FGH and Ocean Rig Settle Dispute
Ocean Rig ASA, Friede Goldman Halter, Inc. and Friede Goldman Offshore, Inc. announced today that they have signed an agreement, resolving problems which arose earlier this month relating to the completion and delivery of Ocean Rig's two Bingo 9000 rigs at Friede Goldman's Pascagoula, Mississippi yard. Work on the rigs, which was suspended briefly by Friede Goldman, causing Ocean Rig to commence arbitration and other legal proceedings against Friede Goldman, resumed in full this morning.
Both companies believe that this latest agreement, which allocates control of ongoing project management to Ocean Rig and responsibility for the operation of the yard to Friede Goldman, reflects the strong interest of both companies in allocating resources as effectively as possible to complete the remaining work on the rigs.
Under the agreement, instead of a predetermined lump sum, Ocean Rig will, from today, pay Friede Goldman a contractually established rate for equipment, personnel and labor provided by Friede Goldman to cover the costs of completing the project. It is hoped by both companies that this agreement will result in greater security of employment for the local workforce and will benefit the economy of the Gulf Coast in general. Additionally, as a key element of the agreement, both companies have waived claims outstanding under previous agreements, including claims for liquidated damages, with the condition that all such claims of Ocean Rig will automatically be reinstated in the event that Friede Goldman stops or slows work on the rigs, or if the rigs are detained or encumbered by Friede Goldman in any way. For its part, Friede Goldman has the right to an automatic reinstatement of any claims it has outstanding in the event that Ocean Rig fails to make any of the payments agreed under the agreement. Friede Goldman have also confirmed Ocean Rig's absolute title to and ownership of the rigs.
Friede Goldman and Ocean Rig acknowledge in reaching this agreement that they will need to continue to cooperate to help resolve the operational problems and financial losses experienced at the yard relating to the complexity of the design of the two rigs. Once completed, Friede Goldman and Ocean Rig believe that these rigs will be two of the most advanced semi-submersible deepwater drilling rigs in operation.
As a further result of the agreement, Ocean Rig has withdrawn the arbitration and other legal proceedings it had commenced on March 1. Work resumed on the rigs this morning.