Court refuses to vacate order restraining Dolphin Drillings from canceling deal with Nigerian firm

Dolphin Drillings Limited, an offshore drilling rig company, has again lost its bid to vacate an order which restrained the company from taking away the Noble Blackford Dolphin rig in Nigeria.

The Noble Blackford Dolphin owned by Dolphin Drillings is drilling in the Oyo Field Complex on Oil Mining License (OMLs) 120 & 121 for General Hydrocarbons Limited (GHL), an indigenous offshore oil and gas company.

Delivering a ruling on Monday, Akintayo Aluko, presiding judge, refused to vacate an order he made on May 8, restraining Dolphin Drillings from “removing, demobilizing, or decommissioning the Rig —Noble Blackford Dolphin” from an oil field owned by General Hydrocarbons Limited (GHL), an indigenous offshore oil and gas company.

In the May 8 ex parte order granted in favour of GHL, Aluko also restrained Dolphin Drillings from interfering with GHL’s rights under the contract for the use of the rig and with the respondents’ personnel involved in drilling operations on fields EWO-2 and 0Y0-8 (GHL’s field). 

However, the judge refused GHL’s prayer seeking an injunction directing the respondents to continue fulfilling contractual obligations.

Dolphin Drillings had filed a motion to discharge the restraining order.

But the court held that “since the purpose and essence of the interim order made on 8/5/2024 is to preserve the res in litigation, I order that the said order shall remain extant and be in force pending when the Arbitrator shall make the appropriate and necessary orders”.

BACKGROUND

Dolphin Drillings secured the formal 12-month contract award with GHL in October 2022 for drilling operations in Nigeria. 

The rig began the drilling assignment in March 2023.

The offshore drilling contractor disclosed in November 2023 that GHL’s past due payments represented a net $17.3 million, along with a part payment from GHL and a proposed payment plan related to the remaining past due payments. 

In 2024, the company received two instalments.

Earlier in March, Dolphin Drillings and GHL reached an agreement regarding past-due payments and the remaining work under the drilling contract for the rig, which was initially supposed to run until the end of March. 

Due to a failure to meet the next payment date, Dolphin Drillings announced the termination of its contract with GHL. 

“The terms for payment under the agreement with GHL have not been met, and the company therefore confirms that it has, in accordance with the agreement, today issued a notice of termination to GHL. The company will now prepare the Blackford Dolphin for transit to India in the near term and intends to pursue the recovery of sums remaining due by GHL,” Dolphin Drilling wrote.

The company has filed a request for arbitration to pursue the recovery of overdue sums but the Nigerian firm is disputing the termination of the rig’s contract, thus, it has also filed a request for arbitration.

The arbitration proceedings commences on May 21.

GHL CLAIMS DOLPHIN DRILLINGS ‘BREACHED TERMS’

Contrary to claims by Dolphin Drilling that there are payment issues, GHL contends that the Blackford Dolphin rig was unserviceable for a prolonged period of time following the side letter agreement and required Dolphin Drilling to make good on its contractual obligations. 

“At the same time, GHL has provided Dolphin Drilling with comfort letters from reputable global financial institutions,” GHL said in a statement seen by TheCable.

“Dolphin Drilling breached the terms of the side letter when its Blow-out Prevention (BOP) System failed a performance test. Dolphin Drilling then served a defective notice of termination and attempted to demobilise the Blackford Dolphin rig.”

GHL took Dolphin Drilling to court seeking for it to fulfil its contractual obligations, which it said were affected by technical challenges with its BOP system on the Blackford Dolphin rig.