Chevron Declares Force Majeure on Hercules Jackup
Chevron on June 23 declared force majeure on its contract for Hercules Offshore jackup Hercules 120, saying that it believes the new regulations issued for drilling in the U.S. Gulf of Mexico prevent Chevron from continuing operations involving the rig.
Hercules and Chevron are in discussions to seek a commercial resolution. "If such attempts are ultimately unsuccessful, the Company will, at that time, determine whether to pursue its contractual and legal rights and remedies," Hercules said in a filing with the Securities and Exchange Commission today.
The Department of Interior and the Bureau of Ocean Energy Management, formerly known as the Minerals Management Service, have issued new regulations for drilling following the Deepwater Horizon incident in the Gulf of Mexico.
The new restrictions on drilling have prompted other producers to declare force majeure on other rigs working in the Gulf. Last week, Apache Corp. declared force majeure for a Rowan Cos., rig it had under contract.
According to RigLogix, Hercules 120 has been working for Chevron at South Timbalier Block 37, and is under contract for a day rate just under $30,000.
Chevron currently operates two additional Hercules jackups, Hercules 173 and the Hercules 350, which were not subject to the notice of force majeure. Hercules 173 is on location at South Timbalier Block 24, and under contract for a day rate of around $30,000. Hercules 350 is undergoing inspection at Bollinger Shipyard.
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