J. Ray McDermott Signs Exclusive Agreement to Fabricate Topsides for Four BP Deepwater Projects in Gulf of Mexico

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NOV 20,2000

J. Ray McDermott, S.A., a subsidiary of McDermott International, Inc. (NYSE:MDR), has signed a letter of intent to fabricate the topsides for four major BP deepwater projects in the Gulf of Mexico. The agreement gives BP exclusive use of J. Ray McDermott's facility near Morgan City, Louisiana, during the fabrication.

Over the next several years, the work is expected to bring as much as $600 million in revenues to J. Ray McDermott and create an additional 400-500 new jobs for fabrication workers at the facility. J. Ray McDermott will dedicate its fabrication yard in Amelia, Louisiana, solely for work on the topsides for BP's Holstein, Mad Dog, Atlantis and Crazy Horse projects in the deepwater Gulf of Mexico. Fabrication will commence in the second half of 2001. Three of the four projects will be spar developments. Development options for Crazy Horse, the largest of the projects, are still being evaluated.

Crazy Horse is located in 6,000 feet of water in the Boarshead Basin, 125 miles southeast of New Orleans. With estimated recoverable oil of at least one billion barrels of oil equivalent, it is the biggest discovery ever in the deepwater Gulf. The other three projects are located in depths varying from 4,000 to 6,500 feet in the South Green Canyon area of the Gulf, 150 miles south of New Orleans.

“We are honored that BP would commit these important deepwater projects to us in exchange for the exclusive use of our facility," said Bobby Rawle, president of J. Ray McDermott. “Our companies have developed a level of trust and understanding that allows what is, to the best of my knowledge, a first in the industry. We look forward to contributing to the success of BP's projects."

Rawle said that since work on the BP projects is scheduled to begin in the second half of next year, it should not materially affect the previously disclosed guidance for J. Ray McDermott's financial results in 2001. The fabrication facility near Morgan City was established in 1956 and currently employs approximately 1,000 workers. Continuous improvements and investments in infrastructure, along with a highly skilled and dedicated workforce, have over the years enabled the yard to competitively and safely produce quality structures for the offshore oil and gas industry.

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