Jurong Shipyard rescinds Petromena rig contract

JURONG Shipyard has cancelled a contract with Petromena for a semi-submersible rig after the final payment was not made.

Jurong Shipyard's parent SembCorp Marine said that semi-submersible Petrorig I had been completed by the yard in early April.

However, as final payment was not made to Jurong Shipyard under the construction contract, Jurong Shipyard has terminated the contract today, SembCorp Marine said.

In accordance with its rights under the contract, Jurong Shipyard will proceed to sell the rig.

Petrorig I was officially named on January 17 before the rig underwent sea trials.

Petromena is a unit of Larsen Oil & Gas and has faced funding problems with all three semi-submersible rigs that it has on order at Jurong Shipyard.

Petromena said in March that it agreed to sell Petrorig I to an unnamed international drilling contractor for $450m. Petromena had fixed Petrorig I on a five-year time charter in the Gulf of Mexico to Petrobras Americas, starting in June.

Based on the best known information, Jurong Shipyard is confident that it will be able to sell the rig and to recover all outstanding amounts owed to the shipyard, SembCorp Marine said.

John Fredriksen's Seadrill acquired 80% of a NKr2bn ($302m) bond issued by Petromena to cover the construction of Petrorig II and Petrorig III being built at Jurong Shipyard for delivery in 2010 and 2011.The Oslo-listed company said it would consider providing further assistance to Petromena if it cannot finance the rigs to delivery.

Source: Lloyd's List