Keppel FELS Kick-Starts 2005 with New Rig Order

Keppel FELS has secured a US$110 million contract to build a jackup rig for Petrovietnam Drilling & Well Services Company (PV Drilling).

Mr. Tong Chong Heong, Managing Director and Chief Operating Officer of Keppel O&M, shared, "We are honored to be the builder of choice for PV Drilling.

"Keppel FELS' relationship with PV Drilling's parent company, PetroVietnam, goes back some 20 years when we delivered Vietnam's first rig, Tam Dao, to Vietsovpetro in 1988.

"We are pleased to have secured this new contract after a long bidding period, the country's second newbuilding project. The job will also put us in a strong position to continue to participate in PV Drilling's newbuilding program as they expand their fleet.

"We look forward to building a successful partnership with PV Drilling, as well as strengthening Keppel's long-term relationship with PetroVietnam."

Vietnam Oil and Gas Corporation (PetroVietnam) is Vietnam's national oil company. The country is important to world energy markets because of its potential to become a regional oil and natural gas supplier. With over 600 million barrels of proven oil reserves, ongoing exploration has led to several oil and gas discoveries in recent years. The country has six operating oil fields of which Bach Ho (White Tiger), Rang Dong (Dawn), Hang Ngoc, and Dai Hung (Big Bear) are four of the largest.

PV Drilling's spokesperson said, "For PV Drilling's first newbuilding project, we selected Keppel FELS yard for its proven rig-building track record and reputation for reliability and quality."

The new jackup, a KFELS B class design customized to client's requirements, will be capable of operating in 90 meters water depth and drilling depth of 20,000 feet, with accommodation for 110 men.

Upon completion in the first quarter of 2007, it will be deployed offshore Vietnam.

With the new order, Keppel FELS will have successfully clinched six KFELS B class contracts since 2004. This also brings the number of KFELS B Class rigs in operation and under construction to 12 since its introduction in year 2000.

Keppel FELS is the world leader in the design and construction of jackup rigs, having built 60% of the world's fleet on order in the last decade. In 2004, the company managed to secure all rig projects and cash jobs it bid on tender, from both national and international drilling contractors.

Its parent company, Keppel O&M is a global leader in offshore rigs and ship conversion and repair as well as a specialized shipbuilder. Keppel O&M's 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 a provider of choice and a partner in solutions for the offshore and marine industry.

PV Drilling is a wholly-owned subsidiary of PetroVietnam. The former specializes in drilling, manpower provision, well services, tubular inspection and other services related to drilling activity.

Vietsovpetro is a Vietnam-Russia joint venture that carries out research, exploration and production of oil and gas on the Vietnam continental shelf. It also owns and operates the Tam Dao rig built by Keppel FELS in 1988.

The contract is not expected to have material impact on the net tangible assets and earnings per share of Keppel Corporation for the financial year 2005.