Pemex cancels third rig contract with Paragon Offshore

Pemex cancels third rig contract with Paragon Offshore

Mexico City: Mexico’s state-run oil company Pemex scrapped another rig contract with Paragon Offshore on Thursday, marking the third such cancellation in the space of a week.

As the price of oil continues to languish, Pemex has had to cut back its costs and these rig deals are among the consequences.

Houston-based Paragon, a leading provider of offshore drilling units was told that Pemex will return the L781 jack-up rig after services weren’t approved. That came just a week after Paragon received two other early termination notices from the same client. Next Paragon will try to move several rigs north into the US Gulf of Mexico or other locations,

Pemex also terminated service and drilling contracts with Diamond Offshore Drilling in February after announcing $4.1 billion in budget cuts this year.

It has been a bad run for Pemex with two fatal incidents on its rigs casting a bigger pall than the economic woes.

Seven workers died and at least 238,000 barrels of crude were lost after an explosion on one rig on April 1. Then a week-and-a-half ago two workers died and 10 were injured on the Troll Solution platform (pictured) in the Gulf of Mexico when one of the supports collapsed and the rig partially sank.

Donal Scully

With 28 years experience writing and editing for newspapers in the UK and Hong Kong, Donal is now based in California from where he covers the Americas for Splash as well as ensuring the site is loaded through the Western Hemisphere timezone.

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