MODEC's FPSO Cidade de Niteroi MV18 Achieves First Oil; Charter Begins

Tokyo, Mar. 4, 2009

MODEC announced today that the FPSO Cidade de Niteroi MV18, owned and operated by MODEC and leased to Petrobras, has reached First Oil and the charter agreement has begun. The contract is a nine year lease with six one-year options.

"This is the fourth vessel we have delivered to Brazil and the fourth vessel we will operate," says Kenji Yamada, President and CEO of MODEC, Inc. "We have two additional FPSOs under construction for Petrobras and partners: the FPSO Cidade de Santos MV20 which will be deployed in Urugua field and will also gather production from the Tambau field and the FPSO Cidade de Angra dos Reis MV22 which is the pilot FPSO for the "pre-salt" Tupi area in the Santos Basin. The Brazil market is obviously important to MODEC."

"MODEC has almost nine years of operational experience in Brazil, has crewed four units and has two operational offices," says Shashank Karve, Managing Director and Chief Operating Officer of MODEC, Inc. "We have invested in Brazil and the results are very rewarding. We are excited about achieving first oil on FPSO Cidade de Niteroi MV18 and look forward to bringing the two other units into operation for Petrobras."

The FPSO Cidade de Niteroi MV18 is capable of processing 100,000 barrels of oil per day, has a gas compression capacity of 124 million cubic feet per day and oil storage capacity of 1.6 million barrels.

The spread-moored FPSO is located on the Marlin East field in the reservoir known as Jabuti in the Campos Basin, offshore Brazil in approximately 1,400 meters water depth.