Shell launches counter-attack in Malaysia platform case

Shell launches counter-attack in Malaysia platform case

Oil giant Shell has reportedly filed a counterclaim in a dispute over the
delivery of the Gumusut-Kakap semi-submersible production platform in
Malaysia.

To remind, Shell in February lost an arbitration in which MISC, the
Malaysian contractor that built the platform, sought "outstanding additional
lease rates, payment for completed variation works and other associated
costs under the Lease Agreement dated 9 November 2012."

Shell was ordered to pay $255 million, through additional lease rates under
the platform lease contract signed in November 2012. The platform has been
producing oil offshore Malaysia since 2014.

In a Bursa Malaysia filing on June 2, MISC said Shell had launched a counter
claim seeking $583 million.

According to MISC, Shell is counterclaiming against MISC for alleged
defective work, alleged limited functionality of the Gumusut-Kakap
Semi-Floating Production System, liquidated damages and a refund of the full
amount paid to MISC under the previous arbitration ruling.

MISC said it maintained its view on the strength of its claims against Shell
and will "rigorously resist and defend against" Shell's counterclaims during
the course of the arbitration proceedings.

Also, the company said the contract with Shell provides a limitation of
liability clause which limits total liability to Shell for any claims
arising from the contract to a maximum amount of $200 million.

The arbitration hearing has been fixed for February 25, 2019 to March 16,
2019 with the arbitration award expected to be issued around year 2020.

According to MISC, the arbitration proceedings will not have any impact on
the operation of the Semi-FPS or the performance of the contract, including
the lease payments which continue to be paid by Shell since October 2014.

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Link to Original Article:
http://www.offshoreenergytoday.com/shell-launches-counter-attack-in-malaysia
-platform-case/

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com