UMW Commences Arbitration as Frontier Breaches UMW Naga 7 Contract

Malaysia's UMW Offshore Drilling Sdn Bhd (UOD), a unit of UMW Oil & Gas (UMW O&G) Group of companies, disclosed that the firm has served a Notice of Arbitration Tuesday with the Singapore International Arbitration Centre (SIAC) on Philippines' Frontier Oil Corp. for damages and/or compensation for all loses incurred from the latter's breach of contract, not limited to the early termination fee of $19.2 million.

Both companies had entered into a drilling contract September 15, 2014, with UOD agreeing to provide a jackup, UMW Naga 7 (375' ILC), and other related services, including "to drill, deepen, side-track, workover, re-enter, tieback and any other such operations on a well until completion of each well as a producing well or have each well suspended, plugged and or abandoned," UMW O&G said in a filing with stock exchange Bursa Malaysia.

UOD revealed that under the contract, Frontier was to have arranged for a $5 million bank guarantee and an advance payment of $15 million on or before Dec. 15, 2014, ahead of the early commencement date on Jan. 15.

"Despite repeated reminders, the respondent (Frontier) has failed to, refused to and/or neglected to arrange for the said Bank Guarantee and Advance Payment."

Under the contract, termination shall be settled by final and binding arbitration in accordance with the SIAC, before one arbitrator to be appointed by the Chairman of SIAC, and that the place of arbitration shall be Singapore.

UMW Naga 7 had been scheduled to drill in the first quarter of this year in Service Contract 50 offshore north west Palawan in the Philippines.



Have a news tip? Share it with Rigzone!
Email news@rigzone.com

WHAT DO YOU THINK?

Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Related Companies
For More Information on the Offshore Rig Fleet:
RigLogix can provide the information that you need about the offshore rig fleet, whether you need utilization and industry trends or detailed reports on future rig contracts. Subscribing to RigLogix will allow you to access dozens of prebuilt reports and build your own custom reports using hundreds of available data columns. For more information about a RigLogix subscription, visit www.riglogix.com.
Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE

More from this Author
Rigzone Staff
e-mail us at news@rigzone.com
 -  Petrofac Suspends Group Chief Operatin... (May 25)
 -  EnQuest On Track For Kraken First Oil ... (May 25)
 -  Energean Signs Lease Agreement for Exp... (May 25)
 -  Seadrill CEO Praises Workforce (May 24)
 -  Serinus Shuts-In Sabria Field Due to S... (May 23)


Most Popular Articles

From the Career Center
Jobs that may interest you
Dispatcher Level 1 and Level 2
Expertise: Logistics Management
Location: Denton
 
Equipment Operator - San Antonio
Expertise: Coil Tubing|Driller|Production Operator
Location: San Antonio, TX
 
Senior Land Professional Job
Expertise: Landman|Lease Analyst
Location: Oklahoma City, OK
 
search for more jobs

Brent Crude Oil : $51.46/BBL 4.63%
Light Crude Oil : $48.9/BBL 4.78%
Natural Gas : $3.18/MMBtu 0.90%
Updated in last 24 hours