Seadrill Ltd. (SDRL) said Sept. 15 it has notified Hyundai Heavy Industries Co Ltd. that it has exercised its right to cancel the contract for the construction of the West Mira.
West Mira is a sixth generation ultra-deepwater harsh environment semisubmersible drilling unit ordered during the second quarter of 2012. The delivery date for the unit, stated in the construction contract, was by Dec. 31.
Due to the Hyundai's inability to deliver the unit within the timeframe required under the contract, the company said it has exercised its cancelation rights.
Under the contract terms, Seadrill has the ability to recoup the US$168 million in pre-delivery installments to the Hyundai, plus accrued interest.
In 2012, Seadrill was awarded a five-year contract for the West Mira with Husky Oil Operations Ltd. for operations in Canada and Greenland. Due to the late delivery of the unit, Seadrill had tentatively agreed with Husky to reduce the dayrate of the West Mira drilling contract.
Seadrill said it remains in discussions with Husky to find an alternative solution to meet its drilling requirements.
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