Tullow set for €120m hit after losing case over drilling
Tullow Oil is set to take a $140m (€120m) hit after losing a court case with a drilling equipment provider.
The payout exceeds a $128m (€110m) provision made against the case by Tullow.
The Irish oil and gas business said it was considering whether to appeal.
The UK's Commercial Court said Tullow was not entitled to terminate a contract with the provider, Seadrill, on the basis of the contract's so-called force majeure provisions.
Force majeure provisions allow a contract to be terminated when unforeseen circumstances arise.
The payment is due within 14 days. Tullow maintains it was entitled to terminate the deal and said it was disappointed with the decision.
At issue was a border dispute between Ghana and Ivory Coast which had the effect of restricting drilling where Tullow was operating.
The court ruled that this did not constitute an event to which force majeure applied.
"In the business of drilling for oil there are many risks," Mr Justice Teare wrote in his judgment. "If the risk which materialises is not a force majeure then Tullow has to bear the consequences".
The ruling comes after Tullow Oil saw disruption to its transportation of oil in Kenya as local protests over bandit attacks escalated.
Local media reports said that angry residents stormed the Ngamia 8 oil facility and blocked oil trucks late last week in protest about the security situation in the region in question.
Tullow said it was "working with the respective national government agencies, the county government, local leadership and the communities to ensure that the matter is resolved amicably".