Panoro Energy has initiated legal proceedings and intends to initiate arbitration following a disagreement with its joint venture partners in license OML 113 off Nigeria, which contains the Aje field, regarding a cash call default notice.
On December 2, 2016, Panoro informed of its intention to initiate arbitration and legal proceedings against its joint venture partners in OML 113 license.
These plans were made following a reception of a default notice from the Technical Advisor on behalf of the operator of OML 113 in relation to a disputed cash call that Panoro believed to be invalid due to an incorrect application of Joint Operating Agreement (JOA) provisions.
The company, through its fully owned subsidiary, Pan Petroleum Aje Limited (PPAL), holds 6.502% participation interest in OML 113. The partners in the license are the Nigerian oil company Yinka Folawiyo Petroleum, the operator, New Age, Energy Equity Resources, and Jacka Resources.
According to Panoro’s statement on Monday, the Commercial Court division of the High Court in London heard PPAL’s pleading on December 2, 2016 to seek an interim injunction in order to prevent the other joint venture partners from exercising any purported rights under the default provisions of the OML 113 JOA.
The court order has been received whereby PPAL has been granted an interim injunction. The other joint venture partners are now temporarily restricted from taking any action under the default provisions of the JOA that would prevent PPAL’s continued participation in the JOA and OML 113, Panoro said.
The company also said that the interim relief available is subject to PPAL starting dispute resolution proceedings in accordance with the JOA by filing a request for arbitration with the Secretariat of the International Chamber of Commerce on or before December 5, 2016. The company intends to file for arbitration proceedings by this deadline. Under the terms of the court order, PPAL is also required to provide a customary bank guarantee to the benefit of the respondents.
Panoro added it will seek to recover all losses, costs, expenses, compensation and damages in law and equity caused directly or indirectly by the joint venture partners’ breach of their contractual and equitable obligations.