Result of Arbitration Between Tullow Oil and Kosmos Energy

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.

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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.

Source: www.proactiveinvestors.com