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Murphy Sarawak Oil gets arbitration notice from THHE

28 May 2019 / 20:41 H.

PETALING JAYA: TH Heavy Engineering Bhd’s (THHE) wholly owned subsidiary THHE Fabricators Sdn Bhd (THF) has served a notice of arbitration on Murphy Sarawak Oil Company Limited claiming RM112.74 million in additional costs for an engineering, procurement, construction and commissioning (EPCC) contract.

The EPCC contract is in relation to the Permas Production Platform-A Topside for Murphy’s Sarawak SK311 Development Project. THF said the notice of arbitration was served on Murphy on Monday.

THF completed its obligations under the EPCC contract and effected the handover of the Permas Topside, achieving the offshore mechanical completion date stipulated by Murphy, on Dec 8, 2014.

On Nov 6, 2014 and on June 3, 2015, THF submitted change order proposals to Murphy setting out in detail and justifying the total additional costs incurred by THF.

These were a result of, among others, loss and expenses incurred due to major design changes and additional works that required massive reengineering works and significant increase in size, weight and complexity of the EPCC contract; prolongation of hookup and commissioning campaign work offshore caused by Murphy; and various field instructions issued by Murphy.

“Despite THF’s submission of the change order proposals to Murphy, no payments were forthcoming. Amicable attempts at resolving the disputes were also unsuccessful,“ the group said.

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