Singapore's Keppel says $1.2b Ukraine rig deal off

Singapore's Keppel says $1.2b Ukraine rig deal off

KIEV - A US$1.2 billion (S$1.4 billion) deal has fallen through for Keppel Corp Ltd to construct offshore drilling rigs for Ukraine's state energy firm, Naftogaz , the Singapore company said on Tuesday.

Keppel, the world's largest builder of offshore oil rigs, said on Dec. 4 it had signed a contract with Naftogaz to build two semi-submersible drilling rigs for use in the Azov and Black seas.

"We wish to announce that the contract will not be taking effect, as certain conditions within the timeline set were not met," Keppel said in a statement.

"Keppel will continue to seek opportunities where we can to support Naftogaz in their exploration and production activities." Naftogaz declined to comment on the matter.

Last October, when Naftogaz announced the tender for rigs that was later won by Keppel, it said they would be used first at the Palas field in the Black Sea, which may hold up to 86 billion cubic metres of gas and some 45 million tonnes of oil.

Developing offshore gas fields, as well as onshore shale gas deposits, is part of Ukraine's strategy to ease dependence on Russian energy supplies.

Kiev has already signed a production sharing agreement (PSA) with Shell to develop the Yuzivska shale gas field and is negotiating similar deals with Chevron on the Olesska shale field and ExxonMobil on the Skifska offshore field in the Black Sea.

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