PGS cancels Spanish newbuildVessel & ROV News // March 27, 2009
PGS has confirmed that it has cancelled a contract for a newbuild seismic vessel originally ordered by its subsidiary Arrow Seismic form Factorias Vulcano shipyard in Spain. The company had a total of four vessels on order, two of which were due to be chartered out to WesternGeco.
PGS said it had informed WesternGeco that there was a right to cancel the shipbuilding contract for newbuild number 532, and has received a formal notification from WesternGeco that, on that basis, it would cancel the charter party and all other related agreements for the vessel.
As a consequence, Arrow has formally notified the yard that it is cancelling the contract for newbuild 532, and has called on the refund of Euros 39 million with the addition of interest, as set out in the shipbuilding contract.
The cancellation of vessel 532 is expected to result in an impairment charge of up to US$50 million in the company's first quarter results.