(Yicai Global) May 16 -- A Norwegian court has ruled that Statoil Petroleum AS, the country's state-owned oil company, unjustifiably terminated its drilling platform contract with China Oilfield Services Ltd. (COSL) -- China's largest offshore drilling service provider -- and ordered the former to pay a contract cancellation fee.
COSL disclosed this development in a regulatory filing with the Hong Kong Stock Exchange yesterday.
COSL’s unit COSL Offshore Management AS (COM) filed a civil lawsuit with the Oslo District Court of Norway in 2016, claiming over USD15 million. A freak wave said to be 17 meters high struck its deep-water drilling rig COSLInnovator during a storm on the Troll Field off the Norwegian coast on Dec. 30, 2015, killing one worker, and injuring several others and Statoil thereafter terminated the contract, apparently citing safety concerns, offshoreenergytoday.com reported in March 2016. The results of Norway’s offshore safety agency’s investigation initially showed the platform’s structural design violated regulations, but it later changed its report, finding no breaches of rig construction rules, per the report.
The court verdict confirms Statoil’s termination of the contract was unlawful. The drilling rig was built in compliance with regulations, and COM therefore discharged its contractual obligations, it said in the filing.
The court ordered Statoil to pay COM the cancellation fees it had not yet paid and ordered both parties to pay their own legal costs.
The litigants have one month to appeal and thus the judgment is not yet final, COSL said.
“The effect of the lawsuit on the company's profits for the current period or in the future will depend on the progress of the lawsuit and the enforcement of the judgment,” it also noted in the filing.
Editor: Ben Armour