Offshore staff
WILTSHIRE, England — Italy will have to pay EUR 190 million (US$189.3 million) to the oil and gas company Rockhopper Exploration for breaching its obligations related to the company's Ombrina Mare Field in the Adriatic Sea.
Rockhopper Exploration, which has key assets in the North Falkland Basin, provided an update Aug. 24 on its ICSID arbitration with the Republic of Italy:
- Successful arbitration award;
- Compensation of EUR 190 million; and
- Plus interest at EURIBOR + 4%, compounded annually from Jan. 29, 2016 until time of payment.
The arbitration panel unanimously held that Italy had breached its obligations under the Energy Charter Treaty entitling Rockhopper to compensation. The award is final and binding on the parties. Italy has 120 days to apply for an annulment of the award, which can only be annulled in limited circumstances. Under a legal agreement with the Falkland Island Government, Rockhopper is prevented from making any form of distribution.
All costs associated with the arbitration were funded on a non-recourse (“no win – no fee”) basis from a specialist arbitration funder. After payments due to the arbitration funder, Rockhopper expects to retain about 80% of the award (assuming full recovery of the award). Further analysis is required to establish the tax treatment on any payments related to the award.
Rockhopper CEO Samuel Moody said, ‘We are delighted to have won our case. A huge amount of work has been involved since we acquired Mediterranean Oil & Gas Plc in 2014 and commenced the arbitration in 2017. I would like to pay tribute to our team for their dedication over such a long period. We will update the market in due course once we have been able to analyze fully the results of the arbitration and its full, very positive financial implications for Rockhopper. This positive milestone builds on our recent transaction with Navitas, and while work still needs to be done on Sea Lion, we believe after collection of the award, it will make a material contribution towards our share of the development costs."
08.24.2022
