Sembcorp delivers Hercules jack-up rig to Maersk, to receive US$190m final payment

RIGBUILDER Sembcorp Marine said on Monday morning that it has delivered a jack-up rig called Maersk Highlander. The rig was originally meant for Hercules Offshore.

Maersk Drilling, a subsidiary of the Danish shipping conglomerate, said last Friday that it had entered into an agreement to buy the rig with immediate delivery from Sembcorp's Jurong Shipyard.

Due to the imminent rig delivery, Hercules has been embroiled in worries that it will be forced to declare bankruptcy again.

But last Friday, Maersk Drilling, which had contracted Hercules to drill in the North Sea, said it will acquire from Hercules the harsh environment rig built by Sembcorp.

The rig will start a five-year contract with Maersk subsidiary Maersk Oil and its partners. The value of the contract is US$420 million.

"According to the agreement, Maersk Drilling assumes the right to take delivery of the rig and Maersk Drilling settles the final payment of approximately US$190 million with Jurong," Maersk said.

The Sembcorp announcement noted that the rig's construction began in September 2014 and "was completed on schedule with an excellent safety record of zero near-misses and reportable cases".

Sembcorp Marine last traded at S$1.56 a share.