Teekay Seals FPSO Deal for Tiro, Sidon Fields

Teekay has signed a new fixed-rate contract with Petrobras to provide a floating production storage and offloading (FPSO) unit for the Tiro and Sidon fields located in the Santos Basin offshore Brazil.

The contract with Petrobras will be serviced by a new converted FPSO unit, to be named the Petrojarl Cidade de Itajai, which is currently under conversion from an existing Aframax tanker at the Sembcorp Marine's Jurong Shipyard in Singapore. The vessel, which was partially converted prior to the Company's project bid, is expected to be completed for an estimated total cost of approximately $370 million. The new FPSO is scheduled to deliver in the second quarter of 2012 when it will commence operations under a nine-year firm period time-charter contract to Petrobras, with six additional one-year extension options.

"The Tiro and Sidon FPSO contract award represents another significant milestone for Teekay's offshore business and reflects the Company's growing presence in the opportunity-rich Brazil offshore market," commented Bjorn Moller, President and Chief Executive Officer of Teekay Corporation. "The Petrojarl Cidade de Itajai will be Teekay's second FPSO unit in Brazil and compliments the existing Cidade de Rio das Ostras FPSO which has been successfully operating in Brazil since 2008. Mr. Moller added, "Teekay's strong operational track record in FPSOs and our ability to source a partially converted Aframax tanker at a competitive price were key factors in Teekay's successful bid. We were able to provide Petrobras with a cost-effective solution that met their project specifications and timelines, which also providing Teekay with an attractive investment return."