Awilco Drilling To Recycle Stacked 38-Year-Old Rig
UK offshore drilling contractor Awilco Drilling has decided to scrap one of only two rigs in its fleet, which has been stacked since 2016.
Awilco Drilling said that it would be recycling the WilHunter semi-submersible rig and that recycling options were being pursued.
WilHunter is one of Awilco Drilling’s two enhanced pacesetter semi-submersibles and is equipped for drilling in water depths up to 1,500 ft. The WilHunter rig was built by South Korean Daewoo Shipbuilding & Heavy Machinery in 1983 and upgraded in 1999 and 2011.
The rig was warm-stacked for some time in Invergordon, but it was prepared and cold-stacked there in late 2016. The last contract for the rig was awarded by Hess in 2015.
Recycling the WilHunter will leave the company with only one rig in its fleet, the WilPhoenix semi-sub built in 1982 and upgraded in 2011. According to VesselsValue, the scrap value of the WilHunter is around $11.43 million.
The rig is a subject of an appeal over a $9.1 million tax bill, which resulted from a termination of a drilling contract. The company lost an appeal to the First-tier Tribunal but decided to make an application to the Tribunal for the decision to be set aside and re-made. Awilco expects the decision regarding the appeal to be announced during the fourth quarter of 2021.
Awilco is tangled up in even more court cases. Namely, it is also in a dispute with Singapore’s rig builder Keppel over two other rigs – Nordic Winter and Nordic Spring – which the company had ordered in 2018 and 2019.
The company canceled both rig orders in 2020 due to alleged breaches of contracts, which Keppel denied. The company is also seeking a refund of $97.7 million in paid installments to Keppel.
For the termination of the two rig orders, Keppel submitted claims of $424.9 million for the Nordic Winter and $268.9 million for the Nordic Spring but Awilco believes it owes nothing regarding the two deals.
The drilling contractor believes the final arbitration for the first rig, including any appeal process, will be no earlier than the fourth quarter of 2022. The process for the second rig started six months later so the outcome is expected near the same time as the first.
As for the one remaining rig, the WilPhoenix was recently operating for Ithaca off the UK. After completing the contract at the start of autumn, the rig was warm stacked in Invergordon, and being marketed for future work.
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