Exhibit 15.3

Seaway Heavy Lifting Limited

Financial statements

December 31, 2005

Contents



|                                  |  |       
|--------------------------------- |  | ------
|                                  |  | Page  
|Report of independent auditors    |  | 2     
|                                  | 
|Income statement                  |  | 3     
|                                  | 
|Balance sheet                     |  | 4     
|                                  | 
|Statement of changes in equity    |  | 5     
|                                  | 
|Cash flow statement               |  | 6     
|                                  | 
|Notes to the financial statements |  | 7  20



---

REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Stockholders of

Seaway Heavy Lifting Limited

We have audited the accompanying balance sheet of Seaway Heavy Lifting Limited as of December 31, 2004, and the related income statement, statement
of changes in equity, and cash flow statement for the year then ended. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, such financial statements
present fairly, in all material respects, the financial position of the Company at December 31, 2004, and the results of its operations and its cash flows for the year then ended in conformity with International Financial Reporting Standards.

International Financial Reporting Standards vary in significant respects from accounting principles generally accepted in the United
States of America. The application of the latter would have affected the determination of net income for the year ended December 31, 2004 and the determination of equity at December 31, 2004 to the extent summarized in note 21 on page 20
below.

Deloitte Accountants B.V.

Rotterdam, The Netherlands

August 12, 2005



---

Seaway Heavy Lifting Limited

Income statement

for the year ended

December 31, 2005



|                        |  |      |  |                                  |   |  |                                  |   |  |                                |   |  |                                  |  
|----------------------- |  | ---- |  | -------------------------------- | - |  | -------------------------------- | - |  | ------------------------------ | - |  | -------------------------------- | -
|                        |  | Note |  | 12 monthsendedDecember 312005US$ |   |  | 12 monthsendedDecember 312004US$ |   |  | 1 monthendedDecember 312003US$ |   |  | 12 monthsendedNovember 312003US$ |  
|                        |  |      |  | (unaudited)                      |   |  |                                  |   |  | (unaudited)                    |   |  | (unaudited)                      |  
|Revenue                 |  | 5    |  | 74,400,823                       |   |  | 69,435,285                       |   |  | 4,775,333                      |   |  | 47,547,157                       |  
|Cost of sales           |  |      |  | (42,928,146                      | ) |  | (40,034,872                      | ) |  | (2,576,670                     | ) |  | (31,907,880                      | )
|                        |  |      |  |                                  |   |  |                                  |   |  |                                |   |  |                                  |  
|Gross profit            |  |      |  | 31,472,677                       |   |  | 29,400,413                       |   |  | 2,198,663                      |   |  | 15,639,277                       |  
|Administrative expenses |  |      |  | (5,462,034                       | ) |  | (7,963,938                       | ) |  | (563,348                       | ) |  | (6,523,686                       | )
|                        |  |      |  |                                  |   |  |                                  |   |  |                                |   |  |                                  |  
|Operating profit        |  | 6    |  | 26,010,643                       |   |  | 21,436,475                       |   |  | 1,635,315                      |   |  | 9,115,591                        |  
|Investment revenues     |  | 8    |  | 534,073                          |   |  | 93,923                           |   |  | 4,157                          |   |  | 55,961                           |  
|                        |  |      |  |                                  |   |  |                                  |   |  |                                |   |  |                                  |  
|Profit before tax       |  |      |  | 26,544,716                       |   |  | 21,530,398                       |   |  | 1,639,472                      |   |  | 9,171,552                        |  
|Tax                     |  | 9    |  | (1,166,000                       | ) |  | (3,675,671                       | ) |  | (98,000                        | ) |  | (407,012                         | )
|                        |  |      |  |                                  |   |  |                                  |   |  |                                |   |  |                                  |  
|Net profit              |  |      |  | 25,378,716                       |   |  | 17,854,727                       |   |  | 1,541,472                      |   |  | 8,764,540                        |  
|                        |  |      |  |                                  |   |  |                                  |   |  |                                |   |  |                                  |  

The notes on pages 7 to 20 are an integral part of these financial statements.



3



---

Seaway Heavy Lifting Limited

Balance sheet

at December 31, 2005



|                              |  |      |  |             |  |           
|----------------------------- |  | ---- |  | ----------- |  | ----------
|                              |  | Note |  | 2005US$     |  | 2004US$   
|                              |  |      |  | (unaudited) |  |           
|Assets                        |  |      |  |             |  |           
|Non-current assets            |  |      |  |             |  |           
|Property, plant and equipment |  | 10   |  | 449,696     |  | 622,390   
|                              |  |      |  |             |  |           
|Current assets                |  |      |  |             |  |           
|Inventories                   |  | 11   |  | 105,600     |  | 179,746   
|Trade and other receivables   |  | 12   |  | 5,428,616   |  | 1,888,500 
|Work in progress              |  |      |  | 189,000     |  | 1,124,000 
|Tax recoverable               |  |      |  |            |  | 153,459   
|Cash and cash equivalents     |  | 13   |  | 41,295,197  |  | 16,372,424
|                              |  |      |  |             |  |           
|                              |  |      |  | 47,018,413  |  | 19,718,129
|                              |  |      |  |             |  |           
|Total assets                  |  |      |  | 47,468,109  |  | 20,340,519
|                              |  |      |  |             |  |           
|Equity and liabilities        |  |      |  |             |  |           
|Capital and reserves          |  |      |  |             |  |           
|Share capital                 |  | 14   |  | 2,178       |  | 2,178     
|Retained earnings             |  |      |  | 35,079,979  |  | 9,701,263 
|                              |  |      |  |             |  |           
|                              |  |      |  | 35,082,157  |  | 9,703,441 
|                              |  |      |  |             |  |           
|Current liabilities           |  |      |  |             |  |           
|Trade and other payables      |  | 15   |  | 9,284,662   |  | 7,620,193 
|Current tax liabilities       |  |      |  | 3,101,290   |  | 3,016,885 
|                              |  |      |  |             |  |           
|Total liabilities             |  |      |  | 12,385,952  |  | 10,637,078
|                              |  |      |  |             |  |           
|Total equity and liabilities  |  |      |  | 47,468,109  |  | 20,340,519
|                              |  |      |  |             |  |           

The notes on pages 7 to 20 are an integral part of these financial statements.



4



---

Seaway Heavy Lifting Limited

Statement of changes in equity

for the year ended

December 31, 2005



|                                                  |  |                 |  |                     |   |  |             |  
|------------------------------------------------- |  | --------------- |  | ------------------- | - |  | ----------- | -
|                                                  |  | SharecapitalUS$ |  | RetainedearningsUS$ |   |  | TotalUS$    |  
|At November 30, 2002/December 1, 2002 (unaudited) |  | 2,178           |  | 8,540,524           |   |  | 8,542,702   |  
|Dividend relating to 2000, 2001 and 2002          |  |                |  | (5,000,000          | ) |  | (5,000,000  | )
|Net profit for the year                           |  |                |  | 8,764,540           |   |  | 8,764,540   |  
|                                                  |  |                 |  |                     |   |  |             |  
|At November 30, 2003/December 1, 2003 (unaudited) |  | 2,178           |  | 12,305,064          |   |  | 12,307,242  |  
|Net profit for the period                         |  |                |  | 1,541,472           |   |  | 1,541,472   |  
|                                                  |  |                 |  |                     |   |  |             |  
|At December 31, 2003/January 1, 2004 (unaudited)  |  | 2,178           |  | 13,846,536          |   |  | 13,848,714  |  
|Dividend relating to 2003 and 2004                |  |                |  | (22,000,000         | ) |  | (22,000,000 | )
|Net profit for the year                           |  |                |  | 17,854,727          |   |  | 17,854,727  |  
|                                                  |  |                 |  |                     |   |  |             |  
|At December 31, 2004/ January 1, 2005             |  | 2,178           |  | 9,701,263           |   |  | 9,703,441   |  
|Net profit for the year                           |  |                |  | 25,378,716          |   |  | 25,378,716  |  
|                                                  |  |                 |  |                     |   |  |             |  
|At December 31, 2005 (unaudited)                  |  | 2,178           |  | 35,079,979          |   |  | 35,082,157  |  
|                                                  |  |                 |  |                     |   |  |             |  

The notes on pages 7 to 20 are an integral part of these financial statements.



5



---

Seaway Heavy Lifting Limited

Cash flow statement

for the year ended

December 31, 2005



|                                                      |  |      |  |                                   |   |  |                                   |   |  |                                 |   |  |                                   |  
|----------------------------------------------------- |  | ---- |  | --------------------------------- | - |  | --------------------------------- | - |  | ------------------------------- | - |  | --------------------------------- | -
|                                                      |  | Note |  | 12 monthsendedDecember 31,2005US$ |   |  | 12 monthsendedDecember 31,2004US$ |   |  | 1 monthendedDecember 31,2003US$ |   |  | 12 monthsendedNovember 30,2003US$ |  
|                                                      |  |      |  | (unaudited)                       |   |  |                                   |   |  | (unaudited)                     |   |  | (unaudited)                       |  
|Cash flows from operating activities                  |  |      |  |                                   |   |  |                                   |   |  |                                 |   |  |                                   |  
|Profit before tax                                     |  |      |  | 26,544,716                        |   |  | 21,530,398                        |   |  | 1,639,472                       |   |  | 9,171,552                         |  
|Adjustments for:                                      |  |      |  |                                   |   |  |                                   |   |  |                                 |   |  |                                   |  
|Depreciation of property, plant and equipment         |  | 10   |  | 301,974                           |   |  | 356,840                           |   |  | 29,529                          |   |  | 254,030                           |  
|Interest income                                       |  | 8    |  | (534,073                          | ) |  | (161,970                          | ) |  | (4,157                          | ) |  | (55,199                           | )
|Exchange loss/(gain) on corporation tax balance       |  |      |  |                                  |   |  | 50,210                            |   |  |                                |   |  | (762                              | )
|                                                      |  |      |  |                                   |   |  |                                   |   |  |                                 |   |  |                                   |  
|                                                      |  |      |  | 26,312,617                        |   |  | 21,775,478                        |   |  | 1,664,844                       |   |  | 9,369,621                         |  
|Changes in working capital:                           |  |      |  |                                   |   |  |                                   |   |  |                                 |   |  |                                   |  
|Inventories                                           |  |      |  | 74,146                            |   |  | 32,774                            |   |  | 14,280                          |   |  | (162,060                          | )
|Trade and other receivables                           |  |      |  | (3,540,116                        | ) |  | 16,310,675                        |   |  | (324,894                        | ) |  | (7,298,682                        | )
|Trade and other payables                              |  |      |  | 1,664,469                         |   |  | (3,987,931                        | ) |  | (764,223                        | ) |  | 8,285,594                         |  
|Work in progress                                      |  |      |  | 935,000                           |   |  | (1,124,000                        | ) |  |                                |   |  |                                  |  
|                                                      |  |      |  |                                   |   |  |                                   |   |  |                                 |   |  |                                   |  
|Cash generated from operations                        |  |      |  | 25,446,116                        |   |  | 33,006,996                        |   |  | 590,007                         |   |  | 10,194,473                        |  
|Tax paid                                              |  |      |  | (928,136                          | ) |  | (1,200,064                        | ) |  |                                |   |  | (205,185                          | )
|                                                      |  |      |  |                                   |   |  |                                   |   |  |                                 |   |  |                                   |  
|Net cash from operating activities                    |  |      |  | 24,517,980                        |   |  | 31,806,932                        |   |  | 590,007                         |   |  | 9,989,288                         |  
|                                                      |  |      |  |                                   |   |  |                                   |   |  |                                 |   |  |                                   |  
|Cash flows from investing activities                  |  |      |  |                                   |   |  |                                   |   |  |                                 |   |  |                                   |  
|Interest received                                     |  |      |  | 534,073                           |   |  | 161,970                           |   |  | 4,157                           |   |  | 55,199                            |  
|Purchase of property, plant and equipment             |  | 10   |  | (129,280                          | ) |  | (722,775                          | ) |  |                                |   |  | (398,029                          | )
|                                                      |  |      |  |                                   |   |  |                                   |   |  |                                 |   |  |                                   |  
|Net cash used in investing activities                 |  |      |  | 404,793                           |   |  | (560,805                          | ) |  | 4,157                           |   |  | (342,830                          | )
|                                                      |  |      |  |                                   |   |  |                                   |   |  |                                 |   |  |                                   |  
|Cash flows from financing activities                  |  |      |  |                                   |   |  |                                   |   |  |                                 |   |  |                                   |  
|Dividends paid to company shareholders                |  |      |  |                                  |   |  | (22,000,000                       | ) |  |                                |   |  | (5,000,000                        | )
|                                                      |  |      |  |                                   |   |  |                                   |   |  |                                 |   |  |                                   |  
|Net cash outflow from financing activities            |  |      |  |                                  |   |  | (22,000,000                       | ) |  |                                |   |  | (5,000,000                        | )
|                                                      |  |      |  |                                   |   |  |                                   |   |  |                                 |   |  |                                   |  
|Increase in cash and cash equivalents                 |  |      |  | 24,922,773                        |   |  | 9,246,127                         |   |  | 594,164                         |   |  | 4,646,458                         |  
|Cash and cash equivalents at beginning of period/year |  |      |  | 16,372,424                        |   |  | 7,126,297                         |   |  | 6,532,133                       |   |  | 1,885,675                         |  
|                                                      |  |      |  |                                   |   |  |                                   |   |  |                                 |   |  |                                   |  
|Cash and cash equivalents at end of period/year       |  | 13   |  | 41,295,197                        |   |  | 16,372,424                        |   |  | 7,126,297                       |   |  | 6,532,133                         |  
|                                                      |  |      |  |                                   |   |  |                                   |   |  |                                 |   |  |                                   |  

The notes on pages 7 to 20 are an integral part of these financial statements.



6



---

Seaway Heavy Lifting Limited

Notes to the financial statements



|1 | General information
|- | -------------------

Country of incorporation

The Company was incorporated in Cyprus as a private limited liability company in accordance with the provisions of the Companies Law, Cap. 113. Its registered office is
at 284 Arch Makarios III Avenue, Limassol, Cyprus.

Principal activities

The principal activities of the Company are the provision of offshore heavy lifting services.

Change of accounting
period

The Board of Directors has decided during 2004 to change the accounting year end from November 30 to December 31 as from 2004. The
reason for the change was so that the accounting year is the same as the calendar year which is also the tax fiscal year.

Ultimate parent companies

The company is ultimately owned by Stolt Offshore S.A., registered in Luxemburg (50%) and OAO Lukoil, registered in Moscow, Russian Federation
(50%).



|2 | Adoptions of new and revised International Financial Reporting Standards
|- | ------------------------------------------------------------------------

In the current year, the Company has adopted all of the new and revised Standards and Interpretations issued by the International Accounting Standards Board (the IASB) and the International Financial Reporting Interpretations Committee
(IFRIC) of the IASB that are relevant to its operations and effective for accounting periods beginning on 1 January 2005.

The adoption of these new
and revised Standards and Interpretations has resulted in no significant changes to the Companys accounting policies.



|3 | Summary of significant accounting policies
|- | ------------------------------------------

The principal
accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to the periods presented in these financial statements unless otherwise stated.



7



---

Seaway Heavy Lifting Limited



|3 | Summary of significant accounting policies (continued)
|- | ------------------------------------------------------



Basis of preparation

The financial statements of Seaway Heavy Lifting Limited have been prepared in accordance with International Financial Reporting Standards (IFRS) in force as per December 31, 2005. The financial statements have been prepared under the
historical cost convention.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates and
requires management to exercise its judgment in the process of applying the Companys accounting policies. It also requires the use of assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on managements best knowledge of current events and actions, actual
results ultimately may differ from those estimates.

Revenue recognition

Revenue from the provision of heavy lifting services is recognized by reference to the stage of completion of the transaction at the balance sheet date and is recognized only when the outcome of the transaction can be
estimated reliably.

Interest income is recognized on a time proportion basis, taking into account the principal outstanding and the effective rate over
the period to maturity when it is determined that such income will accrue to the Company.

Foreign currency translation



|(1) | Measurement currency
|--- | --------------------

The financial statements are
prepared in United States dollars (the measurement currency), which is the currency that best reflects the economic substance of the underlying events and circumstances relevant to the Company.



|(2) | Transactions and balances
|--- | -------------------------

Foreign currency
transactions are translated into the measurement currency using the exchange rates prevailing at the date of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period
end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement.



8



---

Seaway Heavy Lifting Limited



|3 | Summary of significant accounting policies (continued)
|- | ------------------------------------------------------



Tax

Current tax
liabilities and assets for the current and prior periods are measured at the amount expected to be paid to or recovered from the taxation authorities using the tax rates and laws that have been enacted or substantively enacted by the balance sheet
date.

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and
their carrying amounts in the financial statements. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred tax asset is
realized or the deferred tax liability is settled.

Deferred tax assets are recognized to the extent that it is probable that future taxable profit will be
available against which the temporary differences can be utilized.

Dividend distribution

Dividend distribution to the Companys shareholders is recognized as a liability in the Companys financial statements in the period in which the dividends are
approved by the Companys shareholders.

Property, plant and equipment

All property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of property, plant and equipment.

Depreciation is calculated on the straight line method to write off the cost of each asset to their residual values, over their estimated useful life. The annual rates
used are as follows:



|                    |  |            
|------------------- |  | -----------
|Plant and machinery |  | 3  5 years

An assets carrying amount is written down immediately to its recoverable amount if the assets carrying
amount is greater than its estimated recoverable amount.

Expenditure for repairs and maintenance of property, plant and equipment is charged to the income
statement of the year in which it is incurred. The cost of major renovations and other subsequent expenditure are included in the carrying amount of the asset when it is probable that future economic benefits in excess of the originally assessed
standard of performance of the existing asset will flow to the Company. Major renovations are depreciated over the remaining useful life of the related asset.

Gains and losses on disposal of property, plant and equipment are determined by comparing proceeds with carrying amount and are included in the income statement.



9



---

Seaway Heavy Lifting Limited



|3 | Summary of significant accounting policies (continued)
|- | ------------------------------------------------------



Operating leases

Leases where substantially all of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the
income statement on a straight-line basis over the period of the lease.

Impairment of assets

Property, plant and equipment are reviewed for impairment losses whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognized for the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is the higher of an assets net selling price and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest level for which there are separately identifiable cash flows. An impairment loss is recognized immediately in the profit or loss, unless the relevant asset is carried at a revalued amount, in which case
the impairment loss is treated as a revaluation decrease.

Inventories

Inventories are stated at the lower of cost and net realizable value. Cost is determined on a first in first out basis and includes transport and handling costs. Net realizable value is the estimated selling price in
the ordinary course of business, less the costs of realization and, where appropriate, the cost of conversion from its existing state to a finished condition.

Trade receivables

Trade receivables are carried at original invoice amount less provision made for impairment of these receivables. A
provision for impairment of trade receivables is established when there is objective evidence that the Company will not be able to collect amounts due according to the original terms of receivables. The amount of the provision is the difference
between the carrying amount and the recoverable amount, being the present value of expected cash flows, discounted at the original effective interest rate. The amount of the provision is recognized in the income statement.

Long-term contracts

The Company uses the percentage of completion
method in recognizing profit on long-term contracts. Where the contract is more than 5 per cent completed, and the overall outcome can be assessed with reasonable certainty, profit is recognized according to the stage of completion which is
determined by the proportion of actual costs to date to the total estimated costs.



10



---

Seaway Heavy Lifting Limited



|3 | Summary of significant accounting policies (continued)
|- | ------------------------------------------------------



Where an overall loss is expected on the contract, full provision is made for the entire loss as soon as it is
foreseen.

Share capital

Ordinary shares are classified as equity.

Provisions

Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the
amount can be made. Where the Company expects a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain.

Cash and cash equivalents

For the purposes of the cash flow
statement, cash and cash equivalents comprise cash at bank and bank overdrafts. In the balance sheet, bank overdrafts are included in borrowings in current liabilities.

Comparatives

Where necessary, comparative figures have been adjusted to conform with changes in presentation in the
current year. The income statement has been reclassified for the exchange losses over 2003 and 2004. These costs are no longer presented in the Nett Finance Costs, and are now included in the Costs of Sales for the following
amounts: (2003 12 month: USD 704.931) (2003 1 month: USD 2.040) (2004 12 month: USD 601.750). The applicable notes have been changed accordingly.



|4 | Financial risk management
|- | -------------------------



|(1) | Financial risk factors
|--- | ----------------------

The Companys
activities expose it to interest rate risk, credit risk, liquidity risk and currency risk arising from the financial instruments it holds. The risk management policies employed by the Company to manage these risks are discussed below.



11



---

Seaway Heavy Lifting Limited



|4 | Financial risk management (continued)
|- | -------------------------------------



| | (a) | Interest rate risk
| | --- | ------------------

Interest rate risk is the risk
that the value of financial instruments will fluctuate due to changes in market interest rates. The Companys income and operating cash flows are substantially independent of changes in market interest rates. The Company has significant
interest-bearing assets and it borrows at variable rates. The Companys management monitors the interest rate fluctuations on a continuous basis and acts accordingly.



| | (b) | Credit risk
| | --- | -----------

Credit risk arises when a failure by
counterparties to discharge their obligations could reduce the amount of future cash inflows from financial assets on hand at the balance sheet date. The Company has no significant concentrations of credit risk. The Company has policies in place to
ensure that services are provided to customers with an appropriate credit history and monitors on a continuous basis the ageing profile of its receivables. Cash balances are held with high credit quality financial institutions and the Company has
policies to limit the amount of credit exposure to any financial institution.



| | (c) | Liquidity risk
| | --- | --------------

Liquidity risk is the risk that
arises when the maturity of assets and liabilities does not match. An unmatched position potentially enhances profitability, but can also increase the risk of losses. The Company has procedures with the object of minimizing such losses such as
maintaining sufficient cash and other highly liquid current assets and by having available an adequate amount of committed credit facilities.



| | (d) | Currency risk
| | --- | -------------

Currency risk is the risk that the
value of financial instruments will fluctuate due to changes in foreign exchange rates. Currency risk arises when future commercial transactions and recognized assets and liabilities are denominated in a currency that is not the Companys
measurement currency. The Company is exposed to foreign exchange risk arising from various currency exposures primarily with respect to the Euro and GB£. The Companys management monitors the exchange rate fluctuations on a continuous
basis and acts accordingly.



|(2) | Fair values
|--- | -----------

The fair values of the Companys
financial assets and liabilities approximate their carrying amounts at the balance sheet date.



12



---

Seaway Heavy Lifting Limited



|5 | Revenue
|- | -------

Revenue represents income from the provision of offshore
heavy lifting services.



|6 | Operating profit
|- | ----------------

The following items have been included in
arriving at operating profit:



|                                                        |  |                                  |  |                                  |  |                                |  |                                 
|------------------------------------------------------- |  | -------------------------------- |  | -------------------------------- |  | ------------------------------ |  | --------------------------------
|                                                        |  | 12 monthsendedDecember 312005US$ |  | 12 monthsendedDecember 312004US$ |  | 1 monthendedDecember 312003US$ |  | 12 monthsendedNovember 302003US$
|                                                        |  | (unaudited)                      |  |                                  |  | (unaudited)                    |  | (unaudited)                     
|Depreciation of property, plant and equipment (Note 10) |  | 301,974                          |  | 356,840                          |  | 29,529                         |  | 254,030                         
|Operating lease rentals                                 |  | 7,000,000                        |  | 6,209,666                        |  | 500,000                        |  | 6,000,000                       
|Net foreign exchange transaction losses                 |  | 1,628,592                        |  | 651,960                          |  | 2,040                          |  | 704,169                         



|7 | Staff costs
|- | -----------

The Company does not have any employees. All personnel
costs are recharged by a related company which is responsible for the management of the vessel.



|8 | Investment activities
|- | ---------------------



|                          |  |                                  |  |                                  |  |                                |  |                                 
|------------------------- |  | -------------------------------- |  | -------------------------------- |  | ------------------------------ |  | --------------------------------
|                          |  | 12 monthsendedDecember 312005US$ |  | 12 monthsendedDecember 312004US$ |  | 1 monthendedDecember 312003US$ |  | 12 monthsendedNovember 302003US$
|                          |  | (unaudited)                      |  |                                  |  | (unaudited)                    |  | (unaudited)                     
|Interest on Bank balances |  | 534,073                          |  | 93,923                           |  | 4,157                          |  | 55,199                          
|                          |  |                                  |  |                                  |  |                                |  |                                 



|9 | Tax
|- | ---



|                |  |                                  |  |                                  |  |                                |  |                                 
|--------------- |  | -------------------------------- |  | -------------------------------- |  | ------------------------------ |  | --------------------------------
|                |  | 12 monthsendedDecember 312005US$ |  | 12 monthsendedDecember 312004US$ |  | 1 monthendedDecember 312003US$ |  | 12 monthsendedNovember 302003US$
|                |  | (unaudited)                      |  |                                  |  | (unaudited)                    |  | (unaudited)                     
|Current tax:    |  |                                  |  |                                  |  |                                |  |                                 
|Corporation tax |  | 1,166,000                        |  | 3,675,671                        |  | 98,000                         |  | 407,012                         
|                |  |                                  |  |                                  |  |                                |  |                                 



13



---

Seaway Heavy Lifting Limited



|9 | Tax (continued)
|- | ---------------



The tax on the Companys profit before taxation differs from the theoretical amount that would arise using the
applicable tax rates as follows:



|                                                       |  |                                  |   |  |                                  |   |  |                                |  |                                  |  
|------------------------------------------------------ |  | -------------------------------- | - |  | -------------------------------- | - |  | ------------------------------ |  | -------------------------------- | -
|                                                       |  | 12 monthsendedDecember 312005US$ |   |  | 12 monthsendedDecember 312004US$ |   |  | 1 monthendedDecember 312003US$ |  | 12 monthsendedNovember 302003US$ |  
|                                                       |  | (unaudited)                      |   |  |                                  |   |  | (unaudited)                    |  | (unaudited)                      |  
|Profit before tax                                      |  | 26,544,716                       |   |  | 21,530,398                       |   |  | 1,639,472                      |  | 9,171,552                        |  
|                                                       |  |                                  |   |  |                                  |   |  |                                |  |                                  |  
|Tax calculated at the applicable tax rates             |  | 1,171,719                        |   |  | 3,675,105                        |   |  | 98,000                         |  | 389,791                          |  
|Tax effect of expenses not deductible for tax purposes |  | 12,834                           |   |  | 758                              |   |  |                                |  |                                 |  
|Tax effect of allowances and income not subject to tax |  | (18,553                          | ) |  |                                 |   |  |                                |  | (2,007                           | )
|Deferred tax not provided                              |  |                                 |   |  | 9,851                            |   |  |                                |  | 7,419                            |  
|10% penalty                                            |  |                                 |   |  |                                 |   |  |                                |  | 11,809                           |  
|Effect of movement in exchange rates                   |  |                                 |   |  | (10,043                          | ) |  |                                |  |                                 |  
|                                                       |  |                                  |   |  |                                  |   |  |                                |  |                                  |  
|Taxation charge                                        |  | 1,166,000                        |   |  | 3,675,671                        |   |  | 98,000                         |  | 407,012                          |  
|                                                       |  |                                  |   |  |                                  |   |  |                                |  |                                  |  

In Cyprus the Company has opted to be taxed under the transitional rules until December 31, 2005 and is
subject to income tax at the rate of 4,25% for the years up to and including 2005. Thereafter the Company will be subject to corporation tax at the rate of 10%.

The company has also provided for tax in certain other tax jurisdictions where it operates. Applicable tax rates as from 2004 are higher than previous periods as the company is now liable for taxes in higher tax rate jurisdictions.



14



---

Seaway Heavy Lifting Limited



|10 | Property, plant and equipment
|-- | -----------------------------



|                            |  |                       |  |                |  |              |  |              |  |             
|--------------------------- |  | --------------------- |  | -------------- |  | ------------ |  | ------------ |  | ------------
|                            |  | Plant andmachineryUS$ |  | LeasedplantUS$ |  | Total2005US$ |  | Total2004US$ |  | Total2003US$
|                            |  |                       |  |                |  | (unaudited)  |  |              |  | (unaudited) 
|Cost                        |  |                       |  |                |  |              |  |              |  |             
|At January 1/December 1     |  | 1,697,880             |  | 1,212,026      |  | 2,909,906    |  | 2,187,131    |  | 1,789,102   
|Additions                   |  | 129,280               |  |               |  | 129,280      |  | 722,775      |  | 398,029     
|                            |  |                       |  |                |  |              |  |              |  |             
|At December 31/November 30  |  | 1,827,160             |  | 1,212,026      |  | 3,039,186    |  | 2,909,906    |  | 2,187,131   
|                            |  |                       |  |                |  |              |  |              |  |             
|Depreciation                |  |                       |  |                |  |              |  |              |  |             
|At December 1               |  | 689,121               |  | 1,212,026      |  | 1,901,147    |  | 1,901,147    |  | 1,647,117   
|Charge for the period       |  |                      |  |               |  |             |  | 29,529       |  |             
|                            |  |                       |  |                |  |              |  |              |  |             
|At December 31/January 1    |  | 1,075,490             |  | 1,212,026      |  | 2,287,516    |  | 1,930,676    |  | 1,647,117   
|Charge for the year         |  | 301,974               |  |               |  | 301,974      |  | 356,840      |  | 254,030     
|                            |  |                       |  |                |  |              |  |              |  |             
|At December 31/November 30  |  | 1,377,464             |  | 1,212,026      |  | 2,589,490    |  | 2,287,516    |  | 1,901,147   
|                            |  |                       |  |                |  |              |  |              |  |             
|Net book amount             |  |                       |  |                |  |              |  |              |  |             
|At December 31 /November 30 |  | 449,696               |  |               |  | 449,696      |  | 622,390      |  | 285,984     
|                            |  |                       |  |                |  |              |  |              |  |             



|11 | Inventories
|-- | -----------



|               |  |             |  |        
|-------------- |  | ----------- |  | -------
|               |  | 2005US$     |  | 2004US$
|               |  | (unaudited) |  |        
|Fuel  at cost |  | 105,600     |  | 179,746
|               |  |             |  |        



|12 | Trade and other receivables
|-- | ---------------------------



|                                        |  |             |  |           |  
|--------------------------------------- |  | ----------- |  | --------- | -
|                                        |  | 2005US$     |  | 2004US$   |  
|                                        |  | (unaudited) |  |           |  
|Trade receivables                       |  | 5,428,616   |  | 627,263   |  
|Less:                                   |  |             |  |           |  
|Provision for impairment of receivables |  |            |  | (235,000  | )
|                                        |  |             |  |           |  
|Trade receivables  net                 |  | 5,428,616   |  | 392,263   |  
|Other receivables and prepayments       |  |             |  | 2,935     |  
|Accrued revenue                         |  |             |  | 1,493,302 |  
|                                        |  |             |  |           |  
|                                        |  | 5,428,616   |  | 1,888,500 |  
|                                        |  |             |  |           |  



15



---

Seaway Heavy Lifting Limited



|13 | Cash and cash equivalents
|-- | -------------------------

For the purposes of the cash flow
statement, the cash and cash equivalents comprise the following:



|                    |  |            |  |           
|------------------- |  | ---------- |  | ----------
|                    |  | 2005US$    |  | 2004US$   
|Cash at bank in GBP |  | 509,493    |  | 658,960   
|Cash at bank in EUR |  | 12,595,922 |  | 1,239,703 
|Cash at bank in USD |  | 28,189,782 |  | 14,473,761
|                    |  |            |  |           
|                    |  | 41,295,197 |  | 16,372,424
|                    |  |            |  |           



|14 | Share capital
|-- | -------------



|                      |  |                  |  |       |  |                  |  |                 |  |       |  |       |  |                 |  |       |  |      
|--------------------- |  | ---------------- |  | ----- |  | ---------------- |  | --------------- |  | ----- |  | ----- |  | --------------- |  | ----- |  | -----
|                      |  | 2005 (unaudited) |  | 2004  |  | 2003 (unaudited)
|                      |  | Numberof shares  |  | C£    |  | US$              |  | Numberof shares |  | C£    |  | US$   |  | Numberof shares |  | C£    |  | US$  
|Authorized            |  |                  |  |       |  |                  |  |                 |  |       |  |       |  |                 |  |       |  |      
|Shares of C£1 each    |  | 1 000            |  | 1.000 |  |                  |  | 1 000           |  | 1.000 |  |       |  | 1 000           |  | 1.000 |  |      
|                      |  |                  |  |       |  |                  |  |                 |  |       |  |       |  |                 |  |       |  |      
|Issued and fully paid |  |                  |  |       |  |                  |  |                 |  |       |  |       |  |                 |  |       |  |      
|At year end           |  | 1 000            |  | 1.000 |  | 2.178            |  | 1 000           |  | 1.000 |  | 2.178 |  | 1 000           |  | 1.000 |  | 2.178
|                      |  |                  |  |       |  |                  |  |                 |  |       |  |       |  |                 |  |       |  |      



|15 | Trade and other payables
|-- | ------------------------



|                                     |  |             |  |          
|------------------------------------ |  | ----------- |  | ---------
|                                     |  | 2005US$     |  | 2004US$  
|                                     |  | (unaudited) |  |          
|Trade payables                       |  | 380,074     |  | 1,661,408
|Payable to related parties (Note 17) |  | 4,704,925   |  | 1,669,483
|Other payables and accruals          |  | 2,043,312   |  | 2,848,578
|Deferred income                      |  | 2,156,351   |  | 1,440,724
|                                     |  |             |  |          
|                                     |  | 9,284,662   |  | 7,620,193
|                                     |  |             |  |          



|16 | Contingent liabilities
|-- | ----------------------

At December 31, 2005 the Company had
contingent liabilities in respect of bank guarantees arising in the ordinary course of business from which it is anticipated that no material liability will arise. These guarantees amounted to US$ 2,5 m (2004: US$0,7m).



16



---

Seaway Heavy Lifting Limited



|17 | Commitments
|-- | -----------

Capital commitments

There are no capital commitments at the end of the year.

Operating lease
commitments  where the Company is the lessee

The Company leases the vessel Stanislav Yudin under an operating lease. The future
minimum lease payments under non-cancelable operating leases are as follows:



|                                                  |  |             |  |           
|------------------------------------------------- |  | ----------- |  | ----------
|                                                  |  | 2005US$     |  | 2004US$   
|                                                  |  | (unaudited) |  |           
|Not later than one year                           |  | 7,000,000   |  | 7,000,000 
|Later than one year and not later than five years |  | 26,541,667  |  | 28,000,000
|Later than 5 years                                |  |             |  | 5,541,667 
|                                                  |  |             |  |           
|                                                  |  | 33,541,667  |  | 40,541,667
|                                                  |  |             |  |           



|18 | Related party transactions
|-- | --------------------------

The Company is controlled equally by K
& S Baltic Offshore (Cyprus) Limited incorporated in Cyprus and Stolt Offshore BV (formerly named SCS Holdings BV) incorporated in the Netherlands (50% each). The company is ultimately owned by Stolt Offshore S.A., registered in Luxemburg
(50%) and OAO Lukoil, registered in Moscow, Russian Federation (50%). All the related companies represent common ownership companies.



17



---

Seaway Heavy Lifting Limited



|18 | Related party transactions (continued)
|-- | --------------------------------------



The following transactions were carried out with related parties:



|(i) | Income
|--- | ------



|                                                                                                                                     |  |                                  |  |                                  |  |                                |  |                                 
|------------------------------------------------------------------------------------------------------------------------------------ |  | -------------------------------- |  | -------------------------------- |  | ------------------------------ |  | --------------------------------
|                                                                                                                                     |  | 12 monthsendedDecember 312005US$ |  | 12 monthsendedDecember 312004US$ |  | 1 monthendedDecember 312003US$ |  | 12 monthsendedNovember 302003US$
|                                                                                                                                     |  | (unaudited)                      |  |                                  |  | (unaudited)                    |  | (unaudited)                     
|Income from normal operations (heavy lifting activities) to related parties:                                                         |  |                                  |  |                                  |  |                                |  |                                 
|Lukoil Kaliningradmorneft plc                                                                                                        |  |                                 |  |                                 |  |                               |  | 3,796,758                       
|Stolt Offshore Services S.A., France                                                                                                 |  |                                 |  |                                 |  | 417,000                        |  | 1,201,532                       
|                                                                                                                                     |  |                                  |  |                                  |  |                                |  |                                 
|                                                                                                                                     |  |                                 |  |                                 |  | 417,000                        |  | 4,998,290                       
|                                                                                                                                     |  |                                  |  |                                  |  |                                |  |                                 
|Other related activities, which consists of reimbursement of Owners costs of the chartered vessels Neftegaz 66 and Stanislav
Yudin: |  |                                  |  |                                  |  |                                |  |                                 
|K & S Baltic Offshore (Cyprus) Limited                                                                                               |  | 5,973,449                        |  | 6,200,490                        |  | 63,818                         |  | 7,933,128                       
|                                                                                                                                     |  |                                  |  |                                  |  |                                |  |                                 

Management believes that heavy lifting activities with related parties were carried out on commercial terms and
conditions.



|(ii) | Expenses
|---- | --------



|                                                                                                                                            |  |                                  |  |                                  |  |                                |  |                                 
|------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------- |  | -------------------------------- |  | ------------------------------ |  | --------------------------------
|                                                                                                                                            |  | 12 monthsendedDecember 312005US$ |  | 12 monthsendedDecember 312004US$ |  | 1 monthendedDecember 312003US$ |  | 12 monthsendedNovember 302003US$
|                                                                                                                                            |  | (unaudited)                      |  |                                  |  | (unaudited)                    |  | (unaudited)                     
|Chartering of vessels Neftegaz 66 and Stanislav Yudin and other related activities, such as equipment rental, victualling, and labor
costs: |  |                                  |  |                                  |  |                                |  |                                 
|K & S Baltic Offshore (Cyprus) Limited                                                                                                      |  | 12,846,018                       |  | 13,198,243                       |  | 1,081,036                      |  | 10,074,484                      
|                                                                                                                                            |  |                                  |  |                                  |  |                                |  |                                 
|Management fees:                                                                                                                            |  |                                  |  |                                  |  |                                |  |                                 
|Stolt Offshore M.S. Limited, Bermuda                                                                                                        |  |                                 |  | 1,500,000                        |  | 125,000                        |  | 1,500,000                       
|Scansov Offshore (CY) Limited                                                                                                               |  |                                 |  | 1,500,000                        |  | 125,000                        |  | 1,500,000                       
|                                                                                                                                            |  |                                  |  |                                  |  |                                |  |                                 
|                                                                                                                                            |  |                                 |  | 3,000,000                        |  | 250,000                        |  | 3,000,000                       
|                                                                                                                                            |  |                                  |  |                                  |  |                                |  |                                 
|Other overhead and project expenses, such as engineering and project management:                                                            |  |                                  |  |                                  |  |                                |  |                                 
|Seaway Heavy Lifting Engineering BV                                                                                                         |  | 13,074,237                       |  | 12,451,400                       |  | 1,001,826                      |  | 9,096,607                       
|                                                                                                                                            |  |                                  |  |                                  |  |                                |  |                                 



18



---

Seaway Heavy Lifting Limited



|18 | Related party transactions (continued)
|-- | --------------------------------------



Management believe that chartering of vessels and other related activities and management fees payable were carried
out on commercial terms and conditions.



|(iii) | Year-end balances arising from sales/purchases of goods/services
|----- | ----------------------------------------------------------------



|                                       |  |                    |  |                   
|-------------------------------------- |  | ------------------ |  | ------------------
|                                       |  | 31 December2005US$ |  | 31 December2004US$
|                                       |  | (unaudited)        |  |                   
|Payable to related parties:            |  |                    |  |                   
|Seaway Heavy Lifting Engineering BV    |  | 1,808,668          |  | 1,099,669         
|Stolt Offshore Limited                 |  |                   |  | 1,327             
|Stolt Offshore M.S. Limited, Bermuda   |  |                   |  | 173,676           
|K & S Baltic Offshore (Cyprus) Limited |  | 2,896,257          |  | 394,811           
|                                       |  |                    |  |                   
|                                       |  | 4,704,925          |  | 1,669,483         
|                                       |  |                    |  |                   



|(iv) | Credit facilities
|---- | -----------------

The company has credit facilities in place by,
or arranged by, the shareholders, for a total amount of 4.500.000 USD



|19 | Long-term contracts
|-- | -------------------



|                                                                               |  |             |   |  |        
|------------------------------------------------------------------------------ |  | ----------- | - |  | -------
|                                                                               |  | 2005US$     |   |  | 2004US$
|                                                                               |  | (unaudited) |   |  |        
|Contracts in progress at balance sheet date:                                   |  |             |   |  |        
|Amounts due from contract customers included in trade and other receivables    |  | 3,776,600   |   |  |       
|Amounts due to contract customers included in trade and other payables         |  | (2,000,000  | ) |  |       
|                                                                               |  |             |   |  |        
|                                                                               |  | 1,776,600   |   |  |        
|                                                                               |  |             |   |  |        
|Contract costs incurred plus recognised profits less recognised losses to date |  | 1,986,600   |   |  |       
|Less: progress billing                                                         |  | (210,000    | ) |  |       
|                                                                               |  |             |   |  |        
|                                                                               |  | 1,776,600   |   |  |       
|                                                                               |  |             |   |  |        



|20 | Events after the balance sheet date
|-- | -----------------------------------

There were no material post
balance sheet events, which have a bearing on the understanding of the financial statements.



19



---

Seaway Heavy Lifting Limited



|21 | US GAAP adjustments
|-- | -------------------

The Financial Statements of Seaway Heavy
Lifting Ltd have been prepared in accordance with International Financial Reporting Standards. No reconciling items were identified in order to adjust net profit and equity as reported in accordance with IFRS to those amounts that would be reported
in accordance with generally accepted accounting principles in the United States of America.



20