Santos selects MODEC to develop Mutineer-Exeter field, Australia

Tokyo, Oct. 16, 2003

MODEC, Inc., Tokyo (TSE:6269), announced today that they have received a letter of commencement from Santos Ltd, Australia, for the development of the Mutineer-Exeter field (WA-191-P) which is located approximately 150km due north of Dampier on the north west coast of Australia. The Mutineer-Exeter development plan calls for the provision of a turret moored floating production, storage and offloading vessel (FPSO).

The FPSO to be converted from an existing double-hull Suez-max tanker that meets very strict Australian environmental regulatory requirements. MODEC is responsible for the engineering, procurement, construction, installation, commissioning and operation for the 930,000 barrel storage capacity FPSO including the topsides processing equipment and inboard turret mooring system. When a cyclone approaches, the FPSO can easily and temporarily evacuate from the field by its unique disconnectable turret system. MODEC will operate the FPSO for minimum five (5) years with possible extensions.

The FPSO is planned to be installed in 156 meters water depth and capable of processing 100,000 barrels of oil per day. Santos 's first oil from the field is planned for mid 2005 however MODEC are targeting an early date expected in the first quarter 2005.