Marine Log

July 12, 2006

SembCorp Marine expands rig building capabilities

Singapore's SembCorp Marine Ltd has signed two conditional sale and purchase agreements to expand and grow its rig building and offshore engineering business.

The first agreement, between the SembCorp Marine's wholly owned subsidiary, Sembawang Shipyard Pte Ltd and Sembawang Corporation Limited ("SCL") covers acquisition of SCL's entire equity interest in Sembawang Bethlehem Pte Ltd. SemBeth assets include 86 hectares of 22-year leasehold land, workshops, quays and docks located along Singapore's Admiralty Road East and Admiralty Road West.

The second sale and purchase agreement involves the signing of an agreement between SembCorp Marine and SembCorp Utilities Pte Ltd ("SCU") to acquire SCU's entire equity interest in SMOE Pte Ltd.

SemBeth was incorporated in May 1988 to take over the rig and shipbuilding activities of the Singapore subsidiary of Bethlehem Steel Corporation of the USA was a rig building yard operational in the 1970s to 1980s.

The acquisition of SemBeth and the 86 hectares of SemBeth land, workshops, quays and docks will effectively allow SembCorp Marine to own and reorganize the SemBeth land for optimal utilisation to expand and grow its rig building and offshore engineering business.

SMOE owns two fabrication facilities, one located within SemBeth land and the other within the Kabil Industrial Zone on the eastern shore of Batam Island, Indonesia comprising 30 hectares of fabrication facility and 275 metres waterfront land.

Acquisition of SMOE will strengthen SembCorp Marine Group's position in the offshore oil and gas sector, capitalizing on SMOE's fabrication facilities and deriving cost savings by capitalising on the strategic value of land and positive synergies between SMOE and the SembCorp Marine Group.

Mr Tan Kwi Kin, Group President and CEO of SembCorp Marine said "The acquisitions of SemBeth and SMOE would further enhance our capabilities and capacity to expand and grow our rig building and offshore engineering business. With the availability of the SemBeth land and SMOE's fabrication facilities in Singapore and Batam, we would be able to maximise our capacity to take on more rig building and offshore engineering projects. The timely acquisition of SMOE's topside capabilities will also position us to grow and expand our capabilities and capacity for the expected growth in the offshore production market."