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.



Have a news tip? Share it with Rigzone!
Email news@rigzone.com

WHAT DO YOU THINK?

Click on the button below to add a comment.
Post a Comment
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.

Related Companies
Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE

More from this Author
Rigzone Staff
e-mail us at news@rigzone.com
 -  Bell Geospace, Onyx Engineering Bag FT... (Aug 31)
 -  Japanese Banks Loan $630M to ADOC to D... (Aug 31)
 -  SeaOwl Acquires Thailand-based Ogas So... (Aug 31)
 -  UKJV Confirms Commercial Settlement of... (Aug 30)
 -  Origin Commences Production from Halla... (Aug 30)


Most Popular Articles

From the Career Center
Jobs that may interest you
Administrative Assistant-Treasury
Expertise: Contracts Administration|Document Control|Executive
Location: Houston, TX
 
Administrative Assistant-Treasury
Expertise: Contracts Administration|Document Control|Executive
Location: Houston, TX
 
Field Fabrication Drafter
Expertise: Fabrication|Fitter / Turner|Welding
Location: Raceland, LA
 
search for more jobs

Brent Crude Oil : $47.04/BBL 2.74%
Light Crude Oil : $44.7/BBL 3.55%
Natural Gas : $2.89/MMBtu 2.12%
Updated in last 24 hours