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First Contact For Subsea 7's New Gulf of Mexico Spoolbase

20 August 2008

20 August 2008

Subsea 7 Inc (OSE Symbol: SUB), one of the world's leading subsea engineering and construction companies, has won the first contract for its new fabrication and spoolbase facility at Port Isabel, Texas. The subsea pipelay fabrication and installation contract has been awarded by Marathon Oil Corporation and is valued at over US$ 45 million.

The supply agreement is part of Marathon's previously disclosed procurement activities related to long lead time items associated with the Company's Droshky discovery in the Gulf of Mexico. Marathon anticipates sanctioning the Droshky development in the fourth quarter of this year.

The contract has been awarded for the fabrication and installation of two 8” flowlines totalling 58 km at the Droshky field development which is located approximately 180 km south of Houma, Louisiana, USA in water depths ranging from 1,350 ft to 3,000 ft in Green Canyon block 244. Marathon holds a 100 percent working interest in the Droshky development.

Subsea 7's full scope of work on the project includes project management, engineering, fabrication and installation services associated with the subsea infrastructure, including the flowlines, pipeline end terminations (PLETs) and risers. The pipeline will be fabricated at the company's new fabrication and spoolbase facility at Port Isabel, Texas, development of which was announced in May 2008. Engineering work will be carried out from Subsea 7's office in Houston. The offshore phase of the campaign will be carried out in the third quarter of 2009 and will be delivered by Subsea 7's flagship rigid reeled pipelay vessel, the Seven Oceans.

Commenting on the award, John Evans, Chief Operating Officer for Subsea 7 said, “We are very pleased to be working with Marathon on this important project, which further solidifies Subsea 7's position in the pipelay market in the region.”

Mel Fitzgerald, Chief Executive Officer, Subsea 7 commented: “This is a very significant contract for
Subsea 7. It justifies our investment in our new pipelay fabrication and spoolbase facility in Port Isabel and strengthens our position as the Subsea Partner of Choice for our customers in the Gulf of Mexico.”