Petroleum Africa
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Thursday, July 19, 2018
For the second time in recent weeks Tullow Oil has lost out to arbitration. The International Chamber of Commerce ruled in favor of Kosmos Energy in regards to its share of liability of costs related to the West Leo drillship. The ruling covers Kosmos’ costs beyond October 1.
The tribunal’s award is final and binding.
As a result, Kosmos is not liable for its share of costs, being $50.8 million, arising from the recent case in the English Commercial Court brought by Seadrill Ghana Operations against Tullow. The arbitration award also provides that Tullow is due to reimburse Kosmos for some of its legal and rig demobilization costs.
Tullow also recently lost the case brought against its Ghanaian subsidiary by Seadrill Ghana Operations in the British Commercial Court. The UK firm announced that the court ruled that Tullow was not entitled to terminate its contract for the West Leo rig with Seadrill.
Tullow had invoked the contract’s force majeure provisions on December 4, 2016 but the court disallowed the provision. Tullow is now required to pay Seadrill a contractual termination fee and other standby fees that accrued in the 60 days prior to the termination of the contract. These fees amount to approximately $254 million.
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