Bourbon Plans to Spend 2B Euros and Launch Subsea Sector

In February 2006, Bourbon announced the Horizon 2010 plan, a strategy based on an original vision of the market and substantial investments in a modern fleet. In February 2008, Bourbon is announcing its Horizon 2012 strategic plan, which continues and prolongs its outlook.

The last Horizon 2010 strategic plan was developed at the end of 2005, in a context of strong demand from oil operators, who expressed their intention to make massive investments in offshore to extend their reserves and develop their production. Bourbon was then positioned in three marine sectors via the Offshore Division, the Towage and Salvage Division, and the Bulk Division.

Two years later, two new factors, external and internal, have led Bourbon to update its strategic vision. In the offshore oil and gas market, Bourbon notes that oil and gas investments are expected to be higher than initial estimates and that growth has been slowed by bottlenecks at equipment suppliers. As a result, the investments made in oil fields are expected to be spread out over time and generate a positive extension of the production cycle.

Within the group, the sale of the port towage business to the Spanish company Grupo Boluda Corporacion Maritima, which was closed on Dec. 21, 2007, gives Bourbon new maneuvering room in the two remaining Divisions: Offshore (which now includes the salvage business of Les Abeilles International), and Bulk transport.

Facing these major changes, Bourbon has decided to update its strategic plan and enlarge it to 2012.

The new Horizon 2012 plan, covering the 5 years from 2008 to 2012, is characterized by an expected average annual revenue growth of 17%, including 21% for the Offshore Division, a large increase in the number of vessels, a ratio of EBITDA (Gross Operating Income) to average capital employed of 18% in 2012, and investment, in addition to the installments paid in 2007, of 2 billion euros, 85% of which will be devoted to the Offshore Division and largely financed by cash flow.

Within the Offshore Division, the Horizon 2012 plan is characterized by an expansion of the offer, by integrating and developing a new "Subsea Services" Activity, which results in a new organization for the Division where the Offshore Division will be splits in two, including both Marine Services (offshore support vessels, crewboats and salvage tugs) and Subsea Services (engineering and management, IMR vessels, and ROV services).

The company expects average annual revenue growth of 21% a year for the Offshore Division, including 17% for the Marine Services Activity and 38% for the Subsea Services Activity. Bourbon will invest of 1.7 billion euros, in addition to the installments paid in 2007, essentially for the expansion of the fleet of Offshore vessels and ROVs. To this end, 10 GPA 696 type IMR vessels were ordered at the beginning of 2008 at a cost of 450 million euros.

As of Feb. 6, 2008, the company has 219 marine services units, and 169 marine services units on order, including 70 OSVs and 100 on order, 144 crewboats and 69 on order, and five salvage tugs. Bourbon also owns 11 IMR vessels with 19 on order, and 7 ROVs with 4 on order in its subsea sector. The company's total offshore fleet (excluding ROVs) is 230 with 188 on order.

By 2012, Bourbon intends to become the leader in modern offshore oil and gas marine services, by offering to the most demanding oil and gas clients worldwide a full line of new generation, innovative, high performance vessels and an expanded offer of subsea services.