COSL, Statoil Reach Settlement on Dispute Over Stand-by Fees for 2 Semisubs
China Oilfield Services Limited (COSL or the Group), announced that it has reached a settlement agreement with Statoil ASA (Statoil) concerning a dispute related to stand-by fees of operating platforms.
Prior to this, there were disputes between COSL Offshore Management AS (COM), a Norway-based subsidiary of COSL and Statoil Petroleum AS, a subsidiary of Statoil, regarding stand-by fees of two semisubmersible platforms stemming from the installation of third-party equipment. COM filed a lawsuit with Norway Stavanger District Court in 2013 against Statoil Petroleum AS, claiming a compensation sum aggregating approximately $149 million (CNY 924 million) equivalent and overdue interest. Upon acceptance by the Court as a case eligible for further proceedings and after going through the inquisitorial procedures, the two parties conducted settlement negotiations at time and according to procedures specified by the Court. Statoil Petroleum AS recently agreed to a one-off settlement sum of $65 million payable to COM (about CNY 404 million) to release both parties from the previous disputes. After taking into account the ongoing business relationship between the two companies, also considering potential litigation costs, and uncertainties and risks of the final outcome, COSL has agreed to the terms of settlement, and has undertaken to withdraw the lawsuit against Statoil from the Norway Stavanger District Court. The settlement sum will be recognized as revenue for the current period.
COSL's three semisubmersible platforms that are currently provides drilling services to Statoil are operating as usual, and have achieved excellent results from work already delivered, gaining outstanding recognition from the client.
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