Hanwha Drilling, a subsidiary of Hanwha Ocean (formerly Daewoo Shipbuilding & Marine Engineering), has handed over the exclusive marketing rights for a seventh-generation ultra-deepwater drillship in its inventory to a Brazilian drillship owner.
On June 26, Hanwha Drilling awarded Ventura Offshore (Ventura) the exclusive marketing rights for the seventh-generation ultra-deepwater drillship “Tidal Action” (formerly “West Libra”).
The Tidal Action (formerly the West Libra) was originally ordered by Seadrill, the offshore drilling company owned by Norwegian shipowner John Fredriksen, from then Daewoo Shipbuilding & Marine Engineering in 2013. The order, which included another drillship called the West Aquila, was worth $1.1 billion and was originally scheduled for delivery in 2016.
As a result of the downturn in the drilling market and the deterioration of Seadrill’s financial condition, the parties negotiated in 2016 to postpone deliveries to the second quarter of 2018 and the first quarter of 2019, respectively. In September 2017, Seadrill entered into bankruptcy protection proceedings and in March 2018 elected to cancel the order.
Northern Drilling, another offshore drilling company founded by John Fredriksen, purchased the two drillships from Daewoo Shipbuilding & Marine Northern Drilling, another offshore drilling company founded by John Fredriksen, purchased the two drillships from Daewoo Shipbuilding & Marine Engineering in May 2018 for $296 million per vessel after Seadrill canceled the contract. Deliveries were scheduled for January and March 2021, but they were not delivered to the new owner until May 2021, and the parties agreed to suspend the delivery program.
After Seadrill canceled the contract, Northern Drilling, another offshore drilling company founded by John Fredriksen, purchased the two drillships from Daewoo Shipbuilding & Marine Engineering in May 2018 for $296 million per unit after Seadrill canceled the contract. Deliveries were scheduled for January and March 2021, but they were not delivered to the new owner until May 2021, and the parties agreed to suspend the delivery program.
In August and October 2021, Northern Drilling suddenly “changed its mind” and its subsidiaries, West Aquila Inc and West Libra Inc, cited Daewoo Shipbuilding & Marine Engineering’s delayed deliveries and breach of contract, announced that it was canceling the resale contracts for two drillships and that it would seek a refund of the down payments it had made. Subsequently, the parties commenced litigation over the two withdrawn ultra-deepwater drillships.
According to the latest news, the London Court of Arbitration has ruled in favor of Hanwha Ocean (formerly Daewoo Shipbuilding & Marine Engineering), rejecting the claims of two subsidiaries of Northern Drilling, and Hanwha Ocean is not required to refund the $180 million down payment that the owner had already paid.
As for the West Aquila, another drillship that King John Fredriksen abandoned at the time, it was sold to Liquila Ventures, a joint venture between Perestroika, a subsidiary of offshore drilling contractor Transocean, and a fund managed by Lime Rock Management, for about $200 million, and will be delivered from the shipyard in October 2023, according to the company. Liquila Ventures is a joint venture between Perestroika, a subsidiary of offshore drilling contractor Transocean, and funds managed by Lime Rock Management.
