MISC unit Gumusut-Kakap Ltd (GKL) has won its adjudication claim against Sabah Shell.
Kuala Lumpur Regional Centre for Arbitration awarded MISC $254.4million in its ruling.
MISC had filed an arbitration proceeding against Sabah Shell in September last year. The firm sought resolution of contractual disputes covering claims for outstanding additional lease rates, payment for completed variation works and other associated costs.
“This adjudication decision is expected to have a positive impact on the earnings per share, gearing and net assets per share of MISC for the financial year ending 31 December 2017 onwards,” MISC said.
The $254million will be paid as increased day rates under the pair’s lease agreement for the construction and leasing of the Gumusut-Kakap semi-floating production system used for the production of crude oil.
Gumusut-Kakap is Shell’s first deepwater project in Malaysia located in waters up to 1200m deep. It has an annual peak oil production of around 148,000 bpd and contributes up to 25% of Malaysia’s oil production.
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