Global Offshore Market Challenges

Group Overview

DOF Group 3

DOF ASA in briefFleet

69 vessels (wholly and partly owned)

(19 PSV, 20 AHTS, 30 Subsea)

• 61 owned vessels in operation

2 owned less than 50%

• 6 newbuildings; 1 AHTS, 5 Subsea

5 Subsea vessels chartered in from

external owners

58 ROVs, 9 ROVs on order

NOK 31 bn in market value owned

vessel in operation* (100% basis)

Average age 8.8 years, value adjusted

fleet age of 6.6 years

Back log*

Total NOK 64.5 bn

• Firm contracts : NOK 30.6 bn

• Options: NOK 33.9 bn

Global organisation

Head office in Norway

Regional offices in Australia, Angola,

Singapore, UK, USA, Canada,

Argentina and Brazil

Total of 5 167 employees*

Subsea employees: 1 758

Marine personnel: 3 409

30

20

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5 Subsea

AHTS

PSV

Chartered SubseaVessels

Vessels

DOF Group 4

DOF ASA timelineDOF fleet evolution DOF Group employees

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2008 2009 2010 2011 2012 2013 2014 H1 2015

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essels

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2008 2009 2010 2011 2012 2013 2014 H1 2015

No. Of employees

2007 – 2008 2009 – 2010 2011 – 2012 2013 – 2014 H1 2015

Fleet: 45 vessels Fleet: 56 vessels Fleet: 69 vessels Fleet: 70 vessels Fleet: 63 vessels

• DOF Installer founded

• DOFCON merged with DOF Subsea

• DOF Deepwater (ex Aker DOF Deepwater) founded, a JV with Aker Solutions

• Partnered with First Reserve to purchase DOF Subsea ASA and the company was taken private

• Delivery of 9 new-builds from yard (2 PSVs, 1 AHTS and 6 subsea vessels)

• 3 vessels sold

• Delivery and acquisition of 10 vessels(2 PSV, 2 AHTS and 6 subsea vessels)

• DOF Subsea established 2 joint-ventures with Technip in Norway and in Brazil

• 1 vessel sold

• Acquired more engineering capacity in Australia

• Delivery of 12 new-builds from yards (4 PSVs, 3 AHTS, and 5 subsea vessels)

• Purchased Skandi Constructor (subsea)

• 1 vessel sold

• 1 new-build (subsea vessel) sold

• Delivery of 2 vessels (PSV and subsea vessel)

• DOF Subsea &Technip JV won a USD 1,7 bn contract with Petrobras for 4 PLSVs

• Signed newbuild contracts for 4 PLSVs

• Extensive growth in subsea project activity

• Chartered four external subsea vessels (incl. 3 Jones Act vessels) for the project activity

• 2 subsea vessels sold

• Signed new-build contract for one largesubsea construction vessel

• Delivery of Skandi Angra (AHTS)

• Delivery of Skandi Africa (Subsea)

• 5 vessels sold in Brazil

• Skandi Aker (subsea) sold

• Skandi Falcon (PSV) sold

• Skandi Arctic sold (50% share)

• Skandi Fjord sold

Market Experience

6

A global player

6

FOCUS AREAS

PerthRio de Janeiro

Buenos Aires

Singapore

Houston

St. Johns

Aberdeen

Cairo

Brunei

Macaé

Jakarta

Manila

Luanda

Moscow

Austevoll

Malaysia

34

3

23

8

3

Norway Brazil US/Canada UK Asia Pacific Angola Argentina Marine Crew Total

DOF employees 453 566 275 330 427 16 8 3 092 5 167

US Market background

• Jones Act is probably most well known of laws governing national

maritime trade

• Requires that maritime transportation between 2 points in US is limited

to Jones Act compliant vessels

• Subsea wells and facilities anchored to seabed are considered US

points under Jones Act

• Jones Act compliance is enforced by the US coastguard

DOF Group 7

DOF Group 8

US Market operational challenges

• Offshore Marine Service Association aggressively challenges alleged

breaches of the Jones Act

• Supply, towing, construction and well intervention activities all need to

comply with Act

• Increased scrutiny has led Oil Majors to exclude foreign flag vessels at

tender stage in order to avoid ‘hassle’ of potential Jones Act violations

• Vast support for the Act from US Government, military and maritime

organisations who see this as a key strategic defence concern

DOF Group 9

Brazilian Market operational challenges

• Excessive bureaucracy with regulation not stable or predictable

• Frequent changes to legislation with heavy penalties for non-compliance

• Brazilian flagged vessels able to ‘block’ foreign flagged vessels from

contracts

• Extremely complex tax regime

• Local content requirements – must use Brazilian nationals

DOF Group 10

• Strong unions with unrealistic demands

• Local content requirements – must use local crew

• Crew are extremely expensive with ‘special’ qualifications

• Safety risk due to industry focus on temporary 3rd party crews – no

continuity onboard

• Lack of experienced local crew in New Zealand – higher rates of pay in

Australia

Australian / New Zealand Market operational challenges

DOF Group 11

Asian Market operational challenges

• Taxation of seafarers in local country rather than home country

• Complex tax regimes

• Local ownership requirements in many countries

• Local flag requirements not acceptable to many European banks

• Local content requirements for crew

DOF Group 12

Conclusion

• Protectionist legislation is prevalent on a global basis not just in US

• Local content requirements in many regions increase risk and costs

• Complex tax regimes and / or fines for ‘violation’ of legislation can turn

profitable operationss into a loss making operation with no forewarning

• Increased uncertainty for Shipowners and Seafarers

Thank you!