Lamprell, a provider of fabrication, engineering and contracting services to the energy industry, has informed that delivery of the jack-up drilling rig which had been scheduled for delivery in 2Q 2016 has been delayed.

The company said on Tuesday that the rig is in its final stages of commissioning and has undergone a series of equipment proving tests in anticipation of delivery to the client. Lamprell did not reveal the name of the rig nor its client.

During this final testing, a technical issue has arisen with equipment supplied by an original equipment manufacturer (OEM) and this has resulted in a delay to the delivery of the rig.

In all other respects, Lamprell has completed its workscope in making the rig ready for delivery, the company noted.

The revised date for delivery of the rig is now expected to be mid-August. The resultant delay in the delivery means that the Group could be exposed to contractual remedies on the project including liquidated damages.

However, Lamprell said that the board anticipates that the majority of the remedial costs and potential damages exposure as a result of this delay will be recoverable from the OEM.

“The board is fully committed to recover such costs and damages legally, if so required,” said Lamprell.

Apart from the delivery of this rig, all other six rigs that Lamprell are currently constructing remain on schedule.

More broadly, the market environment remains very challenging and this will impact the company’s revenues in 2017, Lamprell said.

John Kennedy, Executive Chairman for Lamprell, said: “We are disappointed to experience this delay in the delivery of a rig project to one of our key clients. This has been caused by technical issues with critical equipment from an OEM and our project team is working closely, with both the OEM’s technical experts and the client’s project team, to resolve these issues and we believe we have a good recovery plan in place.”