Activity report2016Challenging conventional thinking

in today’s cost driven market

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58 A, rue du Dessous des Berges - 75013 PARISSociété Anonyme au capital de 3.571.440 m - Siret 338 274 491 00012 - Code APE 7112 B

S u m m a r yActivity report 2016

General information

Subsidiar ies, Aff i l iates 2 / 3Capital share 3Board of d i rectors 3Company management 3Auditors 3

Report on the activity of the compagny

Company act iv i ty dur ing the f inancial year 4Subsidiar ies, holdings, consort ium, branch 11recent developmentProspects 15Events that occurred af ter the c losure 16of the f inancial year

Accounts (see appendix)

2

ANGOLADORIS Engenharia Angola LdaEdificio IRCA - 5° andarAvenida Amilcar Cabral N°211 Ingombotas - LUANDAPhone: +244 222 33 47 16

ARGENTINADORIS ArgentinaTalcahuano 758 Piso 2e B1013 BUENOS AIRESPhone: +54 (11) 4 373 83 65Fax: +54 (11) 4 373 03 29

AUSTRALIADORIS Engineering Australia Pty LtdLevel 1, 10 Kings Park Road West Perth WA 6005Phone: +61 4 815 10 779

BRAZIL DORIS Engenharia LtdaAv. Almirante Barroso, n°139 Sala 803Centro - RIO DE JANEIRO - RJ CEP : 20031-005Phone: +55 (21) 3031 1500Fax: +55 (21) 3031 1555

CANADADORIS Development CanadaP.O. Box 29119ST JOHN’S - NL A1E 3T9Phone: +1 (709) 570 5244

DORIS ConPro Ltd16 Waterford Heights SouthST JOHN’S - NL A1E 1G4Phone: +1 (709) 749 1193

UNITED ARAB EMIRATESDORIS Abu DhabiGulf Business Center, 3rd floorAbdulla Bin Darwish buildingSalam/Sheikh Zayed Bin Sultan (8th) streetPlot C1, Sector 15 EastP.O. Box 46771 – ABU DHABIPhone: +971 (0) 2 67 60 270

UNITED STATESDORIS Inc.Three Memorial City Plaza840 Gessner, Suite 400HOUSTON, TX 77024Phone: +1 (713) 973 2520Fax: +1 (713) 973 2578

STAT Marine LLC11111 Richmond Ave. # 101HOUSTON, TX 77082 - 6705Phone: + 1 (713) 782 0122Fax: + 1 (713) 782 0312

FRANCEGÉODYNAMIQUE & STRUCTURE106, avenue Marx Dormoy92120 MONTROUGEPhone: +33 (0) 1 46 65 00 11Fax: +33 (0) 1 46 65 58 54

OCÉANIDEPort de Brégaillon - B.P. n° 6383502 LA SEYNE-SUR-MER cedexPhone: +33 (0) 4 94 10 97 40Fax: +33 (0) 4 94 94 42 27

SEA TANK Co58A, rue du Dessous des Berges75013 PARISPhone: +33 (0) 1 44 06 10 00Fax: +33 (0) 1 45 70 87 38

STAT Marine SASCentre Atria5, Boulevard de Prague30000 NÎMESPhone: +33 (0) 4 66 36 65 65Fax: +33 (0) 4 66 36 65 66

STAT Services SASBât. First - Z.I. du Port de Brégaillon83511 LA SEYNE-SUR-MER cedexPhone: +33 (0) 4 94 10 80 04Fax: +33 (0) 4 94 10 80 05

S u b s i d i a r i e sA f f i l i a t e s

D O R I SE n g i n e e r i n g

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UNITED STATESDORIS Inc.Three Memorial City Plaza840 Gessner, Suite 400HOUSTON, TX 77024Phone: +1 (713) 973 2520Fax: +1 (713) 973 2578

STAT Marine LLC11111 Richmond Ave. # 101HOUSTON, TX 77082 - 6705Phone: + 1 (713) 782 0122Fax: + 1 (713) 782 0312

FRANCEGÉODYNAMIQUE & STRUCTURE106, avenue Marx Dormoy92120 MONTROUGEPhone: +33 (0) 1 46 65 00 11Fax: +33 (0) 1 46 65 58 54

OCÉANIDEPort de Brégaillon - B.P. n° 6383502 LA SEYNE-SUR-MER cedexPhone: +33 (0) 4 94 10 97 40Fax: +33 (0) 4 94 94 42 27

SEA TANK Co58A, rue du Dessous des Berges75013 PARISPhone: +33 (0) 1 44 06 10 00Fax: +33 (0) 1 45 70 87 38

STAT Marine SASCentre Atria5, Boulevard de Prague30000 NÎMESPhone: +33 (0) 4 66 36 65 65Fax: +33 (0) 4 66 36 65 66

STAT Services SASBât. First - Z.I. du Port de Brégaillon83511 LA SEYNE-SUR-MER cedexPhone: +33 (0) 4 94 10 80 04Fax: +33 (0) 4 94 10 80 05

GHANADORIS Engineering GhanaVanguard House, 21Independence Avenue,Ridge, Accra, Accra MetropolitanGREATER ACCRA

UNITED KINGDOM ODE(Offshore Design Engineering)St. George’s House, 5 St. George’s RoadWimbledon, London,SW19 4DRPhone: +44 (0) 20 8481 1190Fax: +44 (0) 20 8546 4346

STAT Marine LtdInnovation House, Innovation Way, Sandwich, KENT, CT13 9FFPhone: +44 (0) 122 776 4300Fax: +44 (0) 122 776 4301

INDONESIAPT.SINGGAR DORISPo. Box 13Wisma GKBI JI. Jendral Sudirman No 28 JAKARTA 10210

NIGERIASTAT Marine Nigeria Ltd94 Awolowo Road, Ikoyi,LAGOSPhone: +234 1 4615636 - 4630183 - +234 803 4695621

CAPITAL SHARECM-CIC Investissement SCR 24.6%

DORIS Personnel 20%

VINCI Construction 20%

GRAAVEN Holding 20%

PONTICELLI Frères 15.4%

BOARD OF DIRECTORS

Mr Nicolas PARSLOEChairman

Mrs Pauline BÉRAUD (FCPE DORIS Actionnariat)

Mr Jean-Baptiste CHAMPEAU

(FCPE DORIS Actionnariat)

VINCI ConstructionMr Richard FRANCIOLI

(Permanent Representative)

Mr Jean-Michel LANG (VINCI Group)

GRAAVEN Holding Mr Benoît LECINQ

(Permanent Representative)

CM-CIC Investissement SCRMr Alain BÉNISTY

(Permanent Representative)

CM-CIC Capital et ParticipationsMr Thierry MARTIN

(Permanent Representative)

PONTICELLI FrèresMr Patrick LACQUEMENT(Permanent Representative)

PONTICELLI FrèresMr François LEFEBVRE

(Censor)

COMPANY MANAGEMENT

Mr Nicolas PARSLOEChairman & Chief Executive Officer

Mr Pierre-Yves BURBANVice-President Sales & Marketing

Mr Michel CAPLAINAdministration & Finance Manager

Mr Francis CARMIGNIANIVice-President Engineering

Mr Cyrille SAILLYCompany Secretary

Mr François THIÉBAUDVice-President Operations

AUDITORS

ARPÈGE

BM&A

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Overall levelThe DORIS Group’s activity was considerably reduced during the 2016 financial year. The company accounts show a 65.6% reduction in pre-tax turnover to 20.8 M€ (compared to 60.5 M€).

Consolidated turnover is 152.8 M€ (-43.4%).

The mother company and the entire DORIS Group have been affected by the oil sector crisis, with the sharp fall in the oil price.

Following the collapse of the average oil price in 2015 to 52.3 USD (1) (-47.2% compared to the average for 2014), the fall continued throughout the 2016 financial year to 43.5 USD (-16.8%). The oil price even fell below the symbolic 30 USD mark in January 2016 to reach a record low since 2004.

The market continued to deteriorate throughout the financial year along with the fall in the oil price. The operators, who had already embarked on cost-cutting measures in 2014, have accelerated the process. Many projects have been suspended or simply stopped.

Investments down sharply

After an investment peak in 2014 (nearly 770 billion dollars in investments), the oil operators reacted sharply to the sudden fall in the oil price: investment fell by 26% in 2015 to 577 billion dollars and by a further 25% to 433 billion dollars (2) in 2016. This is the first time that investment has fallen two years running.

There are many uncertainties about the evolution of the oil price over the years to come:

The balance between supply and demand which led to the sharp fall in the oil price is still in favour of supply. The increase in supply has largely been driven by the significant increase in American production (+4.5 M barrels per day between 2004 and 2014, (+60%) where worldwide production rose by only +9% over the same period (3)). By mid-2015, the United States had become the world’s leading producers (with 11.64 M barrels per day), ahead of Saudi Arabia (2nd with 11.5 M barrels per day) and Russia (3rd with 10.8 M barrels per day (4)) . This increase is directly linked to the production of shale oil and gas and a certain political will by the United States to become less dependent on the Middle East, where there has been increasing political disorder in recent years, and to weaken Russia after the embargo that followed the Ukrainian crisis.

ACTIVITY REPORTDORIS Engineering

(1) Barrel of Brent (Source EIA www.EnergyInformationAdministration.com)(2) Source EAI-2016 report(3) Source BP-Statistical Review 2015(4) Source Figaro (11/06/2015)

1 / Company activity during the financial year

2016

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Figure 1: exploration-production world investment (in billion of USD)

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The weakening of OPEC which no longer acts as a regulator to the benefit of the United States. By becoming the number one for oil in 2015, the United States has become the “swing state”, i.e. the country that determines the balance between oil supply and demand – replacing Saudi Arabia.

The OPEC countries tried to contain this situation at the end of 2016 by deciding to cut their production in collaboration with other non-member countries such as Russia to the tune of 1.8 M barrels per day. The fall in production came into effect at the start of 2017: as a result, the barrel price has been maintained at around 50 USD.

The worldwide slowdown, particularly among the emerging countries:

• with a fall in consumption in China that affects oil and all raw materials in general;

• with countries going through major crises, such as Brazil or Russia, mentioned above.

High inflation in the cost of projects in recent years with a barrel at over 100 USD, while huge investment projects have been run at a total cost of several tens of billions of dollars each: Kashagan in Kazakhstan for at least 60 to 80 billion dollars and Gorgon in Australia for 54 billion dollars.

All these factors suggest that it is unlikely that we shall see a significant rise in the oil price over the next few months or years to come. The trend is clear: oil prices will not reach new peaks in the next few years.

Impact on the DORIS Group’s business

The DORIS Group’s activity has been affected by this very particular context: the mother company’s activity virtually ground to a halt between January and September 2016. There was a slight recovery in the final quarter, but at an extremely low level. The engineering subsidiaries (DORIS Inc., DORIS Engenharia Ltda [DEL], ODE and part of the DORIS Engenharia Angola Lda [DEAL] activity) also suffered from this worldwide crisis and their activity levels fell.

Only the subsidiaries specialising in technical support (DORIS Engineering Australia Proprietary Ltd [DEAP] and STAT) managed to maintain a satisfactory volume of business, due to the fact that their employees who had been assigned to operators were working on projects that were in their final development phase (Ichthys for INPEX with DEAP in Australia and Block 15/06 for ENI in Angola with STAT/DEAL).

The evolution in the DORIS Group’s activity is shown in the graph below, against the average annual oil price per barrel, which gives a picture of the sharp downturn in the DORIS Group’s activity.

Considering the significant reduction in its activity, DORIS has had to make some difficult decisions to reduce its cost structure without endangering the future of the Group. A Job Protection Plan was rolled out in Paris during the 2016 financial year to cut employee numbers by nearly a quarter to 178 people. In addition, every expenditure line was examined with a fine tooth-comb to adapt to the market.

DORIS has used its available teams to carry out Research & Development projects with a view to a recovery in activity in the near future. These have focused on cutting the cost of project development and exploitation.

The company has also assigned engineers to business development projects with the aim of diversifying the Group’s activities, including focusing on renewable maritime and nuclear energy.

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DORIS turnover Subsidiary turnover DORIS Group consolidated turnover

Average Brent price

Figure 2: Evolution in company and consolidated turnover since 2000 (in million of €). [Source www.prixdubarrel.com]

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Different activity sectorsDORIS is pursuing its activities in various sectors:1. Basic engineering and conceptual studies for oil and oil services customers,2. Detailed engineering for oil services contractors,3. Project management / “All-inclusive” contracts,4. Technical Support,5. Research & Development,6. Coastal Engineering,7. Diversification.

Basic engineering and conceptual studies for oil and oil services customers

DORIS Engineering has continued to assist its oil industry customers in developing offshore oil and gas fields.

The company had to bring a premature end to the Dalia Debottlenecking project (“DBN”) at the request of the customer, TOTAL E&P Angola. The project began in February 2015 and is situated 135 km off the Angolan coast on block 17, at a depth of between 1200 and 1500 m. The contract was built around the production of the FEED, Detailed Engineering and procurement to improve production on the Dalia FPSO, which came into production in 2006. This new, more global contractual approach aimed to cut costs and interfaces. In the end, after the FEED had been completed within deadline, TOTAL decided not to pursue the project, which ended in late January 2016.

The company also had to put a stop to the studies it was carrying out for block 15/06 (West Hub and East Hub), operated by ENI in Angola. This deep offshore field is 130 km from the Angolan coast (Soyo) and operates at depths of up to 1500 m. Conceptual studies have been carried out for the East Hub part (Cabaça) concerning the subsea connection of new reservoirs to the existing FPSO. For the West Hub part (particularly Mpungi and Vandumbu), DORIS has carried out subsea equipment optimisation studies for the recovery of oil by the Ngoma FPSO. ENI has put all this development on hold and all engineering studies were suspended from the end of March 2016. They may resume within the next few months.

The 2016 financial year saw a very limited number of new projects and the company started only two studies at the end of the year:

The Aquarius FEED for BP since September 2016. BP owns and operates an oil and gas storage centre in Frontignan, near Sète in the South of France, and is looking to build a jetty to improve the usage capacity and eventually the value of its maritime terminal. DORIS, which had worked on the concept, was selected by BP to produce the FEED for the project, which will involve a full team until late April 2017.

At the same time, in basic engineering, the company has continued to work within the ADC consortium involving SONANGOL and DORIS. No new studies have been launched since mid-2015. Only the OSTRA (Offshore Technology Reliability Database for Angola) project was carried on, at a slower pace, in 2016.

As a result of the small number of projects, DORIS has used its resources on innovative concepts with the aim of preparing for a possible recovery and of offering its customers innovative

Jetty platform design for the Aquarius project (BP, France)

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solutions, which have always been the company’s distinctive feature.

Detailed engineeringNo detailed engineering studies of any significant size were carried out in 2016.

Project management / turnkey contracts

As part of the IPMS (Integrated Project Management Services) contract for the Ichthys project, which is being run by the Australian subsidiary (DEAP, described below) since August 2011, the company has continued to employ a complete project management team. The team is overseeing the engineering and construction of two vessels: a CPF - Central Processing Facility - to produce the gas and condensate, and an FPSO to further treat and store the liquid hydrocarbons. Operated by the Japanese company INPEX, this gas field is to the north-west of the Australian coast, over 800 km from Darwin. In addition to the construction of the two vessels, the giant project, estimated at over 30-35 billion dollars in initial investment, includes a 42-inch pipeline over 885 km long to export the gas to a liquefaction plant (LNG) on land in Darwin, with a capacity of 8.4 million tons per year. The teams are overseeing each phase in the construction of the two vessels (end of the FEED in London, detailed engineering in Houston for one and in Kuala Lumpur for the other, then construction in the shipyards in Korea). In 2016, the teams were mainly based in Korea.

The contract is a JV (50%) between the Australian subsidiary DEAP and a local partner (CLOUGH) with a total initial value of 250 MAUD (170 M€) and is set to last for six years. The total

has now been exceeded and the contract is expected to end in June 2017.

Although moderate for the mother company, the contract was the main source of income for the company during the financial year 2016.

DORIS did not carry out any turnkey contracts in 2016.

Technical support

Due to its employees’ high level of technical expertise in a wide range of specialities, the company has assigned a certain number of engineers to specific tasks among its customers. The specialities concerned are process, rotating machines, structure, purchasing and project management.

The number of assignments was considerably reduced in 2016 and the main customers were: TOTAL in France and abroad, SONANGOL for an audit of Kaombo in Angola, ENI in Angola (via STAT) and, of course, INPEX as part of the Ichthys contract, a joint venture between the Australian subsidiary DEAP and its local partner, CLOUGH.

3D modelling of subsea structures - Kaombo MIEC (TOTAL, Angola)

3D modelling of subsea structures - Kaombo MIEC (TOTAL, Angola)

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Research – Development The company continues to dedicate a significant proportion of its activity to research-development projects. Since it was founded, this has been the key to its profitability and development.

This research may take on different forms:

l Research and finalisation work for oil industry operators, e.g. work on a subsea station;

l Works co-financed by CITEPH (“Concertation pour l’Innovation Technologique dans l’Exploration Production des Hydrocarbures” – Dialogue for Technological Innovation in Hydrocarbon Exploration-Production). As part of this programme, DORIS agreed to take part in these works and/or co-finance them. New research topics were developed in 2016:

• fluid-structure interaction around a spool, • vibration caused by “slugging”: a system to reduce the damage to a subsea spool, • experimental investigation and CFD analysis of riser

wake vibrations,• torsional galloping of bundles of risers, • MulanR: multi-varied methodology for analysing the

environment depending on the structure’s response.

DORIS has played an active role in the implementation of CITEPH, acting as both a partner and financer of projects;

l Works on offshore wind turbines from a water depth of 50 m;

Wherever possible, these innovative concepts are protected by patents, sometimes on a joint ownership basis with customers or partners.Finally, DORIS has deemed it appropriate to use the resources available to develop an engineering studies concept internally to meet customers’ concerns. The concept is based on efforts to cut engineering costs combined with a thorough review of operators’ methods and habits, with the aim of making it more economical to develop infrastructures. This innovative concept should soon be used as part of a FEED.

Hai Long offshore windfarm 3D view - Consulting Services as Owner’s Engineer (YUSHAN Energy & NORTHLAND Power, Taiwan)

Basin model testing of the VIV on spools operated by OCÉANIDE (CITEPH)

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Coastal engineering The company did not carry out any coastal engineering studies in 2016.

DiversificationAlthough its activity is mainly linked to offshore oil and gas development projects, DORIS has promoted its knowledge of “complex systems in difficult environments” in other areas,

such as renewable energy (wind turbines at sea for a variety of customers), specific marine operations or equipment and any other subject (such as, for example, studies for the CNES - Centre National des Etudes Spatiales – National Space Studies Centre) as opportunities arise linked to the company’s reputation.

P 76 hull conversion 3D view (ESALEIRO ENSEADA, Brazil)

General view of Cameia field.- Owner’s engineering support services.(COBALT, Angola)

Sanha Lean Gas Connection Project Pre-FEED (CABGOC, Angola)

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Subsidiaries

ODE (100%)

ODE has developed a significant business trend in the new forms of energy, with several major offshore wind farm projects that currently account for nearly 20% of its turnover. The company also has a branch in the Middle East (ODENA in Egypt).

In 2016, the activity of this subsidiary, based in London, Great Yarmouth and Cairo (Egypt) was still significantly lower due to the virtual stoppage of engineering projects in the North Sea, which penalises mainly the London office.

On the other hand, Great Yarmouth maintained its activity, continuing multi-year contracts for RWE and E.ON.

SEA TANK Co (100%)

This 100%-owned company is reactivated from time to time, mainly to work on one-off service provision contracts.

DORIS Development Canada (100%)

DORIS Development Canada (DDC) was set up in St John’s (Newfoundland) for the purposes of the Hibernia contract. DDC then acted as a vehicle for DORIS’ participation, via DORIS ConPro, in the Terra Nova contract. The subsidiary is now dormant but may be reactivated if projects are relaunched in Canada.

DORIS ConPro (100%)

DORIS will use this structure, in liaison with DDC, to develop its activities in Newfoundland. The company is now dormant but may be reactivated if new local developments occur.

DORISAR (75%)

This Argentinian subsidiary carried out certain works for TOTAL Austral in the past. It is now dormant.

DORIS Inc. (100%)

DORIS Inc. is a 100%-owned subsidiary of DORIS Engineering, based in Houston to accompany the projects of operators established in the United States. Founded in 2000, DORIS Inc. is now an engineering company well-known to the main American customers, particularly CHEVRON, MAERSK, ADDAX, CONOCOPHILLIPS, COBALT, EXXONMOBIL and the Mexican operator PEMEX.

In 2016, DORIS Inc. suffered from the oil crisis and the stoppage of nearly all the projects being run in Houston. The signature of framework contracts with PEMEX and CHEVRON for Angola did not provide sufficient activity to cover costs. The company has prepared itself for a significant reduction in activity and the prospect of a recovery in 2017 or 2018.

STAT Marine (97.76%)

Since 2008, DORIS Engineering has had at 70% stake in the STAT

Marine Group; the rest of the capital is held by the employees.

In 2015, DORIS bought out most of the minority shareholders

(SEICO) to obtain a near-98% stake in the STAT Group, directly

or indirectly. The group, based in Nîmes, Sandwich, Houston,

Sanha Complex Laser Scan of the WHRU area for the WHRU replacement project (CABGOC, Angola)

Detail Design of the Prinos area development project including the new Lamda platform (ENERGEAN, Greece)

2 / Subsidiaries, holdings, consortium, branch, recent development

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Lagos and Pointe Noire, specialises in technical support (90% of turnover). The rest of the activity consists of engineering and takes place mainly in Nîmes. The STAT Group has nearly 200 employees.

In 2016, despite an environment unfavourable to technical support, which is a real adjustment variable for oil industry operators, the company maintained a high level of activity. This is mainly due to the completion of a major contract with the Italian operator ENI.

DORIS Engenharia Limitada (100%)

Brazil has been in an extremely difficult situation for over two years now, with a downturn in the economy (recession, high inflation, devaluation of the Real and the fall in the oil price). These problems, which are linked to cases of corruption in PETROBRAS, have affected most of the local manufacturers (ODEBRECHT’s CEO was sentenced to 20 years in prison) and reached as far as Government leadership, with the impeachment of the President, Dilma Rousseff, on 31 August 2016.

The 7-year, 212 MUSD contract with PETROBRAS signed in 2010 for the engineering and construction supervision of 8 FPSOs for Pre Sal came to a partial halt during the 2016 financial year. It was the main contract for the Brazilian subsidiary and DEL had to adapt its structure to cope with a significant reduction in its planned workload. No other new projects were forthcoming in this unfavourable context during the 2016 financial year.

PT SINGGAR DORIS (50%)

PT SINGGAR–DORIS (PTSD), jointly owned with the Indonesian partner PT Singgar Mulia (PTSM), was made dormant on 31 December 2009. This is due to a lack of prospects offered by customers based in Jakarta.

DORIS Engineering Australia Pty Limited (100%)

DORIS Engineering Australia Pty Ltd (DEAP) was set up in 2011

to run the IPMS (“Integrated Project Management Services”, mentioned above) contract for the Ichthys project on behalf of INPEX in Australia. DEAP is the joint owner (a 50% JV), alongside the Australian CLOUGH, of the IPMS contract, worth an initial total of 250 MAUD over six years. The subsidiary may well run other projects in Australia in the future.

Holdings

OCÉANIDE (24.98%)

This company was originally set up to deal mainly with coastal engineering problems and is also the operator of the “BGO First” model test Basin. As such, OCÉANIDE takes part in trials for a wide range of prototypes intended for “deep offshore” projects.

The capital structure of this holding changed in 2015: DORIS has a 24.98% stake in OCÉANIDE’s capital, on the same level as TECHNIP and DAHER. The Principality of MONACO owns 16% and the rest of the capital (9%) is owned by the employees, who have joined together to form a holding company (UNICEAN).

GÉODYNAMIQUE et STRUCTURE (48.76%)

DORIS has a 48.76% stake in this engineering company which specialises in soil mechanics, and particularly problems linked to seismic phenomena and the nuclear industry.

This engineering office has been a partner to DORIS for a long time, providing an interface between these phenomena and the structures that we are studying, such as concrete structures, LNG projects, offshore wind farms and port facilities.

DORIS Engenharia Angola Limitada (49%)

Acquired at the end of 2008, DORIS Engenharia Angola Limitada (DEAL) acts as a vehicle for various group entities (DORIS Engineering, DORIS Inc. and STAT) for carrying out works in Angola.

P 76 hull conversion 3D view (ESALEIRO ENSEADA, Brazil)

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Historically involved in technical support, DEAL develops its own engineering activities: from 2011, DEAL was involved in a 5-year contract in Luanda for TOTAL E&P Angola for the Pazflor “jumpers”, now extended to the CLOV “jumpers”. Since then, the engineering activity has developed significantly, as DEAL represents the Local Content for several major projects developed in coordination with various companies in the Group. The locally-recruited Angolan engineers are sent to the mother company (Paris) or to other subsidiaries (Houston) to be given appropriate training. Once trained, they carry out engineering works in the Luanda offices under the supervision of DORIS expatriates.

In 2016, DEAL’s engineering activity suddenly ground to a halt with the stoppage of the Dalia Debottlenecking contract for TOTAL E&P Angola, which was expected to provide a significant workload for the whole of the financial year. DEAL’s engineering activity was therefore considerably reduced in 2016 with a few projects: with CHEVRON in partnership with DORIS Inc., the framework contract for Blocks 0 and 14 and with TOTAL in partnership with DORIS and STAT.

DEAL also pursued its technical support activity with ENI for the supply of personnel for a PMS (Project Management Services) type contract for Block 15/06, in coordination with STAT.

VIA MARINA (16.7%)

Like its partners, VINCI Construction Grands Projects (VCGP) and GEOCEAN, DORIS has a 16.7% stake in this company. The rest of the capital (49.9%) is held by four individual shareholders via the company BBLM.

This company was set up to carry out engineering for the transport of fresh water via a flexible subsea pipeline. No remunerated activity took place in 2016: the company focused on business prospecting and R&D to develop the proprietary concept.

It was decided to sell off the stake in VIA MARINA, which is expected to be sold shortly to one of the shareholders, a private individual.

Consortium

ADC (Angolan Deepwater Consortium)

The role of this consortium, which is made up of the Angolan national oil company (SONANGOL) and DORIS, is to develop concepts adapted to Angolan conditions, with a view towards long-term developments to accompany the rise of the national industry.

These studies are being carried out on behalf of the operators established in Angola: BP, CHEVRON, ENI, EXXONMOBIL, PETROBRAS, TOTAL and, of course, SONANGOL, since 2001.

As the operators’ and SONANGOL’s budgets have been drastically revised downwards, no new studies were voted in 2016. Only the OSTRA (Offshore Technology Reliability Database for Angola) project was continued at a slower pace in 2016.

Branch

DORIS Engineering Abu Dhabi (100%)

DORIS has decided to set up a structure in the Middle East, where it is essential to take up a position.

This entity has been set up as a branch with the aim of developing an engineering business with local companies for which DORIS is already pre-qualified (ADMA OPCO, ZADCO, …) or international companies.

The company was officially registered in January 2016 and had zero turnover in 2016.

Recent development

DORIS Engineering Ghana Limited (89%)

DORIS registered a subsidiary in Ghana in 2015 in the light of the business opportunities in the country, which is beginning to develop its offshore oil industry. TULLOW, ENI and HESS are the main targeted operators for technical support and engineering. There also appear to be engineering activity opportunities with the local company, GNPC.

DORIS owns 89% of the capital in this Ghanaian subsidiary, which had no activity in 2016. It has joined forces with a local partner (CAPE3 / CAPETANO), which owns the rest of the capital.

Transport and installation engineering for subsea structures - Kaombo in-country Engineering Services (HMC, Angola)

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DORIS booth at the OTC conference in Houston, May 2017

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(5) Energy Information Administration

3 / Prospects

2016 turned out to be in line with the analyses produced by the market specialists: the EIA(5) had anticipated an oil price of around 40 USD, which is close to the annual average (43.5 USD). Although the price is around 50 USD today, the same analysts do not foresee a recovery in the short or medium term. Prospects for 2017 and even 2018 appear to be totally uncertain at present. With an oil price holding steady at around 50 USD and the resulting cost-cutting over the last two years, certain projects have once again become financially viable. The massive reduction in investment in the upstream sector of the oil industry – mentioned above – and the growth in demand anticipated for the next twenty or thirty years should logically mean that operators will be launching new projects.

However, there are other external factors that could delay the recovery in investment: the election of Donald Trump at the end of 2016 and his entry into office at the start of the year rather confuses the issue. He is in favour of the development of the United States and is not likely to hold back any increase in the production of shale oil and gas now that these projects have significantly reduced their break-even point (sometimes between 30 USD and 40 USD) and can be brought into operation very quickly. On the other hand, it is impossible to predict the reaction of OPEC, led by Saudi Arabia, which cut its production at the end of 2016 to maintain the price at around 50 USD. Especially as OPEC is driven by often contradictory interests, with countries that are looking to increase their own production (Iraq, Iran), countries that have been economically and politically weakened by these oil crisis years (Nigeria, Algeria, Venezuela and Angola) or allies (Russia). We also do not know today whether the President of the United States will reconsider the decision to suspend the embargo on Iran and what impact this will have on oil investment, bearing in mind that some companies have already taken up positions in the country.

All these factors, to which must be added a worldwide geopolitical instability and complex relations between the IOCs and the NOCs in which the balance of power is constantly shifting, mean that there is no clear view of the future level of activity in the oil & gas sector in which DORIS operates.

In global terms, the Group’s engineering activities are expected to continue to suffer throughout the financial year, even though there have been a few positive signals since the start of the year, particularly in the mother company, where a few significant contracts have begun and certain prospects are expected to start up within the next few weeks (see §4 below: Events that occurred after the closure of the financial year).

The technical support activities are real adjustment variables and are expected to be in difficulty as the major contracts are coming to an end.

Faced with the difficulties encountered in the DORIS Group’s core business, it has been decided to broaden its areas of expertise to include activities in which its engineers’ know-how may be rapidly recognised, particularly in the maritime renewable energy sector.

In conclusion, although we may be optimistic about a significant recovery for the mother company, the Group’s activity is expected to be still in a downturn situation in 2017. Consolidated turnover should return to the levels seen at the start of the 2010s, prior to the Group’s four record years between 2012 and 2015.

Despite this, the Group is expected to maintain its operating results close to break-even, showing the resilience of all the Group entities, which have all significantly reduced their break-even point in order to adapt to the current market.

Low cost flexible production concept for ultra-deepwater Gulf of Mexico in partnership with STATOIL, ABS Consulting, SEVAN Marine and RPSEA (GOM)

16

4 / Events that occurred after the closure of the financial year

A. DORIS Engineering’s capital changed again in the first quarter of 2017. The FCPE DORIS Actionnariat Group exercised the extra option to sell 4% of the capital it held in DORIS Engineering to CM-CIC Investissement SCR and PONTICELLI Frères. Since 23 February 2017, the company’s capital has been divided as follows: FCPE DORIS Actionnariat 20%, GRAAVEN Holding 20%, VINCI Construction 20%, CM-CIC Investissement SCR 24.6 % and PONTICELLI Frères 15.4%. This transaction helps to improve the FCPE’s liquidity.

B. DORIS Engineering is continuing some contracts like BP Aquarius (France) which will mobilise complete teams in the first quarter of 2017. The company has also picked up a few significant orders since the end of 2016 with a contract for TOTAL (Iris) which will in the first quarter of 2017. There have also been orders from AXENS (Curação) and INPEX for a large number of minor studies for the Ichthys project (Australia). Two major prospects could be starting up by the end of March 2017: Bonga South West Aparo for SHELL in Nigeria and Fenix for TOTAL Austral in Argentina, so there are opportunities for a solid workload for the first quarter of 2017.

C. As a corollary to these projects in new zones, there is a need for the company to consider developments in other countries: Nigeria and Iran. To develop the Africa zone, which has been identified as a priority for the Group, DORIS has appointed Mr. Pierre Vanhaecke as head of business development for Africa. He will be based in Lagos and will also be in charge of the Nigerian subsidiary. He had previously been head of the Angolan subsidiary since 2009.

D. The Angolan subsidiary (DEAL) is bearing the brunt of the virtual stoppage of all the engineering projects since the end of Dalia Debottlenecking in early 2016. The local management is constantly adapting the Angolan structure, while at the same time seeking to maintain the teams that have been trained since the initial engineering contracts carried out in Luanda in 2011. The local structure is surviving thanks to the technical support contracts that it holds in partnership with the STAT Group, with TOTAL and ENI as the main customers. On 1st March 2017, Mr. Pierre Vanhaecke was replaced as head of the subsidiary by Mr. Michel Hamon, who was previously head of engineering at DEAL for two years.

E. The Brazilian subsidiary (DEL) is continuing to carry out the Pre-Salt contract that began in 2010, even though a part of this was stopped in 2016 due to the problems encountered by the national company, PETROBRAS. In March 2017, DEL won a contract with PETROBRAS for the P76 project. The contract should enable the Brazilian subsidiary to achieve a positive year in what is a very depressed situation in Brazil.

F. In England, the ODE subsidiary is maintaining a minimum level of activity in a shrinking market. The company is looking for growth opportunities in the renewable energy sector, where it is beginning to develop a “track record”, and via its Egyptian subsidiary (ODENA), which may play an important role for the Group as a High Value Centre called for by all our customers.

G. DORIS Inc. in the United States is continuing to suffer from a difficult economic environment: its main projects are situated in difficult zones in which projects are being postponed – Mexico with PEMEX and Angola with CHEVRON – while the company has framework contracts signed with these customers. The aim is nevertheless to achieve a break-even year and prepare for a possible recovery in the market in 2018.

H. The IPMS Ichthys contract for INPEX in Australia is expected to end in mid-2017, having begun in mid-2011 in partnership with the Australian CLOUGH. The subsidiary may be kept viable over the long term with possible studies to be carried out locally, particularly with DCNS and INPEX for engineering studies. A new local manager, Mr Benoit Lamoureux, was appointed from 1st February 2017.

I. There have been no particular developments in the Abu Dhabi branch since the start of 2017. Its licence has been renewed.

J. The Ghanaian subsidiary’s operating licence was also renewed at the start of 2017.

Subsea Choke Skid for Pre-Salt (Brazil)

Activity report2016Challenging conventional thinking

in today’s cost driven market

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