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28 MTR May 2006 Just 17 years ago, Bourbon was a driving force in the food processing and sugar production businesses, and the marine industry was not even a blip on its radar. By 2000, the company was well into its planned transition to a marine-dominated company, with food processing com- prising just 21 percent, while marine services had grown to 27 percent. Fast forward to 2006, and the company that made its mark in food has wholly reinvented itself into one of the leading vessel owners serving the offshore oil and gas business, becoming a 100 percent marine serv- ices company. Bourbon CEO Jacques de Chateauvieux and other key company executives recently visited with reporters in Houston to discuss the company's aggressive newbuilding plan - dubbed Horizon 2010 - that outlines the compa- ny's growth plan for the coming four years, including a planned fleet investment of nearly $1.8 billion in new Offshore Service Vessels. In assessing the near and long-term future of the off- shore business, de Chateauvieux said the company sees "strong and continued demand" for oil, as declines in pro- duction output from existing offshore wells will pressure the oil majors to step up efforts to find new reserves. The company projects that the world's production of oil will increasingly come from offshore sources, rising from 34 percent today to 39 percent by 2010, and increasingly that share will come from deepwater developments, based largely on the fact that 65 percent of new discoveries are coming from deepwater searches. The investment in new vessels and a host of new per- sonnel is not being conducted blindly. According to a recent report from Douglas-Westwood, there will be 110 floating production units installed between 2005 and 2009, a 59.4 percent increase compared to the years 2000-2004. In addition, according to Infield and Bourbon, there will be approximately 2,121 subsea instal- lations between 2004-2008, a 71 percent increase over the four year period between 1999-2003. Thus Bourbon projects an overall 12 percent annual turnover growth for the company, driven by an anticipated 20 percent turnover growth, per year, in its offshore division. Fast-Track Growth At the turn of the century the company announced plans to become a pure marine player, and in the years between 2002 and 2006 its Offshore division grew with 53 supply and 39 crew boats; its Towage and Salvage divi- sion added four tugs and two sea going tugs, and its Bulk division added three bulk carriers. At the end of 2006, Bourbon will own a modern, new generation fleet of 264 vessels, which includes 192 for its Offshore Division, 66 tugs for its Towage & Salvage Division, and six bulk car- riers for its Bulk division, all built and deployed world- wide. Bourbon, which builds and operates its vessels world- wide, views the offshore market with particular regard, and estimates that an aging generation of vessels servicing the shallow draft oil and gas market, combined with accel- erating demand for a new generation of vessels capable of operating in increasingly deep waters has created a historic market opportunity. "Today, anything that floats, makes money. In the future, only those with low costs will be successful," said de Chateauvieux. To this end, the company is investing in a fleet of modern vessels with the capacities and capa- bilities to serve evolving needs of offshore operators. This Bourbon Invests in Offshore Vessels to the tune of $1.8 Billion MTR#4 (17-32).qxd 5/15/2006 10:26 AM Page 28
