ConocoPhillips Pays $18 Mln for Cancellation of Drilling Contract

In light of ConocoPhillips’ decision to suspend plans to drill offshore Alaska in the Chukchi Sea, the previously announced contract for the newbuild jack-up rig Noble Houston Colbert, has been terminated by the U.S. oil company effective immediately.

Per the terms of the contract, ConocoPhillips will pay Noble Corporation, the owner of the rig, a cancellation fee of $18 million. 

Related: ConocoPhillips Drops Arctic Drilling Plans

“The Company is actively marketing the rig,” said Noble in its fleet status report issued Thursday.

The contract, which was supposed to be the first for the Noble Houston Colbert jack-up rig, currently under construction in Singapore’s Jurong Shipyard, was expected to start in the fourth quarter 2013.  The dayrate for the contract was set at $235.000.

To remind, ConocoPhillips earlier this week decided to put its 2014 Alaska Chukchi Sea exploration drilling plans on hold given the uncertainties of evolving federal regulatory requirements and operational permitting standards.