Awilco Drilling said Thursday that an arbitration tribunal had ruled in its favor in its second case against Singapore-based Keppel FELS over a rig contract termination. It lost the first in April 2023.
Awilco Drilling in 2018 ordered a harsh environment semi-submersible drilling rig from Keppel FELS. This was followed by another newbuild order of the same type and also with Keppel FELS in 2019 These were the first such orders after the previous oil price collapse, at $425 million apiece, and Awilco wanted to breaking into the Norwegian harsh-environment offshore drilling market with the two rigs..
The first rig - the Nordic Winter - was expected to be delivered in April 2021, with the second one - the Nordic Spring - scheduled delivery in March 2022.
Awilco Drilling's subsidiary, Awilco Rig 1 (AR1) in June 2020 terminated the first rig order citing breaches under the construction contract. Keppel denied the allegations by Awilco and rejected the termination of the contract. Keppel FELS then said Awilco had defaulted on payment of an installment for the rig construction, and the rig builder itself then issued a notice of termination of the contract to Awilco and started arbitration to enforce its rights against Awilco. In April 2023, the arbitration tribunal ruled in Keppel's favor. Awilco said in May 2023 that "although disappointed with the ruling, AR1 has determined that no appeal will be made."
As for the second rig, Keppel in December 2020 cancelled the contract for the Nordic Spring rig, citing Awilco's inability to pay for an upcoming installment, and launched another arbitration case.
Awilco Drilling Wins 2nd Case
In a statement on Thursday evening, Awilco Drilling said that the arbitration tribunal had ruled in its favor with respect to the second rig order termination for the hull number B382, which was supposed to become the Nordic Spring rig.
"Today, the company has received the arbitration tribunal ruling which is in [Awilco Drilling's] favour in an amount of USD 43.0 million plus interest and legal costs. The tribunal will issue a further award related to interest and costs. We will revert with further information, including any notice of appeal received as appropriate," Awilco said.
Worth noting, Awilco had for years operated two 1980s-built semi-submersible drilling rigs, the WilHunter and the WilPhoenix, in the UK North Sea.
The company last year sold the WilPhoenix to Well-Safe Solutions, for conversion into a P&A unit, and the WilHunter for recycling.
Following the agreements to sell both of its rigs, Awilco said its principal activity was to continue the arbitration processes with Keppel FELS shipyard.
Subscribe
