Keppel's US$126 Million Newbuild Contract is Now Effective

Keppel FELS reports that its rig-building contract with the Skeie Group AS has come into effect on February 16, 2004.

The US$126 million contract, announced on January 20, 2004, also includes an option for an additional unit within the next 6 months.

Developed by Keppel FELS' sister company, Offshore Technology & Development, the rig will be an enhanced KFELS B class jackup, capable of operating in water depths of up to 350 feet and high pressure high temperature (HPHT) deep drilling of down to 35,000 ft.

Mr. Tong Chong Heong, Managing Director and Chief Operating Officer of Keppel Offshore & Marine Ltd said, "This jackup rig has been customized to the owner's specifications and marks another milestone in our design and engineering capability."

The rig is due for delivery in the second quarter of 2006.

A privately owned company, Skeie Group AS is primarily involved in investments relating to the offshore industry.

Keppel FELS is the world leader in jackup rigs, having built 60% of the world's fleet on order in the last decade. It is a wholly-owned subsidiary of Singapore-listed Keppel Corporation Limited, through Keppel Offshore & Marine Ltd.

The contract is not expected to have material impact on the net tangible assets and earnings per share of Keppel Corporation for the financial year ending December 31, 2004.