09 Feb 2007

MASNET: Divestment Of Associated Company

KEPPEL CORPORATION LIMITED

KSI Production Ltd (KSI), a wholly owned subsidiary of Keppel Corporation Limited, has agreed to divest its 30% interest in Puffin Ltd to Sea Production Ltd (Sea Production). Puffin Ltd owns the floating production storage and offloading vessel (FPSO) Front Puffin. Completion of the divestment is expected to take place by early March 2007.

The total value of the consideration for the divestment is US$18.3 million comprising US$9.3 million in cash to be paid on completion, and a 5% interest in shares of Sea Production which is in the process of being listed on the Norwegian Over-the-Counter market (NOTC) and will be issued to KSI upon their listing on NOTC. The consideration was arrived at on a willing buyer willing seller basis, taking into account the market value of the FPSO Front Puffin. The 5% interest in Sea Production was arrived at based on Sea Production’s valuation of its assets. Sea Production’s assets comprise two FPSOs and two Aframax-size tankers.

The above transaction is not expected to have any material impact on the net tangible asset or the earnings per Keppel Corporation share for the financial year ending 31 December 2007.

9 February 2007