Sembcorp Marine on Wednesday said its unit PPL Shipyard terminated three contracts with Integradora de Servicios Petroleros Oro Negro and its unit Oro Negro for the construction of three jack-up rigs.
Oro Negro, a Mexican diversified oilfield services company, ordered these jack-up rigs at over US$200 million apiece from PPL Shipyard.
Oro Negro had ordered about half a dozen jack-ups with PPL Shipyard between early 2012 and late 2013, just before the collapse of oil prices in 2014.
However, the demand in offshore drilling acticity curbed as companies held back on capital expenditures following the oil price crash.
The termination is made pursuant to the terms of the deferment agreements between PPL Shipyard and Oro Negro, the company said in a statement.
The transaction is not expected to have any material impact on the net tangible assets and earnings per share of the company for the year ending December 31, the statement said.
Shares in Sembcorp Marine fell about 1 percent to S$1.74 on the Singapore Exchange. The stock has gained 26 percent so far this year, giving it a market value of S$3.6 billion.