Offshore drilling contractor China Oilfield Services Limited (COSL) has reached an agreement with Equinor in a dispute related to the validity of the termination of a drilling rig contract.
The companies will also enter into a new master frame agreement, which enables COSL to provide additional drilling units and services to Equinor, the rig owner said in a statement on Thursday.
As part of the agreement, Equinor will pay, on behalf of the Troll-licence, $188 million to COSL Offshore Management .
CEO of COSL, Frank Tollefsen , said: “I am very pleased with this agreement. We can now finally leave this case behind. It was not the financial compensation that was the most important to us. But rather the recognition, both for COSL as a company, and for our rigs. The master frame agreement is also an important part of this.”
It has been nearly four years since Equinor terminated the rig contracts with COSL. Namely, Equinor, then Statoil, in March 2016 terminated a contract for the COSLInnovator semi-sub following a fatal accident on board the rig in December 2015.
Following the termination, COSL in December 2016 took Equinor to court , claiming that the termination was unlawful. COSL believed it was entitled to a compensation for the termination.
According to COSL, the District Court concluded that the rig was built in accordance with rules, regulations, and best market practices. This resulted in Equinor being sentenced to pay parts of what COSL argued it was entitled to, but both parties appealed the verdict. The appeal was due in January, but the parties have now settled the dispute out of court, COSL explained.”
“With this agreement we can now compete for Equinor assignments on the same terms as our competitors. I am very pleased with that,” Tollefsen concluded.