Sembcorp Marine rebuffs Brazil conspiracy claims

Sembcorp Marine rebuffs Brazil conspiracy claims

Sembcorp Marine, a Singapore-based rig builder, has rebuffed allegations linking it with a conspiracy case in Brazil.

The company was responding to an article by the Norwegian newspaper Upstream, according to which Sembcorp Marine and its subsidiary Jurong Shipyard have been named as defendants along with other shipyards and entities in a complaint filed by EIG Management against Petrobras with respect to their investments in driller Sete Brasil.

According to that article, the investment firm EIG alleged that the entities conspired to induce funds managed by EIG to invest in Sete Brasil. Sete Brasil was established in 2011 to build, own and operate a series of ultra deep water drillships and semi-submersibles to develop the pre-salt oil fields off Brazil’s Atlantic coast and to be used by Petrobras.

Sembcorp Marine Ltd’s subsidiaries had in 2012 entered into contracts with the subsidiaries of Sete Brazil for the construction of seven drillships. To remind, according to several reports in April, Sete Brazil filed for bankruptcy protection as its only client Petrobras failed to book a big enough drilling rig order, cutting the initial plan for 28 rigs down to ten.

The company said on Tuesday: “Sembcorp Marine Ltd and Jurong Shipyard Pte Ltd believe that the allegations against them are entirely without merit and baseless. They have not been served with the proceedings but if served, will rigorously defend the suit. Sembcorp Marine Ltd and its group of companies have strong commitment to corporate governance and adhere to highest standards in all its operations.”

Cuts in Brazil

One of the world’s largest offshore rig builders Sembcorp Marine in April reported a drop in revenue to S$918 million in the first quarter of 2016. This is a 30 percent drop, when compared to $1.3 billion achieved in the corresponding quarter of 2015.

Sembcorp said the decline was largely due to lower revenue recognition for the rig building projects resulting from customer deferment requests and customer restructuring. The company’s net profit almost halved, falling to S$55 million, down from S$106 million a year ago.

Regarding Sete Brazil, the company in its quarterly report said it launched arbitration proceedings against various subsidiaries of Sete Brasil to preserve the Group’s interest under the Sete contracts.

The CEO of the company, which has contract to build no less than seven drillships for Sete, said the company was looking at reducing headcount at its Brazilian Estaleiro Jurong Aracruz (EJA), in light of the latest developments at Sete Brasil.

Offshore Energy Today Staff

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