Abbot Wins New Contract for Sakhalin Island

Abbot Group's subsidiary, KCA Deutag, has been awarded a detailed design contract with Hyundai Heavy Industries (HHI) for the Sakhalin-1 Project in the Russian Far East.

The main contract for the drilling package fabrication has been awarded to HHI of South Korea, and KCA Deutag has subsequently secured the sub-contract for the detailed design of the drilling facilities. The design project will be executed in Houston, Texas, followed by construction support and commissioning at the Ulsan shipyard in South Korea.

The Sakhalin-1 Project encompasses three offshore oil and gas fields in the Sea of Okhotsk, offshore Sakhalin Island. The project is being developed in phases with first production from the Chayvo field scheduled to commence at the end of 2005. The project is being developed by a consortium of U.S., Russian, Japanese and Indian companies and is operated by Exxon Neftegas Limited, an ExxonMobil affiliate.

A modified concrete and steel structure formerly used by ExxonMobil off Alaska's North Slope, will be installed some 7 miles offshore Sakhalin Island in about 45 feet of water. It will support an existing living quarters, minimum production facilities, and a new drilling package designed for world class extended reach wells. Production will be moved by pipeline for further processing at a new onshore processing plant.

Alasdair Locke, Executive Chairman of Abbot, commented: 'This is a very interesting and strategically important project that will build on our current drilling operations contract offshore Sakhalin. We have targeted Sakhalin as an area of significant potential for our drilling business, which is very similar to the businesses we are growing in our other main international markets of the Caspian Sea, the Middle East, North and West Africa.'