81 YINSON PRODUCTION For our assets under construction, closed flaring is included in the design specs of all three assets, while hydrocarbon blanketing is included in two of the three. Our latest asset under construction, FPSO Agogo, is leading the industry in terms of emissions reduction technologies, as highlighted in the Group CEO Review. YP is currently studying ammonia as an energy storage solution via green and blue ammonia FPSOs. We have completed the basic design and a concept evaluation study for our Green Ammonia FPSO Concept – a floating solution that produces ammonia from 100% renewable sources. We are currently addressing commercial feasibility with selected potential clients. We are also in the research phase for our Blue Ammonia FPSO Concept. Our goal is to bring both alternative solutions to market and contribute to a cleaner and more sustainable future. Scan this QR code for more information on our Zero Emissions FPSO Concept RISKS AND OPPORTUNITIES Short to medium-term (1 to 5 years) Long-term (6 to 10 years) In the longer term, the accelerated development of alternative energies may cause a shift away from oil & gas earlier than predicted, resulting in an earlier decline in consumption. Contractors that maintain a leadership position in terms of project delivery, operations and ESG performance will be preferred, in line with rising energy demand. Demand for more emissions-friendly assets creates new opportunities to pioneer and innovate low-emission FPSO designs. The FPSO lease market has, as always, been relatively resilient to external economic impacts due to the long-term nature of its contracts, thus limiting our vulnerability to changing market conditions. YP’s unique Project Execution Philosophy limits our vulnerability to a volatile FPSO market. We are selective about the contracts that we enter into, with a focus on projects that align with our climate and ESG goals. Stricter rules to meet international decarbonisation goals may affect businesses that do not comply. Companies that set strong decarbonisation targets and are able to meet them will be recognised as market leaders, inspiring stakeholder confidence. Yinson has set goals to be carbon neutral by 2030 and net zero by 2050, and is seen as an industry leader in sustainability. In a busy energy market, the energy value chain may be pushed to its maximum capacity, which can increase costs and delivery times. There will also be greater competition for talent, leading to an increase in costs related to attracting and retaining resources. Many oil & gas developments that were postponed are now progressing due to rising demand and pricing. Many delayed projects have reached an improved maturity, which means less uncertainty and lower risks. Current trends in energy demand, as well as the lag in oil & gas reserve replacements, could lead to even higher oil prices – allowing more projects to be developed and becoming economically viable. The increase in project awards against a backdrop of limited specialist FPSO contractors in the market provides opportunities for FPSO contractors to be more selective and to obtain more balanced commercial contracts. YP will actively seek opportunities to increase our portfolio of profitable assets in a strategic manner. YP will continue to strengthen our project execution capacity, while continuously adhering to our Project Execution Philosophy, which includes minimising exposure to inflation and cost increases during a project. YP will continuously strive to be an attractive employer to retain and attract a good talent pool. Risks Opportunities YP’s response BUSINESS REVIEW
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