Keppel Terminates Deals For Two Rigs And Liftboat
Singapore’s Keppel has terminated three contracts with different clients regarding the construction of two rigs and a liftboat.
The first of the three deals was won by Keppel FELS, a subsidiary of Keppel O&M, from TS Offshore back in 2014 to build a 500 feet water depth N Plus jack-up rig, worth about $500 million (TS Jasper). The rig was scheduled for delivery in the first quarter of 2017.
The second contract was for a semi-sub tender-assist rig, named the Sapura Raiqa, signed in January 2015.
The last deal was agreed in July 2015 with Crystal Heights for the construction of a high-specification liftboat worth about $85 million. It was scheduled for delivery in the fourth quarter of 2017 and was supposed to work in China, the Middle East, and the Gulf of Mexico.
The identified assets are transferred to Rigco Holding due to the proposed combination of Keppel Offshore & Marine and Sembcorp Marine. Keppel added that it issued notices of termination for these contracts.
As a reminder, it was agreed that Keppel O&M would sell its legacy rigs and associated receivables to an Asset Co that would be 10 percent owned by Keppel and 90 percent owned by other investors, and transfer other out-of-scope assets to Keppel. The TS Jasper and the Sapura Raiqa are two of the identified assets to be transferred to Rigco Holding.
Keppel said that the termination of the deals for the TS Jasper and the liftboat was the failure of the respective clients to pay the outstanding amounts due and payable under each of the contracts. For Sapura Raiqa, Keppel believes that the client no longer intends to perform its remaining obligations under the contract, including but not limited to accepting delivery of the rig and making the remaining payments.
Following the termination of the contracts, Keppel FELS will retain all payments received under them and will retain ownership of the TS Jasper and the Sapura Raiqa, including the right to sell these vessels. The construction of the liftboat had not and will not be started.
These were not Keppel’s only contract terminations this year as the company made a similar announcement when it terminated two deals for a total of four jack-up rigs, keeping the payments, and ownership of the rigs.
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