Brunei Shell Petroleum Seeks Damages in Arbitration Against Sapura Fabrication, Sapura Offshore

Sapura Energy said Monday that Brunei Shell Petroleum had issued notices of arbitration to its subsidiaries Sapura Fabrication and Sapura Offshore.

Brunei Shell Petroleum is seeking arbitration against Sapura Fabrication in relation to the Salman development.

Sapura Fabrication and Brunei Shell Petroleum entered into a contract on August 30, 2019, for engineering, procurement, construction, and installation works related to the Salman field development in Brunei.

Brunei Shell Petroleum had purported to terminate part of the contract for cause on March 13, 2023, for various alleged breaches of the contract by Sapura Fabrication.

Through arbitration, the oil company is seeking a declaration that it had validly terminated part of the Contract for cause; a declaration that Sapura Fabrication had breached certain provisions of the Contract; and award of monetary relief to the extent necessary to fully compensate Brunei Shell Petroleum for the damages suffered resulting from the breaches and termination event.

It is also seeking an order for indemnification of Brunei Shell Petroleum for all costs, expenses, and fees in the arbitration; and pre- and post-award interest.

Also, Brunei Shell Petroleum has filed a notice of arbitration against Sapura Offshore, over a contract the two companies entered into on February 29, 2020 for the fabrication transport, installation, and pre-commissioning of pipelines relating to the PRP-7 Pipeline Replacement Project.

According to Sapura Energy, Brunei Shell Petroleum then reduced the scope of the contract for cause on March 13, 2023, for alleged breaches of the contract by Sapura Offshore.

Similarly to the Salman project claim, Brunei Shell Petroleum is, through arbitration, seeking a declaration that it had validly reduced the scope of the contract for cause;  a declaration that Sapura Offshore had breached certain provisions of the contract; and an award of monetary relief to the extent necessary to fully compensate the Shell Brunei Petroleum for the damages suffered resulting from the breaches and termination event leading to the Shell Brunei Petroleum’s reduction of the scope of the contract for cause;

It is also seeking an order for indemnification of all costs, expenses, and fees in the arbitration, as well as pre- and post-award interest.

Sapura Energy’s subsidiaries are required to file their respective responses to Shell Brunei Petroleum’s claims by or before October 16, 2023.

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