No 2 • 2007

ProsafeNow 2-07 18-12-07 14:54 Side 1

VISION Prosafe shall be a leading and

innovative provider of technology and services in selected niches of

the global oil and gas industry.

MISSIONBy providing our clients with innovative

and cost-efficient solutions, Prosafe shallmaximise shareholder value and create a

challenging and motivating workplace.

CORE VALUESProfitability

Respect InnOvation

Safety Ambition

Focus Environment

Prosafe NOW is published two to three times a year for our employees, clients,

vendors and other key audiences.

Submit ideas, comments and articles for the next issue to:

Karine Cosemanscommunications and branding manager

karine.cosemans@prosafe.com

EDITORKarine Cosemans

Photo page 1: BitmapPhoto page 9, 10, 11:

Kjetil Alsvik/Elisabeth Oltedal

PRODUCTIONPrinters AS

VISIT OUR WEB SITEwww.prosafe.com

RESPONSIBLE PUBLISHERProsafe SE

Stadiou Street 126CY-6020 Larnaca, CyprusPhone: +357 2462 2450

Fax +357 2462 2480mail@prosafe.com

The year 2007 has been yet anothersuccessful year. With a steadyperformance and solid order intake,we are on track to meet our targetsand commitments to our stake-holders.

The result for the third quarter of2007 was Prosafe’s best-ever. Our twobusiness divisions, Offshore SupportServices and Floating Production,delivered excellent results. We havedistributed a special dividend of NOK 3.75, in addition to the earlierdistributed ordinary dividend of NOK 1.25 for fiscal 2006.

This achievement is the result of good markets, quality assets,demanding clients and last, but not least, great efforts of all ouremployees.

In spite of general good operationalperformance, we had an oil spill onthe FPSO Umuroa in New Zealand.This oil spill resulted in approximatelysix cubic metres of oil contaminatedsand along a section of the Taranakicoast. The sand has been cleaned up, and fortunately there has notbeen done any permanent damage. The incident has been thoroughlyinvestigated, and we have taken thenecessary measures to guard againstany repeat. I would like to remind allco-workers of Prosafe’s objective toconduct its business with no adverseenvironmental impact. It is of the

greatest importance that we at alltimes show HSE responsibility,commitment and accountability.

“Innovation” is one of our corevalues, and I am proud to say thatwe this year have had several majorbreak-throughs for our proprietarycost-effective technological solutions.Floating Production is currentlyconverting a Floating Drilling,Production, Storage and Offloadingsystem (FDPSO). We will operate theFDPSO on a 7 + 8 year contract forMurphy Oil at the deepwater Azuritefield in the D.R. Congo. In addition,the business division is converting anFPSO on which we will install ourfirst-ever in-house developeddisconnectable turret. This FPSO willbe on a 7 + 8 year contract forApache’s Van Gogh field offshoreAustralia.

Floating Production’s long-termresearch and development effortswere also recognised by the Maritimeand Port Authority of Singapore whoawarded them this year’s OutstandingMaritime R&D and TechnologyAward. This annual internationalaward is given to a company foroutstanding innovation in theapplication or research and develop-ment for the maritime industry.

Offshore Support Services has alsothis year demonstrated a very highlevel of rig utilisation. The business

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Splittingfor futuregrowth

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division secured several importantnew contracts and contract extensionsagainst profitable dayrates.

The market for our accommodation/service rigs will remain good in thetime to come, both in the North Seaand internationally. We are confidentthat our strong market position, solidtrack record and versatile rig fleet ofdynamically-positioned and mooredrigs provide an attractive basis forwinning future contracts.

Since our founding in 1997, we havegradually grown the company andfortified our positions within themarket segments we focus on. ReidarLund, who has been chairman ofProsafe for many years, looks in anarticle in this magazine back on thelast decade of Prosafe’s history andshares some of his wisdom with us.

Today’s Prosafe ranks as the world’sleading owner and operator of semi-submersible accommodation/servicerigs, and as a leading owner andoperator of floating production and storage units. The company isrepresented in the world’s largestoffshore oil and gas provinces.

Both business divisions are financiallystrong, have capable organisations, aglobal presence and solid contractportfolio. The market outlook forboth business segments is bright anddemand looks very firm. In order tofacilitate for the best possible furtherdevelopment and growth for each ofthe business divisions, the board ofdirectors has decided that it will bebeneficial to split the company in twoindependent, listed companies.

Prosafe will be divided into onefocused Accommodation and ServiceRig company and one focusedFloating Production company. Thesplit process, including listing of thetwo entities, is expected to becompleted during the second quarterof 2008. After the split, there will betwo companies that are stronglypositioned to further cement theirleading positions.

Prosafe’s Ambassador Prize was sixyears ago established to recognise theefforts of a person who through theprevious year in an excellent way haspromoted one or several of Prosafe’score values. This year, I had thepleasure of presenting it to Alice Ng

for having distinguished herself byhaving in-depth knowledge andbeing a good communicator and apersuasive and convincing leader.Congratulations!

We have also this year given adonation to SOS Children’s Villages,rather than sending Season’sGreetings cards to our businessrelations. We have earmarked thedonation for the running of the SOSChildren’s Village in Igarassú in Brazil,a village that we have supportedbefore and that we know well. Webelieve that ensuring that childrenare given a home, care and educationis the most valuable aid we can give.

Greetings of the season, and my best wishes for a safe and happyNew Year!

Arne AustreidPresident and CEO

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On 6 December 2007, the Board of Directors concluded that bothcompanies, on an independent basis,will have resources and financialcapacity to further develop andgrow in line with previouslycommunicated goals.

As a result of the evaluation, wehave initiated the process intending

to split the company into two listedcompanies, one focused Accommo-dation and Service Rig company and one focused Floating Productioncompany.

The split process, including listing of the two entities, is expected to be completed during the secondquarter of 2008.

Arne Austreid will be the CEO of the Accommodation and Service Rigcompany, while Bjørn Henriksen willassume the role as CEO of theFloating Production company.

Split into two companiesOn 24 September, we released the news that the Board of Directors had decidedto commence a process of evaluating the possible effects of a split of Prosafeinto two focused, listed companies.

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By Karine Cosemans, communicationsand branding manager

Ken Shepherd, director HSEQA inProsafe Production extended a warmwelcome to all attending the SafetyDay and announced that this year’stopic was “human behaviour”. Hestated that the Safety Day’s purposewas to share knowledge, to promotehealth, safety and the environment,and to try to make a difference.

–It is a powerful signal, that in this room today we have so many

distinguished people willing to use time to promote safe working.That gesture in itself sends the clearmessage that we all mean business,said Ken Shepherd.

Human behaviour – the main causeof incidents–Prosafe is a global company, withoperations in 15 countries andemployees from more than 30nations, told Bjørn Henriksen, chiefoperating officer. All these employeeshave different personalities anddifferent cultural backgrounds.

From a safety point of view, this is achallenge. Statistics show that about80 percent of all accidents are causedby human behaviour, and not byfailing procedures or equipment.

–In order to improve safety, we haveto help each other. We expect safebehaviour from all persons who arepart of our business. You must knowthat there is management support forany person who uses the StopProgram. By stopping dangerousactions, you will save lives, savepeople from getting hurt and savethe company reputation, concludedBjørn Henriksen.

Don’t drop the glass ballRoy Hallås, president of FloatingProduction related that they currentlyhave seven vessels in operation, areconducting three major conversion projects and employ around 900 people. –The business division has clearambitions to grow, and may in threeto five year’s time employ as many as 2 000 persons, said Roy Hallås. It is important that this growth issustainable and takes place in a con-trolled manner. It cannot be achievedwithout taking safety seriously.

Roy Hallås compared the responsibili-ties that we face at work and in lifewith a complicated juggling act. –We can think of our differentresponsibilities as balls. We must tryto keep many balls in the air at thesame time, said Roy Hallås. Someballs, representing work, budget andtime, are made of rubber and willbounce back if we drop them onoccasion. Some of the balls that weare juggling are made of glass. Safety

Prosafe’s fifth Annual Safety Day was held on 16 October at the Raffles Hotel inSingapore. About 170 representatives from oil companies, shipyards, suppliers and Singaporean authorities, as well as Prosafe onshore and offshore managersattended and contributed to this successful day.

Annual Safety Day 2007

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Arne Austreid, president and CEO of Prosafe talking with Stephen W. Balint,floating systems engineering manager in Shell’s deepwater engineeringoffice in Malaysia.

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is such a glass ball. It will not bounceback when it falls, it will shatter andwill be very difficult, if notimpossible, to mend. Therefore, wemust never loose safety out of sight.

There is no compromise on safetyRobin Laird, president of OffshoreSupport Services, said that workingoffshore means working in adangerous environment.–We need vigilance in every minuteof our working day. There is nocompromise on safety. We have thesystems and procedures in place tohelp us, but how we as individualsinteract and use the system, is equallyimportant, related Robin Laird.

He referred to the behaviour of meercats, which are always looking out foreach other. –It is up to all to look out for oneanother, say stop when necessary, andassure that no one gets hurt. Wemust look out, not only for ourselves,but also for our colleagues at work,and for others in life in general,stated Robin Laird.

Human behaviour quizThe next item on the agenda was aquiz in which the participants’ know-ledge about the human behaviourwas put to the test. The participantsanswered table wise a list of 22questions. Some of the queries led toanimated debates and round-the-

table discussions, and many attendeeswere surprised when hearing thecorrect answers.

Update on last year’s Safety DayRegina Wang, environmentalengineer, gave an update on whathas happened after last year’s SafetyDay which focused on “theenvironment”. She informed aboutthe environmental managementplans that have been made for FPSOPolvo and FPSO Umuroa, Prosafe’snewest FPSOs that commencedoperations earlier this year.

She informed further that Prosafe isdoing an Envid (Environmental

identification) for the three currentconversion projects, based on ourscope of work once these vessels startoperations. They are preparing anenvironmental management plan forthese vessels, and there has been areview of the design to minimizeunnecessary emissions in theoperation phase.

Top-down message–Behaviour turns systems andprocedures into reality, said IanYoung, director of HSEQ in OffshoreSupport Services. It is not enough tohave good systems in place, becauseperformance is determined by howan organisation actually ‘acts out’

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From left: Rob Mears (Prosafe), Andre du Plessis (ABS Consulting), and threeother Prosafe employees: Don Ranasinghe, Patrick O’ Rourke and Suharyadi.

From left: David Trimble and Peter Walsh from Prosafe talking with Gregoire Lavignolle, FDPSO Manager from Murphy Oil.

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their systems. We must establish asafety culture that stresses that thereare certain ways in which we dothings in Prosafe. Behavioural safetyis not about changing an individual’sattitude, it is about changing themindset of the organisation.

He advised further that culture andbehaviour are top-down messages.–As managers and supervisors weneed to know how to behave andwhat to do in order to motivate ourcolleagues to behave safely. We mustcommunicate our commitment andthe priority that we attach to safety,listen to feedback and take actionwhen and where required.

Incident pyramidLachlan Mckelvie, HSE manager inFloating Production reported thatstatistics show that as accidents getless serious, employees are more andmore tempted to not report them.–In order to further improve our HSEresults, we must get hold of all theinformation and focus on “no blamereporting”, emphasised LachlanMckelvie.

Workshop and awardsThe Safety day continued with aworkshop. Thereafter, the afternoonwas concluded by the presentation ofthe Prosafe STOP Awards, the Safetyin Action Award and the Annual

Safety in Leadership Award toemployees and leaders whothroughout the previous year haddistinguished themselves by doing atremendous effort for improving thecompany’s HSE results. Finally, ArneAustreid, President and CEO ofProsafe awarded the AmbassadorPrize (see separate article in thismagazine).

The day was rounded off by a socialgathering and tasteful dinner at theRaffles hotel, which was a goodopportunity for all to mingle withcolleagues and clients from all overthe world.

We regard the zero mindset both asa goal to work towards and as away of thinking. We undertake todo what we can in working activelyto avoid harming people’s life andhealth, the natural environment andmaterial assets. But, how can weachieve our goal of zero incidentswhen slips and lapses are part ofhuman nature?

We build in robustness and faulttolerance through different forms ofbarriers. Traditionally, these barriershave been technical or physical. Weimplement extra safety valves,additional brake systems or othertechnical components that will be-come operative if there is a failure.

The thought behind this is verysimple: The likelihood of severalcomponents failing at the same timeis smaller than the probability of onesingle component failing. Inaddition, non-physical barriers suchas rules and regulations, proceduresand job descriptions describe indetail describe how critical worksituations must be conducted.

However, we know from experiencethat most accidents and near-misses

are due to human error rather thantechnical deficiencies. Although ouremployees observe prevailinglegislation, statutory regulations and procedures at all times, we must acknowledge that hazardousconditions can arise becauseindividuals make errors ofjudgement.

Collective responsibilitySystematic preventive HSE work is a high-priority line managementresponsibility. We expect all ourmanagers to lead the way by settinga good example and facilitatinggood working conditions. An activeand visible involve-ment by manage-ment is a key factor in achieving ourgoal of operating without injuriesand accidents.

But, management cannot handle thischallenge alone. All employees havea responsibility for performing theirwork in a safe manner, taking aproactive approach to reducing risk, and reporting undesirableconditions. All must contribute, take care and look after each other.

Take two minutes to evaluate therisks involved in your own tasks and

ensure that everyone in the crew is aligned with what is about tohappen. Say ’STOP’ and request atime-out if you feel unsafe - we havetime to do the job safely. Say ’STOP’when you observe unsafe acts orconditions, even though it might bedifficult to challenge a colleague or a superior.

Should a conflict arise betweenprogress and safety, the latter mustalways be the first priority. No safetyrules can be broken, and no shortcuts can be taken to complete a jobquickly.

Zero mindsetThe zero mindset involves a commit-ment to doing what we can toreduce risk and to learn from thingswhich have gone wrong. When anaccident or near-miss occurs, playingdown the incident or concluding thatit was a misfortune is not permitted.We follow up undesirable incidentsin a systematic manner, and continueto build a culture which promoteslearning. Safety for people, theenvironment and material assetsmust be created and re-created every day.

The zero mindset and safe behaviour

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By Karine Cosemans, communicationsand branding manager

Prosafe Production was awarded theprize for its longstanding focus onR&D, which has resulted in innovativeand cost-effective solutions. Prosafehas some seven patents to its credit inturret mooring systems, bearingsystems and the alignment of theircomponents.

The International Maritime Awardsdinner in Singapore was attended bymore than 800 business and industryrepresentatives, and was graced byMr Raymond Lim, Minister forTransport and Second Minister ofForeign Affairs.

Prosafe’s R&D work is based in theoffice in Singapore. The team workingwith engineering innovation consistsof 30 persons, mostly engineers.

–This business is very competitive andto stay ahead, you have to come upwith innovative, cost-effective andchallenging ideas because of themagnitude of what you are trying todevelop, says Alan Hooper, R&Dtechnical director. To stay ahead, youneed to have a design that is flexibleand can be used in different areasand ships in different sizes andconfigurations of fields because eachoil field is different from the next.

We designed our first turret mooringsystem in 1991. We have continued tofurther develop this technology, andhave now a large portfolio ofexternal and internal single-pointmooring systems, with patentedbearings, components and swivelsallowing 360 degree weathervaning.

Prosafe has also developed genericturret and swivel designs, which allowmajor maintenance without shut-down. The generic turret is a modularbase design in which all componentsare building blocks that can be scaledup or down to meet project-specificneeds.

The latest achievement is thedevelopment of a disconnectableturret mooring system that allowsvessels to disconnect from the buoythat is anchored to the seabed to sailaway when sea conditions turn bad.This disconnectable turret is a keyfeature of the FPSO that is beingconverted for the Van Gogh fieldoperated by Apache Energy Ltd. Thefield is located on the North WestCoast of Australia, an area that ischaracterized by cyclonic activityduring the summer periods.

Our ability to combine our in-housedesigned fluid swivels with ourpatented turret mooring systemsenables us to significantly reduce thetraditional long lead time and highcosts associated with such systems.

The combination of long operationalexperience and efficient proprietarytechnical solutions ensures that wedeliver cost-efficient solutions,tailored to the client’s specific fielddevelopment. Close cooperation withthe client and interaction betweenthe engineering and operationsdepartments contribute to continuousimprovement of design andfunctionality and the highest level ofsafe, efficient and reliable operations.

Historically high oil prices, theindustry’s move into deep water

areas, the increased exploitation ofmarginal fields and the growingemphasis on fast-track developmentsare the main factors contributing to a very positive market outlook forFPSOs. Prosafe has the clear intentionto take its part of this growingmarket, and will seek to use innova-tion as one of the ways to do so.

Praise for Prosafe´s R&D workProsafe Production has been awarded this year’s Outstanding Maritime R&D and Technology Award by the Maritime and Port Authority of Singapore. Thisannual international award is given to a company for outstanding innovation in the application or research and development for the maritime industry.

Mr Raymond Lim, Minister forTransport and Second Minister of Foreign Affairs awards theOutstanding Maritime R&D andTechnology Award to Alan Hooper,R&D technical director of ProsafeProduction.

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By Clive Adshead,director oftechnical servicesin ProsafeOffshore

The technicaldepartmentprovides onshore

technical support for 11 semi-submersible accommodation/ servicerigs and one jack-up service rig. In2000 one technical superintendentwas the only employee.

As the number of vessels in the fleetincreased, the number of employeeshas increased correspondingly. In 2007the technical department became astand alone department providing fulltechnical support to the operationsdepartment and the rig fleet.

We have a permanent staff of ninepersons based in Aberdeen: thedirector of technical services, atechnical manager, a senior projectengineer, three project engineers,one reliability centred maintenance(RCM) support engineer, a technicalclerk and a CAD operator. This team is

enhanced by two contracted projectengineers and one project supervisor.In Singapore there will be a fullycontracted project team of oneproject manager, three projectengineers, one project planner, oneCAD operator and one project costcontroller – a far cry from the humblebeginnings of one technicalsuperintendent!

Possible Safe Caledonia refit in 2010The department has now started thework with the possible refit of theSafe Caledonia, which would be thebiggest project undertaken so far.

We have contracted Babcock Designand Technology (BD&T) to providedesign engineering and projectmanagement services, reportingdirectly to our offshore technicaldepartment where one of thepermanent project engineers hasbeen allocated the role of liaisingwith BD&T.

The main scope of the refit will be toreplace the containerised accommo-dation and associated services andsystems, the main deck cranes and the

lifeboats. However, we will also takethe opportunity to improve stabilityand conduct upgrade work toenhance the operational life of thevessel. The result of the investmentwill be a Norsok standard accommo-dation vessel with a potential for afurther 20 years operations both inthe North Sea and world wide.

500 single man cabinsWith continual involvement andfeedback from the vessel crew and onshore support groups, theaccommodation design for the 500single man cabins is now frozen.Crane design requirements have beenidentified and mechanical and electri-cal surveys on the vessel systems andequipment have commenced. BD&Thave some 20 project personnel ofvarious disciplines working full andpart time on the project.

We have identified a number ofpotential yards in Europe and a fewyards in the Middle and Far East thatare capable of and interested incompleting the refit. If we gothrough with the refit, we will haveexciting and busy times ahead!

From humble beginningsProsafe Offshore’s technical department has started the work with its biggestproject so far – the possible refit of the Safe Caledonia.

Impressions of the “new” Safe Caledonia.

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By Morten Helliesen, journalist

“Ten years ago we were dependenton the North Sea. Then the long-termperspective was that if we were togrow, it had to be elsewhere than in our home market at that time. We had to use the knowledge andexperience from our own growth,which we did by buying Nortrans inSingapore. That company wasinvolved in floating production, and through this acquisition a signalwas given both to our employees and owners that we were now going international. In this way we have managed to become a world leader in our niche business,floating production and flotels,” says Reidar Lund.

We meet him home in Stavanger on anice autumn day in September. He isin the company’s offices in the centreof town. In a few days he is leavingfor Larnaca on Cyprus, where thehead office is now located. It’s timefor a board meeting and new strate-gic discussions about the company’sdevelopment and future. Just likeProsafe’s management, Reidar Lund isopen to new growth opportunities.

What is your most important task aschairman?“That is to safeguard the interests ofthe owners, employees and thecompany as a whole. When it comesto the owners, it is important to give

everyone equal and correct treatment.Today’s companies have clear guidingprinciples for their operations,amongst others through corporategovernance. These are rules governinga company and its board so that allaspects are properly attended to. Soall in all the directors have done a lotof positive work in recent years,”states Reidar Lund, who was votedChairman of the Year in Norway onlya few years ago.

Efficient operations, high earningsThe Prosafe of today has its headoffice in Cyprus, while operations aremanaged from Singapore andAberdeen. These locations provide thecompany with optimum competitiveconditions internationally, accordingto Reidar Lund. There is also an officein Stavanger, which is, among otherthings, responsible for the insuranceside of rigs and vessels, and therelationship with the company’sNorwegian banks. Prosafe is alsolisted on the Oslo Stock Exchange.

Despite a turnover in billions of NOKthe organisation is small andefficient. The philosophy has alwaysbeen to run the company costeffectively. If your profits are high, it’seasy to become extravagant. Theexpenses can then absorb the profit,according to chairman Lund.

Was it difficult to move the headoffice from Norway to Cyprus?

“A move like that has both practicaland technical aspects. For me therehas also been an emotional side to it.If our framework conditions had beencomparable to our competitors, weprobably would have remained inNorway. But in view of the conditionscurrently prevailing, it was out of thequestion,” he points out.

Prosafe, a leader in theinternational market”We have been clever, and we have been lucky.” Reidar Lund, chairman ofProsafe for many years, is in no doubt about the reason for the success of the company in the international market of floating production and flotels.Looking back on the last decade in the industry, he sees a company which hasbeen successful all over the world.

Reidar Lund, chairman of Prosafe.

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The interview with Reidar Lund was conducted in September. On 6 December, Prosafe announcedthat is has decided to split thecompany into two listedcompanies, one focusedAccommodation and Service Rig company and one focusedFloating Production company.

Reidar Lund comments this asfollows:“We want to ensure the bestpossible growth possibilities foreach of our business divisions, and believe that the best way toachieve this is by splitting thecompany into two independent,financially strong companies. Bothcompanies will be listed on theOslo Stock Exchange. I look for-ward to following their develop-ment in the years to come.”

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The market for Prosafe’s services isalso international. And in recent yearsthe company has become a trulyinternational workforce.

“All cultures - a wonderful fellowship.I think it’s fantastic to be part of suchan environment. But still we want tobe local where we operate. It isimportant to have an open andembracing attitude, and let thedifferent cultures blossom,” stressesReidar Lund.

Health, safety and environment –how do you manage to keep thatfocus in an international company?“HSE is always a top priority. And ifthere is a single international messageacross all cultures within our company,it is the concern for safety. In additionwe are very concerned with theethical aspect, that everything is donein the correct way and according tothe book. Both of these issues are welltaken care of, not least because ourcustomers are the large, internationaloil companies, where HSE is very muchon the agenda. This helps us to keep aclear and strong focus.

A competent workforceWhat are Prosafe’s current challenges?“Of course there are many challenges.If I were to name one, it would bethat it is important for us to maintainthe position we have at presentwithin offshore support. This alsoinvolves a certain modernisation ofthe fleet. As to floating production,this market is characterised by lots of smaller players. This allows forconsolidation, for instance throughacquisitions,” states Reidar Lund, whoalso mentions competence as one ofthe biggest challenges currentlyfacing the company.

“One thing that is vital now is tohave a competent workforce at alllevels. The market is booming and theoil price is at an all time high, whichmeans very high activity. The oilcompanies for their part have thefinancial muscle and ability to startmajor projects, both concerning rigsand supply vessels. Exploration mustincrease if we are to maintain oilproduction in a world where moreand more people want energy. All of

this means that companies mustcontinuously increase their compe-tence. This is a challenge at a timewhen we have to recruit people, whoperhaps haven’t worked in the rigbusiness before. Everyone needs torecruit. And when you have firstemployed someone you need to holdon to them. Salary is only one aspectin this process. An interesting job anda good working environment are alsoimportant. That is why we put a lotof effort into giving our workforcedevelopment opportunities.”

Your mention all time high oil pricesand record demand within all sectors.That hasn’t always been the situationin the industry. What is differenttoday compared with when the oilprice was $20 a barrel?“Certainly the industry has experien-ced downturns. The most difficultwas probably in the mid-1980s. All over rigs were laid up for longperiods of time. Ships were sold for next to nothing. The generationinvesting in the oil service businesstoday, which doesn’t have thishistorical experience, does not know how bad things can be.Without wanting to stress it toomuch, I think the lessons learnt fromthat time are valuable, particularly in the current market whereeverything points upwards.

Full focus on ProsafeWhere is Prosafe in 10 years?“We still have a clear strategy forgrowth, which means that we don’trule out acquisitions or facilitating forgrowth in other ways. If we are to beable to grow further, if is importantto maintain good and stable earnings.”

Reidar Lund has for many years sat onseveral boards, but has now scaleddown. This means that he is concen-trating fully on his chairmanshipfunction in Prosafe. He will be 66 thisautumn. Good health, physical activityand exercise keep him in good shape.

When not working he likes to playgolf. And he sails. According to himgolf and the sea are his favourites.But of course best of all is his family.Nothing compares to assemblingeveryone at home in Tananger, justoutside Stavanger.

“I have experienced a lot and havehad an incredibly exciting life, notleast thanks to all the challenges inProsafe. What we have achievedtogether has been a result of hardwork. My wife has also been a goodsupport for the family and myself. It is therefore quite natural for me to say: What I have achieved has been achieved by us together, mywife and I,” concludes Reidar Lund.

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Strong safety resultsOn 21 November 2007, the Azurite FDPSO project team reached the milestone ofhaving worked one million man-hours without having experienced any Lost TimeIncident (LTI). On 30 November 2007, the FPSO Ningaloo Vision project team hit 1 099 246 manhours LTI free.

The Azurite FDPSO project teamcelebrated the achievement on 8December at the Keppel Benoi yard inSingapore with management repre-sentatives from Murphy Oil, ProsafeProduction, Keppel Shipyard and anumber of subcontractors present.

Abu Bakar, general manager operationsof Keppel Shipyard thanked allparties involved for the efforts inmaking the repair and life extensionand the conversion work a success.–Safety and productivity go hand inhand, he reminded his audience.

Speeches were also made by anumber of other senior managers.Roy Hallås, president of FloatingProduction, further underlined AbuBakar’s reminder.–In addition to all the pain andsorrow that individuals, colleaguesand relatives involved will suffer,injuries and other unwanted incidents

such as for example fires can have adetrimental effect on a project’sdelivery schedule, he said.

He also conveyed the congratulationsfrom Prosafe’s corporate management.Arne Austreid, president and CEO of Prosafe had sent the following message:–Congratulations to the FDPSOAzurite project team and also to theKeppel shipyard. The achievement ofworking one million man-hourswithout LTI proves that even in themost challenging working situationsall accidents can be prevented. Safetyis a core value in Prosafe, and thecompany has maintained a positivetrend over many years. We are notresting content with these results, butwill continue to work determined tobring the number of accidents downto zero on all our installations.

Ken Shepherd, HSEQ Director ofProsafe Production, shared his own

experience from being an apprenticein a shipyard many years ago with theaudience.–At that time injuries happened daily.The goal of zero accidents seemedtotally unrealistic, but we have yetagain proved that it is possible towork free of injuries.

Prosafe’s project manager, ColinCrewe, and Murphy’s GregoireLavignolle were equally proud of thisimportant milestone being achieved.They both agreed that teamworkaround this common goal of allparties involved is now paying off.

We are proud to announce that alsoanother conversion project, the con-version of the FPSO Ningaloo Vision,recently achieved a similar milestone.At the end of November, they hadworked 1 099 246 manhours withoutLTI in the Keppel Shipyard Subic inthe Philippines. Congratulations withthis achievement, and keep up thegood work!

The proud Azurite project team, inclusive management representatives fromMurphy Oil, Prosafe Production, Keppel Shipyard and a number of subcontractors.

From left: Hans Kristiansen (director of projects in Prosafe Production),Faizul Haque (Azurite’s constructionmanager), Roy Hallas (presidentProsafe Production) and Anthony Hill(Azurite’s engineering manager)inspecting the vessel in the yard.

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A true Ambassador for Prosafe

By Karine Cosemans, communicationsand branding manager

At the annual Safety Day, Alice Ng,financial controller in FloatingProduction was presented the highlyvalued Prosafe Ambassador Prize byArne Austreid, president and CEO ofProsafe.

–The core values on which ouractivities are based are universal: theenvironment, focus, ambition, safety,innovation, respect and profitability,said Arne Austreid. They guide theconduct of our overall business and thebehaviour of each employee at alltimes. We established the AmbassadorPrize six years ago in order to enhanceour employees’ focus on and commit-ment to these core values. By awardingthe prize, we acknowledge the effortsof those who distinguish themselves bypromoting one or several of our corevalues in and excellent way.

Arne Austreid emphasised thatProsafe’s core values must be at thebasis of everything that is being donein Prosafe.

This year’s winning proposal wassubmitted by WanKhum Lee, directorof finance in Floating Production. Shewrote the following:“I would like to nominate Alice Ng forthe Prosafe Ambassador Prize this year.Below is the justification for thenomination.

To be able to qualify for a goodAmbassador, I believe one shouldpossess the quality of toweringpersonality, in-depth knowledge, be agood communicator, a persuasive andconvincing leader and a patriot. AliceNg has been with the company sinceits formation, diligently working her

way to her current position of thefinancial controller of the FloatingProduction division.

Besides having all the qualities asmentioned above, Alice has been apillar of strength to her team, callingbeyond her duties and getting involvedin various aspects of the company for acommon goal of bringing the companyforward. With the tremendousexpansion of the Floating Productiondivision, Alice has demonstrated hercommitment and ability in consoli-dating her team, accomplishing projectsand assisting all the other departmentswhen help is needed.

She once told me she felt that she isrunning a Welfare and ConsultancyAgency as many people always go toher for advices both on work andpersonnel problems. She is kind andunderstanding and always with a goodlistening ear. I’m not at all surprisedthat she is so popular among hercolleagues.

I strongly recommend that this qualityand effort be recognized and am veryglad to nominate her for theAmbassador Prize this year.”

Arne Austreid presented Alice Ng withthe sculpture of the pilot and a giftvoucher. The pilot symbolises a personwho guides others through unknownwaters and into a safe harbour.

A very happy Alice said the followingwhen being asked what she felt aboutbeing awarded the Ambassador Prize:–I was immensely caught off-guardedby the announcement that I had beenselected to be recognized for my roleand contribution in Prosafe. It gave mea tremendous sense of deep sincereappreciation and recognition by

management. The ambassador awardhas an important underlyingsignificance on Prosafe’s core valuesand as an achiever I felt extremelyproud to receive it. This, I am sure willencourage every employee in Prosafeto look towards this annual event andto always put their best foot forward.The pilot is now proudly positioned inmy office and continuously reminds meof its significance.

–Alice, thank you for being a trueAmbassador for Prosafe. I wish you allthe best and good luck in the future,said Arne Austreid. At the same time, Iwould like to take this opportunity toremind all co-workers in Prosafe onceagain that our success is determined bythe way we do things. Our core valuesmust be used as guiding tools. Theyhave helped us to come where we aretoday, and they will guide us on theway forward.

Prosafe’s Ambassador Prize has been awarded for the sixth time. Alice Ng’s totalcommitment to Prosafe and the company’s core values earned her the title ofProsafe Ambassador.

From left: WanKhum Lee, Prosafe Ambassador Alice Ng and ArneAustreid.

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By Gilberto Carvalho, businessdevelopment manager in ProsafeProduction

My colleague Elizabeth Teixeira,human relations manager in ProsafeBrazil and I were so lucky to be giventhe chance to attend the openingceremony and learn more about whatSOS Children’s Villages does to givechildren in need love, education anda future.

I was amazed by the caring, kindnessand motivation of the program. Thisis not like any other institution I havecome in contact with before – this iscreating love. The professionalmothers had each a personal memoryof the struggle and success. I do notthink there was one person that wasnot personally touched by their loveand dedication.

The SOS Children's Village that we

visited in Igarassú comprises 14 familyhouses and accommodates 126children aged from 0 – 15 years. Eachhouse is organised like a family, withnine children in different ages thatgrow up as brothers and sisters and atrained professional SOS mother whois responsible for looking after thechildren and organising the family’sdaily life. These mothers have duringtwo years taken courses in São Pauloand have been given on the jobtraining at a working location, beforethey were considered fit to take careof their own loving family.

The concept of the 58 year old,worldwide represented SOS Children’sVillages is to offer a new home tochildren who have lost their parentsor cannot live with them for variousreasons. Regardless of race, culture orreligion, they find a family in whichthey are given the love and securitythat every child needs for sounddevelopment. All efforts are made tore-integrate them back into theirnatural families. If this is not possible,they can remain in the program untiladult life when they are able to standon their own feet.

Maurice Van Heemstede, president of SOS Brazil told us that they placespecial emphasis on giving thechildren education and training as a preparation for life on their ownafterwards. SOS Children’s Villagescooperates with companies,supermarkets and local vendors thatgive these young people training as a mechanic, baker, hairdresser, cook,

Igarassú - a new realityfor 126 childrenOn 13 November 2007 the new SOS Children Village in the city of Igarassú, nearRecife in Brazil was finally inaugurated. Two proud employees from Prosafe’s officein Brazil attended the official opening ceremony.

Glauco, Eronido and Werberson, together with Elizabeth Teixeira, humanresources manager of Prosafe in Brazil posing in front of some of the houses.

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tailor etc. in parallel to going to high school. If the youngsters do a good job, they guarantee theiremployment. This ensures that thechildren will be able to take care ofthemselves when they become adultsand can contribute with theircompetence to the local community.

The families that will live in theChildren’s Village in Igarassú arecurrently living in rental houses nearby.In the next month they will move andbegin a new, safe life. The children willgo to school and will have the samemedical and social interaction as anyother child in the city.

The SOS Children's Village alsoincludes an SOS Social Centre, whichis run as a day-care centre and offersmedical and dental assistance, and asmall pharmacy as well as class roomsfor counselling and training of adultsand children. The SOS Social Centrecaters to needy people from theneighbourhood. There are goodpublic transport links and manysupermarkets, bakeries, pharmacies,banks, enterprises, schools and healthcentres nearby to meet the needs ofthe SOS Children's Village community.

The project in Igarassú is mainlyfinanced by money that was raisedduring the 2006 FIFA World Cup inGermany and by the profits of adocumentary film about the GermanTeam World Cup. The other major

sponsor is Prosafe. Both will havecommemorative plates in thecomplex’s administration buildingsince the homes cannot have anyadvertisement – after all they arefamily homes.

Igarassú´s SOS Children’s Village is the15th unit in Brazil. To upkeep thesewonderful programs, SOS Children’sVillages relies more on individualdonations than point contributionfrom corporations. I plan to donate to the program myself and will inviteanyone to do the same. If you wish to upkeep the work that Prosafe has begun, please visit www.sos-childrensvillages.org for moreinformation.

SOS Children's Villages is anindependent, non-governmentaland social development organisa-tion, which has been active in thefield of children's needs, concernsand rights since 1949. Its activitiesfocus on neglected and abandonedchildren and orphans, as well asdisadvantaged families.

If a child cannot stay with his/herbiological family, his/her right tocare, protection and equalopportunities should still beguaranteed. This is the basicprinciple according to which SOSChildren's Villages carries out its

activities in 132 countries andterritories. SOS Children's Villagesmakes it possible for children to bepart of a family once again byproviding family-based care.

SOS Children’s Villages has morethan 1 800 projects in 132 countries.More than 65 000 children andyouths have their home in achildren’s house and about 140 000children go to SOS kindergartens,schools and training centres. About 1.3 million children and their families receive assistancethrough SOS Children’s Villages’work.

General view of the SOS Children’s Village in Igarassú. From left: Walter Cadima, president of SOS Latin America,Gilberto Carvalho, business development manager in ProsafeProduction and Maurice Van Heemstede, president of SOS Brazil.

The commemorative plate that will beplaced in the village’s administrationbuilding.

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By Colin Crewe, project manager

Murphy West Africa Ltd is developingits Azurite oil discovery in offshoreRepublic of Congo to produce up to40 000 barrels of crude oil per day. The Azurite oilfield is located in theMer Profunde Sud block in approxi-mately 1 400m water depth.

As part of the development, Murphyhas contracted to charter from Prosafean FPSO which will be fitted with acompact drilling rig supplied byMurphy. The vessel will be a newdevelopment and has been designatedas a Floating, Drilling, Production andOffloading vessel, FDPSO.

During the first two years the FDPSOwill drill up to six production wells andfour water injection wells. Once theinitial wells have been drilled and theproduction of oil has started, theFDPSO vessel will continue to drilladditional wells as well as producecrude oil and offload the oil intoshuttle tankers. The mooring systemwill be a “dynamic” 12 line systemwhich will allow the vessel to be moved

from well to well as required to drilleach new well. After approximatelytwo years the drilling equipment willbe disassembled and removed fromthe vessel and the vessel will continueto operate as a normal FPSO for thelife of the Azurite field.

The vessel selected by Prosafe forconversion to the FDPSO is the MTEurope, a VLCC trading tanker built in1988 by Hyundai Heavy Industries inSouth Korea. The vessel is now in theKeppel Benoi shipyard in Singaporeundergoing repair and life extensionwork and work to convert it into anFDPSO. The topsides modules arebeing fabricated in a yard inMalaysia. In the second quarter of2008, the completed modules will be transported from Malaysia to the shipyard for installation on the vessel and final hook-up and commissioning. The drillingequipment modules will be suppliedby Murphy and integrated on to thevessel during the third quarter of2008. The vessel will sail to the Congoin the fourth quarter of 2008 and beinstalled, ready for drilling early 2009.

The length of the overall projectschedule is longer than that for anormal FPSO due to the complexity of the vessel and the project team isoperating to a very tight schedule. All personnel involved are focused onsupporting the schedule and achievingthe “Ready for Drilling Date”.

The complexity of the vessel isincreased significantly by the additionof the drilling rig as it occupiesapproximately 35% of the availabledeck space. The drilling rig is installedin the middle of the vessel and thedrilling is carried out through the“moonpool” constructed through avoid tank. In addition to the physicalattributes of this interface, the presenceof drilling operations on the FPSOresults in the need to have alignedsystems and procedures to ensurepersonnel safety and vessel integrity ismaintained at all times. This is some-thing which requires some “out-of-the-box” thinking from Prosafe’s Engine-ering and Operations teams who aretypically used to normal FPSO workingpractices but are working closely withMurphy to achieve these goals.

The development of an FPSO with a compact drilling rig brings new challenges for Prosafe.

A brand new concept – the FDPSO

The MT Europe, a VLCC trading tanker, is beingconverted to an FDPSO in the Keppel Benoishipyard in Singapore.3D FDPSO model view.

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Project update – FPSO Cidade de Sao Mateus

By Robert Mountjoy, project manager

For this contract, Prosafe converts aVLCC sized vessel to an FPSO that willbe named Cidade de Sao MateusFPSO (CdSM). Prosafe is responsiblefor the engineering, procurement,construction, installation, commis-sioning and operation of the FPSO.

The Cidade de Sao Mateus (CdSM)FPSO will be installed offshore Braziland operated by Prosafe on 9 + 6year contract. Gas production,compression on the FPSO andexporting to shore by subsea pipelinewill fill an important part of Brazil’sexpansion of its domestic gas supply.

First gas export is scheduled for aroundyear end 2008.

To achieve the first gas target, thefacility will depart Singapore inAugust 2008 and sail under its ownpower to Brazil. Now halfwaythrough the project schedule, themany project challenges are beingeffectively handled by the Prosafe in-house team and with solidperformance from our subcontractors,the project remains on schedule.

Fabrication of the facility is progres-sing with process modules being builtin six yards in the Singapore regionand with the ship undergoing

refurbishment and conversion worksin the Keppel Tuas shipyard. Projectmanagement, engineering andprocurement are all being performedin Singapore by Prosafe.

Of particular interest on the CdSMproject is the unusually large processtopsides, which at approximately 15 000 tonnes, makes it a very largeand complex FPSO. Three 15 MW gasturbine powered export compressorswill export 350 mmscf of natural gasper day. The FPSO also has a full suiteof the normal FPSO productioncapabilities. A spread mooring willhold the facility on station in 800 mwater depth for 15 years.

Prosafe achieved an important company milestone when it was awarded acontract for its first Gas FPSO by Petrobras in December 2006.

MT Navarin is being converted to Prosafe’s first gas FPSO, the FPSO Cidade de Sao Mateus, at the Keppel Tuas shipyard.

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Management appointments

Anita HenryAnita Henry (born 1961) wasappointed head legal counsel ofFloating Production in November2007. She joined Prosafe in June2005 as legal advisor in theContracts & Risks AssessmentDepartment. She has 23 yearspost qualification experience and prior to joining Prosafe, held various positions includingthat of regional legal manager in Rockwater OffshoreContractors, Brown & Root Far East Engineers andKellogg Brown & Root Asia Pacific, as well as practicedin two prominent Singapore law firms.

Bernard CruzBernard Cruz (born 1957) hasbeen hired as senior managerhuman resources of FloatingProduction. Mr. Cruz is agraduate in business and has amasters in human resourcesmanagement. He has nearly 15years of experience in the AsiaPacific region from variousmultinationals like Otis Elevatorand Holcim where he held senior HR positionscovering the Asia Pacific regions, the last beinghuman relations director of a the global IT solutionscompany LogicaCMG.

Helge YstheimHelge Ystheim (born 1954) was appointed as director ofbids & commercial of FloatingProduction in October 2007. He comes from the position as interim president of KCADeutag Norge AS. Mr. Ystheimhas over 25 years of experiencewithin the offshore business and has held the positions of VP drilling, VP finance and VP contract andprocurement in Prosafe’s earlier owned subsidiaryProsafe Drilling Services.

Hans KristiansenHans Kristiansen (born 1947) has been hired as director ofprojects of Floating Productionwith the overall responsibilityfor planning and execution ofprojects. Mr. Kristiansen is agraduate engineer from theGøteborg Technical Institute. He comes to Prosafe from Statoil where he has had various senior management positions during the last22 years, the latest one being VP and project managerfor the Tordis IOR project.

Gilberto CarvalhoAntonio Gilberto Carvalho(born 1948) was appointed asbusiness development manager– Americas in July 2007. He has nearly 15 years of experience withbusiness development in allsectors of the energy field, andwas previously employed asbusiness development andcountry manager of Conoco in Brazil, businessdevelopment director for Southern Electric andsenior consultant in New England Electric.

Bjørn ØdegårdBjørn Ødegård (born 1957) was appointed President ofProsafe AS in Norway in August 2007. He will head the Stavanger office, which has a support function to theProsafe group. He comes fromthe position of CFO of theregional hospital in Stavanger.Previous to this Mr. Ødegårdworked 23 years in the oil service industry in variousmanagerial positions for amongst others AkerDrilling, Transocean and MI Swaco.

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Offshore Support Services – commercial update

By RyanStewart,director ofcontracts and riskmanagement

Over the pastyear I have sat in manycommercial

negotiations communicating ourwork ethic, core values and proudachievements. It is only when I sitback and reflect on, as an examplethe MSV Regalia’s astonishing gang-way connection record at Girassol, orthe complex mooring operations withthe Safe Scandinavia does it sink inthat we as a company have pushedthe boundaries and diversified into

a truly global company. Operations inRussia, Singapore, Africa, UK, Norwayand US Gulf lead to the fleet beingspread over many time zones andcultures; all have to be carefullycoordinated and conducted to ensureall our employees and guests returnhome safely.

As has been reported recently,Prosafe Offshore has secured a contract for the Safe Astoria.Operating offshore Sakhalin Islandfor two distinct periods, the firstcommencing May 2008 and second in May 2009, the Safe Astoria mustundergo various winterisationmodifications for the harsh environ-mental conditions prevalent in thearea. This is an exciting project withmany challenges but with the

experience gained with the SafeBristolia in the region ProsafeOffshore is well placed to succeed.The MSV Regalia and Safe Bristoliabegin 2008 with new contracts in the North Sea with Aker KværnerOffshore Partners and ConocoPhillipsrespectively. The Safe Concordiahas secured a revised contract withChevron in the US Gulf from Augustonwards and the Safe Scandinaviareturns to the Norwegian Continen-tal Shelf with Statoil. Busy timesindeed!

Going forward we are tendering for various contracts and marketingglobally to endorse our brand. Wellplaced and respected in the industrywe are confident that the success wehave achieved can be maintained.

Prosafe Offshore has never been in such a strong commercial position. Owning 12units worldwide and a healthy contract portfolio creates a good feeling goingforward. Positive praise from clients worldwide leads to renewed and refreshedcontracts, and operating ‘firsts’ demonstrates the capabilities within the organisation.

Jimmy LowJimmy Low (born 1957) was appointed asdirector of finance in Offshore SupportServices in September 2007. Mr. Low is aFellow of the Association of CharteredCertified Accountants (FCCA), and hassince 1978 has a number of positions in

accounting and management withinfinancial services, banking, retail andmanufacturing industry sectors. He comesto Prosafe from the Michelin Group werehe has had a number of roles, latest asvice president and chief fnancial officerfor the Asia-Pacific region.

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Prosafe SEStadiou Street 126CY-6020 LarnacaCyprus

We wish you Happy Holidays

Rather than sending traditional Season’s Greetings

cards, we have decided to give a donation to

SOS Children’s Villages.

www.prosafe.com

© istockphoto

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