Norwegia's PGS terminates Spanish shipbuilding contract

Norwegian seismic surveyor Petroleum Geo Services ASA (PGS) (PGS.OL) said it had terminated a shipbuilding contract at Spanish yard Factorias Vulcano and said the yard was disputing its cancellation of a another deal.

"PGS strongly believes that the terminations are rightful, and will pursue its claims for refund of the installed amounts," the company said in a statement on Tuesday.

PGS said it had informed Factorias Vulcano that its subsidiary Arrow Seismic Invest III Ltd had terminated the contract for "New Build number 533", and asked for a refund of 39 million euros with interest.

PGS reiterated that it would be exposed to an impairment charge relating to the vessel of about $50 million to $60 million.

PGS also said that the yard was disputing an earlier contract termination, for "New Build number 532".

"Arrow Seismic Invest II Ltd has received a formal writ of summons from the yard, disputing Arrow's right to terminate the shipbuilding contract for New Build number 532, and claiming damages for incorrect termination," PGS said.

Source: http://www.reuters.com