Mermaid Maritime’s joint venture company, Zamil Mermaid Offshore Services Company LLC (ZMOS), has retained its long-term offshore inspection, repair, and maintenance (IRM) services contract with a client in the Middle East.
However, Mermaid said on Tuesday, the rendering service dayrates have been reduced. The company explained that this reduction in rates was part of a cost reduction initiative driven by the unnamed client, given the challenging business environment.
The contract, which was awarded in the fourth quarter of 2012, is for a five-year period and is scheduled to continue until the fourth quarter of 2017. In this contract, Mermaid provides a suite of diving services using one of its DP2 dive support vessels along with remotely operated vehicles, specialized diving equipment, and divers.
Mermaid’s joint venture partner, an offshore and marine services company, provides other offshore vessels, services, and logistics. Mermaid’s portion of the revised contract value for the remainder of the term is estimated to be not less than approximately $70 million.
The contract also has a two-year extension option embedded which, if exercised by the client, could see the contract further extended until the fourth quarter of 2019.
To mitigate the reduction in rates, Mermaid has also initiated a second round of cost efficiencies, centralization, and consolidation of its business in order to improve its cost base.