Seadrill reached a US$170 million settlement agreement with Hyundai Samho Heavy Industries (HSHI) in relation to the West Mira arbitration. Seadrill said it receive a cash payment of $170 million this month as full settlement of the dispute.
Arbitration proceedings began in October 2015 following the cancellation of the construction contract for the West Mira and were expected to conclude during 1H 2018. This settlement agreement brings an early conclusion to the arbitration process.
Seadrill said it will take a non-cash impairment of approximately $44 million to reflect the difference between the carrying value of the West Mira receivable and the cash payment to be received.
As part of this settlement, Seatankers, a related party, has purchased the West Mira from HSHI. Seatankers is an asset holding company and is not expected to engage in offshore drilling activities in competition with Seadrill. The company expects to execute an agreement with Seatankers for the commercial and technical management of the West Mira as well as a right of first refusal for purchase of the vessel.
In September 2015, Seadrill canceled the construction of the newbuild West Mira after Hyundai Heavy Industries failed to deliver the vessel on time.
One week later, Husky Oil Operations pulled the plug on its drilling contract with Seadrill for the West Mira vessel.
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