Another delay for Sevan Developer drilling rig

Sevan Drilling, an Oslo-listed drilling contractor, has decided to delay the delivery of the Sevan Developer drilling rig once again.

The handover of the rig, which was originally scheduled for delivery in 2014, has now been postponed to April 15, 2017. This means Sevan Drilling Ltd and China’s rig builder Cosco have agreed to exercise the third six-month option to extend the deferral agreement.

Also, Sevan Drilling said, the final delivery installment has been amended to $499.7 million, representing 95% of the $526.0 million contract price.

Cosco, the rig builder, will refund $26.3 million, or 5% of the contract price, plus other associated costs within the fourth quarter 2016.

“The Company continues discussions with Cosco regarding the remaining interest in the Sevan Developer,” Sevan Drilling said.

Offshore drilling contractors postponing the rig delivery dates has been a regular practice in the past two years. Namely, many drilling rigs were ordered during the times when the oil price was above $100 a barrel, providing a reason for the drillers to be optimistic about future work, spurring them to increase their rig fleets.

However, since the collapse of the oil prices, oil companies have slashed their exploration budgets, forcing the drillers to stack or scrap the rigs they already have in their fleets and delay the newbuilds.

As for the Sevan Developer, the rig was ordered by Sevan Drilling from China’s Cosco in May 2011. The delivery, as mentioned above, has been deferred, and according to Sevan’s website, will occur upon securing an acceptable drilling contract. Delivery deferral period has options to extend through October 2017.

Offshore Energy Today Staff

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