Cosco Compensates Sevan

Sevan Drilling and Cosco have agreed to exercise the first six-month option to extend the deferral agreement to April 15, 2016. 

The final delivery instalment has been amended to $447.1 million, representing 85 percent of the $526 million contract price and can be amended further upon the expiration of the option period.

The company first announced winning of the contract back in May 2011. In between, the industry went into a down turn that is persisting until now.

In October 2014, Sevan and Cosco reached an agreement to extend the delivery date for 12 months, with options that could be exercised at six-month intervals, such that the delivery date can be extended by up to 36 months from October 15 2014.

“In view of the deferment and the uncertainty as to whether the remaining options will be exercised, it is not possible to ascertain the financial impact of the agreement for deferment at this point in time,” the company announced.

In view of the deferment and the uncertainty as to whether the remaining options will be exercised, it is not possible to ascertain the financial impact of the agreement for deferment at this point in time.

As announced by the Company on October 17, 2014, the Shipowner and COSCO Qidong have agreed to defer the delivery date of Sevan Developer for 12 months with options exercisable at six-month intervals, to extend the delivery date up to a total of 36 months from October 15, 2014, the corporation said.

The new rig, Sevan Developer, is being built at Cosco (Qidong) Offshore and had its delivery deferred for 12 months from October 15 last year, with options exercisable at six-month interval to further extend the delivery date up to a total of 36 months until October 2017.

Sevan Drilling Limited is an international offshore drilling contractor specializing in the ultra deepwater segment. Sevan Drilling Limited is listed on Oslo Børs.