MODEC announced today that Petroleo Brasileiro S.A. (Petrobras) has signed a letter of intent for the supply, charter and operations of a Floating Production, Storage and Offloading (FPSO) vessel for the Pilot FPSO on the giant Tupi Area in the Santos Basin. The contract is for a 15 year lease with five one-year options.

MODEC is responsible for the engineering, procurement, construction, mobilization and operations for the FPSO, including topsides processing equipment, hull and marine system. SOFEC will design and provide the spread mooring.

MODEC will convert the VLCC "M/V Sunrise IV" into the FPSO Cidade de Angra dos Reis MV22. The FPSO will be capable of processing 100,000 barrels of oil per day or 150,000 barrels of total fluids per day, 150 million cubic feet per day of gas, and having a storage capacity of approximately 1,600,000 barrels. The FPSO will also be able to inject 100,000 barrels of water per day. The FPSO is planned to arrive in Brazil in the 4th quarter, 2010 and will be installed in 2,150 meters water depth. The FPSO is designed to remain on the field for up to 20 years.

This is the sixth vessel MODEC will provide and operate in Brazil. It is the first permanent FPSO to operate in the Tupi area. MODEC is currently operating the FPSO Fluminense and FPSO Cidade do Rio de Janeiro MV14 and the FSO Cidade de Macae MV15. The FPSO Cidade de Niteroi MV18 and FPSO Cidade de Santos MV20 are currently under construction and are scheduled to be installed in the fourth quarter of 2008 and 2009 respectively.

"This Pilot FPSO for the Tupi Area is of particular importance to us." says Kenji Yamada, President and CEO of MODEC, Inc. "We are proud of the confidence Petrobras obviously has in MODEC. We will deliver a quality FPSO on time and on budget."

The FPSO Cidade de Angra dos Reis MV22 will be deployed in the Tupi area and will initially gather production from 5 subsea wells with the capability to handle 4 additional production wells in the future.

Rick Hall, President of MODEC International, Inc., added, "The Tupi Pilot FPSO award represents a significant milestone for MODEC in assisting Petrobras and its partners to start to develop the vast pre-salt reserves of the Santos Basin. Along with the FPSO Cidade de Santos MV20, this will be MODEC's second unit for the developing Santos Basin."