Petrobras Pays $700 Million to Drilling Firm Over Alleged Contract Breach

By Bowdeya Tweh

Petroleo Brasileiro SA has paid $700 million to an offshore drilling firm after an arbitrator determined the oil giant breached a contract and left invoices unpaid in connection with work performed in the Gulf of Mexico in 2015.

"We are very pleased with Petrobras's decision to make payment in satisfaction of the arbitration award and related U.S. judgment," said Ihab Toma, chief executive of Vantage Drilling International, in prepared remarks on Friday. "As always, we continue to focus on our business, and on providing the best service to our clients."

The dispute developed after Petrobras ended a drilling-services agreement with Vantage for the Titanium Explorer in 2015.

In July 2018, an international arbitration panel awarded Vantage and a subsidiary $622 million in damages plus interest. A Houston federal court judge confirmed the arbitration award in May.

Petrobras said Friday it has appealed the decision in Houston federal court upholding the arbitration award and that it will "continue to take all measures to defend its interests."

Petrobras previously recorded a provision in connection with the matter in the fourth quarter of 2018.

Write to Bowdeya Tweh at [e-mail]

(END) Dow Jones Newswires

June 21, 2019 20:24 ET (00:24 GMT)

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