Sembcorp Marine ends contracts with Oro Negro to supply 3 jack-up rigs

Sembcorp Marine's wholly-owned subsidiary PPL Shipyard has cancelled contracts with troubled Mexican offshore oilfield provider Oro Negro.
Sembcorp Marine's wholly-owned subsidiary PPL Shipyard has cancelled contracts with troubled Mexican offshore oilfield provider Oro Negro.PHOTO: SEMBCORP MARINE

SINGAPORE - Sembcorp Marine's wholly-owned subsidiary PPL Shipyard has cancelled contracts with troubled Mexican offshore oilfield provider Oro Negro for three jack-up rigs, it announced in a pre-market filing on Wednesday (Oct 4).

The jack-up rigs were technically accepted by Oro Negro but their delivery had been deferred, said Sembcorp Marine.

It added the move is not expected to have any material impact on its net tangible assets and earnings per share of the company for the year ending Dec 31, 2017.

Demand for rigs and drillships in the last few years have been hit as as oil prices shrank and oil companies cut back on exploration and production activities.

Oro Negro ordered the three rigs in 2013 and they were due for delivery in 2015. Each rig was ordered for about US$209 million but rig values have dropped substantially since then.

Temasek Holdings once owned a 22.5 per cent stake in Oro Negro. But its stake was bought out by major shareholder Axis Capital Management, a private investment firm, last year.