No Deal: Keppel Terminates $1.2 Billion Ukrainian Rig Order

rigSingapore’s Keppel Corporation said Tuesday that it has terminated a deal with Ukraine’s state-run oil and gas company, Naftogaz, that called for the construction of two harsh environment semisubmersible drilling rigs worth about US$1.2 billion.

In a statement, Keppel said that the contract “will not be taking effect as certain conditions within the timeline set were not met.”

Naftogaz signed the deal for the two rigs with Keppel FELS in December 2012 after beating out other shipyards for the tender.

The rigs were to be built to Keppel FELS’ proprietary DSSTM 38U rig design which is customized for harsh environment operations commonly seen in the Black Sea, where Naftogaz intended to first use the rigs.

Despite the setback, Keppel says that it continue to “seek opportunities where we can support Naftogaz in their E&P activities.”

Naftogaz is a State Joint Stock Company in Ukraine and carries out offshore development in Ukrainian sections of the Black and Azov Seas.