Seadrill cancels rig order at Hyundai Heavy

SEPTEMBER 15, 2015 — John Fredriksen led drilling contractor Seadrill Limited has notified shipbuilder Hyundai Heavy Industries Co Ltd. that it has exercised its right to cancel the contract for the construction of the West Mira, a sixth generation ultra-deepwater harsh environment semisubmersible drilling rig.

The unit was ordered during the second quarter of 2012 and the delivery date stated in the construction contract was by December 31, 2014.

"Due to the shipyard's inability to deliver the unit within the timeframe required under the contract, the company has exercised its cancelation rights," says Seadrill, which notes that, under the contract terms, it has the ability to recoup its $168 million in pre-delivery installments to the shipyard, plus accrued interest.

In fourth quarter 2012, Seadrill was awarded a five year contract for the West Mira with Husky Oil Operations for operations in Canada and Greenland.

In its second quarter earnings report, Seadrill reported that, due to the late delivery of West Mira, the company had tentatively agreed with Husky to reduce the dayrate of the West Mira drilling contract.

Seadrill says it remains in discussions with Husky to find an alternative solution to meet its drilling requirements.

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