DSME Says Statoil Offshore Platform Order Canceled

File image courtesy Statoil

By Reuters 2016-07-29 20:52:43

South Korea's Daewoo Shipbuilding & Marine Engineering on Friday said that a $1.41 billion order placed in 2013 for a fixed oil production platform has been canceled.

The shipbuilder said in a regulatory filing that the cancelation would have no effect on its balance sheet as no costs had been incurred. A company spokesman also said the order had not been factored into any earnings forecasts.

Daewoo Shipbuilding said a European company placed the order and had canceled due to deterioration in its global operating environment.

The canceled order was an option in a contract signed with Norway's Statoil ASA as part of the Bressay oil development project on Britain's continental shelf, said a person with direct knowledge of the matter, who declined to be identified as the information was private.

The Daewoo Shipbuilding spokesman declined to comment on the counterparty beyond the content of the filing.

A Statoil spokesman did not provide immediate comment.

A drop in oil prices since mid-2014 has led to cancelations for many planned offshore oil facilities, as well as delays and contract renegotiation for facilities under construction as their hefty price tags became prohibitive.