Shipbuilder Keppel FELS has demanded more than half a billion pounds from Awilco Drilling over the cancellation of two major oil rig orders.
Awilco, headquartered at Westhill, near Aberdeen, has given an update on its ongoing arbitration with the Singapore shipbuilder.
Statements of claims for £516million have been issued by Keppel to Awilco over the cancelled Nordic Winter and the Nordic Spring orders, which were respectively made in 2018 and 2019.
Keppel is claiming £316m for Nordic Spring and another £200m for Nordic Winter, though these are “strongly denied” by Awilco.
The Aberdeen firm has entered counter-claims in respect of deposit and other variation payments of £73million which it claims to be recoverable.
The final arbitration processes for both rig claims are expected “no earlier” than the fourth quarter of 2022.
Awilco pulled the plug on the order for the Nordic Winter in June 2020, claiming a breach of contract, and asked to reclaim its £40m plus interest paid to date. The firm had previously stated slow progress was being made by the shipbuilder in Singapore.
Steel was cut on the Nordic Spring in the third quarter of 2019 and contractual delivery was meant to be in March 2022.
Keppel issued Awilco with a notice of cancellation in December 2020, claiming Awilco would not be able to make its second instalment payment, due three months later.
Both rigs have since been taken up by Dolphin Drilling, whose headquarters are also in Aberdeen, last month.
Awilco unveiled the update in its third quarter results for 2021, reporting pre-tax losses of £3.4million, up from £708,000 in the same quarter in 2020.
Revenues are also down from £7.8m to £5.3million.
After the WilPhoenix rig was involved in the UK North Sea’s only discovery to date this year, the Ithaca Energy Fotla, it has now been warm stacked in Invergordon.
Awilco’s only other vessel, WilHunter, remains cold stacked at the port.
The firm employs 22 people in Aberdeen and nearly 100 people offshore.
It said the “high volume of tendering activity in the UK rig market during 2021 is now resulting in contract awards for work commencing in 2022”.
Awilco added that the outlook towards 2023 and 2024 in the North-West European floater market continues to improve with higher levels of utilisation and improving day rates expected.