Oceaneering’s FPSO Awarded Long Term Contract

Oceaneering International, Inc. announced its United Kingdom subsidiary, Oceaneering International Services Limited, has been awarded a seven-year contract for its FPSO Ocean Producer for the Canuku Area of Block 3 offshore Angola.

Sonangol Pesquisa E Producao S.A.R.L. (Sonangol P&P) is commencing a phased development of the Canuku area on a fast track basis. First oil is expected in the third quarter of this year, less than six months after this project received development approval. Angola Drilling Company (ADC) has the service contract with Sonangol P&P to develop and produce the Canuku Area. Initially, there will be three production and one water injection wells. ADC is providing project management, reservoir evaluation, drilling and completion services and has contracted Oceaneering to provide the FPSO, umbilicals, specialty subsea hardware, and the management of the subsea tiebacks to the FPSO.

The Ocean Producer departed the Kiabo Field in Block 4, Angola in mid-May and is in Cape Town where it will undergo repair, life extension, and modifications as required for the new contract. At a net cost of approximately $14 million, the modifications will include an upgraded mooring system, the addition of water injection equipment, and preparation for the future addition of gas injection equipment. During the new seven-year contract, the Ocean Producer is expected to contribute net income equivalent to $0.12 to $0.15 earnings per share annually, beginning in the fourth quarter of 2001.