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NEW SHIPYARD

March 19, 2010

Keppel O&M in new Azerbaijan
shipyard joint venture

Singapore's Keppel Offshore & Marine Limited is entering a joint venture to develop and manage a new 52-hectare shipbuilding and ship repair facility in Baku, Azerbaijan.


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The new SOCAR-Keppel Shipyard will be developed over a period of two to three years with an investment of US$386 million. The joint venture agreement will be signed with Keppel O&M taking a 10 percent share of the yard, the State Oil Company of Azerbaijan Republic (SOCAR) taking 65 percent and Azerbaijan Investment Company (AIC) taking the remaining 25 percent.

Keppel O&M will be responsible for the management and operation of the yard, and will have the option to acquire another 10 percent stake in the next three years.

The new yard is designed to undertake construction of a variety of vessels ranging from offshore support vessels to tankers, as well as ship repair and conversion.

The President of Azerbaijan, Ilham Aliyev, today broke ground for the new yard in the presence of Singapore's Minister for Foreign Affairs, Mr George Yeo.

Speakers at the ceremony included Mr. Rovnag Abdullayev, President of SOCAR, who noted that SOCAR and Keppel had come together 13 years ago to form the Caspian Shipyard Company in Baku.

Operated by Keppel O&M, the Caspian Shipyard Company is the first international rig construction, repair and conversion yard in the region. It has completed many world class projects including jack-up rigs, semisubmersibles, pipelay vessels, barges, and pipe rack structures.

"The new SOCAR-Keppel Shipyard is envisaged to be on par with the best shipbuilding facilities in the world," Mr. Abdullayev said. "I am confident that with Keppel's proven expertise and operational track record, we will continue to create new benchmarks for the oil and gas industry."

Strategically located along the East-West energy corridor of the Caspian Sea region, the new yard will helpi meet the growing needs of the local oil industry and will support the renewal of SOCAR's vessel fleet.

With a 1,630-meter waterfront, the yard, when completed, will be able to undertake 80 to 100 repairs and conversions a year and is planned to achieve an average annual steel throughput of 25,000 tons when operating at full capacity. When fully operational, it will create employment opportunities for some 2,000 people.


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