30 May 2005

Keppel FELS to build two semis at S$780 million for Maersk

Keppel FELS Ltd, the wholly owned subsidiary of Keppel Corporation Limited through Keppel Offshore & Marine Ltd (Keppel O&M) has secured a contract to build two semi-submersible drilling platforms at S$780 million for AP Moller-Maersk (Maersk).

Under the agreement, Maersk will supply the drilling and other equipment. The contract also carries an option for an additional unit of a similar design and capacity, to be exercised within 12 months and subject to price adjustment for steel material and equipment price, labour and currency fluctuations.

The two development deepwater semi-submersibles are expected to be delivered in 2008 and 2009 respectively.

Maersk has chosen the proprietary design, the DSS 21, developed by Keppel’s Deepwater Technology Group (DTG) and Marine Structure Consultants (MSC).

Mr Claus V. Hemmingsen, CEO of Maersk Contractors, a subsidiary of Maersk, said, “Exploration in deeper water has given good results and now enters the development phase. In a response to our customers’ request for lower cost development solutions, we have together with Keppel and MSC designed a high efficient rig to support our customers’ ambitions.”

The rigs will contain a dynamically positioning system, with the ability to attach to a prelaid mooring system. Capable of operating at water depths to 3,000 metres, the new semi-submersibles are designed for moderate environmental conditions such as West Africa, Brazil, Gulf of Mexico and Southeast Asia. Each rig can accommodate up to 180 people.

In customising the rigs for deepwater development operations, the partners have drawn from extensive customer input and operational experiences from the semisubmersible Maersk Explorer a DSS 20 design from the DTG/MSC team, built by Keppel FELS for the Caspian Sea in 2003.

Mr Hemmingsen added, “The reasons for awarding Keppel FELS are past experience and their proven reputation to deliver on time. We believe that we have an excellent team for our expansion in the deepwater market.”

The award of the two rigs is the second major contract from Maersk this year following the order secured to build four jackup rigs in March.

Mr Tong Chong Heong, Managing Director/Chief Operating Officer of Keppel O&M, said, “The Maersk contract represents a vote of confidence from a top-notch drilling contractor in Keppel’s capability to provide highly efficient solutions for the deepwater development market.

“Our establishment of the Deepwater Technology Group (DTG) to complement Keppel FELS’ expertise in fabrication underscores Keppel’s commitment to provide deepwater drilling and production solutions.”

Keppel O&M has a strong track record of proprietary designs from submersibles, Tension Leg Platforms, spars, semi-drilling units, semi-tenders, semi-accommodation platforms and semi floating production facilities to serve the prevailing market demand.

A wholly-owned subsidiary of Keppel Corporation, Keppel O&M is the global leader in offshore rigs and shiprepair and conversion as well as a specialised shipbuilder. Its near market, near customer strategy is bolstered by a global network of 16 yards 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 in solutions for the offshore and marine industry.

The A.P. Møller - Mærsk Group, based in Copenhagen, is a major international enterprise with activities covering diverse areas such as shipping, exploration and production of oil and gas, shipbuilding, aviation, industry and retail. The Group Fleet comprises more than 250 vessels with a total deadweight of about 12,000,000 tons and includes container vessels, tankers, car carriers, supply ships, special vessels and drilling rigs.

The transaction is not expected to have a material impact on the NTA or the net earnings per Keppel Corporation share for FY2005.


For further information, please contact

Grace Chia (Ms)
Keppel Group Corporate Communications
Tel: +65 9694 1328
Email: grace.chia@kepcorp.com

The press release is also available at www.kepcorp.com and www.keppelom.com

Attachments:

Inking the deal: Mr Claus V. Hemmingsen, CEO of Maersk Contractors and Mr Tong Chong Heong, MD & COO of Keppel Offshore & Marine.

Artist impression of the DSS-21