Malaysia-listed oilfield and drilling services provider UMW Oil & Gas (UMW-OG) has filed a lawsuit against Philippines-based oil and gas exploration company Frontier Oil Corporation, seeking compensation for an alleged breach of contract.
UMW-OG stated in its filing to the Malaysian stock exchange, Bursa Malaysia, that the company is seeking an award for damages and/or compensation for all losses arising from Frontier Oil’s breach of contract, but not limited to the early termination fee amounting to USD19.2 million.
Initially, both parties signed a drilling contract in September 2014, with UMW-OG to provide a drilling unit, UMW Naga 7, and other related services to drill, deepen, side-track, work-over, re-enter, tieback, and any other such operations on a well. The services will be rendered by UMW-OG until the completion of each well as a producing well or have each well suspended, plugged, and/or abandoned.
In return for these services, Frontier Oil was to arrange the issuance of a bank guarantee of USD5 million and an advance payment of USD15 million before the deadline on 15 December 2014. However, Frontier Oil did not arrange for the bank guarantee and the advance payment despite constant reminders from UMW-OG.
Thus, UMW-OG has taken legal action against Frontier Oil for the breach of contract. As stated under the contract’s term, any breach, termination, or validity thereof shall be settled by final and binding arbitration in accordance with the Singapore International Arbitration Centre (SIAC). Therefore, one arbitrator will be appointed by the chairman of SIAC, and that the place of arbitration will be Singapore and the award shall be deemed to be a Singapore Award.
This post was sourced from IHS Maritime 360: View the original article here.
