Hyundai Heavy Industries (HHI) claims it is entitled to an extra $178m, which could bring its claim against Fred. Olsen Energy’s subsidiary Bollsta Dolphin up to $345m for cancelling a drilling rig design and construction contract with the yard.
In October, HHI alleged it is owed a payment of $167m from Bollsta Dolphin, plus more time to complete construction and deliver the ultra-deepwater semi-submersible drilling unit (artist’s impression pictured). The yard delivered a notice of arbitration to the shipping company on October 22, 2015.
Today, HHI has submitted its claim for a further $178m and an alternative claim of $38m, should its primary claim fail.
Singapore-registered Bollsta Dolphin ordered the drilling rig from the South Korean yard in May 2012. The unit was due to be delivered in March 2015, but Bollsta cancelled the contract in October last year, which HHI claims was not a rightful termination.
Bollsta is asking for a refund of its first installment of $186m plus accrued interest.
“Seven months [after the scheduled delivery date] with no realistic prospect of completion before May 2016, Bollsta cancelled the contract. Variations to the work were of minimal consequences to the yard,” Fred. Olsen Energy commented in a filing today.
“Bollsta, together with FOE, remain firm that the cancellation was rightful, that Bollsta is entitled to a full repayment of the first installment (of about $186m) and that none of HHI’s claims holds any merit; they will all be vigorously refuted,” Fred. Olsen Energy said.
At the time of ordering, the rig’s estimated total project cost was 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.
The rig was contracted by Dolphin Drilling, another Fred. Olsen Energy subsidiary, to Chevron on October 26, 2012. The contract has since been terminated.
