Samsung Heavy Industries recently announced that due to the shipowner’s financial difficulties, it will not deliver one crude oil tanker contracted three years ago. The scale of the related crude oil tanker construction project has been reduced by half.
This order cancellation involves two crude oil carriers contracted by Samsung Heavy Industries in June 2023 for an Oceania-based shipowner. The total order value was 227.5 billion won (approximately $172 million at the time), with each vessel costing around $86 million. Deliveries were originally scheduled to commence by February 2026. Based on the per-vessel cost, the vessel type is highly likely to be Suezmax tankers.
According to the relevant announcement released by Samsung Heavy Industries, the order has been scaled back to one vessel, with the contract value revised to 114.8 billion won (approximately $78.31 million at current exchange rates).
Samsung Heavy Industries explained the contract amendment as follows: “The shipowner failed to make an installment payment for one of the two new vessels, prompting the company to exercise its contractual right to cancel the order.”
Samsung Heavy Industries stated that the construction costs for the canceled crude oil carrier will be offset through advance payments already received from the shipowner and the resale of the vessel. The company emphasized: “Considering the advance payments received and current ship price levels, we expect the construction costs to be recovered, and therefore this will not have a significant impact on our financial position.”
Previous reports indicated that the two crude oil tankers mentioned above belong to Teodor Shipping, a Dubai-based shipowner. It is understood that this was the only collaboration between the two parties in the new shipbuilding market. Teodor Shipping is not a shipowner known for frequently ordering new vessels, and there are rarely any shipbuilding-related news reports involving this company.
Records indicate that Teodor Shipping was established in June 2019. Its fleet primarily consists of tankers, specializing in the transportation of liquid bulk cargoes such as crude oil and refined petroleum products. In December 2022, the company acquired its first Very Large Crude Carrier (VLCC), expanding its fleet to include 14 tankers and one asphalt carrier. This acquisition marked the beginning of its strategic expansion into the large tanker business.
According to the information available, Teodor Shipping was founded in June 2019. Its fleet primarily consists of oil tankers, specializing in the transportation of crude oil, refined petroleum products, and other liquid bulk cargoes. In December 2022, the company acquired its first Very Large Crude Carrier (VLCC). At that time, its fleet comprised 14 oil tankers and one asphalt carrier, and this acquisition marked a step towards expanding its large tanker operations.
It is worth noting that Teodor Shipping was added to the sanctions list by the U.S. Treasury Department in 2023 under relevant sanctions provisions such as “IRAN-EO13902”, due to its shipping activities related to Iran. Therefore, Samsung Heavy Industries’ failure to deliver the newly built crude oil tanker to them may also be related to these sanctions.