JSPL and PNBV entered into the P-54 contract in June 2004. Due to cost increases arising from foreign exchange movements and market overheating conditions, contract amendments were made in 2006 and 2007 to adjust the contract price. The Brazilian Federal Court of Accounts, the Tribunal de Contas da União (TCU), commenced an audit process in relation to the P-54 contract and the amendments thereto.
Mainboard-listed Seatrium has commenced arbitration proceedings against Petrobras to finalise disputed payment claims over the P-54 FPSO conversion project contract. The Edge Singapore understands that the arbitration is not expected to impact Seatrium’s current relationship with Petrobras as it is a legacy contract from more than two decades ago.
Specifically, Seatrium’s subsidiary Jurong Shipyard Pte Ltd (JSPL) is seeking withheld payment of US$55.7 million from Petrobras’ subsidiary Petrobras Netherlands B.V (PNBV). In addition, Petrobras is claiming an additional US$79.6 million from JSPL. This sum is derived from alleged P-54 contract overpayment of US$135.3 million less the withheld amount. Seatrium also seeks to prevent any further recovery attempts by Petrobras in connection with the P-54 contract through the arbitration.
