Taipan starts arbitration against Afren subsidiary
NAIROBI, Kenya -- Taipan Resources has started an arbitration action against East African Exploration (Kenya) Limited (EAX), a wholly owned subsidiary of Afren Plc.
This action was filed in response to certain breaches to the Joint Operating Agreement signed between EAX and Taipan’s Kenya-based subsidiary Lion Petroleum Corp. in respect of Block 1, Taipan said in a statement.
The Request for Arbitration was filed on behalf of Lion in accordance with Article 4 of the Rules of Arbitration of the International Chamber of Commerce.
In its Notice of Arbitration, Taipan claims that, among other things, EAX, as operator in Block 1, failed to 1) diligently pursue joint operations or meet minimum work obligations; 2) follow good and prudent petroleum industry practices followed by international petroleum industry operators under similar circumstances; 3) follow agreed contract award procedures; and 4) follow agreed accounting procedures.
Taipan is seeking not less than $10 million as restitution for the damages it has suffered as a result of EAX’s breaches of contract.
Taipan—through Lion—holds a 20% working interest in Block 1 (22,246 km2); EAX holds the remaining 80%.
EAX has a two-well commitment in the current exploration period in Block 1 ending Oct. 8, 2016.
