Statoil Extends Bluewater's Contract for FPSO Munin

Lufeng Development Company ANS, a company within the Bluewater group of companies, has been awarded a contract extension by Statoil (Orient) Inc. for production of hydrocarbons from the Lufeng field in the South China Sea. The contract provides for the FPSO Munin to return to the Lufeng Field early in the 2nd quarter of 2005 for a minimum fixed period of three years.

The FPSO Munin is currently operating on the Lufeng field under arrangements that are intended to extend until Summer 2004. After undergoing minor modifications and maintenance, the FPSO Munin is scheduled to produce on the Xijiang field for ConocoPhillips China Inc. for a period of five to six months as a temporary replacement for the Nanhai Kai Tuo FPSO. The FPSO Munin will utilise its full Dynamic Positioning (DP) capability for mooring and will re-use the Xijiang field's existing fluid transfer equipment.

During the temporary relocation of the FPSO Munin, sidetrack drilling on three existing wells will take place on the Lufeng field. This new drilling technology facilitates production of new pockets of oil, which should serve to extend Lufeng field's life.

"These projects clearly demonstrate the economic advantage, flexibility and portability of FPSOs for offshore development utilising nearly identical equipment from one vessel to another. The redeployment of the Munin will allow both fields to continue commercial activities with very little interruption." stated Hugo Heerema, President of Bluewater Energy Services B.V.