Seadrill cancels delayed rig from South Korean shipyard

John Fredriksen's Seadrill has abandoned the contract for a newly built drilling rig from Hyundai Heavy Industries. With the cancellation, Seadrill gets money in the bank at a tough time for the oil industry.

Photo: Seadrill

Seadrill has opted to cancel the contract for a new semi-submersible rig, which the drilling company had ordered at South Korean shipbuilder Hyundai Heavy Industries, according to a statement from the John Fredriksen-owned company. The rig was commissioned under somewhat different circumstances than the current offshore market conditions with low oil prices and a lack of demand from oil companies.

It was an altogether different situation in 2012, when the order for the new rig was signed. As the yard failed to deliver the rig at the agreed time of December 31 2014, Seadrill thus exercised its right to withdraw from the contract. According to the company, it now has USD 168 million plus interest expense benefits owing to it from Hyundai Heavy Industries as a result of the canceled order.

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