We have received final confirmation for one of the largest bare boat contracts ever awarded in the FPSO market. Aker Floating Production is enjoying high activity levels and a great deal of market interest in its vessels Aker Smart 2 and Aker Smart 3. We are pursuing interesting market opportunities, says Aker Floating Production President and CEO Svein Olsen. Aker Floating Production had a second-quarter 2007 operating profit before financial items, tax, depreciation, and amortization (EBITDA) of US $2.2 million, compared with US $1.9 million in the corresponding 2006 reporting period. In the second quarter of 2007, the Indian company Reliance Industries Limited entered into a contract for chartering an FPSO (Floating Production, Storage and Offloading) production vessel from Aker Floating Production. The bare boat contract value is approximately US $750 million, significantly above the letter of intent announced in the first quarter of 2007. The Reliance Industries field development project represents a commercial breakthrough for Aker Floating Production.
In addition, the parties will sign an operation and maintenance contract to run in parallel with the existing bare boat charter. Conversion of Aker Smart 1 for the Reliance Industries project is on schedule at the Jurong shipyard in Singapore. Production start-up is scheduled for the spring of 2008. Aker Floating Production's two other vessels, Aker Smart 2 and Aker Smart 3 are in service as storage vessels until February 2008 and January 2009, respectively. Plans are to convert the vessels into FPSOs once their charter periods end.
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