In a statement released yesterday, Clough CEO David Singleton indicated that Origin was continuing to take an adversarial stance and was not prepared to negotiate a settlement.
Clough said Origin executive John Piper met with Clough CEO David Singleton on day 21 of the three week mediation window, but apparently had no decision-making authority or mandate from the partners he was supposed to be representing.
“Clough remains ready to talk openly and directly with Origin and its joint venture partners to sensibly tackle the issues related to the BassGas project and achieve a negotiated settlement of the matters,” Singleton said.
“However, regrettably, Origin remains apparently unwilling at this time to avert the need for costly and protracted legal processes to achieve a resolution.”
Clough is also maintaining it has fulfilled its contractual obligations.
“It is now over a month since Clough submitted a certificate issued by Lloyds of London certifying the offshore facilities were contractually Ready For Start Up [RFSU],” Clough said.
“The entire facility – both onshore and offshore – is ready for the introduction of hydrocarbons and has been for some time. Clough maintains that the only issue preventing the introduction of hydrocarbons is the contamination of the gas. Nevertheless, Origin maintains that it is entitled to continue to levy liquidated damages on a daily basis for what it claims is failure to achieve [RFSU]”.
Origin told EnergyReview.Net it was not prepared to argue its case through the media and referred to its ASX statements of 3 December.
In those statements, Origin said the third-party assessment initiated by Clough “did not cover all of the work required to be completed under the contract to ensure that RFSU was achieved.”
Origin also said that impurities such as mercury had forced “minor modifications” to the offshore facilities and the installation of some additional equipment at the onshore plant.
Perhaps the arbitrator will be able to get to the bottom of these issues.
In Clough’s most recent statement, the company announced an arbitrator had been appointed. Professor John Uff QC of Keating Chambers, London – who is experienced in construction disputes and arbitrations – will preside over the first directions hearing in Melbourne early next year.
Clough also said that Origin had chosen not to participate in the initial 21-day executive negotiation period.
“On the final day, Origin’s executive general manager, oil and gas production, John Piper, met with David Singleton, CEO and managing director, Clough Limited, but expressly said that he had no authority to represent the BassGas Joint Venture, nor to make or accept any proposals,” Clough said.
“Mr Piper suggested that following the meeting the joint venture might see an extension of the executive negotiation period, but they have not done so.”
Clough says it has also applied to the Federal Court for an injunction seeking restoration of the bond that has been called by Origin, as well as protection of the second bond.
Origin gave the court an undertaking it would not call on the second bond without giving seven days notice. The matter will go before the Federal Court on 28 January next year.
