6.3.26Provisions

The current portion and the non current portion of provisions refer to the following type of provisions:

Provisions (summary)

Note

31 December 2015

31 December 2014

Demobilisation

119

110

Onerous contract

-

1

Warranty

116

118

Employee benefits

6.3.6

29

32

Other

278

9

Total

541

269

of which :

Non-current portion

131

130

Current portion

410

139

The movements in the provisions, other than those on employee benefits described in Note 6.3.6 ‘Employee benefit expenses’ are:

Provisions (movements)

Demobilisation

Onerous contracts

Warranty

Other

Balance at 1 January 2014

130

-

41

0

Arising during the year

-

1

87

8

Unwinding of interest

3

-

-

-

Utilised

-

-

(10)

-

Released to profit

(19)

-

-

-

Other

(4)

-

-

-

Currency differences

-

0

0

-

Balance at 31 December 2014

110

1

118

9

Arising during the year

36

-

15

273

Unwinding of interest

3

-

-

-

Utilised

(24)

-

(16)

(3)

Released to profit

(7)

(1)

-

0

Other

-

-

-

-

Currency differences

0

0

0

0

Balance at 31 December 2015

119

-

116

278

Demobilisation

The provision for demobilization relates to the costs for demobilisation of the vessels and floating equipments at the end of the respective operating lease periods. The obligations are valued at net present value, and a yearly basis interest is added to this provision. The recognized interest is included in financial expenses (see Note 6.3.7 "Net financing costs").

Expected outflow within one year amounts to US$ 19 million, nil between one and five years and US$ 100 million after five years.

The utilized portion of the demobilization-provision relates mostly to the ongoing demobilization of FPSO Marlim Sul.

Warranty

For most Turnkey sales, the Company gives warranties to its clients. Under the terms of the contracts, the Company undertakes to make good, by repair or replacement, defective items that become apparent within an agreed period starting from the final acceptance by the client.

Other

The Other provision that arised during the year mainly relates to a US$ 245 million provision for settlement in Brazil (Please refer to note 6.3.1 Highlights), a provision related to a contractual dispute for US$ 22.5 million and a US$ 3.5 million provision for restructuring. The provision for a potential settlement in Brazil was classified in full as current. The current or non-current classification may change depending on the final terms of a potential settlement.