DSME loses a offshore platform contract with DONG Energy

South Korean shipbuilders continue to make massive losses from cancellations from offshore project contracts amid the prolonged slump in oil prices.

Danish state-run energy company DONG Energy said on its web page on Tuesday (local time) that it would terminate the contract on an offshore platform for crude oil production, awarded to a consortium consisting of Technip France and Daewoo Shipbuilding and Marine Engineering Co. (DSME) in 2012. The contract was worth $560 million, of which $200 million was reserved for DSME.

The local shipbuilder that incurred more than 5.5 trillion won ($4.7 billion) in operating loss due to order cancellations claimed that it already received 70 percent to 80 percent of the pledged payment and that additional loss would be small.

The domino contract cancellation continues to plague the local shipbuilding industry this year. Samsung Heavy Industries Co. would lose the mega deal worth $4.7 billion to build floating liquefied natural gas (FLNG) for Shell.
Source: Pulse