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Kosmos Energy wins rig fees arbitration against Tullow Oil

The dispute centred around a rig contract which was broken in late 2016

oil and gas operations
Kosmos will not have to pay US$50.8mln and it will be refunded US$14mln

Tullow Oil PLC (LON:TLW) and Kosmos Energy Ltd (LON:KOS, NYSE:KOS) have announced the outcome of an arbitration process, which results in the latter avoiding a US$50.8mln bill.

It comes after Tullow ended on the wrong side of a separate dispute, earlier this month with the English courts, which awarded in favour of rig contractor Seadrill.

READ: Tullow Oil ordered to pay Seadrill by court

On July 3, the court ordered some US$254mln of fees to be payable to Seadrill – at that time Tullow said it expected its share would amount to US$140mln and that it had already made a US$128mln provision in its accounts in relation to the matter.

Tullow’s partner Kosmos, meanwhile, disputed its liability.

Now, the arbitration tribunal awarded in favour of Kosmos, finding that the company would not be required to fund Kosmos' portion of Tullow's liability to Seadrill, estimated at US$50.8mln, and, additionally it will be reimbursed US$14mln of payments made to Tullow under protest.

Quick facts: Kosmos Energy Ltd

Price: 204 GBX

LSE:KOS
Market: LSE
Market Cap: £11.39 m
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