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BP looking to recover over $530m in damages from McDermott

Royal IHC

Posted on February 28, 2024

Energy supermajor BP has started legal action against US subsea and deepwater engineering and construction player McDermott, seeking damages for failing to fulfil its contractual obligations on the Greater Tortue Ahmeyim (GTA) project offshore Mauritania and Senegal.

Kosmos Energy, BP’s partner in the GTA project, revealed this information in its fourth quarter results and stated that unexpected subsea costs at the Tortue Phase 1 project necessitated the replacement of McDermott with Allseas for the installation of subsea pipelines.

Kosmos estimated its share of recoverable damages at up to $160m if the claim results in “maximum recoverable damages” which is what the partnership is going for. As per each shareholder’s stake, BP’s share in damages could go as high as $534m.

To put things more into context, McDermott and Baker Hughes won contracts from BP for subsea umbilicals, risers, flowlines, and subsea production system equipment for the GTA project in 2019.

McDermott was supposed to use its Amazon pipelayer, along with other vessels, to complete the project. The Houston-based firm stopped work on the GTA project over a payment dispute with BP.

BP called Allseas and its massive construction vessel Pioneering Spirit to the rescue as the Dutch firm was awarded the deal to complete the installation. Offshore construction support vessel Oceanic would also be used for the project.

The contract was for the installation of around 75km of two 16-inch export pipelines with field termination assemblies in water depths between 1,500 and 2,800 metres, and four 10-inch CRA infield lines in 2,800 metres of water.

Located on the maritime border between Mauritania and Senegal, GTA is being developed as a gas field with a 30-year production potential and the initial phase is expected to deliver approximately 2.5 mtpa of natural gas. GTA is estimated to contain more than 15 tcf of potentially recoverable gas resources.


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