Fred. Olsen, Hyundai Heavy shuns contract dispute

Fred. Olsen, Hyundai Heavy shuns contract dispute

Offshore driller Fred. Olsen Energy ASA and and South Korea’s rig builder Hyundai Heavy Industries Co., Ltd. have resolved their disputed over the cancelled order for the ‘Bollsta Dolphin’ semi-submersible drilling rig.

To remind, In October 2015, Hyundai Heavy asked for more time and money from Fred. Olsen Energy to complete building the rig. Days later, Fred. Olsen Energy terminated the contract with Hyundai as a result of delay in delivery.

Following the termination, the South Korean rig builder launched arbitration proceedings to resolve the matter.

However, according to a statement by Fred. Olsen on Monday, August 22, 2016, the issue has been resolved by commercial agreement, and the disputes have been terminated by consent from both sides.

Under the agreement reached, the rig will continue to be owned by Hyundai Heavy, and the arbitration will be terminated. Furthermore, Hyundai will pay back $176.4 million of the first instalment paid by Fred. Olsen’s subsidiary Bollsta Dolphin Pte. Ltd.

In a joint statement, the parties said: “We are very pleased that our differences have been resolved in an amicable way.”

Related News:Hyundai Plans to cut 3,000 Jobs

South Korean shipbuilding company Hyundai Heavy Industries is reportedly set to slash 10 percent of its workforce, a preemptive move to survive the protracted slump in the shipbuilding industry.

South Korean Pulse News reported on Thursday, quoting industry sources, that the shipbuilding giant will reportedly cut 10 percent of its total 27,000 employees including those working at dockyards, and some even projected more than 3,000 employees would be subject to company’s workforce reduction plan.

The Korean news source also said that Hyundai plans to streamline the organization by shutting down nearly 100 out of 388 divisions, that make about 20 percent of the group.

Offshore Energy Today has reached out to HHI seeking confirmation of these reports, but the company was not immediately available for comment.

Back in January 2016, reports emerged that HHI planned to temporarily shut down its rig construction yard in Onsan, South Korea due to scarce new orders.

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