Fluor Corp. plans to make an appeal against the judgment of a court in Australia in which the oil and gas developer Santos Ltd. And the partner has to pay about $ 450 million, which is due to a long-term payment dispute in connection with the construction of the Gladstone LNG project in Queensland, which was put into operation in 2015.
The decision of the Supreme Court of Queensland announced by Santos on August 11 supports the developer's claim to overpayments to Fluor as a project EPC contractor between 2011 and 2014, “with other amounts to be determined,” said the developer.
In 2010, Fluor was appointed EPC contractor in the estimated system of 7.8 million tons per year, which has been designed by carbon seams for export to Asia and other markets and in its results from 2010. The contractor also won previous project design and early work contracts. The final costs of Gladstone were estimated by Santos in 2014 to $ 18.5 billion, which has made project problems to an increase of 32% compared to its initial estimate, which is necessary due to the need for increased gas supply and workers, according to a study of 2023 of the Australasian Center for Service Responsibility.
In a dispute that has been running since 2016, Santos said that Fluor was not entitled to all the costs he had applicable and was paid within the framework of the contract. The developer also tried to recalculate payments and to convey the compensation for the late conclusion of the project. The Fluor Treaty began as part of a fixed price approach, but was converted into a costly manner during the construction, said Andrew Wittmann, senior analyst at Baird Equity Research in a research note on August 10.Profitable since its completion ”.
The complexity of the case urged the court to “use referees outside the non -binding to sort the contracts and millions of documentation submitted,” said Wittmann. The Court accepted most of its results against Fluor, which were described in a final report from 2023 to the court, including provisional payments. A final decision on the comparison amount, which is intended to include interest and legal costs, will be issued later this year until “further arguments and inputs of both parties” are viewed to the court, said Fluor.
In an announcement, Fluor said that it “recognized” the court decision in favor of Santos, and found that “the court nevertheless” recognized the recommendations of the referees ” [company] Objection. “ In a federal report on July 31stPresent Fluor claimed that the recommendations were “based on numerous reasons, including [referees’] Not applied to the liability limit of the project ”and its“ obvious bias ”. The contractor asked the court to “abolish the referee's report in the final judgment”, which could take place in the third quarter.
However, Fluor claims that “the contractual principles treated by the court have extensive consequences in the engineering and construction industry”.
A company spokesman did not respond to ENR after the publication of Story in order to obtain further information on these consequences. Fluor said it was “the reaction, including the time of his attraction”.
Santos, Australia's second largest oil and gas company, is an acquisition goal by a consortium, which is led by the international arm of Abu Dhabi National Oil Co., which has a majority stake in the Biet consortium, which also includes Abu Dhabi Developmental Holding Co. and the US private capital company.
The United Arab Emirates are Australia's largest commercial and investment partners in the Middle East with $ 9.43 billion in goods and services in 2023. In June, the country's international arm of the country's national oil company received approval for a five-year plan to scale their work, chemical and energy sectoral work.