Tullow won’t appeal lost rig case. Pays up $248M
- Exploration & Production
Oil company Tullow has paid drilling contractor Seadrill Partners a $248 million fee related to the recent court ruling regarding the West Leo rig contract termination case.
The English High Court earlier in July ruled in favor of Seadrill Ghana relating to the early termination of the West Leo semi-submersible rig contract, awarding the fee of $248 million, inclusive of interest, but net of withholding tax, VAT and legal expenses.
To remind, Tullow had in October 2016 sent a notice of force majeure to Seadrill for the West Leo rig contract, claiming that the field the rig had been hired for was subject to a drilling moratorium by the government of Ghana.
The moratorium was in place due to the, at the time, ongoing arbitration proceedings before the International Tribunal for the Law of the Sea (ITLOS) to determine the delineation of a disputed maritime border between Ghana and Ivory Coast in the Atlantic Ocean. Tullow then in December 2016 unilaterally terminated the rig contract.
Seadrill then filed counterclaims in the Commercial Court in London against Tullow Ghana Limited (TGL) seeking a declaration that TGL was not entitled to terminate the West Leo rig contract for force majeure, eventually winning the case.
In a statement on Wednesday Seadrill said Tullow would not be appealing the English High Court ruling in favor of Seadrill, adding the oil company had paid the $248 million fee.
Seadrill said it would use a portion of the proceeds from the Tullow case for a par prepayment of its $2.8 billion Term Loan B.
“We expect to finalize the determination of the Net Litigation Proceeds in due course and a $100 to $124 million repayment to be made within 5 business days of determining the Net Litigation Proceeds,” Seadrill said.