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Seadrill wins large claim against oil company

A court in the UK has ordered Tulow Oil to pay a little over USD 250 million to rig company Seadrill. The dispute concerns a contract for a drilling rig in Ghana which was terminated in December 2016.

Tulow Oil was established in Ireland, but has its HQ in England. Its business focuses on Africa. | Photo: Tullow Oil

Rig company Seadrill, which has just completed a restructure, has won a case relating to a massive claim against Tullow Oil, an Irish oil company with a strong presence in Africa.

On Tuesday a court in the UK ordered Tulow OIl to pay USD 254 million to Seadrill for having terminated a contract prematurely.

The dispute concerns drilling rig West Leo, which Tullow Oil leased from Seadrill in Ghana. In December 2016, Tullow Oil tore up the contract and returned the rig to Seadrill, citing a force majeure clause.

The UK court, however, concluded that the conditions for terminating the contract were not met. As such, Tullow Oil has been ordered to pay USD 254 million to Seadrill, which is owned by Norwegian-born billionaire and shipping investor John Fredriksen.

"We are disappointed with the decision and maintain the view that it was right to terminate the West Leo contract for force majeure. Tullow will now examine its options, including appealing the ruling," says the oil company in a press release.

Tullow Oil has previously made provisions for USD 128 million for the case, though the verdict on Tuesday made the outcome almost twice as expensive. The oil company has 14 days to pay the money.

The damages have been awarded to company Seadrill Partners, which is partially owned by Seadrill Ltd. The drilling rig company, listed in both New York City and Oslo, recently completed a comprehensive restructuring that had been in process since September 2017.

The rescue plan involved converting debt for billions of dollars into shares, while the once heavily indebted company also received fresh capital.

English Edit: Daniel Logan Berg-Munch

Seadrill is now back after completing restructuring

Fredriksen buys USD 300 million of Seadrill claims from banks  

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