Tanjung Offshore to Build New AHTS

Tanjung Offshore Berhad's subsidiary, Tanjung Kapal Services Sdn. Bhd. has signed a shipbuilding contract with Boustead Naval Shipyard Sdn. Bhd. for the construction and commissioning of one anchor handling tug & supply vessel ("AHTS") for a total cost of approximately Ringgit Malaysia forty-one million (RM41,000,000.00).

The 60-meter AHTS is designed and equipped to perform anchor handling and moving of drilling rigs. It is also able to perform in the capacity of a safety vessel for offshore drilling and workover rigs on a twenty-four basis. The AHTS may also be used for fire fighting, provision of supply and transportation of equipment and cargo between offshore facilities and platforms.

The construction and commissioning of the AHTS is expected to be completed by the third quarter of 2008.

The construction of the AHTS will be part financed by internally generated funds and borrowings from financial institutions. The AHTS is expected to contribute positively to the future earnings and net assets of Tanjung. Notwithstanding this, the construction of the AHTS is not expected to have any material effects on the share capital and shareholding structure of Tanjung.