More rig delays for South Korean shipyard

One of South Korea’s major drilling rig builders Daewoo Shipbuilding & Marine Engineering Co, has informed that it has agreed to delay a delivery of two drillships at the request of a client.

Drilling companies have been negatively impacted by low oil prices, cuts in spending by their clients – the oil companies- and the fact that more rigs are competing for less work, leading to dayrates going down below breakeven prices.

This has lead to the drillers, who had been ordering drilling rigs like crazy while the oil was over $110 per barrel, not anticipating the down-cycle in oil prices would come so quickly, to make arrangements with the shipyards to delay the deliveries, buying time until the oil price and conditions in the drilling market recover.

According to the South Korean news agency Yonhap, Daewoo on Wednesday said that the drillships, originally scheduled for delivery for 2015 end, will now be delivered by April 2018 and January 2019, respectively.

The rig builder did not say who the client was, but it said it was an American customer. The drillships were ordered in 2013, a year before the oil prices would dramatically drop, for a price of $1.25 billion.

To remind, back in October 2015, Transocean, the world’s largest offshore drilling contractor, agreed with Shell and Daewoo Shipbuilding & Marine Engineering Co. (DSME) to delay the operating and delivery contracts of two newbuild drillships. The Deepwater Pontus and the Deepwater Poseidon ultra-deepwater drillships will be delayed by 12 months each.

Earlier, in August 2015, Daewoo lost a contract for another drillship, after Vantage Drilling decided to break it off. Also, in April last year, Atwood Oceanics made changes to the delivery schedule for two of its newbuild drillships being built by DSME.

Offshore Energy Today Staff

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