EnQuest To Settle Contractor Dispute With $17M Payout
UK oil and gas company EnQuest must pay $17.2 million to settle a dispute with a contractor over work in Malaysia.
Barakah Offshore Petroleum said that it claimed an outstanding sum for work up until the year 2020 for a five-year contract.
The Malaysian contractor launched an adjudication process against EnQuest in 2021 over a contract awarded in 2018 for maintenance work on oil and gas fields in the Malaysian Peninsula.
In a Bursa Malaysia filing, Barakah stated that its legal team had been informed that an adjudicator decided to make a verdict in favor of Barakah Petroleum which meant that EnQuest had to pay the $17.2 million.
If EnQuest fails to pay, then it is subject to an interest rate of 5 percent per year from the due date of January 28, Barakah claimed in the statement. It must be said that the adjudication decision was subject to further legal proceedings.
“Therefore, the company will make the appropriate announcements to Bursa Malaysia as and when there are material developments in relation thereof”, Barakah said.
Although EnQuest is a UK-focused oil and gas company, it does hold two operated production licenses in Malaysia.
Its Malaysian assets include the PM8/Seligi fields which it acquired from ExxonMobil back in 2014 and the nearby PM409 block which, according to EnQuest, holds ‘several undeveloped discoveries with tie-back potential.’
Data provided by EnQuest in its latest updates claims that the company’s production in Malaysia totaled 5,078 barrels of oil equivalent per day in the previous year until October 31. That number is down almost a third from the same period in 2020.
The firm’s UK production is almost 8 times higher than in Malaysia but is also down by around 14,000 barrels per day. Production in both countries was affected by unplanned issues such as the shutdown of the Kraken field in the UK and the supplier delay in Malaysia.
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