Shell Enters Two-Year Agreement for use of J. Ray McDermott's Derrick Barge 50

Business Wire, July 1, 1997

NEW ORLEANS--(BUSINESS WIRE)--July 1, 1997--J. Ray McDermott (NYSE:JRM) announced today that it has agreed with Shell Deepwater Development Inc. to commit its Derrick Barge 50 to Shell's exclusive use for two years, beginning July 1, 1999.

The agreement also calls for J. Ray to add two thrusters and upgrade the pipeline installation system on the derrick barge. The modifications will provide year-round station-keeping ability and improved capacity for J-lay pipeline installation.

In recent years, Derrick Barge 50 has participated in most of the Gulf of Mexico's deepwater developments, installing both platforms and pipelines. In service since 1988, it is the world's largest monohull crane vessel, 495 feet long and 151 feet wide with a lifting capacity of 4,400 tons. In 1992, it became the first vessel to successfully install deepwater pipelines using the J-lay method, when it completed lines for Shell's Auger project to depths approaching 3,000 feet. It has worked on the installation of a significant number of fixed and floating facilities in the Gulf of Mexico and other parts of the world, including tension leg platforms, the world's first spar production platform, and on a number of deepwater pipeline projects.

"Over the past several years, J. Ray McDermott and Shell have created a unique working relationship built on open, honest communication, teamwork, and trust. Our relationship has now created this new landmark for partnering and alliances in our industry," said Bobby Rawle, president and chief operating officer, J. Ray McDermott. "Shell asked us to commit one of our best resources for a specified period and in return has made a commitment that will help us meet our financial performance goals. In addition, we both avoid the time and expense required to provide DB-50 on a project-by-project basis. We are very happy with this agreement, which we believe sets a new standard for conducting business in our industry."

"We've created a true partnership between two recognized leaders in one of the world's most active deepwater regions, and both of us benefit," said Rich Pattarozzi, president and chief executive officer, Shell Deepwater Development Inc. "We can count on proven, state-of-the-art equipment for our deepwater developments and on J. Ray's commitment to safety, cost, and schedule. In return, we commit to use DB-50 at a fair rate and to support the modifications that will increase the capabilities of this world-class barge. We are extremely pleased to continue our long relationship with J. Ray through this important agreement."

J. Ray McDermott is a leading worldwide marine construction company. Its services include design, fabrication, transportation, and installation of new and refurbished offshore platforms, installation of offshore pipelines, and design and installation of subsea production facilities for the offshore oil and gas industry. McDermott International, Inc. (NYSE:MDR) holds a majority interest in J. Ray McDermott.

CONTACT: J. Ray McDermott, New Orleans

Don Washington, 504/587-4080