OFFSHORE AND ONSHORE NEWS Autumn 2007

Since the offloading of the rig from the Hamriyah Pride; a major feature in our last edition, one of our primary objectives has been to get the 660 jacking system operational using the rig’s own power.

Most recently the spud cans have been fitted and two sections of leg installed to a total of 158 feet. In conjunction we have reinstalled the refurbished jacking system and a fourth round of pinions is currently being added.

The process of installing the spud cans into the leg wells involves the sinking of the spud cans, shown in the top photograph weighing in at 198 Tons each and the positioning of the rig over the cans using two 250t cranes. This has now been completed with the first leg bay attached to the spud can itself prior to sinking with the lower leg guides. A diving crew was deployed to first check the position

before the de-ballasting operation was initiated.

This allowed the cans to be raised into position finally and the installation of two additional sections of leg enabled trial jacking to be exercised using power supplied from the neighbouring Nabors rig, Ocean Master 8.

The variable frequency drive room is now fully complete and all electrical equipment has been installed. Cable pulling is currently in progress throughout the rig to provide the required power up on all systems. This will enable us to proceed to the commissioning phase of the project. This project, the largest rig project undertaken by Lamprell thus far, will be completed on schedule at the end of the year. (Continued)

Nabors 660

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A Word from our ChairmanThe first half year of 2007 has seen the Company continue to expand and develop following on from our highly successful year in 2006. Throughout the first half of this year we have continued to outperform expectations and we continue to see significant additional opportunities for Lamprell both in terms of additional major projects and also opportunities to further expand the scope and reach of the Company.

In this first six months of 2007 we have commenced the simultaneous construction of the first two lift boats for our client Seajacks. We have also been awarded and commenced construction of the first of the Super 116E Le Tourneau jack up drilling rigs for Scorpion, with options in place for a further four similar units.

We have also seen the successful launch of two of the three Flash Gas Compression Barges for our client SBM for the Kashagan Field Development in the Caspian Sea. This being the largest single project completed to date by Lamprell.

These represent some of the highlights of the year todate. However, these projects represent only a fraction of the work currently underway in what promises to be the busiest and most successful year in the Company’s history.

During this first half year we have also seen a significant development in our training and development program which has been set up jointly with the Don Bosco Academy in Mumbai.

This initiative was initially set up as a training school for potential welders and fabricators who would ultimately join the Company after qualification. However, over the past year Lamprell has significantly extended this initial initiative to the point where this is now the corner stone of our Corporate Social Responsibility (CSR) Policy. We have now expanded this program to provide welfare, education and support to disadvantaged young people in the North West of India.

The concept of the program is to provide sufficient support to the disadvantaged such that they will ultimately acquire a proper education and a working skill which will enable them to become self sufficient. This broad spectrum education and training program will eventually produce better educated and skilled members of society who can rise above the poverty line and become productive members of society. We at Lamprell have the advantage of not only providing the financial resources to provide this education and training but also to provide direct employment within our Organization.

This is an initiative in which we should take great pride as a Company. Through the efforts and success of everyone within Lamprell we are all giving something back in some small way to help the disadvantaged and I feel that this is another significant step in the ongoing positive and responsible development of our Company.

Peter Whitbread, Chairman & C.E.O of Lamprell plc

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GSP’s rig Jupiter departed Victor Lenac shipyard, Rikjeka Croatia on 18th July 2007 after an extensive program of upgrades and repairs completed since the rig’s first arrival in the yard back in January 2007.

Working in an overseas location for an extended period of time such as this has served as a major test for the Lamprell project management team but in hindsight it has provided considerable lessons in a challenging environment.

A core team under the control of Dave Morris, Lamprell Project Manager assembled at the start of this project to work alongside Croatian based Mack Engineering, Project Manager Nenad Ruzic and GSP’s resident site team and rig crew under the overall control of Mr. Paul Nichiforov.

The GSP contingent exceeded over 60 personnel at the height of the project as the scope of work for this rig was extensive.

This included the comprehensive blasting and coating of the main deck and hull structure, as well as the accommodation, jack houses and existing heli-deck support structure.

Prefabricated packages, equipment and piping where assembled on the quay in advance of arrival but the fabrication of additional piping for high pressure lines, deluge systems general replacement pipe work is a theme that dominated throughout the course of the stay.

During the program the Jupiter has seen all five existing engines replaced with new Caterpillar 3512’s and the removal of the original two mud pumps in preference for the installation of three Upetrom new built units.

As a consequence the rig required significant modifications to the overall pump footprint and the introduction of additional piping to accommodate the third pump.

A new built shaker house and mud handling system was also fitted

and made ready to receive additional bespoke pipe work and equipment at a later date.

The two original cranes on board the rig have been replaced with port and starboard mounted National Varco 10,000 series cranes as well as the addition of a smaller aft crane featuring a design structure developed by Lamprell Engineering in Sharjah. A National representative was on site for the duration of the commissioning and load testing of all cranes witnessed by ABS and the client.

The rig now features a zero pollution MODU compliant heli-deck and a 45’ Cantilever, Integrated sub base and drill floor module designed, fabricated and Installed by Lamprell. Installation was achieved by the skidding of the cantilever module onto a waiting barge. The barge was then maneuvered to the rig location and the module was successfully installed using a winch system directly onto the rig push up and hold down clamps. Whilst levels 1 and 2 where refitted the new black box constructed levels 3, 4, 5 allowed for completion in GSP’s Constanta operations base in August. This stay is also being used to accommodate the installation of specific items of drilling machinery and control housing.

A multi discipline commissioning team led by Elvis Rigby has been seconded from Sharjah to assist Mack and sub contractor Kaefer to address areas of carry over and the completion of any additional client required work scopes.

It is anticipated that the Jupiter will depart under tow at the end of September to take up a new position in the Black Sea.

Rig Jupiter Croatia

Five new Caterpillar 3516 engines have now been installed along with radiators and exhausts to include all related piping and electrical supply cabling.

The rig was jacked out of the water for the first time under the rig’s own power supply on the 7th Sept 2007 and this represents yet another major milestone in the rehabilitation of this storm damaged unit.

Heli-Deck framing has been installed and a specially designed “Pancake” has been received into the yard and made ready for installation.

A replacement sub base and a new drill floor where recently installed and a new derrick is now being prepared. This will open up a completely new set of work fronts for us as we turn the corner toward full completion of the upgrade.

The accommodation is coming along as planned and is on schedule for completion in mid October. The plumbing and HVAC units are being installed along with all power cabling and the cabins and galley are taking shape as is the new jacking system control room.

Nabors 660

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Global Santa Fe

In July 2007 two significant events were recognized on the Global Santa Fe rig refurbishment projects at the Lamprell, Sharjah facility.

As the two remaining Global Santa Fe rigs left the shipyard we recorded over 3 million man hours without a loss time incident (LTI) on the High Island II and the Main Pass IV refurbishment projects.

This is a huge achievement when the volume of work is considered. It is even more significant when the divergence of trades required is taken into account.

From the basic steel repair and overall repainting of both rigs to the major activities executed in the repair of the legs the rig teams have been exceptional with over 1100 men working onboard the rigs, at any given time.

The project team, client representatives and the Sharjah safety team are to be congratulated on this excellent performance, and we trust that this effort will be replicated in the safe completion of GSF rig 103.

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RIG 31

November 2006 heralded the arrival of Ensign International Services and Rig 31 into the Oilfield Engineering facility at Jebel Ali. Whilst the Middle East is a relatively new territory for Ensign; a major drilling contractor in Canada operating multiple land rigs, their spring board to this area came from the acquisition of OD&E (Onshore Drilling and Exploration) out of Australia back in 2004.

Rig 31 had been stacked in Ajman Port for approximately 7 years but after a round of discussions with Mr. Garry White, Vice President and Chief Operating Officer for Ensign, a refurbishment program was agreed upon and a contract signed.

The rig, a 2000HP Dreco Unit, has undergone extensive mast and sub base refurbishment. A new mud system has been commissioned together with new engine shacks incorporating MTU power packs a first for our facility as opposed to the conventional Caterpillar configuration. Works are now well advanced and on schedule for the rig to finish commissioning on time. The rig will then depart in advance of a start up drilling program for a regional oil company.

Rig 31 Project Manager, Mr. John Weldon, has actually worked with this rig since the late 80’s and found himself working again in the company of our Manager of Projects, Mr. Gavin Lekich.

The two worked on Rig 31 in Indonesia (in their younger days). We would like to extend a special note of thanks to John for his support during this project and to our client, Ensign for their commitment in placing this refurbishment contract with Lamprell Oilfield Engineering.

RIG 49

A 3000 HP Pyramid Rig, only six months ago Rig 49 and a third rig also called Rig 31 were cold stacked in Venezuela. Ensign International Energy Services, requested our Manager of Projects, Mr. Gavin Lekich, to inspect the rigs with a view to putting them to work after upgrade and refurbishment here in the Middle East region.

Rig 49 arrived at Jebel Ali quayside in February 2007 and OES took delivery of both units into the yard. Within two weeks of arrival, Rig 49 had secured a drilling program with a major oil and gas company in Oman and the second of their Lamprell refurbishment programs was started.

The project was headed by Mr. Bert Shooter (Ensign) and Mr. Darren Killeen (OES). A final completion and commissioning date was set for the rig's departure from our yard for the end of September 2007.

Mr. Bert Shooter shared with us that he had actually lifted this rig’s mast for the first time on 28 August 1989, when the rig was brand new.

I8 years ago and to the day, He lifted the mast again here in Jebel Ali for and on behalf of Ensign International Energy Services. A measure-able 75% of the existing mast has either been refurbished or replaced and not one pin needed to be hammered into place. This is a true testament to the skill sets and competencies of our fabrication team.

KCA DEUTAG RIG T-202

KCA Deutag, Rig T-202, first upgraded and refurbished by OES back in 2005 in advance of a mobilization to Bangladesh, arrived back in the yard on 15 August 2007.

The rig which is currently a 2000 HP unit will be upgraded to 3000 HP and will include a new top drive installation, extended pony bases and a larger capacity mud system. The work is scheduled to be carried out on an aggressive timeline, and will be completed within in 9 weeks.

The rig is then scheduled to leave to take up a new a drilling contract in Libya. In an effort to stay on course with this aggressive timeline, the pre-fabrication work has already started on the mud system in advance of the rig’s actual arrival.

Double Header For Ensign

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FPSO DeeP Producer 1

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Kashagan FGC Barges

The first two Modules B3 and B4 were successfully loaded out from the Jebel Ali facility in July and have now been handed over to the SBM Siemens partnership.

The modules were transferred from the Jebel Ali production facility to berth 43 at Jebel Ali port where both modules were loaded-out onto the Lamprell owned semi-submersible barge ‘Hamriyah Pride’.

The barge then undertook the ‘float-off’ procedure for placing the modules in the water. This was a particularly difficult operation, which was successfully engineered and completed within the confines of the port. Following ‘float-off’ the modules were brought alongside berth 42 / 43 where completion works were carried out prior to SBM Siemens handing over the modules to AgipKCO for transfer to the Caspian sea.

Module B16 is to be loaded out for handover to SBM Siemens at a later date still to be advised by AgipKCO.

The significance of this event was recognised by a dinner and cabaret evening held in the Madinat Jumeirah ballroom. The event was well attended by the members of the project team, their spouses, invited guests and dignitaries from the partner clients.

This has been a major project that has had a number of different challenges during the construction and completion works, all of which have been managed and resolved through the close working spirit of co-operation between all the parties involved. Once again, we express our thanks to all members of the Kashagan project team including our specialist sub-contractors and suppliers for their efforts and support throughout the project.

"We are confident this level of commitment will continue through to the completion of B16" stated John Swift, Lamprell Project Manager.

Construction of FPSOcean DeeP Producer topsides M20 separation module, due for completion in December 07 is now well underway and will be followed by the M80 power generation module and M90 electrical module which are both due in January 08. In addition to these works for FPSOcean, Scana AS Norway a client partner in the Deep Producer project will provide the first of a new generation detachable riser buoy (DRB).

Lamprell have been retained by Scana AS to construct the first of there new DRB’s the buoy’s mating structure and gantry. The buoy will be delivered in November of this year with the ancillary items accompanying the delivery of module M20 in December. The bottom photograph shows the first of the buoys under construction.

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Aker FP Smart 1Considerable progress is now being achieved on the two separation modules P10 and P11 and the manifold module U30 in accordance with our client’s instruction as we head toward the required delivery dates of 15th October for P10 and mid November for P11/U30.

As a direct result of the award received by Aker FP from Reliance India, this project has been the subject of considerable variation, an increase in weight and a level of complexity well in excess of that anticipated in the initial construction contract. We are working with Aker FP to manage this process without disruption to our agreed schedule.

The introduction of a blast wall on module M10 and the procurement of additional heavy wall duplex piping, electrical and instrumentation is ongoing at this time and a collaborative approach between Lamprell and Aker Process has been developed in an effort to source and secure materials from vendors worldwide.

A major time benefit has been realized by the purchase of the additional heavy wall SS316 cladded separators from within our region.

Our sub contractor GMMOS, will deliver vessels very much on a fast track basis, and to limit the risk of any additional delay on vessel supply, Aker process have ordered two additional vessels themselves, to be fabricated by GMMOS in the shortest possible time.

The project is taking on a new dimension contrary to a typical client/vendor arrangement. Aker Process is working at break neck speed to complete detail drawings with simplified designs to allow fabrication to continue unhindered.

The early receipt of manual valves and hydro cyclones has also made a considerable contribution toward accelerated completion at this point in the project.

In September we received a high level management delegation drawn from the Aker Group, Aker FP, and the Aker Kvaerner Process Systems Divisions.

It was the first opportunity

for Mr. Mads Andersen, Mr. Mikkel Maartens, Mr. Arne Tornqvuist and Mr. Per Harald Kongelf to visit our facility and witness the progress being made on the project first hand.

“We are very satisfied with the quality of the module fabrication here at Lamprell. Of course we have some challenges ahead but we remain confident that through our joint efforts the sail away dates will be met” stated Mr. Maartens Executive Vice President Aker Floating Production.

Gimboa

The Gimboa topside module project is now well advanced and approaching the stage where the project team is preparing all modules for completion and load out.

“The project teams from both Lamprell and Saipem are working well together and are now focussing on delivering the completed modules to Dubai Dry Docks to the agreed schedule for integration with the FPSO” said Project Manager Jim Clements.

There are six modules in total, namely dedicated modules for local equipment control, gas lift, TEG dehydration, chemical injection, HP & LP separation and sand removal.

The modules when complete will be transported by barge to Dubai Dry Docks and integrated with the FPSO hull along with another module for water treatment and sand removal.

Lamprell staff and workforce have been able to maintain the project schedule despite a number of

equipment and material delays which is a credit to all involved and particularly highlights the good working relationship that has been developed with Saipem in the overcoming of such adversities.

Saipem Topside Construction Manager Mr Tom O’Hara said ”Lamprell and Saipem have been able to maintain the aggressive project schedule and at the same time maintain a high level of safety in the workplace, with the project recently achieving 750,000 man hours with zero lost time incidents to date, which is a credit to all”.

The modules will commence load out during October onto the Hamriyah Pride, for transport to the Dry Docks. The completed FPSO will then set sail for an Angolan oilfield in the second quarter of 2008.

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Kashagan Sail Away Party

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The load out and sail away of barges B3 and B4 was celebrated at a spectacular dinner held in Dubai, in July 2007. The event brought together personnel, wives and partners from across the project and was also attended by the Lamprell management team and VIP representatives from SBM, Siemens, AgipKco and Partners. The challenges and milestones achieved in this project were acknowledged and recognized by the evening’s speakers namely Mr. David Douglas and Mr. John Stubbs but the exceptional quality of the barges constructed by Lamprell, formed the basis of a repetitive theme throughout the event, "The Lamprell barges are a model for future construction" stated Mr. Stubbs Project Director AGIPKco.

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Currently we have a total of four NEBOSH certified safety managers employed within our facilities this will increase to seven by the end of September 2007.

NEBOSH is the UK’s recognized health and safety authority and co-exists on philosophy with other international authorities on issues of common policy.

The newly developed international NEBOSH certificate sets out

to recognize all international bodies and common health and safety objectives. In an unprecedented departure, we have made the prescribed course of study available to all Lamprell safety department managers, supervisors, and safety officers.

On completion of the course we will command over thirty 3rd party certified, safety advisors across our three facilities and in turn this will necessitate the recruitment of additional safety personnel to work in our most prioritized department.

HSE – Training The Trainers

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FPSO Olowi

Lamprell Energy Limited has cut first steel on the topside modules for the Fred Olsen Production, Knock Allen FPSO currently under refurbishment and conversion at the Dubai Dry Docks for Norway’s Kanfa process systems.

The base case award includes the fabrication of 6 modules of various sizes, and we are in continuing discussions with our client to add to this number during the next phase of construction.

The project will be delivered to the vessel in a number of stages with the last delivery now scheduled for March of next year. Lamprell are again very happy to be working with Kanfa, after the success of the Bergesen/

Pemex KMZ project delivered in August 2006. This vessel is now fully operational in the Bay of Campeche.

Training School Update

The Learn2worK Initiative

Our Mumbai based trade training school at the Don Bosco Maritime Academy is now in full swing with the 5th and 6th batch of trainee intakes fast approaching graduation. It is hoped that the graduates will travel to the UAE for integration to the existing workforce over the autumn period.

An upgrade to the training facility is now underway with a frame gantry crane and a new training facility structure currently being designed by Lamprell in Sharjah.

The new concrete foundation for the facility is now underway and the work is scheduled to be completed September 07. It is hoped that the batch 5 trainees will be the first to benefit from the new buildings and facilities when ready.

The objective of the new outdoor heavy steel facility is to simulate the actual working environment found here in the UAE. Trainees will then undergo a 4 week, heavy steel fabrication orientation program.

In July a second group of 19 short term trainees completed their course in shielded metal arc welding (SMAW) at the 6G quality level and have now traveled to Sharjah. Our first full term group of 19 welder trainees commenced their course in August and will be qualified at the 6G level in flux core arc welding (FCAW).

To ensure that all graduating trainees are armed with the necessary skill sets before arrival in the UAE the fabrication syllabus has been extended to accommodate expanded studies in pipe and plate development calculations and their practical application.

In order for our welder students to achieve higher than expected competency a series of test joints of increasing difficulty has been developed, that not only replicate real site situations, but also set out to test the welder’s level of skill within each individual exercise.

The Work2livE Initiative

Celebrating the sixtieth anniversary since independence was gained; India can now boast the fastest growing economy in the world and yet the gap between the wealthy and those living below the poverty line is increasing. A recent report suggested that over 300 million people are currently living on less than one US Dollar per day.

In conjunction with our partners DBMA we have now embarked on our second initiative, the Work2livE program.

Essentially we will provide appropriate educational training, food and lodging subsistence for underprivileged youths who find themselves through no fault of their own, living below this poverty line.

Candidates who lack opportunity but have the ability to adopt (Continued)

FPSO FRADE Modules and Manifold Deck

Construction activities are proceeding on all seven modules as well as the manifold deck. Structural, piping, E&I and pressure vessel works are all progressing in accordance with the schedule, together with the installation of client free issue equipment. Upon completion of the Lamprell scope of work the modules and turret manifold deck are to be handed over to SBM for transfer to Dubai Dry Docks where the units will be integrated onto the vessel conversion, which is currently ongoing.

The works being undertaken by Lamprell include two separation modules; two compression modules; two power generation modules and one module for gas treatment as well as the turret manifold deck. We express our appreciation to all members of the FPSO FRADE project team including our specialist sub-contractors and suppliers for their efforts and support throughout the project.

The fabrication and production phase of the Seajacks project has commenced and the significance of this early milestone was celebrated by the cutting of first steel for Unit One (1) spud cans, 3 weeks ahead of schedule in July 2007.

To recognize this event, Mr John Ansell, pictured right the resident Seajacks Construction Manager was invited to start the CNC machine that cut the first plate in the company of the project team, the Seajacks management and invited guests from the international and regional press.

“The Seajacks project team have worked extremely hard to achieve this milestone ahead of schedule”, commented the Project Manager. “The basic and detailed design are progressing well as per the schedule, and all major equipment subcontracts are now firmly in place”.

Seajacks

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Lamprell Golf Tournament 2006

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Qualified and Committed

This year we have embarked upon a program of schools sponsorship that will include not only the provision of Lamprell branded sports kit, but also extend to a set of company sponsored motivational awards designed to motivate and recognize the efforts of improving students who continue to work hard to better their results.

This year’s program has been extended to the English College Dubai who will don Lamprell livery on the sports field for the duration of the year.

The School will also enter an under 19 squad for the International Rugby Sevens tournament to be held in Dubai in November 2007As well as sending a multi sports CO-ED representative group to Australia in July 2008 to compete against Schools based in the Queensland area.

Commenting on the program, Allan Forbes school Headmaster stated “We are extremely grateful and excited to be the first school to benefit from the sponsorship program.

We feel that Lamprell’s Qualified and Committed credo is a model theme, worthy of adoption by our school as it conveys the underlying message that great things can be achieved by our students when they apply themselves in the pursuit of excellence”.

This is a form of school sponsorship that we would like to extend to other colleges in the future. The regional school system provides education for hundreds of Lamprell dependents across the Emirates, and we firmly believe that programs of this nature have considerable motivational merit.

and adapt to a disciplined lifestyle in a learning environment will be offered a training opportunity linked to gainful employment.

This course will be much longer in duration and it is currently scheduled to be in excess of twelve months. This initial period will be used to develop confidence and the basic competencies required and will function as a feeder program to the existing training curriculum.

It is expected that the Work2livE program will require a support infrastructure of over two to three years before a working position in

the UAE can be achieved. Such a lengthy program may prove to be too difficult for some and a drop out rate needs to be expected.

We remain confident that the program has considerable merit and offers great potential for those students who can demonstrate the self belief and an unwavering drive to improve their own circumstances.

The pilot program has begun with 6 trainees. And we look forward to sharing the progress of this program with you in the future.

Headmaster Mr. Allan Forbes flanked by Sandra Kendry and Simon Leigh, Head of Sports receiving the inaugeral shirt designed exclusively for the School.

7733-Lamprell Ad ( Upstream ) Size 19.6x21.8 cm