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Smedvig and Unocal Form Deepwater Drilling Project for SPU 550.

STAVANGER, Norway--(BUSINESS WIRE)--September 19, 1997--Smedvig asa has signed a memorandum of understanding (MOU) with Union Oil Company of California (Unocal) for an engineering project to provide a deepwater drillship for the Gulf of Mexico. The agreement is based on the potential conversion of the SPU 550 to a drillship. Subject to settlement on terms and conditions and approval by the boards of both companies, the MOU will form the basis for a five year drilling contract. The drillship will be designed to operate in 10,000 feet of water depth with capabilities for test production in addition to drilling operations.

The SPU 550 is owned 50 percent by Norway's Rasmussen group and 50 percent by Smedvig. On October 1st the Rasmussen ownership share will be transferred to Navion, a company owned 80 percent by the Norwegian state oil company Statoil and 20 percent by Rasmussen.

The SPU 550, a Tentech 700 design now under construction in Japan, is due for delivery from the yard, exclusive of drilling equipment, in November 1997. After delivery from the yard, and subject to the award of a final contract by Unocal, the vessel will be converted and outfitted as a drillship. Drilling operations are due to start late 1998 or early 1999.

"This agreement reinforces Smedvig's strategy as a leading developer of technologically advanced deepwater drilling units. It also strengthens Smedvig's relationship with Unocal, which goes back to 1972 when the company was awarded the first drilling contract in its history, for West Venture on the UK continental shelf," says CEO Ole Melberg.

Smedvig asa is an integrated industrial offshore company offering services within well construction, mobile production and reservoir and well technology. It owns and operates mobile drilling units and holds contracts for production drilling, well services and maintenance on fixed installations in the North Sea. In addition, the Company also pursues substantial production drilling operations in South-East Asia. Smedvig is involved in mobile production solutions with the water injection platform West Omikron and the production vessels Balder FPU. On the technology side, the Company is engaged within resource assessment and reservoir management, well technology and reservoir monitoring.

CONTACT: Smedvig asa

Mr. Ole Melberg, Chief Executive Officer

Mr. Ole Gladhaug, Chief Financial Officer

Ms. Merete Svendsen, Investor Relations Manager

(tel. 47 51 50 99 00)
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Publication:Business Wire
Date:Sep 19, 1997
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