Teco Coating Services Wins Contract from Ocean Rig

TECO Coating Services ASA has secured another contract with Ocean Rig ASA. The contract is valued at approximately US $800,000 and is expected to startup in September 2006 and has a duration of approximately one year.

The contract calls for general paint maintenance on one of their rigs. Bjarne Eia, General Manager of TECO, comments that This is our second assignment for Ocean Rig. We have been working hard to get into the offshore market for quite some time. This is our third offshore maintenance contract and we are exited about the prospects for this kind of work for TECO.

TECO Coating Services ASA is the world s leading operator in the maintenance of ballast tanks onboard ships during voyage. By avoiding off-hire periods in which the ships are not earning any money, the ship owners save considerable amounts of money. Our experience is that shipyards normally are able to finish work on maximum 1,500 square meters of ballast tanks per day. With a daily rate for VLCC s of around US $50,000 up to US $100,000 the ship owners are quickly losing large amounts of income with the vessel off-hire in a yard.

Currently, TECO has around 28 vessels for up-grading and is consequently the largest operator in the market for maintenance of ballast tanks during voyage. The potential is, however, considerable, with 20-30,000 vessels world-wide. Frontline, together with NITC, Bergesen Woldwide Gas, Hoegh, Golar, J.J. Ugland, Teekay Marine Services and others are forming the fundament of the TECO customers. The company s greatest challenge is to secure the quality of the work performed in a period of strong expansion. The access to sufficient qualified specialists at competitive prices is a key factor in this regard. TECO is recruiting personnel with documented qualifications (certificates, etc.) from Poland, Bulgaria and Romania.

The market for the maintenance of ballast tanks is driven by international conventions, regulations and class requirements which are actively being followed up by all coastal states marine officials, oil companies, environmental organizations, insurance companies and classification societies, amongst others. This as a consequence of a series of environmental disasters in connection with tankers being wrecked through the 1970-, 1980- and 1990s.