KBR Subsidiary Awarded Detail Engineering Contract by Statoil on behalf of Gassled Partners

HOUSTON - July 23, 2007 - KBR (NYSE:KBR) today announced that its subsidiary, M.W. Kellogg Limited (MWKL), has been awarded the detail engineering contract by Statoil on behalf of Gassco and Gassled. MWKL will be responsible for the upgrading and development of the Statoil gas treatment facility at Karsto located north of Stavanger, Norway. Karsto is a hub for gas production to 30 large and small fields in the North Sea and the Norwegian Sea. The contract has a value of approximately USD $175 million.

MWKL was the main contractor on three previous major upgrading and expansion projects at the Karsto facility. In addition to detail engineering, the contract calls for procurement assistance and construction assistance. This award is a result of MWKL's successful completion of the Pre-Engineering Front End Engineering and Design (FEED). The project is expected to be completed by 2012, with upgrading work beginning in the Fall of 2008. A maximum workforce of 500 personnel will be required for the project.

MWKL has also sub-contracted the civil engineering detail design to Norconsult, based in Oslo, Norway and significant elements of the instrument upgrade to Sorco, based in Stavanger, Norway, for this phase of the project.

"We are truly delighted to be awarded another major contract by Statoil at the Karsto facility," said John Quinn, chief executive officer of M.W.Kellogg Limited. "We have been working with Statoil on the large gas and NGL processing plant at Karsto for a quarter of a century. The latest award is further evidence of our ability to design and construct major processing plants on schedule and with an exemplary health, safety, and environmental record. Having already completed one major revamp at Karsto we look forward to performing work on this even more complex project'

KBR is a global engineering, construction and services company supporting the energy, petrochemicals, government services and civil infrastructure sectors. The company offers a wide range of services through its Energy and Chemicals (E&C), Government and Infrastructure (G&I), and Ventures business segments. For more information, visit www.kbr.com.

NOTE: The statements in this press release that are not historical statements, including the estimated contract value, are forward-looking statements within the meaning of federal securities laws. These statements are subject to numerous risks and uncertainties, including those detailed in our most recent Annual Report on Form 10-K and Quarterly reports on Form 10-Q filed during this fiscal year, many of which are beyond company's control that could cause actual results to differ materially from the results expressed or implied by the statements.

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KBR Corporate Communications
Heather Browne, 713-753-3775
heather.browne@kbr.com
or
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Rob Kukla, Jr., 713-753-5082
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