Offshore Drilling Rig Contract Cancelled by Pemex

Published at 03:26PM - 22/08/16

Offshore drilling rig West Pegasus had its drilling contract terminated by the Mexican oil company Pemex Exploracion y Servicios (Pemex).

The contract, signed with the rig owner Seadrill Limited, was effective on 16 August 2016.

“Seadrill has disputed the grounds of the termination and is reviewing its legal options,” the company informed in a statement.

Offshore Drilling Rig Contract Cancelled by Pemex

Seadrill Limited had signed a provisional commitment for a two-year extension to the contract for the West Pegasus with Pemex in the second quarter of 2015.

This also entailed the reduction of the day rate for the remaining term of the initial contract.This extension of the contract was finalised during the first quarter of 2016.

Offshore Drilling Rig Contract Cancelled by Pemex
The Seadrill-owned drilling rig West Pegasus

As part of the agreement, Seadrill Limited and Seamex Limited, Seadrill’s 50% owned joint venture (JV) with Fintech, have agreed to reduce the day rate on five jack-up drilling rigs for a period of 365 days.

“The agreement to reduce the day rates of the existing contracts was contingent upon final confirmation of the two-year extension of the West Pegasus by Pemex management,” the statement added.

Drilling Rig Contract Disputed by Seadrill

With the termination, Seadrill and Seamex will be able to recover the day rate concessions as well as the demobilisation for the West Pegasus drilling rig.

As well as this, Seadrill is expected to seek reimbursement of certain costs incurred before the extension.

The five jack-up drilling rigs involved in the agreement include: West Oberon, West Intrepid, West Defender, West Courageous and West Titania.

West Pegasus, a semi-submersible drilling rig with a capacity to drill to a depth of up to 10,000 metres (32,808 feet), had been employed with Pemex in Mexico since it was delivered from Jurong Shipyard in 2011.

The West Pegasus is a sixth generation ultra-deepwater semi-submersible drilling rig.

Last updated on 10:32AM - 23/08/16