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Jacques de Chateauvieux, CEO, Bourbon

Maritime Activity Reports, Inc.

January 28, 2009

The plan, on its face, was simple. At the turn of the century Bourbon embarked on the path to become a dominate player in the global offshore supply vessel sector, building technologically sophisticated vessels for a good price in emerging Chinese shipyards, among others globally. Dubbed Horizon 2012, the plan was backed with a multi-billion dollar investment, a world economy that was firing on all cylinders and an offshore oil and gas market that was steamrolling ahead, powered by oil prices in the region of $150.

That was yesterday.

Bourbon, according to its ubiquitous leader, Chairman and CEO Jacques de Chateauvieux, is feeling fine about its position -- embodied by his recent lecture put on by the Association Française des Trésoriers d'Entreprises in Paris entitled "Crisis... What crisis? Bourbon's situation" -- and the company has not cut back on any vessel building programs to date, and according to de Chateauvieux is unlikely to do so.

While conditions certainly have changed from earlier this year, de Chateauvieux said, and the company's market value has tumbled with its per share "We see ourselves - as the CEO for Schlumberger said - in a stronger and longer good cycle for oil. In the long term, there will be an increase in the use of energy and oil consumption," and we are positioned to be a major player in this regard.

The company's rise to power has been astonishing in the offshore sector, growing from 108 vessels, 1,000 employees and three clients (comprising 76% of the company's revenue) at the end of 2002, to 233 vessels, 4,300 employees and 10 clients (comprising 62% of the company's revenue) at the end of 2007.

The secret to the success is actually not a secret at all, as de Chateauvieux has steered the company to invest in two ends of the O&G market - production and maintenance — that have been less dramatically effected by the economic-and-oil one-two punch.

He summed up the reason for his optimism in analyzing the company's three major customers: international oil companies, national oil companies and independent oil companies.

"International oil companies are not as affected by the credit situation, but they are cutting costs to deal with the drop in oil price," de Chateauvieux said. The national oil companies, he contends are facing the same concerns on cost control as the international oil companies, but the credit crisis is a different matter. Depending on the country, and what percentage of oil revenues are used to fund a country's operation, the effects of a prolonged depressed oil price will be vastly different around the world.

Independent oil producers, on the other hand, are under much greater pressure as they are much more susceptible to hard swings down, and depend much more on strong oil pricing to maintain profitable operations.

From this group, Bourbon receives 72% of its business from the international oil companies, 17% from national oil companies, and just 11% from independents.

"We have built a good position from a customer perspective," said de Chateauvieux, "and our average length of contract is 25 months, giving us a strong cash flow through 2010."

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