Tullow terminates rig deal with Seadrill
Following a force majeure declared in October 2016, oil company Tullow Oil has terminated a drilling contract it had with Seadrill Partners for an offshore drilling rig in Ghana.
Seadrill Partners, the offshore driller, said Friday it had received a notice of termination from Tullow Oil Ghana for the West Leo drilling contract on December 1, 2016.
“Tullow have purported to terminate the contract by reason of the alleged force majeure claim declared in early October 2016, which we have disputed,” Seadrill Partners said.
To remind, Tullow had in October declared force majeure, claiming the field the rig had been hired for, was subject to a drilling moratorium by the government of Ghana stemming from a maritime border issue.
However, Seadrill on Friday said Tullow cited other reasons behind the contract termination as well.
“Further or alternatively, Tullow has alleged that the contract has been discharged by frustration. We do not accept that the contract can be terminated or discharged as alleged and our claim in the English High Court proceedings will be amended to reflect this,” Seadrill further said.
According to Seadrill, Tullow has in the further alternative terminated the contract for its convenience, should it not succeed in its argument that it is entitled to terminate the Contract for Force Majeure or Frustration.
The driller claims that in the event of termination for convenience, Seadrill Partners is entitled to an early termination fee of 60% of the remaining contract backlog. The amount is subject to an upward or downward adjustment depending on the work secured for the West Leo over the remainder of the contract term, plus other direct costs incurred as a result of the early termination.
Offshore Energy Today Staff