New contracts for Borr Drilling offset by series of terminations

Norwegian offshore driller Borr Drilling has announced some new contracts for its jackup rigs as well as a series of terminations.

In the Asia Pacific region, Borr was awarded contracts for two of its jackups with durations of 365 days and 200 days. One of the rigs being utilised is a newbuild, and commencement is scheduled for the third quarter of 2020.

In Nigeria, Borr has received notices of early termination of contracts from ExxonMobil for jackups Gerd and Groa. The contracts for both rigs require 180 days notice for early termination.

Additionally, Borr has received notice to stop operations for another jackup, the Norve which is working in Gabon for BW Energy. The rig finished operations in early April 2020, three months earlier than estimated.

Semi-submersible rig MSS1 has also finished its contract on March 25, a month earlier than estimated. The rig is entitled to an early termination fee.

Lastly, Perenco has elected not to proceed with a contract for jackup rig Prospector 5 and will now commence its next contract with CNOOC in the North Sea between September and November.

“Borr Drilling is experiencing the impact of current unprecedented market conditions and the global market reaction to the COVID-19 pandemic, in particular as a result of the practical issues arising from government-imposed travel restrictions, border closures and quarantines. Safety is our primary focus and we have implemented changes to working arrangements to protect everyone working on our rigs and at our onshore sites. We also respect similar arrangements put in place by our customers and suppliers to safeguard the safety and well-being of their personnel. Some of our customers are unable to continue safe operations in the current circumstances, are experiencing difficulties in their respective supply chains and have announced cost-saving initiatives,” the company said in a statement.

“Further, a number of customers have contractual rights in place to suspend operations in certain circumstances, and we could be subject to further suspension notices in light of market conditions. At this stage the company cannot predict with reasonable accuracy the duration of such suspensions if exercised or the impact on the company,” it added.

Borr said the impact of the early terminations is estimated to be around $16m, although it has managed to keep a solid technical utilisation for the fleet of 99.5% year to date.

Grant Rowles

Grant spent nine years at Informa Group based in London, Sydney, Hong Kong and Singapore. He gained strong management experience in publishing, conferences and awards schemes in the shipping and legal areas, working on a number of titles including Lloyd's List. In 2009 Grant joined Seatrade responsible for the commercial development of Seatrade’s Asia products. In 2012, with Sam Chambers, he co-founded Asia Shipping Media.
Back to top button