BGP: Sues Kenya based UK oil company

 

 

 

BGP: Sues Kenya based UK oil company

A firm prospecting for oil and gas in Lamu is locked in a court battle with its sub-contractor over a Sh90 million debt.

BGP Kenya has taken Zarara Oil and Gas Limited to court for failing to settle $873,561 (about Sh90 million) payment for services offered. BGP claims that it was engaged by Zarara to undertake seismic surveys on blocks L4 and L13 but only part of its debt was settled.

Zarara has been prospecting for gas and oil in Pate island, Lamu East.

“The defendant has for a period of over four years neglected and or declined to fully settle its debt herein but has instead elected to shift goal posts and give the plaintiff empty promises on payment of the same despite having fully acknowledged the debt and confirmed the outstanding amount,” says Zhao Enhui, the BGP general manager.

BGP says it fears that Zarara might silently dispose of its interest in the two blocks and exit the country, arguing that in such a scenario it lacks recourse since the firm has no known assets in Kenya.

The firm wants the High Court to restrain Zarara from disposing of the two blocks until it settles the claim. Zarara is the main operator on the two blocks with a 75 per cent stake, while Swiss Oil Holdings controls 15 per cent with the remaining 10 per cent interest held by the Kenya government.

Zarara has, however, filed a separate application requesting the High Court to refer the dispute for arbitration.

The firm says their agreement provides for all disputes to be resolved through arbitration in accordance with the Rules of the London Court of International Arbitration.

Zarara further claims that the payment for the alleged services was disputed due to sub-standard work, adding that the firm has maliciously jeopardised its interests in the two blocks.

The firm denies allegations that it plans to dispose of the blocks, terming them unsubstantiated.

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