April 20, 2024

• 

[THE INVESTOR] Daewoo Shipbuilding & Marine Engineering has moved a step closer to winning offshore plant projects from US energy company Chevron amid growing concerns over its deteriorating financial status.

The troubled shipbuilder said on Dec. 20 that it signed a framework agreement with Chevron which gives DSME the rights of first negotiation for upcoming shipbuilding contracts. 

Under the agreement, DSME will be able to work from the engineering design phase of offshore plant projects to be initiated by Chevron in the future.

Such a non-binding contract won’t solve immediate cash needs of the firm which is currently under a creditor-led corporate rehabilitation process, but maintaining partnerships with global clients is also crucial for DSME.

“The agreement can be a turning point for DSME’s business normalization plan as some global companies are still giving credibility to our technology and production capability although the company is suffering its worst crisis,” Daewoo chief Jung Sung-leep said.

The shipyard has secured a total of 14 offshore plant-related projects from Chevron including US$2.7 billion worth Tengiz oilfield project in western Kazakhstan that it is currently working on. DSME plans to hand over the 90 completed modules by 2020.

By Park Han-na (hnpark@heraldcorp.com)