Providence Resources, the oil explorer led by Tony O'Reilly jnr, has said it received a positive ruling in a course case between it and Transocean, the provider of a drilling unit that drilled the Barryroe well in 2011.
Transocean had claimed that it was owed $19 million by Providence for the use of the drilling unit. Providence counter claimed against the company and on Friday last, Justice Popplewell ruled in the Commercial Court in London that Transocean was in breach of contract and that Providence did not have to pay the $19 million.
The ruling also supported Providence’s position that it was entitled to certain spread costs which arose as a consequence of the delays related to fixing equipment.
The final payment, including legal fees, will now be negotiated between the parties.
In the published ruling, the Hon. Mr Justice Popplewell found that Transocean was in breach of contract for failing to maintain various parts of its sub-sea equipment and that Transocean was not, therefore, entitled to the amount claimed against Providence. The ruling also supported Providence's position that Providence were entitled to set off certain spread costs against Transocean's claim.
The judgment paves the way for the two sides to reach a final agreement on costs, including legal fees, which Providence said it will apply to recover.
“Whilst we never wanted to go to court in the first instance, this ruling clearly vindicates our decision to defend ourselves against Transocean’s claim. The judgment confirmed our original position that we should not have to pay Transocean for those periods when the rig was not fit for purpose, due to breaches of contract arising from Transocean’s failure to carry out maintenance on safety critical parts of its sub-sea equipment,” said Tony O’Reilly jnr in a statement.
Providence said in August that the process of process of finding a farm-out partner for the Barryroe oil field off the coast of Cork was "nearing completion".
The group said the Irish oil and gas firm was in advanced negotiations for the farm-out process, which involves bringing in a suitably qualified partner to advance the project from development to first oil.
Providence owns 80 per cent of the Barryroe project, alongside partner Lansdowne Oil & Gas, which has the other 20 per cent.
