Keppel Wins US$150 Million Kazakhstan Contract

Keppel Kazakhstan LLP (Keppel Kazakhstan), a unit of Keppel Corporation Limited through Keppel Offshore & Marine Ltd (Keppel O&M), has secured a contract estimated at US$150 million from Agip Kazakhstan North Caspian Operating Company N.V. (Agip KCO).

The contract is to fabricate pipe racks and build four barges. Upon completion, they will support the first phase development of the Kashagan oil field.

By far the world largest oil discovery in 30 years, the Kashagan field is expected to be developed over the next 16 years at approximately US$29 billion, and could yield up to 13 billion barrels of oil.

Mr. Tong Chong Heong, Managing Director & Chief Operating Officer of Keppel O&M, said, "This contract in the Caspian Sea reflects the success of our near-market, near-customer strategy in strengthening our presence in Central Asia.

"Keppel Kazakhstan will be able to tap into the expertise and resources available in the Keppel Offshore & Marine Group, to deliver projects on time and within budget."

Mr. Bill Kee, Chief Executive Officer of Keppel Kazakhstan, said, "The contract signifies the start of a pioneer industry in Kazakhstan, creating employment and providing training opportunities for the Kazakhs.

"This is only the beginning of Keppel Kazakhstan's involvement in Kashagan's development program. The contract will allow us to further develop our facility in line with project requirements and enhance our services for our customers."

Keppel Kazakhstan complements its sister yard, Caspian Shipyard Company (CSC) in strengthening Keppel O&M's presence in the Caspian Sea.

Keppel Kazakhstan is located in the seaport city of Aktau on the northeastern part of the Caspian Sea. It was set up in April 2003 to participate in and contribute to the emerging offshore oil and gas industry in the Kazakh Sector of the Caspian Sea.

The yard's principal activities include the design, construction, conversion and repair of offshore drilling units and structures, specialized vessels such as tugs and supply boats, and the provision of offshore supply and logistics base.

Keppel O&M, a wholly-owned subsidiary of Keppel Corporation Limited, is a global leader in offshore rigs and ship conversion and repair as well as a specialized shipbuilder. Its 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. Agip KCO is involved in hydrocarbon exploration in the North Caspian Sea off the coast of the Republic of Kazakhstan. Partners in Agip KCO include Agip, ExxonMobil, TotalFinaElf, Philip Petroleum, Shell, Inpex and Kazmunaygaz.

The contract secured is not expected to have any material impact on the net tangible assets and earnings per share of Keppel Corporation Limited for the financial year 2005.