Judge Favors Providence in Transocean Dispute
Irish oil and gas explorer Providence Resources confirmed Monday that it has won a case related to cost claims made against it by drilling firm Transocean Drilling UK after a ruling in the Commercial Court in London Friday.
The total claim amounted to approximately $19 million but the Commercial Court ruled that Transocean was in breach of contract for failing to maintain various parts of its subsea equipment and that it was not entitled to the amount claimed against Providence. Providence also noted that the ruling also supported its position that it was entitled to set off certain spread costs against Transocean's claim.
Providence said the judgment paves the way for both parties to finalize the account, including legal fees that Providence intends to recover.
Providence Chief Executive Tony O'Reilly commented in a company statement:
"Whilst we never wanted to go to court in the first instance, this ruling clearly vindicates our decision to defend ourselves against Transocean's claim. The judgment confirmed our original position that we should not have to pay Transocean for those periods when the rig was not fit for purpose, due to breaches of contract arising from Transocean's failure to carry out maintenance on safety critical parts of its sub-sea equipment.
"We are also delighted that the judge agreed with Providence that we should be allowed to set-off certain third party costs against Transocean's claim."
O'Reilly added that, following the handing down of the judgment Providence will look to settle the final account and will update the market when these details are confirmed.
The company also hopes to be in a position to update shareholders on its Barryroe farm-out process, while it plans to update the market soon on its Spanish Point well, where drilling is scheduled to commence in 2015.
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