17th Oct 2018 11:01
LONDON (Alliance News) - Oilex Ltd said Wednesday a payment dispute over the ending of a production sharing contract is to go to the International Chamber of Commerce in Singapore.
In 2006, Oilex entered a joint venture into the contract with the Timor Sea Designated Authority in the country of Timor-Leste, or East Timor.
In 2013, the joint venture partners submitted to the country's Autoridade Nacional do Petroleos e Minerais to end the contract, without penalty, "in accordance with the production sharing contract terms".
However, Timor-Leste in 2015 agreed to end it but with a demand for USD17.0 million of payment related to exploration activity not undertaken in 2013.
Oilex said the joint venture believes the government has not fairly assessed how much work has been carried out, and feels no payment is applicable.
Oilex said no timeframe for the ICC hearing has been set, but it does not expect a decision until 2020.
Managing Director Joe Salomon said: "It is disappointing the ANPM has elected to pursue arbitration at this point. The joint venture had previously and will continue to negotiate in good faith, with previous offers to settle the matter being generous."
Oilex shares were 3.1% lower on Wednesday at a price of 0.19 pence each.
Related Shares:
OEX.L