Petrobras Selects MODEC for the Supply and Operation of the "Opportunity Oil" FPSO, Offshore Brazil

Houston, Dec. 28, 2006

MODEC, Inc., TSE (Tokyo Stock Exchange): 6269, announced today that Petróleo Brasileiro S.A. (Petrobras) has issued a letter of intent for the charter and operation of an FPSO to be located in Brazil's Campos Basin. This is the third FPSO for MODEC to charter and operate for Petrobras.

The project includes developing an FPSO capable of processing 100,000 barrels of oil per day, gas compression capacity of 124 million cubic feet per day and having an oil storage capacity of 1,600,000 barrels. Total contract revenues of the charter and operation of the FPSO including option periods could reach US$1.2 billion.

MODEC is responsible for the engineering, procurement, construction, installation, commissioning and operations of the FPSO, including topsides processing equipment, hull and marine systems, riser hang-offs and SOFEC® spread mooring system. MODEC will convert a VLCC tanker. The FPSO is expected to start the production in the field in the fourth quarter of 2008. The operational life of the FPSO is nine years with an additional six one-year options.

"MODEC is pleased to be working with Petrobras for another development in the Campos Basin," said Shashank Karve, President and CEO of MODEC International LLC.

"Of the 25 floating facilities that we have delivered, this will be our fourth FPSO project offshore Brazil and our third for Petrobras. We look forward to working with Petrobras and continuing to build relationships with the people of Brazil on this world-class project," said Kenji Yamada, President and CEO of MODEC, Inc.