will become non-recourse following project execution finalization and release of the Parent Company Guarantee, (ii) SBM Offshore’s Revolving Credit Facility (RCF) which was drawn for c.US$550 million as at December 31, 2023, and (iii) the new US$210 million Revolving Credit Facility for MPF hull financing, completed and fully drawn in December 2023. Cash and undrawn committed credit facilities amount to US$2,276 million at December 31, 2023.

To diversify its sources of debt and equity funding and to accelerate equity cash flow from the backlog, the Company finalized the funding loan agreement with CMFL and received US$125 million in relation to FPSO Cidade de Ilhabela.

For a total overview of SBM Offshore’s financials under IFRS, please refer to section 4.2 Consolidated Financial Statements of the Annual Report.

2.1.7 Emissions

SBM Offshore is committed to a strategy and actions compatible with its ambition to achieve net zero by no later than 2050, including emissions in scope 1, scope 2 and scope 3 – downstream leased assets. SBM Offshore’s Sustainability Policy is explicit about a path towards zero emissions. Associated targets and transition levers are explained in section 1.4.3.

The topic of emissions is dealt with in various parts of the organization, as explained under the HSSE and Environmental Reporting approaches in sections 2.1.2, 5.2.1 and 5.2.2.

Emissions management and the mission to structurally bring emissions down builds on years of action. For example, gas flaring intensity in 2023 is 14% lower than in 2019, mainly due to target-setting and increased production efficiency and 55% lower compared to 2016. As in previous years, in 2023 SBM Offshore set annual targets to reduce flare emissions on its activities, continue to develop low- and non-carbon solutions and aim to have zero oil spills.

The table below shows the status on greenhouse gas emissions versus baseline and targets, as per end of 2023.

1. Applicable to emissions related to offices, and subject to availablity of green energy for the scope.

SBM Offshore reports on CDP and uses IOGP statistics to steer its ambitions, effectiveness of actions and performance. SBM Offshore strives to outperform industry benchmarks on the following indicators:

• GHG emissions¹, gas flare², energy consumption³.

• Oil in produced water⁴, oil spill per production⁵.

SBM Offshore focuses on GHG emissions while also addressing other emissions − such as emissions to water and non-GHG emissions. Further information can be found in sections 2.2 and 5.3.2. No emissions in this report are subject to regulated trading schemes and no carbon credits have been applied during 2023.

The above supports the management risks in the light of climate change and social license to operate, as mentioned in section 1.4.2.

During 2023 a total of 5.9 million tonnes of GHG emissions are reported, 99% of this being scope 3 emissions. The total is 1.7% lower than in 2022, mainly due to lower emissions in Scope 3 – Purchased Goods and Services. During 2023, around 1 million tonnes of CO₂ was removed from fuel gas and export gas streams.

Compared to 2022, reported Scope 1 emissions have been expanded with emissions in SBM Offshore’s laboratory and the use of generators deployed as electricity back-up. Therefore, Scope 1 emissions in 2023 represented a total of 489 tonnes of CO₂e, a decrease of 8.9% compared to the same scope in 2022 – considered to be due to lower gas use in the Netherlands due to better steering on data and a milder winter in 2023.

The intensity, tonnes GHG CO₂e per employee is 0.07.

Purchased electricity in offices accounts for 1,811 tonnes of GHG CO₂ equivalent, based on the average energy mix of each location, which is 11.2% lower compared to 2022. There has been consolidation of office space in the USA and Monaco, leading to lower levels of energy use and maintenance to elevators for a longer period. The effects of this was higher than the effect of business activity growth in Portugal and Guyana. Accounting for the electricity actually purchased through green contracts, the amount is 1,257 tonnes, a decrease of 6.9% mainly driven by consolidation of office space in the USA.

The intensity, tonnes GHG CO₂e per employee is 0.17.

In 2023, 38% of energy was purchased through green contracts, whereas the target is to achieve 100% by 2030. From 2025 onwards SBM Offshore commits to balance office-related emissions, both scope 1 and 2, with offsets.

The emissions of purchased goods and services are from the FPSO project stage, considering MPF construction and topside equipment and bulks.

In 2023, SBM Offshore had two MPF under completion and one construction ongoing. Additionally, SBM Offshore had advanced in six topside projects, finishing one in 2023. The volume of GHG emissions associated with this activity amounted to 179,822 thousand tonnes. Compared with 2022, the level of associated emissions is 49.5% lower, explained by the fact that projects have moved from hull-related purchases to topsides-related purchases, which are typically less carbon intense from a purchased goods perspective. 

SBM Offshore provides operation and maintenance services for FPSOs on behalf of clients across the globe, on a finance-lease basis. Emissions from downstream leased assets mainly relate to the required production profile of the oil field and the subsequent energy production, e.g. from gas turbines (70%). The other key contributor is flaring (30%).

Emissions from downstream leased assets account for the majority of the carbon footprint reported by SBM Offshore. 5.7 million tonnes of GHG were emitted by downstream leased assets. This volume is 1% higher compared with 2022, due to the start-up of FPSO Prosperity. The carbon intensity of downstream leased assets is 98.95 tonnes of GHG emissions per thousand tonnes of hydrocarbon produced, which is 25% below the industry benchmark¹ and 9% lower than last year.

Compared to SBM Offshore's ambition to see emission intensity reduced by 50% in 2030 compared to 2016, during 2023 these were already 51% lower. 2023, however, could be an outlier as start-up emissions were lower, production levels were higher than expected and there was a shutdown of an asset with a relatively high carbon intensity. SBM Offshore is learning lessons and is continuously tracking performance against 2030 ambitions on this key category of scope 3 emissions.

For 2023, SBM Offshore set a target to further optimize operational excellence on the FPSOs for which it provides operations and maintenance services. SBM Offshore targeted an absolute volume of gas flared below 1.48 million standard cubic feet per day (mmscft/d) as an overall FPSO fleet average during the year. This was set for a specific part of the volume over which SBM Offshore expects to have the largest control, despite it being a scope 3 category. SBM Offshore outperformed on this overall target, the actual being 1.18 million scft/d, which is 17% lower compared with 2022. This performance is mainly attributed to a reduced number of unplanned events on some FPSOs and historical issues having been fixed on some of the Guyana FPSOs. Overall, flaring ratio on downstream leased assets was 4% lower than the industry benchmark².

To further reduce emissions from the power generation aspect of downstream leased assets in operation, SBM Offshore is dependent on investments by clients and partners in co-owned entities. This leads to risk of lock-in emissions and challenges on emissions set for this category. SBM Offshore is ready to lead, co-develop and deliver on such client requirements.

Total air travel-related emissions were 30.6K tonnes in 2023, an increase of 33% over 2022 as a result of a higher number of employees and business activities.

Other performance items relating to emissions:

• In 2023, SBM Offshore achieved a B rating in CDP. Further climate change management disclosures are provided in section 1.4.3.

• SBM Offshore’s energy intensity on downstream leased assets is 26% lower than the industry benchmark³. Energy consumption volumes can be found in section 5.3.2.

• The quantity of oil discharged to sea per hydrocarbon production on downstream leased assets was 3.74 tonnes per million tonnes of hydrocarbon produced, 66%¹ below the IOGP benchmark⁴ (see also section 2.2).

• Downstream leased assets had 0 spills as per IOGP definition⁵. Further detail is given in section 2.1.4.4.

• SBM Offshore engaged in various projects that resulted in lower emissions. In Guyana, a local agricultural project leads to lower emissions from food logistics. More information can be found in section 2.2.

In early 2020, SBM Offshore announced the emissionZERO^® program targeting near-zero emissions. The development of a near zero FPSO is the first milestone and a key pillar of the emission zero road map. Proposing a near zero FPSO to the market requires a suite of systems at a high technology-readiness level, aiming for improved energy efficiency and emissions reduction. In 2023, the catalogues of available solutions has continued to grow to be able to produce lifecycle emissions projections for long-term operations and have a solution ready for the market in 2025.

SBM Offshore is actively developing solutions and working with its stakeholders to drive down emissions from downstream leased assets on a continuous basis. This is, for example, done with customers during the project lifecycle, with financers of projects and with suppliers during qualification processes.

Key achievements on the emissionZERO^® FPSO have been:

• The engagement with strategic and key client accounts and suppliers during the year.

• The collaboration agreement with Mitsubishi Heavy Industries on carbon capture and the statement of qualified technology.

• The qualification of a deep water suction system for the use of colder water on the topside.

• The use of digital technologies (advanced analytics and predictive maintenance) to optimize energy consumption, reduce equipment trips and associated flaring.

• The establishment of a portfolio of ideas and projects to further reduce the carbon footprint of SBM Offshore’s activities.

This builds on progress in the past, such as the low-carbon modules delivery in 2021. Further planned milestones and achievements can be read in sections 1.4.3 and 2.2. The success of the program and the impact on the above stated ambitions is highly dependent on market acceptance. SBM Offshore is therefore open for business on emissionZERO^® and welcomes engagement with its value chain.

SBM Offshore remains committed to the ramp-up of emissionZERO^® in the coming years and to keep setting targets to reduce emissions, as explained in section 2.2.

For 2024, and in line with the ambition to reduce carbon intensity in its value chain, SBM Offshore has set a target to achieve 1.57 million standard cubic feet per day of flaring, for scope 3 downstream leased assets. This target factors in uncertainties in flaring due to two FPSOs that will still be in early phase of production. For scope 1 and 2 emissions, SBM Offshore will define an approach to balance emissions from office energy, which means SBM Offshore will prepare for investments into meaningful projects that offset emissions in scope 1 and 2.

SBM Offshore remains committed to achieve better environmental performance than the 2022 IOGP industry benchmark for energy consumption and oil spills per production; and 50% better than the 2022 IOGP industry benchmark for oil produced in water.

From 2024, SBM Offshore will investigate data regarding purchased goods and services during Operations and Decommissioning phases, so it can engage and influence suppliers to reduce their carbon footprint in the future. Also, energy consumption could be positively impacted by application of thermal film in office windows, stabilizing temperatures in the buildings.

In the coming period, SBM Offshore will keep monitoring its performance against long-term and intermediate climate targets. SBM Offshore is aware that some of its clients’ current assets will potentially be in service in 2050, with associated emissions. For that purpose, engagement with clients and joint ventures – on investments and potential offsets – is performed as part of SBM Offshore’s engagement targets.

1. 128 tonnes of GHG emissions per thousand tonnes of hydrocarbon produced as reported by companies participating in the 2022 IOGP environmental performance indicators, Report p.16.
2. 8.4 tonnes of gas flared per thousand tonnes of hydrocarbon produced as reported by companies participating in the 2022 IOGP environmental performance indicators, Report p.26.
3. 1.5 gigajoules of energy for every tonne of hydrocarbon produced as reported by companies participating in the 2022 IOGP environmental performance indicators, Report p.24.
4. 9.5 tonnes of oil discharged to sea per million tonnes of hydrocarbon produced as reported by companies participating in the 2022 IOGP environmental performance indicators, Report p.28.
5. 0.4 oil spills greater than one barrel per million tonnes of hydrocarbon produced as reported by companies participating in the 2022 IOGP environmental performance indicators, Report p.38.
6. Excluding Thunder Hawk, as SBM Offshore does not provide operational services.

2.1.8 Digitalization

The purpose of digitalization in SBM Offshore remains focused on improving the efficiency of the organization and leveraging data to learn from events. The related value creation is carefully monitored, and the benefits are realized by the introduction of optimized work processes, the reduction of costs and emissions, the transformation of SBM Offshore’s core products and ways of working and the creation of new digital services.

SBM Offshore organizes its IT and digital ecosystem through a more consolidated structure, leveraging four main pillars: Smart Enterprise, Smart Win and Execution, Smart Operations and Smart Services. The four pillars rely on a solid Information Technology infrastructure and dynamic Enterprise and Product Lifecycle Data Management.

Digitalization gives new skills to employees, new services to clients and new business for suppliers. New functions within the organization are filled by new hires and experienced SBMers receive education and on-the-job training. Management of any impacts associated with cyber security is described in section 1.4.2.

Smart Enterprise: A resilient and responsive organization operates efficiently while providing better customer and business services using the latest enterprise applications. It enables better workplace productivity and enables a workforce to respond promptly to changes. In 2023, the main achievements under this pillar were:

• Continued the deployment of the new ERP system in Brazil.

• Initiated progressive deployment of new ERP modules for Project Management to ongoing FPSO projects.

Smart Win and Execution: Increased Win and Execution data availability, quality and continuity from structured data and integrated digital solutions. The main achievements under this pillar in 2023 were:

• eConstruction program continued with 3D construction and workfront management now well deployed at construction yards for ongoing FPSO projects.

• Engineering collaborative environment continued with further developments to improve engineering productivity as well as data and deliverables quality.

• Cost-estimating solution optimizing Win phase and ensuring consistency through end-to-end processes with Execute phase now deployed on ongoing proposals.

Smart Operations: An Operational Intelligence and Performance Optimization Center staffed with industry experts. Digital surveillance as the first line of defense to reinforce operational excellence and contribute to net zero objectives. Remote monitoring, abnormal behavior detection, predictive operations and maintenance based on SBM Offshore-developed applications as well as industry standard solutions. The main achievements under this pillar in 2023 were:

• In addition to ongoing continuous improvement, the number of intelligent digital solutions (so-called Intelligent ’Agents’) that have been deployed by end 2023 reaches a total of 16.

• Installation of integrated Operations Center at SBM Offshore Guyana offices.

Smart Services: the New Energy and Services Product Line has a portfolio of services maximizing the reliability, integrity and performances of offshore assets. Those services, such as ex-integrity services, are tested on the SBM Offshore fleet to demonstrate their value before being commercialized. The 2023 main achievements under this pillar were:

• Launched SBM Offshore’s own digital solution platform, SBM+, designed for offshore asset management and which empowers clients to optimize the reliability and performance of their own assets.

SBM Offshore has also consolidated the transformational digital development functions and innovation activities into a Digital Factory, encompassing competencies such as artificial intelligence, data science and digital solutions development. The growth of data science potential is demonstrated by the increased number of data signals below. This is mainly due to the addition of FPSO Prosperity as well as subsea data in Guyana.

New technologies are rapidly evolving. SBM Offshore will benefit from these new technologies and will develop the skills and capacity necessary to adopt them. SBM Offshore aims to further embed ownership in the business to realize value from investments in digitalization.

2.1.9 Innovation

The primary goal of fostering innovation at SBM Offshore is to introduce valuable new solutions to the market that align with the company's energy transition strategy. All segments of the organization are encouraged to contribute to innovations within their respective areas of expertise, spanning conceptualization to final implementation.

The management of new technology development falls under the responsibility of Group Technology. All innovation programs are aligned with the long-term strategies of the Product Lines, as well as key programs like emissionZERO^®, Fast4Ward^®, and Float4Wind^®. Development roadmaps are regularly updated to incorporate technical and market advancements through systematic reviews.

SBM Offshore follows a structured stage-gate process to bring new technology to market, ensuring thorough validation before deployment. This Technology Readiness Level (TRL) process, rooted in American Petroleum Institute standards (API RP17N), involves prototype testing and comprehensive FEED-level definition of new systems as part of the qualification requirements.

SBM Offshore oversees its intellectual property (IP) holdings by engaging in the registration of patents and trademarks, along with the protection of trade secrets and know-how. Upholding the integrity of its IP, SBM Offshore takes charge of document classification and establishes non-disclosure agreements with partners to limit access to documents containing sensitive technology. Rigorous freedom-to-operate checks are conducted to respect the rights of third parties.

This strategic management approach stimulates innovation while simultaneously minimizing risks associated with the deployment of new technology (see section 1.4.2).

In 2023, SBM Offshore accelerated its development efforts towards emerging technologies associated with decarbonization and renewable energies, allocating 52.3% of the Group Technology R&D budget to EU-Taxonomy-eligible activities, based on eligibility KPI definitions explained in section 5.1.5.

SBM Offshore continues to build on its internal innovation platform, which has been visited by almost 40% of SBM Offshore’s employees. SBM Offshore’s innovation management processes have been further matured and two new corporate functions have been included in the innovation ecosystem. SBM Offshore also continued to expand is collaboration with open innovation providers and explore new avenues of growth and innovation.

SBM Offshore filed 36 new patent applications to strengthen its existing portfolio of 122 patent families: in particular in the areas of renewables and electrification. Over the course of 2023, the TRL of 22 technology development projects has been increased, 9 of which reached TRL 4. This level demonstrates that reliability, function and performance criteria are met in the intended operating condition and the technology can be deployed.

Some of the main development projects undertaken in 2023 include:

• Progression of the SBM Offshore robotics initiatives to reduce high-risk human activities and to improve the efficiency of inspection and maintenance activities on the fleet. In total, four missions have been successfully executed during the year, taking place in several locations in the world (Brazil, France, Guyana).

• Bringing the post-combustion carbon capture module to TRL 3 with SBM Offshore’s partner MHI as well as obtaining DNV’s Statement of Qualified Technology. The technology can now be proposed and customized for specific projects and clients.

• Continued qualification of components and technologies under SBM Offshore’s emissionZERO^® program, demonstrating the potential for further carbon-intensity reduction based on near-market ready technologies.

• The continued development of components in SBM Offshore’s floating offshore wind technology (Float4Wind^®) to better adapt to market requirements.

• The development of new facilities in SBM Offshore’s R&D Laboratory to build and test the key components of the S3^® Wave Energy Converter at full scale.

• Completion of market studies and low TRL developments in the areas of offshore ammonia transfer and production, lithium extraction and deepwater mooring solutions for offshore photovoltaic concepts.

SBM Offshore is committed to directing a minimum of 70% of its development budgets towards decarbonization and renewable initiatives, as part of its focus on technology development for the energy transition.

This allocation aims to advance technologies that significantly decrease the carbon intensity of offshore oil and gas production, supporting the emissionZERO^® program. Included in these efforts are investments in the early stages of offshore hydrogen, ammonia, and lithium production studies. Moreover, ongoing investments in robotics will enhance safety and efficiency within SBM Offshore’s operational fleet.

A minimum of 50% of the research and development investment will be designated for EU-Taxonomy-eligible activities. SBM Offshore will persist in exploring alternative offshore renewable technologies, continuing to invest in its Float4Wind^® program and seek to commercialize its Wave Energy Converter technology. Going forward, SBM Offshore focuses on co-development of new technologies, in collaboration with clients and other value chain partners.

2.1.10 Energy Transition

Key elements that enable SBM Offshore’s success in the energy transition area are:

• The emissionZERO^® program, explained in section 2.1.7.

• Product development for floating offshore wind, wave and other alternative energies.

• Technology development supporting these product developments, (see more detail in section 2.1.9).

Product development for new products to support the energy transition is addressed through SBM Offshore’s Floating Production Systems and New Energies and Services business units, in collaboration with the Technology Department. An important step in this process is the development of concepts, prototypes and pilot projects, which can also be undertaken as co-development projects with partners and/or customers. SBM Offshore monitors its commercial pipeline to allow it to achieve its 2030 ambition.

With this management approach to energy transition, SBM Offshore is addressing the significant risks of oil price dependency, portfolio risks and climate change, described in section 1.4.2.

SBM Offshore reports in line with the EU taxonomy regulation and leverages the framework to set targets for, and report on, the energy transition. Disclosures are found in section 5.1.2.

SBM Offshore has made the following achievements in 2023:

• The three Provence Grand Large floating foundations were successfully installed. These units stand tall as global pioneers, utilizing SBM Offshore’s tension leg floater, developed in collaboration with IFP Energies Nouvelles.

• SBM Offshore signed a Partnership Agreement with Mitsubishi Heavy Industries Ltd. (MHI) that will offer a CO₂ capture solution for FPSOs. The agreement follows a successful engineering and design study conducted by both companies demonstrating the technical feasibility and commercial readiness of CO₂ capture technology offshore. The technology can reduce CO₂ emissions from overall FPSO operations by an estimated 70%, by capturing CO₂ from onboard gas turbines. The solution is being developed as part of SBM Offshore’s emissionZERO^® program using Fast4Ward^® principles.

• SBM Offshore has made partnerships to pursue FOW opportunities globally. The Renewables Project Development organization formalized a new joint venture with DP Energy to develop the 300MW to 400MW Nova East Wind project offshore Canada. In addition to Nova East Wind, the portfolio of projects under development by SBM Offshore also includes 2 x 100MW Llŷr, 60MW Cademo and 1,000MW North Channel Wind projects, with further development opportunities under investigation.

• The seawater intake riser program, bringing cold water from deep in the ocean to the FPSO to cool FPSO systems and reduce energy use, moved to phase 3 of project development with a client.

• SBM Offshore has invested 52.3% of the total 2023 Group Technology R&D budget in EU-Taxonomy-eligible¹ renewable energy technology and product development. This includes further development of the next generation of Tension-Leg Platform (TLP) floater design, Wave Energy Converter products as well as studies in floating solar, energy storage and hydrogen and ammonia for offshore applications.

• WEC S3^® achieved a major milestone with the start of fabrication of its first full-scale section. Once completed, it will be tested in the WEC test facility at SBM Offshore’s R&D Laboratory in Carros, France.

• SBM Offshore continues to work on projects that address emissions reduction along the lifecycle of its business, as part of its emissionZERO^® portfolio (see section 2.1.7).

The revenues, CAPEX and OPEX associated with these projects and initiatives add to EU-Taxonomy-eligible business, as reported in section 5.1.5. SBM Offshore’s commitments should lead to higher revenues from eligible business in the future, with 2023 R&D investment already reflected in the EU-Taxonomy-eligible OPEX KPI stated. Above-mentioned R&D investments are visible in the OPEX KPI reported. These activities support the mitigation of and/or adaptation to climate change impacts.

SBM Offshore will continue to build upon these achievements and is looking to develop from renewable energy pilots to commercial scale energy infrastructure, as well as increasing its role in the supply chain, with the aim of creating more value. Floating Offshore Wind will remain a market that is going to take time to mature.

1. Based on 2023 eligibility KPI definitions explained in section 5.1.5.

2.1.11 Market Positioning

Market positioning is about having a global presence, adapting to market developments and engaging in emerging markets.The size of the business, new business development and sustainability benchmarks are seen as strong indicators of a successful management approach. Examples of metrics are the performance of the fleet, the revenue backlog, the number of projects won, the new developments in the renewables market and SBM Offshore’s ESG ratings performance. The effectiveness of actions related to these metrics is monitored through the regular business reporting cycle involving the Management Board.

SBM Offshore’s strategy addresses material topics, aiming for a leadership position, from an economic, environmental and societal stand point. Through market positioning, SBM Offshore addresses the competitiveness risks mentioned in section 1.4.2.

Performance is detailed in subsections of 2.1. The following achievements were made in 2023:

• FEED contract award for FSO project: Trion.

• FEED contract award for FPSO project: Whiptail.

• The FPSO Liza Unity purchase option was exercised by ExxonMobil Guyana.

• A 10-year agreement with ExxonMobil Guyana for the operations and maintenance of the Guyana FPSO fleet. The lease terms and durations remain the same for all units. SBM Offshore will operate the units through an Integrated Operation Model, which encompasses an organization model including seconding ExxonMobil Guyana employees in some key onshore and offshore positions. This model will combine both companies’ experience and resources to increase team efficiency and foster synergies.

• Fleet size of 16: 15 FPSOs and 1 Semi-submersible. (Including FPSO Prosperity).

• 388.4 years of cumulative operating experience.

• Five FPSO projects under construction and two Fast4Ward^® multi-purpose floaters, including MPF #7 allocated to the Whiptail development project.

• Contract award for the marine installation for both Trion projects, the semisubmersible-based Floating Production Unit and the FSO, which will be SBM Offshore’s largest ever installation scope.

• Launch of digital solution platform, SBM+, designed for offshore asset management. SBM+ delivers services based on solutions currently deployed and tested on SBM Offshore’s fleet. It unlocks the full potential of data to transform offshore asset operations by empowering clients to optimize their assets’ performance and leverages SBM Offshore’s proven track record, industry expertise, operational framework and innovative digital solutions.

• Solid sustainability rankings – most notably in S&P Global, CDP and Sustainalytics (section 2.2).

• Part of Euronext’s AEX^® ESG Index, an index of shares of Dutch-listed companies with a strong ESG performance (25 best-in-class performer).

In 2024, SBM Offshore’s focus remains the safe and reliable execution of its ongoing projects and operation of its fleet. SBM Offshore also continues to engage early with clients and vendors to make further progress on the emissionZERO^® program and enable the energy transition by leveraging SBM Offshore’s unique capabilities in floating solutions. To further advance the energy transition and SBM Offshore’s role in this, SBM Offshore will continue to seek innovation in line with stakeholders' needs and offer digital solutions to the market.

2.1.12 Decommissioning

SBM Offshore is committed to the safe and environmentally sound recycling of assets at the end of their lifecycle, performed in compliance with SBM Offshore’s Responsible Recycling Policy, applying the Hong Kong Convention rules and the principles of the EU Ship Recycling Regulation 1257/2013 or equivalent.

The processes surrounding the end-of-life recycling of products are vital to sustainability and SBM Offshore works to ensure that responsible recycling is carried out and that internationally-recognized regulations are followed. SBM Offshore has a ’Vessel Decommissioning and Recycling Process’, which details the key steps in conducting the responsible recycling of an offshore production facility.

SBM Offshore works with recycling facilities that have suitable infrastructure, an adequate management system, including health and safety procedures in place, and trained staff. SBM Offshore’s process includes inspecting all vessels for hazardous materials identification and ensuring a controlled removal and disposal of such materials as part of the decommissioning and recycling of the vessel. SBM Offshore considers the environmental and social impacts related to the decommissioning and recycling activities of each vessel, with the objective of minimizing adverse impact while pursuing maximization of the circular economy.

During 2023, two projects were in progress; the decommissioning and preparing for recycling of FPSO Capixaba and the recycling of the Deep Panuke MOPU PFC.

The recycling of Deep Panuke is being performed locally in Nova Scotia, Canada. Recycling is progressing as per plan and nearing 100% by end of 2023. Of the total mass of the Deep Panuke facility, 97% has been recycled, reused, or repurposed.  The remaining 3% consists of waste, which was safely disposed of, meeting the environmental regulations of the local jurisdictions of Nova Scotia and Canada. Furthermore, this project contributed to Sustainable Development Goals by promoting local economic development, establishing traceable waste management streams and supporting habitat creation for a variety of marine species including the endangered Atlantic salmon through deployment of reef balls, built by the local Mi’kmaq community that were placed at several locations in the harbor.

The FPSO Capixaba offshore decommissioning scope is in its final phase. The unit has been disconnected from subsea production systems infrastructure and remains moored until it is transported to the recycling yard. For this purpose, SBM Offshore has signed a contract with Modern American Recycling Services Europe for the safe and environmentally sound recycling of the unit at its recycling facility in Denmark.

SBM Offshore is participating as a co-chair of the expert group of IOGP to promote responsible FPSO recycling. Areas of attention for this group are:

• Sharing of best practices and lessons, using experience from IOGP members.

• Developing good practice guidelines for FPSO decommissioning including for safe and environmentally responsible recycling in compliance with international and local regulations.

• Enabling supply chain availability and readiness by compiling forecast data on FPSO recycling demand.

• Engaging with external expert groups, NGOs, and other relevant stakeholders to learn about expectations and identifying common standards and best practices.

During 2024, SBM Offshore expects to begin dismantling and recycling FPSO Capixaba in Denmark. After the close out of the recycling of Deep Panuke, SBM Offshore remains committed to related sustainability projects. At the same time, SBM Offshore is supporting economic development in the region through commercial activities for floating offshore wind, together with its partners.

2.2 Sustainable Development and Local Impact

Environmental, social and governance-related topics are foundational to SBM Offshore's business and consequently drive its strategy development and performance management process. It is the role of every SBMer to contribute positively to this. SBM Offshore is further embedding sustainability in the business by, for example, increasing low-carbon products and promoting local voluntary projects for positive impact.

SBM Offshore leverages the UN SDG framework to steer on positive impact. It has identified nine SDGs to which it can contribute with the most impact, and which are most material to its business. SBM Offshore strives to embed the selected SDG topics within the organization and targets are built with inputs and commitments from different business entities, such as business development, HSSE and operations, as part of business plans and budgets.

A sustainability team is providing guidance to drive positive local impacts aligned with the SDG framework and impacts mentioned in chapter 2. The team reports into the portfolio of the Chief Executive Officer (CEO). SBM Offshore has sustainability ambassadors in various countries working with local colleagues and communities.

SBM Offshore is committed to alignment with the Organization for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises (MNE). As part of Projects, SBM Offshore applies guidance by the World Bank and works within Environmental Impact Assessments and Stakeholder Engagement outcomes conducted by its clients.

SBM Offshore has built on previous years’ efforts and commitments to increase its positive impact on selected SDG targets. This performance program is linked to SBM Offshore’s Short-Term Incentive (STI) scheme. An overview of SBM Offshore’s contribution towards the SDGs is provided in the SDG table.

Overall SBM Offshore is pleased with meeting the performance on 13 out of the 14 SDG-linked targets set in 2023. Although SBM Offshore aims for completion of all targets, challenges are part of the journey for improvement and sustainability. On SDG 4 – completing climate change & energy transition awareness program – SBM Offshore achieved 93% completion instead of the targeted 100%. For a small part of the targeted offshore community, operational priorities inhibited completion.

Detail on the performance against SDG-linked targets is provided in the table found at the end of the section. Three examples of targets SBM Offshore has achieved are:

1. SBM Offshore had set the target for validated investment for climate neutral office energy, as part of SDG 7, for which SBM Offshore has committed the required budget for 2024.

2. To contribute to SDG 10 ‘Reduced Inequalities’, SBM Offshore organized school outreach programs for different locations. Guyana ran a STEM program that caters for indigenous women, with awardees pursuing their studies at the University of Guyana. In Monaco, SBM Offshore developed and piloted the first school outreach program with partner, Elles Bougent. The program encourages young female students to undertake scientific and technical academic training and aims to strengthen gender diversity in enterprises in the industrial and technology sectors. Women in engineering or technical roles at SBM Offshore volunteer to share their career passion through workshops, presentations, and demonstrations to middle school and high school students.

3. In the construction phase of FPSOs, further progress has been made on monitoring of GHG emissions at all nine yards in which FPSOs are being built by SBM Offshore and are included as part of SDG 13 Climate Action.

A key topic to SBM Offshore’s business is biodiversity, reflected in actions taken in the light of SDG 14. During 2023, SBM Offshore has further familiarized itself with guidance from the Taskforce for Nature-related Financial Disclosure (TNFD) – reflecting on nature-related dependencies and impacts. Nature-based dependencies are present in all parts of the business, within particular downstream leased assets (FPSOs) offshore – mainly being weather conditions, food supply and the impact to stakeholders such as local fisheries.

A key input for dealing with nature-related impacts are clients’ environmental impact assessments, which include impacts to life below water and impacts to communities that depend on this life. As part of its materiality assessment – described in section 1.2.2 – SBM Offshore has assessed impacts related to biodiversity. During project financing, biodiversity is a topic for due diligence, typically based on IFC Performance Standards. In that light, based on critical habitat assessments carried out in Brazil, SBM Offshore confirmed that, using Rio de Janeiro as the port base for installation activity, no risks of crossing critical habitats exist. At this point, targets related to life below water concern water discharge indicators and SBM Offshore’s approach to ocean data sharing, including fauna observation in operations. Furthermore, as part of the Deep Panuke recycling project, SBM Offshore contributed to reef restoration with postive impact based on monitoring during 2023. The target for 2023 related to ’Life Below Water’ has been achieved, as described in the SDG-linked targets table.

SBM Offshore takes pride in its continuous improvement approach and will apply the knowledge gained from its performance in future target setting. This has led to solid ratings in sustainability benchmarks, as per the following table.

Ranking of SBM Offshore in Sustainability Benchmarks

1. As per the new policy by CDP, 'B' is the maximum possible score for companies not disclosing the detailed CDP survey responses. As per this report SBM Offshore discloses publicly its emissions performance, climate change impacts, ambitions and GHG data in sections 1.4.3, 2.1.7. and 5.3.2.
2. Ranking as per January 22, 2024. SBM Offshore has engaged with S&P Global on a re-assessment to understand the differences versus 2022.

SBM Offshore has sustainability ambassadors and professionals in Brazil, Guyana, Malaysia, China, India, the Netherlands, Monaco, USA, Switzerland, Angola and Portugal. They engage with local employees, organize SDG-related activities for positive impact and are part of SBM Offshore’s effort to embed sustainability in the business with local initiatives. A few examples of the actions taken are highlighted below.

SBM Offshore further continued its technical, financial and advisory support, with Plympton Farms in light of SDG 3 ’Good Health and Wellbeing’. This agricultural project is the largest hydroponics farm in the country, turning barren earth into lucrative farmland and creating stable jobs for residents in remote areas of the country. SBM Offshore aided in constructing three acres of greenhouses. This project supports national targets of reducing food importation by 25% by 2025 as well as helping to reduce SBM Offshore’senvironmental footprint associated with food production and imports by providing FPSOs with quality, fresh, locally grown food. The farm supplied approximately 2,500kg of fresh farm produce in 2023 to FPSOs Liza Unity, Liza Destiny and Prosperity.

On SDG 4 ’Quality Education’, SBM Offshore, in partnership with the Guyana Marine Conservation Society, launched the Education and Awareness Programme on the Barima-Mora Passage, a wildlife hub in Mabaruma which is home to an extensive spread of mangroves, several IUCN red list species and incredible indigenous culture. Through this program, 10 schools will increase their knowledge and appreciation of the mangroves and the biodiversity of the area, whilst fueling their drive to protect and conserve the wildlife hub. As part of the initiative, the inaugural Wildlife Festival was launched in Mabaruma on July 26, the day declared as International Day for the Conservation of the Mangrove Ecosystem, which saw schools in the Mabaruma sub-district participating in a range of educational and cultural activities.

In addition to contributing to SDG 4 and SDG 10, SBM Offshore Guyana has partnered with the National Coordinating Coalition to implement a literacy program with 35 students aged 6 to 16. The program aims to address the existing educational and social gaps within Sophia D&E Fields and Cummings Park communities. This program completed its first year in June 2023 with 32 students graduating and the second year began in July 2023.

In addition, the Sherriff Street location of SBM Offshore Guyana has been equipped with a solar panel system that has been operational since March 2023, and has reduced SBM Offshore’s emissions by approximately 38 tonnes CO₂ equivalent (SDG 7 and SDG 13).

To further support local economic growth, as per SDG 8 ’Decent Work and Economic Growth’, and act on the need for sustainable income generation and the diversification of Guyana’s economy, SBM Offshore provided support to Hubu Aquafarm to boost production of shrimp and prawns.

To contribute to SDG 10 ‘Reduced Inequalities’, SBM Offshore organized a school outreach program for different locations. Guyana ran a STEM program that caters for indigenous women, with awardees pursuing their studies at the University of Guyana.

For SDG 12 ’Responsible Production and Consumption’, SBM Offshore Brazil has spent time, in partnership with Earthwake, to innovate and develop a machine which transforms plastic waste into fuel through the combination of pyrolysis technology and precision distillation. Subsequently, the produced fuels will be donated to remote communities offgrid to provide electricity.

Further, SBM Offshore Guyana received three awards this year: firstly, for its Quality, Health, Safety and Environment Culture from the Guyana National Bureau of Standards; secondly, for SBM Offshore’s Catalyst of Change Award from AMCHAM for its social investment initiatives; thirdly, from the ’Guyana Manufacturing and Services Association (GMSA)’ a Corporate Social Responsibility Award ’in recognition of SBM Offshore’s substantial contribution in Corporate Social Responsibility’.

In Brazil, SBM Offshore organized internal initiatives for more than 800 employees associated with SDG 10, to raise awareness of issues relevant in the local context, such as prejudice, racism and harassment and inaugurated the first D&I Employee Library with a collection of titles on diverse topics, including race, gender, LGBTQIA+, disabilities, children's literature, and titles related to personal development, leadership, and empowerment. For SDG 14, on Ocean Day, SBM Offshore Brazil promoted various environmental education initiatives by organizing an exhibition on the main marine species in the area of SBM Offshore operations.

Furthermore, SBM Offshore Brazil implemented the first phase of a zero-landfill project, applying a circular economy approach to identify opportunities for improvement in processes that affect waste generation. The project aims to reduce, reuse and recycle at source, minimizing the waste that ends up in landfills or non-energy incinerators to the technical limit. This assessment was carried out on site on two vessels, FPSO Cidade de Anchieta and FPSO Cidade de Saquarema, and in a logistics warehouse that supports operations, and included a detailed analysis of supply-chain processes and contracts.

In Malaysia SBM Offshore partnered with JA Malaysia on SDG 4 to support and mentor a group of students from SMK Seafield to create their company where they used recycled items to make fashionable products and exhibit them. Various SBM Offshore employees, including senior management, were involved in coaching.

Various initiatives were taken in relation to SDG 14 ’Life Below Water’. SBM Offshore Malaysia raised awareness about the importance of protecting the marine environment, with 17 SBM Offshore volunteers and 15 underprivileged children. It featured engaging talks on the impact of plastic pollution on marine ecosystems and the crucial role of coral reefs in supporting marine life. The day included a visit to the solar-powered floating rubbish collection barge.

In China, more than 95% of local staff in SBM Offshore China have received first aid training this year and are now certified first aiders, associated with SDG 3. Associated with SDG 8, SBM Offshore China continued initiatives for the human rights program in the yards. For details on the activities and progress on human rights see section 2.1.3. For SDG 4 and SDG 14, SBM Offshore globally organized beach clean-up activities. Additionally, SBM Offshore China organized workshops on reducing the plastic footprint and a biodiversity ’Protect Black-faced Spoonbill’ campaign was organized, focused on raising the awareness of employees on protecting ocean health and threatened species.

Related to climate action, in Angola, a partnership was formed with the Otchiva Association to protect and restore mangrove ecosystems by planting seeds. Furthermore, SBM Offshore organized cancer awareness for its employees, visited a cancer institute and made donations of supplies for hospitalized children. There was a donation campaign of essential goods organized for over 200 socially vulnerable families living in poverty in the Lupupa community in Angola.

There have been several health and wellbeing initiatives, such as first aid training and healthy mind toolkit for colleagues, associated with SDG 3. Multiple competitions for SBM Offshore colleagues in India were organized including on health and recycling. Celebrations were also held for International Women’s day to empower women and embrace equity.

The Monaco office took part again in the annual Monaco Energy Boat Challenge, competing in the Energy Class. SBM Offshore runs a green hydrogen-powered boat and continues to develop this and aims to contribute, with its research, to the development of clean energy, as highlighted in SDG 7 ’Affordable and Clean Energy’. The office hosted teams from six schools in Guyana, who participated in a local qualifier event for the Monaco Mousetrap Cars Grand Prix, which encourages students to learn and apply the laws of physics, associated with SDG 4 and SDG 9.

Colleagues in the Netherlands teamed up on a beach clean up in Hoek van Holland, supporting Stichting Noordzee, an association that supports a clean and healthy North Sea. In the USA, initiatives around plastic consumption reduction and a preventive health campaign were deployed.

In Porto, awareness sessions about the SDG’s, particularly SDG 13 and SDG 8 were organized for employees. Associated with SDG 3, to raise awareness on breast and prostate cancer, the Portuguese League Against Cancer and Portuguese Association for Prostate Patients was invited. A donation campaign and volunteering was organized to support local institutions on their mission to help homeless people and children at risk.

Worldwide, close to 30 charitable donations were made across the various locations where SBM Offshore is active. These include contributions to local education, literacy projects, sustainable fishing and an ocean protection expedition.

SBM Offshore has formulated SDG-linked targets as part of its Material Topics for 2024, hence taking an integrated approach and further embedding ESG in its perfomance-management processes. SBM Offshore will continue its efforts to structure local projects in line with its Material Topics and SDG-linked actions.

3 Governance

3.1 Corporate Governance Statement

This section gives a broad outline of SBM Offshore’s corporate governance structure by describing the roles of the corporate bodies, the external independent auditor, the internal auditor, the General Meeting and of the foundation Stichting Continuïteit SBM Offshore.

On December 20, 2022 the Corporate Governance Code Monitoring Committee published the updated Dutch Corporate Governance Code (Corporate Governance Code). Dutch listed companies are required to report in 2024 on compliance with the Corporate Governance Code in the 2023 financial year. One of the main changes compared to the 2016 Dutch Corporate Governance Code, is the focus on sustainable long-term value creation as one of the guiding principles. Amongst others, section 1.3 and 1.2.2 describe SBM Offshore’s strategy to realize sustainable long-term value creation, including the social, environmental and economic aspects hereof. Furthermore, it is explained what effects the Company have had on people and the environment and how the interests of stakeholders have been considered (section 1.2.2).

Further to the Corporate Governance Code, the Company has made minor updates to its Management Board and Supervisory Board rules, Diversity & Inclusion Policies for the Management Board, Senior Management and Supervisory Board, its Shareholder Contact and Dialogue Policy (best practice 4.2.2) and published its Stakeholder Engagement Policy (best practice 1.1.5). Reporting on the Diversity targets can be found in section 3.1.9.

This section includes further information to what extent SBM Offshore applies the principles and best practice provisions hereof. The details on compliance with the Corporate Governance Code and the documents referred to above can (also) be found on SBM Offshore’s website (ESG/Governance section). The full text of the Corporate Governance Code can be found on www.mccg.nl.

3.1.1 Corporate Governance Structure

SBM Offshore N.V. is a public company with limited liability (Naamloze Vennootschap) incorporated under the laws of the Netherlands with its corporate seat in Amsterdam. Its shares are listed on Euronext Amsterdam. The Company has a two-tier board consisting of a Supervisory Board and a Management Board. Each board has its specific roles and tasks regulated by laws, the articles of association, the Corporate Governance Code, the Supervisory Board rules and Management Board rules. The Management Board rules and Supervisory Board rules contain details on the ways of working of the Management Board and the Supervisory Board and minor updates in view of the Corporate Governance Code were made on November 8, 2023. All documents referred to in this paragraph can be found on SBM Offshore’s website (ESG/Governance section).

3.1.2 Management Board

The Management Board consists of three members: the Chief Executive Officer, the Chief Financial Officer and the Chief Operating Officer. The Management Board manages the Company and is responsible for the continuity of the Company and its business. In fulfilling its responsibilities, the Management Board focuses on sustainable long-term value creation and takes into account the relevant stakeholders’ interests. Attention is paid to the effects on people and the environment, as well as the impact of new technologies and changing business models. The Management Board divides duties among its members, charging individual members with specific primary responsibilities. However, the Management Board remains collectively responsible for the management, the business and general affairs of SBM Offshore. The Management Board is accountable to the Supervisory Board and the General Meeting for the performance of its management tasks.

Each year, the Management Board presents to the Supervisory Board the long-term strategy of the Company and the operational plan for the following financial year. The strategy of the Company is built around the ESG themes that have priority for the Company (sections 1.2.2 and 1.3). For each of these themes, material topics have been identified following stakeholder engagement. The related objectives that allow quantification and progress measurement of the strategy implementation are regularly reviewed. Both the long-term strategy and the operational plan are adopted after the Supervisory Board’s approval.

The Management Board is responsible for determining the Company’s risk profile and policy, which are designed to realize the Company’s objectives, to assess and manage the Company’s risks and to ensure that sound internal risk management and control systems are in place. The Management Board monitors the design and operation of the internal risk management and control systems and carries out a systematic assessment of their design and operation at least once a year and reports on this to the Audit Committee and the Supervisory Board. This monitoring covers all material control measures relating to strategic, operational, financial, compliance and reporting risks. Among other considerations, attention is given to observed weaknesses, instances of misconduct and irregularities and indications from whistle blowers. In addition the Management Board discusses the Company’s annual risk appetite with the Audit Committee and Supervisory Board. A quarterly risk report is provided to the Audit Committee.

The Management Board adopted corporate core values that contribute to a culture focused on sustainable long-term value creation for the Company. These values are Integrity, Care, Entrepreneurship and Ownership and are regularly discussed with the Supervisory Board. The Management Board encourages behavior that is in keeping with the values and propagates these values through leading by example. The Management Board is responsible for the incorporation and maintenance of the values. The Management Board has drawn up a Code of Conduct and monitors its effectiveness as well as compliance with this Code. Findings and observations in this context are shared with the Supervisory Board. More information about the ways of working of the Management Board can be found in the Management Board rules, as available on the Company's website.

Management Board members are appointed and can be suspended or dismissed by the General Meeting. Further information about the appointment and dismissal of Management Board members can be found in SBM Offshore’s articles of association.

Management Board members are to inform the Supervisory Board before accepting positions outside the Company and shall not accept such positions prior to the approval of the Supervisory Board. Mandates are discussed annually in the Supervisory Board meeting. The positions cannot be in conflict with the Company’s interests. Members of the Management Board may also be appointed to the statutory board of the Company’s operational entities. The Company is compliant with best practice 2.4.2 of the Corporate Governance Code.

Chief Executive Officer, Swiss and French nationality, 1964, male

Initial appointment in 2011

Bruno Chabas joined SBM Offshore as Chief Operating Officer and Member of the Management Board in May 2011 and became CEO in January 2012. Prior to joining, he worked for 19 years with Acergy S.A. (now Subsea 7 SA). From November 2002 until January 2011, he served as the Chief Operating Officer of Acergy S.A., responsible for all the day-to-day commercial and operational activity worldwide. From June 1999 through October 2002, he served as Chief Financial Officer. Between 1992 and 2002, Bruno Chabas held various management positions within preceding companies in the United Kingdom, France and the United States.

Bruno Chabas holds an MBA from Babson College, Massachusetts.

Other mandates: Non-Executive Director of FORACO International S.A.

Chief Operating Officer, Norwegian nationality, 1973, male

Initial appointment in 2022

Øivind Tangen was appointed as member of the Management Board and Chief Operating Officer at the 2022 Annual General Meeting. He joined SBM Offshore in 2002, as operations readiness engineer. He has subsequently acquired a rich background of international projects and operational management, from Nigeria to Angola and Nova Scotia, Canada. Returning to Monaco in 2014, he held the position of Group Strategy Director and subsequently Director of Group Execution Functions. In December 2016, he was appointed as Managing Director Operations. Øivind Tangen began his career in offshore engineering with ABB Offshore Systems in Oslo.

Øivind Tangen holds an MSc in Naval Architecture from Trondheim University in Norway and a Master’s Degree in MEDEA (Energy, Environmental Management & Economics) from ENI Corporate University in Milan.

No other mandates.

Chief Financial Officer, British nationality, 1971, male

Initial appointment in 2016

Douglas Wood joined SBM Offshore as Group Financial Director in October 2016. During the Company’s Extraordinary General Meeting of November 30, 2016 he was appointed as a member of the Management Board and took over the role of CFO. Prior to joining SBM Offshore, Douglas Wood worked for Shell for 23 years in various financial management positions, most recently as CFO and Director of Showa Shell Sekiyu K.K. in Japan. His other roles included Vice President Finance & Planning Exploration (Shell Upstream International) and Head of Business Performance Reporting & Financial Planning (for Shell Exploration & Production).

Douglas Wood is a Fellow of the Chartered Institute of Management Accountants since 2006 and in 1993 obtained a degree in Classics at Oxford University.

No other mandates.

3.1.3 Supervisory Board and Committees

The Supervisory Board consists of six members. The Supervisory Board supervises the policies, the management of the Company and its businesses, the effectiveness and the integrity of the internal risk management and control systems and procedures implemented by the Management Board, as well as the general conduct of affairs of the Company and its businesses. The Supervisory Board also supervises how the Management Board determines its position on the sustainable long-term value creation strategy and how the Management Board implements that strategy, taking into account the effect on people and the environment. The Supervisory Board regularly discusses the strategy, the implementation of the strategy and the risks associated with it. Furthermore, the Supervisory Board assists the Management Board with advice. In the performance of its duties, the Supervisory Board is guided by the interests of the Company and its business as well as the Company’s relevant stakeholders. In addition, certain (material) decisions of the Management Board, as stipulated in the Dutch Civil Code, articles of association or the Supervisory Board and Management Board rules, require the Supervisory Board’s prior approval.

The Supervisory Board has three subcommittees: the Audit Committee, the Appointment and Remuneration Committee and the Technical and Commercial Committee. The Appointment and Remuneration Committee is a joint committee with two separate chairs and tasks: i) the selection and appointment preparation of Management Board and Supervisory Board members and ii) the preparation of decision-making regarding remuneration matters. The task of each subcommittee is to assist and advise the Supervisory Board in fulfilling its responsibilities. More information about the ways of working of the Supervisory Board and its committees can be found in the Supervisory Board and Committee rules, as available on the Company’s website (ESG/Corporate Governance section).

Members of the Supervisory Board are appointed by the General Meeting following nomination by the Supervisory Board. A Supervisory Board member is appointed for a period of four years and may then be re-appointed once for another four-year period. A Supervisory Board member may subsequently be re-appointed again for a third period of two years, which may be extended by at most two years. In case of nominations, the competencies and background of members already in function, as well as the Supervisory Board Diversity & Inclusion policy and Supervisory Board Profile will be observed. The guiding principle is that the Supervisory Board is composed in such a way as to ensure an appropriate degree of diversity with regard to, among others, expertise, experience, competencies and (cultural) background, in line with best practice provision 2.1.4 and 2.1.5 of the Corporate Governance Code. The Supervisory Board appoints one of its members as Chair and one as Vice-Chair. Further information about the appointment and dismissal of Supervisory Board members can be found in SBM Offshore’s articles of association. The Supervisory Board has drawn up a retirement schedule for its members, which is available on the Company’s website (ESG/Corporate Governance section).

Supervisory Board members shall inform the Supervisory Board before accepting positions outside the Company. Positions may not be accepted without the Supervisory Board’s prior approval. The positions cannot be in conflict with the Company’s interests. Mandates are reviewed and discussed annually at the Supervisory Board meeting. The Company is compliant with best practice 2.4.2 of the Corporate Governance Code.

Dutch nationality, 1957, male

Chair of the Supervisory Board, Chair of the Appointment and Remuneration Committee dealing with appointment and selection matters.

First appointment in 2018, expiry current term in 2026.

Profession: CEO of Haldor Topsoe A/S.

Background: Roeland Baan started his career at Royal Dutch Shell where he fulfilled various (senior) management roles. As of 1996, he worked consecutively at Thyssen Sonnenberg Recycling, SHV Gas, Mittal Steel and Arcelor Mittal. Roeland Baan was Executive Vice President and CEO at Aleris until 2015. From April 2016 until June 2020 he was President and CEO at Outokumpu Oyj.

Education: Roeland Baan has a Master in Economics from the VU University in Amsterdam (Netherlands).

Expertise: Roeland Baan has significant management and CEO experience at multinational companies in the Energy industry.

Other mandates¹: independent board member at Syensqo SA

French nationality, 1949, male

Vice-Chair of the Supervisory Board, member of the Technical and Commercial Committee and the Appointment and Remuneration Committee.

First appointment in 2018, expiry current term in 2026.

Profession: Consultant of Amarante International/member of the Strategic Orientation Board.

Background: During his career, Bernard Bajolet held various roles as French diplomat and civil servant.

Education: Bernard Bajolet studied political sciences at Sciences Po in Paris and obtained his degree at the Ecole Nationale d’Administration in Paris. He was also a fellow at the Center for International Affairs of the Harvard University, Cambridge, Massachusetts.

Expertise: Bernard Bajolet has vast international experience in complex environments as well as specific expertise in security.

Other mandates¹: consultant of Amarante International/member of the Strategic Orientation Board.

Danish nationality, 1966, female

Member of the Supervisory Board, member of the Audit Committee and the Technical and Commercial Committee.

First appointed in 2021, expiry current term in 2025.

Profession: Non-Executive Director.

Background: Ingelise Arntsen has held executive top management positions within companies such as, Statkraft AS, REC ASA and Aibel AS. She has also spent seven years within the shipbuilding industry, working for Kværner Fjellstrand in Singapore and Norway.

Education: Ingelise Arntsen holds a Bachelor’s degree in Economics from the University of Southern Denmark.

Expertise: Ingelise Arntsen has extensive international experience from the shipbuilding industry and from various parts of the renewable energy industry. She has been responsible for project development, construction execution and O&M for power production plants within hydropower, wind power and gas-fired power as member of the Management Board of Statkraft, Europe’s largest producer of renewable energy. Arntsen has served on the Management Board of major solar power equipment supplier REC, responsible for its silicon wafer division, and has led technology development efforts within floating offshore wind.

Other mandates¹: member of the Supervisory Board of Statkraft AS, Chair of the Supervisory Board of Asplan Viak AS², member of the Supervisory Board of Exportfinans Norge, member of the Supervisory Board of Corvus Energy AS, member of the Supervisory Board of Fred. Olsen Windcarier ASA, member of the Supervisory Board of Synera Renewable Energy.

Dutch nationality, 1958, male

Member of the Supervisory Board, Chair of the Appointment and Remuneration Committee dealing with remuneration matters.

First appointment in 2023, expiry current term in 2027.

Profession: Non-Executive Director.

Background: Allard Castelein started his career as a medical doctor, before pursuing an international career in the energy sector. He joined Royal Dutch Shell in 1987, where he fulfilled several (senior) management positions. His last position was President Environment for Royal Dutch Shell (2009-2013). From 2014 till 2023, Allard Castelein was President and CEO of the Port of Rotterdam (Netherlands).

Education: Allard Castelein obtained a Master degree in Medicine from the Erasmus University of Rotterdam.

Expertise: Allard Castelein has significant CEO and management experience in the Energy Industry, with skills, amongst others, in sustainable development and the environment.

Other mandates¹: non-executive director at Renewi plc, non-executive director at Heijmans N.V., non-executive director at Associated British Ports, member of the Supervisory Board of the International Architecture Biennale Rotterdam, chairman of the board of the Ronald McDonal Huis Sophia Rotterdam.

British nationality, 1964, female

Member of the Supervisory Board, Chair of the Technical and Commercial Committee, member of the Audit Committee.

First appointment in 2022, expiry current term in 2026.

Profession: Executive Vice President Projects & Engineering at Shell³.

Background: Hilary Mercer has 36 years of experience within Shell in various technical and management roles, including mega project development and delivery in Oman, Russia, Iraq, Qatar and the USA and global project portfolio management.

Education: Hilary Mercer has a degree in Engineering Science from Oxford University (Great Britain) and is a Fellow of the Institution of Mechanical Engineers and a Fellow of the Royal Academy of Engineering.

Expertise: Hilary Mercer adds knowledge and experience in engineering, project management and HSSE to the Supervisory Board.

Other mandates: –

Dutch nationality, 1972, male

Member of the Supervisory Board, Chair of the Audit Committee.

First appointment in 2020, expiry current term in 2024.

Profession: Member of the Executive Board of HAL Holding N.V./director HAL Investments B.V (Netherlands).

Education: Jaap van Wiechen studied Econometrics at the University of Groningen (Netherlands).

Expertise: Jaap van Wiechen has management expertise at various (international) companies.

Other mandates¹: member of the Executive Board of HAL Holding N.V./director of HAL Investments B.V., Chairman of the Supervisory Board of Mondhoekie B.V. (Coolblue), member of the Supervisory Board of Royal Boskalis Westminster N.V.

1. This section includes other mandates that may be relevant for the performance of the duties of the Supervisory Board.
2. Ended February 1, 2024.
3. Effective January 1, 2024.

3.1.4 Share capital

The authorized share capital of the Company amounts to EUR200 million and is divided into 400,000,000 ordinary shares with a nominal value of EUR0.25 and 400,000,000 protective preference shares, also with a nominal value of EUR0.25. The preference shares can be issued as a protective measure, as explained in the section on the Stichting Continuïteit SBM Offshore. As per December 31, 2023, 180,671,305 (2022: 180,671,305) ordinary shares are issued. No protective preference shares have been issued.

As per the Dutch Act on Conversion of bearer shares (Wet omzetting aandelen aan toonder), all bearer shares still outstanding at December 31, 2020 have been converted into registered shares (31,840) held in the name of the Company as per January 1, 2021. A shareholder who hands in a bearer share certificate to the Company before January 2, 2026 is entitled to receive from the Company a replacement registered share. A shareholder may not exercise the rights vested in a share until the shareholder has handed in the corresponding bearer share certificate(s) to the Company.

3.1.5 General Meeting

Within six months after the end of the financial year, the Annual General Meeting (AGM) is held. The agenda for this meeting generally includes the following standard items:

Proposals to the agenda of General Meetings can be made by persons who are entitled to attend General Meetings, solely or jointly representing shares amounting to at least 1% of the issued share capital, or with a market value of at least EUR50 million. Proposals of persons who are entitled to attend the shareholders meetings will only be included in the agenda if such proposals are made in writing to the Management Board not later than sixty days before that meeting.

With reference to the articles of association, all shareholders are entitled, either personally or by proxy authorized in writing, to attend the General Meeting, to address the General Meeting and to vote. The articles of association do not provide for any limitation of the transferability of the ordinary shares and the voting rights of shareholders are not subject to any limitation.

At the General Meeting, each ordinary share with a nominal value of EUR0.25 each shall confer the right to cast one (1) vote. Each protective preference share with a nominal value of EUR0.25 each shall confer the right to cast one (1) vote, when issued. None of the protective preference shares have been issued to date. Unless otherwise required by law or the articles of association of the Company, all resolutions shall be adopted by an absolute majority of votes. The General Meeting may adopt a resolution to amend the articles of association of the Company by an absolute majority of votes cast, but solely upon the proposal of the Management Board, subject to the approval of the Supervisory Board. The articles of association are reviewed on a regular basis and were last amended on April 7, 2022.

The 2023 AGM was held physically and shareholders could cast their votes prior to and during the meeting. 130,899,638 ordinary shares participated in the voting, equal to 72.45% (2021: 72.82%) of the then total outstanding share capital of 180,671,305 ordinary shares. All proposed resolutions were adopted. The outcome of the voting of the meeting was posted on the Company’s website on the day following the 2023 AGM and draft minutes were made available to the shareholders via the Company's website within three months after the meeting.

Finally, SBM Offshore’s policy on shareholder contacts and dialogue can be found on the Company website (ESG/Governance section) as per best practice 4.2.2 of the Corporate Governance Code.

3.1.6 Issue, Repurchase and Cancellation of Shares

The General Meeting or the Management Board, if authorized by the General Meeting and with the approval of the Supervisory Board, may resolve to issue shares.

The General Meeting or the Management Board, subject to the approval of the Supervisory Board, shall set the price and further conditions of issue, with due observance of the provisions contained in the articles of association. Shares shall never be issued below par, except in the case as referred to in article 2:80 (2) Dutch Civil Code. At the 2023 AGM, the shareholders have delegated to the Management Board for a period of eighteen months and, subject to the approval of the Supervisory Board, the authority to issue ordinary shares up to 10% of the issued share capital at that time. In addition, authorization was granted to restrict or to exclude pre-emption rights for a period of eighteen months and subject to the approval of the Supervisory Board.

The Management Board may, with the authorization of the General Meeting and the Supervisory Board and without prejudice to the provisions of article 2:98 Dutch Civil Code and the articles of association, cause the Company to acquire fully paid-up shares in its own capital for valuable consideration. The Management Board may resolve, subject to the approval of the Supervisory Board, to dispose of shares acquired by the Company in its own capital. No pre-emption right shall exist in respect of such disposal. At the 2023 AGM, the shareholders have delegated the authority to the Management Board for a period of eighteen months, as from April 13, 2023 and subject to approval of the Supervisory Board, to repurchase up to 10% of the issued share capital at that time.

3.1.7 External independent Auditor and Internal Auditor

The external independent auditor of SBM Offshore is appointed by the General Meeting on the proposal of the Supervisory Board upon the selection process and recommendation of the Audit Committee and the advice of the Management Board. PricewaterhouseCoopers Accountants N.V. (’PricewaterhouseCoopers’) was first appointed during the 2014 AGM. Pursuant to the Dutch Auditors Profession Act (Wet op het accountantsberoep), the audit firm of a so-called public interest entity (such as a listed company) is required to be replaced if the audit firm has performed the statutory audits of the company for a period of ten consecutive years. This means that the term for PricewaterhouseCoopers ends with the audit of the financial year 2023. On April 13, 2023 the General Meeting appointed Deloitte Accountants B.V. as external independent auditor for a period of four years from the audit of the financial years 2024 up to and including 2027.

The external independent auditor attends all meetings of the Audit Committee, as well as the meeting of the Supervisory Board at which the financial statements are approved. The external independent auditor receives the financial information and underlying reports of the quarterly results and is given the opportunity to comment and respond to this information. Pursuant to the Auditors Profession Act, the auditors are prohibited from providing the Company with services in the Netherlands other than ’audit services aimed to provide reliability concerning the information supplied by the audited client for the benefit of external users of this information and also for the benefit of the Supervisory Board, as referred to in the reports mentioned’. During 2023, a minor number of limited-scope non-audit services were provided by foreign member firms of the PricewaterhouseCoopers global network, taking into account the external auditor’s independence rules and SBM Offshore’s policy in this regard.

The task of the Internal Audit department is to assess the design and the operation of the internal risk management and control systems. It assists the Company in accomplishing its objectives by bringing a systematic and disciplined approach to evaluate and improve the effectiveness of the organization’s governance, risk management, and internal controls. The Management Board is responsible for the Internal Audit function. The Supervisory Board oversees the Internal Audit function and, through the Audit Committee, maintains regular contact with the Group Internal Audit Director. Administratively the Group Internal Audit Director reports to the CFO. An Internal Audit Plan, based on a risk-based prioritization of the audit universe, is submitted annually to the Management Board and then to the Audit Committee and Supervisory Board for approval. The Internal Audit department reports the results of the internal audit activities and progress compared to plan to the Management Board, Audit Committee and the external independent auditor. The Internal Audit department is governed by adherence to the Corporate Governance Code and the International Professional Practices Framework (IPPF) of the Institute of Internal Auditors. Every five years, the Internal Audit department is subject to an external quality assurance review against the standards as set out in the IPPF.

3.1.8 Stichting Continuïteit SBM Offshore

In this section, SBM Offshore’s takeover protection measures are described, as well as the circumstances under which it is expected that these measures may be used.

A foundation ‘Stichting Continuïteit SBM Offshore’ (the Foundation), was established on March 15, 1988. In summary, the objectives of the Foundation are to represent the interests of SBM Offshore in such a way that the interests of the Company and of all parties involved in this are safeguarded, and that influences which could affect the independence, continuity and/or the identity of the Company in breach of those interests are deterred. The Foundation will perform its role, and take all actions required, at its sole discretion. In the exercise of its functions it will, however, be guided by the interests of the Company and the business enterprises connected with it, and all other stakeholders, including shareholders and employees.

The Foundation is managed by a Board, the composition of which is intended to ensure that an independent judgment may be made as to the interests of the Company. The Board consists of a number of experienced (former) senior executives of multinational companies: Mr. A.W. Veenman, Chair, Mr. B. Vree, Vice-Chair, Mr. R.H. Berkvens, Ms. H.F.M. Defesche and Mr. J.O. van Klinken. In order to inform the Board about the business and interests of the Company, the Chair of the Supervisory Board, the CEO and the CFO are invited to attend the Foundation Board meetings.

The Management Board, with the approval of the Supervisory Board, has granted a call option to the Foundation to acquire a number of protective preference shares in the Company’s share capital, carrying voting rights, equal to one half of the voting rights carried by the ordinary shares outstanding immediately prior to the exercise of the option, enabling it effectively to perform its functions, at its sole discretion and responsibility, as it deems useful or desirable.

The option agreement between SBM Offshore and the Foundation was last amended and restated in 2011, to reflect a waiver by the Company of its put option and the alignment of the nominal value of the protective preference shares with the nominal value of ordinary shares by reducing the nominal value of EUR1 to EUR0.25 and the related increase in the number of protective preference shares, as per the amended articles of association of the Company. The Foundation is independent, as stipulated in article 5:71 (1) (c) Financial Markets Supervision Act.

3.1.9 Other Regulatory Matters

The members of the Management Board have a services contract with SBM Offshore N.V. These contracts stipulate that members of the Management Board may not compete with the Company. Conflict of interest procedures are included in the Management Board and Supervisory Board rules and the Company’s Code of Conduct, and reflect Dutch law and the principle and best practices of the Corporate Governance Code. In 2023, there were no conflicts of interest in relation to the members of the Management Board and Supervisory Board reported that were of material significance to the Company. For an overview of remuneration granted to the Management and Supervisory Board, reference is made to the remuneration report. The Company is compliant with best practice 2.7.3 to 2.7.4 of the Corporate Governance Code.

In 2023, SBM Offshore did not enter into transactions with legal or natural persons who held at least 10% of the shares in the Company. The Company is compliant with best practice 2.7.5 of the Corporate Governance Code.

In addition to the Company’s Insider Trading Rules, the Supervisory Board and Management Board rules contain a provision stipulating that Supervisory Board and Management Board members will not trade in Company shares or other shares issued by entities other than the Company on the basis of share-price-sensitive information if this information has been obtained in the course of managing or supervising the Company’s business. For information about the shares (or other financial instruments) held in SBM Offshore N.V. by members of the Management Board, reference is made to section 4.3.6 of the notes to the consolidated financial statements.

The Company is not a party to any material agreement that takes effect, alters or terminates upon a change of control of the Company following a public takeover bid as referred to in section 5:70 of the Dutch Financial Markets Supervision Act, other than as mentioned in this paragraph. SBM Offshore N.V. has a revolving credit facility agreement under which the approval of the participating lenders must be obtained in the event of a change of control of the Company due to a public takeover bid. Certain shareholder agreements, vessel charter, EPC and O&M contracts that subsidiaries of the Company entered into contain clauses that are triggered in case of a change of control of the Company following a public takeover bid, providing contracting parties with certain rights, such as the right to terminate the relevant agreement. In addition, local bidding rules and regulations (e.g. in Brazil for Petrobras) may require client approval for changes of control. A change of control clause is included in the services contract between the Company and each of the members of the Management Board.

Since the end of 2012, an Executive Committee has been in place. The Executive Committee facilitates decision-making without detracting from the exercise of statutory responsibilities by the members of the Management Board. At year-end 2023, the Executive Committee is comprised of the Management Board members, the Managing Directors of Floating Production Solutions, Global Resources & Services, Operations, and New Energies & Services, as well as the Group HR Director, the Group HSSEQ & Sustainability Director and the Group General Counsel. In principle, the Executive Committee meets every three months, with ongoing interaction in the interim. In the meetings strategic, operational, financial and organizational topics are discussed.

SBM Offshore has a Diversity & Inclusion Policy in place for the Group which can be found on the Company website. Furthermore, in 2023 and with the approval of the Supervisory Board, the Diversity & Inclusion policies for the Supervisory Board and for the Management Board including Senior Management were updated and can also be found on the Company website (ESG/Governance section). Diversity and inclusion targets found to be relevant for the Supervisory Board and Management Board including Senior Management are i) nationality/cultural background with a due and fair representation of the geographic regions in which the Company operates and ii) gender.

At year-end 2023, the members of the Management Board represented four and the members of the Supervisory Board represented four nationalities of which two are different from the Management Board. Two additional nationalities were represented in the Executive Committee. A broad range of experience in the geographic regions the Company operates is seen, or in case of new regions, experience is being build up. Employee development plans are aimed to contribute further to this target.

For 2023, the Company maintained the following gender diversity targets: i) Supervisory Board: males and females each hold at least one third of the seats; ii) Management Board: to have at least one female; and iii) Senior Management: to have at least one third of each of males and females.

As at December 31, 2023, 33.33% of the Supervisory Board members was female (at target). Senior Management met the target as 42.86% of the Executive Committee (excluding Management Board) was female. The Management Board consisted of 100% males, which means the set target was not met. In 2023 there were no vacancies in the Management Board.

In general, more than for re-appointments, whereby experience and good performance are weighing heavily on the decision, new appointments offer opportunity to re-balance the composition in view of fair and equal gender representation when needed. The targets set for (gender) diversity will be taken into consideration when there are vacancies in the Supervisory Board, Management Board and Senior Management positions. For example, the leadership program (RISE) is designed to ensure that both men and women can advance into senior management and executive positions. Another example to reach the target is collaborating with technical schools, whereby it is noted that for this action it will take longer to see the results in the organization.

The same targets for the Supervisory Board, Management Board and Senior Management will be applied for 2024. Additionally, in terms of the broader organization, the target is that 25% of the broader group of senior management consists of females.

The Company has a Code of Conduct which is built on the Company’s four core values Integrity, Care, Entrepreneurship and Ownership. Reporting channels and a Speak Up Line are in place and enable SBM Offshore to carefully listen to its employees and partners in the value chain about concerns related to potential violations against the Code of Conduct, Core Values, or the law. The Speak Up Line, managed by an independent third party, is available 24 hours a day, 365 days a year, supports multiple languages, and allows for anonymous and confidential reporting. For more details on SBM Offshore’s compliance program reference is made to section 3.5.2. The Code of Conduct can be found on the Company website.

SBM Offshore complies with the principles and best practices of the Corporate Governance Code.

3.2 Report of the Supervisory Board

In 2023, Cheryl Richard and Sietze Hepkema stepped down after the 2023 AGM after eight years of service. The Supervisory Board is grateful for their insights, knowledge and contributions. The Supervisory Board welcomed Allard Castelein who was newly appointed at the 2023 AGM for a period of four years, until the 2027 AGM. In accordance with best practice 2.2.2 of the Corporate Governance Code, the competencies and background of the Supervisory Board members already in function, as well as the Diversity & Inclusion Policy and the Profile for the Supervisory Board, were closely observed for nominations made.

As per year-end, five out of six Supervisory Board members are independent from the Company within the meaning of best practice provisions 2.1.7 to 2.1.9 inclusive of the Corporate Governance Code. The exception is Jaap van Wiechen in view of his position as member of the Executive Board of HAL Holding N.V./director HAL Investments B.V.

In 2023, the Supervisory Board met seven times for its scheduled meetings including a two-day Strategy Session in August, and some ad hoc calls. The Supervisory Board assessed that its members have adequate time available to give sufficient attention to the Company. The attendance percentage of the Supervisory Board meetings was 97.73%. The table below shows the overview of the attendance in 2023 at meetings for the individual members out of the number eligible to attend.

1. Where a Supervisory Board member retired from or was appointed to the Supervisory Board, stepped down from a Committee or was appointed throughout the year, only meetings during his/her tenure were taken into account

The Management Board prepared detailed supporting documents as preparation for all meetings and several representatives of senior management were invited to discuss specific topics within their area of responsibility. The Supervisory Board and Committee meetings were usually held over two days to ensure sufficient time for review and discussion. The Management Board attended all regular meetings of the Supervisory Board. Whenever possible informal pre-board dinners were held. Several informal meetings and contacts among Supervisory Board members and/or Management Board members outside the Board meetings also took place. Prior to the regular meetings, the Supervisory Board met outside the presence of the Management Board to reflect on agenda items and discuss potential items requiring attention during the meeting. The Supervisory Board also received regular updates from the Management Board outside meetings on relevant developments within the Company.

The Supervisory Board discussed a wide range of topics during the year. In its deliberations, the Supervisory Board considered the interests of the Company and its business as well as the relevant stakeholders from the Company. Among others, recurring standard items on the agenda of the Supervisory Board meetings were the Company strategy, the commercial activities/projects and the market environment, the operational performance, project execution and performance, the financial performance and liquidity position, tax including notably OECD Pillar Two developments and impact, treasury topics, investor relations topics, compliance, risk management and internal controls, internal audit plan, SBM Offshore organization and culture including diversity and inclusion, corporate governance, composition and succession planning of the Management Board, Supervisory Board and senior management of the Company, remuneration for the Management Board, Supervisory Board and senior management, and ESG/sustainability matters in relation to the strategy and embedding in the organization.

In February 2023 the Supervisory Board approved the 2022 financial statements and the proposal to the General Meeting of an all cash dividend distribution. In the same meeting, the 2023 operating plan was approved in its final form. In August 2023 the Supervisory Board reviewed SBM Offshore’s long-term strategic plan including mission, goals, vision and values. The Company strategy is built around the strategic pillars Environment, Social and Governance, for each of which material topics have been identified following stakeholder engagement. In this session, the macro trends impacting the world, the risks related to the strategy and the impact on the ESG pillars were discussed. Hereafter the long-term strategic plan was approved. On various occasions during the year, the progress on the implementation of the strategy was reviewed and discussed, also via KPI's set. Monitoring whether targets are reached also takes place via the Group Balanced Scorecard for the Management Board as well as the organization. The Supervisory Board annually reviews and discusses the Company’s risk appetite. Finally, time was spent on talent management and leadership development.

The Supervisory Board has appointed three committees which are formed from among its members. These committees have advisory powers, share the main considerations and conclusions of their meetings in the Supervisory Board meeting and provide recommendations for decision by the Supervisory Board. The committee composition changed in 2023 due to changes in the Supervisory Board.

1. Appointed as per April 13, 2023

There is an open invitation to join committee meetings for those Supervisory Board members who are not a member of specific committee. This invitation is regularly made use of.

The Audit Committee has seen changes in 2023: following the departure of Sietze Hepkema as of April 13, 2023, Ingelise Arntsen joined as member. The Audit Committee convened five times in 2023. The attendance percentage of the Audit Committee meetings was 93.33%. The Chair of the Audit Committee reported to the Supervisory Board on the principal issues discussed, on actions arising and the follow-up of such actions and made recommendations on those matters requiring a decision by the Supervisory Board. The Management Board, the Group Internal Audit Director, the Group Controller and the external independent auditor attended the meetings. After each meeting, the Audit Committee met with the external independent auditor outside the presence of the Management Board. The Chair of the Audit Committee regularly held meetings with the CFO, and separately with SBM Offshore’s Group Internal Audit Director and again separately with PricewaterhouseCoopers.

The external independent auditor participated in all meetings of the Audit Committee. Discussions were held with PricewaterhouseCoopers about the audit plan, interim audit findings report, board report, audit report and financial statements including managerial judgments and key accounting estimates. Additionally, the Audit Committee formally evaluated the external independent auditor.

The Appointment and Remuneration Committee saw changes in 2023: following the departure of Cheryl Richard and Sietze Hepkema, Allard Castelein was appointed as Chair of the Committee for remuneration matters, and Bernard Bajolet became member. The Appointment and Remuneration Committee had five scheduled meetings in 2023. The attendance rate of the Appointment and Remuneration Committee meetings was 100%. The Appointment and Remuneration Committee consists of two parts as prescribed by the Corporate Governance Code: a part for selection and appointment matters and a part for remuneration matters. During the Supervisory Board meetings, the respective Chair reported on the selection and appointment matters and on the remuneration matters reviewed by the Committee, on actions arising and the follow-up of such actions. They made recommendations on those matters that require a decision from the Supervisory Board.

The meetings were attended by the Management Board and the Group HR Director, except where the Appointment and Remuneration Committee chose to discuss matters in private.

The Technical and Commercial Committee convened six times in 2023. The attendance rate of the Technical and Commercial Committee for these meetings was 100%. The Chair of the Technical and Commercial Committee reported to the Supervisory Board on the principal issues discussed, on actions arising and the follow-up of such actions and made recommendations on those matters requiring a decision.

The meetings were attended by the Management Board, and at times relevant senior management representatives to discuss topics within the remit of the Technical and Commercial Committee.

New members of the Supervisory Board receive a comprehensive induction tailored to their needs. Furthermore, during the first year of appointment, new members often are present at the meetings of committees of which they are not a member. In 2023, SBM Offshore welcomed one new member to the Supervisory Board. The induction program took place in the form of sessions with the Management Board and senior management where operational, commercial, financial, social, legal and sustainability matters regarding SBM Offshore were discussed, and included a site visit to the Schiedam office.

Both the Management Board and the Supervisory Board spent time on deep dives on various relevant subjects, for example the energy transition and the role of the Company herein. The Boards expanded their knowledge on what is expected from each of them in terms of sustainability governance.

In August 2023, the Supervisory Board assessed the profiles and the competencies of the individual Supervisory Board members. Annually, an assessment on the functioning of the Supervisory Board, its committees and its members is performed. For 2023, the assessment was done informally during an off-site session in Summer 2023, and continued with a process with the support of an external advisor. The latter was kicked off in Q4 2023 with a survey to be completed by the members of the Management Board, Supervisory Board and Company Secretary, followed by interviews and a feedback and review session with the Supervisory Board. Topics discussed throughout the year are around what went well and where there is room for improvement, which included, for instance, a review of items to be discussed at Committee meetings and at Supervisory Board level. This has led to some adjustments to the planning for 2024. Furthermore having an off-site session was much appreciated as it was an informal way to spend time together outside the meetings. This will be continued in 2024.

The Chair of the Supervisory Board frequently spoke with the CEO, and the Committee Chairs spoke with other Management Board members outside the meetings. The Supervisory Board also evaluated the functioning of the Management Board and its members. Overall, it was concluded that both the Supervisory Board and the Management Board function properly and effectively and that the relationship is constructive.

The Management Board reviewed its own functioning as a whole and that of the individual Management Board members on various occasions throughout the year. During these sessions, its role and responsibilities, meeting efficiency and the relationship with the Supervisory Board and senior management was also discussed. In addition there has been continuous attention to diversity and inclusion within the organization.

The Financial Statements have been audited by the external independent auditor, PricewaterhouseCoopers Accountants N.V. Their findings have been discussed with the Audit Committee and the Supervisory Board in the presence of the Management Board. The external independent auditor has expressed an unqualified opinion on the Financial Statements.

The members of the Supervisory Board have signed the 2023 Financial Statements pursuant to their statutory obligations under article 2:101 (2) of the Dutch Civil Code. The members of the Management Board have signed the 2023 Financial Statements pursuant to their statutory obligations under article 2:101(2) of the Dutch Civil Code and article 5:25c (2) (c) of the Financial Markets Supervision Act. The Supervisory Board of SBM Offshore N.V. recommends that the General Meeting adopts the Financial Statements for the year 2023.

Roeland Baan, Chair

Bernard Bajolet, Vice-Chair

Ingelise Arntsen

Allard Castelein

Hilary Mercer

Jaap van Wiechen

Schiphol, the Netherlands

February 28, 2024

3.3 Remuneration Report

Letter from the Chair of the Appointment and Remuneration Committee for remuneration matters

3.3.1 Management Board Remuneration Policy

The Remuneration Policy 2022 (RP 2022) became effective January 1, 2022 after being approved by shareholders with 91% of the votes on April 7, 2021. Full details and the principles and rationale for the RP 2022 are available on SBM Offshore’s website (ESG/Governance section).

The Company remunerates members of the Management Board for long-term value creation. RP 2022 is based on competitive remuneration aligned with the long-term performance of SBM Offshore. It is built on six reward principles: simplicity, flexibility, predictability, competitiveness, alignment and, most importantly, driving the right results.

This remuneration report has been written in accordance with the EU Shareholder Rights’ Directive (SRD II) as implemented in the Netherlands.

SBM Offshore believes the oceans will provide the world with safe, sustainable and affordable energy for generations to come. Our mission is to share our experience to make it happen. We enable the energy transition, leveraging our unique capabilities in floating solutions. In executing our strategy we are guided by our Core Values: Integrity, Care, Entrepreneurship and Ownership.

The underlying principles of the remuneration policy of the Management Board of SBM Offshore N.V. support the vision and ambition and aim for sustainable long-term value creation for the Company through the Value Creation Stake balanced with pay for performance through the Short-Term Incentive (STI) .

The Company’s strategy revolves around the pillars Environmental, Social and Governance in order to grow in size and create sustainable long-term value. In RP 2022, this is reflected in the STI performance areas of Profitability, Growth and Sustainability performance. Through the STI performance areas, Management Board remuneration is directly linked to the success of the Company and the value delivered to shareholders. Sustainability is an integral part of our strategy, and is explicitly expressed through the Sustainability performance area and also through the underpin test (if applicable) for the Value Creation Stake.

Employment conditions and pay of the Company’s employees within SBM Offshore are taken into account when formulating the remuneration policy, for instance through the internal pay-ratio analysis. Employment conditions for Management Board members may differ from those applicable to employees, also because Management Board members have a service contract rather than an employment relationship. The principles of the remuneration policy are used as a guideline for employment conditions at SBM Offshore as a whole.

The four components of the remuneration package of Management Board members under RP 2022 are: (1) base salary, (2) STI, (3) Value Creation Stake and (4) Pension and Benefits.

The base salary is set by the Supervisory Board and is a fixed component paid in cash. Depending on internal and external developments such as market movements, the Supervisory Board may adjust base salary levels.

The objective of the STI is to provide a direct alignment of pay with short-term operational performance. Under RP 2022, the STI key performance indicators focus on three performance areas: (i) Profitability, (ii) Growth and (iii) Sustainability Performance. The Supervisory Board, upon the recommendation of the A&RC, determines for each of the performance measures the specific performance targets and their relative weighting at the beginning of the financial year within the following margins for each area:

The Supervisory Board will inform the shareholders in the remuneration report of the performance indicators it applies in each financial year. Performance measures will never be adjusted retrospectively.

Performance ranges – threshold, target and maximum – are set for each of the key performance indicators. The STI is set at a target level of 100% of the base salary for the CEO and 75% of the base salary for any other member of the Management Board. The threshold pay-out is at 0.5 times target and maximum pay-out will not exceed 1.5 times target. A linear pay-out line applies between threshold and maximum. Below threshold, the pay-out is zero. The Supervisory Board may adjust the outcome of the STI down by up to 10%, which adjustment will be reported on in the remuneration report.

At the end of the performance year, the performance is reviewed by the Supervisory Board and the pay-out level is determined. Target setting and realization are published ex post in this remuneration report. For order intake and project performance that are commercially very sensitive a qualitative appraisal will be presented. The STI is payable in cash after the publication of the Annual Report for the performance year.

The Value Creation Stake is an award of restricted shares to create direct alignment with long-term shareholder value. The awarded shares must be held for at least five years. After retirement or termination, the holding period will not be longer than two years. The gross annual grant value for each of the Management Board members is 175% of base salary. The number of shares is determined by a four-year average share price (volume-weighted). The Value Creation Stake has a variable element to the extent that the share price develops during the holding period. The Supervisory Board retains the discretion not to award the Value Creation Stake in case of an underpin event. RP 2022 introduces a clearly defined and observable underpin. The underpin serves as a mechanism to ensure an acceptable threshold level of performance and avoid vesting in case of circumstances as defined as underpin event. The underpin is evaluated each year at moment of vesting and in case the criteria are not met, the entitlement to the Value Creation Stake grant at that time will forfeit.

Two pillars have been defined when Supervisory Board is considering withholding the Value Creation Stake – in full or in part:

• Event(s) that threaten long-term continuity of the Company; and

• Where circumstances of the event(s) are/were within control of the incumbent Management Board.

These two pillars are the umbrella criteria: in case an event does not qualify under these pillars, the underpin test does not come into play. Underpins shall be assessed in determining the amount of Value Creation Stake vesting in a year:

• Safety event resulting in the loss of multiple lives and/or significant oil damage to the environment and/or loss of an FPSO; and/or

• Compliance issue resulting in the Company being unable to operate in one or more of its primary markets; and/or

• Significant project impairment due to insufficient oversight or gross negligence or deliberate omissions. This relates to large projects with a value exceeding US$1 billion.

All members of the Management Board are required to build up Company stock of at least 350% of base salary. The value of the share ownership is determined at the date of grant.

In principle, the Management Board members are responsible for their own pension arrangements and receive a pension allowance equal to 25% of their base salary for this purpose.

The Management Board members are entitled to additional benefits, such as a company car allowance, medical and life insurance and (dependent on the personal situation of the Management Board member) a housing allowance and school fees.

Each of the Management Board members has entered into a four-year service contract with the Company, the terms of which have been disclosed in the explanatory notice of the General Meeting at which the Management Board member was (re-)appointed. Next to his service contract, Bruno Chabas has an employment contract with Offshore Energy Development Corporation S.A.M., in relation to a split pay-out of his remuneration.

The service contracts with the Management Board members contain an adjustment clause giving discretionary authority to the Supervisory Board to adjust the payment of the STI , if a lack of adjustment would produce an unfair or unintended result as a consequence of extraordinary circumstances during the period in which the performance criteria have been, or should have been achieved. However, the Supervisory Board has determined that upward adjustments will not be considered based on earlier shareholder feedback.

A claw-back provision is included in the service contracts enabling the Company to recover the Value Creation Stake, STI and/or LTI (as granted under RP 2015) on account of incorrect financial data.

The Supervisory Board will determine the appropriate severance payment for Management Board members in accordance with the relevant service contracts and Corporate Governance Code. The Corporate Governance Code provides that the severance payment will not exceed a sum equivalent to one times annual base salary. This also applies in a situation of a change in control.

SBM Offshore does not grant loans, advance payments or guarantees to its Management Board members.

3.3.2 2023 Management Board Remuneration

The Supervisory Board is responsible for ensuring that the remuneration policy is appropriately applied and aligned with the Company’s objectives. The remuneration level is determined by the Supervisory Board using a comparison with Dutch and international peer companies, as well as internal pay ratios across the Company.

In order to determine a competitive base salary level and to monitor total remuneration levels of the Management Board, a reference group of relevant companies in the industry (the ‘Reference Group‘) has been defined. Pay levels of the Management Board members are bench-marked to the Reference Group. In the event a position cannot be bench-marked within the Reference Group, the Supervisory Board may benchmark a position to similar companies. For 2023, the Reference Group consisted of:¹

In 2023, there were no changes in the base salary of the Management Board members.

The pay ratio shows the developments in the annual total remuneration of the Management Board members and the average remuneration on a full-time-equivalent basis of employees of the company.² The average total employee and contractor costs per FTE in 2023 was EUR136 thousand.

The pay ratios of each of the Management Board members over the period of 2019 to 2023 are displayed in the following graph.

The table below provides insight into the costs for SBM Offshore for Management Board reward in 2023 (based on RP 2022) and presents an overview of the remuneration of the Management Board members who were in office in 2023.

Remuneration of the Management Board

1. STI based on accrual accounting, taking into consideration that this reflects the STI to be paid over the performance of that year.
2. Including unwinding of rights as employee prior to the Management Board nomination.

The 2023 and 2022 base salary levels of the Management Board members are shown in the table above: Remuneration of the Management Board.

RP 2022 indicates that for the STI, the performance areas are Profitability, Growth and Sustainability. As the Company now revolves its strategy around the strategic pillars Environment, Social and Governance, the Supervisory Board deemed it appropriate that the STI performance measures can also be linked to these pillars.

The Supervisory Board set the metrics and the detailed targets (reflected as Threshold/Target/Max) for each of these performance areas at the beginning of the financial year. For each of these targets a scenario analysis takes place to ensure that the targets are suitable, supportive to the strategy and challenging. When conducting scenario analyses and establishing the metrics and detailed targets, the Supervisory Board identifies critical variables and factors that could impact the Company’s performance in the relevant performance areas and could influence pay outcomes. Additionally, regular updates are given on the forecasted target realization throughout the year. These updates are also taken into consideration in the scenario analyses when establishing the targets and detailed metrics at the beginning of the following year.

The following two tables show an overview of the 2023 target realization and the related 2023 STI for the individual Management Board members.

1. Underlying EBITDA reflects the following adjustments: i. impact of the sale of Liza Destiny earlier than planned; ii. implementation costs of an optimization plan related to the Company's support functions; and iii. impact of the delay in commencement of a charter by a client notwithstanding the on-target delivery of the vessel by the Company.

2023 STI Performance

The Supervisory Board decided to grant the Value Creation Stake for 2024 to the Management Board members in accordance with RP 2022. The underpin test as explained in section 3.3.1 was applied to this grant. As per RP 2022, the granted Value Creation Stake vests immediately. The gross annual value for each of the Management Board members is 175% of base salary. The number of shares was based on the four-year average share price (volume weighted) at the date of the respective grant. The cost of the granted Value Creation Stake is included in the table at the beginning of this section 3.3.2. The number of shares vested under the Value Creation Stake can be found in section 3.3.3 of this remuneration report under Conditions of and information regarding share plans.

The following table contains an overview of shares held in SBM Offshore N.V. by members of the Management Board at December 31, 2023.

Shares held by members of the Management Board

1. Management Board member since April 6, 2022.

All Management Board members met the share ownership requirement, which is set at an equivalent of 350% of their base salary. Section 3.3.3 contains more information about the (historical) share plans for the Management Board.

Management Board members received a pension allowance equal to 25% of their base salary. In case these payments are not made to a qualifying pension fund, Management Board members are individually responsible for the contribution received and SBM Offshore withholds wage tax on these amounts. For the CEO, two pension arrangements (defined contribution) are in place and its costs are included in the table at the beginning of this section 3.3.2.

The Management Board members received several allowances in 2023, including a car allowance, a housing allowance as well as school fees. The value of these elements is included in the table in section 3.3.2 under item Other Benefits.

1. Compared to RP 2022 the reference group has changed. Due to changes such as bankruptcy and delisting, Boskalis, Superior Energy Services and RPS Group are no longer part of the reference group.
2. The pay ratio is calculated as the total accounting costs of remuneration for each of the Management Board members expressed as a multiple of the average overall employee benefit and contractor expenses for a given year (excluding employees working for non consolidated JVs and associates).

3.3.3 Other Remuneration Information

In compliance with the implemented EU Shareholder Rights’ Directive into Dutch law, this section provides further information to increase transparency and accountability for the execution of RP 2022 and aim to allow shareholders, potential investors and other stakeholders to better assess Management Board remuneration.

The following table includes further details regarding the various (historical) share plans, including the changes throughout 2023.

Conditions of and information regarding share plans

1. Opening balance consists of both shares held and unvested grants for conditional plans at assumed maximum target.
2. Closing balance consists of the full grant and vesting of the relevant plan, including any sell-to-cover performed to compensate a wage tax impact.
3. Converted at the share price at the date of grant.
4. Converted at the share price at the date of vesting.
5. Includes additional Value Creation Stake granted due to salary increase.
6. Additional Value Creation Stake granted due to salary increase.
7. Pro-rata VCS following appointment to Management Board per April 6, 2022.

In the table below, information on the annual change of remuneration of each individual Management Board member is set out over the five most recent financial years. In addition, the performance of the Company (measured in Directional Underlying EBITDA and TRIFR) is displayed as well as the average remuneration on a full-time equivalent basis of employees of the Company (calculated in the same manner as the internal pay ratio in this section).

Comparative table on the change of remuneration and Company performance over the last five reported financial years

1. Annual change in percentage is calculated comparative to the amount of the current year.
2. 2018 – 2020 impacted by transition from RP15 (delayed LTI vesting) to RP18 (immediate VCS vesting and a holding period).
3. Underlying EBITDA reflects the following adjustments: i. impact of the sale of Liza Destiny earlier than planned; ii. implementation costs of an optimization plan related to the Company's support functions; and iii. impact of the delay in commencement of a charter by a client notwithstanding the on-target delivery of the vessel by the Company.
4. Total recordable injury frequency rate trends are positive when downwards.
5. The average employee expenses of the company are based on the IFRS expenses including share based payments. The average employee expenses are influenced by both the composition of the population both in function as well as geographical location and the related foreign currency impacts. This calculation has a different basis than the pay-ratio calculation in accordance with the Dutch corporate governance code.

3.3.4 Supervisory Board Remuneration Policy

The Supervisory Board Remuneration Policy became effective April 8, 2020 after being approved by shareholders with 99% of the votes on the same date. The full version of the Remuneration Policy is available on SBM Offshore’s website (ESG/Governance section).

The Supervisory Board Remuneration Policy encourages a culture of long-term value creation and a focus on the long-term sustainability of the Company. The remuneration of the Supervisory Board members is not dependent on the results of the Company, which allows an unmitigated focus on long-term value creation for all stakeholders.

The Company’s strategy revolves around the pillars Environmental, Social and Governance. The Social pillar is reflected in the competitiveness of the remuneration policy, which is in line with global peer companies that may compete with SBM Offshore for business opportunities and/or talent. The remuneration should enable retaining and recruiting Supervisory Board members with the right balance of experience and competencies while observing the Supervisory Board Profile and Diversity & Inclusion Policy, to oversee the execution of the strategy and the performance of the Company. The remuneration intends to promote an adequate performance of their role. The strategic pillars are reflected in the focus of the Supervisory Board on long-term value creation.

Considering the nature of the role and responsibility of the Supervisory Board, the pay and employment conditions of employees are not taken into account when formulating the Remuneration Policy.

The fee level and structure for the Supervisory Board remuneration is currently as follows:

All fees above are on an annual basis and are not dependent on the number of meetings. Supervisory Board members also receive an annual amount of EUR500 for expenses, and a lump sum of EUR5,000 per meeting when intercontinental travel is involved. No share-based remuneration is granted to the members of the Supervisory Board.

The Supervisory Board members do not receive a pension allowance.

Members of the Supervisory Board are appointed by the General Meeting for a maximum term of four years. Re-appointment can take place as per the law, articles of association and the Supervisory Board rules of the Company. The term of the Supervisory Board members terminates at the end of their term, in case of resignation or dismissal by the General Meeting.

SBM Offshore does not provide loans, advances or guarantees (and/or securities) to the members of the Supervisory Board.

3.3.5 Supervisory Board Remuneration in 2023

In accordance with the Supervisory Board Remuneration Policy, the remuneration paid out to the Supervisory Board in 2023 is as per below. Supervisory Board members do not receive variable remuneration.

Remuneration of the Supervisory Board by member in thousands of EUR

1. Other benefits items for the supervisory board consist mainly of the lump sum for intercontinental travel at EUR 5,000 each and a yearly expense allowance of EUR 500.
2. As per April 13, 2023.
3. As per April 6, 2022.
4. Until April 13, 2023.
5. Until April 6, 2022.

In the table below, information on the annual change of remuneration of each individual Supervisory Board member is set out over the five most recent financial years.

Comparative table on the change of remuneration over the last five reported financial years in thousands of EUR

1. Annual change in percentage is calculated comparative to the amount of the current year.

None of the Supervisory Board members receives remuneration that is dependent on the financial performance of the Company, as per best practice 3.3. of the Corporate Governance Code.

SBM Offshore does not provide loans, advances or guarantees (and/or securities) to the members of the Supervisory Board.

In 2023, the base salary for the Management Board members stayed the same. Bruno Chabas has served the Company for 12 years and will step down as CEO at the end of the 2024 AGM. The Management Board will continue after April 12, 2024 as a two-person board consisting of Øivind Tangen (CEO) and Douglas Wood (CFO). The Supervisory Board resolved to increase the base salary of Øivind Tangen to EUR775 thousand as of that date.

The Supervisory Board Remuneration Policy was approved in 2020. In 2023, the Supervisory Board reviewed its own Remuneration Policy and concluded that the Policy serves its purpose in full and therefore minor changes are proposed in our submission to the 2024 AGM.

Pursuant to Dutch law, the Management Board Remuneration Policy must be approved by shareholders every four years and is therefore subject to renewal at the AGM in 2025. In this context the base salary of Douglas Wood will be benchmarked this year. We will seek input from our shareholders on the Remuneration Policy during the course of 2024.

3.4 Shareholder Information

SBM Offshore has been listed on Euronext Amsterdam since 1965. The market capitalization as at year-end 2023 was US$2.49 billion. The majority of the Company’s shareholders are institutional long-term investors.

SBM Offshore publishes audited full-year earnings results and unaudited half-year earnings results, which include financials, within sixty days after the close of the reporting period. For the first and third quarters, SBM Offshore publishes a trading update, which includes important Company news and financial highlights. The Company conducts a conference call and webcast for all earnings releases and a conference call only for all trading updates during which the Management Board presents the results and answers questions. All earnings-related information, including press releases, presentations and conference call details are available on the SBM Offshore website. Please see the Financial Calendar at the end of this section for the timing of publication of financial disclosures for the remainder of 2024. The Company reports a ’Directional’ income statement, balance sheet and cash flow statement. Directional reporting aims to increase transparency in relation to SBM Offshore’s cash flow generating capacity and to facilitate investor and analyst review and financial modeling. Furthermore, it also reflects how Management monitors and assesses financial performance of the Company. Directional reporting is included in the audited Consolidated Financial Statements in section 4.3.2.

The Company is evolving its shareholder return policy as follows: “The Company’s shareholder return policy is to maintain a stable annual cash return to shareholders which grows over time, with flexibility for the Company to make such cash return in the form of a cash dividend and the repurchase of shares. Determination of the annual cash return is based on the Company’s assessment of its underlying cash flow position. The Company prioritizes a stable cash distribution to shareholders and funding of growth projects, with the option to apply surplus capital towards incremental cash returns to shareholders.” The policy will be presented for discussion at the Annual General Meeting on April 12, 2024.

As a result, following review of its cash flow position and forecast, the Company intends to pay a total cash return to shareholders of US$220 million in 2024. This represents an increase of 12% compared with the dividend paid in 2023. The cash return is to be composed of a proposed dividend of US$150 million (equivalent to c. US$0.83 per share¹) combined with a EUR65 million (US$70 million equivalent²) share repurchase program. Shares repurchased as part of the cash return will be cancelled. The share repurchase program will be launched on March 1, 2024, and the dividend will be proposed at the Annual General Meeting on April 12, 2024. Going forward, the Company intends to maintain a material level of dividend as part of the annual cash return with US$150 million as a base level.

Share price development in 2023 (in EUR)

As at December 31, 2023, the following investors holding ordinary shares had notified an interest of 3% or more of the Company’s issued share capital to the Autoriteit Financiële Markten (AFM) (only notifications after July 1, 2013 are included):

The Company maintains open and active engagement with its shareholders and aims to provide information to the market which is consistent, accurate and timely. Information is provided among other means through press releases, presentations, conference calls, investor conferences, meetings with investors and research analysts and the Company website. The website provides a constantly updated source of information about SBM Offshore’s core activities and latest developments. Press releases, presentations and information on shareholder communication can be found there under the Investors section.

1. Based on the number of shares outstanding at December 31, 2023. Dividend amount per share depends on number of shares entitled to dividend. The proposed ex-dividend date is April 16, 2024.
2. Based on the foreign exchange rate on February 22, 2024.

3.5 Risk & Compliance

The Management Board is responsible for:

• determining the Company’s risk profile and policy, which are designed to achieve the Company’s objectives, to assess and manage the Company’s risks and to ensure that sound internal risk management and control systems are in place, and

• ensuring that the entire SBM Offshore organization operates within its clearly defined Compliance Program.

The Management Board monitors the operation of the Compliance Program and the internal risk management and control systems and performs an annual systematic assessment of their design and effectiveness. The results are discussed with the Supervisory Board. This monitoring covers all material control measures relating to strategic, operational, financial, compliance and reporting risks. Among other considerations, attention is given to observed weaknesses, instances of misconduct and irregularities and indications from whistle blowers.

The Group General Counsel & Chief Compliance Officer has managerial responsibility for compliance, insurance and legal matters. The Compliance Function, headed by the Group Compliance Manager, has a leadership role in proactively advising the Management Board and Management on acting with integrity and in a compliant manner, both from a strategic and an operational perspective.

The Compliance Function comprises a globally diverse team of experienced compliance professionals located within the Company’s most prominent locations worldwide. Business leadership has accountability and responsibility to manage compliance and integrity risks within their fields of management control.

3.5.1 Design and Operation of the Internal risk management and control system

Group Risk & Control facilitates the business in identifying and managing risks, thereby ensuring the risks are managed within the Risk Appetite (see section 1.4.1) in order for the Company to achieve its strategic goals and objectives. The Risk Assurance Committee (RAC) brings together the heads of assurance functions and reviews the significant risks faced by the Company and its relevant control measures. It also oversees the integrated risk management approach.

3.5.2 Compliance Program

SBM Offshore aims to enable its employees and business partners to make the right decisions, with commitment to integrity at all levels. In recognition of this commitment, the Company has implemented a comprehensive Compliance Program applicable to the SBM Offshore group.

SBM Offshore’s Compliance Program aims to promote an ethical culture throughout SBM Offshore and guides the Company’s Management and employees in making value-led decisions, as well as strengthening the management control system to prevent, detect and respond to compliance risks and potential violations of the Code of Conduct, the law and other wrongdoing. The leaders of SBM Offshore are responsible for ensuring that the Company fulfils this commitment. They provide direction to employees to make decisions in line with our Core Values and Code of Conduct and foster and encourage a safe space for employees to speak up. To support leaders in this role, the Compliance function provides guidance and offers various training and communication tools such as newsletters and tailored e-Learning.

Key elements of the Compliance Program:

• Commitment of the Management Board and the Supervisory Board.

• Oversight and autonomy of the Group Compliance Manager and adequate, qualified resources in the department.

• Code of Conduct, compliance policies and procedures (incl. Anti-Bribery and Corruption Policy that is, amongst others, consistent with the UN Convention against corruption).

• Regular communication, training and continued guidance and advice.

• Regular monitoring of compliance risks, mitigating measures and incident and action reporting.

• A thorough third-party management process, including an internal Validation Committee, which reviews the due diligence outcome on high-risk third parties prior to engagement.

• Independent verification (e.g. compliance audits).

• Compliance-related internal financial controls, following ICOFR principles.

• SBM Offshore only engages with third parties who share the same principles of conduct, communicated to all third parties prior to any contractual engagement.

• Confidential reporting procedures, including a Speak Up Line and internal investigations.

• Annual compliance statements for designated staff to monitor adherence to the Code and policies.

• Business conduct related questions part of the annual employee engagement survey.

SBM Offshore’s reporting channels and Speak Up Line enable leadership to carefully listen to employees and partners in the value chain about their compliance concerns. SBM Offshore is committed to investigate these concerns promptly, independently and objectively. SBM Offshore’s focus is on the prevention of misconduct and to protect the rights of the reporting person and SBM Offshore does not tolerate any form of retaliation against the reporting person. SBM Offshore takes claims of retaliation very seriously and deals with them directly.

• The Speak Up Line is managed by an independent third party, available 24 hours a day, allowing for anonymous and confidential reporting for both internal and external stakeholders.

• Once a report is made through the Speak Up Line, the below steps will be taken.

• SBM Offshore’s Integrity Panel oversees and investigates reports of (potential) misconduct.

• Reporting persons will receive a confirmation of their report within 7 days and will receive feedback within a reasonable timeframe, usually not exceeding three months after receiving the report, except in cases where the nature or complexity of the report requires a longer timeframe.

• A revised version of the Speak Up Policy was drafted in 2021, in line with the requirements set in the EU Whistleblowing Directive, and is available on SBM Offshore’s website.

3.6 Company Tax Policy

SBM Offshore’s tax policy is summarized as follows:

• The Company aims to be a good corporate citizen in the countries where it operates, by complying with the law and by contributing to countries’ progress and prosperity through employment, training and development, local spending and through payment of the various taxes it is subject to, including wage tax, personal income tax, withholding tax, sales tax and other state and national taxes as appropriate.

• The Company aims to be tax-efficient in order to be cost-competitive, while fully complying with local and international tax laws.

• The Company operates in a global context, with competitors, clients, suppliers and a workforce based around the world. A typical FPSO Engineering, Procurement and Construction (’EPC’) project sees a hull construction or conversion in Asia, topsides construction in Asia or South America, engineering in Europe or Asia and large-scale procurement from dozens of companies in many countries across the globe. Depending on the particulars of the client contract, the EPC phase may be followed by a lease-and-operate phase involving the country of operations but also support centers of the Company located around the world. In each of these countries, the Company complies with local regulations and pays direct and indirect taxes on local value-added, labor and profits and in some cases pays a revenue-based tax. To coordinate the international nature of its operations and its value flows and to consolidate its global maritime and EPC activities, in 1969 the Company created Single Buoy Moorings Inc, followed in 1986 by SBM Production Contractors Inc. S.A., which continue to perform their functions today from their offices in Marly, Switzerland.

The Company:

• Complies with the OECD transfer-pricing guidelines.

• Supports the OECD’s commitment to enhance tax transparency and is committed to full compliance with applicable laws in countries where it operates. Consistent with this approach, the Company supports the initiatives on base erosion and profit shifting, including, but not limited to, Anti Tax Avoidance Directive 2 (ATAD 2), as well as the Directive implementing the minimum taxation (OECD Pillar Two) at EU level. The Company is required to file detailed reports and transfer-pricing documentation in accordance with Base Erosion and Profit Shifting’s (BEPS) action 13, as is now implemented in Dutch tax law. The disclosures contained in the country-by-country reporting (‘CbCR‘) have been prepared to meet the OECD requirements and have been filed with the Dutch tax authorities for the year 2022.

• Makes use of the availability of international tax treaties to avoid double taxation.

• Does not use intellectual property as a means to shift profits, nor does it use digital sales. Furthermore, the Company does not apply aggressive intra-company financing structures such as hybrids. In 2023, the Company reported a current corporate income tax charge of US$130 million under IFRS (compared to US$86 million in 2022).

• Endorsed the B Team Responsible Tax Principles in August 2021, the VNO-NCW Tax Governance Code in 2023, and published the SBM Offshore Approach to Tax on its website. This explains the key principles applied to tax matters and the associated governance as well as describing the Company’s global tax footprint.

• Regarding the OECD initiative to address the Tax Challenges Arising from the Digitalization of the Economy and its two-pillar solution aiming to reform the international tax system, the Company acknowledges that the implementation of Pillar Two may have some impacts on its income tax charge. However the final assessment on Pillar Two legislation will be known only when final legislation, including all administrative guidance, will be enacted in the domestic law of the relevant jurisdictions. The OECD has released its additional guidance but further discussions and consultations are taking place and will continue in 2024. SBM Offshore will continue to asses the impact of Pillar Two legislation accordingly.

3.7 Operational Governance

Operational Governance of the Company is managed through:

• GEMS, as introduced in section 3.7.1.

• GTS, as introduced in section 3.7.2.

A detailed certification and classification table is provided in section 5.5, mapping compliance of SBM Offshore entities and sites with international certification standards and codes.

Note: for complementary details on SBM Offshore’s approach to Operational Excellence, refer also to section 2.1.4.

3.7.1 Global Enterprise Management System

The Management System is one of the key enablers for the Company to perform its business activities in a consistent, reliable and sustainable manner, meeting client expectations, adapting to new challenges and continuously improving ways of working.

The Management System of SBM Offshore is called the Global Enterprise Management System (GEMS) and is based on several international standards and other good practices. GEMS is the core of a broader ecosystem, including software solutions (e.g. LUCY, SBM Offshore’s Human Capital Management System) and other elements such as SharePoint microsites and Group Technical Standards (GTS) as introduced in section 3.7.2. The Group’s Vision, Values (section 1.3.1) and Policies are embedded in GEMS to support the correct governance of SBM Offshore’s organization and business activities. These form the foundation processes that are consistently applied throughout all offices and fleet operations (in-country offices and vessels).

GEMS is structured around three main process domains: executive processes, core processes and support processes. The core processes have been modelled to show where the company generates value from its activities. GEMS is represented as shown in the illustration. GEMS gives clear and formal ownership of end-to-end processes and clear identification of key controls. It provides a cohesive framework for quality and regulatory compliance, health and safety, security of personnel and assets, protection of the environment, as well as risk and opportunity management throughout the product lifecycle, ensuring the Company’s sustainability. GEMS can be accessed in its entirety via the Company's intranet which ensures easy access to all employees.

3.7.2 Group Technical Standards

A key driver for the cost of new projects is the technical standards to be applied in addition to the local regulatory requirements. Typically, these standards fall into three categories – customer standards, contractor standards or a hybrid set of customized standards. In the current climate of severe cost-pressure, there is a logical push in the industry towards wider acceptance of contractor standards. By leveraging its expertise – notably through its Fast4Ward^® program – SBM Offshore can minimize project customization and efficiently deliver more standard products, with significant cost and schedule savings.

To support this approach, the Company has, over the years, established its own Group Technical Standards (GTS) by integrating key elements of its accumulated project execution and fleet operational experience. The GTS consist of a set of minimum technical requirements applicable to Company products provided to customers on a Lease and Operate basis. They ensure a consistent design approach, optimized from a lifecycle-cost perspective and integrating the Company’s policies and standards with respect to personnel safety, environmental protection and asset integrity. Additionally, all GTS documents are formally reviewed and approved by Classification Societies acting as independent third parties.

To date, the Company has executed over 24 major projects using its GTS as the basis of design since they were established in 2003. GTS are now digital and available through a Requirement Management Software since Q1 2022, providing new features for GTS users and the team in charge of GTS development. The main benefits are time-saving, enhanced search and filtering functionalities, data re-use capacity, improved overall quality and multi-support availability.

The GTS are maintained by a team of internal technical authorities and experts covering all key technical aspects of Company products, providing assurance over GTS application during project execution and integrating operational feedback as part of GTS continuous improvement.

In 2023 SBM Offshore started the development of the GTS for its renewable product line and will continue in 2024. The main benefit will be the standardization of requirements for the development of wind farms.

In 2024 SBM Offshore will start improving the quality of the GTS’ requirements using Artificial Intelligence, benefits being clearer requirements that are easier to implement for project teams and vendors.

3.8 In Control Statement

The Management Board is responsible for establishing and maintaining adequate internal risk management and control systems. The implementation of the internal risk management and control framework at SBM Offshore focuses on managing strategic, financial, compliance and operational risks, as described in section 3.5.1 of the Management Report. As a key part of its scope, the Risk Management function is responsible for the design and monitoring of, and reporting on, the internal control framework.

During 2023, various aspects of risk management were discussed by the Management Board, including the consolidated quarterly Risk Report, Risk Appetite Statement review and the result of the yearly testing Internal Control Over Financial Reporting (ICOFR) campaign. The responsibilities concerning risk management, as well as the lines of defense, were also discussed with the senior management of the Company. There were no major failings in the internal risk management and control systems observed over the period. In addition, the result of the yearly ICOFR testing campaign was reviewed by the Audit Committee and Supervisory Board. This testing campaign did not highlight any major control deficiency and concluded with a consistent level of conformity rate around the organization.

SBM Offshore prepared the In Control Statement 2023 in accordance with the best practice provision 1.4.3 of the Dutch Corporate Governance Code. With due consideration to the above, the Company believes that:

• The Management Report provides sufficient insights into the Company’s internal risk management and control systems.

• Its internal risk management and control systems provide reasonable assurance that the financial reporting over 2023 does not contain any errors of material importance.

• Based on the current state of affairs, the Management Board states that it is justified that the financial reporting over 2023 is prepared on a going concern basis; and

• The material risks and uncertainties that are relevant to the expectation of the Company’s continuity for the period of 12 months after the preparation of the report have been included in the Management Report.

However, the Company cannot provide certainty that its business and financial strategic objectives will be realized or that its approach to internal control over financial reporting can prevent or detect all misstatements, errors, fraud or violation of law or regulations. Financial reporting over 2023 was based upon the best operational information available throughout the year and the Company makes a conscious effort at all times to weigh the potential impact of risk and the cost of control in a balanced manner.

With reference to section 5.25c paragraph 2, sub c of the Financial Markets Supervision Act (Wet op het financieel toezicht), the Management Board states that, to the best of its knowledge:

• The financial statements for 2023 give a true and fair view of the assets, liabilities, financial position and profit or loss of SBM Offshore and its consolidated companies.

• The Management Report gives a true and fair view of the position as per December 31, 2023 and that of SBM Offshore’s and its affiliated companies development during 2023. Furthermore, the Management Report includes a description of the principal risks facing SBM Offshore.

Schiphol, the Netherlands

February 28, 2024

Bruno Chabas, CEO

Øivind Tangen, COO

Douglas Wood, CFO