National Oilwell to build Caspian drilling facility

National Oilwell has been awarded a letter of intent for design and construction of a complete drilling facility for the Agip Kazakhstan North Caspian Operating Co. "D" Island Project in the Kashagan field offshore Kazakhstan. The project is valued at approximately $150 million and includes two complete harsh environment land drilling rigs and drilling support equipment. Agip KCO has made an initial payment to the company of approximately $30 million.

The harsh environment module style rigs are designed to drill on artificial islands in the North Caspian Sea where winter conditions are challenging and similar to the North Slope of Alaska. All rigs currently drilling on the North Slope of Alaska were designed and manufactured by National Oilwell. This project specifies 3,000-hp rigs capable of drilling to depths of 25,000 - 30,000 ft that can be moved fully erect from well location to well location via rail. The rigs will be assembled and commissioned at National Oilwell facilities in Houston, with equipment and products coming from the company's plants in Norway, Canada, China, and the United States. The rigs are expected to be shipped in the Q3 2005.

"We believe that Agip KCO's selection of National Oilwell for this project is a testament to our expertise in designing and building harsh environment rigs and managing large, fast track design/build projects, and anticipate that the contract for this project will be finalized in early August," said Pete Miller, chairman, president and CEO of National Oilwell. "This type of major capital investment is indicative of many of the business opportunities we believe we will see over the next few years."

07-30-04