Singapore-listed offshore support vessel operator Swiber Holdings has been hit by the cancellation of a project in Vietnam, adding to the string of negativity in the offshore oil and gas space.
The revelation of the terminated contract was made in response to questions from the Singapore Exchange, which queried Swiber Holdings about a number of recent developments, including the postponement of a USD710 million offshore field development project in West Africa.
The Business Times in Singapore had reported that one of Swiber’s vessels, Kaizen 4000, was still “detained” in a yard in China, prompting the SGX to question the company.
Swiber has been a victim of the downturn in the offshore sector. Credit: Daniel Ferro
Swiber replied that the vessel was not detained, but was unable to be deployed as the project in Vietnam was terminated.
Swiber said, “The group received a termination letter dated 18 July, 2016 from the client in respect of the project but the group is disputing such termination. No announcement was made by the company in respect of such termination because the value of the contract is approximately USD21 million and the company is of the view that such amount is immaterial based on calculations against its annualised revenue, net tangible assets and assets figures for the first financial quarter ended 31 March, 2016.”
Amid weak oil prices, oil companies have been cautious towards investing in new oil fields, choosing instead to focus on maintaining production from existing fields. This has in turn, slashed demand for OSVs.
Swiber was also asked about the cancellation of the proposed subscription of preference shares in the company.
The company clarified that the subscriber, AMTC Ltd, had requested further due diligence on 10 June, and accordingly, the completion date of the transaction was postponed to 29 June.
But on 27 June AMTC requested a further postponement and Swiber rejected the extension, resulting in the subscription falling through.
The revelation of the terminated contract was made in response to questions from the Singapore Exchange, which queried Swiber Holdings about a number of recent developments, including the postponement of a USD710 million offshore field development project in West Africa.
The Business Times in Singapore had reported that one of Swiber’s vessels, Kaizen 4000, was still “detained” in a yard in China, prompting the SGX to question the company.
Swiber has been a victim of the downturn in the offshore sector. Credit: Daniel Ferro
Swiber said, “The group received a termination letter dated 18 July, 2016 from the client in respect of the project but the group is disputing such termination. No announcement was made by the company in respect of such termination because the value of the contract is approximately USD21 million and the company is of the view that such amount is immaterial based on calculations against its annualised revenue, net tangible assets and assets figures for the first financial quarter ended 31 March, 2016.”
Amid weak oil prices, oil companies have been cautious towards investing in new oil fields, choosing instead to focus on maintaining production from existing fields. This has in turn, slashed demand for OSVs.
Swiber was also asked about the cancellation of the proposed subscription of preference shares in the company.
The company clarified that the subscriber, AMTC Ltd, had requested further due diligence on 10 June, and accordingly, the completion date of the transaction was postponed to 29 June.
But on 27 June AMTC requested a further postponement and Swiber rejected the extension, resulting in the subscription falling through.
ihs.com
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