2001 Maritime
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May 11, 2001

Conoco, Alabama Shipyard and Samsung
in shuttle tanker alliance

Conoco's wholly owned affiliate, Seahorse Shuttling and Technology LLC, has formalized an alliance with Alabama Shipyard, Mobile, Ala., and Samsung Heavy Industries of Korea to develop a design and construction plan that could have double hulled, dynamically positioned, American-built shuttle tankers ready for service in 2004.

Seahorse was formed by Conoco to provide crude oil storage and tanker shuttling services for new oil discoveries made by Conoco and other companies in the deepwater Gulf of Mexico.

"Our previous successes with Samsung building the first generation of double-hulled tankers and our pacesetting ultra deepwater drillships are evidence of the companies' technological innovation," said Rick Oshlo, vice president and general manager of Conoco Supply and Trading. "We are pleased to add Alabama Shipbuilding to this long-standing relationship," he added.

Oshlo said Conoco remains confident that the Minerals Management Service (MMS) will approve the shuttling concept in the Gulf of Mexicoand the company is continuing its program to deploy shuttle tankers to the Gulf as soon as possible.

Conoco and Samsung have completed an extensive conceptual design for a new tanker classification, the Gulf of Mexico Maximum Cargo (GOMAX) shuttle tanker.

This double-hulled, dynamically positioned vessel will have a capacity of more than 550,000 barrels of crude oil, and will still comply with the 40-foot draft restrictions of most Gulf of Mexico ports.

Crude oil shuttling has the potential to significantly reduce the cost of crude oil transportation from deepwater Gulf of Mexico discoveries, making possible the economical development of smaller oil discoveries. Shuttle tankers also offer more flexibility for delivering domestic crude oil to various U.S. ports, thus enhancing the economics of marginal fields and further reducing U.S. dependence on foreign crude oil imports.

"This alliance brings together three key ingredients: Conoco's experience as a shuttle tanker operator, the eagerness of the Alabama Shipyard to build this new class of tanker and the world-class ship design capability of Samsung Heavy Industries," said Bob Lindsay, president of Seahorse.

"We believe this unique alliance of international companies can economically construct American-built shuttle tankers that exceed current safety and environmental regulations. These vessels will provide Seahorse a competitive advantage in moving crude oil from deepwater Gulf of Mexico discoveries to U.S. refineries."

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