George Economou’s Cardiff Marine is contracting a slew of tanker newbuildings worth close to $500m at Samsung Heavy Industries (SHI) as renegotiations take place over one of four drillships the owner has on order at the yard.

Industry sources say the company has penned four suezmaxes and four aframaxes at SHI for delivery during the first half of 2017.

Brokers say Economou has swapped one of his Nasdaq-listed Ocean Rig’s drillships for the clutch of tankers.

Efforts by TradeWinds to contact the Greek owner were unsuccessful. SHI officials decline to comment on the orders.

Ocean Rig is due to take delivery of the first drillship — the Ocean Rig Apollo — shortly and a second — the Ocean Rig Santorini — in 2016. The former will be undertake drilling work for Total in the Republic of Congo for three years, while the Ocean Rig Santorini has not found employment.

The remaining two units should be delivered during the first half of 2017.

Market players have cast doubt on Economou’s ability to convert the drillship order into tankers as the price gap between offshore vessels and conventional ships is so huge.

The latter two drillships at SHI are advanced, seventh-generation ultra-deepwater (UDW) units that stock-exchange filings list as costing $728m each — which is well below the total $470m estimated cost of the combined tanker newbuildings. But brokers have suggested that Economou has also pencilled in a string of options for both types of vessel at the yard, which could go further towards covering the drillship contract.

In China, there are also whispers in broking circles that Cardiff is in talks with yards there to convert some of its newcastlemax bulker newbuildings into long-range-two (LR2) tankers. But one market expert thinks the likelihood of this is slim, as the orders were placed some time ago yards would already have procured the materials needed for the bulkers.

Cardiff is listed by London broker Clarksons as having six newcastlemaxes on order at Yangzijiang Shipbuilding and four at Shanghai Waigaoqiao Shipbuilding (SWS). The 208,000-dwt vessels are scheduled for delivery between this year and 2016.

In December, Economou sold six suezmaxes en bloc to Teekay spin-off Tanker Investments Ltd (TIL). The Oslo-listed outfit was reported to have paid $315m for the Kamari, Toska, Taipan, Vadela (all built in 2009), Matala and Karakare (built in 2010). All were built at China Rongsheng Heavy Industries.

source:www.tradewindsnews.com