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Marine Log

MPF1000

August 29, 2006

MPF project moves ahead

Plans to build "the largest and most versatile offshore drilling unit ever" are picking up pace.

The Multi Purpose Floater (MPF) is the concept of Norwegian entrepreneur Wilhelm P. Blystad and has been under development since 1995.

The MPF will be a new tool in the exploration and development phases of offshore oil and gas fields. The MPF combines floating production, storage and offloading with drilling.

The MPF 1000 is designed for simultaneous drilling and production in deep waters and harsh environments including ultra deep water. The vessel is 290 meters long and has storage capability of one million barrels of oil.

Yesterday MPF Corp Ltd announced that it is to issue a new bond loan of $150 million. The proceeds from the loan will be used for partial financing of the first Multi Purpose Floater (MPF 1).

Expected delivery of the vessel is December 2008 from Dragados Offshore SA, Spain.

MPF has also issued contracts for key elements of the MPF.

Last week, Wartsila announced that been awarded a contract from MPF Corp. Ltd to deliver a total power system for the vessel.

The Wartsila contract involves detail design, products, systems and commissioning of the power plant, propulsion, electrical and automation systems. Delivery of the major components will be during the first quarter of 2008. The value of the deal is over EUR 50 million.

"Wartsila has over time been committed to MPF Corp. during various project stages with an influential and convincing understanding of our needs, and we are happy to conclude with Wartsila as one of the main sub-contractors for our Multi-Purpose Floater" said Tore Nedregaard, President and COO of MPF Corp.

Wartsila will deliver eight 16-cylinder Wrtsil 32 diesel engines with a combined power output of 58,880 kW, generators, medium voltage switchgear, low voltage distribution boards, frequency converters, safety and automation systems (including emergency shut down, fire and gas, power management, vessel automation), a DP3 dynamic positioning system, thruster control and information management systems. The systems will mainly be delivered as complete, fully-equipped factory-tested modules.

In July, MPF signed a contract worth about $72 million with Aker Kvaerner. It covers delivery of a complete drilling package to the ship. The package includes a derrick, drilling and pipe deck tools including control system, equipment for mud treatment, subsea equipment and equipment for compensating undulation. The delivery will commence in the fourth quarter of 2007.

Meantime, the Board of MPF says it is "very pleased with the reception the company has received so far in the capital markets."

With the bond issue announced yesterday, MPF has now secured a total of $425 million from Norwegian and International institutional and private investors. The remainder of the MPF 1 construction cost is expected to be financed through bank loans at a later stage.

The bond issue is subject to finalization of loan documentation. Settlement is expected to take place on or around 20 September 2006.

The bond issue was managed by Pareto Securities ASA

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