Malaysia's MISC Berhad has won its battle in court against supermajor Shell over contractual disputes concerning the construction and lease of the Gumusut-Kakap semi-floating production system (Semi-FPS), offshore Malaysia that was filed last year.
|Image of Gumusut-Kakap platform, from Shell.|
MISC unit Gumusut-Kakap Ltd. (GKL) was awarded US$254.4 million by the Kuala Lumpur Regional Centre for Arbitration from its adjudication claim against Sabah Shell, MISC said in a Bursa Malaysia filing.
The amount will be paid as increased day rates under the 9 November 2012 lease agreement between GKL and Sabah Shell for the construction and leasing of the Gumusut-Kakap Semi-FPS used for the production of crude oil.
Additionally, GKL was also awarded applicable interest, and costs of nearly $70,000.
MISC had filed arbitration proceeding against Sabah Shell on 30 September 2016, seeking resolution of contractual disputes covering claims for outstanding additional lease rates, payment for completed variation works and other associated costs.
“This adjudication decision is expected to have a positive impact on the earnings per share, gearing and net assets per share of MISC for the financial year ending 31 December 2017 onwards,” MISC said.
Gumusut-Kakap is Shell’s first deepwater project in Malaysia located in waters up to 1200m deep. With an annual peak oil production of around 148,000 b/d, the platform contributes up to 25% of Malaysia’s oil production.
It is a joint venture between Shell (33%, operator), ConocoPhillips Sabah (33%), PETRONAS Carigali (20%), Murphy Sabah Oil (14%).