64 YINSON HOLDINGS BERHAD BUSINESS REVIEW RISKS AND OPPORTUNITIES (1 TO 10-YEAR TIME HORIZON) External environment Risks Opportunities Yinson Production‘s response Geopolitical tensions, including recent tariff announcements • Sanctions, supply chain disruptions and rising energy costs, leading to increased costs and project delays. • Reduced investments in high CAPEX infrastructure due to uncertainty in global markets. • Continued demand for FPSOs as countries prioritise energy security. • Companies with strong liquidity and adaptable business models can respond nimbly to opportunities. • Companies with robust supply chains and strategic partnerships can navigate the volatility and become market leaders. • Prudently manage liquidity and capital. • Careful and risk-informed approach to project selection. • Early engagement with our supply chain and focus on quality engagements. • Actively monitor and adapt to changing market conditions, remaining agile. Evolving ESG sentiments • Uncertain access to capital. • Reputation risk for traditional energy producers. • Greenwashing. • Lack of interest in pursuing oil & gas careers amongst young talent pool. • Continued opportunities for projects that support an inclusive energy transition. • Companies that embed ESG principles into decision-making are more adaptable and resilient. • Companies that have clear transition plans will enjoy stakeholder confidence. • ESG leaders can contribute to shaping the industry’s ESG landscape. • Steadfast incorporation of ESG principles into business decisions to build efficiency, innovation, adaptability, and a solid business model. • Continue being a leader in the sustainability space to contribute to shaping the industry’s ESG landscape. Increased regulatory requirements • Deficiencies in governance structures and risk management processes may result in non-compliance with regulatory, legal, and other requirements. • Compliance opens access to high-value markets with strict environmental and safety standards. • Regulatory pressures drive innovation, cost savings, and improved operational performance. • Adhere to the highest standards of governance, transparency and disclosure. • Continuous improvement of ERM framework to monitor and manage regulatory risk indicators. Accelerated development of alternative energies • Decline in oil consumption. • Earlier shift away from oil & gas. • Rising energy costs and energy security concerns provide strong opportunities for traditional energy producers with strong track record of delivery. • Strong opportunities for transitional projects. • We are relatively resilient to external impacts due to the long-term nature of contracts and surety of backlog revenues. • Maintain industry leadership in project delivery and operations & maintenance. • We have a strong transition story. Technology and AI • Outdated and slow business and decision-making processes. • Unable to compete with peers. • Development of future generation assets powered by AI. • Efficient and ESG-positive assets and processes will be preferred. • Cost savings from efficiency gains. • New business revenue streams. • Implement latest technologies on board Agogo FPSO. • Maintain industry leadership in asset lifecycle management technologies, including predictive maintenance. • Integrate AI into our processes. Short-term Long-term Time horizon
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