MPF, which was building a drillship in Asia, has gone bankrupt after
failing to secure funding to finance construction work and because the
project costs are well over budget, writes Martyn Wingrove.


The global financial crisis has pushed the Norwegian offshore specialist
into insolvency and halted construction work in China and Singapore.


"Our sale or refinancing process has not resulted in any firm offers from
potential buyers or strategic investors and our company has exhausted its
financial resources," MPF said in a statement.


"As such, our only option is to continue the sales and asset realisation
process under the protection of insolvency proceedings."


MPF will continue efforts to sell the drillship building project and the
equipment contracts under these proceedings.


The Norwegian company was trying to build a multi-purpose drilling and oil
production ship, but encountered huge cost overruns. Originally, MPF had
asked China's Cosco to build the hull and Spanish shipyard Dragados had a
contract to install the topsides and commission the vessel.


MPF had secured $630m to build the ship and supply it to Brazilian state
firm Petrobras, but costs started to spiral upwards and Dragados' part of
the project was canned. Topside installation and commissioning work was
switched to Keppel Shipyard instead.


MPF has failed to secure funding to pay for the cost overruns as global
banking liquidity has frozen and the project is seen as a failure


This is the second offshore company to be hit by the credit crisis this
summer as the MPU Heavy Lifter construction project at Keppel Verolme in
the Netherlands was cancelled when MPU Offshore Lift filed for bankruptcy.