Deferred rig delivery: SembMarine again extends 'standstill'

Rig builder Sembcorp Marine (SembMarine) has pushed back the delivery of a semi-submersible drilling rig for the fifth time as the industry continues to suffer a general downturn.

The company yesterday said a "standstill agreement" between its wholly owned unit Jurong Shipyard and the North Atlantic Drilling group for the delivery of the rig has been extended further.

This is the fifth time the delivery has been delayed since it was first announced in December 2015.

The standstill agreement for the rig, the West Rigel, has now been pushed back for another six months to Jan 6.

During the standstill period, North Atlantic Drilling will continue to market the rig for an acceptable drilling contract, while Jurong Shipyard will have the right to sell it at an acceptable price, SembMarine told the Singapore Exchange in a filing.

The West Rigel will remain at Jurong Shipyard in Singapore during this period.

If no employment is secured for the rig and no alternative transaction is completed when the standstill period ends, the parties will form a joint asset-holding company for joint ownership of the unit. This will be 23 per cent owned by North Atlantic Drilling and 77 per cent held by Jurong Shipyard, said SembMarine.

North Atlantic Drilling will then continue to market the rig for the joint asset-holding company for an acceptable drilling contract, while Jurong Shipyard will continue to market the unit for sale.

Shares of SembMarine closed 0.9 per cent or 1.5 cents lower at $1.67 yesterday, after the announcement was made in the morning.

Jacqueline Woo

A version of this article appeared in the print edition of The Straits Times on July 08, 2017, with the headline 'Deferred rig delivery: SembMarine again extends 'standstill''. Print Edition | Subscribe