Chevron Terminates Songa Mercur Contract

Songa Offshore ASA on Monday was notified by Chevron Australia Pty Ltd that they have elected to terminate the Songa Mercur contract due to late rig delivery.

Santos, which were co-contracting the rig with Chevron for 2/3 of the time in the original contract, will now enter into a direct contract with Songa Offshore for the rig on similar terms as the original Chevron contract, with the exception that the fixed term for Santos is as per the outset of the Chevron contract, i.e. an initial firm period of 270 days with an option for a further 90 days at the same rate and thereafter 2 x 6 month options at market rate. Expected revenue is approximately USD 81 million for the 270 day firm period excluding mobilization and demobilization revenues.

Santos is one of the largest offshore contractors in Oceania, with potential work for Songa Offshore beyond the initial contract for Songa Mercur. The contract with Santos will commence as soon as the rig is ready for departure from Singapore, which is now expected to be late June.

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