South Korea's HHI to Halt Ops at Onsan Shipyard Due to Industry Downturn
South Korea's Hyundai Heavy Industries Co., Ltd. (HHI) planned to halt operations at one of the company's yards amid the downturn in the global oil and gas industry, a report in local daily the Korean Times said Friday.
The firm intends to seek alternative use for its Onsan yard, which currently manufactures offshore rigs and other resource development facilities, in March following its failure to secure a single order for offshore oil and gas facilities as the petroleum industry cutback on capital spending.
"The plant will complete its last order in late March, and then it has no more orders to work on ... So, we decided to utilize the facility for other purposes. Under no circumstances will we close the plant," an HHI spokesman said, as quoted by the Korean Times.
HHI is likely to use the Onsan yard, which occupies an area of 2.15 million square feet (200,000 square meters), as storage for the shipbuilder's raw materials and equipment. The yard has been used to build floating production storage and offloading, liquefied natural gas plants and other offshore facilities.
Around 60 of the workers from the Onsan yard will be transferred to another shipyard, with the remainder expected to see their contracts terminated, the Korean Times indicated, adding that the other shipyard -- Gunsan -- will handle all future orders for offshore facilities.
HHI and other major South Korean shipyards, namely Daewoo Shipbuilding & Marine Engineering Co., Ltd. (DSME) and Samsung Heavy Industries Co., Ltd. (SHI), incurred heavy operating losses amouting to $6.1 billion in 2015 -- as mentioned in a Yonhap News Agency report on Jan. 19 -- due to weak demand to build offshore oil and gas facilities as well as more intense competition from rival shipyards in China.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Falcon Oil Declares Commercial Flow Test Results for Shenandoah Well
- Japan Failing to Meet Corporate Demand for Clean Power: Amazon
- Macquarie Strategists Expect Brent Oil Price to Grind Higher
- UK Oil Regulator Publishes New Emissions Reduction Plan
- PetroChina Posts Higher Annual Profit on Higher Production
- McDermott Settles Reficar Dispute
- US, SKorea Launch Task Force to Stop Illicit Refined Oil Flows into NKorea
- Pennsylvania County Joins List of Local Govts Suing Big Oil over Climate
- Russian Navy Enters Warship-Crowded Red Sea Amid Houthi Attacks
- USA Commercial Crude Oil Inventories Increase
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Equinor Makes Discovery in North Sea
- Standard Chartered Reiterates $94 Brent Call
- India Halts Russia Oil Supplies From Sanctioned Tanker Giant
- DOI Announces Proposal for Second GOM Offshore Wind Auction
- Centcom, Dryad Outline Recent Moves Around Red Sea Region
- PetroChina Set to Receive Venezuelan Oil
- Czech Conglomerate to Buy Major Stake in Gasnet for $917MM
- US DOE Offers $44MM in Funding to Boost Clean Power Distribution
- Oil Settles Lower as Stronger Dollar Offsets Tighter Market
- Chinese Mega Company Makes Major Oilfield Discovery
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Another Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Vessel Sinks in Red Sea After Missile Strike
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension
- Equinor Makes Discovery in North Sea