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Wednesday, 14 August 2019

Arbitration court rules against Nostra Terra in Egypt oil payments dispute

DISPUTE WATCH- Arbitration court rules against Nostra Terra in Egypt oil payments dispute: Nostra Terra Oil & Gas has been found in default of the joint operating agreement (JOA) governing its East Ghazalat joint venture in Egypt with North Petroleum International, the company said on Monday. The London Court of International Arbitration ruled against the UK-based oil and gas company, finding subsidiary Nostra Terra Inc. in default for the non-payment of November and December 2015 cash calls to North Petroleum of around USD 1.06 mn, along with an estimated USD 125k in interest. The company’s failure to make the payments could result in the transfer of Nostra Terra’s 50% stake in the East Ghazalat concession to North Petroleum. Nostra Terra has described the concession as “non-core” to its operations. The company is considering seeking damages from North Petroleum for allegedly breaching the JOA.

Background: The case was referred to the London Court of International Arbitration in April, at which time we reported that Nostra Terra was hoping to reach a settlement with North Petroleum International. Nostra Terra’s subsidiary Sahara Resources has held a 50% non-operating interest in the East Ghazalat concession since June 2017, when Nostra Terra acquired Echo Energy’s 25% stake in the concession for USD 500k.

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