Fred Olsen Energy to be sued by Hyundai Heavy

Fred Olsen Energy to be sued by Hyundai Heavy

Hyundai Heavy Industries (HHI) has delivered a notice of arbitration to Bollsta Dolphin, the Singapore-registered subsidiary of Fred Olsen Energy that ordered a drilling rig from the yard in 2012.

HHI alleges it is owed an extra payment of $167m from Bollsta Dolphin, plus more time to complete construction and deliver the ultra-deepwater semi-submersible drilling unit to the company (artist’s impression pictured). The rig was originally scheduled for delivery this year.

“HHI’s claim is considered unfounded,” Fred Olsen Energy stated in a filing to the Oslo Stock Exchange today.

The two parties signed a newbuilding contract for the harsh-environment drilling rig in 2012. At the time, the total project cost was estimated at around $700m, including spare parts, owner-furnished equipment and the yard project team.

The drilling rig itself is being built to a Moss Maritime CS 60 E design for year-round operations in the Norwegian Barents Sea. The rig will be able to drill at water depths of up to 10,000 feet and will be compliant with Norwegian Continental Shelf requirements.

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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1 Comment

  1. David Harrison
    October 25, 2015 at 3:35 pm

    Another energy company trying to stiff a shipyard on construction costs. When the market recovers, I wonder how many shipyards will remember that they got into this mess by offering sweetheart finance deals to get the contract.
    In fact, I wonder how many shipyards will be left standing after they eat these rigs.