Keppel to Undertake Conversion of World's Largest Turret

Keppel Shipyard Ltd has entered into an agreement with Charter Development Limited Liability Company (CDC), a special purpose company of ABN Amro Bank's Brazilian unit, for the hull conversion of a Floating Production Unit (FPU) for US$174 million.

Work includes marine conversion as well as the fabrication and integration of the internal turret on the 322, 446 dwt tanker, the VLCC Settebello. When completed, the turret, with 75 risers, will be the largest turret ever fabricated and installed in the world. To be named PETROBRAS 53 (P-53), the production unit will be completed in end 2006.

The facility will then be towed to a CDC topside contractor yard in Brazil for installation and integration of the topside modules.

Petrobras SA will then charter the P-53 from CDC for the Marlim Leste field in the Campos Basin.

To be installed at 1,080 meters water depth, P-53's capacity will include processing up to 180,000 bopd (barrels of oil per day), a gas compression capability of 6 million cubic meter of per day and a water injection capability of 39,0000 cubic meter per day.

Mr. Nelson Yeo, Executive Director of Keppel Shipyard, a member of the Keppel Offshore & Marine Ltd (Keppel O&M), said, "This contract is a reflection of Petrobras' confidence in us.

"Having successfully completed 51 FPSO and FSO conversion projects to date, we have the expertise to offer our customers high quality products and value-added services."

Keppel O&M has undertaken several significant offshore projects, directly and indirectly, for Petrobras. These projects account for more than 600,000 bopd or a third of Petrobras' current oil production. Its latest completion, the successful conversion and redelivery of the FPSO P-48 by Keppel FELS Brasil, formerly FELS Setal, earlier this year has raised Petrobras' average daily production to 1,819,000 bopd.

Currently, the group is building Petrobras' P-51 and P-52 production platforms through a consortium comprising Keppel FELS Brasil, Keppel FELS and Technip Coflexip.

"Keppel is pleased to be given yet another opportunity to contribute to the development of Brazil's offshore oil and gas industry," added Mr. Yeo.

Petrobras, the national oil company of Brazil, engages in the exploration, production and distribution of the country's oil and gas resources. As of December 2004, Brazil has proven oil and gas reserves of more than 11.82 billion barrels of oil equivalent, making it the second largest in South America, after Venezuela, in proven oil reserves.

A wholly owned subsidiary of Singapore-based Keppel Corporation Ltd, Keppel O&M is a global leader in offshore rigs, ship conversion and repair and specialized shipbuilding.

Its near market, near customer strategy is bolstered by its wide global network of shipyards 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 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.


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