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EnQuest pursues BP over invoices

Sullom Voe Terminal
Sullom Voe Terminal

Oil and gas company EnQuest has launched a legal claim against BP worth nearly £26 million for allegedly failing to pay invoices relating to the Sullom Voe terminal in Shetland.

Legal documents submitted to the High Court of Justice in London within the past month show the period EnQuest Heather Limited is claiming for covers 2013 to 2017.

EnQuest became terminal operator in 2017, taking over from BP. It is making the legal claim as operator on behalf of the terminal owners, which include other oil and gas partners.

Much of EnQuest’s legal claim, around £18.25m, relates to services associated with the gas sweetening plant at the terminal, which BP operates.

It also refers to payment of costs relating to the Clair oilfield, which BP operates and connects by pipeline to Sullom Voe. The terminal provides services to the owners of the field.

The claim against BP Exploration Operating Company Limited states that an audit of expenditure was carried out in 2017 by the then terminal owners in respect of the 2015 calendar year.

It is said to have identified “failings” in the way in which people working on the terminal, or operating it, were recording their time, meaning it could not be allocated accurately between the terminal users and owners.

The claim also said the audit identified “failings in the codes and systems used for allocation purposes, with the result that direct costs in fact incurred in the provision of services” to and for shared terminal users were not being allocated to users when they should have been.

“It was, therefore, the case that the Clair owners and the sweetening facilities owner (which BP appears on behalf of) had not paid in full for the services provided to them,” the claim said.

It added: “Furthermore, since the same systems for time-recording and cost allocation had been in place for the years 2013, 2014, 2016 and 2017, it was the case that the Clair owners and the sweetening facilities owners had not paid in full for the services provided to them for any of those years either.”

Terminal owners reached an agreement on the first “fault” identified in the audit, but not the second, legal documents say.

Following determination from an expert, correcting invoices were issued on April 16 2019 to BP in respect of the year ending December 31 2015 to reflect adjustments, with more following later.

The legal document says BP then paid some of the invoices but not all.

EnQuest said invoices were subject to “pay now, dispute later” provisions, in which companies are obliged to pay the sums first and then raise any dispute with the terminal owners.

The company is claiming declarations in respect of its contractual rights, as well as the unpaid invoices or alternatively damages, and interest.

BP and EnQuest were approached for a response, but both said they were unable to comment.

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