Sembcorp Marine rig delivery to North Atlantic Drilling delayed to June 2016

RIGBUILDER Sembcorp Marine's Jurong Shipyard unit has entered into a standstill agreement with North Atlantic Drilling for the delivery of the sixth generation harsh environment semi-submersible drilling rig, the West Rigel, until June 2016.

Until that time, North Atlantic will continue to market the rig for an acceptable drilling contract and Jurong Shipyard will have the right to sell it at an acceptable price, Sembcorp said in a Thursday morning announcement.

The unit will remain at Jurong Shipyard's yard in Singapore during this period, it said.

If the rig cannot secure a drilling contract and no alternative transaction is completed in June 2016, both sides will form a company to jointly hold the unit: 23 per cent by North Atlantic and 77 per cent by Jurong Shipyard.

North Atlantic will continue to market the rig for an acceptable drilling contract while Jurong Shipyard will continue to market the rig for sale, Sembcorp Marine said.

Sembcorp Marine's shares on Wednesday traded nine cents down at S$1.97 before Thursday's announcement.