Teekay Inks Extension Agreement with Petrobras for FPSO

Teekay has signed an agreement with Petrobras to extend the operating contract for Teekay's Cidade de Rio das Ostras Floating Production Storage and Offloading (Rio das Ostras FPSO) unit through 2018.

The Rio das Ostras FPSO, which has operated at the Siri reservoir on the Badejo field in Brazil's Campos Basin since 2008, will be re-deployed to the Aruana field in the Campos Basin following upgrades to prepare the unit for its new field. The upgrades are expected to be completed during the fourth quarter of 2010.

During the operation on the Badejo field, the Rio das Ostras FPSO served as a test facility for the production of heavy crude oil, specific to the region. The unit has a total crude oil storage capacity of approximately 214,000 barrels (bbls) and is capable of producing up to 15,000 bbls per day of heavy crude oil.

"The extension of the Rio das Ostras FPSO contract is a reflection of the unit's successful operation during its two-year deployment on the Badejo field, where it has performed with a high degree of reliability in the complex production of heavy oil with a record-low API gravity," said Bjorn Moller, Teekay Corporation's President and Chief Executive Officer. "We are pleased with this significant contract extension in the strategic Brazilian offshore sector, where Teekay also has a growing presence in the shuttle tanker trade."

Mr. Moller added, "This contract extension marks our third FPSO contract renewal during the past year and highlights the progress we have made towards our goal of further improving the profitability of Teekay's existing assets."