Rig termination and payment issues set arbitration and court processes underway

Offshore drilling contractor Dolphin Drilling is engaged in arbitration and court proceedings with Lagos-based General Hydrocarbons Limited (GHL) due to the Nigerian oil and gas player’s failure to comply with the established payment plan regarding the work one of the drilling firm’s semi-submersible rigs carried out off the coast of Nigeria and the subsequent termination of the rig’s contract.

Once it secured a letter of award (LoA) for the Blackford Dolphin semi-submersible rig in September 2022, Dolphin Drilling got a formal 12-month contract award with General Hydrocarbons Limited in October 2022 for drilling operations in Nigeria. The rig started the drilling assignment in March 2023.

The rig was expected to continue operations for GHL, following a deal the duo struck to enable the drilling player to receive payment of all sums due under the contract and allow the Lagos-based company to continue to utilize the Blackford Dolphin rig for an agreed period.

Upon the completion of the assignment, the Blackford Dolphin semi-sub was slated to depart Nigeria and go to India to embark on its new drilling campaign with Oil India Limited. However, Dolphin Drilling issued a notice of termination to General Hydrocarbons Limited after payment terms were not met.

After the notice of termination, the company has filed a request for arbitration to pursue the recovery of overdue sums but the Nigerian firm is disputing the termination of the rig’s contract, thus, it has also filed a request for arbitration.

In addition, GHL has made an application to the Nigerian courts for an interim injunction seeking to maintain the status quo, pending the appointment of an arbitrator. In response, Dolphin Drilling is, together with its external counsel in Nigeria, immediately taking steps to oppose the interim injunction before the Nigerian courts.

The 1974-built Blackford Dolphin is a semi-submersible drilling rig of an enhanced Aker H-3 design and can accommodate 120 people. With the sale of its Bideford Dolphin rig out of the way, Dolphin Drilling owns a fleet of four high technical standard fourth and fifth-generation enhanced Aker H3 and H4 units: Borgland Dolphin, Blackford Dolphin, Paul B. Loyd, Jr., and Dolphin Leader.