99 ANNUAL REPORT 2022 STRATEGY & OUTLOOK BUSINESS REVIEW - OFFSHORE PRODUCTION Climate change continues to be a dominant external factor affecting the oil & gas industry. The IEA estimates that the oil & gas industry accounts for over 40% of global emissions, with direct emissions responsible for around a quarter of that figure. The IEA also estimated that the industry needs to reduce its emissions by at least 3.4 GtCO2e compared to ‘business as usual’ in order to mitigate climate change to the degree required. In terms of governance, this has given rise to a push for oil & gas companies to disclose consistent, comparable and reliable climate data, and greater scrutiny on climate polices and climate action plans. Operations wise, there is increasing pressure on the industry to find solutions to lower industry-wide emissions, such as through engineering capabilities, financial resources and project management expertise. As an upstream oil & gas player ourselves, we are determined to play our part to combat climate change within our organisation and within our sphere of influence. YEAR IN REVIEW It has been an extraordinary year for Yinson’s FPSO business, contributed in part by the various external factors mentioned in the market review above, and the effort Yinson has invested into building a resilient business over the years. Business development We firmly anchored our presence in Brazil in the period under review, with two new contract awards and through the continued development of our operational resources in preparation to welcome our first Brazil-bound asset, FPSO Anna Nery. The first contract award was from Petrobras for the charter, operations and maintenance of FPSO Maria Quitéria, destined for the Jubarte Field. The second contract award was from Enauta for the provision, operations and maintenance of FPSO Atlanta, which is destined for the Atlanta Field in the Santos Basin. A significant feature of both these projects is the integration of low-emission features into the FPSO designs, something that we and our clients are very passionate about. Our three Brazilian projects represent a combined orderbook of over USD12.6 billion, and allows us to contribute to Brazil’s economy and energy infrastructure up until 2048. With a solid order backlog in Brazil, we have started focusing more on West Africa again as well as Latin America, more specifically in Angola, Mexico and Suriname. In June 2021, we were awarded pre-FEED contracts from Total for two FPSO projects in Block 20/21 in Angola and Block 58 in Suriname, with Technip partnering with us for topside design. We were also selected by ENI to participate in the competition for FPSO Agogo, the third asset for their Block 15/06 in Angola. In addition, we have been pursuing opportunities for the redeployment of FPSO Nganhurra, which Yinson has an exclusive purchase option for. Several major oil companies have expressed interested in the unit and we believe it will be selected and reserved for a particular project shortly. Looking ahead to 2022, we aim to secure one FPSO conversion project as well as a redeployment project for FPSO Nghanurra. As such our project pipeline remains robust. Projects update The team’s hard work and adaptability, as well as the close working relationship with our client, vendors and shipyard were able to mitigate the additional risk brought on by Covid-19. This has been a key factor that has enabled the FPSO Anna Nery project to remain on track. Even with the pandemic, our progress on the project is in line with where we would expect to be on a normal FPSO project. All topside modules and equipment have been successfully delivered and integrated onboard the asset, and our commissioning is progressing as planned with an expected departure from China in Q3 2022. The FPSO Maria Quitéria project commenced on 12 November 2021, with the vessel arriving at Cosco Changxing shipyard on 15 January 2022. Demolition is well underway and most major contracts and purchase orders have already been placed. Thus, the project is on track to achieve its challenging 32-month schedule. FPSO OSX-2, now renamed FPSO Atlanta, safely arrived in Dubai from Indonesia on 14 March 2022, where she will be retrofitted for redeployment over an 18-month period. Engineering for the project is well advanced and all major contracts are signed. Site team mobilisation started prior to vessel arrival and progressive arrival of the project management team, vessel and topsides teams and operations teams are underway. Steel renewal and tank refurbishment work make up two of the main critical areas on the redeployment schedule and this work is already underway together with a comprehensive demolition programme to prepare the topsides for the arrival of the new equipment required for the Atlanta Field in Brazil. HSE performance The safety performance, both on projects and operations has been extraordinary in FYE 2022. Yinson Production experienced zero LTI and only three recordable incidents, including two restricted work cases, one that occurred at a project site and another onboard an offshore unit, and one medical treatment case onboard an offshore unit. In FYE 2022, our Lost Time Injury Frequency (“LTIF”) was zero throughout the whole year, and our Total Recordable Injury Frequency (“TRIF”) was on a downward trend, ending at 0.21.
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