Offshore drilling company Ensco have had a three year drillship contract with offshore operators ConocoPhillips terminated.
Ensco are yet to comment on the reason to the contract termination. However, it’s thought that as with most other negative business announcements over the last 6 months, it’s connected with the downturn on the global offshore oil and gas industry.
ConocoPhillips had contracted Ensco’s newest drillship, The Ensco DS-9. With work starting in the fourth quarter of this year, the contract would have been the Ensco DS-9’s maiden work.
Ensco have released a statement on the details of compensations due from ConocoPhillips. In the statement they claim Conoco will have to continue paying Ensco the daily hire rate of US$550,00 for two years. The contract states that this maybe cut if Ensco are able to re-contract the drillship to another company in that time.
Ensco has also stated that all costs caused by the contract termination will have to be reimbursed by ConocoPhillips.
Due to this, Ensco has said that it doesn’t believe the contract cancellation will have any financially negative effect on the company.