Jurong Shipyard, a subsidiary of Singaporean offshore giant Seatrium, and MHWirth, a subsidiary of Norwegian oil services investment firm Akastor, have reached a final settlement in a dispute over the termination of a rig contract.
According to Akastor’s filing with the Norwegian Oslo Stock Exchange, Seatrium has agreed to pay Akastor a further $68 million to settle a contractual dispute between the two parties over four drilling rigs.Akastor said the amount will be paid in full as a final settlement and will be included in its second-quarter financial report.
It is understood that the above four rigs were initially signed in 2012 and after a multi-year pause, Jurong Shipyard announced the termination of the contract in 2021 and 2022. The contract is part of the expected deliverables under the rig contract between Jurong Shipyard and Sete Brasil, a Brazilian offshore energy company, for which a full and final settlement agreement was reached in 2019.
Notably, while the rig contract is held by MHWirth, a wholly-owned subsidiary of HMH Holding, Akastor has the full financial interest in the contract. The reason is that MHWirth was established in 2021, which at that time did not include the four rigs at issue in the case.
Earlier this year, the Singapore International Arbitration Centre (SIAC) issued a final award in favor of MHWirth based on evidence submitted by both parties to the case, ordering Jurong Shipyard to pay it US$101 million in damages.MHWirth was also awarded approximately US$7 million in reimbursement of legal fees and certain suspension costs, as well as interest which has now been settled. The total amount to be paid by Seatrium is approximately $176 million.
