Offshore staff
SINGAPORE – Two Far East rig groups have reached settlement agreements with Sete Brasil on various unfulfilled newbuild contracts.
In 2012, Sembcorp Marine secured contracts for seven new drillships with a total contract price of $5.6 billion from various subsidiaries of Sete Brasil.
However, following the latter’s application in April 2016 for a judicial restructuring in Brazil, Sembcorp initiated arbitration proceedings against the subsidiaries for claims under the contracts.
It has now reached a full settlement, subject to certain conditions, that should lead to all seven contracts being terminated and the parties mutually releasing each other from all outstanding claims.
In the case of five of the drillships, Sembcorp will retain all works performed. As for the other two, which were the most advanced in terms of construction progress, the titles to the works will be apportioned between the parties in proportion to payments made by Sete Brasil.
Sete Brasil has identified a purchaser for the subsidiaries that own these two vessels, and new contracts are likely to follow to complete their construction.
Keppel Offshore & Marine subsidiaries Fernvale and FELS Offshore have entered a settlement agreement with six of the Brazilian group’s subsidiaries concerning EPC contracts for six new semisubmersible drilling rigs.
Fernvale will take over ownership of the uncompleted rigs that arose from the contracts with the Bracuhy, Portogalo, Mangaratiba and Botinas yards, with the associated agreements deemed to be amicably terminated.
The works performed with Bracuhy and Portogalo are about 40% and 21% complete, and in the cases of Mangaratiba and Botinas are less than 10%.
Fernvale will subsequently take full ownership over the four uncompleted rigs, and will explore various commercial options.
As for the rigs under construction at the Urca and Frade yard, a sum of around $260 million will be recognized as part of the undisputed debt included in Sete Brasil’s judicial reorganization plan, with the outstanding amounts paid to Fernvale and other creditors of the Sete Group.
Last week, Magni Partners (Bermuda) bid successfully to purchase four Sete Brasil subsidiaries, including Urca and Frade. Fernvale is in discussions with Magni Partners on terms for completing these yards’ rigs, which are respectively 92% and 70% complete.
10/07/2019
