Offshore drilling contractor Seadrill Limited has notified 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 semi-submersible drilling rig.
The rig was ordered during the second quarter of 2012 and the delivery date stated in the construction contract was by December 31, 2014.
According to Seadrill’s press release issued Tuesday, the company has exercised its cancellation rights due to the shipyard’s inability to deliver the unit within the timeframe required under the contract.
Under the contract terms, Seadrill has the ability to recoup the $168 million in pre-delivery instalments to the shipyard, plus accrued interest.
In the fourth quarter of 2012 Seadrill was awarded a 5 year contract for the West Mira with Husky Oil Operations Limited (Husky) for operations in Canada and Greenland. As stated in the company’s second quarter earnings report, due to the late delivery of the rig, 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.
The West Mira’s design is based on Moss Maritime CS60 and it is designed to work in both benign and harsh environments.