Prosafe, an operator of semi-submersible accommodation rigs known as flotels, expects to resolve its dispute with Westcon related to cost overruns for the conversion of one of its units in March.
The company said in an update on Monday that court proceedings in the Westcon dispute regarding the tender support vessel (TSV) Safe Scandinavia started on August 22, 2017.
The company also added that the ruling is expected by early March 2018.
To remind, Westcon Yards and Prosafe Rigs entered into an EPC contract for the conversion of Safe Scandinavia into a tender support vessel on February 25, 2015. The rig arrived at the yard in March 2015 and the plan was for the work to be completed in the first half of 2015.
However, the project experienced delays thereby also delaying the contract start with the Norwegian oil company Statoil.
According to Prosafe, the conversion of the vessel experienced a substantial cost overrun compared to the price estimate given by Westcon when the two entered into the contract.
Following delays, the unit finally completed its acceptance testing and mobilized to the Oseberg Øst installation in the North Sea to start drilling support operations for Statoil in March 2016.
In mid-2016, Westcon made a claim through initiating litigation proceedings of NOK 306 million, plus interest. Prosafe Rigs disputed Westcon’s claim for additional compensation and presented a claim for repayment for NOK 270 million.
In case Prosafe does not get the claim, it will have to pay the NOK 306 million claim from Westcon and legal fees for both Westcon and Prosafe Rigs.
A court mediation was held in mid-March 2017 without conclusive outcome which led to the court case in August 2017.
The Safe Scandinavia TSV was fully contracted in the fourth quarter 2017 for Statoil at Oseberg East with a firm contract period until the end of June 2018.
Offshore Energy Today Staff