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Wednesday, October 1, 2014
Swala Energy reported that its wholly-owned subsidiary, Swala Energy (Kenya), has called for arbitration over its dispute with Cepsa Kenya over its withdrawal from Block 12B.
Cepsa farmed in on Block 12B in Kenya, acquiring a 25% equity interest. Upon electing to withdraw from the license it indicated it would return its equity interest in accordance with the terms of the JOA, returning 8.33% to Swala Kenya and 16.67% to Tullow Kenya. This would result in Swala Kenya holding a 33.33% equity interest and Tullow holding a 66.67% equity interest.
Swala Kenya maintains that Cepsa is obliged to return the entire 25% to Swala Kenya in accordance with the terms of the farm-out agreement. Accordingly, Swala Kenya maintains that Cepsa is in breach of its obligations under the farm-out agreement.
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