By Geoff Percival
Tullow Oil is considering appealing a court judgment ruling it should pay a minimum of $140m (€120m) to cover costs arising from an early termination of a drilling equipment contract in 2016.
The English Commercial Court has ruled in favour of rig contractor Seadrill, saying it is owed a total of $254m for the termination. Tullow cited force majeure in its termination of the rig contract.
It said a territorial dispute between the Ivory Coast and Ghana — suspending drilling at its TEN field off the Ghana coast — and industrial problems at its Jubilee field amounted to unforeseen circumstances.
Tullow is liable to around $140m of the total costs, according to the court, with the remainder due to be paid by relevant project partners in the region.
The Irish-founded exploration company said it was “disappointed” with the ruling and said it was right to terminate the contract for force majeure. It said it will now examine its options, “including seeking leave to appeal the judgment”.
Tullow expects to be required to pay its costs within the next 14 days. The $140m is higher than the $128m Tullow set aside for the case in its 2017 accounts.
The company is also being pursued by partner company Kosmos Energy, which is disputing its 20% share of the overall liability, equating to around $50m.
If Kosmos were to win its separate case, Tullow would also be liable to that payment. However, Tullow has not made any provision for such extra costs.
