EnscoRowan Wins $180M in Drillship Case Against Samsung Heavy Industry
Offshore driller EnscoRowan has won $180 million in damages in arbitration proceedings against Samsung Heavy Industry stemming from a 2016 drillship case.
EnscoRowan on Thursday said: “EnscoRowan today announced that an arbitration tribunal has awarded the Company $180 million in damages in its proceedings against Samsung Heavy Industries, a shipyard in South Korea (“SHI”). Further, the Company will be claiming interest on this amount and costs incurred in connection with this matter.”
In April 2016, the company, then known as just Ensco, initiated arbitration proceedings in London against SHI for the losses incurred in connection with a drilling services agreement for ENSCO DS-5 that was voided Brazil’s Petrobras.
According to EnscoRowan, in January 2018, the arbitration tribunal issued an award on liability fully its favor, and the arbitral hearing on damages took place in the first quarter of 2019.
“SHI may apply to the English High Court for leave to appeal this award within 28 days from date of the award. There can be no assurance when the Company will be paid all or any portion of the damages awarded or any related interest or costs,” EnscoRowan said.
To remind, the whole conundrum started in January 2016 when Petrobras canceled its contract with Ensco for the drillship DS-5 over corruption charges. Drilling firm Pride, bought by Ensco in 2011, had entered into a drilling services agreement with Petrobras in 2008 for the drillship ordered from Samsung Heavy Industries.
Petrobras in January 2016 asserted that the Ensco DS-5 drilling services contract was void based on an allegation that Ensco’s subsidiary Pride had had knowledge of and assisted a former third-party marketing consultant that procured and received improper payments from Samsung Heavy Industries, the shipbuilder of Ensco DS-5 drillship, that were then paid to employees of Petrobras.
Ensco disagreed with the allegations and initiated proceedings against both Petrobras and Samsung Heavy Industries.
Come August 2018, Ensco and Petrobras announced that they had agreed to a settlement of all claims relating to the ENSCO DS-5 drilling services agreement.
As for the rig itself, according to the company’s latest fleet status report, the ENSCO DS-5 is currently stacked in Spain.
