Norscot threatens to 'liquidate' Essar Oilfield

Vol 20, PW 12 (09 Mar 17) People & Policy
     

Any hope that semi-submersible Essar Wildcat will ever mobilise for ONGC has almost disappeared following a threat by former rig manager Norscot Rig Management to liquidate Essar Oilfield Services to recover $12.4m in unpaid bills.

"Norscot's lawyers have sent a cautionary letter to (Essar's main Mumbai-based lender) Axis Bank at its Dubai International Finance Centre branch (to which the rig is mortgaged)," reports an industry source."This is so the bank is aware its loans will be at risk once liquidation proceedings are set in motion." Wildcat remains stranded at the Sembawang shipyard in Singapore, seized by Mauritius-based Norscot as security for the payment of bills dating back to 2006-2008 when it managed the rig on behalf of Essar. Norscot's move follows a favourable 2016 London arbitration award against Essar Oilfield Services, also based in Mauritius, for its unpaid bills.

Norscot's latest liquidation proposal also comes after the Singapore High Court in February rejected Essar's plea to take Wildcat from Singapore to India to begin its three-year ONGC contract worth $104.35m. The Singapore court also rejected Essar's request for three weeks grace before Norscot's arbitration award is enforced.

Many are wondering why Essar does not pay up. "Essar is playing with fire," we hear.

"If the liquidation goes ahead, it will lose not just Essar Oilfield and Wildcat but also subsidiary or parent companies." When contacted, an Essar source said the company is trying to "sort out the Norscot issue."

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