Bw Offshore Ltd. — M&A Activity 2010

Sep 13, 2010

Agreement to sell APL to National Oilwell Varco for USD 500 million in cash

NOT FOR PUBLIC DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED

STATES OF AMERICA, SOUTH AFRICA, CANADA, AUSTRALIA OR JAPAN

13 September 2010 - BW Offshore Cyprus Ltd, a wholly owned subsidiary of BW

Offshore Limited ("BW Offshore") has signed a definitive agreement, subject to

final approval by its board of directors and other conditions to closing, to

sell all of its shares in its subsidiary APL (Advanced Production & Loading) Plc

("APL") (the "APL Transaction") to National Oilwell Varco Norway AS, a wholly

owned subsidiary of National Oilwell Varco, Inc. ("NOV"). As consideration for

the purchase of APL, NOV shall pay USD 500 million in cash to BW Offshore.

"We are pleased to see APL becoming an independent provider of technology to the

FPSO industry and benefit from NOV's strong position as a worldwide leader in

the design, manufacture and sale of equipment and components used in oil and gas

drilling and production operations." says Carl Arnet, CEO of BW Offshore.

In relation to the transaction, BW Offshore and APL shall enter into a supply

agreement, a technology agreement and a non-compete agreement (the "ancillary

agreements").  Pursuant to the ancillary agreements BW Offshore will purchase

from APL on commercial terms certain systems on an exclusive basis for a period

of five years, and the parties will cooperate with respect to technology

development.

BW Offshore has agreed that neither BW Offshore nor any of its subsidiaries

shall carry out activities in competition with APL's current business for a

period of five years.

Completion of the APL Transaction is subject to certain customary conditions and

board approval of National Oilwell Varco and BW Offshore Limited. The

transaction agreement does not include a financing condition.

Completion of the APL Transaction is expected to take place before the end of

the fourth quarter of 2010.

An extended stock exchange notice pursuant to Oslo Stock Exchange's continuing

obligations, article 3.4, will be published later today.

Carnegie ASA is acting as financial advisor to BW Offshore in relation to the

APL Transaction.

Advokatfirmaet Thommessen AS is BW Offshore's legal advisor as to Norwegian law

in connection with the APL Transaction.

For further information, please contact:

Carl K. Arnet, CEO, +65 9630 3290

Knut R. Sæthre, CFO, +47 9111 7876

About BW Offshore

BW Offshore is one of the world's leading FPSO contractors and a market leader

within advanced offshore loading and production systems to the oil and gas

industry. BW Offshore has more than 25 years' experience and has successfully

delivered 14 FPSO projects and 50 turrets and offshore terminals. BW Offshore's

technology division APL has delivered solutions for production vessels, storage

vessels and tankers in a wide range of field developments. Adapting through

competence, in-house technology, solid project execution and operational

excellence, BW Offshore ensures that customer needs are met through versatile

solutions for offshore oil and gas projects. BW Offshore has a global network

with offices in Europe, Asia Pacific, West Africa and the Americas. BW Offshore

has 1,100 employees and is listed on the Oslo Stock Exchange. For more

information, please visit www.bwoffshore.com and www.apl.no.

This announcement is not an offer for sale of any securities in the United

States. Securities may not be offered or sold in the United States absent

registration or an exemption from registration under the U.S. Securities Act. BW

Offshore has not registered and does not intend to register any portion of any

offering of shares in the United States or to conduct a public offering of any

securities in the United States.

[HUG#1443975]