A dispute between Tap Oil and one of its substantial shareholders has escalated after the operator of the company’s flagship Manora oil development served joint operator Northern Gulf Petroleum with a $35 million default notice.
Tap said Northern Gulf was served the notice by Mubadala Petroleum because it failed to comply with a joint operating agreement by not paying its 10 per cent participating interest share of expenses at the Manora project.
Northern Gulf is controlled by Chatchai Yenbamroong, a Thai entrepreneur who owns 19.9 per cent of Tap’s shares and recently proposed a shake-up of the company’s board.
If Northern Gulf refuses to pay the outstanding expenses, it could lose its entitlement to attend and vote at operating committee meetings within five business days, have its proceeds from the sale of crude oil distributed to the project’s non-defaulting parties after 30 days, and have its stake in the project transferred to the non-defaulting parties after 60 days.
Meanwhile, Northern Gulf has demanded a reserves payment of $19 million from Tap for the Manora project; however Tap said the 2P reserves estimate for December 31 2014 had not yet been finalised by the joint venture.
“Tap considers there is no proper legal basis for Northern Gulf to make this demand,” the company said.
“There is no obligation on Tap to make the 2P reserves deferred payment until December 31 2014 reserves are finalised and agreed either through the joint venture process, or further reserves certification by an independent expert if required by either Tap or Northern Gulf.”
Earlier in the month, Mr Yenbamroong proposed to replace three existing directors of Tap with new nominees, meaning he would nominate 80 per cent of the board despite having only 19.9 per cent voting control.
That prompted the company to announce a strategic review process, which included either selling the business or offloading assets, including the Manora project.
Tap shares were unchanged at 27 cents per share at 10am.
