Petrobras axes 10 Tidewater vessels

SAO PAOLO, November 6, 2015 – Brazil’s state-run Petrobras has cancelled 10 contracts for work boats supplied by Tidewater, the US marine support services company’s chief financial officer Quinn Fanning told analysts on a conference call this week. The move comes as part of a wide series of cost cutting measures being enacted by Petrobras, and saw the company invoke local content regulations in order to end the contracts.

Under Brazilian rules, operators are permitted to demand discounts or cancel contracts with foreign vessel owners in favour of Brazilian-flagged vessels – a tactic that Petrobras has started to increasingly use in recent months, according to Fanning.

“Our vessel contract cancellations appear to have been part of this effort,” Fanning said. “We do know that the effort is not Tidewater-specific, and our sense is that the numbers still to come may be significant,” he added.

Tidewater is believed to have had 20-25 vessels leased to Petrobras prior to the cancellations. Brazil accounts for 12-15 percent of the company’s revenues, according to US investment bank Tudor Pickering Holt.

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