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EnQuest ordered to pay Malaysian contractor £12.7m

UK-listed EnQuest (LON:ENQ) has been ordered to pay 71.6million RM (£12.7million) in a dispute with a Malaysian contractor over offshore works.

UK-listed EnQuest (LON:ENQ) has been ordered to pay 71.6million RM (£12.7million) in a dispute with a Malaysian contractor over offshore works.

Barakah Offshore Petroleum launched an adjudication process against EnQuest last year over a maintenance contract awarded in 2018 for oil and gas fields in the Malaysian Peninsula.

The company said it was calming an outstanding sum for work up until the year 2020 for the five-year contract.

In a statement issued this week, Barakah said its legal team had been informed that an adjudicator has delivered a decision in favour of its claim, ordering EnQuest to pay the £12.7million.

EnQuest has been contacted for comment.

If the operator fails to pay then it is subject to an interest rate of 5% per year from the due date of January 28, the Barakah statement added.

It also noted, however, that the adjudication decision is subject to further legal proceedings.

“Therefore, the company will make the appropriate announcements to Bursa Malaysia as and when there are material developments in relation thereof”, it added.

EnQuest is a predominantly UK-focussed oil and gas operator but holds a pair of operated production licenses in Malaysia.

The Malaysian assets include the PM8/Seligi fields, acquired from ExxonMobil in 2014, and the nearby PM409 block which holds “several undeveloped discoveries” with tie-back potential.

In its latest trading update, issued in November, EnQuest said Malaysian production totaled 5,078 barrels of oil equivalent per day in the year to October 31, down nearly 29% on the same period in 2020.

The firm’s UK production meanwhile totaled 39,228 boepd, down from 53,662 barrels per day.

At the time, EnQuest said production had been challenged by an unplanned shutdown at Kraken in the UK North Sea and a supplier-driven delay in Malaysia.

Culled: energyvoice