Mermaid cancels newbuild rig pair at China Merchants

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.