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Offshore

Offshore staff

(Brazil)- The company's fully owned subsidiary Atlantia Offshore Ltd. recently received 3 letters of intent from several Brazilian drilling contractors in the wake of major drilling contracts recently awarded by Petrobras for their deep offshore development plans.

Under these LOI's, Atlantia would provide several newbuilt, dynamically-positioned drilling units on a lumpsum turnkey basis.

The units will be built according to the GustoMSC TDS2000 design, already proven through existing drilling rigs operating worldwide. Depending on the client's need, each unit will be able to operate in water depths up to either 2,000 or 2,400 m. Each unit will also be capable of drilling up to 7,500 m below the seabed. The units will reportedly feature state of the art drilling equipment and dynamically positioning systems.

Each unit represents a portfolio value of around $370 million for SBM's turnkey sales segment. The contracts will be awarded following successful negotiation of the terms and conditions with the respective clients, which will take place during the coming weeks.

The delivery times of the units will range from 30 to 42 months from contract award.

In other news, SBM Offshore has completed the sale of two group companies that respectively own and operate the Roncador (Brasil) FPSO to Malaysian International Shipping Company Sdn Bhd (MISC). The FPSO is currently on a long term charter to Petrobras. SBM reports that the transaction represents a sale revenue of $103.7 million, and will generate a profit in excess of $10 million.

07/06/2006