Petrobras pays $700mn to Vantage Drilling on premature contract termination

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Petrobras pays $700mn to Vantage Drilling on premature contract termination

On Friday, the 21st of June 2019, the Brazilian state-owned oil company, Petróleo Brasileiro SA, or simply known as Petrobras said that the Rio Di Janeiro-based company had paid off a lump-sum of $700 million to a Texas-based oil service provider, Vantage Drilling Company over premature breaking off of a contract.

Besides, the Petrobras said at a security filing on Friday (June 21st) that the state-controlled oil company had made the decision of paying off Vantage Drilling following a ruling on a district court of Texas, when the US district court had denied the Brazilian oil giant’s request to reverse outcomes on an earlier courtroom battle in Holland, opened by the Vantage Drilling after Petrobras had suspended a drilling contract prematurely back in the 2015s.

However, during the earlier arbitration on Holland, Petrobras had claimed that the contract had been awarded to the US-based drilling company “by way of corruption”, citing findings provided by the Brazil’s Operation Car Wash anti-corruption investigation.

Nonetheless, Vantage Drilling had denied the allegations, adding that the Brazilian oil company had wrongfully terminated its contract. Following an earlier dispute between Vantage Drilling and Petrobras, the US-based oil driller had filed a lawsuit against Petrobras in Holland, which went in favor of Vantage Drilling, and following the hearing, Petrobras had appealed against the verdict at a district court in Texas, which also went in favor of Vantage Drilling.

After four years of courtroom battle, Petrobras had finally agreed to pay a premature contract termination fee of $700 million on last Friday (June 21st) as beforementioned.