Awilco Drilling terminates rig building deal with Keppel. Wants refund
Offshore driller Awilco Drilling has terminated its offshore rig construction order with Singapore’s Keppel due to a “breach of contract“ and is seeking a refund.
This comes following Keppel terminated the construction contract for the same – Nordic Spring semi-submersible drilling rig – and serving Awilco with a notice of arbitration.
At the time, Keppel also stated that it would Keppel retain the $43 million already paid by Awilco for the rig and seek reimbursement of Keppel’s costs of the project up to the date of termination.
Awilco “vigorously” denied the allegations by Keppel in the notice and considered the vessel construction contract to be “intact”. It is worth remembering that the notice arrived shortly after a letter sent by Awilco to Keppel raising concerns about the status of the project since it was experiencing delays.
On Monday, Awilco said it exercised its contractual termination right under the newbuilding contract with Keppel for the construction of the Nordic Spring, “as a result of breaches under the vessel construction contract“.
The offshore driller further stated that it exercised its contractual rights under the contract and given Keppel notice of termination as a result of force majeure.
Awilco also claimed that the vessel construction contract provided that, on termination, Awilco Drilling would be entitled to a refund of the instalments paid to Keppel. This refers to the previously mentioned $43 million but with accrued interest added.
Nordic Spring is one of the two Moss Maritime CS60 Eco MW design two semi-submersible drilling rigs ordered by Awilco Drilling from Keppel. Construction of both rigs has been terminated.
Awilco – an owner of two 1980s-built drilling rigs – ordered the two rigs from the rig builder back in March of 2018 and 2019. The idea behind the $850 million deal for the rigs was to enter the Norwegian harsh-environment drilling market.
Awilco terminated the order for the Nordic Winter in June 2020 citing a breach of contract. The company also asked for a refund of instalments paid up to that point – $54,720,985 plus interest.
Keppel rejected the allegations and then reverted by terminating the contract as well, citing Awilco’s non-payment of a $31.9 million instalment for the rig construction. The company also launched an arbitration.