Sevan Underscores FPSO Updates, Plans to Drill for Petrobras

Sevan Marine ASA has issued the following update on its projects and cotract activities.

FPSO projects

The commissioning activities continue on the FPSO Sevan Hummingbird, which has been installed on Venture's Chestnut field in the central North Sea. Good progress has been made and the problems related to the ballast piping reported on June 27 have been rectified. Sevan does not expect any material cost impact due to the extended commissioning period. First oil is expected during third quarter 2008.

The FPSO Sevan Voyageur is currently undergoing commissioning activities at the Keppel Verolme shipyard in Rotterdam ahead of its installation on Oilexco's Shelley field in the central North Sea. The ballast piping has
been tested and accepted by DNV, so the Company does not expect to have the same problems as on the FPSO Sevan Hummingbird. Commissioning is otherwise proceeding according to schedule and budget and testing of the main equipment and systems is mostly completed. First oil is planned for the fourth quarter of 2008.

The FPSO Sevan Piranema continues its good performance for Petrobras with a production uptime of 100% in July and 99.7% in June. A second well was successfully put on stream last month. The uptime during Sevan
Piranema's first nine months of operations exceeds 99%.

The work during the FEED phase for the Goliat FPSO is proceeding according to schedule. The Sevan hull has particular advantages in harsh and arctic environments due to its cylindrical shape and ability to be powered with electricity from shore, enabling a high uptime and reducing CO2 emissions.

Drilling projects

Petrobras has requested that the deep water drilling unit Sevan Driller is to be installed offshore Brazil for its first drilling program, instead of US Gulf of Mexico, as initially agreed. The preliminary drilling schedule forecasts exploratory wells to be drilled in Santos basin pre-salt cluster in which Tupi field is located. The drilling unit will be equipped for initial operations in 2,400 meters water depth instead of 1,500 meters as previously agreed. The agreed start up date for the drilling program is mid-2009. Petrobras will cover the extra costs related to the change of location and specifications.

The construction of the Sevan Driller is otherwise proceeding according to schedule and budget at Cosco's Nantong Shipyard in China. The production and delivery of the drilling package by Aker Kvaerner MH are proceeding according to plan. The drill floor which has been produced at Nymo's shipyard in Norway under Aker Kvaerner MHs scope of work, was shipped off for installation in China last week, 4 weeks ahead of

Sevan has awarded letter of intents (LOIs) to Cosco for turnkey contracts comprising construction, equipment procurement and installation, and commissioning of the two new deepwater drilling units to be delivered to ONGC and Petrobras, end-2010 and end-2011, respectively. Under the contracts, Cosco shall also provide yard financing. Aker Kvaerner MH has been awarded an LOI for delivery of the drilling package to both rigs. In total, these agreements secures that all three Sevan drilling units are built at the same shipyard and utilizing the same drilling package, with a significant reduction of risks to schedule and cost. Also the delivery of other long lead equipment has been secured.

As previously announced, the capital required for the drilling projects will be raised directly in Sevan Drilling AS. Sevan will finance the debt portion of the construction of the two new drilling rigs for ONGC and Petrobras in the bank market and via yard financing. The Board is evaluating various alternatives and models for the development of its drilling activities, including a separate listing of Sevan Drilling.

Contract activities

Sevan sees a strong market outlook for the business areas in which the Company operates. The Company is in the final stages of negotiations with oil companies for the provision of one or more Sevan FPSOs. Sevan
is also seeing several opportunities on the drilling side, as well as for the other business areas.


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