FOR IMMEDIATE RELEASE: January 05, 2007

J. Ray McDermott to Start New Operations in Mexico in 2007

Mexico?s Port of Altamira, in the state of Tamaulipas, will be the site of J. Ray McDermott?s (J. Ray) new construction facility. With direct access to the Gulf of Mexico J. Ray is targeting the third quarter of 2007 to begin the first phase of operation.

?Located on Mexico?s east coast, near the city of Tampico, Altamira is the latest addition to our global construction locations,? said Bob Deason, president and chief operating officer. ?Initially we plan to target projects for Petróleos Mexicanos (PEMEX), Mexico's state-owned, nationalized petroleum company. In the long term we hope to win work for export to the Gulf of Mexico, Caribbean, South America, and West Africa.?

J. Ray recently signed a 30 year partial concession agreement with the port authority of Altamira, which is developing as one of the Gulf of Mexico?s major harbors. Container terminals, petrochemical plants, bulk liquid terminals and other import/export facilities are already operating at the site. The port has an open channel to the Gulf with adequate width, and water depth to accommodate large fixed and floating offshore oil and gas structures and semi-submersible transportation vessels.

With increasing consumption rates and declining reserves, Pemex has outlined an aggressive development strategy to maintain Mexico?s self-sufficiency on domestic energy reserves. Research indicates that the market is expected to grow through 2012 in the Mexican Gulf.

?We believe that J. Ray?s advanced construction methods, high quality production, and efficiently designed facilities will cater to the engineering, procurement, construction and installation needs of Mexico?s field development programs in the Gulf of Mexico,? said Deason.

?Altamira will complement our existing Gulf of Mexico yard at Morgan City, Louisiana, and this symbiotic relationship will allow us to enter the Mexican construction market, while still serving the needs of our Americas customer base regardless of project type or location. ?  

J. Ray McDermott recently held a ground breaking ceremony at Altamira which included guests (from left to right) Juan Manuel Pineda (J. Ray?s Mexico's country manager), Juvenal Hernández Llanos (Altamira county's Mayor) and Alejandro Gochicoa (Altamira's port director).