Vietnam: Vietgazprom Terminates Contract with Northern Offshore for Energy Searcher Drillship

Northern Offshore, Ltd.  reported  that the company received notice from Vietgazprom that they will not proceed with the fifth and final well of the five-well drilling program offshore Vietnam. The drillship Energy Searcher, upon completion of the fourth well, was at a standby location awaiting the appropriate approval to undertake drilling operations when notice of the terminated program was received.

Under the contract with Vietgazprom, a 20-day notice of cancellation is required. The company therefore expects to receive day rate under the contract until December 9, 2010. The contract further requires that Vietgazprom make a demobilization payment of US$2.4 million.

The company intends to demobilize the drillship to Singapore, and will investigate the opportunity to accelerate certain inspections to coincide with the rig’s idle time. In the meantime, the company will pursue other near-term drilling programs in the region.

About the Company

Northern Offshore, Ltd. is a Bermuda holding company which operates offshore oil and gas production and drilling vessels deployed around the world. The company’s fleet consists of one floating production facility and five drilling units (a drillship, a semisubmersible and three jackup drilling rigs). The Northern Offshore fleet operates in various markets including the North Sea, the Indian Ocean, offshore Russia, the Mediterranean Sea and Southeast Asia. The company also provides rig management services, and is currently operating in this capacity on two semisubmersibles in the Caspian Sea.

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Source:PRNewswire , November 22, 2010;