Ensco loses two semi-sub contracts with Petrobras

UK-based drilling contractor Ensco has received terminations for two rig contracts from Brazil’s oil giant Petrobras and these two semi-sub rigs will now be ‘permanently retired’.

In addition, Ensco has been awarded an extension, including dayrate reduction, for one drilling contract with Petrobras.

The drilling contractor said in April it was in discussions with Petrobras regarding revised commercial terms with respect to the Ensco 6001, 6002, 6003 and 6004 drilling contracts. The company expected the contracts to be early terminated or subject to reduced day rates in May 2016.

As expected, two semi-submersible drilling rigs Ensco 6003 and Ensco 6004, both built in 2004, had their contracts terminated effective May 1, 2016 by mutual agreement, Ensco said.

The company said it would mobilize these two rigs out of Brazil in the second quarter of 2016 and ‘permanently retire’ them.

In addition, Ensco said that previous downtime on 2000-built semi-sub Ensco 6001 that could have been applied toward the limit permitting contract termination has been reduced to zero. From May 1, 2016 to June 2018, the operating dayrate for the rig will be $275,000. The rig’s previous dayrate was in the mid-$340,000 range.

Furthermore, 2001-built Ensco 6002 has had its contract term extended from July 2018 to December 2019. From May 1, 2016 to December 2019, the operating dayrate for the rig will be $240,000, a reduction from mid-$340,000 range.

The revised terms for these rig contracts result in an aggregate backlog reduction of approximately $140 million.

Earlier this year, Petrobras cancelled a drilling contract with Ensco for the drillship DS-5 over corruption charges.

The drillship was hired by Petrobras from a company that Ensco took over in 2011. In its cancellation notice in January 2016, Petrobras claimed there were irregularities with respect to the contracting of drillship DS-5 prior to Ensco’s acquisition in 2011.

Offshore Energy Today Staff

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