Santos files $1.47 billion damages claim against construction firm
Santos has lodged a damages claim in the Queensland Supreme Court to get back almost $1.5 billion from a US-based construction company.
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SANTOS has filed a claim worth almost $1.5billion against an American construction firm that completed work during the development of the GLNG project on Curtis Island.
The claim was filed against Fluor Corporation's Australian arm in the Queensland Supreme Court in December last year and related to the construction phase of Santos's upstream facilities at Roma.
It's understood the claim does not relate to the quality of work carried out during the development of Santos's $18.5billion GLNG facility.
However, it was reported in the Australian Financial Review that "Santos ... is contending that Fluor was not entitled to some $1.47billion of costs under the terms of its engineering and construction contract”.
But in its 2016 annual report, which was released to the New York Stock Exchange last week, Fluor appeared confident of defeating the LNG giant's $1.47billion damages claim.
"On December 13, 2016, Santos filed an action ... against Fluor Australia, asserting various causes of action and seeking damages of approximately AUD $1.47billion,” the report reads.
"The company believes that the claims asserted by Santos are without merit and is vigorously defending these claims.
"Based upon the present status of this matter, the company does not believe it is probable that a loss will be incurred.
"Although the asserted value of these matters may be significant, the company currently does not expect that the ultimate resolution of any open matters will have a material adverse effect on its consolidated financial position or results of operations ... accordingly the company has not recorded a charge as a result of this action”.
Because the case was before the court, Santos declined to comment.
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