Oilex Ltd Update on Cambay Joint Venture (5848U)
April 01 2019 - 1:00AM
UK Regulatory
TIDMOEX
RNS Number : 5848U
Oilex Ltd
01 April 2019
ASX Announcement
31 March 2019
ASX: OEX
AIM: OEX
Update on Cambay Joint Venture
Further to previous announcements, Oilex confirms that it is
continuing to pursue resolution of its dispute with Gujurat State
Petroleum Corporation (GSPC). The resolution of dispute is
essential to potential development of Cambay and the recovery of
the funds owed by GSPC for the joint venture activity at
Cambay.
On 29 November 2018, the Company announced that it was in
discussions with GSPC and the Government of India (GoI) to seek a
commercial resolution to avoid arbitration and if possible, allow a
drilling programme at Cambay to proceed. During the subsequent
period, the Company has actively engaged with key stakeholders,
including GSPC, with a view to resolving the dispute incorporating
a clear path forward for the potential development of Cambay.
Oilex has worked tirelessly in seeking a resolution and in
recent months has submitted several proposals to GSPC for
consideration, with the most recent draft proposal tabled on 20
March 2019. This is currently under active consideration by
GSPC.
The negotiations have been challenging given the commercial
drivers for all parties and the regulatory and administrative
imposts, including GSPCs internal financial constraints, and, at
this time, a conclusion has not been reached, although discussions
continue.
Parallel to the discussions referenced above, Oilex and GSPC
have been working to resolve unpaid past cash calls. In the event
that an agreement on the current proposal cannot be achieved in the
very near future, including the unpaid cash calls, the Company
intends to fully enforce its rights under the Cambay Joint
Operating Agreement (JOA).
The Directorate General of Hydrocarbons (DGH) and Ministry of
Petroleum and Natural Gas (MoPNG) are actively monitoring the
progress of the Event of Default (EoD) dispute and are supportive
of the present negotiations. Furthermore, GSPC is reportedly under
pressure to meet obligations in several of its joint ventures.
Commencement of GSPC Sale Process
More recently, it is Oilex's understanding that the State
Government of Gujarat and the GSPC board of directors' have
approved a sales process for a number of its local Indian joint
venture participating interests. At present, Cambay is not formally
part of this sale process, however, GSPC have indicated their
willingness to divest their interest. Pursuant to the Cambay and
Bhandut JOAs, Oilex holds pre-emptive rights to acquire GSPC's
interests in both assets.
Background
By way of background, on 29 May 2018, the Company issued an EoD
Notice to GSPC in accordance with the JOA for the equivalent amount
of US$3,054,832. The EoD Notice was issued as a result of GSPC's
ongoing failure to pay its participating interest (PI) share of
Cambay PSC expenses. GSPC failed to remedy its default within 60
days and, in accordance with the JOA, Oilex formally requested the
DGH and the MoPNG in India to transfer GSPC's PI in the Cambay PSC
to the Company. This was announced by Oilex on 30 July 2018.
On 13 August 2018, GSPC served an ex-parte interim stay order
(IAAP No. 130 of 2018) from the High Court of Gujarat (Court)
directing the Company not to take any coercive steps against GSPC
(Order) with regard to the EoD Notice. As disclosed in the
announcement of 13 August 2018, the Order was awarded on an interim
basis to delay the transfer of GSPC's PI in the Cambay PSC to
Oilex.
Following various hearings in the Court, on 5 November 2018, the
Company announced that that the Court had decided on all
applications pending regarding the Order obtained by GSPC. The
Court issued and passed judgement further delaying the
implementation of the EoD Notice and Notice of Withdrawal of
Participating Interest dated 29 July 2018, subject to certain
conditions. The conditions were subsequently attained by GSPC,
including the requirement to commence arbitration proceedings. It
is important to note that in practice, the transfer of the PI is
currently subject to vacation of the Order.
As required by the order of the Court on 19 November 2018, GSPC
had invoked the dispute resolution provisions of the JOA and
commenced arbitration proceedings through the Singapore
International Arbitration Centre (SIAC). The arbitration
proceedings have been temporarily deferred while dispute resolution
with GSPC has been ongoing.
The Order also requires that GSPC performs its duties and
obligations under the JOA and Oilex continues to work to ensure
that this occurs. In the case that it does not, Oilex will
vigorously pursue its legal rights.
For and on behalf of Oilex Ltd
Joe Salomon
Managing Director
For further information, please contact:
Investor AIM Broker AIM Nominated Media Enquires Media Enquiries
Enquiries Cornhill Capital Adviser (UK) (Aus)
Oilex Ltd Limited Strand Hanson Vigo Communications Citadel-MAGNUS
Joe Salomon Broker Limited Public Relations Michael Weir
Managing Daniel Gee Nominated Adviser Patrick Email:
Director Email: Rory Murphy/Ritchie d'Ancona/Chris mweir@citadelmagnus.
Email: danielg@cornhillcapital. Balmer McMahon com
oilex@oilex.com.au com Email: Email: Tel: +618
Tel: +61 oilex@strandhanson.c patrick.dancona@vigo 6160 4900
8 9485 3200 Tel: +44 20 o.uk comms.com Australia
Australia 3700 2500 Tel: +44 20 chris.mcmahon@vigoco
UK 7409 3494 mms.com
UK Tel:+ 44 20 7390
0230
UK
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END
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