Norway's FPSO operator BW Offshore is continuing to make progress on the construction of a floating
production storage and offloading (FPSO) vessel, which is destined to work on a gas field offshore Australia.

BW Offshore won the contract for the construction, connection, and operation of an FPSO for the Barossa field
back in March 2021. The FID for the project was taken days after the company secured the contract award.

Dyna-Mac was hired by BW Offshore in May to build the topside modules. In September 2021, the FPSO
operator completed a $1.15 billion project debt financing for the construction and operation of the FPSO
Barossa. The combined construction and long-term debt facility was provided by a syndicate of nine international
banks.

Later that same month, a partnership was announced, consisting of BW Offshore, ICMK Offshore Investment,
and Macquarie Bank, however, the completion of the agreement was subject to certain customary regulatory
approvals. These were granted a few days later.

Currently, the FPSO Barossa project is progressing in line with schedule. According to BW Offshore, the project
was approximately 73 per cent complete at the end of July 2023, while maintaining “an excellent health and
safety (HSE) record” with over 17.5 million hours of work executed, without lost time injury.

The FPSO operator further explains that persistent cost inflation is impacting the construction, commissioning
and installation phases, and is expected to consume the engineering, procurement, construction and installation
(EPCI) buffers. However, the overall economics of the lease and operate contract currently remain intact.

Marco Beenen, CEO of BW Offshore, commented: “We have a firm focus on progressing the Barossa FPSO per
plan, delivering high operational uptime on our core assets while completing the divestment of the non-core
assets.”

Operated by Santos on behalf of the Upstream Joint Venture partners, the Barossa field is located 300
kilometres offshore Darwin. The services contract for the FPSO Barossa includes an initial production period of
15 years, however, it also contains options for a 10-year production extension period. The contract for the initial
production period of 15 years is valued at $4.6 billion.

This will be a large FPSO with a processing capacity of up to 800 million standard cubic feet per day (MMSCFD)
of gas and a design capacity of 11,000 barrels per day of stabilised condensate. The initial gas production is
expected during the first half of 2025.

“The FPSO market remains strong, supported by high energy prices and oil and gas companies seeking efficient
production solutions. We continue to pursue new projects meeting our selection criteria, however, the timing of
new awards is affected by both the inflationary environment and selective lenders and co-investors,” added
Beenen.

BW Offshore is expecting a cost impact in the magnitude of $10 million per quarter for 3Q and 4Q 2023, related
to the decommissioning of the FPSO Petróleo Nautipa and related costs as part of the strategic rebalancing of
the FPSO portfolio, as older units are leaving the fleet and organisational adjustments take place.