Tullow Oil, a U.K. explorer operating mostly in Africa, has suspended work at a project off Guinea following the start of an investigation into its partner, Hyperdynamics Corp. A U.S. probe into Hyperdynamics means Tullow, which had planned to start drilling a deepwater well by April 1 this year, is unable to meet its contractual obligations. The company spokesman said Tullow “cannot proceed with its activities on the license until these issues are resolved.”
The U.S. Department of Justice and the U.S. Securities and Exchange Commission are probing Houston-based Hyperdynamics over the acquisition and retention of exploration rights in Guinea. Since last year the U.S. also has been examining how iron-mining rights were awarded in the West African nation’s Simandou area.
Tullow, the operator of the oil and gas project, joined the concession in 2012 by acquiring 40 percent from Hyperdynamics, which now has 37 percent. The London-based company agreed to pay $27 million in cash to Hyperdynamics to cover past costs and as much as $200 million for future expenses, it said at the time. Korea National Oil Corp.’s Dana Petroleum unit also is a partner in the venture.
Tullow’s exit from its contractual arrangements, declaring what’s known as ‘force majeure’, follows a February 7 filing from Hyperdynamics, which said it may be subject to fines and “civil and criminal penalties” if violations of the Foreign Corrupt Practices Act are uncovered.
“We have retained legal counsel to represent us in these matters, initiated an internal investigation, and we are cooperating fully with the government,” Hyperdynamics said at the time.
Read the original at Bloomberg: http://www.bloomberg.com/news/2014-03-12/tullow-suspends-work-off-guinea-as-partner-investigated-by-u-s-.html