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April 7, 2009

Jurong to complete first SeaDragon semi

Jurong Shipyard, a wholly-owned subsidiary of Sembcorp Marine, yesterday said that it had secured a rig order from Gander Drilling Limited, a wholly-owned subsidiary of SeaDragon Offshore Limited, to complete and deliver a Moss Maritime Full Dynamically Positioned (DP-3) Semi-submersible drilling unit with an option for an additional unit.

Jurong's contract value for the first unit is US$247.3 million.

The rig will be based on the first of two bare-deck hulls built for SeaDragon at Russia's Vyborg Shipyard.

When SeaDragon first launched the two-rig project, the plan was to complete the rigs on Teeside U.K. and was widely ballyhooed as bringing maritime industry back to that region.

Last month, though, SeaDragon backed out of its deal with the Tees Alliance Group (TAG) of companies, based at Billingham's Haverton Hill shipyard, saying that "after exhaustive attempts to raise equity and long-term debt funding" it had "concluded that its ability to secure the necessary funding ... can only be achieved if the risk associated with building these assets is minimized" and that this required "a contract with a shipyard with previous experience of these technically complex large-scale assets and the ability to put up requisite performance guarantees."

Today, Teeside Alliance Group told local media it was confident of securing a contract of a similar size to the SeaDragon project and that had been in talks with a Saudi Arabian oil company for some time. It now expects a contract to build a drilling rig for use in the Persian Gulf to be signed "within a few weeks."

Meantime, the six-column bare-deck hull of the first SeaDragon rig is expected to arrive at Jurong Shipyard this month. On arrival, Jurong will proceed with the construction, outfitting, furnishing, equipping, testing and completion of the baredeck hull.

Scheduled for delivery by end 2010, the ultra-deepwater harsh-environment semi-submersible rig has already secured a five-year charter contract with Pemex.

This new rig will be built for a water depth rating of 10,000 feet and maximum drilling depth of 30,000 feet. The rig's ability to operate even in harsh environment gives it the flexibility to operate worldwide.

Mr. Don Lee, Jurong Shipyard's Senior General Manager of Offshore Division, said: "These are trying times for the industry but we are pleased that SeaDragon has chosen Jurong as the preferred shipyard based on our excellent track record in this segment. This order shows that there are selective market demands buoyed by increasingly strong fundamentals. We must thank SeaDragon for their trust and confidence in Jurong's ability to deliver fully functional and ready-to-drill semisubmersible drilling units."

"This Moss Maritime Ultra-Deepwater design provides us with another industry solution to the oil companies when it comes to rig selection besides the Friede & Goldman EXD Design that Jurong has successfully delivered so far. We are very proud to be part of this equation and have no doubt the unit when delivered will be the first of its class."

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