Sembcorp Marine braces for a rough 2016 as Sete Brasil hurdles escalate

Petrobras may reduce orders from 15 to just 6.

The first month isn’t even over for 2016, but it’s shaping to be a dreary one for Sembcorp’s marine arm, as cancelled orders from Sete Brasil continue to get worse.

According to analysts from UOB Kay Hian, there have been some speculations that Petrobras may reduce Sete Brasil rig orders from 15 to 6, a huge blow for SembMarine.

“The six will comprise units currently in advanced stages of construction, with the remainder to be cancelled. The nine rigs cancelled will be replaced by rigs acquired from the secondary market. At this juncture, this decision is not confirmed as negotiations are still ongoing,” UOB Kay Hian said.

UOB Kay Hian added SMM is already in advanced stages of construction on three rigs, and analysts say the reduced orders should go ahead, leaving two rigs without an owner.