PPL SHIPYARD TRASHES JACKUP CONTRACT WITH ORO NEGRO

Singapore’s Sembcorp Marine announced that its wholly-owned subsidiary, PPL Shipyard, has terminated three contracts with Integradora de Servicios Petroleros Oro Negro, S.A.P.I. de C.V. and its subsidiary Oro Negro Vastus Pte. Ltd. (collectively “Oro Negro”), for the construction of three jack-up rigs. The jack-up rigs have been technically accepted by Oro Negro but delivery of the rigs has been deferred. The termination is made pursuant to the terms of the deferment agreements between PPL Shipyard and Oro Negro. The three jackups have been sitting at PPL shipyard for months.
Oro Negro ordered the three rigs in 2013 and they were due for delivery in 2015. Each rig was ordered for about US$209 million but rig values have dropped substantially since then.
ORO NEGRO owns a fleet of five 400ft jackups. Three of them are Baker Marine Pacific Class 400 built by PPL Shipyard, Fortius, Decus and Impetus, and are currently drilling for Pemex in the Gulf of Mexico. Two Keppel FELS Mod-BV, Primus and Laurus delivered in 2012 and 2013 are presently idle.
About one month ago PPL Shipyard terminated two contracts with Perisai, for the construction of two jack-up rigs, Perisai Pacific 102 and 103, following the expiry of the existing Deferment Agreements.

This is arguably the biggest fiasco in the history of the offshore drilling rigs construction. (Source: Semcorp Marine – Image: energy global news / RB)