KCA Deutag Wins Caspian Sea Contract from BP

Abbot Group subsidiary, KCA Deutag has been awarded an interim arrangement by BP Exploration (Caspian Sea) Limited, on behalf of the Azerbaijan International Operating Company (AIOC) operated by BP, relating to the provision of platform drilling services for the development of the Azeri, Chirag and Deepwater Gunashli (ACG) Fields, in the Azerbaijan sector of the Caspian Sea.

This agreement, which is effective from 1 January 2003, is expected to lead to the award of a formal contract in the near future, with an estimated value of approximately US$75 million.

The contract requires KCA Deutag to carry out platform drilling services for a primary contract duration of 5 years from commencement of drilling operations on the Central Azeri platform scheduled for mid 2004. Earlier this year, in preparation for the start of operations, KCA Deutag began a comprehensive recruitment and training program for about 125 persons, of which about 70% will be Azerbaijan nationals.

The design for the Central Azeri drilling facilities has already been completed by KCA Deutag. It includes several major safety improvements including the provision of mechanized drill floor handling arrangements and advanced drilling control systems designed to protect personnel from potential safety hazards.

Alasdair Locke, Executive Chairman of Abbot Group plc, commented:

'We are extremely pleased to continue to expand upon our existing contracts with AIOC since it is justification for our long term commitment to Azerbaijan as a major business opportunity. This contract will complement our existing AIOC platform drilling services contract for the Chirag Early Oil Project, which commenced in 1997, and our other Azerbaijan engineering contracts currently being carried out in London and Paris for the Azeri and Shah Deniz Field Developments.

This contract confirms KCA Deutag as being a major international drilling contractor for both onshore and offshore exploration and field development projects.'

AIOC announced project sanction for the Central Azeri (Phase 1) development of the Azeri, Chirag and Deepwater portion of the Gunashli Field (ACG) in August 2002 at a cost of US$3.4 billion. ACG Participating Interests are: BP (operator - 34.1%), SOCAR (10.0%), Unocal (10.3%), LUKoil (10.0%), Statoil (8.6%), ExxonMobil (8.0%), TPAO (6.8%), Devon (5.6%), Itochu (3.9%), Delta Hess (2.7%).