Malaysian OSV operator TAS Offshore has entered into agreements with Chinese shipbuilder Hangtong Shipbuilding to terminate contracts to construct 16 OSVs at two Hangtong yards in Guangdong.
TAS ordered the 16 vessels at the yards between 2013 and 2015 with the price for each vessel ranging from $10.38m to $39.38m.
According to TAS, the company had signed supplementary agreements and addendums with the shipbuilder to postpone the delivery dates as well as to suspend the shipbuilding progress due to the low oil price and subdued demand for offshore vessels. Now the company has terminated the contracts as the spread of Covid-19 pandemic has exacerbated the market situation in the offshore market.
The company expects to lose RM70m ($16.45m) from the termination of the contracts.