Fred Olsen Energy has formally declared that construction contract for a newbuild semisubmersible rig which was originally destined for development drilling at the Chevron-operated Rosebank oil development in the UK West Shetlands region has been cancelled.
In a stock exchange statement today Fred Olsen Energy declared that the construction contract for the Bollsta Dolphin rig, which had been contracted by Olsen from Hyundai Heavy Industries in South Korea, has been terminated.
The rig was ordered by an Olsen subsidiary, Bollsta Dolphin, from Hyundai. Olsen said the decision to terminate the contract was taken “...as a result of delay in delivery of the rig.”
Olsen ordered the rig back in October 2012, through its subsidiary Dolphin Drilling Limited, after winning a five-year US$1.1 billion development drilling contract from Chevron North Sea for the Rosebank field. Olsen says it has now terminated the contract with Chevron on “amicable terms.” The rig was originally due to start its contract in the third quarter this year.
As a result of the construction contract cancellation, Olsen says it is entitled to repayment of a first installment from HHI, worth $186.39 million, plus accrued interest.
Chevron's multi-billion dollar deepwater west of Shetland Rosebank development appeared to be edging closer back to fruition earlier this year after a contract was awarded for the floating production, storage and offloading (FPSO) vessel turret.
The Rosebank project was on track until 2013, when partner OMV revealed operator Chevron was re-thinking the project to reduce costs - before oil prices nearly halved in 2014-5.
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