SEATRIUM’S wholly owned subsidiary, Seatrium New Energy, along with RigCo Holding, has entered into a settlement agreement with Awilco Drilling and two of its units.
On Thursday (Jun 20), Seatrium said one of the units, Awilco Rig 2 (AR2), will receive a US$57 million settlement sum related to an arbitration with Seatrium New Energy, formerly known as Keppel Fels.
AR2 received the arbitration award in November 2023 for a contract executed in March 2019 to construct a repeat mid-water semi-submersible drilling rig.
The settlement sum, along with other legal fees and costs, will come from RigCo, which has held the rig assets since the combination of Sembcorp Marine and Keppel Offshore & Marine. This means RigCo is liable for all and any monies payable by Seatrium New Energy for the settlement.
Seatrium noted that the settlement is not expected to have any material impact on its net tangible assets or earnings per share in the current financial year.
Previously, Seatrium New Energy was granted an arbitration award against another Awilco unit – Awilco Rig 1 (AR1) – on Apr 24, 2023.
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The company issued a notice of termination in June 2022 to AR1 after it defaulted on an instalment payment for the construction of a mid-water semi-submersible drilling rig for harsh environmental use.
The parties had entered into a contract worth US$425 million in March 2019 for the construction of the rig. But, Seatrium New Energy assessed that AR1 was unable to make its second instalment payment that was due in March 2021.
The counter closed 0.7 per cent or S$0.01 lower at S$1.50 on Wednesday.
