DSME to sue Songa Offshore for cost overruns in rig construction

DSME to sue Songa Offshore for cost overruns in rig construction

Athens: Daewoo Shipbuilding and Marine Engineering (DSME) has served its client Songa Offshore with notices of arbitration regarding the contracts for the construction of four Category-D rigs at the Korean shipyard.

All four of the Category D rigs are being specifically built for and contracted to Statoil, but construction has been plagued by delays and escalating costs.

“Irrespective of that, the company continues to be of the view that any attempt to recover cost overruns is of no merit and will defend its position vigorously,” Songa said in a filing to the Oslo stock exchange today.

No details regarding the dispute have been included by DSME in the notices, the company said.

The first of the four rigs Songa Equinox (pictured) was delivered to Songa at the end of June. The rig was originally scheduled for delivery in mid-May, but was delayed by unexpected remedial work that needed to be done after its sea trial.

Songa Equinox has started an eight-year drilling contract with Statoil, which will begin in the Troll oilfield on the Norwegian continental shelf. Drilling is scheduled to commence in the final quarter this year.

 

 

Holly Birkett

Holly is Splash's Online Editor and correspondent for the UK and Mediterranean. She has been a maritime journalist since 2010, and has written for and edited several trade publications. She is currently studying for membership of the Institute of Chartered Shipbrokers. In 2013, Holly won the Seahorse Club's Social Media Journalist of the Year award. She is currently based in London.

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