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News Release

May 10, 2001
Category: 2001
Jurong Shipyard secured a US$80 million FPSO conversion project

SembCorp Marine Ltd announces that its wholly-owned subsidiary, Jurong Shipyard Pte Ltd (JSPL), will be investing S$16 million in newly formed joint-venture company, Mauà Jurong S.A. in Rio de Janeiro, Brazil. JSPL will take a 70 per cent share in Mauà Jurong while the remaining 30 per cent will be held by its joint venture partner, the Mauà Group.


JSPL will be using its internal funds to pay for this investment which is not expected to have a material impact on SembCorp Marine's earnings and net tangible assets per share.

Mauà Jurong's business is in the conversion and construction of floating production and drilling units for deep-water oil and gas exploration and production. The company has the exclusive use of a shipyard and its ancillary facilities owned by Companhia Comercio e Navegcao for a period of 28 years. This yard and its facilities are located in Ponta d'Areia, Niteroi in the State of Rio de Janeiro. The Chairman of Mauà Jurong is Mr Omar Peres, a well-known man in the marine fraternity in Brazil while the CEO is Mr Chew Yam Poey who was previously the Executive Director of JSPL.

Said Mr Heng Chiang Gnee, deputy president of SembCorp Marine: "This investment is part of our growth strategy to create a network of strategically located yards in Singapore, Brazil, China and the Middle East. It will position SembCorp Marine closer to the offshore and conversion markets in the Gulf of Mexico and West Africa, henceforth allowing us to carry out our ship conversion, offshore and repair works for customers in these markets."

Presently the joint-venture company is negotiating with Kellogg Brown & Root for the fabrication of process topside modules for the Barracuda and Caratinga fields, offshore Brazil, where Kellogg Brown & Root is the main contractor to Petrobras, the Brazilian state oil company. This project is adjunct to the Barracuda P-43 FPSO conversion project that has been recently awarded by Kellogg Brown & Root Inc. of USA to JSPL.

The US$80 million FPSO Conversion Project

The P-43 project which involves the conversion of the 270,000 dwt VLCC Stena Continent to a floating production, storage and offloading (FPSO) platform for the deep water Barracuda oil field in the Campos Basin offshore Brazil is worth some US$80 million and is presently under execution in JSPL. The tanker, renamed P-43 will have the capacity to produce 150,000 barrels per day of oil plus gas compression capacity of 6 million m3/d. It will be equipped with water injection capacity of 40,000 m3/d and can accommodate 100 personnel offshore. The P-43 will be spread-moored in water depth of 800 metres using a recently developed Petrobras-patented mooring system. When completed in the third quarter of 2002, the converted vessel will be towed to Brazil where the process topside modules' integration and commissioning works will commence.

This contract is the latest in a series of oil and gas floating facilities projects undertaken by Jurong Shipyard for Petrobras. The securing of this project is significant as it inadvertently places Jurong Shipyard as the premier yard for deep water offshore oil and gas floating construction projects. Having recently completed three major conversion projects - the FPSO Petrobras 37, FSO Petrobras 38 and FPU Petrobras 40, Jurong Shipyard is familiar with Petrobras' specifications and standards.

Petrobras is the Brazilian-state owned company responsible for the oil and gas exploration and production and refinery in Brazil. It is also recognised as the world's pioneer in deep water oil and gas exploration and production.

For media and investor enquiries, please contact:

Ms Judy Han
Vice President
Investor Relations & Communications
Tel : (65) 6262 7203
Fax : (65) 6261 0738
E-mail: judy@jspl.com.sg

Submitted by Lee Cheng, Company Secretary on 18/4/2001 to SGX

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