Sevan, Petrobras Finalize Contract for Newbuild Deepwater Rig

With reference to the announcement on June 2, 2008, Petrobras SA and a subsidiary of Sevan Drilling AS, have signed a firm drilling contract for a newbuild drilling unit intended for operations off the coast of Brazil, in water depths down to 2,400 meters.

This is the second deepwater drilling unit contracted to Petrobras, and the third deepwater drilling unit to be built, owned and operated by Sevan Drilling, as the company also signed a drilling contract with India's ONGC in June 2008.

The drilling contract will have a fixed term of six years with start-up by end-2011. Revenues which could be generated over the six-year period are approximately USD$975 million, including a bonus arrangement and
mobilization fee.

Sevan has awarded a letter of intent (LOI) to the Cosco Shipyard Group for a turnkey contract comprising the construction, equipment procurement and installation, and commissioning of the drilling unit. Cosco shall also provide yard financing.

Aker Kvaerner MH has been awarded a LOI for delivery of the drilling package. Also the delivery of other long lead equipment has been secured.

The newbuild drilling unit to Petrobras is based on Sevan's proprietary cylindrical Sevan 650 design, as is the case also for the two other Sevan drilling units. All three Sevan deepwater drilling units are built at the same shipyard and utilize the same drilling package, thus significantly reducing risks to schedule and cost.

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