Mermaid Maritime cancels US$298m order for two rigs with China Merchants Industry

MERMAID Maritime Public Company has cancelled its US$298 million construction order for two rigs as the depressed oil and gas market reduces demand for drilling rigs.

In an announcement late on Dec 31, the group said that it will not be taking delivery of the rigs from the builder, China Merchants Industry Holdings, by the delivery date, and that it has also not received any genuine interest from third party buyers for the rigs so far.

Each of the rig cost US$149 million, and Mermaid Maritime had earlier made a pre-paid instalment of US$44 million. Both parties agreed that China Merchants Industry will retain this amount, as well as the materials and equipment forming part of the rigs.

Mermaid Maritime had already recorded an asset impairment on the pre-paid instalment and associated costs relating to the rigs in its 2015 financial statements.

In a separate announcement, the firm said that its Indonesian unit has entered into an additional one-year charter contract for a remotely operated vehicle and air diving support vessel, DP2 Multi-Purpose Support Vessel.

Mermaid had chartered-in the vessel and deployed it to support its various subsea projects since Dec 2013. It said that it expects continuing demand for subsea services in both Indonesia and the rest of the South-east Asia region.