2017 REGISTRATION DOCUMENT

BOURBON 2017 Registration Document 68 MANAGEMENT REPORT 3 Risk factors Since June 2014, there has been a sharp drop in the barrel price. The average price of a barrel of Brent fell from USD99 in 2014 to USD52 in 2015, reaching a low of USD31 in January 2016. This fall in prices is due to an imbalance between supply and demand as the demand from importers was not as sustained as expected, due to slower growth in China. However, supply remained stable, with oil and shale gas production in the United States and Saudi Arabia maintaining its production levels. The barrel price was volatile throughout 2016. Prices began to recover shortly after OPEC members – followed by other major producers – announced their agreement to cut oil production. OPEC pledged to scale back production by 1.2 million barrels per day. This was swiftly followed by non-OPEC countries (558,000 barrels), resulting in an overall decrease in production of 1.8 million barrels per day in the first half of 2017. In November 2017, they decided to continue this action until the end of 2018. This production cut-off led to a reduction in global stocks and consolidated the rise in the price of oil. The price of Brent stood at USD54 over 2017, thus returning some margin for maneuver to the oil majors. In 2016, for the second consecutive year, the low oil price continued to impact strongly on investment from oil companies in exploration and production (E&P investments dropped by 25% between 2014 and 2015, then by -28% between 2015 and 2016). In a context where the price of a barrel stood at USD54 over 2017 (the average price over 2016 was USD44), the movement reversed to reach an increase of 4%, which represents a volume of USD389 billion over 2017 (against USD374 billion the previous year) (source: IFPEN). Since mid-2014, the offshore oil and gas marine services industry has seen levels of activity decline. A sharp slowdown in deepwater and shallow water offshore drilling resulted in a significant fall in demand for supply vessels. Prospects are looking clearer for 2017, but the market for offshore services is not yet benefiting from this recovery, which is slowed by overcapacity in vessels, which is keeping prices low. activity in offshore services is stabilizing and should gradually recover during 2018. Even if it is slow, the recovery should be seen through a very gradual increase in usage rates, held back by strong pressure on daily rates, as a consequence of the overcapacity in vessels on the market. The speed of this recovery will depend on the number of stacked vessels that are capable of re-entering service. With regard to supply, changes to the fleet of offshore supply vessels depend on the rate at which old vessels are scrapped and investment is made in new vessels. These two factors are influenced by several things, including: 3 forecasts made by marine services suppliers with regard to changes in customer demand; 3 obsolescence of old vessels, this being dependent upon changes in oil companies’ expectations; 3 access to financial resources enabling operators to invest. Unforeseen changes in oil companies’ demand cycle and changes in numbers of vessels available on the market, events which by their very nature are beyond BOURBON’s control and affect one or more of the markets on which BOURBON has a presence, may have a significantly prejudicial effect on BOURBON’s business, financial position, results or outlook. 5.1.1 Risks related to changes in demand A reduction in investments in the oil sector could result in a decline in demand for offshore oil and gas services, with an unfavorable impact on BOURBON’s financial position and results. The demand for offshore oil and gas services is dependent on the oil companies’ capacity to invest. The price of oil on world markets has a significant influence over decisions to engage in new investments in this sector. In fact, new investment projects are based on future projections, internal to each company, of the price per barrel that will be needed to cover the cost of extraction. The price of oil in the short term has a lesser influence once oil projects have been launched and in the production phase. The potential impact remains limited to exploration phases which may be delayed or even canceled. Generally, oil investment cycles are long, between 10 and 20 years on average between the construction phase and the exploitation/ production phase. The price per barrel depends on demand, which is related to global growth and the production capacity of the producing countries. With forecasts for an increase in demand for oil and the accelerating decline in production at existing fields, the oil services activity is expected to grow in the long term. However, the fall in barrel prices will affect the sector’s business in the short and medium term, as certain shallow water offshore projects are canceled or delayed. BOURBON’s strategy is to develop close relationship with the national and international oil majors that have sustained investment plans and to place particular importance on a policy of long- term contractualization of BOURBON vessels. The long-term contractualization rate of offshore support vessels was 36.8% as of December 31, 2017. Active monitoring of the market in the field of production and exploration/development has been set up to react quickly to changes in the market. The loss of one or more of its main clients could, however, have a significantly prejudicial effect on BOURBON’s business, financial position, results or outlook. Risks related to changes in technical requirements for marine oil and gas exploitation and related services. The already high demands of oil and gas companies, in terms of risk management, have gone up further in view of the incidents that took place aboard the oil rigs in the Gulf of Mexico and the North Sea. On this account, oil companies generally prefer cutting-edge, high