Pacific Drilling Can't Appeal Samsung Drillship Case Ruling

Bartolomej Tomic
Friday, October 23, 2020

Offshore drilling contractor Pacific Drilling can't appeal the ruling under which it was in January ordered to pay $320 million to Samsung Heavy Industry for a 2015 drillship order cancellation.

Pacific Drilling had placed the order for the Pacific Zonda ultra-deepwater drillship with Samsung in 2013, with the scheduled delivery in for March 31, 2015.

The offshore drilling contractor then decided to delay the rig delivery for the fourth quarter of 2015. It then, in October 2015 canceled the rig order, citing the failure of Samsung Heavy Industries "to timely deliver a vessel that substantially meets the criteria required for completion of the vessel in accordance with the construction contract and its specifications." 

Samsung then started an arbitration proceeding and won the case in January, with Pacific Drilling ordered to pay the South Korean shipbuilder $320 million. The award did not include around $100 million in interest and costs sought by Samsung, for which the decision was to be made at a later date.

Pacific Drilling's subsidiaries related to the drillship then filed an application with the High Court in London for leave to appeal the January ruling, while at the same time acknowledging that the grounds for the grant of permission to appeal were limited.

Come this week, Pacific Drilling said the High Court in London had denied the application of the company’s Zonda-related subsidiaries for leave to appeal the award to Samsung.

The two subsidiaries PDVIII and PDSI have previously filed a separate plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York, and that plan was confirmed on January 30, 2019. 

On the date the Zonda Plan was confirmed, Pacific Drilling said that the Zonda subsidiaries had $4.6 million in cash and no other material assets for Samsung to recover against on account of its claims.

"The Company expects that PDVIII and PDSI [the Zonda-related subsidiaries] will proceed to be liquidated in accordance with the terms of their Chapter 11 plan," Pacific Drilling said this week.

Offshore Engineer has reached out to Samsung Heavy Industries, seeking more info on how it planned to recover the awarded $320 million, given the liquidation of Pacific Drilling's Zonda subsidiaries. 

"Regarding the award of $320 million, the details are yet to be decided," a Samsung Heavy Industries spokesperson said.

As for the Pacific Zonda drillship, the rig is an upgraded Dual Load Path Samsung 12000 design dynamically-positioned, Dual Gradient capable drillship, able to operate in moderate environments and water depths up to 3,657 m (12,000 ft) using 183/4n BOP and 21″ OD marine drilling riser. The drillship can accommodate 200 persons. The rig is, according to AIS data, currently located near the Samsung yard in Geoje, South Korea.

Categories: Drilling Activity Rigs Regulations Energy Vessels

Related Stories

Hanwha Ocean's Tidal Action Drillship Starts Maiden Job with Petrobras

DOF Secures Moorings Hook-Up Job in Asia Pacific

Norwegian Oil Investment Will Peak in '25

Allseas-Boskalis Consortium Bags $1.4B Offshore Gas Pipeline Job in Taiwan

Valeura Energy, PTTEP Partner Up on Gulf of Thailand Blocks

Sapura Scoops Over $118M for Chevron, PTTEP Subsea Ops off Thailand

Dutch Contractor Completes Malaysia’s Largest 'Rig-to-Reef' Decom Project

One Shelf Drilling Rig Up for New Job in India, Other for Disposal

Four Jack-Up Drilling Rig Deals Set to Bring In $129M for Borr Drilling

Yinson Production, “K” LINE Target Europe's CCS with FSIU and LCO2 Solutions

Current News

Hibiscus Petroleum Starts Drilling at Teal West Field off UK

Yinson Production Nets DNV Approval for New FPSO Hull Design

Hanwha Ocean's Tidal Action Drillship Starts Maiden Job with Petrobras

Petronas to Leverage AI to Expedite Oil and Gas Exploration Activities

Brownfield Output Decline Accelerates, says IEA

PV Drilling Takes Ownership of Noble Corporation’s Stacked Jack-Up Rig

Hanwha Ocean Enlists ABB for Singapore’s First Floating LNG Terminal

Aquaterra Energy Nets Subsea Analysis Contracts with INPEX off Indonesia

POSH Set to Tow Nguya FLNG from China to Eni’s Congo Field

Chinese Contractor Secures Offshore Oil and Gas ‘Mega Deal’ from QatarEnergy

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com