Offshore contractor Subsea 7 saw its offshore vessel charter with Petrobras terminated earlier than expected.
The company said Petrobras terminated the day-rate contract for Subsea 7’s Pipelay Support Vessel (PLSV), Seven Mar, effective 31 May 2016.
The vessel was working offshore Brazil.
According to Subsea 7, the contract was originally set to expire at the end of 2016 and as a result, the group backlog has now diminished by approximately $47 million.
Brazilian maritime law prioritizes Brazilian-flagged ships over international vessels of a similar specification. As a consequence, the operating license for Seven Mar has expired, which resulted in the early termination of the contract, Subsea 7 said.
The Seven Mar vessel had been operating with Petrobras for years, working on engineering and installation of flowlines, umbilicals and equipment supplied by Petrobras.