Seatrade Maritime is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Mermaid cancels newbuild rig pair at China Merchants

Mermaid cancels newbuild rig pair at China Merchants
Mermaid Maritime Public Company Limited has terminated contracts with China Merchants Industry Holdings (CMIH) over the construction of two tender assist drilling rigs.

Singapore-listed Mermaid said the contract cancellation has been mutually agreed with CMIH, in view of the challenging global oil and gas market that has led to low demand for drilling rigs, depressed asset values and charter rates.

The order was made by Mermaid in January 2014 at a contract price of $149m for each rig. During that same time, Mermaid also ordered a DP1 dive support and construction vessel from CMIH and the contract was aborted in December 2016.

Mermaid said it has made pre-paid installment of $44m for the two drilling rigs and the sum has been forfeited and recorded as asset impairments in Mermaid’s 2015 financial statement. No further payments are due to CMIH.

Subsequent to the termination of the construction contracts, Mermaid has been given a right of first refusal to purchase the rigs under the same terms and conditions from CMIH in the event that a new buyer is identified.