The MODEC vessel Cidade de São Paulo, recently arrived from China to complete its conversion as an FPSO (Floating Production Storage and Offloading) at the BrasFELS shipyard in Angra Dos Reis, Brazil. The vessel was anchored 5 nautical miles west of Ilha Grande.

At 09:30 hours on Friday, December 16th 2011 preparations for docking at the shipyard commenced.

During the startup of the de-ballasting operations approximately 2,000 litres (12 bbls) of fuel oil was accidentally discharged into the sea. The operation was stopped immediately and the MODEC oil spill response plan was put into action.

The relevant authorities were promptly notified and Oil Spill Response Vessels were deployed to the site within 3 hours. A series of helicopter observation flights were conducted to help with the location of potential oil sheens. Two possible sheens were located on Sunday December 18th, 2011 however the Oil Response Vessels confirmed the absence of oil.

Oil presence was subsequently reported to have reached a public beach located at Praia Bonfim, well inside the bay of Ilha Grande, about 13 nautical miles from the location of the FPSO. The Oil Spill Response Team headed to the beach, collected samples for analysis and proceeded to clean the area.

INEA, the State Environmental Agency authorized the demobilization of the emergency response resources on Monday December 19th, 2011.

MODEC has been collaborating fully with the authorities throughout the ongoing investigations and are in the process of determining the cause of the incident and implementing the necessary actions to avoid reoccurrence.

Tokyo

Kazuo Yamashita

General Manager of General Affairs Dept.

MODEC, Inc.

Kazuo.Yamashita@modec.com

Rio de Janeiro

Cláudia Bensimon

Link Comunicação Integrada

cbensimon@linkcomunicacaointegrada.com.br