This article first appeared in The Edge Financial Daily on October 19, 2017

KUALA LUMPUR: Sapura Energy Bhd, formerly SapuraKencana Petroleum Bhd, said it is discontinuing its joint venture (JV) with London-based Subsea 7 S.A.

In a statement to Bursa Malaysia, it said the two entities have mutually agreed on Tuesday to discontinue their SapuraAcergy JV.

Consequently, SapuraAcergy’s heavy-lift and pipelay vessel, Sapura 3000, has been sold to Sapura Energy, now the vessel’s sole owner.

“Having full ownership of Sapura 3000 will further enhance the group’s competitive positioning in the engineering and construction segment,” Sapura Energy said.

“Sapura 3000 has established a strong track record in executing heavy-lift, pipelay and decommissioning work for shallow and deepwater projects globally,” it added.

Sapura Energy said the transaction is not expected to have a material effect on its net assets, but it will be recognised as a loss in the JV for the current financial year.  In a statement on its website, Subsea 7 said the decision to discontinue the 50:50 JV reflects the “evolution of both companies’ long-term strategic priorities”.

As a result of the discontinuation of the JV and the sale of Sapura 3000, Subsea 7 expects to receive approximately US$100 million (RM422 million) in cash dividends, and recognise a loss of approximately US$10 million in the third quarter,” it said.

Subsea 7 also said its share of net income from SapuraAcergy in 2016 was US$6 million.