Shell Awards $150 Million Pan-European Maintenance Contract

Shell U.K. Limited on behalf of itself, Nederlandse Aardolie Maatschappij B.V., Norske Shell and Shell E&P Ireland Limited (Shell) has awarded a three-year fixed term contract to UK-based Subsea 7 BV's UK branch for the provision of routine underwater inspection for Shell operated sub sea infrastructure in the North Sea. The three year contract, with a further two one-year options, is worth in excess of $150 million ($50m per annum).

The contract is the first major pan-European contract for Shell's new Exploration & Production organization in Europe and one of the largest in the North Sea. A substantial part of Shell's oil and gas production in the Northern, Central and Southern UK sectors of the North Sea as well as the offshore sectors of Norway, The Netherlands and Ireland comes from sub sea wells.

Tom Botts, Chief Executive Officer for Shell Exploration & Production in Europe, said: "This is the first pan-European contract awarded by Shell following the reorganization of the eight European Exploration & Production businesses in the Royal Dutch/Shell Group of Companies into one single organization, EP Europe. It is an excellent example of how this new organization creates opportunities for contractors to leverage skills and services on a cross border scale across the North Sea, while creating faster implementation, increased efficiencies and a common high standard for safety and working practices in Shell's North Sea operations."

Subsea 7 will be the primary contractor responsible for the inspection, repair and maintenance of Shell's European operated sub sea oil and gas related infrastructure. The contract scope includes inspection, repair and maintenance of sub sea infrastructure together with pipeline inspection activities. The operations will involve air and saturation diving as well as remotely operated vehicle and survey services.

The annual volume of work to be completed under this contract is anticipated to be in the region of 350 to 450 vessel days within the territorial waters and continental shelves of the UK, Netherlands, Norway and Ireland.

Robin Davies, Subsea 7's UK Vice President said: "Winning this prestigious award for Europe-wide utilisation of our services is extremely good news for Subsea 7 and will provide excellent continuity of work for our personnel and vessels. Our success is based on our long and successful relationship with Shell and their appreciation of our past safety record, capability and flexibility. We are looking forward to continuing to provide a comprehensive and integrated service to Shell."