Conoco Forms Gulf Of Mexico Shuttle Tanker Alliance.

Business/Energy Editors

HOUSTON--(BUSINESS WIRE)--May 10, 2001

Conoco (NYSE:COCA) (NYSE:COCB) has taken another step toward safe movement of newly discovered crude oil reserves from the deepwater Gulf of Mexico to U.S. refineries by shuttle tankers built in the United States.

Conoco's wholly owned affiliate, Seahorse Shuttling and Technology LLC (Seahorse), has formalized an alliance with the Alabama Shipyard of Mobile, Ala., and Samsung Heavy Industries of Korea to develop a design and construction plan that could have American-built shuttle tankers ready for service in 2004. Seahorse was formed by Conoco to provide crude oil storage and tanker shuttling services for new oil discoveries made by Conoco and other companies in the deepwater Gulf of Mexico.

"Our previous successes with Samsung building the first generation of double-hulled tankers and our pacesetting ultra deepwater drillships are evidence of the companies' technological innovation," said Rick Oshlo, vice president and general manager of Conoco Supply and Trading. "We are pleased to add Alabama Shipbuilding to this long-standing relationship," Oshlo added.

Oshlo said Conoco remains confident that the Minerals Management Service (MMS) will approve the shuttling concept in the Gulf of Mexico. Hence, and the company is continuing its program to deploy shuttle tankers to the Gulf as soon as possible.

Conoco and Samsung have completed an extensive conceptual design for a new tanker classification, the Gulf of Mexico Maximum Cargo (GOMAX(TM)) shuttle tanker. This double-hulled, dynamically positioned vessel will have a capacity of more than 550,000 barrels of crude oil, and will still comply with the 40-foot draft restrictions of most Gulf of Mexico ports.

Crude oil shuttling has the potential to significantly reduce the cost of crude oil transportation from deepwater Gulf of Mexico discoveries, making possible the economical development of smaller oil discoveries. Shuttle tankers also offer more flexibility for delivering domestic crude oil to various U.S. ports, thus enhancing the economics of marginal fields and further reducing U.S. dependence on foreign crude oil imports.

"This alliance brings together three key ingredients: Conoco's experience as a shuttle tanker operator, the eagerness of the Alabama Shipyard to build this new class of tanker and the world-class ship design capability of Samsung Heavy Industries," said Bob Lindsay, president of Seahorse. "We believe this unique alliance of international companies can economically construct American-built shuttle tankers that exceed current safety and environmental regulations. These vessels will provide Seahorse a competitive advantage in moving crude oil from deepwater Gulf of Mexico discoveries to U.S. refineries."

Conoco is a major, integrated energy company based in Houston and active in 40 countries.

This release contains forward-looking statements about Conoco's operations and business plans. These statements are not guarantees of future performance, involve certain risks, uncertainties, and assumptions that are difficult to predict, and are based upon assumptions as to future events that may not prove accurate. Actual outcomes and results may differ materially from what is expressed herein. Among the factors that could cause such differences are failure to obtain governmental approvals for use of shuttle tankers; inability to obtain financing for ship construction; unexpected increases in ship construction costs; design or construction delays or difficulties; and other matters detailed in Conoco's publicly available filings with the Securities and Exchange Commission.