EXHIBIT 10.3

           This Amendment, dated April 5, 2002, is made to the Master Option
Agreement dated April 6, 2000 (`Master Option Agreement"), by and among Chiles
Offshore Inc. (formerly known as Chiles Offshore LLC), a corporation organized
under the laws of the State of Delaware ("Chiles"), Keppel FELS Limited, a
corporation organized under the laws of the Republic of Singapore ("Keppel
FELS") and AMFELS, Inc., a corporation organized under the laws of the State of
Texas ("AMFELS") and as amended hereby, and as the same may be further amended
from time to time.

                                    RECITALS:

           WHEREAS, Chiles, Keppel FELS and AMFELS, desire to amend the Master
Option Agreement as detailed herein.

           NOW, THEREFORE, in consideration of these premises, the mutual
benefit set forth herein, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Chiles, Keppel FELS and
AMFELS agree as follows:

ARTICLE II - SECOND OPTION Articles 2.1 through 2.5 shall be amended and
replaced to read as:

           2.1 Extension of Option. On the terms and subject to the conditions
herein set forth, AMFELS hereby extends the irrevocable option granted to Chiles
(the "Second Option"), to require AMFELS to enter into one platform construction
agreement (the "Second Construction Agreement") for construction of one
additional drilling rig (the "Second Rig") in the form attached as Exhibit 1 to
the Master Option Agreement, except that Exhibit C hereto shall be substituted
for Exhibit C thereto, in the event that the Second Option Notice (as defined)
is delivered to AMFELS with such changes or modifications thereto as may be
required pursuant to the terms hereof. The Second Construction Agreement shall
be dated as of the date of the Second Option Notice.

           2.2 Exercise of Second Option. The Second Option may only be
exercised by delivery by Chiles to AMFELS of written notice of exercise of the
Second Option (the "Second Option Notice"), not later than October 6, 2002,
Chiles and AMFELS shall each execute and deliver the Second Construction
Agreement no later than the date that is seven (7) days after the date of the
Second Option Notice. If Chiles fails to execute the Second Option Agreement as
aforesaid, the Second Option shall thereafter lapse.

           2.3 Conditions. The obligations set forth in Section 2.5 hereof shall
be subject to availability of AMFELS to whom Chiles has delivered a Second
Option Notice, of sufficient production capacity.

           2.4 Contract Price. The Contract Price, as defined in the Second
Construction Agreement, shall be U.S.$76,900,000 (the "AMFELS Fixed Price",
provided, however, that if the Second Option is exercised and the Consumer Price
Index (the "CPI"), at its official reading most recently preceding delivery of
the Second Option Notice (the "Exercise CPI"), shall be greater than zero, the
AMFELS Fixed Price shall be adjusted upwards at a growth rate equal to the
Exercise CPI, compounded annually and applied to the period of time beginning on
the first day of the Second Option Term and ending on the date of the Second


<PAGE>
Option Notice. No adjustment to the AMFELS Fixed Price shall be made using the
CPI in the event that the Exercise CPI shall not be greater than zero, i.e., the
AMFELS Fixed Price shall not then be reduced. For purposes of this Section 2.4,
the "CPI" shall be the rate published by Bloomberg Financial Services or by such
other source as may be agreed upon by the parties hereto.

In the event prior to the issue of the Second Option Notice and for two months
thereafter, if US Import Tariffs are imposed on steel imports into the United
States, the price shall be adjusted according to the impact of such steel price
increases brought about by the Import Tariffs for the steel. (Best accomplished
by comparison of charges for the steel from the steel purchases for the Galileo
and then current quotations/prices.) Price change shall only be applied to such
steel prices affected.

Operation of Section Article 2.4 is illustrated by the examples set forth below.
Actual results could vary significantly from these examples.

(i)        In the event that the Second Option Notice was delivered to AMFELS
           six months into the second year of the Second Option Term, the
           Exercise CPI was 3% then the Contract Price would increase at an
           annual rate of 3% applied over one and one-half years. As a result,
           the Contract Price would increase to US$80,395,105.

(ii)       In the event that the Second Option Notice was delivered to AMFELS
           six months into the second year of the Second Option Term and the
           Exercise CPI was less than zero then no adjustment would be made in
           the Contract Price, which would be unchanged, at U.S.$76,900,000.

           2.5 Rig Delivery. Subject to Article 2.3 hereof, the Second
Construction Agreement shall provide for delivery of the Second Rig not later
than twenty-two (22) months after the date thereof."

ARTICLE III - THIRD OPTION, shall be amended to delete references to KFELS as
the Option shall be granted by AMFELS.

ENTIRE AGREEMENT / LIMITATION OF CHANGES. Except as specifically set forth in
this Amendment, the Original Agreement remains unchanged and in full force and
effect, including, without limitation, all provisions regarding choice of law,
forum and dispute resolution. This Amendment and the Original Master Option
Agreement constitute the Master Option Agreement as amended, and contain all of
the parties, agreements and undertakings with respect to the Master Option
Agreement.


                                       2
<PAGE>
           IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized as of the
date first written above.


CHILES OFFSHORE INC.

By: /s/ William E. Chiles
    -----------------------------------
    Name: William E. Chiles
    Title: President



KEPPEL FELS LIMITED

By: /s/ C. H. Tong
    -----------------------------------
    Name: C. H. Tong
    Title: Managing Director



AMFELS, INC.

By: /s/ Y. Y. Chow
    -----------------------------------
    Name: Y. Y. Chow
    Title: President




                                       3
<PAGE>
                                    EXHIBIT C

                               TITLE XI PROVISIONS






                                 AMENDMENT NO. 1

                                       TO

                         PLATFORM CONSTRUCTION AGREEMENT

                                     BETWEEN

                      CHILES OFFSHORE INC. -- HOUSTON TEXAS

                                       AND

                        AMFELS, INC. - BROWNSVILLE, TEXAS


<PAGE>
                                    EXHIBIT C

                               TITLE XI PROVISIONS

           THIS AMENDMENT NO. 1 TO PLATFORM CONSTRUCTION AGREEMENT (this
"Amendment") is entered into this ___ day of ______, 2002, between AMFELS, INC.,
a Texas corporation ("Builder"), and CHILES OFFSHORE INC., a corporation
organized under thc laws of thc State of Delaware ("Owner"), for the
construction by Builder and purchase by Owner of one mobile, self-contained and
self-elevating Keppel FELS MOD V-B class platform (the "Platform"), between
Builder and Owner dated as of ________, 2002 (the "Original Agreement," and as
amended hereby, and as the same may be further amended and assigned from time to
time, (the "Contract").

                                    RECITALS:

           WHEREAS, Owner will issue its United States Government Ship Financing
Obligations, Galileo Series (the "Obligations"), in order to finance the
construction of the Platform, on the closing date relating to such issuance (the
"Closing Date").

           WHEREAS, the United States of America, represented by the Secretary
of Transportation, acting by and through the Maritime Administrator (the
"Secretary"), on the Closing Date will guarantee the payment of the outstanding
principal and interest on the Obligations (the "Guarantee") pursuant to Title XI
of the Merchant Marine Act, 1936, as amended.

           WHEREAS, Owner and Builder, in order to induce the Secretary to issue
the Guarantee, desire to amend the Original Agreement as detailed herein.

           NOW, THEREFORE, in consideration of these premises, the mutual
benefit set forth herein, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Owner and Builder agree
as follows:

SECTION 1. PARAGRAPH 3. The following is added as a new sub-paragraph (i) to
Paragraph 3:

         (i)      Records:

         Builder and Owner shall keep records of construction costs paid by or
         for Owners' account and furnish the secretary with a detailed statement
         of these costs, distinguishing between (i) items paid or obligated to
         be paid, and (ii) costs of American and foreign materials (including
         services) in the hull and superstructure."

SECTION 2. PARAGRAPH 8. Paragraph 8 is deleted in its entirety and the following
inserted in lieu thereof:


<PAGE>
"8.      INSURANCE.
         ---------

         A. Prior to the commencement of construction of the Platform, Builder
         shall obtain, at its own cost and expense, and furnish certificates or
         copies thereof to the Owner, the following policies of insurances:

         (i)      Worker's compensation (including occupational disease) and
                  employer's liability insurance with maritime, In Rem and U.S.
                  Longshoremens and Harborworkers Act coverage in accordance
                  with the applicable statutory requirements of the Untied
                  States of America, with limits on the employer liability
                  coverage of not less than U.S.$1,000,000 for bodily injury per
                  person, with umbrella excess liability limits of
                  U.S.$25,000,000;

         (ii)     Comprehensive public liability, including broad form
                  contractual liability coverage, with limits of not less than
                  U.S.$500,000 for bodily injury per occurrence, and
                  U.S.$500,000 for property damage per occurrence with umbrella
                  excess liability limits of U.S.$25,000,000; and

         (iii)    Automobile liability insurance covering automobile equipment
                  used in the performance of the work under this Contract with
                  limits in accordance with the rules and regulations of
                  U.S.$10.000,000.

                  All Builder insurance policies set forth in this paragraph 8A
                  shall, either on the face thereof or by appropriate
                  endorsement: (w) name (except for the policy specified in
                  clause (i) herein above) Builder and Owner as assureds and
                  provide that payments thereunder shall be made to the extent
                  that their respective interests may appear, (x) provide that
                  they shall not be cancelled or their coverage reduced, except
                  upon thirty (30) days' prior written notice to Builder and
                  Owner (if such cancellation or reduction should be caused by
                  Builder's failure to pay any premium when due, Owner shall
                  have the right to pay any such premium within such thirty (30)
                  days to maintain the coverage in effect for the benefit of
                  Owner, and Owner retains the right to be reimbursed by
                  Builder), (y) contain waiver of subrogation provisions
                  pursuant to which the insurer waives all express or implied
                  rights of subrogation against Builder and Owner, Builder and
                  Owner hereby waiving any rights to subrogate against each
                  other, and (z) be maintained in full force and effect by
                  Builder from commencement of construction until the Platform
                  is accepted by Owner at delivery, the obligation to name Owner
                  as assured and waive subrogation with respect to the policy
                  specified in clauses (ii) and (iii) herein above shall be
                  limited to those risks which are covered by Builder's
                  indemnity obligations under this Contract.

         B. From the time the first material destined for inclusion as part of
         the Platform becomes at risk and until the Platform has been physically
         delivered to and accepted by Owner, the Platform and all materials,
         outfit and equipment provided by Builder or Owner (including OFE) for


                                       2
<PAGE>
         and to be used in the construction thereof, shall be at the risk of the
         Builder and shall be kept fully insured under a full form Builder's
         Risk Policy under the latest American Institute Builder's Risk Clauses,
         including loss or damage caused by strikers, locked-out workmen, or
         persons taking part in labor disturbances, or riot or civil commotion,
         protection and indemnity clauses and including pre-keel and tests and
         trial clauses. The amount of such insurance shall be equal to the
         aggregate value of the work done, including material, appurtenances,
         equipment and outfit delivered to the Shipyard for the Platform at any
         time during the construction period, including any such items furnished
         by Owner and expenses of design and inspection, construction period
         interest and the Title XI Guarantee Fee. Such coverage shall be
         maintained in full force and effect from commencement of construction
         until the Platform is accepted by Owner at delivery. The amount of
         insurance, the terms of the policies and the underwriters shall at all
         times be satisfactory to the Builder, Owner and the Secretary,
         provided, however, that the amount of such coverage shall be in an
         amount at least equal to the Contract Price and the
         value of all OFE and shall be increased as appropriate for change
         orders and alterations.

         C. The Builder's Risk Policy shall contain the following provisions:

         (i)      All losses in excess of U.S. $100,000 shall he payable to the
                  Secretary for distribution by him to himself, Owner and
                  Builder as their interests may appear in accordance with
                  Section 2.05 of the Security Agreement between Owner and the
                  United States of America, represented by the Secretary of
                  Transportation, acting by and through the Maritime
                  Administrator (the "Secretary"), Contract No. MA--____, dated
                  the date hereof relating to the Platform (the "Security
                  Agreement").

         (ii)     Owner, Builder and the United States of America shall be named
                  assureds.

         (iii)    The policy shall provide no recourse against the United States
                  of America for payment of premium.

         (iv)     At least ten (10) days' prior written notice of any
                  cancellation or material change in the policy shall be given
                  to the Secretary, U.S. Department of Transportation, c/o
                  Maritime Administration, 400 Seventh Street, S.W., Washington,
                  D.C. 20590, Attention: Chief, Division of Maritime Insurance,
                  and to Builder and Owner.

         (v)      There shall be a waiver of subrogation provision pursuant to
                  which the insurer waives all express and implied rights of
                  subrogation against Builder and Owner. Builder and Owner
                  hereby waive any rights to subrogate against each other.

         (vi)     The deductible or self-insured retention under the Builder's
                  Risk Policy shall be to the account of Builder in an amount to
                  be agreed among Builder, Owner and the Secretary, in any case
                  not exceeding $100,000 per occurrence. Builder shall cooperate


                                       3
<PAGE>
                  in providing timelines of increasing values and other
                  information Owner may require to assure coverage in the
                  required amount.

         D. (i) If the Platform or any OFE shall be damaged by any insured cause
         whatsoever prior to acceptance thereof by Owner, and such damage does
         not constitute an actual, compromised or constructive total loss of the
         Platform, insurance proceeds shall be applied to the repair of the item
         and paid in accordance with Section 2.05 of the Security Agreement, and
         Owner and Builder shall then seek to mutually agree on new milestone
         payments for work which has to be redone as a result of the damage
         covered by the Builder's Risk Policy.

         (ii)     In the event of an actual, compromised or constructive total
                  loss of the Platform prior to delivery, this Contract shall
                  automatically be deemed terminated unless Builder, Owner and
                  the Secretary elect to construct the Platform under the
                  Contract. Upon any such termination, Builder shall retain all
                  Milestone Payments made pursuant to this Contract and the
                  price for that portion of the Platform then constructed for
                  which a Milestone Payment has not yet been made and all work
                  in progress (including profit thereon to Builder). All
                  proceeds of the Builder's Risk insurance payable as a result
                  of such loss shall be paid to the Secretary for distribution
                  to the Secretary, Owner and Builder, as their interests may
                  appear.

         (iii)    The parties acknowledge that the Secretary has certain rights
                  to claim for a constructive total loss and to enter into an
                  agreement or compromise providing for an agreed or compromised
                  total loss of the Platform pursuant to Section 2.05 of the
                  Security Agreement, with the prior written consent of Builder
                  and (prior to any default thereby) Owner, which consent shall
                  be deemed to have been given if the surveyor appointed by the
                  underwriters for the Builder's Risk Policy has determined that
                  an actual, agreed or compromised, or constructive total loss
                  of the Platform has occurred."

SECTION 3. PARAGRAPH 5. Changes in the Contract. Notwithstanding anything to the
contrary contained in the Contract, the Contract shall not be amended or
modified except in writing duly signed by the Builder and Shipowner with the
Secretary's prior written consent, provided that with respect to changes made or
contracted for after the Closing Date the Secretary's prior written consent
shall not be necessary, but prior written notice to the Secretary shall be
given, for (a) any mandatory changes to the Contract as a result of any
requirements of any government agency or classification society, or (b) any
non-mandatory changes that Builder and Shipowner desire to make which do not
exceed, with respect to any item of the Vessel's construction, one (1%) percent
of the Vessel's Contract Price and which do not, in the aggregate, cause the
Vessel's Contract Price to be increased more than five (5%) percent or the
delivery and completion date of the Vessel to be extended more than ten (10)
days. Notwithstanding the foregoing, Shipowner shall not present or propose to
Builder any change in the general dimensions and/or characteristics of the


                                       4
<PAGE>
Vessel which would diminish the capacity of the Vessel to perform as originally
intended by the Contract, without the Secretary's prior written consent. Payment
procedures for all changes pursued and accomplished in accordance with this
paragraph shall be governed by the provisions of paragraph 3(d) and no payment
for any change requiring prior written approval from the Secretary shall be made
with proceeds under the Credit Agreement until such prior written consent shall
have been received.

SECTION 4. NOT USED.

SECTION 5. PARAGRAPH 7. Paragraph 7 is deleted in its entirety and the following
is inserted in lieu thereof:


           "7.    LIENS.
                  -----

                  Provided Builder is paid all amounts owing by Owner to Builder
                  pursuant to Paragraph 3 hereof, Builder, its agents and
                  subcontractors agree not to place or create, or permit to be
                  placed or created, any liens, charges or encumbrances on or
                  security interests as to, or pledges of, the Platform
                  (including any item incorporated in or made a part of the
                  Platform (including any item incorporated in or made part of
                  the Platform and not yet paid for by Owner,) or any OFE, and
                  any lien, charge, encumbrance or security interest so placed
                  or created shall be forthwith released by Builder. In the
                  event Builder fails to secure the removal of same, Builder
                  shall reimburse Owner for its costs of securing such discharge
                  or release (which costs shall include any expenses incurred in
                  connection therewith) or at Owner's sole option, by deducting
                  such sum from any payments due or become due to Builder under
                  this Contract.

                  Builder agrees and acknowledges that Owner has, as
                  contemplated by the Security Agreement between the Secretary
                  and the Owner dated the date hereof, granted a security
                  interest to the Secretary in the Equipment as defined in
                  paragraph 9(a) of the Contract. Owner agrees to cooperate to
                  execute, deliver and file any UCC filing statements or other
                  documents reasonably necessary or desirable for the perfection
                  of the Owner's and the Secretary's security interests.

                  On the Closing Date, and at the time of delivery of the
                  Platform, and from time to time as Owner shall submit a
                  Request for Disbursement under the Credit Agreement to the
                  Secretary, Builder agrees, on behalf of itself, or any party
                  claiming through the Builder, to execute certificates of no
                  liens, in form and substance satisfactory to the Secretary,
                  with respect to the applicable Platform, hull or component
                  parts for which payment is requested or with respect to all
                  work that has been previously been accomplished and
                  incorporated in and made part of the Platform."

SECTION 6. SUBORDINATION. The Builder agrees to, and does hereby fully
subordinate to the rights of the Secretary all liens and security rights and
remedies to enforce such rights which the Builder has or may have with respect
to the equipment, as defined in paragraph 9(a) of the Contract, for which title


                                       5
<PAGE>
has vested in the Owner pursuant to Paragraph 9(a) of the Contract. Prior to
commencement of any work under this Contract, the Builder shall provide to the
Secretary the release or subordination of any claim to a security interest or
other encumbrance, and the remedies to enforce such rights, held or claimed by
any of the Builder's lenders. Said release or subordination shall be in form and
substance satisfactory to the Secretary. In any financing statement filed by
Builder to perfect Builder's security interest in the Equipment, Builder will
include the following statement: "This security interest in favor of AMFELS,
INC. is fully subordinate to the rights and remedies granted in the collateral
by AMFELS, INC. to Chiles Galileo LLC pursuant to that certain Security
Agreement between Builder and Owner dated of even date herewith and as further
assigned by Chiles Galileo LLC to the Secretary of Transportation, acting by and
through the Maritime Administrator, (the "Secretary"), even if this financing
statement is for any reason filed earlier in time than the financing statement
filed by Chiles Galileo or the Secretary with respect to the collateral."

SECTION 7. PARAGRAPH 3. The following is added at the end of sub-paragraph (b)
to Paragraph 3:

                  "Builder shall provide to Owner at the time of the notice
                  required by the immediately preceding paragraph, all written
                  substantiation of completion of the relevant Milestone event
                  to support all payments required to be made hereunder as Owner
                  may reasonably request in order to make timely application to
                  obtain the proceeds of the Obligations for such payments. Upon
                  receipt of such written substantiation from Builder, Owner
                  shall submit to the Secretary a Request for Disbursements
                  under the Credit Agreement relating to the Obligations. Upon
                  receipt of the Secretary's approval to such Request, Owner
                  shall drawdown the amount pursuant to the Credit Agreement and
                  payment shall be made directly from the Lender under the
                  Credit Agreement to Builder."

SECTION 8. PARAGRAPH 4. The following is added as a new last paragraph to
Paragraph 4:

                  "Builder shall permit inspection by, supply information to and
                  cooperate with representatives of the Secretary at its Yard
                  where the assembly of the Platform is taking place and at such
                  other yards of the Builder, its affiliates and subcontractors
                  where parts of the Contract or subcontracts may be performed.
                  Builder acknowledges that such cooperation may include, but
                  not be limited to, providing the Secretary (a) access to the
                  Platform and areas of the Yard where work related to the
                  Platform is being performed by Builder, its contractors and
                  subcontractors, at all reasonable times during normal working
                  hours to inspect performance of the work performed hereunder,
                  and to observe trials and other tests, (b) copies of detailed
                  construction schedules and critical paths for the Platform
                  along with changes to such documents as they occur, and
                  updated schedules of all Equipment and material received by or
                  delivered to the Shipyard relating to the Platform, (c) access
                  to contract plans and specifications for the Platform, (d)
                  reasonable access to the Yard's production manager or


                                       6
<PAGE>
                  supervisor, (e) information on the origination and source of
                  materials, (f) access to progress payment and construction
                  Milestone information, and (g) copies of all notices and
                  correspondence (i) relating to compliance with the
                  requirements of Paragraph 2(a)(ii) referred to in Section 3 to
                  Amendment No. 1 to this Contract (regarding change orders),
                  (iii) referred to in sub-paragraph (b) of Paragraph 3
                  (regarding to Milestone Payments), (iv) referred to in
                  Paragraph 14 (regarding Force Majeure), (v) relating to
                  Paragraph 17 (regarding Litigation), (vi) relating to
                  Paragraph 10 (regarding tests and trials), and (vii) referred
                  to in Paragraph 16(c) (regarding Owner default). In
                  conjunction with any such inspections by the Secretary,
                  Builder will furnish, on a temporary basis, reasonable space
                  at its Yard for the Secretary's representatives and
                  communication, copying and other facilities as appropriate.
                  The Secretary's representatives shall comply with and follow
                  Builder's safety, traffic and security rules while at the
                  Yard, and shall not interfere in Builder's prosecution of the
                  work hereunder."

SECTION 9. PARAGRAPH 18. The following is added after the address of Owner in
Paragraph 18:

                  "If to the Secretary: United States Maritime Administration
                                        400 Seventh Street, S.W.
                                        Washington, D.C.  20590
                                        Attention: Office of Ship Financing"

SECTION 10. PARAGRAPH 21. The words "or amended are added after the word
"modified" in the first sentence of Paragraph 21, and the words "and Owner" are
deleted from said first sentence of Paragraph 21, and the following inserted in
lieu thereof: ", Owner and the Secretary."

SECTION 11. PARAGRAPH 9. The first sentence of the sub-paragraph (a) of
Paragraph 9 is deleted and the following substituted therefor:

                  "Notwithstanding anything to the contrary contained in the
                  Contract, title to the Platform and all work, materials,
                  goods, and components, incorporated in, attached to, or
                  intended to be incorporated in or attached to the hull or the
                  Platform shall vest in Owner on the earlier of (a) when Owner
                  makes the next installment payment required by the Contract to
                  Builder following receipt of the materials, goods, or
                  components or performance of the work by the Builder (such
                  items are hereinafter called the "Equipment"), or (b) when
                  work is performed on any of the Equipment or materials, goods,
                  or components are incorporated in or attached to any of the
                  Equipment, whether or not such work, materials, goods, or
                  components have been paid for by the Shipowner. Title to OFE
                  paid for by the Owner shall be in the Owner. Risk with respect


                                       7
<PAGE>
                  to the hull or the Platform and all materials destined for
                  inclusion as part of the Platform (including OFE) shall be
                  governed by the provisions of Paragraph 8, as amended."

SECTION 12. PARAGRAPH 16.

         (a)      Subparagraph 16(b) is redesignated as subparagraph 16(b)(i)
                  and the following is added as the last sentence thereof:

                  "Notwithstanding anything in this Contract to the contrary,
                  specifically including but not limited to this Paragraph 16,
                  Owner may not terminate or cancel this Contract without the
                  prior written consent of the Secretary."

         (b)      A new subparagraph 16(b)(ii) is added as follows:

                  "(b)(ii) Upon the Owner's election to enforce its rights and
                  remedies under subparagraph (b)(i) of this paragraph 16, the
                  Owner may, with respect to Equipment for which title has not
                  yet passed under section 9(a) of the Contract, request that
                  Builder assign all its right, title and interest in any of
                  such Equipment and in any of the purchase orders for such
                  Equipment to the extent in each case that such purchase orders
                  are assignable. Upon receipt of such an Owner's request,
                  Builder shall forthwith effectuate the assignments to the
                  Owner and Owner shall reimburse the Builder for any amounts
                  that Builder has paid for such Equipment or under such
                  purchase orders. To the extent that money is owed by the
                  Builder to the vendors of any Equipment which the Owner wishes
                  to purchase under an assignment from the Builder including by
                  assignment of purchase orders, the Owner shall pay the vendors
                  directly for any balance due. The Builder's obligations and
                  the Owner's rights under this subparagraph 16(b)(ii) shall
                  survive any termination of this Agreement by the Owner under
                  subparagraph 16(b)(i) and shall constitute one of Owner's
                  remedies in the event of a Builder's Default. Builder agrees
                  not to offer any of the Equipment referred to herein without
                  first offering to sell the Equipment to Owner under the
                  conditions stated herein."

SECTION 13. PARAGRAPH 16.

         (a)      The words "seven (7)" appearing in Paragraph 16(c)(i) are
                  changed to "ten (10) business."

         (b)      The following is added as a new First sentence to Paragraph
                  16(c)(i):

                  "Builder shall give Owner and the Secretary notice of any
                  default by Owner under this Paragraph 16(c)(i)."


                                       8
<PAGE>
         (c)      The following is added as a new sub-paragraph (e) to Paragraph
                  16:

                  "(e) Notwithstanding anything to the contrary contained in
                  this Contract, Builder hereby grants the Secretary thirty (30)
                  days from the receipt of the notice referred to in the first
                  sentence of clause (i) of sub-paragraph (c) of this Paragraph
                  16 to cure any default under this Contract, and Builder agrees
                  to take no action to enforce its rights pursuant to this
                  Contract, including, without limitation, its right to
                  terminate pursuant to sub-paragraph (d) of this Paragraph 16,
                  until the elapse of said 30 (30) days."

         (d)      A new Paragraph 16(f) is added to read as follows:

                  "(f) Equipment Proceeds. In the event that prior to delivery
                  of the Platform and following the occurrence or during the
                  continuation of any material default by the Builder as defined
                  in Subparagraph 16(a) of the Construction Contract which would
                  permit the Owner to terminate the Construction Contract, the
                  Secretary shall have the right to sell the Equipment. Any
                  proceeds the Secretary receives from the sale of the
                  Equipment, after deducting any fees or costs it incurs in
                  connection with the enforcement of its rights under the
                  Security Agreement, shall be distributed promptly to the
                  Secretary for payment of all amounts secured by the Security
                  Agreement with any remainder to be paid to the Builder and the
                  Owner as their interests appear. In the event that prior to
                  delivery of the Platform and following the occurrence or
                  during the continuation of any material default by the Owner
                  as defined in Subparagraph 16(b) of the Construction Contract
                  which would permit the Builder to terminate the Construction
                  Contract, and provided that the Builder is not in material
                  default under the Construction Contract, Builder shall have
                  the right to sell the Equipment subject to the Secretary's
                  first priority security interest in all of Owner's right,
                  title and interest in and to the Equipment to the full extent
                  and in accordance with all procedures as set forth in Article
                  9 of the Texas UCC. Nothing herein shall relieve Owner or
                  Builder of their respective obligations and liabilities under
                  Paragraph 16 of the Construction Contract."

SECTION 14. PARAGRAPH 16.  A new Paragraph 16(g) is added to read as follows:

                  "(g) Notwithstanding anything to the contrary in
                  sub-paragraphs (b), (c), (d) or (e) of this Paragraph 16, if a
                  Default exists and is continuing under the Security Agreement,
                  Owner shall not exercise any right, remedy or action pursuant
                  to this Paragraph 16, including, without limitation,
                  termination of this Contract or any sale or disposition of the
                  Platform, without the prior written consent of the Secretary."


                                       9
<PAGE>
SECTION 15. DUTIES, OBLIGATIONS, AND LIABILITIES OF THE OWNER

           Nothing in this Amendment shall be construed to modify, amend, waive
or supercede the duties, obligations and liabilities of Owner to Builder under
the Original Agreement, whether accruing prior to or after the date hereof,
including, without limitation, the obligation of the Owner to pay all amounts
owing under the Contract to Builder as and when due. Without limitation as to
the generality of the foregoing, nothing herein shall be deemed to allow Owner
to pay such sums solely from the proceeds of the loan made under the Credit
Agreement.

SECTION 16. DISTINCT OBLIGATIONS

           Builder hereby agrees and acknowledges that the obligations of Owner
under the Contract with regard to the Platform are separate, distinct and
independent of any other obligation or agreement of Owner to or with Builder in
connection with any other transaction, and that a default by Owner under such
other obligation or agreement in connection with any other such transaction
shall not in any way affect the obligations of Builder under the Contract with
regard to the Platform or permit Builder to exercise any right of set-off or
other remedy (all of which Builder expressly waives and agrees not to assert
with respect to the Contract) which could materially adversely affect the
Contract, the Platform or the construction thereof.

SECTION 17. SHIPYARD PLANS. Upon the delivery of the Platform, or earlier if
feasible, upon the Secretary's request. Shipyard and Shipowner agree to submit
to the Secretary one set of Shipyard plans, designs and specifications in form
and substance satisfactory to the Secretary, for the Platform as built.

SECTION 18. ENTIRE AGREEMENT; LIMITATION OF CHANGES. Except as specifically set
forth in this Amendment, the Original Agreement remains unchanged and in full
force and effect, including, without limitation, all provisions regarding choice
of law, forum and dispute resolution. This Amendment and the Original Agreement
constitute the Construction Contract, and contain all of the parties' agreements
and undertakings with respect to the Construction Contract.






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<PAGE>
           IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on their behalf by their respective duly authorized representatives on
the date first shown above.



AMFELS, INC.

By:
    -------------------------------------
    Name:
    Title:



CHILES OFFSHORE INC.

By:
    -------------------------------------
    Name:
    Title:












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