Petrobras (Petróleo Brasileiro S/A) has awarded Subsea 7 do Brasil a contract to install flexible and steel lines offshore Brazil. The two-year contract valued at $110 million will involve two vessels from the Subsea 7 fleet.

TheLochnagar will be used on virtually a continuous basis for flexible installation, and the Skandi Navica for shorter campaigns on the steel line installation. The Lochnagar work is on a dayrate basis, while the Skandi Navica campaigns are on a lump sum basis. All pipes and certain other materials are free issued by Petrobras. The contract contains options to extend the duration for up to five years.

Major modifications will be made to theLochnagar, upgrading the top tension capability beyond 250 tons to enable the vessel to lay flexible lines in up to 2,000 m of water. This upgrade will be carried out in a Brazilian shipyard soon to be nominated.

During the contract period it is anticipated that the vessels will install over 300 km of steel and flexible lines, primarily in deepwater Campos basin. The project will commence in 3Q 2005.

8/17/04