Subsea 7 Wins Installation Contract in Brazil

Subsea 7 has been awarded a contract by Petrobras to install flexible and steel lines offshore Brazil. The two year contract valued at USD 110 million will involve two vessels from the Subsea 7 fleet, Lochnagar on virtually a continuous basis for flexible installation, and Skandi Navica on shorter campaigns for the steel line installation. The contract contains options to extend the duration for up to five years. Major modifications will be made to the Lochnagar, upgrading the top tension capability to in excess of 250 tons to enable the vessel to lay flexible lines in up to 2,000 meters.

This upgrade, which will make the Lochnagar one of the world`s most capable flexilay vessels, will be carried out in a Brazilian shipyard soon to be nominated.

It is anticipated that during the contract period the vessels will install over 300 km of steel and flexible lines primarily in deep water Campos basin. The project will commence in third quarter 2005.

The Lochnagar work is on a dayrate basis, while the Skandi Navica campaigns are on a lump sum basis.

All pipes and certain other materials are free issued by Petrobras.