Transocean Inc. today announced that a subsidiary of BP PLC has awarded a subsidiary of Transocean a drilling contract for an enhanced Enterprise-class design newbuild drillship with modified specifications for expected operations offshore Angola for which BP is the operator.

The enhanced Enterprise-class drillship is expected to be owned and operated by a joint venture which is 65% owned by Transocean and 35% owned by an Angolan partner.

The five-year drilling contract is expected to commence during the third quarter of 2010, following shipyard construction, sea trials, mobilization to Angola and customer acceptance. The term of the drilling contract may be extended to seven years at BP's election on or before March 31, 2008. The contract commencement date is contingent on vendor performance and other factors. Contracted revenues related to the five-year and seven year contract terms are approximately $900 million and $1,159 million, respectively, including mobilization fees and customer reimbursed equipment.

Contracted revenue represents the maximum amount of revenue that may be earned in the firm contract period, excluding revenues for demobilization, reimbursement for the escalation of operating costs and miscellaneous adjustments.

Construction of the dynamically positioned, double-hull drillship is scheduled to take place at the Daewoo Shipbuilding and Marine Engineering Co., Ltd. yard in Okpo, South Korea, where three of Transocean's previously announced enhanced Enterprise-class drillships are currently being constructed. The estimated total capital expenditure for the fourth drillship, including customer reimbursed equipment, is approximately $640 million, excluding capitalized interest.

The rig will feature Transocean's patented dual-activity drilling technology, allowing for parallel drilling operations designed to save time and money in deepwater well construction, compared with conventional rigs. The rig will also feature expanded completions capabilities. It will have a variable deckload of 20,000 metric tons and the capability of drilling in up to 7,500 feet of water depth, upgradeable to 12,000 feet of water depth and 40,000 feet of total drilling depth with additional equipment.