Singapore yard Keppel Offshore & Marine (Keppel O&M) is terminating jack-up rig construction contracts signed with an affiliate of Clearwater Capital Partners, and Fecon International, in October 2013 and February 2014, respectively. Significantly, the yard will keep the drilling units and is exploring the sale and charter of the rigs.
Keppel in October 2013 said it had received two jack-up rig orders from an affiliate of Clearwater Capital Partners, with the rigs due to be finished in 4Q 2015 and 1Q 2016. Yesterday, according to Keppel, one of the two rigs, worth about $200 million remains undelivered.
Clearwater in 2014 sold one of the two rigs ordered to Arabian Drilling Company (ADC), while it was still being built.
Regarding the Fecon deal, Keppel in February 2014 announced contracts to build three high-specification KFELS B Class jack-up rigs for Fecon International, worth about $650 million. The three rigs were originally due to be delivered progressively within 2H 2016.
Keppel said on Wednesday that it has issued notices of termination for the relevant contracts, citing “the failure of the respective clients without reasonable or legal justification to take delivery of the respective rigs (despite Keppel FELS’ readiness to deliver), and concurrently pay the outstanding instalments.”
“Following the termination of the relevant contracts, Keppel FELS will retain all payments received to date under the relevant contracts, and will retain ownership of the rigs, including the right to sell. The relevant contracts are being terminated as part of ongoing efforts to explore other options, such as the sale and charter of these rigs,” said Keppel.
Last June, Singaporean rig builders Keppel Corporation and Sembcorp Marine confirmed they were in talks over a merger of their offshore and marine (O&M) businesses. The companies said the tie-up would create a stronger combined entity and was in response to dramatic changes in the O&M engineering and energy sectors.
Both parties said the merger, if completed, would create a stronger player to capitalise on growing opportunities in the O&M and renewables sectors.
However, progress on the merger appears to be stalling. An agreement on the proposed merger between Singapore shipyard giants Keppel Offshore & Marine (Keppel O&M) and Sembcorp Marine should be struck by the end of April 2022. However, while significant progress has been made in advancing the deal that would create a mega-yard group, the pair said earlier this month that there “is no guarantee that definitive agreements will be executed.”