EXHIBIT 10.198

==========================================================================
                                     
                                 CONTRACT

                                    FOR

                           CONSTRUCTION AND SALE

                                    OF

                                  VESSEL

                            (HULL NO. HRBS8-D)

                                  BETWEEN

                          R&B FALCON DRILLING CO.

                                    AND

                    HYUNDAI HEAVY INDUSTRIES CO., LTD.

                                    AND

                            HYUNDAI CORPORATION

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                                 INDEX

                                                     PAGE

PREAMBLE                                              P-1

ARTICLE I - DESCRIPTION AND CLASS
     1.   Description:                                I-1
     2.   Dimensions and Characteristics:             I-1
     3.   The Classification, Rules and Regulations:  I-2
     4.   Registration:                               I-3
     5.   Drawings and Document Approval              I-3
     
ARTICLE II - CONTRACT PRICE, TERMS OF PAYMENT & OPTIONS
     1. Contract Price:                               II-5
     2. Adjustment of Contract Price:                 II-5
     3. Currency:                                     II-5
     4. Terms of Payment:                             II-5
     5. Method of Payment:                            II-6
     6. Notice of Payment before Delivery:            II-7
     7. Expenses:                                     II-7
     8. Prepayment:                                   II-7
     9. Options                                       II-7
    10. Supply of Marine Equipment                    II-8

ARTICLE III - ADJUSTMENT OF CONTRACT PRICE
     1. Delivery:                                    III-1
     2. Displacement:                                III-2
     3. Weight Control                               III-3
     4. Effect of Rescission:                        III-3

ARTICLE IV - APPROVAL OF PLANS
     AND DRAWINGS AND INSPECTION DURING CONSTRUCTION
     1. Approval of Plans and Drawings:               IV-1
     2. Appointment of OWNER's Supervisor             IV-1
     3. Inspection by the Supervisor:                 IV-1
     4. Facilities:                                   IV-3
     5. Liability of BUILDER and OWNER:               IV-3
     6. Responsibility of OWNER:                      IV-4
     7. Delivery and Construction Schedule:           IV-5
     8. Responsibility of BUILDER:                    IV-5

ARTICLE V  MODIFICATIONS, CHANGES AND EXTRAS
    1. How Effected:                                   V-1
    2. Changes in Rules of Classification Society,
         Regulations, etc.:                            V-1
     3. Substitution of Materials:                     V-2

ARTICLE VI - TRIALS AND ACCEPTANCE
     1. Notice:                                       VI-1
     2. Weather Condition:                            VI-1
     3. How Conducted:                                VI-2
     4. Method of Acceptance or Rejection:            VI-2
     5. Effect of Acceptance:                         VI-3
     6. Disposition of Surplus Consumable Stores      VI-3
     
ARTICLE VII - DELIVERY
     1. Time and Place:                              VII-1
     2. When and How Effected:                       VII-1
     3. Documents to be delivered to OWNER:          VII-1
     4. Tender of VESSEL:                            VII-2
     5. Title and Risk:                              VII-3
     6. Removal of VESSEL:                           VII-3

ARTICLE VIII - DELAYS AND EXTENSION OF TIME FOR DELIVERY (FORCE
    MAJEURE)
     1. Causes of Delay (Force Majeure):            VIII-1
     2. Notice of Delay:                            VIII-1
     3. Definition of Permissible Delay:            VIII-2
     4. Right to Rescind for Excessive Delay:       VIII-2

ARTICLE IX - WARRANTY OF QUALITY
     1. Guarantee:                                    IX-1
     2. Notice of Defects:                            IX-1
     3. Remedy of Defects:                            IX-2
     4. Extent of BUILDER's Responsibility:           IX-3
     5. Guarantee Engineer:                           IX-4
     
ARTICLE X - RESCISSION BY OWNER
     1. Notice:                                        X-1
     2. Refundment by BUILDER:                         X-1
     3. Discharge of Obligations:                      X-1

ARTICLE XI - OWNER'S DEFAULT
     1. Definition of Default:                        XI-1
     2. Effect of Default on or
           before Delivery of VESSEL:                 XI-1
     3. Disposal of VESSEL:                           XI-2
     4. Dispute:                                      XI-2

ARTICLE XII - ARBITRATION
     1. Decision by the Classification Society:      XII-1
     2. Proceedings of Arbitration:                  XII-1
     3. Notice of Award:                             XII-2
     4. Expenses:                                    XII-2
     5. Entry in Court:                              XII-2
     6. Alteration of Delivery Date:                 XII-2

ARTICLE XIII - SUCCESSOR AND ASSIGNS

ARTICLE XIV - TAXES AND DUTIES
     1. Taxes and Duties Incurred in Korea:          XIV-1
     2. Taxes and Duties Incurred Outside Korea      XIV-1

ARTICLE XV - PATENTS, TRADEMARKS, COPYRIGHTS, ETC.
     1. Patents:                                      XV-1
     2. General Plans, Specifications
          and Working Drawings:                       XV-1

ARTICLE XVI - OWNER'S SUPPLIES
    1. Responsibility of OWNER:                      XVI-1
    2. Responsibility of BUILDER:                    XVI-3
    3. Title:                                        XVI-4
    4. OWNERS's Supplies Refundment:                 XVI-4

ARTICLE XVII - INSURANCE
    1. Extent of Insurance Coverage:                XVII-1
    2. Application of the Recovered Amounts:        XVII-3
    3. Termination of BUILDER's
           Obligation to Insure:                    XVII-3

ARTICLE XVIII - NOTICE
    1. Address:                                    XVIII-1
    2. Language:                                   XVIII-1
    3. Effective Date of Notice:                   XVIII-1

ARTICLE XIX - EFFECTIVE DATE OF CONTRACT

ARTICLE XX - INTERPRETATION
    1. Laws Applicable:                               XX-1
    2. Discrepancies:                                 XX-1
    3. Entire Agreement:                              XX-1
    4. Amendments and Supplements:                    XX-1

ARTICLE XXI - CONFIDENTIALITY

END OF CONTRACT                                        E-1

EXHIBIT "A" LETTER OF REFUNDMENT GUARANTEE            EA-1

     
     THIS  CONTRACT,  made and entered into on this 16th day  of  December,
1998  by and between R&B FALCON DRILLING CO., a corporation existing  under
the  laws  of Oklahoma, and having an office at 901 Threadneedle,  Houston,
Texas  77079-2902  (hereinafter called the "OWNER"), on the  one  part  and
HYUNDAI HEAVY INDUSTRIES CO., LTD., a corporation incorporated and existing
under  the laws the Republic of Korea, having its registered office at  #1,
Cheonha-Dong, Dong-Ku, Ulsan, Korea and HYUNDAI CORPORATION, a  corporation
incorporated and existing under the laws the Republic of Korea, having  its
registered  office at 140-2 Kye-Dong, Chongro-Ku, Seoul, Korea (hereinafter
collectively called the "BUILDER"), on the other part.

W I T N E S S E T H:

     In  consideration  of  the  mutual  covenants  herein  contained,  the
BUILDER  agrees  to build One (1) VESSEL as described in the  specification
attached hereto as Exhibit 1 of this Contract (hereinafter referred  to  as
the  "VESSEL")  and  in accordance with (i) the Delivery  and  Construction
Schedule  attached  hereto as Exhibit 2 and (ii) the BUILDER's  Unit  Rates
attached  hereto as Exhibit 3 (said Exhibits 1 through 3 being  hereinafter
collectively  called the "Specifications") which Specifications  have  been
initialed  by representatives of the parties hereto for identification  and
which  Specifications  hereby  are each incorporated  herein  by  reference
hereto  and  made  an  integral part of this  Contract,  at  the  BUILDER's
shipyard  located  in  Ulsan,  Korea  (hereinafter  referred  to   as   the
"Shipyard")  and to deliver and sell the same to the OWNER, and  the  OWNER
hereby  agrees  to  purchase and accept delivery of  the  VESSEL  from  the
BUILDER, upon the terms and conditions hereinafter set forth.


               ARTICLE I - DESCRIPTION AND CLASS

1.  Description:

         The  VESSEL,  having  the BUILDER's Hull  No.  HRBS8-D,  shall  be
    constructed,  equipped and completed in accordance with the  provisions
    of  this  Contract,  and  the Specifications (as  heretofore  defined),
    which  Specifications  are  an  integral  part  of  this  Contract   as
    heretofore provided.

2.  Dimensions and Characteristics:

    NOTE: U. S. Units are approximate

                                  Metric Units      U.S. Units
    Overall Structure
        Length                         120.7 m       396.0 ft.
        Breadth                         78.0 m       255.9 ft.
    Upper Hull
        Length                          81.5 m       267.4 ft.
        Breadth                         61.0 m       200.1 ft.
        Depth                            8.5 m        27.9 ft.
    MainDeck
        Length                          84.1 m       275.9 ft.
        Breadth                         61.0 m       200.1 ft.
    Pontoons (two each)
        Length                         114.0 m       374.0 ft.
        Breadth (amidship)              13.4 m        44.0 ft.
        Breadth (ends)                  16.5 m        54.1 ft.
        Depth                            9.1 m        29.9 ft.
        Corner Radius                    3.0 m         9.8 ft.
        Transverse Distance (c. to c.) 61.50 m       201.8 ft.

     Columns (four each)
          Horizontal Section (LxB)
                    17.0 m X 16.5 m (@WL)    55.8 ft. X 54.1 ft.
                    14.0 m X 16.5 m (bottom)45.9 ft. X 54.1 ft.
          Corner Radius                  3.0  m         9.8.ft.
          Vertical Height               23.9  m        78.4 ft.
          Longitudinal Distance
                    (c. to c.)          60.0  m       196.9 ft.
          Transverse Distance
                 (c. to c.) at Top      46.0  m       150.9 ft.
                            at Bottom   61.5  m       201.8 ft.

    Transverse Braces (two each)
         Length                        45.0 m        147.6  ft.
         Breadth                        6.0 m         19.7  ft.
         Depth                          3.0 m          9.8  ft.
         Corner Radius                  0.6 m         2.0   ft.
         Longitudinal Distance
                        (c. to c.)     68.0 m        223.1 ft.
        Centerline Elevation            1.5 m          4.9  ft.
    Diagonal Braces (four each)
        Diameter                        3.0 m          9.8  ft.
        Centerline Elevation            1.5 m          4.9  ft.
    Elevations
        Drill Floor                    46.0 m        150.9  ft.
        Main Deck (at sides)           41.5 m        136.2  ft.
        Second Deck                    38.0 m        124.7  ft.
        Third Deck (Inner bottom Top)  34.5 m        113.2  ft.
        Upper Hull Bottom              33.0 m        108.3  ft.
        Lower Hull Top                  9.1 m         29.9  ft.

    Draft
         Operating Condition (G.O.M.)  23.0 m         75.5 ft.
         Severe Storm Condition        16.5 m         54.1 ft.
         Transit Condition              8.8 m         28.9 ft.
         Operating Condition (W.O.S.)   9.1 m         29.9 ft.

         The  details  of the aforementioned particulars, as  well  as  the
    definitions and the methods of measurements and calculations  shall  be
    as  indicated in the Specifications and shall be subject to  adjustment
    with  design  development. The design criteria, deckload  criteria  and
    variable loads will be as in the Specifications.

3.    The Classification, Rules and Regulations:

         The  Vessel,  including hull, machinery, equipment and outfitting,
    shall  be  constructed  in accordance with the  Rules  and  Regulations
    (edition and amendments thereto being in effect as of the signing  date
    of the Contract) of the Classification Society and under survey of the
    Classification  Society (hereinafter called as "the Class")  and  shall
    be distinguished in register by symbol of:

              American Bureau of Shipping
              +A1 "Column Stabilized Drilling Unit", +CDS,
              +AMS, (P) , PAS, DPS - 3

              ABS statement of fact for UK/Den/HSE compliance,
              and Drilling System Compliance.

         Decisions  of  the  Classification Society  as  to  compliance  or
    non-compliance with the classification rules and regulations  shall  be
    final  and binding upon both parties hereto. Details of Class  notation
    shall be in accordance with the Specifications.

         The  VESSEL  shall  also  comply with the rules,  regulations  and
    requirements  of the regulatory bodies as described and listed  in  the
    Specifications.

         The  VESSEL will be built and delivered (i) in accordance with the
    terms  of this Contract and the Specifications, (ii) in full compliance
    and  certification to and with the IMO MODU code with amendments, (iii)
    in  full  compliance with the regulations, provisions, and requirements
    included  in  the  Specifications, (iv) in  full  compliance  with  the
    requirements  of  the Classification Society so as to be  classed  with
    the  Classification Society as a MODU, and (v) so that the VESSEL  will
    be  approved  to  operate  worldwide.  BUILDER  will  take  all  action
    necessary,  and  remedy at its cost and expense, any  deficiency  which
    constitutes a failure to comply with the above requirements.

         All  the fees and charges incidental to the Classification Society
    and   in   respect  to  compliance  with  the  above  referred   rules,
    regulations and requirements, as well as all VESSEL design fees  and/or
    royalties  (except for any fees and/or royalties for the basic  design,
    specifications  and  OWNER's Supplies), shall be  for  account  of  the
    BUILDER.

         BUILDER  shall  be  responsible for obtaining  the  Classification
    Society's approval of all required plans and drawings of the VESSEL.

4.  Registration:

         The  VESSEL, at the time of its delivery and acceptance, shall  be
    registered at the port of registry by the OWNER under the flag  of  the
    United States of America at the OWNER's expense.

5.  Drawings and Document Approval

         The  BUILDER  shall  be  responsible to prepare  detailed  working
    drawings  and  submit  these  to ABS and  the  OWNER  for  approval  in
    accordance  with the Specifications. The BUILDER shall provide  to  the
    OWNER  a  copy of all correspondence to ABS concurrent with its sending
    to  ABS.  Furthermore, the BUILDER shall request ABS to copy the  OWNER
    on all its correspondence to the BUILDER and vendors relative to this
    project,  including  relevant output from ABS'  engineering  management
    system.

(End of Article)


ARTICLE II - CONTRACT PRICE, TERMS OF PAYMENT & OPTIONS

1.   Contract Price:

          The  purchase price of the VESSEL, net receivable by the  BUILDER
     and  exclusive of the OWNER's Supplies (as defined in Paragraph  1  of
     Article  XVI  hereof)  is  United  States  Dollars  One  Hundred   and
     Thirty-Nine   Million   Five  Hundred  SeventySeven   (US$139,577,000)
     (hereinafter referred to as the "Contract Price"). The Contract  Price
     shall  be  subject  to  upward  or downward  adjustment,  if  any,  as
     hereinafter set forth in this Contract.

2.   Adjustment of Contract Price:

          Increase  or  decrease  of the Contract Price,  if  any,  due  to
     adjustments  thereof made in accordance with the  provisions  of  this
     Contract  shall be adjusted by way of addition to or subtraction  from
     the  Contract  Price  upon delivery of the VESSEL  in  the  manner  as
     hereinafter provided.

3.   Currency:

          Any  and all payments by the OWNER to the BUILDER, or vice  versa
     if  any  which are due under this Contract in regards to the  Contract
     Price shall be made in United States Dollars.

4.   Terms of Payment:

          The  Contract Price shall be due and payable by the OWNER to  the
     BUILDER in the installments as follows:

     (a) First Installment:
         The First Installment amounting to United  States
         Dollars Thirteen Million Five  Hundred  Eighty-Eight
         Thousand Eight Hundred(US$13,588,800) shall be due and
         payable by January 31, 1999, provided that the Letter
         of Refundment Guarantee required  under Article X has
         been received by the OWNER or its designee.

     (b) Second Installment:
         The Second  Installment amounting to United States
         Dollars  Thirteen Million Five  Hundred Eighty-Eight
         Thousand Eight Hundred(US$13,588,800) shall be due and
         payable thirteen (13) months  after   the  first
         installment payment. 

     (c) Third Installment:
         The  Third  Installment  amounting  to United States
         Dollars Thirteen Million Five Hundred Eighty-Eight
         Thousand Eight Hundred(US$13,588,800) shall be due and
         payable eighteen (18) months after the first
         installment payment.

     (d) Fourth Installment:
         The Fourth Installment amounting to United States
         Dollars Ninety-Eight Million Eight Hundred and Ten
         Thousand Six Hundred(US$98,810,600) plus any increase
         or minus any decrease due to adjustment of the Contract
         Price under and pursuant to the provisions of this
         Contract, shall be due and payable upon delivery of the
         VESSEL or upon tender for delivery of the VESSEL
         pursuant to Paragraph 4 of Article VII of this
         Contract.

5.  Method of Payment:

     (a) First Installment:
         Within January 31, 1999, the OWNER shall remit by
         telegraphic transfer the first installment to the
         BUILDER's account number in the Korea Exchange Bank or
         to the banks which the BUILDER may designate
         (hereinafter referred to as the "BUILDER's BANK") in
         favor of Hyundai Heavy Industries, Co., Ltd.

     (b) Second and Third Installments:
         Upon the due date of the second and third installments,
         in accordance with Article II, 4 (b), (c) and (d) as
         appropriate, the OWNER shall remit by telegraphic
         transfer each of the respective installments to the
         account at the BUILDER's BANK in favor of Hyundai Heavy
         Industries Co., Ltd.

     (c) Fourth Installment:
         At the time of delivery of the Vessel to the OWNER
         pursuant to Section 2 of Article VII of this Contract,
         the OWNER shall remit by telegraphic transfer the
         fourth installment to the account at the BUILDER's BANK
         in favor of Hyundai Heavy Industries, Co., Ltd., with
         an irrevocable instruction that the amount so remitted
         shall be payable to the BUILDER against presentation by
         the BUILDER to the BUILDER's BANK of a copy of PROTOCOL
         OF DELIVERY and ACCEPTANCE OF THE VESSEL executed by
         the OWNER and the BUILDER.

    No  payment  due  under  this Contract shall be delayed,  suspended  or
    withheld  by  the  OWNER  on  account of any  dispute  or  disagreement
    between the parties hereto. Any claim which the OWNER  may have against
    the  BUILDER hereunder shall be settled and liquidated  separately from
    any payment by the OWNER to the BUILDER of the  Contract Price hereunder.

6.   Notice of Payment before Delivery:

          With  the  exception of the first installment, the BUILDER  shall
     give  the OWNER Ten (10) banking days prior notice in writing or telex
     or  telefax confirmed in writing by registered mail of the anticipated
     due date and amount of each installment payable before delivery of the
     VESSEL.

7.   Expenses:

         Expenses  and  bank charges for remitting payments and  any  taxes
     (other  than taxes on income imposed on the BUILDER), duties, expenses
     and fees applicable to remitting such payment shall be for account  of
     the OWNER.

8.   Prepayment:

          The  OWNER  may  prepay  any or all of the  installments  of  the
     Contract Price, provided that the OWNER declares the OWNER's intention
     to  do  so  in  writing or by telex confirmed in  writing  stating  in
     advance the intended date of such prepayment, subject to the BUILDER's
     acceptance, which shall not be unreasonably withheld.

9.   Options
          
          The  BUILDER  hereby grants to the OWNER options to purchase  one
     (1)  additional deepwater semisubmersible drilling units (the  "OPTION
     VESSEL(S)")  of the same size and Specifications as the VESSEL. In the
     event  OWNER exercises this option, the purchase price, payment  terms
     and  delivery period of the OPTION VESSEL shall be the same as for the
     Vessel.  The notice period for exercising such option shall be  within
     eight  months  of  the date of this contract. All contract  terms  and
     conditions  shall,  except as may otherwise be  specifically  modified
     herein,  be  on the same terms and conditions as are set out  in  this
     Contract for the VESSEL, mutatis mutandis. The specifications for  the
     OPTION VESSEL shall be the same as the "Specifications" identified and
     defined  in  this Contract. Any extras or change orders  made  to  the
     Specifications of the VESSEL subsequent to the date of  this  Contract
     shall not be included in the specifications for the OPTION VESSEL  but
     OWNER  shall  be entitled to request same pursuant to the shipbuilding
     contract  for the OPTION VESSEL with appropriate credits  for  design,
     engineering and  other  non-recurring  costs  and  any other price and
     delivery  date adjustment or consequence.

10. Supply of Marine Equipment

     OWNER  has the option to pay BUILDER United States Dollars One Million
     Eight  Hundred  Thousand  (US$1,800,000)  as  a  fixed  lump  sum  for
     procurement engineering, purchasing and the associated costs  for  the
     supply  of  six generators, medium voltage switchgear and  IACS,  with
     vendors,  invoices  to  be  passed through to  the  Buyer  for  direct
     payment.

     OWNER  also  has  the option to purchase individually, medium  voltage
     switchgear and ICAS, in which case the BUILDER has proposed  that  its
     fee  be 11.5% of vendors'  net prices and/or engine generator sets  in
     which  case, Builder has proposed its fee for purchase of such  engine
     generator sets be 4.78% of vendors' net prices.

(End  of Article)

           ARTICLE III - ADJUSTMENT OF CONTRACT PRICE

     The  Contract Price shall be subject to adjustment, as hereinafter set
forth, in the event of the following contingencies (it being understood  by
both  parties  that  any  reduction of the Contract  Price  is  by  way  of
liquidated damages and not by way of penalty):

1.    Delivery:

     (a)  No adjustment  shall be made and the Contract Price shall  remain
          unchanged for the first Thirty (30) days of delay in delivery  of
          the  VESSEL  beyond the Delivery Date as defined in  Article  VII
          hereof  (ending  as of twelve o'clock midnight of  the  Thirtieth
          (30th) day of delay).

     (b)  If the  delivery of the VESSEL is delayed more than  Thirty  (30)
          days  after the Delivery Date, then, in such event, beginning  at
          twelve  o'clock midnight of the Thirtieth (30th)  day  after  the
          Delivery Date, the Contract Price shall be reduced by the sum  of
          Twenty  Thousand  United Dollars (US$20,000) for  each  full  day
          thereafter for which delivery is delayed.

          However,  the total reduction in the Contract Price  pursuant  to
          this  Paragraph (b) shall not be more than as would be  the  case
          for  a  delay  of  One  Hundred Fifty (150)  days  counting  from
          midnight of the Thirtieth (30th) day after the Delivery  Date  at
          the above specified rate of reduction.

     (c)  However, if  the delay in delivery of the VESSEL should  continue
          for  a  period of One Hundred Eighty (180) days from the Delivery
          Date  in  Paragraph  1 of Article VII, then in  such  event,  and
          after  such  period has expired, the OWNER may,  at  its  option,
          rescind  this  Contract  in accordance  with  the  provisions  of
          Article X hereof.

          The  BUILDER  may,  at  any  time after  the  expiration  of  the
          aforementioned  One  Hundred  Eighty  (180)  days  of  delay   in
          delivery,  if  the OWNER has not served notice of  rescission  as
          provided  in Article X hereof, demand in writing that  the  OWNER
          shall  make  an  election, in which case the OWNER shall,  within
          Twenty  (20)  days after such demand is received  by  the  OWNER,
          notify  the  BUILDER  of  its intention either  to  rescind  this
          Contract  or  to  consent to the acceptance of the  VESSEL  at  a
          specified future date which date BUILDER represents to  OWNER  is
          the earliest date BUILDER can deliver  the  VESSEL to OWNER under
          this Contract,  based  on  the   circumstances then known. If the
          OWNER shall not  make  an  election   within  Twenty (20) days as
          provided hereinabove, the OWNER  shall be deemed to have accepted
          such extension of the Delivery Date to the  future  delivery date
          indicated  by the BUILDER and it being understood by the  parties
          hereto that if the VESSEL is not delivered by such specified date,
          the OWNER shall have the same right of rescission upon  the  same
          terms and conditions as hereinabove provided.

     (d)  After the  Delivery Date, should OWNER decide to keep the  VESSEL
          at  BUILDER's  facility  prior to tow-out,  OWNER  shall  pay  to
          BUILDER  the reasonable cost of any services associated with  the
          VESSEL's stay during such period of time.

     (e)  If  the delivery of the VESSEL is made more than thirty (30) days
          earlier  than  the Delivery Date, then, in such event,  beginning
          with  the  thirty-first (31) day prior to the Delivery Date,  the
          Contract  Price  of  the  VESSEL shall  be  increased  by  adding
          thereto  Twenty  Thousand United States Dollars  (US$20,000)  for
          each  full day. However, the total increase in the Contract Price
          pursuant  to this Paragraph (d) shall not be more than  as  would
          be  the  case  for an early delivery of Sixty (60) days  counting
          from the Thirty-first (31) day prior to the Delivery Date at  the
          above specified rate of increase.

     (f)  For the  purpose  of  this Article, the delivery  of  the  VESSEL
          shall  be  deemed  to be delayed when and if  the  VESSEL,  after
          taking  into  account all postponements of the Delivery  Date  by
          reason  of  permissible delay as defined in Article  VIII  and/or
          any  other  reason under this Contract, is not delivered  by  the
          date  upon  which delivery is required under the  terms  of  this
          Contract.

2.  Displacement:

     (a)  The guaranteed displacement of the VESSEL is 40,700  metric  tons
          at  16.5  meters  draft and 47,509 metric  tons  at  23.0  meters
          draft, subject to adjustment with design development.

     (b)  In the  event  of  a  discrepancy (whether higher  or  lower)  in
          either  guaranteed displacement of the VESSEL being one  thousand
          (1,000)  metric tons or more, then, the OWNER may, at its option,
          reject  the  VESSEL and rescind this Contract in accordance  with
          the  provisions  of Article X hereof or accept the  VESSEL  at  a
          reduction  in  the  Contract  Price  of One Million United States
          Dollars.  (US$1,000,000).

3.  Weight Control

         The  BUILDER  shall  negotiate reasonable steel weight  tolerances
    with  the  mill to meet minimum ABS scantling requirements and appraise
    the OWNER of this value.

         The   BUILDER  shall  develop  and  implement  a  weight   control
    procedure  in  accordance  with  the Specifications  and  track  actual
    weights  by periodically weighing some of the major assemblies as  they
    are being completed.

         The  BUILDER  shall  earn  a weight performance  bonus  of  United
    States  Dollars  Two  Thousand  (US$2,000)  per  ton  steel  of  actual
    lightship  weight below the agreed contract lightship weight. Likewise,
    the  BUILDER shall accrue a weight penalty of United States Dollars Two
    Thousand  (US$2,000)  per  ton steel of actual  lightship  weight  over
    agreed  contract  lightship weight. Actual lightship  weight  shall  be
    determined on the basis of the ABS approved inclining test.

         The  agreed  lightship weight will be set by the BUILDER  and  the
    OWNER  within  four  (4)  months following ABS approval  of  the  basic
    design package.

4.   Effect of Rescission:

         It  is expressly understood and agreed by the parties that in  any
    case,  if  the  OWNER rescinds this Contract under  this  Article,  the
    OWNER  shall  not be entitled to any liquidated damages, or  any  other
    recourse unless by means of the provisions of Article X hereof.

(End of Article)

                      ARTICLE IV - APPROVAL OF PLANS AND
                 DRAWINGS AND INSPECTION DURING CONSTRUCTION

1.   Approval of Plans and Drawings:

          The  BUILDER shall obtain the approval of the OWNER for the plans
     and  drawings  in  accordance with the procedures  set  forth  in  the
     Specifications.

2.   Appointment of OWNER's Supervisor:

          The  OWNER  may send to and maintain at the Shipyard  and/or  the
     Engineering  Office,  at  the  OWNER's  own  cost  and  expense,   one
     supervisor  (herein  called  the  "Supervisor")  who  shall  be   duly
     authorized  in  writing  by the OWNER, which  authorization  shall  be
     described in a separate letter to be sent to the BUILDER prior to  the
     Supervisor's  arrival,  to act on behalf of the  OWNER  in  connection
     with  the  modifications  of the Specifications,  adjustments  of  the
     Contract  Price and Delivery Date in writing, approval  of  the  plans
     and  drawings, attendance to the tests and inspections relating to the
     VESSEL,  its  machinery,  equipment  and  outfitting,  and  any  other
     matters  for  which he is specifically authorized by  the  OWNER.  The
     Supervisor  may appoint assistant(s) to attend at the Shipyard  and/or
     the Engineering Office for the purposes as aforesaid.

3.   Inspection by the Supervisor:

          The   necessary   inspections  of  the  VESSEL,  its   machinery,
     equipment  and  outfitting shall be carried out by the  Classification
     Society, other regulatory bodies and/or the Supervisor throughout  the
     entire   period   of  construction  in  order  to  ensure   that   the
     construction  of the VESSEL is duly performed in accordance  with  the
     Specifications. The Supervisor shall have, during construction of  the
     VESSEL,  the right to attend such tests and inspections of the VESSEL,
     its  machinery and equipment within the premises of either the BUILDER
     or  its subcontractors. Detailed procedures of the inspection and  the
     tests thereof shall be in accordance with Specifications.

          The   Supervisor  shall,  within  the  limits  of  the  authority
     conferred upon him by the OWNER, make decisions or give advice to  the
     BUILDER  on  behalf of the OWNER promptly on all problems arising  out
     of,  or  in  connection  with,  the construction  of  the  VESSEL  and
     generally  act  in a reasonable manner with a view to  cooperating  to
     the  utmost  with  the  BUILDER  in the construction  process  of  the
     VESSEL.

          The  decision,  approval or advice of the Supervisor  within  the
     limits of authority conferred on the Supervisor by the OWNER shall  be
     deemed  to have been given by the OWNER. THE OWNER's Supervisor  shall
     notify  the  BUILDER  promptly in writing  of  his  discovery  of  any
     construction  or  materials, which he believes  do  not  or  will  not
     conform to the requirements of the Contract or the Specifications  and
     likewise advise and consult with the BUILDER on all matters pertaining
     to  the construction of the VESSEL, as may be required by the BUILDER,
     or as he may deem necessary.
     
          However,  if  the  Supervisor fails  to  submit  to  the  BUILDER
     promptly  any  such  demand  concerning alterations  or  changes  with
     respect to the construction, arrangement or outfit of the VESSEL which
     the Supervisor has examined, inspected or attended at the test thereof
     under  this  Contract or the Specifications, the Supervisor  shall  be
     deemed  to  have approved the same and shall be precluded from  making
     any  demand  for  alterations, changes,  or  complaints  with  respect
     thereto at a later date.
     
          The  BUILDER  shall  comply with any such  demand  which  is  not
     contradictory to this Contract, provided that any and all such demands
     by  the Supervisor with regard to construction, arrangement and outfit
     of  the  VESSEL  shall  be  submitted in  writing  to  the  authorized
     representative of the BUILDER. The BUILDER shall notify the Supervisor
     of  the  names of the persons who are from time to time authorized  by
     the BUILDER for this purpose.
     
          It  is  agreed  upon between the OWNER and the BUILDER  that  the
     modifications, alterations or changes and other measures necessary  to
     comply with such demand may be effected at a convenient time and place
     at  the  BUILDER's  reasonable discretion in view of the  construction
     schedule of the VESSEL.
     
         In  the  event that the Supervisor shall advise the BUILDER  that
    he has discovered and believes the construction or materials do not or
    will  not conform to the requirements of this Contract and the BUILDER
    shall  not  agree  with the views of the Supervisor in  such  respect,
    either  the  OWNER or the BUILDER may either seek an  opinion  of  the
    Classification  Society or request an arbitration in  accordance  with
    the  provisions of Article XII hereof. The Classification  Society  or
    the  Arbitration Board shall determine whether or not a  nonconformity
    with  the  provisions  of this Contract exist. If  the  Classification
    Society  or the Arbitration Board enters a determination in  favor  of
    the  OWNER,  then  in such case the BUILDER shall make  the  necessary
    alterations  or changes, or if such alterations or changes  cannot  be
    made  in  time  to  meet  the construction schedule for the VESSEL the
    BUILDER  shall  make fair and reasonable adjustment  of  the  Contract
    Price  in  lieu of such alterations and changes. If the Classification
    Society  or the Arbitration Board enters a determination in  favor  of
    the  BUILDER, then  the  time for delivery  of  the  VESSEL  shall  be
    extended for a period of delay in construction, if any, occasioned  by
    such proceedings, and the OWNER shall compensate the BUILDER  for  the
    proven loss  and  damages  (always  excluding  consequential  damages)
    incurred to the BUILDER as a result of the dispute herein referred to.

         OWNER's  Supervisor, at his discretion, may refuse to  inspect or
    attend tests where adequate safety measures have not been  implemented
    and in such event such tests/inspections shall not be deemed complete.

4.  Facilities:

     (a) The  BUILDER  shall  furnish the Supervisor  and  his  staff  with
         adequate   furnished  office  space  and  such  other   reasonable
         facilities  according  to the BUILDER's  practice  at  or  in  the
         immediate  vicinity of BUILDER's Offshore Yard and its Engineering
         Office  as  may  be necessary to enable them to effectively  carry
         out  their duties as further specified in the Specifications.. The
         OWNER  shall  pay  for any extra services at the BUILDER's  normal
         rate  of  charge.  BUILDER  shall  advise  OWNER  in  advance   of
         BUILDER's  normal  rate  of charge for any  facilities  for  which
         OWNER will be required to pay.

     (b) The  BUILDER  shall make available for OWNER's  personnel  at  the
         OWNER's  request, during the VESSEL's construction, a  minimum  of
         15  two  or  three bedroom apartments furnished with the BUILDER's
         standard  furniture, electrical facilities and utilities.  If  the
         OWNER  requests  the  BUILDER to provide the  OWNER  with  special
         furniture  and  facilities  beyond  the  BUILDER's  standard,  any
         additional  costs  which may result therefrom,  if  any,  will  be
         borne  by  OWNER.  Costs for such housing,  on  a  monthly  rental
         basis,  will be presented to OWNER prior to occupation  and  shall
         be  reimbursed by OWNER, along with metered utility and  telephone
         charges.  The BUILDER will use best efforts to furnish  additional
         apartments requested by the OWNER.

5.  Liability of BUILDER and OWNER:

         The  BUILDER agrees to fully protect, defend, indemnify  and  hold
    OWNER harmless from and against all liabilities, obligations, claims or
    actions  for  personal injury or death arising  out  of  performance by
    BUILDER or OWNER of their obligations hereunder prior to the acceptance
    by OWNER of the VESSEL, and asserted by or on  behalf of,

          (i) any   employee,   agent,  contractor,  or  subcontractor   of
              BUILDER, or

          (ii)any  employee  of any agent, contractor, or subcontractor  of
              BUILDER,

    regardless  of the basis of such claims and even if such claims  should
    arise  out  of the sole or concurrent fault or negligence of OWNER,  or
    any employee, agent, contractor or subcontractor of OWNER.

    Similarly,  the  OWNER agrees to fully protect, defend,  indemnify  and
    hold  BUILDER  harmless from and against all liabilities,  obligations,
    claims  or  actions  for  personal  injury  or  death  arising  out  of
    performance  by  BUILDER or OWNER of their obligations hereunder  prior
    to  the acceptance by OWNER of the VESSEL, and asserted by or on behalf
    of,

          (i) any  employee, agent, contractor, or subcontractor of  OWNER,
              or

          (ii)any  employee  of any agent, contractor, or subcontractor  of
              OWNER,

    regardless  of the basis of such claims and even if such claims  should
    arise out of the sole or concurrent fault or negligence of BUILDER,  or
    any employee, agent or subcontractor of BUILDER.

6.  Responsibility of OWNER:

         The  OWNER  shall  undertake and assure that the Supervisor  shall
    carry   out  his  duties  hereunder  in  accordance  with  the   normal
    shipbuilding  practice  of the BUILDER, which  BUILDER  represents  and
    confirms   is  in  all  material  respects  in  accordance  with   good
    international shipbuilding practice and in such a way so  as  to  avoid
    any  unnecessary  increase in building cost, delay in the  construction
    of  the VESSEL, and/or any disturbance in the construction schedule  of
    the  BUILDER. The BUILDER has the right to request the OWNER to replace
    the  Supervisor  who  is deemed unsuitable and unsatisfactory  for  the
    proper progress of the VESSEL's construction.

         The   OWNER  shall  investigate  the  situation  by  sending   its
    representative(s)  to  the  Shipyard  if  necessary, and if  the  OWNER
    considers  that such BUILDER's request is  justified, the OWNER   shall
    effect such replacement as soon  as conveniently arrangeable.

7.  Delivery and Construction Schedule:

         Attached  hereto  as  Exhibit  2  is  a  tentative  Delivery   and
    Construction  Schedule, and within Sixty (60) days after  the  date  of
    this  Contract, BUILDER shall deliver or cause to be delivered to OWNER
    a  final  Delivery and Construction Schedule (herein, as from  time  to
    time  amended  with  the  knowledge  of  OWNER,  referred  to  as   the
    "Schedule"),  prepared  in  reasonable detail  and  setting  forth  the
    estimated  time  table  for the construction of the  VESSEL,  it  being
    understood  that  the  Schedule may be used by OWNER  for  purposes  of
    verifying  and  measuring the progress being made under  the  terms  of
    this Contract.

8.  Responsibility of BUILDER:

(a) BUILDER personnel and subcontractors which, in the  sole  opinion
    of  OWNER,  are  found to be in violation of the safety  policies
    established  by  BUILDER or those specially in place  during  the
    construction  of the VESSEL, may be requested to be removed  from
    the  project  by the OWNER's Supervisor. BUILDER will immediately
    take  such actions as necessary to comply with OWNER's reasonable
    request.

(b) The BUILDER  is  to  assign a dedicated safety supervisor  and  a
    sufficient  number  of  safety inspectors  to  remain  in  effect
    throughout  the  Contract to monitor employee  and  subcontractor
    safety,   scaffolding  and  safety  netting,  tank  entry,   work
    permitting  procedures, electrical safety, etc. Upon  request  by
    the  OWNER,  the safety supervisor shall participate  in  OWNER's
    daily safety and quality meetings.

(c) The BUILDER  shall  provide a 24 hour fire-watch  at  the  VESSEL
    construction site. In addition, at various locations  around  the
    site,  fire  alarm  stations will be situated  whereby  a  manual
    alarm  may  be  sounded and a local emergency  response  team  is
    notified and activated.

(d) BUILDER shall  immediately report to OWNER all  incidents  and/or
    accidents  involving  injury, no matter the  level  of  severity,
    including  first aid, loss of property, no matter the  value,  as
    well as any identified hazards and/or near misses occurring.

    Any  and  all reports of hazards, accidents, incidents, or near  misses
    will   result  in  the  immediate  and  full  ceasing  of  construction
    activities   in  the  affected  area  until  such  time   as   adequate
    precautions have been implemented.

(e) BUILDER  hereby agrees that the cranes and other related  lifting  gear
    of  the  VESSEL will not be used by BUILDER during construction (except
    for  the  testing and commissioning stage), without the  prior  written
    approval of OWNER. Should such approval be given, BUILDER shall  return
    such  cranes  to normal in functional respect of operation,  including,
    but not limited to the changing of all wires.

(f) It  is  agreed  by BUILDER and OWNER that no more than  twenty  percent
    (20%),  by  number,  of all blocks fabricated for construction  of  the
    VESSEL  will  be built outside of BUILDER's own yard and then  only  by
    local  subcontractors. In case more than twenty percent  (20%)  of  all
    blocks  for  the  VESSEL is required by the BUILDER  to  be  fabricated
    outside  of  BUILDER's  own  yard, then the BUILDER  shall  obtain  the
    OWNER's prior written consent.

(g) All  initial  spare  parts  for equipment  furnished  by  the  BUILDER,
    ("BUILDER  Furnished  Equipment")  ,  including  those  necessary   for
    shipyard  start-up  testing  and for the  commissioning  of  equipment,
    shall  be provided by BUILDER at BUILDER's cost. Further, BUILDER shall
    provide  to OWNER a listing of all critical spare parts (any long  lead
    item  and  those  spares causing equipment to be  out  of  service  for
    extended  periods  of  time) and two years operating  spare  parts.  In
    addition,  BUILDER agrees to specifically identify on the  listing  any
    and  all  ABS  required spare parts. BUILDER will  provide  such  spare
    parts  listing  to OWNER as soon as an order for equipment  is  placed,
    but  in no case later than 90 days prior to VESSEL delivery. The  OWNER
    is  responsible  for  supplying  all  the  equipment  and  material  in
    accordance   with  the  OWNER's  Supplies  list  made   part   of   the
    Specifications  including the spare/service parts for start-up  testing
    and  commissioning  and specialized tools and initial  consumables  for
    the OWNER's Supplies.

(h) BUILDER agrees that any material and/or supplies not fabricated by  the
    BUILDER   will   originate  from  a  vendor   so   specified   in   the
    Specifications.  In the event procurement of material  and/or  supplies
    from  the  approved vendors are not available due to shortage or  delay
    in delivery thereof to meet the BUILDER's overall construction schedule
    of  the  VESSEL,  the  BUILDER  may mobilize and originate  from  other
    equivalent  with  the OWNER's consent,  which shall not be unreasonably
    withheld.

(i) The BUILDER  shall,  on  a monthly basis,  provide  OWNER  with  a
    written  progress report regarding the construction of the  VESSEL
    based   on  the  BUILDER's  standards  in  accordance  with  their
    procedure. Such report is to include a summary of the progress  to
    date,  the  progress since the previous report  and  a  report  on
    weight  control. In a form and frequency to be agreed, the BUILDER
    will  furnish  the  OWNER  a simple written  report  updating  the
    progress  on major milestones in the production schedule. Informal
    oral  reports shall be furnished to the OWNER by the BUILDER  upon
    request.

    In  addition,  BUILDER  shall include a limited  number  of  color
    photographs   relevant  to  the  fabrication   process   for   the
    construction  period  of  the  VESSEL  in  the  progress   report.
    Photographs are to be 5 x 7 inches, bound in books with dates  and
    descriptive  captions.  As  soon  as  each  volume  is  available,
    BUILDER shall furnish three (3) sets of books of photographs  (two
    sent  directly  to  OWNER's Houston office) and  one  (1)  set  of
    negatives to the OWNER.

(j) It  is  the  intent of the BUILDER to seek third party  engineering
    services in order to assist with the detailed engineering  of  the
    VESSEL.  In this regard, the BUILDER agrees that it will seek  the
    prior  consent  of the OWNER before the selection of  a  qualified
    engineering   consultant  company  is  made.  The  BUILDER   shall
    establish  a detailed scope and schedule for any such third  party
    work and submit same to the OWNER for approval.

(End of Article)

         ARTICLE V - MODIFICATIONS, CHANGES AND EXTRAS

1.  How Effected:

         The  Specifications  may  be modified and/or  changed  by  written
    request  of  the  OWNER subject to BUILDER's approval  (which  approval
    shall  not  be  unreasonably withheld) provided that any  modifications
    and/or  changes  requested by the OWNER (or  an  accumulation  of  such
    modifications  and/or changes) will not adversely affect the  BUILDER's
    other  commitments. The BUILDER will respond within fourteen (14)  days
    of  OWNER's  request  for quotation (unless otherwise  agreed)  of  the
    aforementioned  change. Likewise, the OWNER shall notify  its  approval
    or  rejection or give its comments to BUILDER within fourteen (14) days
    of  receipt of BUILDER's quotation. In the event of an adverse  effect,
    the  BUILDER and the OWNER shall first approve a Shipyard Change Order,
    before  such  modifications and/or changes  are  carried  out,  to  any
    adjustment  in the Contract Price, time for delivery of the  VESSEL  or
    other  terms and conditions of this Contract occasioned by or resulting
    from  such  modifications and/or changes. The BUILDER hereby agrees  to
    exert  its  best efforts to accommodate any reasonable request  by  the
    OWNER  so that the said changes and/or modifications may be made  at  a
    reasonable  cost  and  within the shortest  period  of  time  which  is
    reasonably  possible.  Any  Shipyard  Change  Order  for  modifications
    and/or  changes  shall  include an agreement  as  to  the  increase  or
    decrease, if any, in the Contract Price of the VESSEL together with  an
    agreement as to any extension or reduction in the time of delivery,  or
    any   other   alterations   in  this  Contract   occasioned   by   such
    modifications  and/or  changes.  The aforementioned  agreement  may  be
    effected  only  by  a Shipyard Change Order signed  by  the  authorized
    representatives  of  the  parties hereto. Such Shipyard  Change  Orders
    exchanged  by  the  parties  hereto pursuant  to  the  foregoing  shall
    constitute  an  amendment, and such Shipyard  Change  Orders  shall  be
    incorporated  into  this Contract and made a part hereof.  The  BUILDER
    may  make  minor changes to the Specifications, if found necessary  for
    introduction  of  improved production methods  or  otherwise,  provided
    that  the BUILDER shall first obtain the OWNER's written approval which
    shall not be unreasonably withheld.

2.   Changes in Rules of Classification Society, Regulations, etc.:

         If,  after the date of signing this Contract, any requirements  as
    to  Classification Society, or as to the rules and regulations to which
    the  construction of the VESSEL is required to conform, are altered  or
    changed by the

Classification  Society  or  regulatory  bodies  authorized  to  make  such
alterations  or  changes,  either of the parties hereto,  upon  receipt  of
information thereof, shall transmit such information in full to  the  other
party  in  writing, thereupon within twenty-one (21) days after receipt  of
the  said notice from the other party, the OWNER shall instruct the BUILDER
in  writing if such alterations or changes shall be made in the  VESSEL  or
not, in the OWNER's sole discretion.

    The BUILDER shall promptly comply with such alterations or changes,  if
any, in the construction of the VESSEL, provided that the OWNER shall first
agree:

(a)  To any  increase or decrease in the Contract Price of the VESSEL  that
     is reasonably occasioned by the cost of such compliance;

(b)  To any  reasonable  extension in the time of delivery  of  the  VESSEL
     that is necessary due to such compliance;

(c)  To any  reasonable  deviation in the contractual displacement  of  the
     VESSEL,  if  compliance  results in an altered  displacement,  or  any
     other  reasonable alterations in the terms of this Contract or of  the
     Specifications or both, if compliance makes such alterations of  terms
     necessary.

    Such  agreement  of  the OWNER may be effected in the  same  manner  as
    provided  in  Paragraph  1  of this Article  for  modifications  and/or
    changes of the Specifications.

3.  Substitution of Materials:

    In  the  event that any of the materials required by the Specifications
or otherwise under this Contract for the construction of the VESSEL can not
be  procured  in  time to effect delivery of the VESSEL, or  are  in  short
supply,  the  BUILDER may, provided the OWNER so agrees in writing,  supply
other  materials  and  equipment of the best available  and  like  quality,
capable  of meeting the requirements of the Classification Society  and  of
the  rules,  regulations, requirements and recommendations with  which  the
construction  of  the  VESSEL  must  comply.  Any  agreement  as  to   such
substitution  of materials shall be effected in the manner as  provided  in
Paragraph  1  of  this  Article, and shall, likewise, include  decrease  or
increase  in  the  Contract Price and other terms and  conditions  of  this
Contract affected by such substitution.

4.   Pricing Mechanism for Change Orders

     The  parties  agree that the following principles for the  pricing  of
     change orders shall apply:

     i)   mark-up will be 12.5% of net price of materials;

     ii)  all other costs at unit rates;

     iii) for credits, 100% of net price for deletion of materials will be
          used; and

     iv) no  additional engineering costs for items already added  pursuant
         to the construction of the RBS-6.

(End of Article)

               ARTICLE VI - TRIALS AND ACCEPTANCE

1.  Notice:

         The  sea trial shall start when the VESSEL is reasonably completed
    in all material respects according to the Specifications.

         The  BUILDER  shall  give  the  OWNER  at  least  Twenty(20)  days
    estimated  prior notice and Seven (7) days confirming prior  notice  in
    writing  or  by telex or telefax confirmed in writing of the  time  and
    place  of  the  trial run of the VESSEL, and the OWNER  shall  promptly
    acknowledge  receipt  of  such  notice.  The  OWNER  shall   have   its
    representative  and  his assistant(s) on board the  VESSEL  to  witness
    such trial run.

         Failure  in attendance of the OWNER's representative at the  trial
    run  of  the VESSEL for any reason whatsoever after due notice  to  the
    OWNER as above provided shall be deemed to be a waiver by the OWNER  of
    its  right to have its representative on board the VESSEL at the  trial
    run,  and  the BUILDER may conduct the trial run without attendance  of
    the  OWNER's  representative,  and in such  case  the  OWNER  shall  be
    obligated  to  accept  the VESSEL on the basis of certificates  of  the
    Classification  Society and a certificate of the BUILDER  stating  that
    the VESSEL, upon trial run, is found to conform to this Contract.

2.  Weather Condition:

         The  trial  run  shall be carried out under the weather  condition
    which  is  deemed favorable enough by the judgement of both  the  OWNER
    and  the  BUILDER.  In  the event of unfavorable weather  on  the  date
    specified  for the trial run, the same shall take place  on  the  first
    available  day  thereafter that the weather condition  permits.  It  is
    agreed  that, if during the trial run of the VESSEL, the weather should
    suddenly  become so unfavorable that orderly conduct of the  trial  run
    can  no  longer  be continued, the trial run shall be discontinued  and
    postponed  until  the  first favorable day next following,  unless  the
    OWNER  shall assent in writing to acceptance of the VESSEL on the basis
    of the trial run already made before such discontinuance has occurred.

         Any  delay  of  trial  run  caused  by  such  unfavorable  weather
    condition shall operate to postpone the Delivery Date by the period  of
    the  delay involved and such delay shall be deemed as permissible delay
    in the delivery of the VESSEL.

3.  How Conducted:

     (a)  The VESSEL  shall  run the official trial run in  the  manner  as
          specified in the Specifications.

     (b)  All expenses  in  connection with the trial run  are  to  be  for
          account of the BUILDER and the BUILDER shall provide, at its  own
          expense,  the  necessary crew to comply with conditions  of  safe
          navigation.

     (c)  OWNER shall furnish complete procedures and supervision  for  the
          installation, testing and recommissioning for the BOP stack.

4.  Method of Acceptance or Rejection:

     (a) Upon completion  of  the trial run, the BUILDER  shall  give  the
         OWNER  a  notice by telex confirmed in writing of  completion  of
         the  trial run, as and if the BUILDER considers that the  results
         of  trial  run indicate conformity of the VESSEL to this Contract
         and  the  Specifications. The OWNER shall, within Five  (5)  days
         after  receipt  of  such  notice from  the  BUILDER,  notify  the
         BUILDER  by  telex  or  telefax  confirmed  in  writing  of   its
         acceptance or rejection of the trial results.

     (b) However,  if  the result of the trial run is unacceptable,  or  if
         the  VESSEL, or any part or equipment thereof, (except  a  defect
         in  the  OWNER's Supplies not the responsibility of the  BUILDER)
         does not conform to the requirements of this Contract and/or  the
         Specifications,   or   if  the  BUILDER  is   in   agreement   to
         non-conformity as specified in the OWNER's notice  of  rejection,
         then,  the  BUILDER shall take necessary steps  to  correct  such
         non-conformity.

         The  VESSEL  may  be  redocked  in  the  event  of  unsatisfactory
         sea-trial  results  for  the dynamic positioning  and/or  thruster
         systems,  or  other  major  system  malfunction  which  cannot  be
         repaired afloat.

         Upon  completion of correction of such non-conformity, and re-test
         or trial if necessary, the BUILDER  shall  give  the  OWNER notice
         thereof by telex or telefax  confirmed  in writing.

         The  OWNER  shall,  within Five (5) days  after  receipt  of  such
         notice  from the BUILDER, notify the BUILDER of its acceptance  or
         rejection   of  the  VESSEL's  conformity  by  telex  or   telefax
         confirmed in writing.

     (c) If  any  event that the OWNER rejects the VESSEL, the OWNER  shall
         indicate in detail in its notice of rejection in what respect  the
         VESSEL, or any part or equipment thereof (except a defect  in  the
         OWNER's  Supplies not the responsibility of the BUILDER) does  not
         conform to this Contract and/or the Specifications.

     (d) In  the event that the OWNER fails to notify the BUILDER by  telex
         or  telefax  confirmed  in writing of the  acceptance  of  or  the
         rejection  together with the reason therefor of the VESSEL  within
         the  period as provided in the above Sub-paragraph (a) or (b), the
         OWNER  shall  be deemed to have accepted the trial results  and/or
         the VESSEL, as appropriate.

     (e) Any   dispute  between  the  BUILDER  and  the  OWNER  as  to  the
         conformity or non-conformity of the VESSEL to the requirements  of
         this  Contract  and/or the Specifications shall be  submitted  for
         final decision in accordance with Article XII hereof.

5.   Effect of Acceptance:

         Acceptance of the VESSEL as above provided in Paragraphs  4(a)  or
    4(b)  of  this  Article  VI  shall be  final  and  binding  so  far  as
    conformity  of  the  VESSEL to this Contract  is  concerned  and  shall
    preclude  the  OWNER from refusing formal delivery  of  the  VESSEL  as
    hereinafter   provided,  if  the  BUILDER  complies  with   all   other
    procedural  requirements  for  delivery  as  provided  in  Article  VII
    hereof. However, the OWNER's acceptance of the VESSEL shall not  affect
    the OWNER's rights under Article IX hereof.

6.  Disposition of Surplus Consumable Stores:

         Any  fuel oil furnished and paid for by the BUILDER for trial runs
    remaining on board the VESSEL, at the time of acceptance of the  VESSEL
    by  the  OWNER,  shall be bought by the OWNER from the BUILDER  at  the
    BUILDER's  purchase  price for such supply and  payment  by  the  OWNER
    thereof  shall  be  made at the time of delivery  of  the  VESSEL.  The
    BUILDER  shall  pay  the OWNER at the time of delivery of the VESSEL an
    amount  for  the consumed quantity of any lubricating oil  and  greases
    which  were furnished and paid for by the OWNER at the OWNER's purchase
    price thereof.

(End of Article)

                     ARTICLE VII - DELIVERY

1.   Time and Place:

         The  VESSEL shall be delivered by the BUILDER to the OWNER at  the
    Shipyard  in  Ulsan, Korea within November 1, 2000(unless delays  occur
    in  the construction of the VESSEL or in any performance required under
    this  Contract  due to causes which under the terms  of  this  Contract
    permit  postponement  of  the date of delivery,  in  which  event,  the
    aforementioned  date  for  delivery of  the  VESSEL  shall  be  changed
    accordingly)  or,  such  earlier date after completion  of  the  VESSEL
    according to this Contract and the Specifications.

         The  aforementioned date, or such earlier or later date  to  which
    the  requirement of delivery is advanced or postponed pursuant to  this
    Contract, is herein called the "DELIVERY DATE11.

2.  When and How Effected:

         Provided  that the BUILDER and the OWNER shall have fulfilled  all
    of  their  obligations stipulated under this Contract, the delivery  of
    the VESSEL shall be effected forthwith by the concurrent remittance  of
    the  fourth installment in accordance with Article II, Section 5(c) and
    delivery by each of the parties hereto to the other of the PROTOCOL  OF
    DELIVERY  AND ACCEPTANCE, acknowledging delivery of the VESSEL  by  the
    BUILDER and acceptance thereof by the OWNER.

3.  Documents to be delivered to OWNER:

         Upon  delivery  and  acceptance of the VESSEL, the  BUILDER  shall
    deliver  to  the  OWNER the following documents, which shall  accompany
    the PROTOCOL OF DELIVERY AND ACCEPTANCE:

(a) PROTOCOL OF TRIALS of the VESSEL made pursuant to the Specifications;

(b) PROTOCOL OF INVENTORY of the equipment of the VESSEL, including spare
    parts and the like, as specified in the Specifications;

(c) PROTOCOL OF STORES OF CONSUMABLE NATURE referred to under paragraph 6
    of Article VI hereof;

(d) ALL  CERTIFICATES, including the BUILDER's CERTIFICATE required to be
    furnished  upon delivery of the VESSEL pursuant to this  Contract and
    the Specifications;

    It  is agreed that if, through no fault on the part of the BUILDER, the
    Classification   certificates  and/or  other   certificates   are   not
    available   at  the  time  of  delivery  of  the  VESSEL,   provisional
    certificates shall be accepted by the OWNER, provided that the  BUILDER
    shall  furnish  the OWNER with the formal certificates as  promptly  as
    possible after such certificates have been issued.

    Application  and certificate for statutory inspections  by  the  United
    States Coast Guard in the Gulf of Mexico, if any, shall be arranged  by
    the OWNER at its expense.

(e) DECLARATION  OF  WARRANTY of the BUILDER that the VESSEL  is delivered
    to  the OWNER free and clear of any liens, charges, claims, mortgages,
    or   other  encumbrances  upon  the  OWNER's  title  thereto,  and  in
    particular  that the VESSEL is absolutely free of all burdens  in  the
    nature   of   imposts,  taxes  or  charges  imposed  by   Governmental
    Authorities,  as  well  as  all liabilities  of  the  BUILDER  to  its
    subcontractors,  employees and crew, and of  the  liabilities  arising
    from  the  operation of the VESSEL in trial runs, or otherwise,  prior
    to delivery;

(f) DRAWINGS  AND  PLANS  pertaining to the VESSEL  as  stipulated  in the
    Specifications;

(g)  COMMERCIAL INVOICE;

(h) Necessary  export  licenses,  permits, and  clearances  by  the Korean
    Government  to  enable the VESSEL to sail from Ulsan, Korea  following
    delivery; and

(i) DRAWINGS/OPERATING  MANUALS.  All  documentation,  including,  but not
    limited   to   complete,   as-built  drawings,   operations   manuals,
    commissioning   reports,  inclining  reports,  major/minor   equipment
    certifications,  sea  trial reports, spare parts  list  and  BUILDER's
    vendor's  documentation will be furnished by BUILDER to  OWNER  on  or
    before the delivery of the VESSEL.

4.  Tender of VESSEL:

         If the OWNER  fails to take delivery of the VESSEL after completion
    thereof  according  to  this Contract and the Specifications without any
    justifiable reason, the BUILDER shall have the  right to tender delivery
    of  the  VESSEL  after  accomplishment  of  all BUILDER's obligations as
    provided herein.

5.  Title and Risk:

         Title  to  and risk of loss of the VESSEL shall pass to the  OWNER
    only upon the delivery and acceptance thereof having been completed  as
    stated  above; it being expressly understood that, until such  delivery
    is  effected, title to and risk of damage to or loss of the VESSEL  and
    her equipment shall be in the BUILDER.

6.  Removal of VESSEL:

          The  OWNER  shall take possession of the VESSEL immediately  upon
    delivery  and acceptance thereof and shall remove the VESSEL  from  the
    premises  of  the  Shipyard within Seven (7) days  after  delivery  and
    acceptance thereof is effected.

          If  the  OWNER shall not remove the VESSEL from the  premises  of
    the  Shipyard within the aforesaid Seven (7) days, in such  event,  the
    OWNER  shall pay to the BUILDER the reasonable mooring charges  of  the
    VESSEL.

(End of Article)


              ARTICLE VIII - DELAYS AND EXTENSION OF TIME FOR
                         DELIVERY (FORCE MAJEURE)

1.   Causes of Delay (Force Majeure):

          If,  at  any  time  either the construction or  delivery  of  the
     VESSEL or any performance required hereunder as a prerequisite to  the
     delivery  thereof  is delayed by any of the following  events;  namely
     war, acts of state or government, blockade, revolution, insurrections,
     mobilization,  civil  commotion, riots, strikes,  sabotage,  lockouts,
     Acts   of  God  or  the  public  enemy,  plague  or  other  epidemics,
     quarantines, prolonged failure of electric current, freight embargoes,
     or  defects  in  major forgings or castings, if any,  or  shortage  of
     materials,  machinery or equipment in inability to obtain delivery  or
     delays in delivery of materials, machinery or equipment, provided that
     at  the time of ordering the same could reasonably be expected by  the
     BUILDER to be delivered in time, or defects in materials, machinery or
     equipment  which  could not have been detected by  the  BUILDER  using
     reasonable  care,  or earthquakes, tidal waves, typhoons,  hurricanes,
     prolonged  or  unusually severe weather conditions  or  delay  in  the
     construction of the BUILDER's other newbuilding projects in  the  same
     yard due to any such causes as described in this Article which in turn
     delay  the keel laying and eventual delivery of the VESSEL in view  of
     the  Shipyard's overall building program or the BUILDER's  performance
     under this Contract, or by destruction of the premises or works of the
     BUILDER or its sub-contractors, or of the VESSEL, or any part thereof,
     by  fire,  landslides, flood, lightning, explosion,  or  other  causes
     beyond the control of the BUILDER, or its sub-contractors, as the case
     may  be,  or for any other causes which, under terms of this Contract,
     authorize and permit extension of the time for delivery of the VESSEL,
     then,  in  the  event of delays due to the happening  of  any  of  the
     aforementioned  contingencies, the Delivery Date of the  VESSEL  under
     this  Contract shall be extended for a period of time which shall  not
     exceed the total accumulated time of all such delays.
     
2.   Notice of Delay:

          Within  Fourteen  (14) days after the date of occurrence  of  any
     cause  of  delay, on account of which the BUILDER claims  that  it  is
     entitled  under this Contract to a postponement of the Delivery  Date,
     the  BUILDER shall notify the OWNER in writing or by telex or  telefax
     confirmed  in  writing of the date when such cause of delay  occurred.
     Likewise, within Fourteen (14) days after the date of ending
    of  such  cause of delay, the BUILDER shall notify the OWNER in writing
    or  by  telex  or  telefax confirmed in writing of the date  when  such
    cause  of delay ended. The BUILDER shall also notify promptly the OWNER
    of  the  period, by which the Delivery Date is postponed by  reason  of
    such cause of delay. If the BUILDER does not give the timely advice  as
    above,  the  BUILDER  shall lose the right  to  claim  such  delays  as
    permissible delay.

         Failure  of  the  OWNER  to acknowledge the  BUILDER's  claim  for
    postponement  of  the  Delivery Date within fourteen  (14)  days  after
    receipt  by the OWNER of such notice of claim shall be deemed to  be  a
    waiver by the OWNER of its right to object to such postponement of  the
    Delivery Date.

3.  Definition of Permissible Delay:

         Delays  on account of such causes as specified in Paragraph  1  of
    this  Article  and  any  other delay which  under  the  terms  of  this
    Contract  permits postponement of the Delivery Date shall be understood
    to  be permissible delays and are to be distinguished from unauthorized
    delays  on account of which the Contract Price is subject to adjustment
    as provided for in Article III hereof.

4.  Right to Rescind for Excessive Delay:

     (a) If  the  total  accumulated  time of all  delays  claimed  by  the
          BUILDER  on  account of the causes specified in  Paragraph  1  of
          this  Article, excluding other delays of the nature  which  under
          the  terms  of this Contract permit postponement of the  Delivery
          Date, amounts to One Hundred Eighty (180) days or more, then,  in
          such  event,  the OWNER may rescind this Contract  in  accordance
          with the provisions of Article X hereof.

          The  BUILDER may, at any time after the accumulated time  of  the
          aforementioned delays justifying rescission by the OWNER,  demand
          in  writing that the OWNER shall make an election, in which  case
          the  OWNER  shall, within fourteen (14) working days  after  such
          demand is received by the OWNER either notify the BUILDER of  its
          intention  to rescind this Contract, or consent to a postponement
          of  the  Delivery  Date to a specified future  date,  which  date
          BUILDER  represents  to OWNER is the earliest  date  BUILDER  can
          deliver  the  VESSEL  to OWNER, based on the  circumstances  then
          known,  it  being understood by the parties hereto  that  if  the
          VESSEL  is  not  delivered by such future date, the  OWNER  shall
          have  the  same  right  of  rescission  upon  the  same terms and
          conditions as hereinabove provided.

    (b)  If at  any  time  during the term of this Contract, BUILDER  falls
         more  than  270  days  behind in the construction  of  the  VESSEL
         according  to  the  Delivery and Construction  Schedule,  for  any
         reason  whatsoever, and whether as a result of  permissible  delay
         or  otherwise, OWNER shall be entitled to give written  notice  to
         BUILDER  that OWNER considers BUILDER in material default  of  its
         obligations  under  this Contract, and if BUILDER  has  not  cured
         such  default  within  Thirty  (30) days  after  receipt  of  such
         notice,  OWNER  shall have the right to rescind this  Contract  in
         accordance with the provisions of Article X hereof.

(End of Article)

                ARTICLE IX - WARRANTY OF QUALITY

1.   Guarantee:

         The  BUILDER, for the period of Twelve (12) months after  delivery
    of  the VESSEL (hereinafter called "Guarantee Period"), guarantees  the
    VESSEL   and   her   engines,  including  all   parts   and   equipment
    manufactured,   furnished  or  installed  by   the   BUILDER   or   its
    subcontractors  under  this  Contract,  and  including  the  machinery,
    equipment  and  appurtenances thereof (including the installation  work
    performed  or  required to be performed by BUILDER under this  Contract
    for  the OWNER supplied or furnished equipment), under the Contract but
    excluding any item which is supplied or designated by the OWNER  or  by
    any  other bodies on behalf of the OWNER, against all defects  and  all
    damages  to  the  VESSEL  resulting  therefrom  occurring  within   the
    Guarantee  Period  which are due to defective material,  design  and/or
    poor  workmanship or negligent or other improper acts or  omissions  on
    the  part of the BUILDER or its subcontractors (hereinafter called  the
    "Defect" or "Defects") and are not a result of accident, ordinary  wear
    and  tear, misuse, mismanagement, negligent or other improper  acts  or
    omissions or neglect on the part of the OWNER, its employee or agents.

         The  BUILDER shall arrange for the OWNER to obtain a five (5) year
    guarantee after delivery of the VESSEL for the paint materials and  the
    ballast  tank coatings through the paint manufacturer selected  by  the
    BUILDER.  But,  the  BUILDER's guarantee for the ballast  tank  coating
    shall  be  in no event longer than one (1) year after delivery  of  the
    VESSEL  unless  major repairs as defined in Clause 3  of  this  Article
    have  arisen. Such additional extended guarantee shall proceed  between
    the  OWNER and the selected manufacturer arranged by the BUILDER. Final
    selection of the ballast tank coatings manufacturer is subject  to  the
    approval of the OWNER, not to be unreasonably withheld.

2.  Notice of Defects:

         The  OWNER  shall  notify  the BUILDER in  writing,  or  by  telex
    confirmed in writing, of any Defect for which claim is made under  this
    guarantee,  as  promptly  as  possible  after  discovery  thereof.  The
    OWNER's  written notice shall describe in detail the nature, cause  and
    extent of the Defects.

         The  BUILDER  shall  have no obligation for any Defect  discovered
    prior  to  the  expiry date of the Guarantee Period, unless  notice  of
    such  Defect  or  any  damage resulting therefrom is  received  by  the
    BUILDER not later than Ten (10) BUILDER's working days after the expiry
    date of the Guarantee Period.

3.  Remedy of Defects:

(a) The  BUILDER shall remedy, at its expense, any Defect against which the
    VESSEL  is  guaranteed  under this Article,  by  making  all  necessary
    repairs or replacements at the Shipyard.

(b) However,  if  it is impracticable to bring the VESSEL to the  Shipyard,
    the  OWNER may cause the necessary repairs or replacements to  be  made
    elsewhere which is deemed suitable for the purpose, provided  that,  in
    such  event,  the  BUILDER may forward or supply replacement  parts  or
    materials to the VESSEL, unless forwarding or supplying thereof to  the
    VESSEL  would impair or delay the operation or working schedule of  the
    VESSEL.  In  the event that the OWNER proposes to cause  the  necessary
    repairs  or  replacements  for the VESSEL  to  be  made  at  any  other
    shipyard or works than the Shipyard, the OWNER shall first, but in  all
    events  as soon as possible, give the BUILDER notice in writing  or  by
    telex  or  telefax confirmed in writing of the time and place when  and
    where  such  repairs  will be made, and if the VESSEL  is  not  thereby
    delayed,  or her operation or working schedule is not thereby impaired,
    the   BUILDER   shall   have  the  right   to   verify   by   its   own
    representative(s)  the  nature,  cause  and  extent  of   the   Defects
    complained  of.  The BUILDER shall, in such case, promptly  advise  the
    OWNER  by  telex or telefax, after such examination has been completed,
    of  its acceptance or rejection of the Defects as ones that are covered
    by  the guarantee herein provided. Upon the BUILDER's acceptance of the
    Defects as justifying remedy under this Article, or upon award  of  the
    arbitration  so  determining, the BUILDER shall pay to  the  OWNER  for
    such  repairs  or  replacements a sum equa to the  reasonable  cost  of
    making  the  same  repairs  or replacements in  a  first  class  Korean
    shipyard,  at  the  prices prevailing at the time of  such  repairs  or
    replacements  are made. The guarantee works shall be settled  regularly
    during   the  Guarantee  Period.  The  actual  reimbursement  for   the
    guarantee  shall be made in a lump sum at the expiry of  the  Guarantee
    Period.

(c) In  any  case,  the  VESSEL shall be taken, at  the  OWNER's  cost  and
    responsibility,  to the place elected, ready in all respects  for  such
    repairs or replacement.

(d)  Any dispute  under  this Article shall be referred to  arbitration  in
     accordance with the provisions of Article XII hereof.

(e)  Repairs under  this  Article are guaranteed for  the  balance  of  the
     period  set  out in paragraph 1 of this Article but for major  repairs
     are guaranteed for the longer of the balance of the period set out  in
     paragraph  1  of this Article or 6 months from the date of  completion
     of  major  repairs, but in no event longer than 18  months  after  the
     Delivery  Date. For purposes hereof, "major repairs" shall be  defined
     as  a  repair  costing  more than One Hundred  Fifty  Thousand  United
     States Dollars (US$150,000)

4.   Extent of BUILDER's Responsibility:

(a)  The BUILDER  shall have no responsibility or liability for  any  other
     defect  whatsoever in the VESSEL other than the Defects  specified  in
     Paragraph 1 of this Article, other than to repair all damages  to  the
     VESSEL  discovered within the Guarantee Period and resulting  from  or
     caused  by  the Defects which are not attributable to the OWNER's  (i)
     improper acts or omissions, (ii) negligence, or (iii) misuse.

     Nor  shall  the BUILDER in any circumstances be responsible or  liable
     for  any  consequential or special loss, damage or expense, including,
     but  not  limited  to,  loss of time, loss of profit  or  earnings  or
     demurrage directly or indirectly occasioned to the OWNER by reason  of
     the Defects specified in Paragraph 1 of this Article or due to repairs
     or other works done to the VESSEL to remedy such Defects.

(b)  The BUILDER  shall not be responsible for any defect in  any  part  of
     the  VESSEL  which may, subsequently to delivery of the  VESSEL,  have
     been  replaced or repaired in any way by any other contractor,  unless
     done  pursuant to Paragraph 3 (b) of this Article, or for  any  defect
     which  have been caused or aggravated by omission or improper use  and
     maintenance  of the VESSEL on the part of the OWNER, its  servants  or
     agents  or  by  ordinary wear and tear or by any  other  cause  beyond
     control  of  the BUILDER (other than aggravation of defect or  results
     of  defect  resulting from the use or operation of  the  VESSEL  after
     knowledge of same by OWNER, where such continued use or operation  was
     unavoidable  to preserve or protect the safety of the  VESSEL  or  her
     crew).

(c)  The guarantee contained as hereinabove in this Article  replaces  and
     excludes  any  other liability, guarantee, warranty and/ or  condition
     imposed  or implied by the law, customary, statutory or otherwise,  by
     reason  of the construction and sale of the VESSEL by the BUILDER  for
     and to the OWNER.

5.   Guarantee Engineer:

          The BUILDER shall, at the request of the OWNER, appoint a maximum
     of  two  (2)  Guarantee  Engineers to  serve  on  the  VESSEL  as  its
     representative for a period of up to Three (3) months  from  the  date
     the VESSEL is delivered. However, if the OWNER shall deem it necessary
     to  keep  the  Guarantee Engineers on the VESSEL for a longer  period,
     then  they  shall remain on board the VESSEL after the said three  (3)
     months, up to but not longer than Six (6) months from the delivery  of
     the VESSEL.
          
          The OWNER, and its employees, shall give such Guarantee Engineers
     full cooperation in carrying out their duties as the representative of
     the BUILDER on board the VESSEL.
          
          The   OWNER   shall  accord  the  Guarantee  Engineers  treatment
     comparable to the VESSEL's Chief Engineer, and shall provide board and
     lodging  at  no  cost to the BUILDER or the Guarantee  Engineers.  The
     BUILDER  and the OWNER shall, prior to delivery of the VESSEL, execute
     a  separate agreement regarding the Guarantee Engineers, including  an
     appropriate mutual hold harmless agreement.
          
          While  the Guarantee Engineers are on board the VESSEL, the OWNER
     shall  pay  to the Guarantee Engineers the sum of US$5,000 per  month,
     the expenses of their repatriation to Korea by air upon termination of
     their  service, the expenses of their communication with  the  BUILDER
     incurred  in  performing their duties and expenses, if any,  of  their
     medical and hospital care in the VESSEL's hospital.
          
          BUILDER will have the option, at BUILDER's sole risk and expense,
     to  place a maximum of two (2) Guarantee Engineers on board the VESSEL
     for  a  period of up to six (6) months. The OWNER will provide  board,
     lodging,  communications and general working support  services  at  no
     cost  to the BUILDER or the Guarantee Engineers but all other expenses
     shall be for the sole account of BUILDER.

(End of Article)

                ARTICLE X - RESCISSION BY OWNER

1.  Notice:

         The  payments  made by the OWNER prior to delivery of  the  VESSEL
    shall  be  in the nature of advances to the BUILDER, and in  the  event
    that  the  VESSEL  after sea trial is rejected  by  the  OWNER  or  the
    Contract  is  rescinded by the OWNER in accordance with  the  terms  of
    this  Contract  under  and pursuant to any of the  provisions  of  this
    Contract  specifically permitting the OWNER to do so,  then  the  OWNER
    shall  notify the BUILDER in writing or by telex confirmed in  writing,
    and  such  rescission  shall be effective as of the  date  when  notice
    thereof is received by the BUILDER.

2.  Refundment by BUILDER:

         In case the BUILDER receives the notice stipulated in Paragraph  1
    of  this  Article, the BUILDER shall promptly refund to the  OWNER  the
    full amount of all sums paid by the OWNER to the BUILDER on account  of
    the  VESSEL,  together with the interest thereon,  unless  the  BUILDER
    proceeds  to  the  arbitration  under the  provisions  of  Article  XII
    hereof.

         In  the  event of such rescission by the OWNER, the BUILDER  shall
    pay  the OWNER interest at the rate of Eight percent (8%) per annum  on
    the  amount required herein to be refunded to the OWNER, computed  from
    the date following the respective date on which such sums were paid  by
    the  OWNER to the BUILDER to the date of remittance by transfer of such
    refund  to  the OWNER by the BUILDER, provided, however,  that  if  the
    said  rescission by the OWNER is made under the provisions of Paragraph
    4  of Article VIII hereof, then in such event the BUILDER shall pay the
    OWNER interest at the rate of Four percent (4%) per annum. on the  sums
    refundable.

         As  security for refund of installments prior to delivery  of  the
    VESSEL,  the BUILDER shall furnish to OWNER, prior to the due  date  of
    the  first installment, with a letter of guarantee covering the  amount
    of  such pre-delivery installments and issued by the BUILDER's BANK  in
    favor  of  the OWNER. Such letter of guarantee shall have substantially
    the same form and substance as Exhibit "All annexed hereto.

3.   Discharge of Obligations:

          Upon  such  refund by the BUILDER to the OWNER, all  obligations,
     duties  and  liabilities of each of the parties hereto  to  the  other
     under  this Contract shall be forthwith completely discharged, without
     prejudice, however,to any claims either party may have resulting  from
     the  other  party's  breach  of  any of  its  obligations  under  this
     Contract.

(End of Article)


                  ARTICLE XI - OWNER'S DEFAULT

1.  Definition of Default:

         The  OWNER shall be deemed to be in default of its performance  of
    obligations under this Contract in the following cases:

     (a) If  the  first,  second or third installment is not  paid  by  the
         OWNER  to  the BUILDER within Five (5) banking days  in  New  York
         after  such  installment becomes due and payable  as  provided  in
         Article II hereof; or

     (b) If  the fourth installment is not paid by the OWNER to the BUILDER
         in  New  York at the time such installment becomes due and payable
         upon delivery of the Vessel as provided in Article II hereof; or

     (c) If  the increased amount in the Contract Price as adjusted due and
         payable  upon  delivery of the VESSEL is not  paid  by  the  OWNER
         concurrently  with delivery of the VESSEL as provided  in  Article
         II hereof; or

     (d) If  the  OWNER, when the VESSEL is duly tendered for  delivery  by
         the  BUILDER  in accordance with the provisions of this  Contract,
         fails  to accept the VESSEL within Five (5) days from the tendered
         date  without  any  specific and valid ground thereof  under  this
         Contract.

2.   Effect of Default on or before Delivery of VESSEL:

     (a)  Should  the  OWNER make default in payment of any installment  of
          the Contract Price on or before delivery of the VESSEL, the OWNER
          shall  pay  the  installment(s) in default plus accrued  interest
          thereon  at  the  rate of eight percent (8%) per annum.  computed
          from  the  due  date  of such installment to the  date  when  the
          BUILDER receives the payment, and, for the purpose of Paragraph 1
          of  Article VII hereof, the Delivery Date of the VESSEL shall  be
          automatically extended by a period of continuance of such default
          by the OWNER.

In  any event of default by the OWNER, the OWNER shall also pay all charges
and expenses incurred to the BUILDER in direct consequence of such default.

     (b) If  any  default by the OWNER continues for a period of  Ten  (10)
         days,  the  BUILDER may, at its option, rescind this  Contract  by
         giving  notice  of  such effect to the OWNER by telex  or  telefax
         confirmed in writing.

                             XI-1
         Upon  dispatch  by the BUILDER of such notice of rescission,  this
         Contract  shall  be  forthwith rescinded and  terminated.  In  the
         event  of  such rescission of this Contract, the BUILDER shall  be
         entitled  to  retain any installment or installments already  paid
         by  the  OWNER to the BUILDER on account of this Contract and  the
         OWNER's Supplies, if any.

3.  Disposal of VESSEL:

     (a) In  the event that this Contract is rescinded by the BUILDER under
         the  provisions  of  Paragraph 2(b) of this Article,  the  BUILDER
         must, at its sole discretion, either complete the VESSEL and  sell
         the  same, or sell the VESSEL in its incomplete state, free of any
         right  or  claim  of  the OWNER. Such sale of the  VESSEL  by  the
         BUILDER  shall be either by public auction or private contract  at
         the BUILDER's sole discretion and on such terms and conditions  as
         the BUILDER shall deem fit.

     (b) On  sale  of the VESSEL, the amount of the sale proceeds  received
         by  the BUILDER shall be applied firstly to all expenses attending
         such sale or otherwise incurred to the BUILDER as a result of  the
         OWNER's  default,  secondly  to  the  payment  of  all  costs  and
         expenses  of  construction of the VESSEL incurred to  the  BUILDER
         less  OWNER's Supplies and the installments already  paid  by  the
         OWNER,  and  then  to  the  compensation  to  the  BUILDER  for  a
         reasonable loss of profit due to rescission of this Contract,  and
         finally to the repayment to the OWNER if any balance is obtained.

     (c) If  the proceeds of sale are insufficient to pay such total  costs
         and  loss of profit as aforesaid, the OWNER shall promptly pay the
         deficiency to the BUILDER upon request.

4.  Dispute:

         Any  dispute  under this Article shall be referred to  arbitration
    in accordance with the provisions of Article XII hereof.

(End of Article)


                   ARTICLE XII - ARBITRATION

1.  Decision by the Classification Society:

         If  any dispute arises between the parties hereto in regard to the
    design  and/or construction of the VESSEL, its machinery and equipment,
    and/or  in  respect of the materials and/or workmanship thereof  and/or
    thereon,  and/or  in respect of interpretations of this  Contract,  the
    parties   may   by   mutual  agreement  refer  the   dispute   to   the
    Classification  Society  or to such other expert  as  may  be  mutually
    agreed  between the parties hereto, and whose decision shall be  final,
    conclusive and binding upon the parties hereto.

2.   Proceedings of Arbitration:

         In  the  event that the parties hereto do not agree  to  settle  a
    dispute  according to Paragraph 1 of this Article and/or in  the  event
    of  any  other dispute of any kind whatsoever between the  parties  and
    relating to this Contract or its rescission or any stipulation  herein,
    such  dispute shall be submitted to arbitration in London.  Each  party
    shall  appoint an arbitrator and the two arbitrators so appointed shall
    appoint  an Umpire. If the two arbitrators are unable to agree upon  an
    Umpire  within  Twenty  (20)  days  after  appointment  of  the  second
    arbitrator,  either  of  the  said two arbitrators  may  apply  to  the
    President  for  the  time  being  of the  London  Maritime  Arbitrators
    Association  to  appoint the Umpire, and the two  arbitrators  and  the
    Umpire  shall constitute the Arbitration Board. Such arbitration  shall
    be  in  accordance with and subject to the provisions  of  the  British
    Arbitration  Act  1979, or any statutory modification  or  re-enactment
    thereof for the time being in force.

         Either  party may demand arbitration of any such dispute by giving
    notice to the other party. Any demand for arbitration by either of  the
    parties  hereto  shall  state the name of the arbitrator  appointed  by
    such  party and shall also state specifically the question or questions
    as  to which such party is demanding arbitration. within Fourteen  (14)
    days  after receipt of notice of such demand for arbitration, the other
    party  shall  in  turn appoint a second arbitrator and give  notice  in
    writing  of such appointment to the party demanding arbitration.  If  a
    party  fails to appoint an arbitrator as aforementioned within Fourteen
    (14) days following receipt of notice of demand for arbitration by  the
    other  party,  the  party  failing to appoint an  arbitrator  shall  be
    deemed  to  have  accepted and appointed, as its  own  arbitrator,  the
    arbitrator  appointed  by  the  party  demanding  arbitration  and  the
    arbitration shall  proceed  before  this sole   arbitrator who alone in
    such  event  shall  constitute  the  Arbitration Board.

         The  award of the Arbitration Board shall be final and binding  on
    both parties.

3.  Notice of Award:

         The  award decision shall immediately be communicated to the OWNER
    and the BUILDER by facsimile and confirmed in writing.

4.  Expenses:

         The  Arbitration Board shall determine which party shall bear  the
    expenses of the arbitration or the portion of such expenses which  each
    party shall bear.

5.  Entry in Court:

         In  case  of failure by either party to respect the award  of  the
    Arbitration  Board, the judgement may be entered in  any  proper  court
    having jurisdiction thereof to enforce such award.

6.  Alteration of Delivery Date:

         In  the  event of reference to arbitration of any dispute  arising
    out  of  matters occurring prior to delivery of the VESSEL,  the  award
    may  include  any adjustment of the Delivery Date which the Arbitration
    Board may deem appropriate.

(End of Article)


              ARTICLE XIII - SUCCESSOR AND ASSIGNS

     Neither of the parties hereto shall assign this Contract to any  other
individual or company unless prior consent of the other party is  given  in
writing,  such  consent not to be unreasonably withheld, provided  however,
that  the  OWNER  shall be freely entitled to assign this  Contract  to  an
Affiliated Company without the prior approval of BUILDER. For the  purposes
of any such assignment, "Affiliated Company" means a company or other legal
entity which controls or is controlled by OWNER, or which is controlled  by
an  entity which controls the OWNER. For purposes hereof, control means the
ownership,  directly or indirectly, of fifty percent (50%) or more  of  the
shares or voting rights in a company or legal entity. Upon giving notice to
the BUILDER of such assignment, the assignor shall, to the extent assigned,
have  no  further obligation thereunder. The notice given by OWNER of  such
assignment  shall include a reasonable explanation of the  purpose  of  the
assignment  and  shall provide sufficient information so as  to  allow  the
BUILDER to advise the BUILDER's Bank regarding any amendment of the name of
the  beneficiary of the Refund Guarantee provided for in Article X  hereof.
Upon  such  assignment, the OWNER shall provide to BUILDER a  copy  of  any
assignment made pursuant hereto.

     In  the  event  of  any  assignment pursuant  to  the  terms  of  this
Contract,  the  assignee  shall succeed to  all  of  the  assigned  rights,
responsibilities,  duties  and  obligations  of  the  assignor  under  this
Contract  and, to the extent assigned, the assignor shall have  no  further
right  or  obligation  hereunder. Should OWNER assign  this  Contract,  any
assignee  or  subsequent assignee of this Contract  shall  succeed  to  the
rights  of  the  OWNER to further assign this Contract under  this  Article
XIII.

(End of Article)

                 ARTICLE XIV - TAXES AND DUTIES

1.  Taxes and Duties Incurred in Korea:

          The BUILDER shall bear and pay all taxes, duties, stamps and fees
    incurred  in  Korea in connection with execution and/or performance  of
    this  Contract  as  the BUILDER, and any taxes and  duties  imposed  in
    Korea   upon   the   OWNER's  Supplies  resulting  from   the   failure
    attributable  to the BUILDER in taking all appropriate action  to  have
    such  OWNER's  Supplies  imported into Korea under  bond  for  ultimate
    export with the VESSEL following delivery.

2.   Taxes and Duties Incurred Outside Korea:

          The  OWNER  shall  bear and pay all taxes (other  than  taxes  on
    income  imposed  on BUILDER), duties, stamps and fees incurred  outside
    Korea  in connection with execution and/or performance of this Contract
    as  the  OWNER,  except for taxes and duties imposed upon  those  items
    (other than OWNER's Supplies) to be procured by or for the BUILDER  for
    construction  of  the VESSEL which shall be the responsibility  of  the
    BUILDER.

(End of Article)


            ARTICLE XV - PATENTS, TRADEMARKS, COPYRIGHTS, ETC.

1.   Patents:

         Except  as  to  OWNER's provided basic design, specifications  and
    OWNER's  Supplies, BUILDER agrees to defend, indemnify and  hold  OWNER
    harmless  from  any liability or claims of patent infringement  of  any
    nature  or  kind  (including legal fees and expenses) relating  to  the
    infringement  or  claimed infringement of patent rights  of  any  third
    party  with  respect  to any material, service, process,  or  apparatus
    covered by this Contract, or their use for their intended purpose.

         With  regards  to  the performance of the current Contract,  OWNER
    shall  defend, indemnify and hold BUILDER harmless from all  claims  of
    infringement  of  patent  rights of any  third  party  related  to  (i)
    processes supplied by OWNER or (ii) OWNER's Supplies.

         Except  as  otherwise  provided for  in  this  Agreement,  nothing
    contained herein shall be construed as transferring any rights  in  any
    patents, trademarks or copyrights utilized in the performance  of  this
    Contract.

2.  General Plans, Specifications and Working Drawings:

     (a) The  OWNER retains the right to use the Specifications to  inspect
          and/or verify the work performed by the BUILDER hereunder  or  to
          make  repairs or modifications to the VESSEL or to use or operate
          the VESSEL

     (b) It  is  specifically  agreed  that the  Contract  Price  does  not
          include provision for BUILDER's obtaining or having obtained  any
          and  all necessary design rights from R&B Falcon Drilling Co. and
          Ishikawajima-Harima  Heavy  Industries  Co.,  Ltd.  and/or  their
          parent,   affiliated   or   subsidiary   companies   (hereinafter
          "Designer")  nor  payment of any and all  design  and/or  royalty
          fees and that same has or will be obtained/paid by OWNER.

3.   License

    The  VESSEL is being constructed pursuant to a design supplied by OWNER
    and  ISHIKAWAJIMA-HARIMA HEAVY  INDUSTRIES CO.,  LTD.  ("IHI").  It  is
    agreed  between  OWNER  and  BUILDER that BUILDER  will  not  construct
    another  rig  of  the RBS8-D design without seeking  the  agreement  of
    OWNER  and  IHI, nor will BUILDER disclose RBS8-D design to  any  third
    parties who are not related to the  execution of this Contract, without
    prior consent of both OWNER and IHI.

    BUILDER  and  OWNER  agree  on the following principals  regarding  the
    licensing of the OWNER/IHI design:

    (a)  OWNER   and   IHI  (referred  in  this  article  collectively   as
         "LICENSORS") are the joint owners of the design of  "RBS8-D"  Type
         semisubmersible Drilling Unit.

    (b)  In  order  to protect the rights of the LICENSORS as joint  owners
         of   RBS8-D   design,   LICENSORS  agree  to   grant   BUILDER   a
         non-exclusive  license to construct and to  sell  RBS8-D  designed
         Drilling Units only to OWNER.

    (c)  The  license  granted  to BUILDER shall not confer  the  right  to
         grant a sublicense to any third party.

    (d) The  arrangement  and  outfitting of  RBS8-D  may  be  modified  by
         BUILDER   to   suit  their  production  facilities  or   for   the
         requirement of OWNER or by normal detail design progress.

    (e)  BUILDER agrees  to maintain confidential all information  provided
         which  is the property of LICENSORS and such information  will  be
         returned upon LICENSORS' request.

(End of Article)

                      ARTICLE XVI - OWNER'S SUPPLIES

1.   Responsibility of OWNER:

         (a)   The  OWNER shall, at its own risk, cost and expense,  supply
          and  deliver  to the BUILDER all of the items to be furnished  by
          the  OWNER as specified in the Specifications (herein called  the
          OWNER's Supplies) to a first point of arrival (the port of  Pusan
          or other places as may be agreed between the parties) in Korea in
          good  condition. Once delivered to the first point of arrival  in
          Korea,  the OWNER's Supplies will be at the BUILDER's risk.  Upon
          transportation of the OWNER's Supplies to the shipyard and  after
          customs clearance, the BUILDER shall make a visual inspection  of
          OWNER's Supplies and report to OWNER any apparent damage  to  the
          OWNER's  Supplies.  OWNER and BUILDER shall inspect  the  OWNER's
          Supplies after customs clearance and upon arrival thereof at  the
          Shipyard  to  determine  through visual examination  whether  the
          OWNER's  Supplies  comply with the contractual specifications  or
          have been damaged during the transportation. If as the result  of
          such  inspections,  (i)  any defect to the  OWNER's  Supplies  is
          found, or (ii) any damage to the OWNER's Supplies occurring prior
          to  arrival  at the shipyard is found, then all the remedies  and
          replacements  thereof are the responsibility of  the  OWNER.  Any
          delay or direct expenses regarding the construction of the VESSEL
          resulting  solely  from  OWNER's  failure  to  have  the  OWNER's
          Supplies delivered in Korea as agreed herein shall be the OWNER's
          responsibility.  Risk  of  transportation  within  Korea  to  the
          Shipyard  and  risk of offloading, uncrating and storage  of  the
          OWNER's Supplies upon their arrival at the Shipyard will be  with
          BUILDER.  However,  the  cost for inland transportation,  customs
          clearance,  insurance for inland transportation and other  costs,
          if any, for the OWNER's Supplies shall be one half of one percent
          (0.5%)  of the OWNER's Supplies amount on the C.I.F. value  basis
          for  those delivered to Mipo port outside the shipyard, Ulsan  or
          one  percent  (1.0%)  for those delivered to Pusan  Port,  Pusan,
          which shall be paid by the OWNER to the BUILDER together with the
          payment of the 5th installment pursuant to Article II hereof.  In
          case such OWNER's Supplies are delivered directly to the Shipyard
          or  Mipo  Port in the Offshore Yard by the OWNER, the  applicable
          cost (rate) shall be reduced to zero point zero percent (0.0%) of
          the  OWNER's Supplies amount on the basis of C.I.F. value, except
          OWNER  will  pay for customs clearance or any third party  costs.
          OWNER's  Supplies  sent  to  ports  nearby   the  Shipyard   will
          be  assessed  charges for transportation, customs clearance  fee,
          harbor  union fee, pilotage and other costs that are incurred  by
          the BUILDER to facilitate delivery of the OWNER's Supplies to the
          Shipyard.  These fees will be charged at actual direct cost.  Any
          loss  of or damage to the OWNER's Supplies after they are in  the
          custody of the BUILDER will be for the account of the BUILDER and
          BUILDER will replace or repair any OWNER's Supplies that  may  be
          lost or damaged, and a subsequent delay due to the foregoing  and
          resulting  cost  impact  will  be the  BUILDER's  responsibility.
          BUILDER  agrees and acknowledges that any or all of  the  OWNER's
          Supplies  may arrive at the Shipyard in individual  parts  or  as
          component parts to be placed in or made a part of a larger system
          or  module. The BOP is to arrive in not more than four  (4)  main
          components.
     
     (b)  In  order to facilitate detailed design and installation  by  the
          BUILDER  of the OWNER's Supplies in or on the VESSEL,  the  OWNER
          shall  furnish the BUILDER with necessary specifications,  plans,
          drawings,   instruction   books,  manuals,   test   reports   and
          certificates  required  by  the  rules  and  regulations  of  the
          Specifications.  If  so  requested by  the  BUILDER,  the  OWNER,
          without   any   charge   to   the  BUILDER,   shall   cause   the
          representatives of the manufacturers of the OWNER's  Supplies  to
          advise the BUILDER in installation thereof in or on the VESSEL.
     
     (c)  Any  and  all  of  the OWNER's Supplies shall be subject  to  the
          BUILDER's reasonable right of rejection, as and if they are found
          to be unsuitable or in improper condition for installation.
     
     (d)  The   insurance   for  the  OWNER's  Supplies   during   storage,
          construction  and  installation at the Shipyard  is  covered  and
          handled by the BUILDER at its cost and responsibility.
     
     (e)  A  preliminary  Delivery  Schedule of the  OWNER's  Supplies  and
          vendor data specific to the VESSEL (Hull No. HRBS8D) showing  the
          BUILDER's   requested  delivery  dates   is   attached   to   the
          Specifications. The Delivery Schedule of the OWNER's Supplies and
          vendor  data  shall  be  mutually agreed, finalized  and  settled
          within  Sixty  (60)  calendar days  from  the  date  of  contract
          signing.  The  delivery dates agreed to on the Delivery  Schedule
          will  be  the date OWNER's Supplies are required at the shipyard.
          Should the OWNER fail to deliver  any  of  the  OWNER's  Supplies
          within Twenty (20) days of the  time  designated by the  Delivery
          Schedule, the Delivery Date shall be  automatically extended  for
          a period not  to  exceed  the  actual  delay,  beyond twenty (20)
          days, incurred by the BUILDER.  If  no  delay  in the delivery of
          the VESSEL is incurred by the  BUILDER,   the Delivery Date shall
          not change.

     (f) If  delay  in  delivery  of  any of the OWNER's  Supplies  exceeds
         thirty(30)  days, then, the BUILDER shall be entitled  to  proceed
         with  construction of the VESSEL without installation  thereof  in
         or  on  the  VESSEL as hereinabove provided, and the  OWNER  shall
         accept  and  take  delivery of the VESSEL so  constructed,  unless
         such  delay is caused by Force Majeure in which case the provision
         Paragraph 1(e) of this Article shall apply.

2.  Responsibility of BUILDER:

         The  BUILDER  shall be responsible for storing and  handling  with
    reasonable care of the OWNER's Supplies after delivery thereof  at  the
    Shipyard,  and shall, at its own cost and expense, install them  in  or
    on  the  VESSEL,  unless otherwise provided herein  or  agreed  by  the
    parties  hereto,  provided,  always, that  the  BUILDER  shall  not  be
    responsible for quality, efficiency and/or performance of  any  of  the
    OWNER's  Supplies  (other than to install same in accordance  with  the
    manufacturer's specifications and requirements, copies  of  which  have
    been provided to BUILDER by OWNER).

         It will be the BUILDER's responsibility at no cost to OWNER to:

          (i)     assemble the OWNER's Supplies, bulk material
                  and provide modularization and/or
                  engineering, except procurement engineering
                  related to the OWNER's Supplies, at the
                  Shipyard;

          (ii)    test the OWNER's Supplies as necessary or
                  appropriate;

          (iii)   construct modules from the OWNER's Supplies
                  as appropriate;

          (iv)    test and pre-commission the modules
                  containing the OWNER's Supplies and to
                  generally test all of the OWNER's Supplies;

          (v)     install the OWNER's Supplies on the VESSEL,
                  in modules, as required, or otherwise as
                  required,  and  to integrate the OWNER's 
                  Supplies  into the overall designed system
                  of the VESSEL;

          (vi)    test and pre-commission the integrated
                  modules and systems; and

          (vii)   complete and test the entire drilling system
                  where practicable (i.e., equipment functional
                  test only, not full operational load test) to
                  insure that it works harmoniously as a part
                  of the drilling process and the VESSEL so as
                  to be able to accomplish its intended
                  purpose.

    In  no  event will BUILDER charge any additional cost for  any  of  the
    above. Pre-commission or pre-commissioning as used in this Contract  or
    the  Specifications means the putting into service or the commissioning
    to   be  done  at  the  Shipyard  prior  to  delivery  and  acceptance.
    Pre-commission  or  precommissioning does not mean  commissioning  that
    occurs elsewhere.

3.   Title:

          Title  to  OWNER's Supplies shall at all times remain with  OWNER
    during  the Contract; however, BUILDER shall have the risk of  loss  of
    or   damage  to  such  OWNER's  Supplies  from  the  time  set  out  in
    subparagraph 1(a) of this Article until delivery of the VESSEL.

4.   OWNER's Supplies Refundment:

          Notwithstanding  anything  else  contained  in   this   Contract,
    BUILDER  agrees  that if for any reason whatsoever the  VESSEL  is  not
    delivered  to  OWNER, other than as a result of OWNER's  default  under
    Article  XI  of this Contract, then BUILDER shall remit  to  OWNER  the
    full  value  of all OWNER's Supplies which have been delivered  to  the
    Shipyard or which BUILDER has taken custody of under this Article  XVI.
    BUILDER  shall  remit  all  amounts due under  this  paragraph  4  upon
    written  demand by OWNER and upon BUILDER's request, OWNER will furnish
    BUILDER  with reasonable documentation showing OWNER's cost of  OWNER's
    Supplies.  BUILDER shall remit all amounts due within thirty (30)  days
    of demand.

(End of Article)


               ARTICLE XVII - INSURANCE

1.   Extent of Insurance Coverage:

          From the time of the launching until delivery of the VESSEL,  the
     BUILDER  shall, at its own cost and expense, keep the VESSEL  and  all
     machinery, materials and equipment delivered to the Shipyard  for  the
     VESSEL  or  built into or installed in or upon the VESSEL (except  the
     OWNER's  Supplies) fully insured with first class insurance  companies
     or  underwriters in Korea with coverage corresponding to the Institute
     of  London Underwriter's Clauses for BUILDER's Risks. From the time of
     the  first  arrival  of  the OWNER's Supplies in  the  shipyard  until
     delivery  of  the VESSEL, the BUILDER shall keep the OWNER's  Supplies
     fully   insured  with  the  aforementioned  insurance   companies   or
     underwriters to cover BUILDER's Risk.
          
          The  amount of such insurance coverage shall, up to the  date  of
     delivery  of  the  VESSEL, be an amount at least  equal  to,  but  not
     limited  to,  the aggregate of the payments made by the OWNER  to  the
     BUILDER  plus Ninety-Two Million United States Dollars (US$92,000,000)
     to cover OWNER's Supplies in the custody of the Shipyard.
          
          The policy referred to in this paragraph for the OWNER's Supplies
     shall  be  taken  out in the name of the BUILDER and OWNER,  as  their
     interests  may  appear,  and all losses under  such  policy  shall  be
     payable to the BUILDER and OWNER, as their interests may appear.
          
          Prior  to  the  commencement of construction of the  VESSEL,  the
     BUILDER  shall  obtain,  at  its own cost  and  expense,  and  furnish
     certificates or copies thereof to the OWNER, the following policies of
     insurance:
          
    (a)   Worker's  compensation  (including  occupational   disease)   and
          employer's liability insurance with Maritime and In Rem  coverage
          and  in accordance with the applicable statutory requirements  of
          the  country  of  Korea, with limits on the employer's  liability
          coverage  of  not less than U.S. $500,000 for bodily  injury  per
          person, with excess liability limits of U.S. $10,000,000;
    
    (b)   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 excess  liability  limits  of  U.S.
          $10,000,000;
    
    (c)   All-Risk  BUILDER's   Risk  policy,  including   protection   and
          indemnity, relating to the VESSEL and OWNER Supplies  and  in  an
          amount  equal to the aggregate of the payments made by the  OWNER
          to the  BUILDER  plus  Ninety-Two Million United  States  Dollars
          (US$92,000,000) to cover OWNER's Supplies in the custody  of  the
          Shipyard.  At  any time during the period of this Agreement,  the
          OWNER has the right by giving prior written notice to the BUILDER
          to  increase  the amount of the insurance provided hereunder  and
          the  OWNER  will promptly reimburse the BUILDER for any  premiums
          resulting  from  such increase based on the published  Lloyds  of
          London  rates  at the time of such increase. Should the  Delivery
          Date  be  later than March 1, 2000 for any cause attributable  to
          the  OWNER, any additional premium charged to continue the policy
          shall  be borne solely by the OWNER to the extent that the  delay
          is caused by the OWNER. The OWNER agrees that the BUILDER has the
          right  of  settlement of all losses (except  for  damages  to  or
          losses  of  OWNER Supplies) applicable under this Paragraph  2(c)
          with  the  underwriters provided such losses do not  exceed  U.S.
          $300,000 each. All deductibles under the All-Risk BUILDER's  Risk
          policy shall be for the account of the BUILDER; and
    
    (d)   Automobile liability insurance covering automobile equipment used
          in  the  performance of the work under this Agreement 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 excess
          liability limits of U.S. $10,000,000;

     All  insurance  policies  shall, either on  the  face  thereof  or  by
     appropriate endorsement: (w) name (except for the policy specified  in
     Paragraph  (a)  hereinabove) the BUILDER and the OWNER as  unqualified
     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  days,  prior written notice to the BUILDER and the  OWNER  (if
     such  cancellation  or  reduction should be caused  by  the  BUILDER's
     failure to pay any premium when due, the OWNER will have the right  to
     pay  any such premium within such thirty days to maintain the coverage
     in effect for the benefit of the OWNER; the OWNER retains the right to
     be  reimbursed  by  the  BUILDER); (y) contain waiver  of  subrogation
     provisions pursuant to which the insurer waives all express or implied
     rights  of subrogation against the BUILDER and the OWNER, the  BUILDER
     and  the  OWNER  hereby waiving any rights to subrogate  against  each
     other;  and (z) be maintained in full force and effect by the  BUILDER
     from commencement of construction until the Delivery Date.

2.   Application of the Recovered Amounts:

         In  the  event that the VESSEL shall be damaged from  any  insured
    cause  at  any time before delivery of the VESSEL, and in  the  further
    event  that  such damage shall not constitute an actual or constructive
    total  loss  of  the  VESSEL, the amount received  in  respect  of  the
    insurance  shall  be applied by the BUILDER in repair of  such  damage,
    satisfactory  to the Classification requirements, and the  OWNER  shall
    accept  the VESSEL under this Contract if completed in accordance  with
    this   Contract  and  the  Specifications,  however,  subject  to   the
    extension  of delivery time under Article VIII hereof (except  in  case
    of negligence of the BUILDER).

         Should  the VESSEL from any cause become an actual or constructive
    total loss, the BUILDER shall either:

     (a) Proceed  in accordance with the terms of this Contract,  in  which
          case  the  amount received in respect of the insurance  shall  be
          applied  to the construction and repair of damage of the  VESSEL,
          provided  the parties hereto shall have first agreed  thereto  in
          writing and to such reasonable extension of delivery time as  may
          be  necessary  for  the  completion of  such  reconstruction  and
          repair; or

     (b) Refund  promptly to the OWNER the full amount of all sums paid  by
          the  OWNER to the BUILDER as installments in advance of  delivery
          of  the VESSEL, and deliver to the OWNER all OWNER's Supplies (or
          the  insurance proceeds paid with respect thereto), in which case
          this Contract shall be deemed to be automatically terminated  and
          shall  be  deemed rescinded for purposes of Article X hereof  and
          all  rights, duties, liabilities and obligations of each  of  the
          parties to the other shall forthwith cease and terminate.

3.   Termination of BUILDER's Obligation to Insure:

         The  BUILDER  shall  be under no obligation to insure  the  VESSEL
    hereunder after delivery of the VESSEL.

(End of Article)


                     ARTICLE XVIII - NOTICE

1.  Address:

         Any  and  all notices and communications in connection  with  this
    Contract shall be addressed as follows:

    To the OWNER:

         R&B Falcon Drilling Co.
         901 Threadneedle
         Houston, Texas 77079-2902

         Attn: President

         Facsimile No.: (281)589-5189

    To the BUILDER:

         Hyundai Heavy Industries, Co. Ltd.
         1, Choenha-Dong
         Ulsan, Korea

         Attn: Project Director

         Facsimile No.: (82)522-50-1998

2.   Language:

         Any  and  all notices and communications in connection  with  this
    Contract shall be written in the English language.

3.  Effective Date of Notice:

         The   notice  in  connection  with  this  Contract  shall   become
    effective  from the date when such notice is received by the  OWNER  or
    by  the BUILDER except otherwise described in the Contract. In case any
    notice  is  made by facsimile confirmed in writing, the date  when  the
    facsimile is received shall govern.

(End of Article)


            ARTICLE XIX - EFFECTIVE DATE OF CONTRACT

    This  Contract  shall  become effective upon  signing  by  the  parties
hereto.

(End of Article)

                             
                  ARTICLE XX - INTERPRETATION

1.   Laws Applicable:

         The  parties hereto agree that the validity and the interpretation
     of  this  Contract  and  of each Article and  part  thereof  shall  be
     governed  by the General Maritime Law of the United States of America,
     not  including, however, any of its conflicts of law rules which would
     direct or refer to the laws of any jurisdiction.

2.   Discrepancies:

         All   general   language   or   requirements   embodied   in   the
     Specifications  are  intended to amplify, explain  and  implement  the
     requirements of this Contract. However, in the event that any language
     or requirements so embodied permit an interpretation inconsistent with
     any  provision  of this Contract text, then, in each  and  every  such
     event,  the applicable provisions of this Contract text shall  prevail
     and  govern.  In the event of conflict between the Specifications  and
     Plans, the Specifications shall prevail and govern.

3.   Entire Agreement:

         This  Contract  contains  the entire agreement  and  understanding
     between  the  parties  hereto and supersedes all  prior  negotiations,
     representations, undertakings and agreements on any subject matter  of
     this Contract.

4.   Amendments and Supplements:

         Any   supplement,  memorandum  of  understanding   or   amendment,
     whatsoever form it may be in relating to this Contract, to be made and
     signed among parties hereof after signing this Contract, shall be  the
     integral  part  of  this Contract and shall be  predominant  over  the
     respective  corresponding Article and/or Paragraph  of  this  Contract
     when clearly identified as such.

(End of Article)

                  ARTICLE XXI - CONFIDENTIALITY

    BUILDER  and OWNER agree that the terms and conditions of this Contract
shall  remain confidential and neither party shall disclose any such  terms
and  conditions of this Contract to any third party without first obtaining
the prior written consent of the other, provided however, that either party
shall be entitled to disclose any or all of the terms and conditions of the
Contract  to  the extent it is necessary to do so to implement,  effectuate
and  comply  with  the terms of the Contract or to otherwise  exercise  any
right  or  discharge any obligation that party may have  pursuant  to  this
Contract  or  to comply with any law, rule, regulation of any  governmental
entity  having jurisdiction over a party or of a stock exchange, securities
commission and such on which stock of a party or its affiliate is traded.

(End of Article)



IN  WITNESS  WHEREOF,  the  parties hereto have  caused  this  Contract  to
be duly executed on the day and year first above written.

OWNER:                        BUILDER:
R&B FALCON DRILLING CO.       HYUNDAI HEAVY INDUSTRIES CO., LTD.

By:Andrew Bakonyi             By: Youn Jae Lee
Title: President              Title: Chief Operating Officer

                              HYUNDAI CORPORATION
                              

                              By: Dong Soo Han
                              By: Title: Senior Vice President


                           EXHIBIT "A"

               LETTER OF REFUNDMENT GUARANTEE NO.

Gentlemen:

     We hereby open our irrevocable letter  of  guarantee  No.____ in favor
of R&B Falcon Drilling Co.(hereinafter  called the "OWNER")  for account of
Hyundai Heavy Industries Co., Ltd. and  Hyundai Corporation,  as follows in
consideration  of  the   shipbuilding    contract   dated    December   16,
1998(hereinafter  called  the "Contract")  made by and among  the OWNER and
Hyundai  Heavy  Industries Co., Ltd. and  Hyundai Corporation  (hereinafter
collectively called the "BUILDER") for  the construction of  one (1) VESSEL
having BUILDER's Hull No.____(hereinafter called the "VESSEL").

     If  in  connection  with  the terms of the Contract  the  OWNER  shall
become  entitled to a refund of the advance payment(s) made to the  BUILDER
prior  to  the delivery of the VESSEL, we hereby irrevocably guarantee  the
repayment  of  the same to the OWNER immediately on demand  USD  13,588,800
(Say  Thirteen  Million  Five Hundred Eighty-Eight Thousand  Eight  Hundred
only)  together with interest thereon at the rate of eight  per  cent  (8%)
per annum from the date following the date of receipt by the BUILDER to the
date of remittance by telegraphic transfer of such refund.

     The  amount  of  this guarantee will be automatically  increased,  not
more  than  two  (2)  times,  upon  BUILDER's  receipt  of  the  respective
installment: each time by the amount of installment of USD 13,588,800  (Say
Thirteen  Million Five Hundred Eighty-Eight Thousand Eight  Hundred  only),
plus  interest thereon as provided in the Contract, but in any  eventuality
the  amount  of  this  guarantee shall not exceed  the  total  sum  of  USD
40,766,400 (Say United States Dollars Forty Million Seven Hundred Sixty-Six
Thousand Four Hundred only) plus interest thereon at the rate of eight  per
cent  (8% per annum. from the date following the date of BUILDER's  receipt
of  each  installment to the date of remittance by telegraphic transfer  of
the refund.

     In  case any refund is made to you by the BUILDER or by us under  this
guarantee,  our liability hereunder shall be automatically reduced  by  the
amount of such refund.

     In  the event of rescission of the Contract being based on delays  due
to  force  majeure or other causes beyond the control of  the  BUILDER,  as
required  by Article X of the Contract, interest shall be paid at the  rate
of  four  percent  (4%)  per  annum  from  the  date  following the date of
BUILDER's  receipt  of  each  installment  to  the  date  of  remittance by
telegraphic transfer of the refund.

     This  letter of guarantee is available against OWNER's simple  receipt
and  signed  statement certifying that OWNER's demand for refund  has  been
made  in  conformity  with Article X of the Contract and  the  BUILDER  has
failed to make the refund within Thirty (30) days after your demand to  the
BUILDER.  Refund  shall be made to you by telegraphic  transfer  in  United
States Dollars.

     This  letter of guarantee shall expire and become null and  void  upon
receipt by the OWNER of the sum guaranteed hereby or upon acceptance by the
OWNER  of  delivery  of  the VESSEL in accordance with  the  terms  of  the
Contract and, in either case, this letter of guarantee shall be returned to
us. This guarantee is valid from the date of this letter of guarantee until
delivery or in the event of delayed delivery until such time as the  VESSEL
is  delivered by the BUILDER to the OWNER in accordance with the  terms  of
the Contract.

     Notwithstanding  the  provisions  hereinabove,  in  case  we   receive
notification  from  you or the BUILDER confirmed by the  Arbitration  Board
stating  that  your  claim  to  rescind the  Contract  or  your  claim  for
refundment  thereunder  has been disputed and referred  to  Arbitration  in
accordance  with the provisions of the Contract, the period of validity  of
this  guarantee  shall be extended until Thirty (30) days after  the  final
award  shall be rendered in the Arbitration and a copy thereof acknowledged
by  the  Arbitration  Board.  In such case, this  guarantee  shall  not  be
available unless and until such acknowledged copy of the final award in the
Arbitration justifying your claim is presented to US.

     This  guarantee  shall  not be affected by any extension  of  time  or
concession  granted by the OWNER to the BUILDER or any delay or failure  of
the OWNER in enforcing its rights under the Contract.

     The  OWNER  shall have the right to assign this guarantee and  all  of
its benefits to any assignee to whom the Contract is assigned.

     This  guarantee shall be governed by the General Maritime Law  of  the
United  States of America, not including, however, any of its conflicts  of
law rules which would direct or refer to the laws of any jurisdiction.

                              Very truly yours,
                              
                              ____________________________________



                                Exhibit II
                                     
                       RBS -8D MASTER SCHEDULE (L-1)


                                EXHIBIT III

                          4.2 Schedules of Rates

NOTE - HHI  includes  Schedules  of  Rates which  shall  be  used  to  cost
       additional work that may arise outside the scope of work covered  in
       the  Lump  Sum Contract price (i.e., work that will be addressed  by
       Change  Orders).  Them  schedules of rates shall  also  be  used  as
       factored  at 85% to calculate credits to the Company for deleted  or
       reduced  work scope, when such credits cannot be directly determined
       from the Lump Sum Price.

  1)   Schedule of Manhour Rates for Fabrication/Construction

             DESCRIPTION               HOURLY RATE (US$)
                                   STANDARD     OVERTIME
   Project Management / Engineering

     Manager                          75             94
     Lead engineer                    68             85
     Engineer                         62             78
     Administrator                    62             78
     Drafting                         45             56
     Secretary                        30             38

   Labor(See Note below)

     Structural Welder / Fitter       35             53
     Pipe Welder / Fitter             35             53
     Mechanics                        35             53
     Electrican/Instruim.Technician   35             53
     Blaster / Painter                35             53
     Scaffolder / Rigger              32             48
     Inspection / Testing /
       NDE Technician                 40             60

   NOTE   The labor rates include all related management, supervision,
   overhead, construction consumables, overhead profit etc.

2) Unit rates for Carbon steel Pipe Work(fabricated, erected and installed)

   Items        Size            Unit       Unit rates(US)
                                              Install
Pipe & Fitting  1.5" & below     Ton           20,160
                2" to 3"         Ton           15,360
                4" to 6"         Ton            8,640
                8" to 12"        Ton            4,800
               14" to 18"        Ton            4,320
               20" & above       Ton            4,080
                                                   
Supports           All           Ton            6,240


3) Unit rates for Structural Steel (fabrication/erection and installation)

Items       Description       Unit           Unit rates(U S)
                                                Install
Steel Work  I)Upper Hull      Ton                 2,640
            2)Column          Ton                 2,928
            3)Brace           Ton                 2,064
            4)Lower Hull      Ton                 2,208
            5)Outfitting      Ton                 2,544


4) Unit Rates for Plant, Equipment and Instruments (installation labor)

Items       Description Unit  Unit rates(US)
                              Mat'l    Install
Installation 
Lobor                     M-H             48


5)Unit rates for Insulation (Material: Mineral wool)

Description                           Unit     Unit rates (US)
                                                Mat'l   Install
1)Vertical, 100 mm Thickness           *         14        48
2)Overhead, 150 mm Thickness           *         20        48
3)StructuralMember, 50 mm T.           *          9        38
4)Under Exposed Deck, 300 mm T.        *         41        82

*meter squared


6) Unit rates for Catholic Protection (Anode)

Items         Description    Unit      Unit rates (US)
                                        Mat'l     Install
Anode                        Ton        3,335       960


7) Unit Rates for Blasting and Painting

Items             Area     Unit       Unit rates (US)
                                      Mat'l   Install
Blasting/Paint     All      *          6         26
   Paint

*meter squared


8) Unit rates for Heating, Ventilating and Air Conditioning Duct

Description                          Unit   Unit rates (US)
                                            Mat'l    Install
1)Rectangular Duct (Hot Dipped Gal )
  -N.E. 2000 mm Girth                 Meter    293        144
  -Over 2000mm N.E 4000mm Girth       Meter    437        216
  -Over 4000mm N.E 6000mm Girth       Meter    591        432
  -Over 6000mm Girth                  Meter   1,018       576
                                               
2)Circular or Flatoval Duct
  -N.E. 100mm Dia                     Meter     9          17
  -Over 100mm N.E. 200mm Dia          Meter     16         31
  -Over 200mm n.e. 300mm Dia          Meter     26         46
  -Over 300mm N.E. 400mm Dia          Meter     37         62
  -Over 400mm Dia                     Meter     52         72


9) Unit rates for Joiner Work

Description                        Unit      Unit rates (US)
                                             Mat'l  Install
1) Intemal B-Class Bulkhead/Liner Panels
   -25mm Thk. PVC Film finished      *          44       48
   -50mm Thk. PVC Film finished      *          60       48  
   -25mm Thk. SUS finished           *          78       48
   -50mm Thk. SUS finished           *          94       48
                                                      
2) Ceilings
   -PVC Film finished                *          26      120
   -US finished                      *          52      120
                                               
*meter squared


10) Unit rates for Electrical Cabling including Cable Tray


b)  Reprographic Services

      Use by the Owner of the Equipment Installation Yard's reprographic
      department to provide additional copies of documents and drawings.

                     Reproducible      Dyeline   Photocopy
                       per Copy        per Copy   per Copy
                       --------        --------   --------
       Size A0         USD 4            USD 8       USD 16
       Size Al         USD 2            USD 4       USD 8
       Size A2         USD 1.5          USD 3       USD 6
       Size A3         USD 1            USD 2       USD 4
       Size A4         USD 0.7          USD 1.5     USD 3

c)  Secretaries

    Person/month - USD 1,500


11)  Rate of Housing Facilities for Company Personnel