J. Ray McDermott Prepares for More Work in Azerbaijan

McDermott Caspian Contractors Inc., the Caspian operating arm of J. Ray McDermott, S.A., is preparing for new work in Azerbaijan following the recent announcement that it has signed new contracts with the Azerbaijan International Operating Company (AIOC) in Baku. The total value of the additional work is approximately US$ 300 million and will take approximately two and a half years to complete.

"We are very pleased to have been selected by AIOC, once again, for major contract awards," said Hafez Aghili, Vice President & General Manager, J. Ray McDermott - Middle East, India & Caspian operations. "These new awards show the confidence AIOC has in MCCI to perform work on large projects, and follow on from four major contracts for topsides fabrication and pipeline installation that we received for Phase 1 and Phase 2 developments back in 2001 and 2002."

The most recent contract, valued at approximately US$ 140 million, is for the fabrication of a 14,500-tonne integrated Drilling, Utilities and Quarters (DUQ) deck for the Phase 3 development of AIOC's Azeri, Chirag and deepwater portion of the Gunashli (ACG) field, in the Azerbaijan sector of the Caspian Sea. Fabrication work is scheduled to commence in January 2005 by Caspian Offshore Fabricators, LLC., the Joint Venture between MCCI and Baku Deep Water Jacket Factory (BDJF) and will be done primarily in Azerbaijan utilizing the infrastructure, equipment and labor of SOCAR's BDJF in Baku. Prefabrication work will take place at J. Ray's Jebel Ali yard in the United Arab Emirates.

The second contract is for offshore pipelay for the Phase 2 development of the West Azeri (WA) and East Azeri (EA) fields, valued at approximately US$ 160 million. MCCI will undertake engineering, project management and installation of 189km of 30" subsea oil export pipeline with two subsea Wye assemblies; and 65km of interfield pipelines varying in diameter from 6" to 22".

"The successful ongoing topsides decks fabrication and pipelines installation has provided MCCI with significant lessons learned, from which AIOC will definitely benefit on the Phase 2 and 3 projects," said Aghili.

As part of its previous topsides fabrication contracts with AIOC, MCCI performed incremental upgrades at BDJF and has established a full project infrastructure. MCCI has also implemented extensive safety and craft training programs for the local workforce consistent with its commitment to AIOC to perform the work safely while achieving maximum local Azerbaijanian content.