PGS Scraps Newbuild Contract with Factorias Vulcano

26 September 2010 (Last Updated September 26th, 2010 18:30)

Petroleum Geo-Services (PGS) has terminated the contract for a newbuild it had ordered at Factorias Vulcano shipyard in Spain due to a delay in delivery, the company said. The Norwegian company, through its subsidiary Arrow Seismic Invest, had ordered four newbuild vessels at the shipyard

Petroleum Geo-Services (PGS) has terminated the contract for a newbuild it had ordered at Factorias Vulcano shipyard in Spain due to a delay in delivery, the company said.

The Norwegian company, through its subsidiary Arrow Seismic Invest, had ordered four newbuild vessels at the shipyard with the third vessel scheduled for delivery in January 2010.

Following the cancellation, PGS expects a refund of €40.5m ($54m) with interest from the shipbuilder.

PGS also expects an $80m material impairment charge following the termination of the contract, which it wants to record in the third quarter of 2010.