4.3.31Interest in Joint Ventures and Associates
The Company has several joint ventures and associates:
|
Entity name |
Partners |
Joint venture/ |
% of ownership |
Country registration |
2017 main reporting segment |
Project name |
|---|---|---|---|---|---|---|
|
Sonasing Xikomba Ltd. |
Sociedad Nacional de Combustiveis de Angola Empresa Publica -Sonangol E.P.; Angola Offshore Services Limitada |
Joint venture |
50.00 |
Bermuda |
Lease & Operate |
FPSO N'Goma |
|
OPS-Serviçõs de Produção de Petróleos Ltd. |
Sociedad Nacional de Combustiveis de Angola Empresa Publica -Sonangol E.P. |
Joint venture |
50.00 |
Bermuda |
Lease & Operate |
Angola operations |
|
OPS-Serviçõs de Produção de Petróleos Ltd. Branch |
Sociedad Nacional de Combustiveis de Angola Empresa Publica -Sonangol E.P. |
Joint venture |
50.00 |
Angola |
Lease & Operate |
Angola operations |
|
OPS Production Ltd. |
Sociedad Nacional de Combustiveis de Angola Empresa Publica -Sonangol E.P. |
Joint venture |
50.00 |
Bermuda |
Lease & Operate |
Angola operations |
|
Malaysia Deepwater Floating Terminal (Kikeh) Ltd. |
Malaysia International Shipping Corporation Behard |
Joint venture |
49.00 |
Malaysia |
Lease & Operate |
FPSO Kikeh |
|
Malaysia Deepwater Production Contractors Sdn Bhd |
Malaysia International Shipping Corporation Behard |
Joint venture |
49.00 |
Malaysia |
Lease & Operate |
FPSO Kikeh |
|
Anchor Storage Ltd. |
Maersk group |
Joint venture |
49.00 |
Bermuda |
Lease & Operate |
Nkossa II FSO |
|
Gas Management (Congo) Ltd. |
Maersk group |
Joint venture |
49.00 |
Bahamas |
Lease & Operate |
Nkossa II FSO |
|
Solgaz S.A. |
Deepwater Enterprises A/S (an entity of Maersk group) |
Joint venture |
49.00 |
France |
Lease & Operate |
Nkossa II FSO |
|
Sonasing Sanha Ltd. |
Sociedad Nacional de Combustiveis de Angola Empresa Publica -Sonangol E.P.; Angola Offshore Services Limitada |
Joint venture |
50.00 |
Bermuda |
Lease & Operate |
FPSO Sanha |
|
Sonasing Kuito Ltd. |
Sociedad Nacional de Combustiveis de Angola Empresa Publica -Sonangol E.P.; Angola Offshore Services Limitada |
Joint venture |
50.00 |
Bermuda |
Lease & Operate |
FPSO Kuito |
|
Sonasing Saxi Batuque Ltd. |
Sociedad Nacional de Combustiveis de Angola Empresa Publica -Sonangol E.P.; Vernon Angolan Services Limitada |
Joint venture |
50.00 |
Bermuda |
Lease & Operate |
FPSO Saxi-Batuque |
|
Sonasing Mondo Ltd. |
Sociedad Nacional de Combustiveis de Angola Empresa Publica -Sonangol E.P.; Vernon Angolan Services Limitada |
Joint venture |
50.00 |
Bermuda |
Lease & Operate |
FPSO Mondo |
|
SNV Offshore Ltd. |
Naval Ventures Corp (an entity of Synergy group) |
Joint venture |
50.00 |
Bermuda |
Turnkey |
Brazilian yard |
|
Pelican Assets S.à.r.l. |
SNV Offshore Limited (see information above) |
Joint venture |
50.00 |
Luxembourg |
Turnkey |
Brazilian yard |
|
Estaleiro Brasa Ltda. |
SNV Offshore Limited (see information above) |
Joint venture |
50.00 |
Brazil |
Turnkey |
Brazilian yard |
|
Brasil Superlift Serviçõs Içamento Ltda. |
SNV Offshore Limited (see information above) |
Joint venture |
50.00 |
Brazil |
Turnkey |
Brazilian yard |
|
Normand Installer S.A. |
The Solstad group |
Joint venture |
49.90 |
Switzerland |
Turnkey |
Normand Installer |
|
OS Installer AS |
Ocean Yield AS |
Associate |
25.00 |
Norway |
Turnkey |
SBM Installer |
|
SBM Ship Yard Ltd. |
Sociedad Nacional de Combustiveis de Angola Empresa Publica -Sonangol E.P.; Daewoo Shipbuilding & Marine Engineering Co. Ltd. |
Associate |
33.33 |
Bermuda |
Turnkey |
Angolan yard |
|
PAENAL - Porto Amboim Estaleiros Navais Ltda. |
Sociedad Nacional de Combustiveis de Angola Empresa Publica -Sonangol E.P.; SBM Shipyard |
Associate |
30.00 |
Angola |
Turnkey |
Angolan yard |
The Brazilian market continues to face a downturn related to economic and political factors. The adverse changes in the economic environment in the market to which the Brazilian yard is dedicated is considered as a triggering event and thus an impairment test of Company’s net investment in the joint ventures owning the Brazilian yard has been carried out as of December 31, 2017.
The recoverable amount of the net investment in the Brazilian yard is determined based on value-in-use calculations which require the use of assumptions, including future market conditions, which are by essence subject to uncertainty. The key assumptions to calculate the value-in-use are as follows:
- The calculations use cash flow projections approved by the Management Board of the Company for the next eight years, including expectations of the market development and award perspective on the FPSO and brownfield market. Management expects to see a gradual recovery of the market within the next five years.
- The terminal value is based on the average of the 2021-2025 period (with no expected growth), the low level of activity expected on the 2018-2020 being not considered as normative.
- The discount rate used is pre-tax and reflects the specific country and industry risk (9.4%).
As a result of the impairment test performed, the determined value-in-use is higher than the carrying amount of the net investment in the Brazilian yard as of December 31, 2017 (US$ 24 million) and no impairment has therefore been recognized.
The Company has no joint operation as per definition provided by IFRS 11 ‘Joint arrangements’.
The movements in investments in associates and joint ventures are as follows:
|
2017 |
2016 |
||
|---|---|---|---|
|
Investments in associates and joint ventures at 1 January |
484 |
460 |
|
|
Share of profit of equity-accounted investees |
33 |
45 |
|
|
Dividends |
(76) |
(45) |
|
|
Cash flow hedges |
3 |
3 |
|
|
Capital increase/(decrease) |
4 |
12 |
|
|
Foreign currency variations |
(1) |
(7) |
|
|
Share in negative net equity reclassification to loans to joint ventures and associates |
10 |
17 |
|
|
Investments in associates and joint ventures at 31 December |
457 |
484 |
The following tables present the figures at 100%.
Information on significant joint arrangements and associates - 2017
|
Project name |
Place of the business |
Total assets |
Non-current assets |
Cash |
Loans |
Non- current liabilities |
Current liabilites |
Dividends paid |
Revenue |
|---|---|---|---|---|---|---|---|---|---|
|
FPSO N'Goma |
Angola |
1,130 |
981 |
27 |
432 |
386 |
291 |
- |
101 |
|
Angola operations |
Angola |
225 |
1 |
22 |
- |
- |
180 |
10 |
156 |
|
FPSO Kikeh |
Malaysia |
350 |
253 |
5 |
- |
4 |
17 |
107 |
111 |
|
Brazilian yard |
Brazil |
49 |
37 |
1 |
- |
- |
6 |
- |
11 |
|
Angolan yard |
Angola |
130 |
0 |
77 |
437 |
437 |
62 |
- |
13 |
|
Non material joint ventures/associates |
255 |
211 |
21 |
252 |
236 |
51 |
41 |
44 |
|
|
Total at 100% |
2,140 |
1,483 |
154 |
1,121 |
1,063 |
605 |
158 |
436 |
Information on significant joint arrangements and associates - 2016
|
Project name |
Place of the business |
Total assets |
Non-current assets |
Cash |
Loans |
Non- current liabilities |
Current liabilites |
Dividends paid |
Revenue |
|---|---|---|---|---|---|---|---|---|---|
|
FPSO N'Goma |
Angola |
1,215 |
1,061 |
25 |
564 |
554 |
269 |
- |
105 |
|
Angola operations |
Angola |
230 |
2 |
36 |
- |
0 |
168 |
- |
175 |
|
FPSO Kikeh |
Malaysia |
426 |
328 |
(3) |
0 |
20 |
23 |
90 |
108 |
|
Brazilian yard |
Brazil |
76 |
49 |
3 |
- |
- |
9 |
- |
78 |
|
Angolan yard |
Angola |
490 |
324 |
67 |
639 |
639 |
102 |
- |
40 |
|
Non material joint ventures/associates |
304 |
226 |
40 |
271 |
209 |
96 |
4 |
36 |
|
|
Total at 100% |
2,740 |
1,989 |
169 |
1,474 |
1,422 |
668 |
94 |
543 |
The bank interest-bearing loans and other borrowings held by joint ventures and associates are as follows:
Information on loans and borrowings of joint ventures and associates
|
Net book value at 31 December 2017 |
Net book value at 31 December 2016 |
||||||||
|---|---|---|---|---|---|---|---|---|---|
|
Entity name |
% Ownership |
% Interest |
Maturity |
Non-current |
Current |
Total |
Non-current |
Current |
Total |
|
US$ Project Finance facilities drawn: |
|||||||||
|
Sonasing Xikomba Ltd |
50.00 |
4.77% |
16-Aug-21 |
256 |
85 |
342 |
342 |
81 |
423 |
|
Normand Installer SA |
49.90 |
4.99% |
15-Feb-19 |
35 |
8 |
43 |
- |
50 |
50 |
|
OS Installer AS |
25.00 |
4.18% |
16-Dec-19 |
80 |
7 |
88 |
88 |
7 |
95 |
|
Loans from subsidiaries of |
355 |
33 |
387 |
416 |
20 |
437 |
|||
|
Loans from other shareholders of the joint ventures and associates |
261 |
- |
261 |
246 |
- |
246 |
|||
|
Loans from other joint ventures 2 |
252 |
1 |
253 |
250 |
- |
250 |
|||
|
Net book value of loans and borrowings |
1,240 |
134 |
1,374 |
1,343 |
158 |
1,501 |
|||
- 1 Please refer to note 4.3.15 'Loans to joint-ventures and associates' for presentation of the carrying amount of these loans in Company's Consolidated Statement of financial position.
- 2 Loans from the joint ventures SBM Shipyard Ltd to the JV Paenal - Porto Amboim Estaleiros Navais Ltda.
Aggregated information on joint ventures and associates
|
2017 |
2016 |
||
|---|---|---|---|
|
Net result at 100 % |
(33) |
38 |
Reconciliation equity at 100 % with investment in associates and joint ventures
|
2017 |
2016 |
||
|---|---|---|---|
|
Equity at 100% |
472 |
650 |
|
|
Partner ownership |
(181) |
(294) |
|
|
Share in negative net equity reclassification to loans to joint ventures and associates |
166 |
127 |
|
|
Investments in associates and joint ventures |
457 |
484 |