Seadrill cancels construction contract for ultra-deepwater semisubmersible
HAMILTON, Bermuda -- Seadrill Limited has notified Hyundai Heavy Industries 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 unit.
The West Mira was ordered during the second quarter of 2012, and the delivery date stated in the construction contract was by Dec. 31, 2014. Due to Hyundai Heavy Industries' inability to deliver the semisubmersible within the timeframe required under the contract, Seadrill has exercised its cancellation rights.
Under the contract terms, Seadrill has the ability to recoup the $168 million in pre-delivery installments made to Hyundai Heavy Industries, plus accrued interest.
In the fourth quarter of 2012, Seadrill was awarded a five-year contract for the West Mira with Husky Oil Operations Ltd. for operations in Canada and Greenland. However, due to the late delivery of the semisubmersible, Seadrill tentatively agreed with Husky to reduce the dayrate of the West Mira drilling contract. Seadrill remains in discussions with Husky to find an alternative solution to meet its drilling requirements.
