Conoco Leading the Way for Gulf of Mexico Shuttle Tankers.

Business/Energy Editors

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HOUSTON--(BUSINESS WIRE)--May 2, 2002

Seahorse Shuttling and Technology LLC, a wholly owned entity of Conoco (NYSE:COC), has completed the functional design of a new tanker for shuttling crude oil from the deepwater Gulf of Mexico to shore. The 80,000 dead-weight ton (DWT) double-hulled "GoMAX 550(TM)" shuttle tanker will be capable of transporting 550,000 barrels of crude oil. With a 40-foot draft, the new shuttle tanker will be able to enter most ports in the U.S. Gulf of Mexico.

"A major challenge of producing new crude oil discoveries in the deepwater Gulf of Mexico has been developing efficient means of transportation to U.S. refineries," said Antonio Valdes, manager of Conoco Marine. "The GoMAX 550(TM) tanker design meets this challenge by providing safe, environmentally sound and cost-effective transportation."

The GoMAX 550(TM) design is the result of a shipbuilding alliance between Conoco, Alabama Shipyard of Mobile, Ala., and Samsung Shipbuilding and Heavy Industries of South Korea.

"The GoMAX (TM) is a prime example of Conoco's innovative application of technology," said Bob Lindsay, president of Seahorse Shuttling. "Working with world-class marine equipment suppliers like Wartsila, Rolls Royce, ABB and Kongsberg Simrad, we have developed construction techniques that could significantly improve the productivity of the U.S. shipbuilding industry."

Designed by Samsung specifically for production at Alabama Shipyard, the new shuttle tankers would meet the Jones Act requirement that vessels operating totally in U.S. waters must be constructed in the U.S.

"The GoMAX 550(TM) project would not only meet Jones Act requirements, but it would represent a unique opportunity for Alabama Shipyard to create the kind of sustainable high quality jobs that would enhance the Mobile community well into the future. It also is tangible evidence of the progressive vitality of commercial shipbuilding in the United States to meet our nation's needs," said Ed Phipps, president of Atlantic Marine Inc., the parent company of Alabama Shipyard.

Earlier this year, the U.S. Minerals Management Service (MMS) approved in principle the use of FPSO's and shuttle tankers for crude oil production and transportation from the deepwater Gulf of Mexico.

"Interest from potential customers has increased dramatically since the MMS issued its environmental impact study," said Matthew Prichard, vice president of marketing and commercial development for Seahorse. "We believe U.S.-built shuttle tankers will compete favorably with pipelines as oil and natural gas discoveries move into the deeper water depths in the Gulf of Mexico where pipeline construction is costly and operations are more difficult."

The American Bureau of Shipping would be the vessel's classification society. The first of the GoMAX 550(TM) shuttle tankers could be operational in the Gulf of Mexico by 2005.

Conoco is a major integrated energy company active in more than 40 countries.

http://www.conoco.com

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