Yinson Annual Report 2018

We’reMaking Steady Progress MARKET CONDITIONS The oil market for the period under review started off by extending its uncertainty from last year which was largely influenced by the global economy, spending tendency of oil majors and the geopolitical situation. An agreement signed between the OPEC and non-OPEC countries to rebalance the supply in the market in late 2016 also saw prices hover well above USD40 per barrel in first half of the year before trading began to trend upwards in a more industry sustainable range towards the price level of USD60 per barrel by the end of 2017. Average annual oil price per barrel per barrel USD54.20 USD43.74 2017 2016 The start of 2018 saw oil prices fluctuate above USD60 per barrel but with the ongoing Middle East tensions heightening, this will potentially drive the oil price higher. April 2018 witnessed the oil price surge past USD70 per barrel for the first time in three years. The average annual price of USD54.20 per barrel in 2017 was higher than the 2016 average price of USD43.74 per barrel, providing a welcome boost to margins for companies involved in exploration and production. The recent price increase was driven by both supply and demand. On the supply-side, both geopolitics and high compliance with OPEC production quotas and the gradual drawdown of oil inventories have had an impact, including an agreement reached in May 2017 between OPEC and Russia to curb supplies in an effort to balance the market for crude oil by extending output cuts until the end of 2018. The higher and relatively more stable oil prices also saw a revival of project awards in the leased Floating Production Storage and Offloading (“FPSO”) market, with six contracts awarded worldwide during 2017 compared to none in 2016. As the 6 th largest independent FPSO leasing company globally, we are very excited about the strong recovery in the demand for leased FPSO and optimistic that the outlook for 2018 will continue to be positive. Corporate Overview Stewardship Governance Accountability 41 Yinson Holdings Berhad Annual Report 2018