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Integrated Annual Report 2012
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Grupa LOTOS S.A. - Integrated Annual Report 2012

38. Material events subsequent to the balance-sheet date

  • On March 12th 2013, Talisman Energy Norge AS (the YME field operator) and Single Buoy Moorings Inc. (SBM, owner of the platform) announced that an agreement was reached to terminate all existing contracts and agreements executed by the parties in connection with the YME project and remove the platform from the YME field.  Under the agreement, SBM paid joint venture partners an amount of USD 470m. Acting on behalf of the licence holders, Talisman Energy Norge AS agreed to make all the necessary preparations and remove the rig from the field. SBM Offshore will be responsible for transporting and scrapping the rig onshore. At the same time, ownership of the subsea structure installed on the YME field will be transferred to the joint venture partners. The structure was supplied by SBM and the company has an obligation to disassemble it and reclaim the drilling site upon completion of work. The parties will cover the costs of decommissioning work as set out in the agreement. The settlement has been approved by all partners in the YME licence, including LOTOS Exploration and Production Norge AS. The settlement includes a note announcing termination of all arbitration proceedings between SBM and Talisman Energy Norge AS. For more information, see Note 36.1.
  • On March 11th 2013, LOTOS Petrobaltic SA received the final pre-court payment notice for approximately GPB 6.5m from AGR Subsea Ltd. (“AGR”). The claim concerns AGR’s remuneration for performance of an agreement to unearth the legs of the Baltic Beta platform. LOTOS Petrobaltic SA questioned the figure quoted by AGR as remuneration for services. In the course of negotiations, LOTOS Petrobaltic SA has proposed to pay PLN 16m (GBP 3.2m translated at the mid-exchange rate quoted by the National Bank of Poland for December 31st 2012) to AGR under the claim. AGR Subsea Ltd. did not accept the settlement and sent a payment notice to LOTOS Petrobaltic SA. The dispute between the parties concerns the nature of the contract, the reasons behind its delayed and incomplete performance, as well as whether LOTOS Petrobaltic SA had grounds to terminate the contract and demand reimbursement of costs incurred for replacement contractors hired by LOTOS Petrobaltic SA to complete the work.  Given the complex nature of the dispute, LOTOS Petrobaltic SA recognises the risk arising in relation to court proceedings, as in case of an unfavourable verdict, LOTOS Petrobaltic SA may have to incur additional expenses related to court proceedings, including costs of legal representation and costs of enforcement proceedings. As at December 31st 2012, the Group recognises a liability of PLN 16m (GBP 3.2m translated at the mid-exchange rate quoted by the National Bank of Poland for December 31st 2012) towards AGR Subsea Ltd. for unearthing the legs of the Baltic Beta platform.


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