Diamond Offshore files injunction against Petrobras for rig contract termination

Photo by Andy Grzymala ATGphotos.com

Diamond Offshore, a U.S. based offshore drilling contractor has reportedly taken legal action against Petrobras for the recent rig contract termination.

To remind, Offshore Energy Today has earlier reported that Petrobras had on August 30, terminated the contract for Diamond Offshore’s Ocean Valor semi-submersible drilling rig.

At the time, Diamond Offshore said Petrobras didn’t have a valid or lawful basis for terminating the contract. The driller then said it would defend rights of its subsidiary – which operates the rig – under the contract.

According to a recent report by Bank of America Merrill Lynch, Diamond Offshore filed for injunctive relief with the Brazilian courts hoping to place the rig back in service.

“A contract dispute would likely involve lengthy court arbitration, with an uncertain outcome,” Bank of America Merrill Lynch said in its report.

According to the report, the Petrobras contract termination slashed around $350 million from the driller’s backlog, or around 8% of the
ending second quarter 2016 backlog of $4.4 billion. Had it not been for the termination, the contract would have ended in 2018.

Offshore Energy Today has reached out to Diamond Offshore, seeking more information. The company did not reply.

The Ocean Valor, an ultra deepwater semi-submersible drilling rig built by Sembcorp Marine’s Jurong Shipyard in Singapore, had been working for Petrobras since 2010.

Offshore Energy Today staff

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