Singapore’s SBI Offshore has annulled a $24m design and engineering contract with a consortium of six Middle East-Chinese parties over the construction of five jack-up drilling rigs.

Singapore-listed SBI Offshore said the contract termination was by mutual agreement between SBI O&M, wholly-owned by SBI Offshore, and the consortium.

No reason was given by SBI Offshore for the contract termination. Today’s jack-up drilling rigs market is battered by low utilisation and rates, and project delays or cancellations due to the crash of oil prices, not to mention a looming oversupply.

“The impact from the termination of the contract has been provided in the financial results of the group for the financial year ended 31 December 2015 and following the termination, no further revenue will be recognised from the contract,” SBI Offshore said.

If the contract goes through, the rigs will potentially be built in China or Singapore, and will be deployed in the Middle East and various parts of Asia.

The contract was mooted back in August 2014, when the offshore oil and gas industry was seeing high utilisation and rates from high oil prices.