It initially issued a notice of cancellation for the four vessels at Estaleiro Ilha SA (EISA) last August 2014.

However, the Singapore-based company has been in negotiations with the yard since then in a bid to rescue the deal.

“Regrettably, on SPO’s specific project, EISA was unable to meet the minimum and critical conditions to continue with the construction of the vessels despite SPO’s repeated and good faith efforts to find a satisfactory way forward,” SPO said in a statement.

“Our board has concluded that they can no longer have confidence in the delivery of these vessels on a reasonable timescale and to our satisfaction, and therefore must reaffirm the cancellation of these shipbuilding contracts.”

SPO managing director Neil Glenn said: “We commissioned EISA to build four Brazilian flagged vessels in May 2011 as part of our plans to develop our business in Brazil.

“The first vessel was due for delivery in January 2014 with the remaining vessels at about three month intervals thereafter.

“The vessels were not built against specific client tenders or contracts but rather to service the general requirements of the offshore industry in Brazil.

“As of today, we have not taken delivery of any vessels, and have no reason for confidence that they will be delivered to our satisfaction and on a reasonable timeframe. We have therefore resolved to reaffirm cancellation of the orders.

“This is the first time that SPO has cancelled a vessel order and I hope it is very clear that the decision was not taken lightly. We remain committed to the Brazilian market as it is still an important part of our long term plans.”

SPO said its vessel newbuilding contracts in other countries are “proceeding as planned”.

It recently took delivery of the anchor handler Pacific Centurion and PSV Pacific Goldfinch.

It is due to take delivery of five more PSVs in 2015 and four more PSVs across 2016 and 2017.