Tullow Oil Plc has announced it has received judgement in the English Commercial Court case brought against its wholly-owned subsidiary Tullow Ghana Limited (Tullow) by Seadrill Ghana Operations Limited (Seadrill).
In a release dated July 3, 2018, the company said Justice Teare ruled that Tullow was not entitled to terminate its West Leo rig contract with Seadrill on 4 December, 2016 by invoking the contract’s force majeure provisions and as such required Tullow to pay Seadrill a contractual termination fee and other standby fees that accrued in the 60 days prior to termination of the contract.
These fees amount to approximately $254 million.
“Tullow expects to be required to pay these fees within the next 14 days with Tullow being liable for a net amount of approximately $140 million, which compares with the provision of $128 million made in the 2017 Annual Report and Accounts.”
Meanwhile, the company indicated: “Tullow is disappointed with the decision and maintains the view that it was right to terminate the West Leo contract for force majeure. Tullow will now examine its options, including seeking leave to appeal the judgment.”
It added that as disclosed in the Group’s recent trading statement, Kosmos was disputing separately through an arbitration against Tullow with the International Chamber of Commerce, its share of the liability (c. 20%) of any costs related to the use of the West Leo rig beyond 1 October 2016.
It added that the arbitration tribunal’s decision was expected shortly.
Source: Daily Guide
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