London-listed oil and gas service provider Petrofac has cancelled its construction contract of 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”. Initially, the JSD-6000 design vessel was first contracted for construction in ZPMC’s yard in China on January 2014 and is expected for delivery in early 2017.
Then, 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 that a reversal of such venture, prompting Petrofac to focus on onshore, Middle East and North Africa-focussed engineering and construction contracts instead in the low oil prices environment.
Ayman Asfari, group chief executive of Petrofac regarded the decision of cancellation as “regrettable” but “necessary”. He also highlighted the management board of Petrofac is reviewing its options, leaving industry players to speculate that Petrofac may probably consider moving the hull construction contract to another shipyard or postpone the hull construction at a later date or simply cancel the vessel entirely.