Global Offshore Market Challenges

Global Offshore Market Challenges

Group Overview

DOF ASA in brief Fleet 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 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 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 Vessels 5 Subsea Back log* 19 30 AHTS Total NOK 64.5 bn Firm contracts : NOK 30.6 bn Options: NOK 33.9 bn 20 PSV Chartered Subsea Vessels DOF Group 3

No. Of Vessels MNOK DOF ASA timeline DOF fleet evolution DOF Group employees 80 70 60 50 No. of operated Vessels MV of Fleet 40000 35000 30000 25000 6000 5000 4000 No. Of employees 40 20000 3000 30 20 15000 10000 2000 10 5000 1000 0 2008 2009 2010 2011 2012 2013 2014 H1 2015 0 0 2008 2009 2010 2011 2012 2013 2014 H1 2015 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 jointventures 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 large subsea 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 DOF Group 4

Market Experience

A global player 34 Austevoll Aberdeen Moscow St. Johns Houston 3 Cairo Macaé Rio de Janeiro 23 Luanda 3 Manila Malaysia Singapore Brunei Jakarta Perth Buenos Aires 8 FOCUS AREAS 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 6

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

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 8

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 9

Australian / New Zealand Market operational challenges 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 3 rd party crews no continuity onboard Lack of experienced local crew in New Zealand higher rates of pay in Australia DOF Group 10

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 11

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 DOF Group 12

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