Sevan Marine: Cost Increase for FPSO Sevan Voyageur

- Sevan Marine: Cost Increase for FPSO Sevan Voyageur

Friday, August 26, 2011
Sevan Marine ASA

Sevan Marine informed that the results for the second quarter of 2011 will be postponed until August 31, 2011. There will be no public presentation for 2Q-2011.

Following detailed project reviews and assessments on the FPSO Sevan Voyageur upgrade project, there has been identified additional costs to be incurred by the Company, resulting in a current cost estimate for the project in the range of USD 170-190 million. The increase from the previously announced cost estimate of USD 160-170 million is mainly a result of time related costs due to additional delays, in part as a result of the Company's challenging liquidity situation, as well as certain increased procurement costs for equipment and yard services. First oil is currently expected to take place during the second quarter of 2012. FPSO Sevan Voyageur is contracted to E.ON Ruhrgas UK E&P for the Huntington field in the UK North Sea. Estimated contract value is USD 535 million for the fixed term of five years. The contract has extension options.

The Board of Directors continues to hold constructive dialogue with bondholders and other relevant parties regarding a global restructuring of the Company's balance sheet.

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ABB Lands Marine Orders in Asia

- ABB Lands Marine Orders in Asia

Thursday, August 18, 2011
ABB

ABB won several orders for a total of $200 million from Samsung Heavy Industries, Hyundai Heavy Industries, Keppel FELS and Jurong Shipyard Pte Ltd., to supply equipment 23 new Jackup and DP drilling vessels and one FPSO to be executed in South-Korea and Singapore. The orders were booked during the second quarter.

The vessels operate in oil and gas extraction, production and transportation, and include semi-submersible drilling rigs, drill ships, mobile oil and gas platforms as well as floating production, storage and offloading vessels.

"This group of important orders underscores ABB's excellent reputation for delivering comprehensive, reliable solutions that help our marine customers operate at the highest levels of efficiency, as well as our vast oil and gas industry expertise," said Veli-Matti Reinikkala, head of ABB's Process Automation division.

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Schilling Robotics, Gregg Marine Complete Subsea Drilling Test Offshore BC

- Schilling Robotics, Gregg Marine Complete Subsea Drilling Test Offshore BC

Thursday, August 18, 2011
Schilling Robotics LLC

Schilling Robotics and Gregg Marine announced the successful completion of the field testing of their subsea drill in the waters offshore of Vancouver, British Columbia.

The Seafloor Drill was conceived by John Gregg, owner of Gregg Marine, and completed its Factory Acceptance Testing at Schilling Robotics in June 2011. The four week sea trials took place last month in St. Vincent's Bay outside of Vancouver, Canada, in water depths up to 250 meters. The sea trials allowed Gregg to work closely with Schilling technicians to fine tune the control systems and train the drill's operators. The drill testing has exceeded Gregg's expectations, as well as the clients that attended the demonstrations.

When speaking of the sea trials, John Gregg commented, "The seafloor drill system is a complex and expanded technology over the current systems in the market today. By leveraging the proven technologies by Schilling Robotics, the Seafloor Drill offers robust telemetry and controls that will maximize the efficiency and effectiveness of the system. To demonstrate our confidence, we invited our industry colleagues to the sea trials in order to see the demonstrations first hand." The drill was able to successfully retrieve core samples of both unconsolidated soft sediment as well as granitic rock. Many in attendance were impressed with the flexibility of the drill compared to other equipment on the market. One of the clients for a major US energy company remarked that "Not many companies are willing to open themselves to outsiders during such an important phase of their development program. It appears to me that the team has put a lot of thought into the design of these tools and I am certain it will pay off with many successful projects."

The system is currently being mobilized to drill near Australia where it will begin work in the coming months. "I am very thankful to Apache Oil for the Seafloor Drill's first job. Their commitment to innovation is shown in their excitement about the system," said Gregg. "We are pleased that the sea trials for the Seafloor Drill were successful," said Tyler Schilling, CEO of Schilling Robotics. "With this technology, and the Cone Penetration Testing unit, Gregg Marine is uniquely equipped for seabed sampling worldwide."

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Clough to Sell Offshore Marine Business

- Clough to Sell Offshore Marine Business

Monday, August 08, 2011
Clough Ltd.

Clough has agreed to sell its offshore Marine Construction Division to SapuraCrest Petroleum Berhad (SapuraCrest), a company listed on the Malaysian stock exchange, for gross proceeds of approximately AUD 127MM in cash. The companies have entered into a conditional Master Sale and Purchase Agreement with certain conditions precedent.

Clough's offshore Marine Construction Division includes the derrick lay barge, Java Constructor, and associated marine construction equipment. Also included will be Clough's interest in the Clough Helix Joint Venture, which operates the chartered Normand Clough vessel, and its investments in specialist engineering businesses, OFI and Peritus. Relevant contracts including the Chevron Gorgon Domestic Gas pipeline project are proposed to be novated.

Post transaction the division will continue to operate from Perth with a continuing focus on both the Australian and regional markets. Clough will continue to provide a number of back office services to the business for a period of two years.

The sale will see Clough exit the asset intensive offshore marine construction market. Clough CEO, John Smith said, "While Clough has enjoyed a long history of successfully executing marine construction projects, it is a sector where significant capital investment is required to compete with the larger regional and global players. Our results have been lumpy in this division and consistency requires scale, flexibility of assets and broad geographic coverage. We believe SapuraCrest will bring these characteristics and we wish them and the skilled workforce who will transfer every success for the future. Opportunities abound in the Australian gas and mineral sectors. Our strategy remains that of Engineering led EPC and this transaction leaves Clough with significant net cash and with capacity for further investment."

The sale is subject to satisfaction of a range of conditions precedent, including SapuraCrest obtaining Malaysian Central Bank and shareholders' approval, the consent of relevant clients and partners, the transfer of certain marine construction division staff, and Clough receiving approval from its debt funders. It is anticipated that satisfaction of these conditions precedent will take up to three months. As a result, completion of the sale is currently expected to occur in Q2 of the 2011/12 financial year.

The Marine Construction Division reported an underlying loss of AUD 7.6MM in the 6months to December 31, 2010 after reporting underlying earnings of AUD 24.1MM in the year ended June 30, 2010. Based on current estimates, the one off profit on the sale is expected to be approximately AUD 8MM. The net increase in cash held by Clough will be approximately AUD 50MM after full repayment of Clough's debt facility with RBS and allowing for cash held by the division.

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Sevan Marine Briefs Financial Position

- Sevan Marine Briefs Financial Position

Monday, July 11, 2011
Sevan Marine ASA

The Board of Directors of Sevan Marine continues to hold constructive dialogue with bondholders and other relevant parties regarding a global restructuring of the Company's balance sheet. In particular, the Board is in dialogue with the advisors to Norsk Tillitsmann ASA (the bond trustee for the Company's bond issues) and an informal group of the Company's largest bondholders. The dialogue with the bondholder group regarding a global restructuring currently assumes that the restructuring would involve:

• a full equitisation of the Company's existing unsecured bonds;
• a partial but reasonably material equitisation of each of the series of the Company's existing secured bonds;
• a corresponding substantial dilution of the Company's existing shareholders;
• a capital raise for the Company, likely in the form of new equity, currently estimated to be at least USD 200 million, to be funded primarily by bondholders, but with a right for existing shareholders to participate;
• extension of maturities for the Company's existing secured bonds; and
• a revision of interest rates and amortization schedules of the Company's secured bonds to correspond with the Company's cash flow profile and debt service capacity.

The above assumptions, and the detailed terms and conditions of a global restructuring proposal, remain to be finally determined and negotiated, and will, inter alia, be affected by the contents of a revised business plan currently being prepared by the Company, and the final cost estimate and schedule developments for the FPSO Sevan Voyageur upgrade project. Any global restructuring proposal will be subject to obtaining necessary agreements with, and consents from, the Company's bondholders, shareholders and other key stakeholders and counterparties to the Company and its subsidiaries.

The Company continues to be under serious short term liquidity pressure, and the Board is currently in discussions regarding bridge financing of at least USD 35 million. Further, the Company intends to request deferrals of interest payments due under the relevant bond loans up to at least end of September 2011, and bondholders who have been approached on a confidential basis have expressed their support in principle to such proposal. The Board is optimistic that its short-term liquidity issues will be resolved and that a long-term solution to the financial challenges facing the Company can be obtained by the end of September 2011.

As for the FPSO Sevan Voyageur upgrade project, further detailed project reviews and assessments have identified additional costs to be incurred by the Company, resulting in a current cost estimate for the project in the range of USD 160-170 million. The increase from the previously announced cost estimate of USD 135 million is mainly a result of time related costs due to additional delays, certain increased procurement costs for equipment, yard services and additional contingencies. First oil is currently expected to take place during the second quarter of 2012. The review is ongoing in close cooperation with the charterer.

The Company's financial situation remains challenging. In connection with the ongoing processes, renewed scrutiny and assessment of booked assets has been required. The Board has initiated a process to impairment test the Company's asset base, which is expected to result in substantial write-downs in the closing of half-year accounts of 2011.

Notwithstanding the ongoing dialogue with lenders, FPSO Sevan Voyageur stakeholders and others, no assurance can be given that a viable global solution can be found in a timely manner, failing which the Board will be required to file for bankruptcy.

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Hallin Marine Lands Repair Gig Offshore Angola

- Hallin Marine Lands Repair Gig Offshore Angola

Friday, June 24, 2011
Superior Energy Services

Hallin Marine announced the award of its latest subsea pipeline repair project off the African west coast. Working on behalf of a major oil company, Hallin is providing overall project management and engineering, the subsea operations vessel (SOV) Ullswater, repair equipment plus a saturation diving team, to support the urgent repair of a 20 inch water injection pipeline offshore Malongo, Angola. The contract was awarded following successful projects previously completed by Hallin in offshore Angola.

Mike Arnold, Managing Director of Hallin West commented, "This is a typical project for our West Africa project team and shows the effectiveness of our specialist-designed SOV Ullswater for this type of project. The vessel is strategically placed for work in West Africa as part of our ongoing commitment to the region."

A recent addition to the Hallin fleet, Ullswater is an ultra-modern SOV incorporating an integral 15-man saturation diving system. With a length of 78 meters and a 20.4 meter beam, the vessel incorporates DP2 dynamic positioning and can accommodate up to 120 personnel.

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Merchant Marine Fund OKs Financing to OSX Shipbuilding Unit

- Merchant Marine Fund OKs Financing to OSX Shipbuilding Unit

Thursday, June 23, 2011
OSX Brasil S.A.

Merchant Marine Fund (Fundo da Marinha Mercante ­ FMM) has approved the prioritization of financial support for the Açu Shipbuilding Unit ("UCN Açu") project of OSX Construção Naval S.A., pursuant to the resolution published today in the Federal Official Gazzete (Diário Oficial da União).

According to the news published by the media in general, OSX estimates that the credit line could reach R$ 2.7 billion to implement the largest shipyard in the Americas within the Açu Superport Industrial Complex, which is located in the São João da Barra Industrial District created by the Rio de Janeiro State Government and implemented by the Rio de Janeiro State Developing Company (Companhia de Desenvolvimento do Estado do Rio de Janeiro - CODIN).

"This decision from the FMM is a confirmation of the national interest in the realization of the OSX Shipbuilding Unit, which is a decisive instrument so that we, Brazilians, may enjoy the benefits arising from the oil and gas that we have discovered in the offshore basins of our country," stated Eike Batista, Chairman of the Company's Board of Directors.

The Açu Shipbuilding Unit is a result of a partnership between OSX Construção Naval S.A. and its partner Hyundai Heavy Industries. "In addition to the technological endorsement provided by Hyundai, our project receives with pride and responsibility the most important credit line available to the Brazilian naval industry from the FMM's Board," affirmed Luiz Eduardo Carneiro, OSX's CEO.

The main characteristics of the shipyard are:

• 5th generation shipyard leveraging the Korean technology of Hyundai
• Largest shipyard of the Americas, creating more than 10,000 direct jobs during the operational phase
• Located in the Açu Superport Industrial Complex, with excellence in logistics and strategic location, at approximately 150 km from Campos Basin, responsible for 85% of Brazil's crude oil output
• Proximity to steel plants, enabling operation with steel plates of 18m x 4m, generating up to a 56% cost reduction in welding
• Near to energy plants, guaranteeing its supply and up to 30% cost reduction
• Quay of 2,400m, expandable to 3,525m, enabling the integration of up to 11 FPSOs

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Sevan Marine Reports Financial Results for 1Q11

- Sevan Marine Reports Financial Results for 1Q11

Tuesday, June 14, 2011
Sevan Marine ASA

Sevan Marine reported the results for the first quarter of 2011.

The Company's working capital is insufficient to support its present requirements and there is an immediate need to solve the Company's financial situation. The Company, together with its advisors, is in the process of seeking a debt restructuring, potentially in combination with a share issue as well as a reduction of overhead cost to secure the Company's financial position. A robust financial structure coupled with the Company's FPSO assets and technology should form the basis for creating shareholder value and securing stakeholders going forward. However, the Company is dependent on a successful restructuring in order to meet its commitments. The Company is in constructive dialogue with its stakeholders, but at the date of this report, no firm resolution has been reached.

The Board confirms that the 1Q 2011 financial statements have been prepared based on a going concern assumption. The basis for this assumption is the Company's strategic plan and a successful outcome of the restructuring plans described above. The outcome of the restructuring is however, at the date of this report, still uncertain and may impact the assumptions applied in the preparation of the 1Q 2011 financial statements. In addition to the going concern assumption, this particularly relates to "Sevan Capital Assets" and "Deferred Tax Assets" as further described in the attached report. Sevan Marine has engaged ABG Sundal Collier, DnB NOR Markets, Pareto Securities and SEB Enskilda to address a financial and strategic restructuring of Sevan Marine.

The loss from continued business carry only rounding differences compared to the preliminary figures presented in the announcement on May 20, 2011. However, a temporary breach of an equity covenant as further described in note 9 in the attached report, requires that amounts which formally could be held to be mandatory repayable at balance sheet date to be classified as current. All interest-bearing debt was therefore classified as current as per March 31, 2011.

Operating revenue for the quarter amounted to USD 51.1 million (USD 53.5 million). EBITDAFX was USD 20.4 million (USD 27.6 million). Operating profit was USD 3.8 million (USD 13.0 million), and net loss was USD 53.3 million (net loss of USD 63.3 million).

Operating revenue was USD 2.4 million lower than the previous quarter mainly as a result of a non-recurring compensation received from the Oilexco administration in previous quarter. This effect was partly offset by higher revenue from rebillable expenses from FPSO Sevan Voyageur and FPSO Sevan Hummingbird and higher revenue from the Topside and Process Technology segment.

Operating expense was USD 4.7 million higher than the previous quarter mainly due to higher rebillable operating expense on FPSO Sevan Voyageur and FPSO Sevan Hummingbird as well as higher operating expense in the Topside and Process Technology segment, all of which are also reflected in the revenues above.

A net foreign exchange loss relating to financing of USD 21.4 million (gain of USD 0.7 million) was mainly a result of unrealized disagio on NOK-nominated bonds following a strengthening in NOK compared to USD of 5.8% during the quarter.

Financial expense through profit and loss decreased by USD 25.4 million to USD 22.0 million (USD 47.4 million) mainly due to non-recurring expenses relating to refinancing activities in previous quarter.

Net loss on continued business was USD 39.7 million (loss of USD 45.4 million) for the quarter. Net pro forma loss reflects the net loss as if the drilling segment was a third party to the Sevan Marine Group and amounted to USD 33.6 million for the quarter.

Net loss on discontinued business, which reflects the net loss from the drilling segment to be de-consolidated following the initial public offering executed on May 3, 2011, amounted to USD 13.6 million (USD 17.9 million) for the quarter.

As of March 31, 2011, total assets amounted to USD 2.723 billion (USD 2.587 billion), of which USD 1,169.7 million (USD 2,145 billion) was capitalized as 'Sevan Capital Assets'. Assets of disposal group, which reflect the total assets in the drilling segment, amounted to USD 1.298 billion. Cash and cash equivalents amounted to USD 29.2 million (USD 116.1 million).

As of March 31, 2011, Sevan Marine has undrawn USD 52.1 million on a bank facility to part finance the upgrade of FPSO Sevan Voyageur which is not reflected on the balance sheet as per March 31, 2011. As at the date of this report, USD 10.0 million remains undrawn under the financing facility. In addition, the discontinued operation has undrawn USD 342.9 million on a bank facility to fund the construction of Sevan Brasil which is not reflected on the balance sheet as per March 31, 2011.

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Operators Look to Unlock Tuscaloosa Marine Shale Potential

- Operators Look to Unlock Tuscaloosa Marine Shale Potential

Monday, June 06, 2011
Rigzone Staff
by Karen Boman

The Tuscaloosa Marine shale play, located on the border of southwestern Mississippi and northeast Louisiana, could emerge as the next big oil shale play as oil and gas producers shift their focus from gas to oil drilling and seek to unlock unconventional resources in unexplored shale plays.

The Louisiana Department of Natural Resources Office of Conservation will hold a public hearing on June 7 in Baton Rouge to approve a drilling production unit that Devon Energy has applied for in the Tuscaloosa play near Ethel in East Feliciana Parish.

Devon holds 250,000 acres in the Tuscaloosa Marine shale play. Devon spokesperson Chip Minty said it is still too early to quantify the liquids content of this acreage. The company plans to drill two horizontal wells this year on its Tuscaloosa shale acreage, which Devon officials said is stratigraphically equivalent to the Eagle Ford shale play and has a low average acreage cost of $180/acre. The company will have a rig on site in this year's second quarter.

The company's Tuscaloosa activity is part of Devon's goal of identifying and establishing large acreage positions in highly economic plays at reasonable prices. "We have continued building these new venture positions and now have roughly 850,000 net acres and a handful of new plays, primarily targeting oil and liquid rich gas," the company said.

The Tuscaloosa shale on Devon's acreage is approximately 200 to 400 feet thick, at depths of 11,000 to 14,000 feet across Devon's acreage position. Oil production has been established, up dip in the play from the Tuscaloosa Shale, said David Hager, Devon's executive vice president of exploration and production, during Devon's first quarter 2011 earnings conference call in early May. "We plan to utilize horizontal drilling and fracture simulation to enhance the productivity of the reservoir in both the oil and liquids-rich portion of the play."

Denbury Resources recently signed a small joint venture covering its Tuscaloosa Marine Shale acreage wherein the partner will complete one well and drill another at no cost to us, leaving Denbury with a small retained interest in future activities. Denbury in late 2009 agreed to acquire EnCore, which had drilled four horizontal wells targeting the Tuscaloosa Marine Shale play in 2007 and 2008. The JV will allow Denbury to develop this acreage it acquired with the EnCore acquisition.

The first Tuscaloosa Marine shale well was tested in 1975; to date, five well have been tested and produced. The Tuscaloosa Shale has an unproven unconventional resource estimate of 7 billion barrels of oil, according to a report by researchers at Louisiana State University in Baton Rouge.

The marine shale section lies between sands of the upper and lower Tuscaloosa sections and varies in thickness from 500 feet in southwestern Mississippi to more than 800 feet in the southern part of the Florida parishes in Louisiana. The Tuscaloosa Marine Shale is very similar in geology to the Eagle Ford, and is believed to have the same potential for development and production.

Brammer Engineering and Indigo II Louisiana Operating hold permits in the same area as the Tuscaloosa shale. Indigo Chairman and Chief Executive Officer Bill Pritchard said he sees potential for Tuscaloosa shale production in the acreage it received from Roy O. Martin Minerals, Louisiana's largest private landowner, in exchange for equity in Indigo.

The company put together about 240,000 acres in central Louisiana, of which half has been leased to timber companies; Indigo will focus its Tuscaloosa exploration efforts on the remaining half. Indigo drilled the Bentley Lumber 32-1 vertical well, and will drill the Indigo Bentley Lumber 23H-1 horizontal well in July.

The company's acreage is northwest of the area where Devon and EnCore have drilled, but the interval Indigo is targeting sits above the Edwards carbonate formation; to the east, the Eagle Ford/Tuscaloosa play overlies the main body of the Lower Tuscaloosa sandstone. Indigo's acreage features a higher percentage of calcite, which makes it more brittle and easier to frack. The company set intermediate casing just above the shale and drilled with oil based mud. "That and the fact that we are more calcitic through the section allowed us to drill through the TMS [Tuscaloosa Marine Shale] without incident," Pritchard said.

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Sevan Marine Board Member Resigns

- Sevan Marine Board Member Resigns

Thursday, May 26, 2011
Sevan Marine ASA

Sevan Marine has received a letter of resignation from Jan Erik Tveteraas, advising that he resigns from the Board of Directors of Sevan Marine ASA for personal reasons. The Company will discuss replacement plans and alternatives with major shareholders and the Nomination Committee.

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Delta Marine Technologies Inks Agency Agreement with Ampelmann

- Delta Marine Technologies Inks Agency Agreement with Ampelmann

Monday, May 16, 2011
Delta Marine Technologies Inc.

Delta Marine Technologies and its affiliates announced the signing of an Agency Agreement with Ampelmann Operations BV of The Netherlands as sole agent throughout much of the Western Hemisphere excluding Brazil for the rental and hire of the Ampelmann Offshore Access System.

This system is designed to address the requirement for personnel transfer in the offshore environment where active compensation of wave-induced vessel motions of marine vessels brings safety and efficiency to new levels of performance unmatched by the more conventional conveyances currently employed in the offshore energy industries of Oil and Gas, Wind and Wave Power.

Future applications for the Ampelmann system include but are not limited to the following:

• Floatel accommodation support
• Offshore hook-up and commissioning
• Platform decommissioning
• Platform jacket installations
• Brownfield re-development
• Production operations for unmanned facilities
• Ship-to-Ship personnel transfer
• Wind Energy installation projects
• Wave Energy installation projects

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Sevan Marine Says Hello to New CEO

Sevan Marine Says Hello to New CEO

Thursday, April 28, 2011
Sevan Marine ASA

Mr. Jan Erik Tveteraas will retire from the position as CEO of Sevan Marine ASA to take on the position as CEO of Sevan Drilling ASA. Mr. Tveteraas was a founding shareholder of Sevan Marine ASA and has been the CEO since the inception in 2001. He has been proposed by the nomination committee as a Board member of Sevan Marine.

Carl Lieungh has been appointed new CEO of Sevan Marine ASA following the general meeting in Sevan Marine.

Mr. Lieungh comes from the position as CEO for Norse Cutting & Abandonment AS (NCA) and has more than 25 years of experience from the oil and gas industry including management and development of enterprises, project management, marketing and international business development. Mr. Lieungh has held key positions within these areas as Senior Vice President for Business Development of the Oil, Gas and Marine Solutions Division in Siemens AG, President for Kvaerner Process System Group of companies and Managing Director of Hitec Framnes AS.

Mr. Lieungh holds a Master of Science from the Norwegian Institute of Technology and Master of Management from The Norwegian School of Management.

Chairman of the Board, Arne Smedal, commented, "We are very pleased to announce that Carl Lieungh has accepted the position as CEO in Sevan Marine ASA. Mr. Lieungh has extensive knowledge about international business and the offshore industry in general and we are convinced that Mr. Lieungh’s industrial experience will be valuable to Sevan Marine ASA. I want to thank Jan Erik Tveteraas for his valuable contribution to the commercialization of the Sevan technology, and wish him all success with his new role in Sevan Drilling ASA where Sevan Marine ASA remains a main shareholder."

Keppel Secures Offshore, Marine Jobs Globally

Keppel Secures Offshore, Marine Jobs Globally

Tuesday, April 12, 2011
Keppel Corp. Ltd.

Keppel has clinched new contracts totaling S$240 million from international customers.

These entail building a new multi-purpose dive support construction vessel for SBM Offshore as well as modifying and upgrading a Floating Production Storage and Offloading (FPSO) vessel for Petrofac.

Mr. Nelson Yeo, Managing Director (Marine) of Keppel O&M, said, "These new contracts reflect the confidence of our customers in the capabilities of the Keppel O&M group. We are proud of the solid partnerships built with faithful customers who turn to our yards worldwide for their fleet expansion and upgrading needs.

"Looking ahead, I am confident that we will continue to strengthen the mutual trust and partnership with SBM Offshore and Petrofac with Keppel's commitment to quality and reliability."

Keppel Singmarine will build for SBM Offshore a prototype multi-purpose dive support construction vessel (DSCV) scheduled for delivery in 2Q 2013. This cutting-edge vessel combines capabilities of diving support, subsea construction and anchor handling, and features a DP III (Dynamically Positioned) system.

The DSCV will be equipped with a fully integrated 12-men saturation diving system that enables divers to work safely up to a depth of 300m, and a 250-tonne crane to support subsea oilfield development. It will also feature a 200-tonne double drum winch, four chain lockers and a stern roller for anchor handling functions.

Since 2000, sister company Keppel Shipyard has completed 13 FPSO and FSO projects for SBM Offshore with another four FPSO conversion projects currently underway.

Keppel Shipyard has also secured a fast-track project for the upgrading of a FPSO vessel from Petrofac International (UAE), a subsidiary of Petrofac. The upgrading of the ex-FPSO East Fortune includes refurbishment and life extension works, engineering, fabricating, installing and integrating new topside process modules, upgrading of spread mooring and auxiliary support systems.

Work has commenced in 1Q 2011. Designated for an oil and gas field offshore Peninsular Malaysia, this FPSO facility will be able to handle both oil and gas production.

The above contracts are not expected to have material impact on the net tangible assets and earnings per share of Keppel Corporation Limited for the current financial year.

Keppel Delivers Rig Four Months Ahead of Schedule

Keppel Delivers Rig Four Months Ahead of Schedule

Tuesday, March 29, 2011
Keppel Corp. Ltd.

Keppel FELS has delivered Alpha Star, the second of two DSSTM 38 semisubmersible rigs, to Brazil's Queiroz Galvão Óleo e Gás (QGOG) four months ahead of schedule and with zero lost time incidents.

This continues Keppel FELS track record of delivering its rigs on time or ahead of schedule. It is the third early delivery this year, following the early delivery of the semisubmersible drilling tender, West Jaya, to Seadrill and of the KFELS N Class rig, Rowan Stavanger, for Rowan Companies.

Mr. Tong Chong Heong, CEO of Keppel Offshore & Marine, said, "This is our second safe and early delivery to QGOG and a sterling record for our company. This outstanding achievement is a demonstration of the great teamwork and synergy we have built with QGOG. It brings to fore the excellence of our efficient processes, project management, innovative methods and the Can-Do spirit which we apply on all our projects.

"We are glad to be able to send Alpha Star off early to contribute to Brazil's exploration and production efforts, enabling QGOG to anticipate its service from Petrobras. Our philosophy is to provide maximum value to our customers and we look forward to supporting QGOG as they expand their foothold in the deepwater drilling segment."

The rig has been chartered by Petrobras for six years to support exploration and production activities offshore Brazil.

Mr. Leduvy Gouvea, Chef Executive Officer of Queiroz Galvão Óleo e Gás said, "With this early delivery, we are able to start work earlier for Petrobras, and reinforce our status as the premier drilling operator in Brazil. We are confident that Alpha Star will be just as successful as its sister rig, the DSSTM 38 Gold Star, which is performing successfully for Petrobras in Brazil.

"Through the various projects we have been working on, they have proven to be an exceptional partner, delivering projects which exceed expectations and enabling us to efficiently serve the fast-growing oil and gas exploration industry. They share our commitment to provide technologically advanced and high quality products to our customers in a reliable and safe manner."

Jointly developed and owned by Keppel's Deepwater Technology Group and Marine Structure Consultants, the DSSTM 38 design is in the league of some of the world's most advanced drilling semisubmersibles.

Designed to maximize uptime with reduced emissions and discharges, a DSSTM 38 rig is well-suited to handle the operational requirements in the deepwater "Golden Triangle" region, which comprises Brazil, Africa and the Gulf of Mexico.