Oslo, 29 February 2024 – As I reflect on the challenges and successes of the past year, I am deeply aware of the complex macro environment in which BW Offshore operates. The global energy industry, particularly the FPSO sector, has been impacted by a myriad of factors, from escalating geopolitical tensions to the urgent need for cleaner energy solutions amidst the sobering impacts of climate change.
The dynamic market conditions have underscored the pressing need for both energy security and transition. Our strategic vision remains to engineer offshore production solutions to progress the future of energy, and I am proud to say that BW Offshore is steadfast in our commitment to leverage our extensive expertise and capabilities to navigate this evolving landscape and steer towards a cleaner, more sustainable future. We are actively exploring innovative solutions and embracing technological advancements to enhance operational efficiency and reduce environmental impact.
Delivering on strategy
Reflecting on highlights of 2023, several achievements stand out. The arrival of the hull of BW Opal in Singapore in November marked a pivotal milestone in the Barossa project, keeping the project on track for first gas as per schedule. Furthermore, the successful sale of BW Opportunity and the subsequent potential Engineering, Procurement, Construction and Commissioning (EPCC) contract of the floating production solution for a large gas development in the Black Sea, signifies a substantial achievement, aligning seamlessly with our strategic objectives.
In 2023, we completed our fleet divestment programme. This strategic initiative addressed a complex global operational set up, and resolves the unbalanced monetary and operational risk/reward proposition associated with our legacy fleet. While this transition necessitated organisational changes, it has strengthened our foundation for future growth. Over the course of less than two years, we have undergone a significant organisational shift, emerging as a leaner and more agile company.
Additionally, in January 2024, the remaining 22.5 per cent ownership in BW Energy was sold to BW Group, raising approximately USD 176 million in proceeds.
These divestments have jointly strengthened our financial resilience, generating a total of approximately USD 507 million in proceeds. This accomplishment signifies the successful execution of the first leg of our strategy: extracting maximum value from the conventional business. With these divestments, we are now ready to advance the remaining two legs of our strategy: growing the core infrastructure FPSO segment and increasing our position in offshore renewable energy.
Recognising the still evolving nature of the floating offshore wind market, BW Ideol delisted in 2023 to enhance its access to new equity through private capital. Presently, BW Ideol is engaging with investors specialising in privately held growth companies, including industrial investors, to secure growth capital. A successful capital raise will enable BW Ideol to advance its growth plans and strengthen its position in the floating wind segment, including exploring potential Engineering, Procurement, Construction and Installation (EPCI) opportunities.
Driving sustainable growth
As we navigate the rapidly evolving energy landscape, the strategic positioning of BW Offshore is paramount to safeguard the company’s future. The transition in the global energy market reflects growing public and environmental concerns, as well as political commitments to reduce carbon emissions.
In 2023, we took important steps to drive sustainable growth for our company. We established a new Strategic Development function, with a clear focus on diversifying our asset portfolio. This includes exploring opportunities in energy transition fuels, as well as renewable technologies.
Recognising the integral role of sustainability in our strategic efforts, our Sustainability department is part of the Strategic Development function. This underlines our belief that strategy and sustainability are inherently interconnected. We are currently in the process of aligning our internal practices to report on sustainability matters deemed material to the company, in accordance with the requirements outlined in the EU’s Corporate Sustainability Reporting Directive (CSRD) and its applicable European Sustainability Reporting Standards (ESRS).
As we continue to evolve and adapt to changing markets, driving sustainable growth remains a core focus for BW Offshore. We are committed to leverage our strategic initiatives to not only create value for our shareholders but also contribute positively to the global energy transition.
Safeguarding people and assets
In September 2023, despite our collective and unwavering focus on safety, an accident occurred in the yard where BW Opal was under construction, resulting in the loss of a subcontracted yard worker’s life. This tragic incident serves as a stark reminder of the constant importance of focus on safety in all activities, both our own, and those of our subcontractors.
Our commitment to the highest international safety standards is unyielding. Safety is not just a priority; it is fundamental to our core business objective of achieving safe and secure operations with a commitment to zero harm. At BW Offshore, our culture of continuous improvement remains central to a journey which will never end. Our second We LEAD Day exemplifies our aim to foster a culture defined by our values and leadership behaviours. As we continue to evolve, strengthening our culture will remain a focal point.
Progress in today’s world is driven by a relentless pursuit of knowledge, experience, and technological advancements. At BW Offshore, we embrace this ethos as we strive for continuous improvement and innovation. Our digitalisation efforts enables us to enhance operational performance while simultaneously reducing our environmental footprint. However, with these advancements come new challenges and vulnerabilities.
One such challenge is the heightened risk of cyber-attacks. In the event of a targeted cyberattack on one of our assets, the safety of our workers and the continuity of our business could be compromised. This highlights the critical importance of cyber security in safeguarding our operations.
While technology solutions and mitigations play a crucial role in defending against cyber-threats, our greatest asset in this endeavour is our people. Led by a competent IT team, our employees are at the forefront of mitigating the risks posed by cyber-attacks. Continuous focus on maintaining and improving our systems and processes is instrumental in protecting our organisation.
Looking to the horizon
The need for both energy security and transition has never been more pressing. Looking ahead, I am convinced that collaboration and joint initiatives among industry stakeholders and governments will be key in driving transformative change within the oil and gas sector, and beyond.
I would like to extend my gratitude to our business partners, vendors, and especially our dedicated teams, offshore and onshore, for their unwavering support throughout the year. As we continue to navigate the complexities of the energy industry, BW Offshore remains committed to delivering value to all stakeholders while contributing to a more sustainable future.
Guided by our strategic vision, and fuelled by the dedication of our team, we stand well-prepared to seize the opportunities that lie ahead.
Marco Beenen, BW Offshore CEO
Read the full BW Offshore 2023 Annual Report here.