Built in 1976, the Rig is equipped with legs of 127.20 meters long with a maximum drilling depth of 6,000 meters. According to the agreement, Yu Song will be transported to Dalian City in China at the end of November 2003. Upon completion of the preliminary renovation at the Dalian shipyard, the Rig will be engaged in certain exploratory drilling activities in the Bohai Bay area. Subsequent to these exploratory drilling activities, the Rig will be sent to the shipyard again for upgrading. In order to support drilling activities offshore China, KS Tech has agreed to renovate and upgrade the Rig with a cantilever unit before and during the charter. The upgraded Rig will continue its service to COSL for the remainder of the contract term. The term of the charter contract is eight years, including the time spent on renovation and upgrading of the Rig. The renovation and upgrading will be financed by KS Tech, and the Company will not pay any rent when the Rig is subject to such renovation and upgrading.
Mr. Jin Xiaojian, Executive Vice President of COSL, and Mr. Tan Kim Sang, Chairman of KS Tech, signed the charter contract on behalf of the contracting parties. Mr. Li Wen-xian, Executive Director and Executive Vice President, commented, "The dry-lease of Yu Song will enhance the capabilities of our drilling rigs in our Bohai Bay E&P activities. COSL also welcomes this additional opportunity for overseas cooperation." Listed on the Singapore Stock Exchange, KS Tech is engaged in oilfield services related businesses.
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