Worley reviews its legal options for work in Ecuador after arbitration was dismissed

The $9.3bn engineering company is determined to be paid for work on energy projects in Ecuador, but it’s proving challenging and another legal battle may be on the cards.

Engineering group Worley is considering its legal options after an international arbitration tribunal dismissed its bid to get paid for extensive work on energy projects in Ecuador.

The $9.3bn company, led by Chris Ashton, say the international arbitration tribunal issued its decision on December 22 to dismiss arbitration on “jurisdictional grounds”.

“Worley is reviewing the decision with its legal advisers and considering the options for further legal proceedings,” the group said in a brief statement on Wednesday.

The company commenced arbitration in 2019, relating to historic unpaid trade receivables owing to a subsidiary of Worley by Petroecuador, a state-owned enterprise in Ecuador, and a related state entity.

The arbitration was commenced under the Bi-Lateral Investment Treaty between the US and Ecuador.

“The Worley receivables relate to contracts for services provided by WorleyParsons (now Worley) from 2011 until 2017. The Worley contracts were for the provision of pre-agreed services for energy projects in Ecuador which were sponsored by the government of Ecuador. Through these services, Worley provided significant value to our customers,” Worley said in its statement to the ASX.

The parties were unable to agree to payment for the unpaid Worley receivables, and the ASX-listed company commenced the arbitration in 2019 seeking payment.

Worley last week ­secured two new BHP contracts for stage one of its Jansen Potash project.

BHP Canada awarded Worley a contract to fabricate pre-assembled units for the dry mill area and rail loading robot facilities of stage one of the Jansen Potash project in Saskatchewan, Canada.

The mining giant also awarded Worley a separate contract to execute field construction for the dry mill area of stage one of the project.

Worley’s financial performance has been mixed The company in August reported an almost 79 per cent drop in annual net profit to $37m. The result was marred by a previously disclosed $240m loss on the sale of a turnaround and maintenance business in North America – a legacy of the company’s $4.6bn acquisition of Jacobs Engineering Group’s energy, resources and chemicals division in 2019.

However, its underlying performance improved over the 2023 financial year, and profit excluding one-off items was up 6 per cent to $348m as revenue jumped 21 per cent to $10.93bn.

At the time, Mr Ashton said the economic threat posed by global inflation appeared to be receding.

Worley shares were up 0.7 per cent to $17.65 in a higher market on Thursday afternoon.

Originally published as Worley reviews its legal options for work in Ecuador after arbitration was dismissed