IMO ENVIRONMENTAL REGULATIONS
Are IMO regulations tough enough to keep national governments from imposing stricter measures?

Yes--Mostly
Only partly
No--expect a slew of regional regs!

Marine Log

June 22, 2007

Petropod to build CJ70 jack-up at Jurong

PetroProd D&P I, a wholly owned subsidiary of PetroProd Ltd, today signed definitive EPC contract with Jurong Shipyard Pte Ltd of Singapore for the construction of one MSC/Gusto CJ70 jack up rig at a cost of approximately USD 440 million and delivery first half 2010.

Petroprod Ltd is a company specializing in mobile production and field development mainly for small and medium size oilfields. It is managed by Larsen Oil & Gas and the main shareholders are associated with Larsen. The company is presently trading over the counter at the Oslo OTC and intends to seek full listing at the Oslo Stock Exchange later this year.

The CJ70 is the world's largest jack up rig and is capable of drilling in water depths to 150 meters in harsh environment. The rig is well suited for simultaneous drilling and production and will be outfitted to meet rules and regulations for the Norwegian sector and can be applied world wide.

The rig is classed with DNV and has a state of the art drilling package supplied by Sense EDM for efficient drilling to 45,000 feet.

The managers, Larsen Oil & Gas, are presently working on a client-funded front end engineering study (FEED) for a Norwegian oil company to qualify the rig for full field development duties on the Norwegian continental shelf.

A tender for this work will be given this fall with a potential start up immediately following delivery from Jurong Shipyard.

This is the eighth rig order that Larsen Oil & Gas has placed with Jurong Shipyard since 2004.

Jurong Shipyard and PetroProd have also purchased legs for a second unit on favorable terms with Industeel Creusot/Arcelor, which secures delivery of a second unit early 2011.

In addition, PetroProd has commenced FPSO conversion of the first of its three AFRAMAX tankers, MT "Arc", to be renamed "PetroProd I FPSO". This will be completed at Jurong Shipyard in the second half of 2008. The FPSO will be equipped with process facilities for 60,000 bbls of fluid per day, water injection (80,000 bbls) and gas compression facilities (76MM scf.). The vessel is designed with a turret mooring system for 1000 meter water depth and is equipped with a FRAMO Engineering swivel system for fluid transfer.

Martin Nordaas, acting CEO of PetroProd and Project Director for Larsen Oil & Gas:

"We have the pleasure of participating in a fantastic upturn in the offshore rig and FPSO market, and we are extremely happy to have found the perfect partner for our ambitious plans at Jurong Shipyard. Their co-operation has been and continues to be a major contributor to our success. We enjoy the benefits of a trusting and effective relationship with Jurong Shipyard, whereby our projects are given genuine focus and efforts to finding the optimum solution that we can offer the market. Without their support, we would not have come this far. We experience significant market interest for our units."

Mr Don Lee, Senior General Manager of Jurong Shipyard, said, "We are delighted to be to chosen as a strategic partner by PetroProd and Larsen Oil & Gas in their offshore rigbuilding and FPSO conversion programs. In addition to the latest orders, Jurong Shipyard is currently building three semi-submersibles and 2 jack-up rigs for the Larsen Oil & Gas group. We are grateful to Larsen Oil & Gas for their continuous trust and confidence and look forward to further building on this good relationship in the future."

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