NewChina shipyards hit as oil price fall forces delay in delivery of rigs
Chinese state-owned builders hit as offshore oil service companies push back six orders worth US$2 billion on lack of charter contracts
The fate of six drilling rigs worth more than US$2 billion contracted at Chinese state-owned shipyards is in doubt as offshore oil service companies try to push back deliveries amid an oil rout that is squeezing energy majors and their contractors.
A US$1.3 billion contract signed in 2013 between Singapore-based Frigstad Offshore and CIMC Raffles, part of Hong Kong-listed China International Marine Containers, is under review, according to Frigstad chief executive Simen Eriksen.
"Frigstad is working with CIMC to agree a deferred delivery of both rigs under construction by approximately eight months, in which case the revised delivery dates will be in the third quarter of 2016 and the first quarter of 2017, respectively," Eriksen said on the sidelines of the IBC Offshore Vessels & Rigs conference.
The two deepwater drilling rigs were originally scheduled for delivery in the fourth quarter of this year and the second quarter of next year. Neither has found charter contracts from oil majors.
CIMC president Mai Boliang had denied there were any difficulties facing the company's rig-building business at the firm's annual results briefing last month.
Chinese shipyards moved into the offshore drilling market to ease the impact of collapsing demand for new cargo ships after the financial crisis.
Top-tier Chinese shipbuilders, mostly state-owned, ventured into the high-end sector dominated by South Korean and Singaporean shipyards when the offshore oil drilling market was experiencing the biggest boom since the 1980s, spurred by oil prices that topped US$100 per barrel.