Fred Olsen Energy and Hyundai Heavy Industries reached commercial agreement over rig dispute

Bollsta DolphinFred Olsen Energy and Hyundai Heavy Industries reached an agreement over a dispute for outstanding construction of semi-submersible platform called Bollsta Dolphin. According to the agreement, the South Korean shipbuilder will pay back the first installment of 176.4 million USD to the Norwegian offshore drilling company. Fred Olsen Energy canceled the rig order at Hyundai Heavy Industries last year due to late delivery, requesting repay of the all paid funds. The case was submitted for arbitration proceeding, but both companies reached amicable out of court settlement and commercial agreement, keeping the ownership of the semi-submersible rig to South Korean shipbuilder.

“Ownership of the platform will be retained by HHI and the arbitration proceedings associated with the disputes have been terminated by consent”, says the official statement of Fred Olsen Energy. “We are very pleased that our differences have been resolved in an amicable way”, adds the statement.

Last year, the Norwegian offshore company claimed Hyundai Heavy Industries for payment of 178 million USD plus additional 38 million USD for lost contract. It was unlikely the arbitration court to approve the additional costs, but was expected the cancellation of contract due to late delivery to be accepted.

The semi-submersible drilling rig Bollsta Dolphin is Moss Maritime CS 60 E design, able to drill at water depths of up to 10,000 feet. It is not yet clear, how Hyundai Heavy Industries will be able to sell it at the years of crisis offshore market and low crude oil prices.