Daewoo Shipbuilding & Marine Engineering (DSME) said on Aug. 5 that it has filed an arbitration request with the International Chamber of Commerce (ICC) regarding a claim for damages from INPEX, Japan’s largest oil and gas exploration and production company.

The Japanese company demanded damages worth US$970 million regarding the floating production storage and offloading (FPSO) built and installed by DSME in the waters off Australia in 2017.

INPEX claimed that production was delayed at the FPSO due to defects of the facilities.

DSME signed a contract on the FPSO in March 2012. After about five years of construction, DSME shipped the facility in July 2017. In June 2019, the facility was delivered after preparations for production in Australia, and is currently producing LNG, LPG and condensate.

“Most of INPEX’s claims do not hold water and the amount of the damages is excessive,” DSME said. “The facility was ready for departure at Okpo Shipyard within the completion date required in the contract. Additional costs related to changes in contract details that occurred during the execution of the contract were also approved by INPEX, so we received the payment. The claims filed by INPEX are matters beyond the scope of DSME’s responsibilities under the contract,”

“We will actively respond to arbitration procedures to minimize financial impacts on our company and receive the remaining contract money. We will make steady efforts to commercially settle this matter,” it added.

Source: Business Korea