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Court restrains Dolphin Drillings from breaking off rig deal with Nigerian oil & gas firm

Court restrains Dolphin Drillings from breaking off rig deal with Nigerian oil & gas firm
May 14
23:35 2024

A federal high court in Lagos has refused to vacate an order which restrained Dolphin Drillings Limited, an offshore drilling rig company, from taking away the Noble Blackford Dolphin rig in Nigeria.

The Noble Blackford Dolphin owned by Dolphin Drillings is drilling in the Oyo Field Complex on Oil Mining License (OMLs) 120 & 121 for General Hydrocarbons Limited (GHL), an indigenous offshore oil and gas company.

Akintayo Aluko, presiding judge, had on May 8, granted an ex-parte motion filed by GHL, restraining Dolphin Drillings from “removing, demobilizing, or decommissioning the Rig —Noble Blackford Dolphin” from GHL’s field. 

The court also restrained Dolphin Drillings from interfering with GHL’s rights under the contract for the use of the rig and with the respondents’ personnel involved in drilling operations on fields EWO-2 and 0Y0-8 (GHL’s field). 

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The court granted leave to GHL to serve the drilling company through Frank Fenton, the Rig manager.

However, the judge refused GHL’s prayer seeking an injunction directing the respondents to continue fulfilling contractual obligations.

At the resumed court session on Tuesday, Olasupo Shasore, counsel representing GHL, told the court that although the respondents served a motion to discharge the restraining order, only six out of 12 pages referenced in the motion were sent. He added that he did not receive the remaining copies until Tuesday.

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Apologising, counsel to the respondents, Olusina Shofola, told the court that he made the error in a rush to file the motion.

Aluko adjourned the court to May 20 to allow GHL file a response to the motion seeking to discharge the interim order.

The judge also fixed Wednesday, May 15, to deliberate and decide upon the appointment of a sole arbitrator for the dispute among the parties. 

BACKGROUND

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Dolphin Drillings secured the formal 12-month contract award with GHL in October 2022 for drilling operations in Nigeria. 

The rig began the drilling assignment in March 2023.

The offshore drilling contractor disclosed in November 2023 that GHL’s past due payments represented a net $17.3 million, along with a part payment from GHL and a proposed payment plan related to the remaining past due payments. 

In 2024, the company received two instalments.

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Earlier in March, Dolphin Drillings and GHL reached an agreement regarding past-due payments and the remaining work under the drilling contract for the rig, which was initially supposed to run until the end of March. 

Due to a failure to meet the next payment date, Dolphin Drillings announced the termination of its contract with GHL. 

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“The terms for payment under the agreement with GHL have not been met, and the company therefore confirms that it has, in accordance with the agreement, today issued a notice of termination to GHL. The company will now prepare the Blackford Dolphin for transit to India in the near term and intends to pursue the recovery of sums remaining due by GHL,” Dolphin Drilling wrote.

GHL CLAIMS DOLPHIN DRILLINGS ‘BREACHED TERMS’

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Contrary to claims by Dolphin Drilling that there are payment issues, GHL contends that the Blackford Dolphin rig was unserviceable for a prolonged period of time following the side letter agreement and required Dolphin Drilling to make good on its contractual obligations. 

“At the same time, GHL has provided Dolphin Drilling with comfort letters from reputable global financial institutions,” GHL said in a statement seen by TheCable.

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“Dolphin Drilling breached the terms of the side letter when its Blow-out Prevention (BOP) System failed a performance test. Dolphin Drilling then served a defective notice of termination and attempted to demobilise the Blackford Dolphin rig.”

GHL took Dolphin Drilling to court seeking for it to fulfil its contractual obligations, which it said were affected by technical challenges with its BOP system on the Blackford Dolphin rig.

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