Songa Offshore stays adamant in DSME rig spat

Drilling contractor Songa Offshore is pressing on with its defence in an arbitration case with South Korean shipyard Daewoo Shipbuilding and Marine Engineering (DSME). 

According to Songa Offshore’s statement on Monday, the drilling contractor submitted its defence in the arbitrations initiated by DSME in 2015, regarding the first two Cat D rigs DSME built for Songa, Songa Equinox and Songa Endurance.

Songa’s first Cat D rig, Songa Equinox, was delivered to its owner in June 2015, and Songa Endurance was delivered in August. The first one started its drilling contract with Statoil in early December, and the second one in late December.

Soon after the rigs started their contracts with Statoil, the drilling contractor experienced the blowout preventer (BOP) equipment failure on both Songa Equinox and Songa Endurance.

As previously informed, DSME’s claim relates to alleged cost overruns and additional work in relation to the rigs due to what DSME alleges were inherent errors and omissions in the design documents, as often referred to as the FEED package.

Along with its defence, on the same date Songa Offshore submitted counterclaims in respect of the rigs for the aggregate amount of $65.8 million, by means of which Songa Offshore intends to recover damages caused by the default of DSME.

Songa Offshore considers that DSME is solely responsible for the delays to the rigs and any attempt by DSME to recover cost overruns has no merit due to the “turn-key” nature of the construction contracts, the drilling contractor reiterated.

All four Cat D rigs built by DSME for Songa were contracted by Statoil. The Norwegian oil company recently shortened the duration of the drilling contracts for the first two rigs, Songa Equinox by 347 days and Songa Endurance by 184 days, due to delay in delivery which was then followed by delay in operations start for Statoil.

Meanwhile, the shipyard recently said it would cut 12,000 jobs as part of efforts to revive its struggling core business.

Offshore Energy Today Staff

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