Songa Offshore DSME Drilling Rig Row Heats Up

Published at 12:55PM - 23/11/15

Offshore drilling contractors, Songa Offshore, could be heading to court, after the row between the firm and rig builders Daewoo Shipbuilding and Marine Engineering (DSME) heats up.

Korean based DSME, had hit Songa with a US150 million claim last week, over costs relating to the construction of the Songa Endurance at the DSME yard.

Further, DSME also submitted a claim to Songa for US$22 million for the ‘repayment of liquidated damages’

According to DSME costs on the build, of the offshore drilling rig, spiralled from initial cost estimates.  The firm said that the cost escalations on the build was due to Songa and in particular the company’s ‘inherent errors and omissions in the design documents’.

Norwegian-Cypriot Songa Offshore, has placed an order for four semisubmersible offshore drilling rigs with DSME.  All four rigs are to be Cat D class, with the Songa Endurance bing the second delivered.

DSME has also hit Songa with similar demands over the first rig delivery, the Songa Equinox.

Songa Offshore

In reply to DSME’s claims, Songa Offshore made a press release today stating that it refutes the claim and that the company is considering a counterclaim of ‘significant magnitude’.

Songa said that it is ’conducting a full legal review of the project and its position; finding evidence of default by DSME during the engineering and construction of each of the four Cat D units.’

Further the offshore drilling company said that in finding evidence to back up is claim, it will ‘allocate sufficient resources to that effect’.

DSME

DSME has been on the ropes over the last 12 months, with numerous contract issues and fires on two separate construction projects in as many months, resulting on the deaths of three workers.