03 Mar 2006

Keppel secures US$270 million contract from GlobalSantaFe

Keppel FELS Ltd (Keppel FELS) has secured a contract with GlobalSantaFe Corporation (GSF) to build an ultra-deepwater drilling rig for US$270 million.

Under the contract agreement, GSF will supply the drilling and sub-sea equipment while Keppel FELS provides the design, engineering and construction of the hull as well as the accommodation quarters for 180 men and marine equipment.

The rig, to be named the GSF Development Driller III, is scheduled for delivery in the first quarter of 2009.

GSF has chosen to build the state-of-the-art semisubmersible (semi) to the proprietary design, DSS-51, jointly designed and developed by Keppel’s Deepwater Technology Group (DTG) and Marine Structure Consultants (MSC).

Mr Choo Chiau Beng, Chairman and CEO of Keppel Offshore & Marine Limited, the parent company of Keppel FELS, said, “GSF and Keppel share a longstanding relationship which dates back to 1987. To date, Keppel FELS and GSF have co-operated and completed six new generation jackups that are still performing extremely well in the North Sea, Eastern Canada and South America.

“I am happy that we are now working on our first semi newbuild project together, and I am confident that the highly efficient DSS-51 rig will meet GSF’s charter commitment on time and within budget.”

Commenting on the demand for deepwater mobile drilling rigs, Mr Choo said, “The fundamentals for deepwater exploration and production are strong with consensus amongst operators, drillers and service providers that the market for exploration and production of hydrocarbons will be sustained over the next few years.”

Accordingly to ODS-Petrodata’s 12-monthly rolling forecast between February 2006 and January 2007, the demand for semisubmersibles is expected to rise from 141 to 167 units while the marketed supply remains inelastic from 152 to 153. Even as utilisation levels approach full capacity, global demand for the mobile offshore drilling units shows no sign of slowing down.

Said Mr Jon A. Marshall, President & CEO of GSF, “We are looking forward to working again with Keppel FELS on our newbuild semi. Keppel FELS has a track record of well designed and built rigs that have been delivered on schedule.

“In the last few years, GSF has sent a number of rigs to Keppel for repair and upgrading. They have been very responsive and professional. I am certain that the new semi will be a great addition to our fleet.”

The DSS-51 rig is maintenance-friendly with excellent safety features well suited for both exploration and development drilling as well as workover operations. With a dynamically positioned system (DPS 2), it can drill wells down to 10,000 m (30,000 ft) and operate in water depths of up to 3,048 m (10,000 ft) in environments such as offshore Brazil, the Gulf of Mexico, West Africa and South East Asia.

Keppel FELS is a wholly-owned subsidiary of Keppel Offshore & Marine through Keppel Corporation, a leader in offshore rigs, shiprepair and conversion and specialised shipbuilding. Keppel O&M’s near market, near customer strategy is bolstered by a global network of 17 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.

GlobalSantaFe owns or operates a modern, diversified fleet of 61 offshore drilling rigs. The company’s offshore rigs are equipped with many of the latest in drilling technologies and undergo strict maintenance schedules on a regular basis. The company continues to invest in extensive equipment upgrades to ensure the most advanced fleet available.

The transaction is not expected to have a material impact on the NTA or the earnings per Keppel Corporation share for FY2006.

For further information, please contact

Sarah Seah (Ms)
Deputy General Manager
Keppel Group Corporate Communications
Tel: (65) 6413 6420
Email: sarah.seah@kepcorp.com

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

Attachments:

Keppel FELS will build for GlobalSantaFe an ultra-deepwater semisubmersible rig designed by Keppel’s Deepwater Technology Group (DTG) and the Marine Structure Consultants (MSC). This DSS-51 is an enhancement of the successful DSS-20 rig, Maersk Explorer (above), built by Keppel FELS.