Cairo: Egypt’s Maridive and Oil Services said on Monday it had cancelled contracts to have two vessels built in India but had recouped its losses with deals to build two vessels in a Chinese shipyard.
The Indian contracts with ABG Shipyard were worth $46 million, the oil services firm said, while the contracts in China were valued at $37 milion.
The biggest oil services firm in the Middle East by fleet size said it had cancelled its ABG contracts because the Indian firm did not meet its delivery date, said Maridive chief financial officer Emad Fawzi.
He added Maridive would receive $9 million it had previously paid to finance the ABG deal.
Construction on the Chinese vessels would be completed by the end of 2011, and revenues would reach about $5 million per year, Fawzi said.
ABG officials in India were not immediately available to comment.
“It is not a big deal because Maridive is simply changing its supplier,” said Hatem Alaa, an analyst at HC Securities.
Oilfield services companies have been hit hard by the global financial crisis which prompted oil and gas producers to slash spending, although some services companies have begun to see new orders.
Maridive also said in the statement it would raise capital in its 75% owned subsidiary Valentine by $10 million.
Shares in Maridive closed down 0.8%, while Egypt’s benchmark index gained 0.4%.
Maridive’s first-quarter net profit fell more than one third on sluggish oil industry activity to $15.4 million compared with $23.4 million in the same period last year.
The firm, which serves Total, Royal Dutch Shell Plc, BP Plc, Saudi Aramco, Qatargas, Kuwait Oil Company and other oil giants, owns over 60 marine units and has contracted to receive about six vessels and one barge by 2012.