02 Dec 2010

Keppel seals US$360 mil contract with Mermaid’s Asia Offshore Drilling for two newbuild jackups

Keppel FELS Limited ("Keppel FELS") is pleased to announce that it has signed a contract to build two proprietary KFELS B Class jackup rigs worth US$360 million with Asia Offshore Drilling Limited ("AOD"), a 49% owned affiliate of Mermaid Maritime Public Company Limited ("Mermaid"). This follows a Letter of Intent entered into by Keppel FELS and Mermaid on 22 October 2010.

The two jackup rigs are scheduled for delivery in 2012 and 2013 respectively.

As part of the contract, AOD has been given options to build another two similar jackup units. If exercised, the options for the additional two rigs will bring the total contract value to above US$720 million.

Mr Chandchutha Chandratat, Executive Chairman of Mermaid Maritime, said, "This latest contract represents a significant order from an Asian drilling company, and is in line with Mermaid's goal to be a long-term owner of high specification modern drilling assets in the region.

"I am pleased to announce that the response from investors in the recent equity placement exercise conducted for the two rigs was most encouraging. With that, we have been able to put in place the necessary funding for our new fleet expediently.

"This reflects the market's confidence in Mermaid's capabilities as an operator, and in our choice of partnering Keppel FELS, the world's leading offshore rig designer and builder, to construct the proven KFELS B Class jackup rig design."

Mr Tong Chong Heong, CEO of Keppel Offshore & Marine and Keppel FELS, said, "We would like to thank Mermaid for their confidence in Keppel FELS, and are very pleased to take our partnership to the next level with the building of two new KFELS B Class jackup rigs.

"At Keppel FELS, we have supported and grown with all our customers over the years, many of whom have become today's market leaders. It is with the same passion and commitment that we look forward to support Mermaid in developing its premium rig fleet and operational track record in the region."

The KFELS B Class jackup design is developed by Keppel's technology arm, Offshore Technology Development. When completed, AOD's rigs will be able to operate in water depths of 350 feet, drilling depth of 30,000 feet and accommodate 150 men.

An impressive number of 37 KFELS B Class rigs has been ordered to date. This includes the two units from Mermaid, and one from Standard Drilling Ltd that was secured last week.

As at the time of this media release, the total value of new contracts secured by Keppel O&M Group in 2010 has grown to more than S$2.7 billion.

The new contract with AOD is not expected to have material impact on the net tangible assets or earnings per share of Keppel Corporation Limited for the current financial year.

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About Mermaid

Mermaid Maritime Public Company Limited ("Mermaid") is a leading provider of drilling and sub-sea engineering services for the offshore oil and gas industry. Over the last six years Mermaid has grown significantly in these areas. Mermaid has established itself as a company recognised by the industry for high quality services, delivered safely and efficiently.

The group has developed a strong blue chip client base that includes some of the world's largest oil and gas related companies. Its sub-sea engineering division is represented by Mermaid Offshore Services Ltd. ("MOS"). MOS' existing fleet consists of eight (8) subsea vessels which it owns. Half of this fleet are specialised dive support vessels (DSVs). MOS operates its vessels as part of a one stop solution utilising a highly skilled workforce and other key assets, including three (3) saturation diving systems, ten (10) offshore air diving systems and fourteen (14) ROV systems.

MOS service clients in South East Asia, India, China, Sakhlin, the North Sea, the Middle East (through Subtech Ltd.) and South America. Mermaid's drilling division owns and operates two tender rigs and has recently announced plans to invest in the construction and operation of another two high specification jackup rigs. Mermaid's corporate headquarters is in Bangkok, Thailand and Mermaid is listed on the Singapore Stock Exchange. Mermaid's mission is to deliver world class service to the region from within the region. For more information, please visit: www.mermaid-maritime.com.

About Keppel FELS

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, repair and construction, shiprepair 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.

For further information, please contact:

Diana Chan (Ms)
Senior Executive
Keppel Group Corporate Communications
Tel: (65) 6413 6430
Email: diana.chan@kepcorp.com