01 Feb 2010

Keppel-J. Ray joint venture wins Brazil’s P-61 TLWP contract worth about US$ 1 billion

FloaTEC Singapore Pte Ltd (FloaTEC Singapore), an equal joint venture between Keppel FELS Ltd (Keppel FELS) and J. Ray McDermott (J. Ray), has signed a contract worth about US$ 1 billion with the Papa-Terra Joint Venture, consisting of PETROBRAS and CHEVRON, to build and operate the P-61 Tension Leg Wellhead Platform (TLWP). This follows shortly after a Letter of Intention for the unit was issued by the Papa-Terra Joint Venture to FloaTEC Singapore in October 2009.

The project scope — comprising design, engineering, construction, maintenance and installation work, as well as a three-year contract to operate the TLWP — will be jointly undertaken by Keppel FELS and J. Ray. Keppel FELS and J. Ray will also enlist the expertise of their US-based joint venture company, FloaTEC LLC, to perform global engineering and basic design work, as well as manage the supply of risers, well systems and tendon components for P-61.

Mr. Chow Yew Yuen, President of Keppel Offshore & Marine USA Inc, said, “We are pleased that FloaTEC’s strong bid for the P-61 project matched Petrobras’ expectations. This contract affirms Petrobras’ commitment to expedite the development of the sizeable Papa-Terra project, as well as its confidence in our joint venture’s ability to deliver the best solution for the job.”

Designated for Brazil’s Papa-Terra field in the Campos Basin, the P-61 TLWP will work alongside the P-63 Floating Production Storage Offloading vessel to handle up to 180,000 barrels of oil per day. P-61 will be built at Keppel’s BrasFELS yard in Angra dos Reis, fulfilling local content requirements, while its critical components such as the tendons, temporary buoyancy modules and piles will be fabricated at J. Ray’s Morgan City facility in Louisiana, USA. Targeted for completion by mid-2013, P-61 will be installed on location in the Papa-Terra field by J. Ray.

Mr. Steve M. Johnson, President and CEO of J. Ray McDermott, said, “The P-61 project is a significant collaboration between J. Ray, Keppel FELS and FloaTEC LLC, and will bring together all our global engineering, project management, fabrication and construction resources to provide the best possible solution for the Papa-Terra field. This unique synergy and ability to offer proprietary technology and critical engineering expertise through FloaTEC will provide additional positive opportunities and will fortify our collective track record for offering innovative deepwater solutions.”

Mr. Eric H. Namtvedt, President of FloaTEC LLC said, “This project underscores FloaTEC’s ability to draw from its parents’ global resources to offer a robust and cost effective solution when our customers need one most. Almost the entire scope of the project will be implemented using the combined resources of FloaTEC, Keppel FELS and J. Ray.

“This is a key strength of our proposal, which should enable us to better manage risks, ensure the high integrity of the TLWP design and generate efficiencies in the work processes. Through the P-61, the first dry tree floater completion development offshore Brazil, we will be investing technology, know-how, and international performance standards in a sustainable way.”

Papa-Terra is a heavy oilfield project located at the Exploratory Block BC-20 in Brazil's most important oil-producing region in the Campos Basin. The offshore field is located in a water depth of 1,180 metres. Jointly owned by operator PETROBRAS (62.5%) and US-based international oil company CHEVRON (37.5%), the Papa-Terra field is expected to achieve first oil by mid-2013, and bring Brazil closer to its goal of becoming a net oil exporter.

Mr. Chow added, “Brazil’s offshore sector is embarking on a very exciting phase with many of Petrobras’ new projects put on fast-track. There is an intensifying need for innovative and cost-effective solutions and local content, which Keppel, supported by our joint venture partner J. Ray, is well placed to offer. Being close to the pulse of the action in Brazil, we look forward to participate meaningfully in projects where we have the best competitive advantage to deliver value to our customers and stakeholders.”

FloaTEC LLC is a US-based deepwater joint venture company between J. Ray McDermott and Keppel FELS. FloaTEC LLC specialises in designing deepwater floating production systems (FPS), with a focus on its proprietary designs in tension leg platform, semisubmersible and Spar technology. The Company extends and integrates its parents' resources and capacities to create value for its clients by assuming the engineering and management role of programme and project interfaces.

J. Ray McDermott, a subsidiary of McDermott International, Inc. (NYSE:MDR), provides engineering, construction, procurement, installation and project management services to offshore oil and gas developments worldwide.

Keppel FELS is a subsidiary of Keppel Offshore & Marine Ltd (Keppel O&M), a wholly-owned company of Keppel Corporation Limited. Keppel O&M is a leader in offshore rig design, construction and repair, ship repair and conversion and specialised shipbuilding. Its near market, near customer strategy is bolstered by a global network of 20 yards and offices in the Asia Pacific, Gulf of Mexico, Brazil, the Caspian Sea, Middle East and the North Sea regions. Integrating the experience and expertise of its yards worldwide, the group aims to be the provider of choice and partner for solutions for the offshore and marine industry.


Forward-Looking Statements

This release contains forward-looking statements, including statements related to the scope, timing, performance and amount of the P-61 TLWP project and the ability of the collaboration among J. Ray, Keppel FELS and FloaTEC to create positive opportunities. These statements are subject to a number of risks and uncertainties, including the risk that the parties may be unsuccessful in executing a contract with respect to the project or that the contract will not be finalized as discussed in this release. If these or other risks materialize, actual results may vary materially from those expected and you are cautioned not to rely on these statements unduly.

For further information, please contact

For Keppel FELS:
Ivana Chua (Ms)
Manager
Keppel Group Corporate Communications
Tel: (65) 64136 436
Email: ivana.chua@kepcorp.com

For J. Ray McDermott:
Louise Denly
Director, Corporate Communications
Tel: + 1 (281) 870-5025
Email: ldenly@mcdermott.com

For FloaTEC LLC:
Werner Bornstein
Director-Operations
Tel: + 1 (281) 870-5680
Email: wbornstein@floatec.com

Attachments:

Keppel-J. Ray joint venture has secured Brazil’s P-61 TLWP contract worth about US$ 1 billion, affirming the joint venture’s ability to deliver the best possible solution for the Papa-Terra field.

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