Emergency arbitrator picked: Has Dolphin Drilling’s attempt to oppose Nigerian oil & gas firm’s restraining order against rig termination failed?

Following a notice of rig contract termination, Lagos-based General Hydrocarbons Limited (GHL) has obtained an interim injunction against Dolphin Drilling’s plan to break off a semi-submersible rig’s deal off the coast of Nigeria. While the offshore drilling contractor put the wheels into motion to take a shot at stopping the Nigerian oil and gas player from achieving its goal, the move has not budged the restraining order so far, but things may change in the future. An emergency arbitrator has also been appointed.

After Dolphin Drilling issued a notice of contract termination to General Hydrocarbons Limited for the Blackford Dolphin semi-sub, citing failure to comply with payment terms among the reasons, GHL decided to dispute the termination of the rig’s contract and filed a request for arbitration alongside an application to the Nigerian courts for an interim injunction seeking to maintain the status quo, pending the appointment of an arbitrator.

In a bid to counteract this, Dolphin Drilling, together with its external counsel in Nigeria, made a move to discharge the interim injunction before the Nigerian courts. However, the Norwegian rig and drilling services player’s ploy fell through, according to GHL, as the Nigerian firm claims that Dolphin Drilling was not successful in vacating a substantive interim injunction order issued against it upon the application of General Hydrocarbons Limited at the Federal High Court in Lagos, Nigeria.

Following a letter of award (LoA) from September 2022, GHL engaged the services of the drilling company through a 12-month contract for an assignment on its Ewo field. The Nigerian firm explains that the relationship soured when Dolphin Drilling abruptly stopped work in February 2024, which led to GHL terminating the contract. However, the duo attempted to revive their contractual relationship with a side letter dated March 22, 2024.

Contrary to claims by the offshore drilling contractor about payment issues, GHL contends that the Blackford Dolphin rig was unserviceable for a prolonged period, following the side letter agreement, and requires the Norwegian firm to make good on its contractual obligations. Simultaneously, the Lagos-based company confirms that it has provided Dolphin Drilling with comfort letters from reputable global financial institutions.

Furthermore, GHL is adamant that Dolphin Drilling breached the terms of the side letter when its blow-out prevention (BOP) system failed a performance test, after which the Norwegian firm served – what the African firm describes as – “a defective notice of termination” and attempted to demobilize the Blackford Dolphin rig.

GHL explains that this pushed it to take Dolphin Drilling to court seeking for it to fulfill its contractual obligations affected by technical challenges with the BOP system on the semi-sub rig. This legal action bore fruit as the Nigerian oil and gas player was granted an injunction allegedly barring Dolphin Drilling from taking away the Blackford Dolphin rig from Nigeria until the arbitration instituted by GHL is determined.

“The order of interim injunction ordered by Hon. Justice Akintayo Aluko of the Federal High Court, Lagos restrains Dolphin Drilling, their agents, servants, privies or anybody acting on their behalf from removing, demobilising or decommissioning the Blackford Dolphin rig from the field of the applicant pending the hearing and determination of the motion on notice for interlocutory injunction filed contemporaneously,” elaborated General Hydrocarbons Limited.

While underscoring that Dolphin Drilling has failed to discharge the restraining order at the Federal High Court, GHL also welcomed the approval of its request for an emergency arbitrator to be appointed by the court. The judge ruled that the appointment of an emergency arbitrator would be made within 24 hours, and other motions would be considered the following week.

Ayomide Olufawo, Spokesperson for General Hydrocarbons Limited, told Offshore Energy: “I can confirm that Dolphin’s bid to discharge the restraining order was unsuccessful. Furthermore, I would like to inform you of a recent development in court today: an emergency arbitrator, Yemi Candide Johnson, has been appointed. The interim injunction remains in effect and will be further deliberated by the court next Monday.”

Incorporated in 2009, General Hydrocarbons Limited acts as the operator of OMLs 120 and 121 in Nigeria. The company’s mission is to carry out the commercial development and exploration of deep offshore energy resources and assets located in the resource-rich Niger Delta region of Nigeria for the people of Africa.