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Delayed rig set to cost Lamprell $35m

A fault with the jacking mechanism on a new offshore rig for London-based global drilling services giant Ensco is set to cost UAE rig builder Lamprell $35m.

Lamprell confirmed it has agreed a $25m discount on the final payment due to the late delivery of the LeTourneau­-designed, Super 116E (Enhanced) Class mobile offshore drilling unit, "Ensco 140".

Ensco has also negotiated “additional” services for the Ensco 140 and its sistership Ensco 141,  including temporary storage of the rigs and extended warranties on the jacking equipment supplied by original manufacturer Cameron LeTourneau.

“As a result of the settlement agreement, Lamprell's expects 2016 revenue will be reduced by $25m and the company anticipates a reduction of around $35m on its expected 2016 profit,” Lamprell said in a statement.

As Seatrade Maritime News reported July 26, Lamprell has pegged the fault squarely on Cameron LeTourneau and will seek damages.

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“Lamprell's Board is fully committed to recovering the remedial costs arising from technical defects in the jacking equipment from Cameron as well as seeking compensation from Cameron,” it said.

The UAE-based builder has reiterated the six other jack-up rigs it has in build at its Hamriyah facility in Sharjah are scheduled to be delivered “on time, on budget and to high quality standards”.

“Lamprell retains a positive net cash position and a healthy balance sheet which will be strengthened as the Group completes and delivers the six ongoing rig projects over the coming eight months,” it said.

However, Lamprell has previously warned of continued market difficulties that it says will “impact our revenues in 2017”. It is due to release its financial results for the first half of 2016 on 22 September. 

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