Pacific Drilling Cancels Half Built Deepwater Drillship

Published at 06:22PM - 29/10/15

Offshore drilling contractors, Pacific Drilling, have announced the cancellation of the half built ultra deepwater drillship- the Pacific Zonda.

Pacific drilling confirmed the news in a press release, Thursday (29th Oct), in which it said it had cancelled the construction due to Samsung Heavy Industries (SHI) failure to “timely deliver the vessel”.

The Pacific Zonda ultra deepwater drillship was original to be delivered in the third quarter of 2015, although this was postponed by SHI in July of 2015, to the fourth quarter of 2015.

It is unclear if SHI would have been able to meet the latest deadline, with two months to run until the end of the year.

The offshore drilling company went further saying the SHI had also failed to deliver a vessel that: “substantially meets the criteria required……. in accordance with the construction contract and its specifications.”

Millions Refund

Pacific Drilling has now said that it will look to recoup the advance payments made to SHI, totalling US$181.1 million.  The firm said that this move was inline with the contract singed for the build of the vessel.

Korean Crisis

Samsung Heavy Industries, is the latest ship and rig building company to fall foul of deadlines.  Already this year, Hyundai Heavy Industries (HHI) has had two cancellations for part build offshore drilling rigs, due to missing delivery deadlines.

Only this week, the Bollsta Dolphin, was cancelled by partners Fred. Olsen Energy and Dolphin Drilling, in a mutual decision with oil major Chevron, who had leased the semisubmersible for work in the UK North Sea.

Back in September of this year, HHI also had a contract cancelled by UK drilling firm Seadrill for exactly the same reason.  The missed delivery cost Seadrill a 5 year drilling contract with Canadian based Husky Energy.

On Monday (26th Oct), HHI reported a company loss of US$398 million for the third quarter of 2015.  It is believed that money being claimed by drilling companies that have cancelled rig builds have not been included in this figure.