Marco Polo Drilling claims to have found “more than 180 new cracks” and other defects during testing of a high-specification jack-up drilling rig built at Sembcorp Marine’s PPL Shipyard in Singapore.
On November 17, parent company Marco Polo moved to terminate the rig’s construction contract, just 13 days prior to the unit’s delivery date.
Today, the Singapore-listed company said in a statement it is “fully discharged of its obligations to take delivery or make further payment to PPL Shipyard” because the structural failings of the new rig constitute breach of contract.
In late August, a full preload test commissioned by PPL, followed by a full-length jacking test and a 100% non-destructive testing, found 70 cracks on all three legs of the new rig, Marco Polo stated. The cracks were found on the parent material, mostly at or near the weld joints on both the internal and external surfaces of the spud cans, the company said.
PPL Shipyard completed repair work on the unit by October 22 and another full preload test was performed by October 29, followed by a partial non-destructive testing on all leg connections to spud cans, Marco Polo continued.
More than 180 new cracks plus other defects were found on all three legs of the new rig during this second round of testing. “This does not include the condition of the external spud cans below water line, on which non-destructive testing has yet to be conducted,” the drilling company said.
Sembcorp Marine has not denied the existence of cracks in the rig, Marco Polo noted.
The driller has begun legal proceedings and seeks a refund from PPL of around $21.4m plus interest, approximately 10% of the original $214.3m contract price. The initial payment was made to the yard after the construction contract was signed in February 2014.
Sembcorp Marine said on November 25 the sudden contract termination was because Marco Polo Marine was looking to avoid the second downpayment on the rig, worth $21.43m, something the yard had already deferred twice at the request of the owner. Marco Polo denies these claims.