MODEC Receives FPSO Order from Petrobras, Brazil

MODEC announced today that Petróleo Brasileiro S.A. (“Petrobras”), through its subsidiary Tupi B.V., on behalf of Consortium BM-S-11, has signed a Letter of Intent (LoI) for the supply, respectively, charter, and operations of a Floating, Production, Storage, and Offloading (FPSO) vessel for the BM-S-11 block (Cernambi South) in the giant “pre-salt” region of the Santos Basin with its water depth of 2,300m.

The BM-S-11 block is under concession to a consortium formed by Petrobras (65%), BG Group (25%), and Petrogal Brasil S.A – Galp Energia (10%).The LoI was issued to the Schahin Group and MODEC, Inc., who have partnered for the latest leased FPSO. This is the second venture between the Schahin Group and MODEC, Inc.

The Schahin Group and MODEC, Inc. are responsible for the engineering, procurement, construction, mobilization, and operation of the FPSO, including topsides processing equipment as well as hull and marine systems. SOFEC will design and provide the spread mooring.

MODEC will convert the VLCC Sunrise J into the FPSO Cidade de Mangaratiba MV24. The FPSO will be capable of processing 150,000 barrels of oil per day, 280 MM standard cubic feet of gas per day and has storage of 1,600,000 barrels of total fluids. Scheduled for delivery during the 3rd quarter of 2014, the FPSO will be installed in the Cernambi South area.

This is the eighth vessel MODEC will provide and operate in Brazil. MODEC is currently operating the FPSO Fluminense, the FPSO Cidade do Rio de Janeiro MV14, the FSO Cidade de Macae MV15, the FPSO Cidade de Niteroi MV18, the FPSO Cidade de Santos MV20 and the FPSO Cidade de Angra dos Reis MV22. The FPSO Cidade de Sao Paulo MV23 is currently under construction and scheduled to be installed in the fourth quarter of 2012.

“We are very happy to be awarded the third vessel for the pre-salt discoveries. And we are committed to carry out the project by maximizing Brazilian local content in order to contribute to the foundation for the development of heavy industry in Brazil,” said Toshiro Miyazaki, President and CEO of MODEC, Inc.

The Schahin Group has a significant presence in the drilling services market and has been working with Petrobras Group and Consortia of which Petrobras has been participating since 1982. The Schahin Group is pleased to expand in to production services via the partnership with MODEC and Petrobras Group and Consortia in which Petrobras participates.

The information contained in this news release is true and accurate at the time of publication; however, it may be subject to change without prior notice.