Operations Deep Panuke

In the early part of 2013, the Company focused on ensuring that the platform’s path to production continued on track. The Deep Panuke project now produces and processes natural gas from the Deep Panuke field,

approximately 250 kilometres (155 miles) southeast of Halifax, Nova Scotia on the Scotian Shelf. The platform is designed to produce up to 300 million cubic feet per day (MMcf/d) of natural gas.

The platform had been producing sales gas since early August. Through the autumn, the operational team of Deep Panuke continued commissioning activities leading up to production acceptance and the start of the lease contract. These activities involved achieving a steady state of production and taking the time required to safely start the gas platform. Production Acceptance Notification was obtained in December. The facility is now on hire. The terms of the lease and operate contract are for a minimum period of eight years with annual extension provisions of up to a maximum of twelve additional years. A charge of US$ 35 million related to the delayed start-up and associated cost was taken in 2013.

FPSO Cidade de Paraty

FPSO Cidade de Paraty was formally on hire from June 7, 2013, following full system acceptance by the client, Petrobras. The facility was constructed in 34 months from Letter of Intent in June 2010, and met the local content requirements for Brazilian FPSOs. The FPSO will operate under twenty year charter and operate contract on the Lula Nordeste development in the pre-salt area, offshore Brazil. It is a first of its kind third generation FPSO, which carries topside loads of about 18,000 tonnes to 23,000 tonnes to meet the advanced processing requirements of Brazil’s pre-salt projects. The vessel is designed to produce 120,000 barrels per day and is equipped to deal with high volumes of associated gas.

FPSO OSX-2

The Company announced the successful turnkey sale delivery to the client, OSX 2 Leasing B.V., on time and in line with the contract, in early September 2013. With a total topside weight of over 10,000 tonnes and a

The addition of these nine modules triggered the next phase – the start of integration, mechanical completion and commissioning activities on these modules. This will take place alongside on-going refurbishment works on 12 existing modules that were kept on board the FPSO, as well as the turret integration, before moving into the final phase of commissioning activities.

The FPSO will subsequently sail to Paenal in Angola, where the next stage will see the two final modules integrated onto the FPSO.

The schedule foresees the start of production in 2014 at a design capacity of 100,000 barrels per day. In autumn 2013, a project loan of US$600 million was secured from a consortium of international banks at a weighted average cost of debt of 4.7%.

Shell Prelude FLNG Turret Mooring System

This large and complex turret, which is progressing on schedule, represents a substantial part of the Turnkey segment. As with other large turret projects currently being undertaken, Prelude required advanced technology solutions for high mooring loads and will have a total weight of 11,000 tonnes with a height of 100 meters. Design work on the turret started towards the end of 2008, when Shell selected the Company to handle the design, procurement and construction of the Turret Mooring Systems (TMS) for their FLNG facilities. The project moved into the construction phase in May 2012 with the first module delivered in September 2013. The four remaining turret modules are scheduled for delivery progressively over 2014 to the SHI shipyard in South Korea, where they will be integrated with the FLNG substructure. The Prelude FLNG, which will be the world’s largest floating facility, is expected to sail towards its final destination off Western Australia in 2016.

QUAD 204 Turret

In June 2010, BP awarded the Company the contract to supply the Quad 204 FPSO turret, which will be one of the largest in the world with a mooring force of 2,250 tonnes. Delivery of the turret was phased during the year to facilitate the FPSO construction sequence with the final phase of delivery to the HHI shipyard in Korea taking place towards the end of November 2013. The mechanical completion activities of the integrated turret are planned to commence in mid-2014. As per the project agreement, this phase will be managed by the customer, with the assistance of the Company.

FPSO Cidade de Ilhabela

Cidade de Ilhabela remains the largest and most complex FPSO the Company has ever undertaken. The topside process modules will weigh close to 20,000 tonnes, including large and complex gas processing facilities. During 2013, construction of FPSO Cidade de Ilhabela made satisfactory progress, with the completion of refurbishment and conversion at the Chinese shipyard in Guangzhou. The vessel set sail for Brazil in early November and construction of the process modules at the Brasa yard continued in anticipation of the arrival of the FPSO. Start-up of the facility is expected in the second half of 2014.

The turret will have a diameter of 19 meters, a height of 85 meters, and a weight of over 7,000 tonnes. It will accommodate up to 15 risers and will be designed for 40 years of operation without the need for disconnection. Fabrication of the turret, in Singapore, has commenced and is scheduled for completion in the second half of 2014. Installation of the Turret and Mooring system in the field is anticipated in 2015.

FSO Yetagun

The Company has a lease and operate contract for the FSO Yetagunwhich runs until 2015, with extension options for up to 5 years. This contract was awarded prior to an international campaign to impose sanctions against Myanmar. In 2003, the Company stated in a press release that it had decided not to seek any new contract in Myanmar but confirmed its commitment to complete its existing contract.

The Company is still committed not to extend its existing contract past the expiry date as long as international sanctions against Myanmar continue to apply. Should the international sanctions be suspended or lifted, the Company may want to reassess its position with regard to operating in Myanmar.

The Company has ensured that all operations comply with the highest social accountability standards. The Company commissioned Bureau Veritas to conduct an independent audit of the operators. This audit confirmed full compliance with the Group's Social Accountability Policy.