gas flaring offshore rig

Global credit crunch hitting offshore rig operators

in Non-Renewable Energy by

Offshore drilling companies are having a hard time expanding their fleets because the economic conditions have made new vessels harder to finance. Scorpion Offshore announced today that it was unable to secure financing for their Deepwater Rig semisubmersible. Keppel FELS in Singapore was to build the new rig.

Scorpion blames the “continuing turmoil in the global credit market” for its inability to get financing. The company says it has reached amicable agreements with Keppel FELS and third party vendors to terminate the construction contract and equipment orders on “mutually acceptable terms.”

Seadrill also announced today that it had amended its agreements with PPL Shipyard and Keppel FELS for the construction of four new jackups—postponing payments. Seadrill has issued corporate guarantees for the remaining installments on the first two units; no guarantees were made for payments on the second units at the yards.

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