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Tue 3 Apr 2007 03:52 PM

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KS Energy to build ME oil rig

Singapore firm's deal to build its first ME offshore rig is worth $148m.

Singapore's oil & gas services firm KS Energy Services said on Tuesday it has formed a joint venture to build its first offshore oil drilling rig at a Middle East shipyard in a deal worth $148 million.

KS Energy, one of the three Singapore-listed oil services firms headed by Indonesian tycoon Kris Wiluan, said it will hold a 50% stake in the joint venture with two Middle East partners, Amwal Al Khaleej Investment Co. and Maritime Industrial Services (MIS).

The shallow water jackup rig, which stands on the seabed on retractable legs, would be built at a shipyard in Sharjah, United Arab Emirates, owned by MIS which would have a 10% stake in the joint venture.

Saudi Arabia's private equity firm Amwal Al Khaleej would have a 40% stake in the joint venture.

Wiluan told reporters in a telephone conference call that the rig, scheduled to be completed in about 30 months, would be rented out to oil companies operating in the Arabian Gulf.

"We expect a lease contract in the next six months. We are already in discussions with several companies including Saudi Aramco," Wiluan said.

He said the rig, based on Friede & Goldman Super M2 design, would be able to operate in waters of up to 300 feet (90 metres) and drill up to 30,000 feet into the ocean floor.

Wiluan said MIS shipyard was already building two jackup drilling rigs of F&G Super 2 class for Norway's Mosvold Shipping ASA, one of which was due for delivery this year.

Wiluan said the joint venture firm would be named at a later date and would function as a dedicated offshore drilling rigs charter firm targetting initially the Middle East market.

"We want to be a player in this region where there is rising demand for offshore rigs and as such this joint venture firm will built more rigs and eventually operate a fleet of rigs as a separate business unit."

Wiluan said it was too early to say if the new joint venture firm would be listed on a stock exchange.

Shares in KS Energy, which has a market capitalisation of $458 million, last traded on Monday at S$2.93, unchanged from the previous close. The company suspended trade before the start of trade on Tuesday.

It later announced to resume trading of shares after the midday break, starting 2 p.m. (0600 GMT) on Tuesday.

Wiluan, who owns Jakarta-listed drilling pipe maker Citra Tubindo, in his maiden acquisition in Singapore in 2005 bought a stake in SSH Corporation, which makes steel pipes for building oil derricks and drilling rigs.

Last year, he bought a stake in KS Energy which gave him access to KS Energy's 54.8-percent subsidiary Aqua-Terra Supply which provides both hardware and customised engineering services to the oil and gas industry.

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