Tullow Oil PLC (TLW.LN) said Wednesday that an arbitration panel has ruled against it in a dispute with Kosmos Energy Ltd. KOS, -0.37% finding that Kosmos isn’t liable to pay costs arising from a lawsuit brought by Seadrill Ghana Operations Ltd. against Tullow.
On July 3 a commercial court in England ruled that Tullow must pay $254 million to Seadrill in contract termination and standby fees after Seadrill argued that Tullow’s Ghanaian subsidiary, Tullow Ghana Ltd., wasn’t entitled to terminate the West Leo rig contract in December 2016 by invoking the contract’s force majeure provisions.
The arbitration ruling, which is final and binding, relates to a dispute between Tullow Ghana and Kosmos Energy Ghana HC over the Deep Tano joint operating agreement offshore Ghana.
As a result of the ruling, Kosmos won’t be required to pay its $50.8 million share of costs related to the case brought by Seadrill. Additionally, Tullow is to pay Kosmos $14 million plus interest related to amounts previously paid under protest, as well as costs of arbitration.
Kosmos’s Ghana-based subsidiary filed its arbitration request against Tullow Ghana Limited in June 2016, disputing its responsibility for costs arising from Tullow’s contract with Seadrill for use of the West Leo drilling rig once partner-approved 2016 work-program objectives were concluded.
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