[THE INVESTOR] Hyundai Heavy Industries, South Korea’s largest shipbuilder, has decided to refund advance payment it received from a Norwegian drilling contractor that canceled its order to build a semi-submersible drilling rig, the firm said Aug. 23.

Under a settlement the two companies reached, the shipyard will return US$176 million to Fred. Olsen Energy in exchange for the ownership of the semi-submersible drilling rig it built for the Norway-based offshore drilling rig company.

The sum amounts to the first installment paid to Hyundai Heavy Industries by Fred. Olsen Energy.



The agreement broke a year of deadlock between the two, which had sought mediation from London Maritime Arbitrators Association over the drilling rig project Bollsta Dolphin.

In 2012, Hyundai Heavy Industries won the project worth US$700 million and was expected to deliver the ship in March this year. But the contract was nixed by the owner last year, citing late delivery.

The Korean shipbuilder blamed Fred. Olsen Energy for the delayed building process, saying the Norwegian firm demanded excessive corrections in design and other requirements.

Hyundai Heavy Industries plans to put the semi-submersible drilling rig on sale.

By Park Han-na (hnpark@heraldcorp.com)