Daewoo Shipbuilding: $1.4 bln order Cancelled

Maritime Activity Reports, Inc.

July 29, 2016

Cancelled order part of Statoil's Bressay project.

South Korea's Daewoo Shipbuilding & Marine Engineering Co Ltd on Friday said a 1.58 trillion won ($1.41 billion) order placed in 2013 for a fixed oil production platform has been cancelled.

The shipbuilder said in a regulatory filing that the cancellation 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 cancelled due to deterioration in its global operating environment.

The cancelled 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 cancellations for many planned offshore oil facilities, as well as delays and contract renegotiation for facilities under construction as their hefty price tags became prohibitive. ($1 = 1,122.9900 won) (Reporting by Joyce Lee

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