Subsea engineering, construction and services company Subsea 7 on Monday announced the early termination of the day-rate contract for its pipe-lay support vessel (PLSV), Seven Mar.
The 2001-built vessel was working for Petrobras, offshore Brazil, and the termination is effective from January 16, 2017.
The contract was due to expire in 2018 and as a result the group backlog has diminished by approximately $106 million, Subsea 7 said on Monday.
The company added that Brazilian maritime law prioritizes Brazilian-flagged vessels over international vessels of a similar specification. As a consequence, the operating license for Seven Mar has expired, which resulted in the early termination of the contract.
This is the second time for the Seven Mar to receive an early termination from Petrobras due to prioritization of Brazilian-flagged vessels. The first termination was in June last year.
However, by the end of that month, Subsea 7 substituted a vessel chartered from Solstad Offshore, the Normand Seven, for its own PLSV, Seven Mar, in a day-rate contract with Petrobras. As a consequence, Subsea 7 return Normand Seven to its owner Solstad.
Earlier on Monday, Petrobras awarded a contract of 532 days to the the first pipe-lay vessel built in Brazil, Skandi Vitória, which is owned by DOF and Technip.
Offshore Energy Today Staff