31st Dec 2010 07:00
31 December 2010
West Kampar Update
Oilex (West Kampar) Limited ("OWK"), a wholly owned subsidiary of Oilex Ltd, continues to seek resolution of disputes with Indonesian joint venture party and operator PT Sumatera Persada Energi ("SPE") in relation to the West Kampar Production Sharing Contract ("PSC").
OWK is pursuing the recovery of an amount in excess of US$4.6million owing pursuant to the Final Award made by the International Court of Arbitration of the ICC (International Chamber of Commerce) in favour of OWK in its claim against PT Asiabumi Petroleo (Asiabumi) for the recovery of the money owed to OWK. Asiabumi is the parent company of SPE. OWK commenced the ICC Arbitration against Asiabumi in Singapore in April 2009 following the failure of SPE in early 2009 to repay a debt owing to OWK under a previous agreement between OWK and SPE. SPE's obligations to repay the debt were secured by a parent company guarantee granted by Asiabumi to OWK in 2008.
OWK maintains that it is further entitled to have assigned an additional 22.5% to its 45% interest in the West Kampar PSC through the exercise of its rights under a Power of Attorney granted by SPE, arising out of the failure of SPE to repay the debt referred to above. The assignment has been provided to BPMigas but has not been approved or rejected.
SPE continues to allege that OWK no longer has an interest in the West Kampar PSC arising out of an alleged failure to perform obligations under the farm out agreement entered into by the parties in 2007. OWK denies those allegations and maintains that it holds its 45% interest in the West Kampar PSC. The Indonesian regulator, BPMIGAS has not transferred OWK's 45% participating interest to SPE despite requests from SPE. For over a year OWK has, despite requests, not been provided by SPE with any data relating to the West Kampar PSC operations.
OWK has now been notified of a claim by SPE in an Indonesian court in which SPE is seeking damages from OWK for alleged defamation arising out of correspondence in November 2008 that provided BPMigas (the Indonesian petroleum regulatory authority) with information relating to SPE's performance as operator. The claim is substantially the same as the claim which SPE commenced against OWK in early 2010 and which OWK was advised in October 2010 SPE had withdrawn (please refer to Oilex's previous announcements on 5 February 2010 & 29 October 2010). OWK rejects the allegations in the claim and will vigorously oppose the claim.
OWK will continue to take steps to protect its participating interest in the West Kampar PSC and to pursue enforcement of its Arbitration Award while remaining open to a commercial resolution to the dispute.
For further information, please contact:
Oilex Ltd +61 (0)8 9485 3200 (Western Australia) Bruce McCarthy Managing Director [email protected] Ben Clube, Finance Director
vendorRelated Shares:
OEX.L