COSCO Secures Semisub Hull Construction Contract

COSCO Zhoushan Shipyard, a subsidiary of COSCO Shipyard Group, has signed a contract with Norwegian owner, Red Flag A.S, to build a semisubmersible rig hull, GM5000, valued at US $202 million (Approximate S$307 million).

GM5000 is a semisubmersible rig unit with a dynamic positioning system, accommodation and a ballasting system. It will be outfitted with conventional drilling equipment capable of drilling to 1500 meters and will be designed to operate and function in the North Sea including the Norwegian continental shelf.

GM5000 is a sister rig of GM4000, a well intervention semisubmersible ordered by Marine Accurate Well ASA (Maracc) from Cosco Zhoushan Shipyard at the beginning of this year. Red Flag A.S decided to use the basic GM4000 design concept after a period of observation on the construction of GM4000 at Zhoushan shipyard.

The project is scheduled to commence on June 30, 2007 and is targeted to be delivered by the shipyard before the end of 2009.

None of the directors or controlling shareholders of the Company has any interest, direct or indirect in the contract.

The contract is not expected to have a significant impact on the net tangible assets (NTA) and earnings per share (EPS) of the Company for the year ending December 31, 2007.

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