Published September 18, 2008

SembMarine unit wins US$229m Sinopec contract

Chinese firm's first rig to be built outside China set for delivery in 2011

By VINCENT WEE
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SEMBCORP Marine (SembMarine) unit PPL Shipyard has won a US$229 million contract from a subsidiary of China oil major Sinopec Corporation.

Standing tall: The Pacific Class 375 rig remains one of PPL's most popular designs with 27 orders so far

The contract, which came from Sinopec International (HK), is for the construction of a jackup rig, Sinopec Corporation's first to be built outside China and which could pave the way for more deals in the future from the group.

The Pacific Class 375 rig to be built is scheduled for delivery in the first quarter of 2011, and will be owned and operated by Sinopec Corporation unit Shanghai Offshore Petroleum Bureau. Sinopec Corporation, formally known as China Petroleum & Chemical Corporation, is one of China's leading oil exploration companies with oil and gas blocks and 364 exploration licences in 26 provinces in eastern, western and southern China as well as shares in projects from Russia to Saudi Arabia.

The high performance jackup rig will be built based on PPL Shipyard's proprietary Pacific Class 375 design and proprietary components. It will be equipped to drill high-pressure and high-temperature wells at 30,000 feet while operating in 375 feet of water and will have accommodation for 120 crew.

The Pacific Class 375 rig remains one of PPL's most popular designs. So far, 27 rigs have been ordered with 13 units delivered and 14 units currently under various stages of construction with deliveries till 2011. The most recent contract, which SembMarine announced earlier this month, was for two of these rigs for US$425 million.

'We are pleased that Sinopec International (HK) has chosen PPL Shipyard to place its first jack-up rig order. This is significant as it will be the first jackup drilling rig to be constructed outside China for China Petroleum and Chemical Corporation. We are delighted to be part of this milestone,' said PPL senior general manager Tan Kim Yung.

This contract is not expected to have any material impact on the net tangible assets and earnings per share of SembMarine for the year ending Dec 31, 2008. SembMarine stock closed four cents lower at $3.15 yesterday.