Rig order cancellations

FAR East yards like Yantai Raffles have huge new rig order books. However, the credit crunch and $50 oil are now leading to cancellations.

Keppel of Singapore appears to be worst hit so far, with Seadrill and Scorpion Offshore reviewing their options on their new-build contracts placed mid-2008.

The contracts under review are for a semi-submersible for Scorpion Offshore and two jack-up rigs for Seadrill.

Keppel said in a statement issued on November 27 that it was “in talks” with both parties to arrive at “mutually acceptable arrangements” for these contracts.

Construction work has not started on these projects, for which Keppel has received down payments.

The Scorpion semi is significant as Energy understands it is possibly the first ever deepwater rig facing cancellation.