MISC wins US$254.45 million arbitration award

PETALING JAYA: MISC Bhd has been awarded US$254.45 million (RM1.13 billion) for the variation works undertaken by its wholly-owned subsidiary Gumusut-Kakap Semi-Floating Production System (L) Ltd (GKL) for Sabah Shell Petroleum Co Ltd.

Last September, MISC commenced arbitration proceedings against Sabah Shell to seek resolution on contractual disputes covering claims for outstanding additional lease rates, payment for completed variation works and other associated costs for the Gumusut-Kakap semi-floating production system.

In a filing with the stock exchange, MISC said the amount will be paid as increased day rates, pursuant to the terms of the lease agreement dated November 9, 2012 between GKL and Sabah Shell for the construction and lease of the Gumusut-Kakap semi-floating production system for the purposes of the production of crude oil.

The group said the adjudication decision is expected to have a positive impact on its earnings per share, gearing and net assets per share for the financial year ending Dec 31, 2017 onwards.