Hyperdynamics sues Tullow, Dana for breach of contract in Guinea
- Business & Finance
Hyperdynamics, an independent oil company with an offshore block in Guinea, Africa, has filed legal actions against its partners under the Joint Operating Agreement governing the oil and gas exploration rights offshore Guinea.
The company’s subsidiary, SCS Corporation, has filed parallel actions in the United States District Court for the Southern District of Texas and before the American Arbitration Association against Tullow Guinea Ltd., a wholly owned subsidiary of Tullow Oil and Dana Petroleum (E&P) Limited , a wholly owned subsidiary of the Korean National Oil Company, for their failure to meet their obligations under the JOA and the Production Sharing Contract with the Government of Guinea (“PSC”).
Hyperdynamics through these legal actions seeks a determination that Tullow and Dana are in breach of their contractual obligations; and orders requiring Tullow and Dana to move forward with well drilling activities offshore Guinea.
Furthermore, Hyperdynamics seeks the damages it says have been caused by the repeated delays in well drilling caused by the activities of Tullow and Dana.
Hyperdynamics said it decided to bring the legal actions only after it became apparent that Tullow and Dana would not move forward, “despite many opportunities to do so, with petroleum operations.”
We bring these lawsuits with reluctance, Hyperdynamics CEO
Ray Leonard, President and CEO, commented, “We bring these lawsuits with reluctance, and only after concluding that all other avenues available to us have been exhausted. Having watched Dana and Tullow send the unsigned PSC amendment back and forth to each other repeatedly, we determined that neither of our partners was prepared to honor the commitments made to us and to the Government of Guinea to proceed with drilling. We therefore had no choice but to pursue our rights by the only means left open to us. We plan to continue with all efforts to get this well drilled.”
Following the agreement between Tullow and a subsidiary of Hyperdynamics in 2012 in connection with the sale to Tullow of a portion of Hyperdynamics’ interest in the concession, Tullow agreed to drill an exploratory well and to pay all of the costs of Hyperdynamics’ participating share of expenditures associated with joint operations up to a gross exploration cap of $100 million. The participating interests are owned 40% by Tullow, 37% by Hyperdynamics and 23% by Dana Petroleum.
According to Hyperdynamics,the Production Sharing Contact Amendment agreed to at the Petroleum Operations Management Committee in Guinea on December 16-17, 2015, remains unsigned by both Tullow and Dana despite the fact that Tullow initialed the document in Guinea and the amendment contains the exact title assurance request previously made by Dana.
Instead of signing, Hyperdynamics claims, the two companies have exchanged the document repeatedly with each continuing to insist the other must sign first and ignoring Hyperdynamics’ suggestion that they sign simultaneously.
In March 2014, Tullow, the operator of the offshore exploration block in Guinea, declared Force Majeure on operations in the area, following a U.S. regulatory investigation of Hyperdynamics Corp. The Force Majeure was lifted in May 2014 and discussions have been ongoing with the Government of Guinea on the resumption of Tullow’s petroleum operations.
Offshore Energy Today has reached out to Tullow, and Dana, seeking comment on the allegations by Hyperdynamics. Tullow declined to comment.
A Dana spokesman said: “Dana is aware of the situation in relation to Hyperdynamics. We have nothing additional to say at this point.”
Offshore Energy Today Staff