Oslo court orders Statoil to pay $490m to COSL for cancelling rig contract
A court has ruled in favour of China Oilfield Services, finding Statoil's termination of drilling contract was unlawful.
China Oilfield Services Ltd, a subsidiary of state-owned China National Offshore Oil Corp, has won a suit against Norway’s Statoil Petroleum in a drilling contract dispute. Statoil terminated a contract with COSL Offshore Management, a unit of COSL, after the rig COSL Innovator was hit by an abnormal wave during a storm in the Troll field off Norway at the end of 2015. The Oslo City Court handling the civil action filed by COM, ruled in favour of the COSL said in an exchange filing that the court found that 'Statoil’s termination of the contract was unlawful, that the rig was built in accordance with all applicable rules and regulations, and that COM consequently followed its contractual obligations under the contract.'
Not final and binding
Statoil, which had refused the pay, was accordingly ordered to pay COM the cancellation fee under the contract. Though not disclosed, a Norwegian business newspaper Dagens Naeringsliv, based on its own calculation, estimated Statoil may need to pay COSL NKr4bn ($493.3m). However, the court decision may be appealed by either party within one month of the verdict. COSL stated the decision is thus not final and binding, and the 'impact of this decision on profits of current period or future profits of the company depends on the progress and the implementation of the judgment.' COSL is experiencing losses under sluggish market conditions in offshore drilling.