J. Ray McDermott Signs Contract with AIOC for Caspian Construction.

Business Editors

NEW ORLEANS--(BUSINESS WIRE)--Dec. 5, 2001

McDermott Caspian Contractors Inc. (MCCI), the Caspian arm of J. Ray McDermott, S.A., a subsidiary of McDermott International, Inc. (NYSE: MDR), has signed contracts with AIOC for the fabrication of platform topsides and the installation of offshore pipelines in Phase 1 of the development of the Azeri, Chirag and deepwater portion of the Gunashli (ACG) fields in the Azerbaijan sector of the Caspian Sea. The total value of the two contracts is approximately $320 million.

MCCI's scope of work for platform topsides involves fabrication, assembly, hook-up and commissioning of a 14,000 metric ton (15,400 tons) integrated drilling/quarters/ production deck. Under the pipeline contract, MCCI is responsible for offshore installation of a 186 kilometer (115 mile) 30-inch pipeline, two 11.5 kilometer (7 mile) 24-inch pipelines, and an 11.5 kilometer 18-inch pipeline for the compressor and water injection platform.

The topsides fabrication work will be done primarily in Azerbaijan utilizing the infrastructure, equipment and labor of SOCAR's Shelprojectstroi (SPS) fabrication facility. An upgrade of plant and equipment at the SPS yard is already underway. Kaspmornefteflot, SOCAR's marine operations group, will provide the laybarge Israfil Huseynov and key marine support vessels for the pipeline installation. The Israfil Huseynov will also be upgraded for the project.

ACG participating interests are: BP (operator - 34.1%), SOCAR (10%), Unocal (10.3%), Lukoil (10.0%), Statoil (8.6%), ExxonMobil (8%), TPAO (6.8%), Devon (5.6%), Itochu (3.9%), Delta Hess (2.7%).

McDermott International, Inc. is a leading worldwide energy services company. The company's subsidiaries manufacture steam-generating equipment, environmental equipment, and products for the U.S. government. They also provide design, engineering, fabrication and installation services to the oil and natural gas industries for offshore production facilities and pipelines.

Statements in this release which express a belief, expectation or intention, as well as those which are not historical fact, are forward looking. They involve a number of risks and uncertainties which may cause actual results to differ materially from such forward-looking statements. These risks and uncertainties include factors detailed from time to time in the company's filings with the Securities and Exchange Commission, including its Form 10-Q for the period ending September 30, 2001.