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Seadrill mulls legal action over drilling rig charter termination by Pemex

Seadrill mulls legal action over drilling rig charter termination by Pemex
Seadrill Limited has received a notice of termination from Pemex Exploracion y Servicios (Pemex) effective 16 August over a semi-submersible drilling rig.

Seadrill announced that it has since disputed the grounds for termination of the contract by Pemex for the West Pegasus drilling rig, and is reviewing its legal options.

During the second quarter of last year, Seadrill sign a provisional commitment for a two-year extension to the contract with Pemex for West Pegasus. In conjunction with the extension, the dayrate for the remaining term of the initial contract was reduced. The extension of the contract was finalised during the first quarter of 2016.

“As part of this agreement, Seadrill and Seamex Limited, our 50% owned joint venture with Fintech, agreed to reduce the dayrate on five jack-ups for a period of 365 days. The agreement to reduce the dayrates of the existing contracts was contingent upon final confirmation of the two-year extension of the West Pegasus by Pemex management,” Seadrill said.

“In the event of termination, Seadrill and Seamex are entitled to recover the dayrate concessions as well as the demobilization for the West Pegasus. In addition, Seadrill will seek reimbursement of certain costs incurred in anticipation of the extension.”