Singapore’s Keppel Corporation has announced that subsidiary Keppel FELS has terminated the contract with Norway’s Awilco Drilling for semi-submersible drilling rig Nordic Spring.
Keppel issued the notice because it says Awilco will not be able to make payment of the second instalment under the newbuilding contract, which is due in March 2021.
Keppel has commenced arbitration to enforce its rights against Awilco, and says it reserves all rights including the right to retain the amounts already paid by Awilco to date – around $43m – and seek reimbursement of costs up to the date of termination.
Awilco ordered two rigs at Keppel at $425m each, the first in 2018 and the second in 2019. Keppel’s move to terminate the second rig comes after Awilco terminated the contract for the first rig, Nordic Winter, in June claiming breaches under the vessel construction contract.
According to Awilco, the termination by Keppel FELS comes after the company raised concerns about the status of the project. It denies the allegations by Keppel FELS and considers the vessel construction contract to be intact.
