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Diamond in Ocean Valor victory

Written by  Thursday, 16 March 2017 13:32

Diamond Offshore has won its case in a Brazilian court against the state oil firm Petrobras regarding the early termination of the Ocean Valor semisubmersible.

Image of the Ocean BlackHawk, from Diamond Offshore. 

Yesterday (15 March), the presiding panel of appellate judges ruled unanimously against Petrobras’ appeal and upheld its injunction. As a result of the favorable ruling, the injunction and the Ocean Valor contract each remain in effect, and will continue until its original end date of October 2018, Diamond Offshore said in a Form 8-K filing.

Petrobras has the right to seek to appeal the ruling to the Superior Court of Justice.

According to Diamond’s fleet status report for February, the Ocean Valor is on a standby rate, with a status of pending litigation. The dayrate for the rig is US$455,000.

On 30 August, Petrobras sent Diamond Offshore subsidiary Diamond Offshore Drilling an early termination notice for the Ocean Valor. Diamond immediately fired back, denying the request, as the company said that it did not believe that Petrobras had a valid or lawful basis for terminating the contract.

On 31 August, Diamond Offshore Drilling filed a lawsuit against Petrobras in the 17th Lower Court of Rio de Janeiro Central District, claiming that Petrobras’ purported termination of the contract was unlawful and asking the court to order Petrobras to continue to comply with its obligations under the contract and to pay monetary damages for its unlawful termination.

On 13 September, the presiding judge in the case issued a preliminary injunction, suspending Petrobras’ termination of the contract and ordering that the contract remain in effect until the end of the contract term or further court order. As a result of the injunction, the contract remained in effect and was not terminated. On 4 October 4, Petrobras filed an appeal, requesting that the injunction order be overturned.

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