China’s Cosco Qidong Shipyard has as expected agreed to extend the delivery date by one year for a newbuild rig it is building for Norway’s Sevan Drilling.

Updating progress on previous announcements made during the summer, Sevan and Cosco say they have now agreed to amend the termination rights of the engineering, procurement and construction contract and defer the delivery date for the Sevan Developer rig. Delivery is deferred for 12 months with mutually agreed options, exercisable at 6 month intervals, to further extend that delivery date for up to a total of 36 months from 15 October 2014.

The agreement will terminate at the end of each deferral period, unless the option to extend is mutually agreed by both. If term­ination does occur, Sevan is entitled to a refund of its instalments less any agreed costs, it says.

Cosco will continue to complete construction and maintain the rig at the shipyard in Qidong, China. Originally the rig was due to be completed and delivered in the second quarter of this year.

Sevan added that it will continue to market the rig as part of its fleet and delivery will take place only after a drilling contract is in place which is sufficient for secured financing to be obtained. Payment of the construction liability and other related costs will be deferred until delivery, and the service agreement is expected be concluded during the fourth quarter of this year.

  • Sevan also said that its Sevan Louisiana rig began earning operational dayrates on 7 October under its contract with LLOG Exploration in the US Gulf after repairs to its Blow Out Preventor and tensioner system. The companies are currently in talks over the allocation of contractual liability and commercial consequences with respect to the downtime experienced during the third quarter while the repairs were carried out.