Ensco International Updates On Status Of ENSCO 69 Rig In Venezuela

Published: 11-May-2009

Ensco International Incorporated (Ensco International), an offshore contract drilling company, has provided an update on the status of ENSCO 69 jackup drilling rig in Venezuela. As earlier disclosed ever since May 2007 ENSCO 69 has entered into contract with the Petrosucre, a subsidiary of Petroleos de Venezuela S.A. In January 2009, Ensco postponed drilling operations after Petrosucre failed to meet commitments concerning the payment of past due invoices.

Petrosucre consequently restarted ENSCO 69 drilling operations with its employees and a portion of the Venezuelan crews was made use of by Ensco International, under observation by the company’s supervisory rig personnel. Petrosucre has informed that Ensco International at that time was provisionally taking over operations on the rig.

Since January 2009, the company has engaged in discussions and exchanges of correspondence with Petrosucre regarding each party's contractual rights and commitments, but a decision has not been reached. In earlier disclosure, Ensco International noted that should a satisfactory resolution not be reached, the company may submit a notice of termination as outlined in the provisions of the contract giving the company a right to terminate in the event of non-payment.

Given Petrosucre’s non-payment of past due invoices for an extended period of time and the absence of a resolution, Ensco International recently submitted a notice of termination. During the notice period that extends through about May 30, 2009, Petrosucre may resolve the matter by paying past unpaid invoices or negotiating a satisfactory arrangement with the company. If not, as earlier disclosed, Ensco International may then terminate the contract. The company’s supervisory personnel carry on scrutinizing operations on ENSCO 69.

Separately, the ENSCO 68 drilling rig is under contract with Chevron Corporation offshore the coast of Venezuela and is being operated by Ensco International personnel.

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