Singapore-based offshore yard Keppel FELS has terminated a US$425 million (S$567.3 million) contract with Awilco Drilling to build semi-submersible drilling rig Nordic Spring, due to Awilco’s failure to make its second installment payment due in March 2021, said Keppel Corporation last Friday (4 December).
It was reported earlier on that Awilco had ordered two semi-submersible drilling rigs from Keppel in 2018 and 2019, which worth about US$425 million each.
The first rig Nordic Winter was set to be delivered in April 2021, while the second rig Nordic Spring was scheduled to be delivered in March 2022, Offshore Energy reported.
Awilco reportedly terminated the first contract to build semi-submersible drilling rig Nordic Winter in June this year, claiming that it breaches under the vessel construction contract.
It also asked for a refund of instalments paid to the value of US$54.72 million, plus accrued interest.
Keppel FELS, however, has denied Awilco’s allegations, saying that it has “further reserved all its rights under the contract”.
Such rights, said Keppel FELS, include the right to retain the instalments already received and to seek compensation for the work done to date in the event that Awilco defaults in the payment of the 9 June instalment.
Keppel FELS earlier revealed that it has issued a notice of termination of the second contract and has commenced arbitration to enforce its rights against Awilco, as reported by Business Times.
Awilco, however, denied the allegations made by Keppel FELS and considered the vessel construction contract to be intact.