Subsea 7 - News - June 3, 2005

Subsea 7 Orders New Build Pipelay and Construction Vessel

The Board of Directors of Siem Offshore Inc (“SIEM”) has performed an assessment of the medium to long term market for rigid pipelay and subsea construction. The Board expects the overall demand to grow and that the development in the deeper waters will constitute a significant portion of such growth, particularly in West Africa and Brazil.

SIEM, through its subsidiary Subsea 7, has announced that they have signed contracts for a new-build rigid pipelay and construction vessel. The overall project cost is in the USD 180-200 million range and is based on fixed prices from the shipyard and equipment supplier.

The vessel, which is 157m long and 28.4m wide, will have a top tension capability initially of 300t, is upgradeable to around 400t and will have a storage capacity of 3500t of steel pipe on the main reel. The vessel will also have a 400t deepwater crane, a built-in deepwater ROV spread and a comprehensive survey system and will have the ability to install flexible flowlines and umbilicals. The completed ship is expected to be delivered in the second quarter of 2007.

The vessel greatly enhances Subsea 7’s pipelay capabilities, particularly in deepwater. She is a much larger vessel than Subsea 7’s existing pipelay vessel, the Skandi Navica, and will have almost 50% more carrying capacity and double the top tension capability. The current charter on the Skandi Navica expires in December 2007, but can be extended through 2014 by seven one year extensions in Subsea 7´s option.

Mel Fitzgerald, Subsea 7’s Chief Executive Officer, stated, “We have seen considerable growth in our business since Subsea 7 was formed in 2002 and this is a fantastic opportunity for us to consolidate our position in the premier tier of contractors. The investment in a new vessel also demonstrates our considerable commitment to the global marketplace for underwater engineering and pipeline construction operations”.

SIEM intends to finance the new vessel through a combination of debt, existing liquidity and cashflow from operations.

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For further information please contact:

Mel Fitzgerald Tel: +44 1224 344300
CEO E-mail: mel.fitzgerald@subsea7.com

Kristian Siem Tel: +44 20 774 70545
Chairman E-mail: kristiansiem@siem.co.uk

Notes to editors:

1. With a workforce in excess of 3000 people worldwide, Subsea 7 is one of the world’s leading subsea engineering contractors. The company’s global offshore operations are supported out of Asia Pacific, Brazil, Gulf of Mexico, Norway, UK and West Africa. Subsea 7 has more than 100 remotely operated vehicles (ROVs), four pipeline construction yards and a fleet of modern, high specification dynamically positioned ships capable of deepwater reeled and flexible pipelay, deepwater subsea construction and saturation diving. Website: www.subsea7.com

Merwede Shipyard
http://www.merwede.com/

Huisman-Itrec
http://www.huisman-itrec.com/