Marco Polo Marine‘s unit MP Drilling has issued a notice of termination to Sembcorp Marine’s subsidiary PPL Shipyard in Singapore regarding a previously awarded $214.3m rig construction contract.
The contract was awarded to PPL Shipyard in February 2014 to construct a high-specification jack-up rig based on its Pacific Class 400 design.
According to Marco Polo, PPL failed to comply with certain of its material contractual obligations.
The company said it decided to terminate the contract after considering various factors including cracks found on all three legs of the rig during two rounds of tests.
MP Drilling will not take delivery of the rig following the termination of the rig construction contract.
Further the company will seek a refund of the initial amount of 10% of the contract price (about $21.4m) from PPL.
Referring to the announcement made by MP Drilling, Sembcorp Marine said that its subsidiary has not received any notice of termination of the contract at the time they learnt of the announcement.
The company said in a statement: "PPL Shipyard disagrees with the allegations in the announcement and will regard this as repudiatory breach of the contract, and will terminate the contract and claim amounts due under the contract against MP Drilling and its guarantor Marco Polo Marine.
"PPL Shipyard will take the necessary steps to enforce its rights and will provide the update when required."