In line with the strategy decided by the Board, Frontline Ltd. (“Frontline” or the “Company”) is currently in the process of establishing a separate entity to develop the Company’s floating production activity. Frontline is in discussion regarding the sale of all its floating production activities including the FPSO “Front Puffin” currently under conversion at Keppel Shipyard in Singapore and its floating production management organization to Sea Production Ltd. (“Sea Production” – a company under incorporation). The conversion of “Front Puffin” is expected to be completed in the second quarter of 2007.
Sea Production will be established as a separate entity to develop floating production (FPSO) and storage (FSO) projects. The company’s Chief Executive Officer and Executive Chairman will be, Mr. Oscar Spieler, the previous Chief Executive Officer of Frontline Management AS. Sea Production endeavors to become a leading FPSO contractor by utilizing its fleet of suitable vessels, through its existing experienced management organization and through partnerships with strategic subcontractors.
Sea Production will include the FPSO “Front Puffin”. In addition, the Company is in negotiation with Greenwich Holdings to purchase two Double side Aframax tankers suitable for FPSO conversion and the FPSO “Crystal Ocean” from Seadrill Limited. The final terms for these transfers are still under discussion.
Frontline is in the process of bringing external investors into Sea Production, and to finance the company on a stand alone basis. It is the intention that Keppel Shipyard which has been a partner in the Puffin project also will be a substantial shareholder in Sea Production. Keppel Shipyard and Frontline intend together to subscribe to minimum 33% of the new equity. Frontline expects a final clarification around the financing of Sea Production and the final terms of the sales will be communicated to the market within the next week.
January 31, 2007
The Board of Directors
Questions should be directed to:
Bjørn Sjaastad: Chief Executive Officer, Frontline Management AS
+47 23 11 40 99
Oscar Spieler: Chief Executive Officer, Sea Production Management AS
+47 23 11 46 11