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Petrofac cancels newbuilding contract with ZPMC

PetrofacLondon-listed oil and gas service provider Petrofac has cancelled its construction contract for a deepwater multipurpose offshore vessel with China-based shipyard Shanghai Zhenhua Heavy Industry (ZPMC).

According to Petrofac, the contract is cancelled because of “performance issues”. The JSD-6000 design vessel was first contracted for construction in ZPMC’s yard on January 2014, with expected delivery in early 2017.

At the time, the contract was marked as a “strategic evolution” for Petrofac to compete in the subsea offshore market against players like Technip, Saipem, and Subsea 7. However, the cancellation seems to indicate a reversal of such a move, leaving Petrofac to concentrate on onshore, Middle East, and North Africa-focused engineering and construction contracts instead in the low oil prices environment.

Petrofac group chief executive Ayman Asfari described the cancellation as “regrettable” but “necessary”. He said Petrofac’s management board is reviewing its options, leaving industry players to speculate whether the company will move the hull construction contract to another shipyard, postpone the construction to a later date, or simply cancel the vessel entirely.

The Original Posted by Titus Zheng/IHS Maritime 360

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