Keppel Wins Contract to Upgrade Ocean Endeavor

Keppel FELS has secured a contract from Diamond Offshore to upgrade semisubmersible rig Ocean Endeavor for US$85 million.

Completion of the upgrade is scheduled for fourth quarter 2006.

Ocean Endeavor will be capable of drilling down to 35,000 feet and be fully outfitted for 8,000 feet moored operations, with design capabilities to operate in up to 10,000 feet of water. In addition, the rig will have increased crew quarters to accommodate up to 140 personnel, over 6,000 tons of operating variable deck load and increased usable deck space.

Mr. Larry Dickerson, President & COO of Diamond Offshore, said, "Keppel FELS comes with a proven track record of consistently delivering complicated upgrades on time and on budget.

"We chose their yard because of the expertise and experience they demonstrated in the previous upgrades of our Victory-class semisubmersibles Ocean Baroness and Ocean Rover.

"We are pleased to once again be embarking with them on a major rig upgrade."

Mr. Tong Chong Heong, Managing Director & Chief Operating Officer of Keppel O&M, shared, "We are happy to be able to service Diamond Offshore's fleet of rigs.

"Diamond's rigs are sent regularly to our yards around the world, including Singapore, USA and Brazil, for maintenance, repair and upgrading. We also perform onsite servicing for them.

"Diamond and Keppel project teams work closely on all projects, from the initial planning to final execution stages. Such close partnership has helped to produce synergy and understanding, as well as some of Keppel's finest works."

In recent years, Diamond rigs upgraded or repaired at Keppel O&M yards include Ocean Baroness, Ocean Rover, Ocean America, Ocean Winner, Ocean Sovereign, Ocean Heritage, Ocean Tower, Ocean Warwick, Ocean Spartan and Ocean Spar.

Ocean Endeavor is expected to arrive at Keppel FELS in May 2005 for the upgrading.

When completed, it will expand Diamond Offshore's fifth-generation semisubmersible fleet to four units and be the most capable among the company's upgraded Victory-class units.

The modernized rig is expected to serve exploration and development needs in deepwater regions such as the Gulf of Mexico, South East Asia and Africa.

Keppel FELS is the world leader in the design and construction of jackup rigs, having built more than 60% of the world's fleet on order in the last decade.

Its parent company, Keppel O&M is a global leader in offshore rigs and ship conversion and repair as well as a specialized shipbuilder. Keppel O&M's near market, near customer strategy is bolstered by a global network of 16 yards in the Asia Pacific, Gulf of Mexico, Brazil, the Caspian Sea, Middle East and the North Sea regions. Integrating the experience and expertise of its yards worldwide, the group aims to be a provider of choice and a partner in solutions for the offshore and marine industry.

Diamond Offshore provides contract drilling services to the energy industry around the globe and is a leader in deep water drilling. The Company's fleet of 45 offshore drilling rigs consists of 30 semisubmersibles, 14 jack-ups and one drillship.

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 2005.