BW Offshore to Provide FPSO for Petrobras' Chinook & Cascade Fields

BW Offshore Ltd has been selected by Petrobras America Inc. for the conversion, installation and operation of an FPSO at the Chinook and Cascade fields in the Gulf of Mexico in Walker Ridge Block 469 and Walker Ridge Block 206, respectively. The final agreement is subject to the board approval of Petrobras and approval by the fields' partners, to be confirmed before October 5, 2007.

The contract is for a total of up to 8 years including optional periods of up to 3 years after the end of the first 5 fixed years. The contract has a nominal value of US $740 million and will generate an annual EBITDA contribution of about US $80 million in the fixed period and US $70 million in the optional periods.

The project will also include the delivery and installation of an APL disconnectable Submerged Turret Production Buoy (STP) including fluid swivel and the appurtenant mooring system.

The contract will strengthen BW Offshore's position as the leading contractor of FPSOs to the Gulf of Mexico. The FPSO will be installed on the Chinook Cascade fields in the beginning of 2010. Production will commence in the first quarter of 2010. The FPSO will have a storage capacity of about 600,000 barrels of oil, a process capacity of 80,000 bopd and gas export facilities of 16 mmscfd. The FPSO will be installed on the field with a water depth of 2,600 meters, probably the deepest water depth on which an FPSO has ever been installed. BW Offshore's subsidiary, APL will deliver a complete STP buoy and mooring system to the oil field. The APL STP technology is the world's leading disconnectable turret system with an unparalleled track record of more than 1,500 disconnect/connect operations, enabling the FPSO to disconnect from its moorings and seek sheltered waters in a hurricane situation with minimum disruption to operations. This will be the deepest application to date for the STP system and the first APL turret and swivel delivery to a Petrobras operated field.

Svein Moxnes Harfjeld, CEO of BW Offshore comments: "It is one of BW Offshore's goals to be the leading contractor of FPSOs with APL's disconnectable STP system in the US Gulf of Mexico. Furthermore, as part of BW Offshore's strategy to work with leading National Oil Companies, it is a pleasure to secure our first FPSO contract with Petrobras, one of the world's largest clients for FPSOs. We are proud of the confidence Petrobras has put in us to deliver the first FPSO to the US GoM. In June this year we delivered the first FPSO ever in the GoM to the Mexican State owned oil company, Pemex. It is also of great importance installing an FPSO on an oil field located in waters this deep, demonstrating that FPSO's are a preferred production solution in the development of ultra deepwater oil fields."

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