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SBM Offshore outlines response to Covid-19

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Oilfield Technology,

SBM Offshore has said that it has set up a dedicated task force to monitor the situation at all company locations across the globe, on a daily basis in response to the Covid-19 pandemic.

In 1Q20, the year-to-date uptime of the fleet has been in line with the company's historical track record. Business continuity protocols have been activated at shore bases, as well as for offshore operations. To keep offshore operations safe and stable, only essential maintenance is being performed. Crew changes have become more difficult as travel restrictions often apply in and out of countries where the company has operations or crewmembers are located. Crew rotations have been extended for those offshore while their upcoming counterparts are in self-quarantine at monitored facilities onshore.

In the last few days, SBM Offshore has transported some crew members with symptoms from one FPSO back to shore. Further tests have now confirmed a number of positive Covid-19 cases. The company is assessing the situation with the client and the authorities.

SBM Offshore is carrying out construction activities in many parts of the world. Additional measures and protocols have been put in place to ensure the health and well-being of staff and contractors at the yards. Construction yards in China reopened in February and are now close to planned capacity. In Singapore and Dubai, the yards have remained open until the end of March. Since last week, the authorities suspended activities at the yard in Singapore for a period of two weeks. Some delays in project execution will be unavoidable. The company is in close contact with clients and business partners to manage the situation, adjust execution planning and where appropriate create mitigation plans.

Activity and operations continue, although with some incremental expenditure to keep operations running safely. In this regard, measures have been taken to postpone non-vital programmes to reserve cash to help offset these impacts.

The unprecedented effects of the combined supply and demand shocks in the oil and gas industry have a major impact on oil and gas companies across the globe. In order to preserve liquidity and cash, measures to reduce and defer expenditure are in the process of being implemented by most oil companies across all of their business segments. SBM Offshore is assessing where the company may be able to assist its clients, while creating a solution which is fair for all parties.

SBM Offshore announced the completion of the EUR150 million 2020 share repurchase program on 3 April 2020. The company continues to have access to sufficient liquidity from its operating cash flow, committed project financing, revolving credit facility and cash balances.

The company expects to provide further visibility on the impact of the current situation on the company’s business and financials as part of the regular 2020 First Quarter Trading Update on 14May 2020. An update on the status of the outlook and guidance for 2020 financials will be provided at that time, taking into consideration any further developments in the coming weeks.

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