Scomi Engineering Lands OCTG Contract from Saudi Aramco

Scomi Engineering Bhd (formerly known as Bell & Order Berhad) has received another major order from Saudi Aramco for the supply of Oil Country Tubular Goods ("OCTG"). The order was awarded to Scomi Engineering's Singapore machine shop unit, OMS Oilfield Services Pte. Ltd for RM80 million.

This order is the single largest order received to-date since OMS penetrated the market in 2003. The expected contribution to Scomi Engineering's turnover is approximately RM80 million, which will be realized in the fourth quarter 2006 and the first quarter 2007. The contract value is more than doubled the previous contract awarded by Saudi Aramco in March this year. With this new contract, the total value of all contracts awarded by Saudi Aramco to OMS for this year has increased to approximately RM115 million.

"We are very pleased with the excellent progress we have made with Saudi Aramco. This is quite unexpected because we received the same order from Saudi Aramco in March. It is a testimony of the quality of our products and our ability to deliver as per their requirement." said Hilmy Zaini, Senior Vice President of Scomi Engineering.

This order, similar to the previous order, is for the supply of large diameter casing pipes and connectors, equipped with our proprietary JV-LW connectors. The order will be supplied in lengths of between 38 feet to 42 feet each. The order is targeted for delivery within the fourth quarter 2006 and the first quarter 2007.

This is the fifth straight successful orders for this material from Saudi Aramco since OMS penetrated the market a few years ago.

"We are expanding the manufacturing capacities of our Singapore machine shop and we are confident of meeting the delivery of this order to our client." continued Hilmy Zaini.

The machine shops unit which has 7 facilities in 6 countries continues to remain the highest contributor to Scomi Engineering's businesses, contributing 73% to its turnover for the financial year 2005. The machine shops unit is also embarking on an expansion program for its facilities. It plans for an increase in size of facility as well as enhancing its production capacity with an increase in machinery and equipment. This expansion plan will initially focus on its Singapore, Labuan and Brunei machine shops.

"With the ongoing business relationships with Saudi Aramco, we are also currently looking at possibilities of setting up a facility in the country." ended Hilmy Zaini.

Scomi Engineering continues to target the Middle East and Asia as its key markets. With its global expansion plans, Scomi Engineering is reviewing the feasibility of expanding its machine shop operations into Sakhalin Island, Tanggu Island in Irian Jaya and Saudi Arabia.

Scomi Engineering, as an energy and logistics engineering company, has business units in energy engineering comprising of machine shop services for Oil Country Tubular Goods; logistics engineering comprising of design and fabrication of special purpose vehicles, rail and defense, and fleet management services.