Oil prices a sticking point for Saudi deal

Low oil prices are jeopardising a Vosper Thornycroft contract to sell three minehunters worth hundreds of millions of pounds to Saudi Arabia. The ships were due to be supplied under the multi-billion pound Al Yamamah oil-for-arms deal, for which British Aerospace is the prime contractor. With oil prices remaining weak, Saudi Arabia has found the […]

Low oil prices are jeopardising a Vosper Thornycroft contract to sell three minehunters worth hundreds of millions of pounds to Saudi Arabia.

The ships were due to be supplied under the multi-billion pound Al Yamamah oil-for-arms deal, for which British Aerospace is the prime contractor. With oil prices remaining weak, Saudi Arabia has found the deal difficult to finance.

At an Abu Dhabi defence exhibition last month, a BAe source said three Al Jawf class ships, based on the Royal Navy’s Sandown class, would not be supplied.

Vosper Thornycroft said this week that the contract has been postponed, not abandoned.

It has already delivered three minehunters to Saudi Arabia and is providing a support package for them. `Our understanding is that the Saudi navy still requires three further minehunters, but the funding picture is not clear,’ a spokesman said.