Smedvig Secures Contract Extension for West Pelaut

Smedvig has been awarded a new contract extension by Brunei Shell Petroleum for the semisubmersible self-erecting tender rig West Pelaut. The production drilling assignment has a firm duration of five years, with annual renewal options for another five years. The contract value for the firm period is estimated to approximately US $100 million.

The new contract is scheduled to start in direct continuation of the current contract with Brunei Shell Petroleum, in April 2004. In connection with the new contract extension the unit will be upgraded with a new derrick set which will significantly increase drilling efficiency. The capital expenditure will be some US$ 20 million. West Pelaut has been employed by Brunei Shell Petroleum since delivery in 1994.

The average contract backlog for the Company's tender rigs, including the new contract for West Pelaut, is 30 months.

"The contract with Brunei Shell Petroleum is in line with our strategy to secure long-term contracts combined with upgrades that improve the operational efficiency and safety of our units", says CEO Kjell E Jacobsen.