EXHIBIT 10.5

 

Immediately

 

MURPHY OIL AWARDS KIKEH AREA DEVELOPMENT CONTRACT

 

El Dorado, Arkansas, January 31, 2005 – Murphy Oil Corporation announced that
its wholly owned subsidiary, Murphy Sabah Oil Co., Ltd. has awarded a major
contract for the Kikeh Area Field Development.

 

The contract for the floating, production, storage and offloading (FPSO) vessel
was awarded to Malaysia International Shipping Corporation Berhad (MISC). Single
Buoy Moorings Inc., a fully owned subsidiary of IHC Caland N.V., is the
technical partner in the venture to MISC. The contract will include both the
charter of the vessel as well as the operation and maintenance work. The
contract has a firm duration of eight years and includes options for five
subsequent three-year extension periods. The FPSO will have the facilities to
process 120,000 barrels of oil per day, and will be fitted with high capacity
water and gas treatment facilities with associated reinjection plants. The FPSO
will have an oil storage capability in excess of 1.5 million barrels of oil. The
unit will be designed to remain in the field for 20 years. The FPSO is scheduled
to be delivered to the Kikeh field in the second half of 2007. All construction,
outfitting, and integration work for the FPSO will take place at Malaysia
Shipyard and Engineering Sdn Bhd.

 

“We are extremely pleased to announce this major contract commitment that keeps
us on schedule,” said Claiborne P. Deming, Murphy Oil Corporation’s President
and Chief Executive Officer. “This timely commitment shows the support of
PETRONAS in our procurement efforts as wells as our commitment to utilize the
local content requirements in these projects. This announcement further
solidifies our commitment of first oil from Kikeh in the second half of 2007.”

 

The full Kikeh Area Field Development plan was approved by PETRONAS in November
2004. The field has a recoverable reserve base in excess of 400 million barrels
with associated expansion capability. The Kikeh project has a projected capital
cost of US$1.4 billion, excluding the FPSO charter. Future announcements will
follow for construction contracts for the subsea equipment and infield pipeline
portions of the development project.

 

The Kikeh Development is located offshore Block K Malaysia, which is operated by
Murphy with an 80% working interest. The Block has more than four million acres
and PETRONAS Carigali Sdn. Bhd., a wholly owned exploration and production arm
of PETRONAS, holds the remaining 20%.

 

The forward-looking statements reflected in this release are made in reliance
upon the safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. No assurance can be given that the results discussed herein will be
attained, and certain important factors that may cause actual results to differ
materially are contained in Murphy’s January 15, 1997 Form 8-K report on file
with the U.S. Securities and Exchange Commission.

 

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