Fred Olsen Energy's Unit Terminates Contract with HHI for Newbuild Semisub

Norway’s Fred Olsen Energy ASA (FOE) announced Tuesday that its wholly owned subsidiary Bollsta Dolphin Pte Ltd. (Bollsta) has notified South Korea’s Hyundai Heavy Industries Co., Ltd. (HHI) that it has exercised its contractual termination right under a newbuilding contract between HHI and Bollsta for the construction of a semisubmersible drilling rig (the Rig) as a result of delay in delivery of the Rig. 

The rig construction contract provides that on termination Bollsta will be entitled to a refund of the first instalment paid to HHI of $186,390,240 plus accrued interest.

The Rig was on Oct. 26, 2012 contracted by Dolphin Drilling Ltd., another wholly owned subsidiary of FOE (DDL), to Chevron North Sea Limited (CNSL). CNSL (as operator on behalf of its coventurers) and DDL have mutually terminated the drilling contract on amicable terms.

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Leonard HARVEY | Oct. 28, 2015
This is the second termination HHI have suffered on extremely one sided contracts because they have failed to comprehend that time is of the essence on every contract they have executed over the last few years. They requested arbitration on this rig for mor time and money, presumably after several go fund me letters that they have been plagueing operators with for more than one year. Whilst termination is rather harsh on them, they really only have themsleves to blame. DSME took the right option by agreeing to extend their contracts wiht Shell at mutually agreeable terms. It is anmother bad year for the Korean shipyards and in the current environment, they risk losing their market share to other emerging builders.


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