China Oilfield Services Limited (COSL) announced that it has reached a settlement agreement with Statoil concerning a dispute related to stand-by fees of operating offshore drilling rigs.
More specifically, the dispute was between COSL Offshore Management AS (“COM”), a Norway-based subsidiary of COSL and Statoil Petroleum AS, a subsidiary of Statoil, regarding stand-by fees of two semi-submersible drilling rigs, stemming from the installation of third-party equipment, COSL has said.
COSL Offshore Management filed a lawsuit with Norway Stavanger District Court in 2013 against Statoil Petroleum AS, claiming a compensation sum aggregating approximately RMB924 million (USD 148 million) equivalent and overdue interest.
Upon acceptance by the Court as a case eligible for further proceedings and after going through the inquisitorial procedures, the two parties conducted settlement negotiations at the time and according to procedures specified by the Court.
Statoil Petroleum AS recently agreed to a one-off settlement sum of US$65 million payable to COSL Offshore Management (about RMB404 million) to release both parties from the previous disputes.
After taking into account the ongoing business relationship between the two companies, also considering potential litigation costs, and uncertainties and risks of the final outcome, COSL has agreed to the terms of the settlement, and has undertaken to withdraw the lawsuit against Statoil from the Norway Stavanger District Court. The settlement sum will be recognized as revenue for the current period.