Tullow Oil liable for additional €43.7m over Ghana contract row

www.irishtimes.com Business News Jul - 18 - 2018 , 11:07

Irish explorer Tullow oil has been found liable for $50.8 million (€43.7 million) of costs, in addition to a previous award against it of $140 million, to settle a row over the termination of a contract in Ghana.

A panel of arbitrators, working under the jurisdiction of the International Chamber of Commerce, has delivered an award in favour of Kosmos Energy Ghana in relation to a dispute with a Tullow subsidiary.

The panel found Kosmos not to be liable for its $50.8 million share of costs which arose from the recent case in the English Commercial Court brought by Seadrill Ghana Operations Ltd against Tullow.

Additionally, Tullow has to reimburse Kosmos for some of its legal and rig demobilisation costs.

Tullow cancelled the contract for the West Leo rig in December 2016 after Ghana set a drilling moratorium on its offshore oil and gas field in waters that were the subject of a dispute between Ghana and the Ivory Coast.

On July 3rd a court ruled that Tullow was not entitled to terminate the rig contract by invoking the contract’s force majeure provisions. Tullow expected to be required to pay around $140 million, although its total liability is now in excess of $190 million.

Shares on Tullow’s London listing had fallen marginally in early morning trade with over 355,000 shares traded. No shares had been traded on its Irish listing in the first hour since the market opened.