Awilco CEO Steps Down, Citing Dispute Over Canceled Drill Rigs
The CEO of offshore operator Awilco Drilling has stepped down from his post, citing the company's ongoing dispute with Keppel over two offshore rig cancellations.
"With the cancellation of Awilco Drilling’s newbuild rigs, I feel that the prerequisites for my role have changed significantly," said CEO Jens Berge. "The company has reached a crossroads and I have concluded that I would like to pursue new opportunities. However, Awilco Drilling is a great company and I wish the company and its skilled employees all the best."
Awilco is in the midst of a complex dispute over the cancellation of two rigs ordered from Keppel in 2018-19. The $425 million semi-subs were due for delivery in 2021 and 2022, but Awilco terminated the contract for the first unit last June, accusing Keppel of a breach of contract. The firm demanded that Keppel repay installments worth a total of $55 million, but Keppel refused, claiming that Awilco had failed to make a $32 million payment.
In December, Keppel upped the ante, cancelling the contract for the second rig as well. The yard alleged that given reports on Awilco's finances, it did not believe that the drilling company would be able to make its next $42 million installment payment in March 2021. Keppel gave notice that it was canceling the construction contract for the second rig and launching arbitration proceedings.
Awilco denied Keppel's claim and asserted that the contract for the second rig was still valid and in force. The firm did not have the cash on hand for the next installment as of the end of Q3 2020, but it said that it planned to fund the bill with a combination of new equity and debt.
Against this backdrop, Awilco CEO Jens Berge opted to depart the company.
"The Board would like to thank Jens Berge for his contributions during the past two years as Awilco Drilling’s CEO and understands his decision to be relieved from his position to pursue other opportunities," said Sigurd Thorvildsen, Awilco's chairman. "We wish Jens Berge all the best in the future.”
Eric Jacobs, general counsel of leading Awilco shareholder Awilhelmsen AS, will step in as Awilco's interim CEO until a permanent successor is found.