the new-build offshore support vessels (platform supply vessels and anchor handlers only) being added to  the offshore support vessel fleet. It is unknown at this time the extent to which the recovery from the recent  worldwide recession will influence the utilization of equipment currently in existence or the ultimate timing of  delivery and placing into service of new drilling rigs, floating production units and vessels currently under  construction. Analysts have reported some offshore vessel construction contract cancellations as a result of  the foregoing factors, which may reduce the ultimate number of vessels built and delivered.  The company operates in many challenging operating environments around the world that present varying  degrees of political, social, economic and other uncertainties. We operate in markets where the possibility  exists of expropriation, confiscation or nationalization of our vessels or other assets, terrorism, piracy, civil  unrest, changing foreign currency exchange rates and controls, and changing political conditions that may  adversely affect our operations. Although the company takes what it believes to be prudent measures to  safeguard its property and personnel against these risks to the extent practicable, it cannot be assured that  the company will escape any of the aforementioned events, although the wide geographic dispersion of the  company's vessels helps substantially mitigate the impact of these risks. In some international operating environments, local customs or laws may require the company to form joint  ventures with local owners or use local agents. The company’s international operations are carried out with  due regard to the rules and regulations of the Office of Foreign Assets Control (OFAC), the Trading with the  Enemy Act, the Foreign Corrupt Practices Act (FCPA), and other applicable laws and regulations. Certain  international environments in which the company operates are characterized by heightened levels of  governmental corruption and local customs and practices that may conflict with the requirements of U.S.  law. The company has adopted policies and procedures in an effort to mitigate these risks.  The company has previously reported in its periodic filings that it was in discussions with Sonangol, the  national oil company of Angola, regarding a Sonangol proposal to increase its control over Sonatide Marine  Services Ltd., an Angolan joint venture between Sonangol and a Tidewater subsidiary. The company  currently has an indirect 49% ownership interest in Sonatide. The company also previously reported that it  had reached agreement with Sonangol on certain amendments to the joint venture agreement that would  increase Sonangol’s control over the operations of Sonatide. Thereafter, Sonangol and the company  continued to have dialogue regarding additional changes proposed by Sonangol to Sonatide’s practices and  procedures that, if adopted, would further Sonangol’s control over Sonatide’s day-to-day operations,  including treasury functions. In December, 2009, Sonangol notified Tidewater that the existing joint venture  agreement, which was scheduled to expire on July 31, 2010 unless renewed, would not be renewed by  Sonangol, although Sonangol advised that it was willing to discuss a new joint venture agreement. The  company is in constructive discussions with Sonangol regarding the terms of a new joint venture  arrangement although no assurances can be given that these discussions will be successfully concluded or  whether such terms will be advantageous to the company. In addition, over the course of the last several  months Sonangol has been willing to extend the term of the Sonatide joint venture to fulfill several new or  renewed charterparty agreements with customers for a substantial portion of the current fleet in Angola that  extend beyond July 31, 2010. Failing to further extend the existing Sonatide joint venture or reach a new  joint venture agreement with Sonangol could impair the company's ability to continue to effectively compete  for business in Angola in the future. More Tidewater vessels are deployed in Angola than in any of  Tidewater’s other countries of operation, and a significant portion of revenues derived from the company’s  largest customer, Chevron, are derived through the company’s operations in Angola.  The International Labour Organization's Maritime Labour Convention, 2006 (the Convention) seeks to  mandate globally, among other things, seafarer working conditions, ship accommodations, wages, conditions of employment, health and other benefits for all ships (and the seafarers on that ship) that are  engaged in commercial activities. To date, this Convention has been ratified by five countries, namely, the  Bahamas, Liberia, Marshall Islands, Norway and Panama, representing 33% of the world's tonnage. If  adopted by an additional 25 countries, then within 12 months thereof, the Convention will become law. Some believe that this Convention could become law in 2011. The company believes that the labor changes  -11-  International Labour Organization’s Maritime Labour Convention  Sonatide Challenges We Confront as an International Offshore Vessel Company 