Oro Negro Defaults on Second Overseas Bond, Nordic Trustee Saysby
Default is company's second on overseas debt since October
Services provider has been battered by drop in crude prices
Mexican oil services provider Oro Negro Drilling Pte Ltd. defaulted on a second overseas bond after a fall in global oil prices triggered cuts in rates paid by its biggest client, state-owned oil company Petroleos Mexicanos.
Oro Negro failed to make an interest payment Jan. 24 on $677 million of bonds due 2019, documents posted online by Nordic Trustee show. In October, the company defaulted on bonds due in 2015 as a glut of available oil rigs pushed down leasing prices.
Oro Negro, which means Black Gold in Spanish, has suffered after oil producers from Pemex to Brazil’s Petroleo Brasileiro SA slashed spending budgets by billions of dollars as oil plunged 70 percent since its 2014 peak. Like most oil-services companies operating in Mexico, Oro Negro is especially vulnerable to the cuts because it gets 100 percent of its revenue from Pemex, still the nation’s lone oil producer even after a new law two years ago changed the constitution to allow foreign drilling for the first time since the 1930s.
Oro Negro didn’t respond to a call and e-mail seeking comment.
On Jan. 12, Oro Negro said it signed a five-year agreement to lease the Impetus platform, which was used to secure the 2019 bonds, at a daily rate of $130,000. In an earlier statement, the company had said it expected the rate to return to about $160,000 by June 1, 2016. Pemex announced last year it would cut rig rates amid oil price decline and budget cuts.
Last week, oil prices fell to a 14-year low, trading at $28.46 per barrel.