In line with the strategy of the Company to expand its leasing activities to offshore oil and gas production concepts beyond the current FPSOs, and to enter new geographical areas for its leasing operations, SBM Offshore has secured two contracts as follows:
Semi-Submersible Floating Production Unit for Thunder Hawk, Gulf of Mexico
A lease contract has been signed with Murphy Exploration & Production Company USA and it's co-producers Dominion Exploration & Production Inc., Hydro Gulf of Mexico, L.L.C and Marubeni Offshore Production (USA) Inc. for the provision of a new built semi-submersible floating production unit for installation in Mississippi Canyon (MC), Block 736 offshore Louisiana in the Gulf of Mexico and will further process production from MC 734.
The Thunder Hawk Facility, which will be based on Atlantia's DeepDraft Semi (TM) design, will be moored in 1,800 meters water depth and equipped to produce up to 60,000 barrels of oil and 70 million standard cubic feet of gas per day from the initially installed equipment and deck area. The unit will have the capability for further expansion to accommodate additional production from satellite discoveries or third party tie-backs. The produced oil and gas will be exported via steel catenary risers into existing pipelines.
The contract is based on a production handling agreement providing the Thunder Hawk partners firm capacity of the facility for an initial period of five years. Atlantia will supply the complete facility with a planned installation scheduled for late 2008.
Mobile Offshore Production Unit with Storage (MOPU Stor) for Yme, North Sea
A FEED (Front End Engineering Design) contract has been signed with Talisman Energy Norge AS, operator of the PL316 license offshore Norway, for a MOPU Stor, a production jack-up installed on a sub sea storage tank. The purpose of the FEED work is to adapt the patented design of SBM Offshore subsidiary GustoMSC, previously used in the Danish sector of the North Sea in the Siri field, towards a final investment decision and the submission, late 2006 or early 2007, of a PDO (Plan for Development and Operation) for the re-development of the Yme field. In view of the then prevailing low oil price environment the previous operator abandoned production from the Yme field in 2001.
In the event the PDO is granted, the parties intend to enter into a contract for the lease by Talisman of the MOPU Stor for an initial firm period of five years, with start of offshore oil production scheduled for autumn 2008.
Partners of Talisman in the PL316 license are Revus Energy ASA (20%) and Pertra ASA (10%).
Turnkey Supply Orders
Supply of DP Semi-Submersible Drilling Units
On July 3, 2006 the Company announced the receipt of three Letters of Intent from Brazilian drilling contractors for the supply of Dynamically Positioned Semi-Submersible Drilling Units. These LoI's were issued in the context of ongoing negotiations between the drilling contractors and Petrobras for the award of long term drilling contracts, starting in 2009. One of the drilling contractors discontinued its negotiations with Petrobras, whilst the two remaining secured their long term contracts with Petrobras and the related LoI's have been confirmed in signed supply contracts as follows:
A contract with Queiroz Galvao Perfuraçoes S.A. for the supply of a new built dynamically positioned drilling unit of the GustoMSC TDS 2000Plus design. The unit will be able to operate in water depths up to 2,400 meters and be capable of drilling up to 7,500 meters below the seabed. Delivery is scheduled for the first quarter 2009.
A contract with Odebrecht Drilling Services LLC for the supply of a new built TDS 2000Plus drilling unit. The unit will be able to operate in water depths up to 2,000 meters and be capable of drilling up to 7,500 meters below the seabed. Delivery is scheduled for the third quarter of 2009.
The fact that, in view of the third Letter of Intent, SBM Offshore has secured yard capacity for delivery of a further drilling unit in early 2010 has attracted the interest of several other drilling contractors and negotiations are currently ongoing to possibly conclude in the near future a third turnkey supply contract.
Provision of Design and Components for Drilling Units
GustoMSC has further received orders for the supply of basic design packages and components for:
One DSS38 type semi-submersible drilling rig to be built by KeppelFELS in Singapore for Queiroz Galvao Perfuraçoes S.A. Two jack-up multi purpose rigs to be built by Labroy Offshore at Batam Indonesia.
Supply of Process Modules
Gusto B.V. received an order from Siemens AG for the supply of two Process Modules for Shell's Gbaran Ubie onshore gas development project in Nigeria.
The cumulative Portfolio Value of the above orders is in excess of US $1.2 billion.
For the contract for the production semi-submersible in the Gulf of Mexico the above amount includes the non-discounted total of the fixed day rates and a conservative estimate of the revenues related to production throughput, payable over the initial five year period. For the MOPU Stor project in the North Sea only the value of the current FEED contract has been accounted for.
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