PetroRig I acts to block rig sale by Jurong Shipyard

Jurong Shipyard's planned sale of a disputed rig could hit a roadblock after PetroRig I Pte Ltd filed an application before the bankruptcy courts in New York yesterday. The application is seeking a preliminary injunction restraining Jurong Shipyard, a unit of Sembcorp Marine, from selling the rig, and comes just hours before today's noon deadline for interested parties to submit their bids. In a brief statement issued to the media, SembMarine said the application was fixed for hearing yesterday at 10am in New York (10pm Singapore time). 'Jurong Shipyard has sought and obtained legal advice and will vigorously resist the application filed for hearing in New York. Jurong Shipyard has also received a copy of the complaint filed by PetroRig I seeking protection under US Chapter 11 procedure,' it said. SembMarine added that Jurong Shipyard was advised that the application is 'without merit' and that it will resist the action on various grounds, including the jurisdiction of US bankruptcy courts over a company incorporated in Singapore'.

This latest twist in an increasingly complicated saga comes just after SembMarine said on Monday that it was unaware of 'any injunction of any kind' restraining Jurong Shipyard from proceeding with the rig sale. SembMarine also said then that it was unaware of a lawsuit filed against Jurong Shipyard by PetroRig I over the termination of a rig construction contract. PetroRig I sought bankruptcy protection on Sunday and was said to have launched a lawsuit against Jurong Shipyard, which it had hired to manufacture its US$464 million oil rig. PetroRig claimed that the shipyard attempted to deliver an 'incomplete and inoperable' rig. On April 29, SembMarine said Jurong had terminated the contract with PetroMena - an oil services group in Norway - because the final payment had not been made and planned to sell the rig to recover money owed.

PetroMena's three Singapore subsidiaries - PetroRig I, II and III - entered into agreements to build three ultra-deepwater semi-submersible drilling with SembMarine. The rigs were scheduled for delivery from Jurong Shipyard in April 2009, September 2009 and January 2010. PetroMena has since struggled to come up with adequate financing to complete construction of the rigs, which have previously been assigned five-year drilling contracts. In its earlier statement on Monday, SembMarine maintained that Jurong Shipyard was confident it would be able to sell the rig and to recover all outstanding amounts owed to the shipyard. As for what happens next, SembMarine said things would have to wait until the hearing in New York is over. 'Sembcorp Marine will make the necessary announcement at the appropriate time of the development of the proceedings.'

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