Offshore Project Due Diligence What really matters''

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Offshore Project Due DiligenceWhat really
matters..?

• Dr. David Bean
• Director, PMSS
• Wednesday, 5th December 2007
• Offshore Wind 2007, Berlin. Germany

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Overview
Overview

• Introduction to PMSS
• Offshore Project Due Diligence
• Major Issues to Consider
• Issues often Underestimated
• Life Cycle Costs vs. Construction Costs
• Offshore Project Due Diligence What really
  matters?

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About PMSS

• Leading independent multi-disciplinary UK
  consultancy established in 1994
• Providing developers, financiers, project
  managers, and professional service providers with
  support services within the offshore wind sector
• Specialising in
• Technical Commercial advice
• Project Management
• Development Construction
• Health Safety
• Environmental Management
• Quality Assurance
• Offices in England (2), Wales, Ireland and The
  Netherlands (offices opening soon in Germany /
  Denmark)

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Offshore Wind Track Record
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Offshore Windpark
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Offshore Project
Due Diligence Issues I

• Project Execution
• Regulatory Issues
• Technology (WTG / Foundations etc.)
• Contracts
• Schedule
• Energy Yield

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Offshore Project
Due Diligence Issues II

• Financial
• Grid Connection
• Insurance
• OM
• Decommissioning

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Foundations
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Wind Turbines
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Cables
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Operations
Maintenance
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Issues often
under-estimated I
Design Development

• Project profitability often set during design
  phase
• Short Term vs. Long Term decisions
• Compatibility between aspects of the Project
• Contracting Strategy / the ability to assess
  project structures, and impacts on Schedule /
  Economics
• The effect which contingency has on a Project
• The ability to mitigate against reasonably
  foreseeable circumstances

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Issues often
under-estimated II
Construction Operations

• Size of vessels vs. Anticipated Schedule / Cost /
  Downtime
• Ability to cooperate with neighbouring projects
• Operations Maintenance costs
• Asset Management

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Life Cycle
Costs

• Mindset of the long-term owner
• Focus on
• Integrated Design
• Robust Total Quality Management (TQM)
• Life Cycle cost model
• Balance between short term pain vs. long term
  less pain

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Challenges for
Project Owners I

• To identify and reduce Project Risk as much as
  possible using minimum cost
• Deposits on WTGs / Vessels etc.
• To demonstrate the thought process behind
  project design and therefore profitability
• To maintain flexibility under new ownership

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Challenges for
Project Owners II

• Know your
• Site
• Technology
• Consultees
• Contractors

• Market Forces
• Appetite for Risk
• Programme
• Opportunities

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What really
Matters?

• Can the thought process between the project
  design and implementation be demonstrated?
• Has the project been established
• To be Sold?
• To be Constructed then Sold?
• To be Constructed Operated for 20yrs?
• How has Contingency been measured and costed ?
• Are the resources skills available to implement
  the project?

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Contact
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thank you for listening