(Alliance News) - Victoria Oil & Gas PLC on Friday said RSM Production Corp filed a separate arbitration application against the company over the the Logbaba participation agreement.
Shares in Victoria were down 12% at 4.57 pence in London in midday trading.
RCM is wholly owned Victoria subsidiary Gaz du Cameroun SA's partner in the Logbaba concession in Cameroon, with Gaz du Cameroun having a 57% holding to RCM's 38%. The remaining 5% is held by Societe Nationale des Hydrocarbures.
In July 2016, RSM filed a request for arbitration with the International Chamber of Commerce regarding the operating agreement signed over the rig and drilling contractor chosen by Gaz du Cameroun for two wells at Logoba. The subject of the claim was withdrawn in January 2019 on the condition that RSM pay Gaz du Cameroun's costs.
Then, in October 2018, RSM filed another ICC arbitration claim - amended in August 2019.
Victoria said: "RSM is asserting material claims primarily related to final invoices for the drilling of the two wells, La-107 and La-108, and certain audit exceptions raised by RSM following audits of the Logbaba operations between 2015 and 2018".
According to Victoria, RSM made two attempts at obtaining interim rulings and these were "successfully defended" by Gaz du Cameroun. The "substantive matter" is scheduled for a hearing at the end of January 2021.
Most recently, on February 3, 2020, RSM filed a separate arbitration claim under United Nations Commission on International Trade Law rules, pursuant to the Logbaba participation agreement.
"Much of the relief sought in this second arbitration duplicates the new claims in the ICC arbitration," said Victoria.
However, Victoria did point out that the new February arbitration "also challenges the validity of cash calls [Gaz du Cameroun] issued in November 2019 for RSM's share of expenses in relation to the La-108 well remediation", a total of USD2.9 million.
The new claim additionally "raises issues relating to the primacy of the underlying governing documents relating to the Logbaba project" and the approval process for some of Gaz du Cameroun's actions as Logbaba operator.
The arbitration is to be heard in London under Cameroon law.
Victoria said it is not allowed to give detailed comments on its ongoing arbitration dispute with RSM, save that it is still "vigorously" defending the claims made against it, as such arbitrations are "confidential processes".
This is not Victoria's only ongoing dispute. On February 5, Victoria said Gaz du Cameroun had stopped making payments to Cameroon Holdings Ltd under the royalty agreement between the two firms. This prompted Cameroon Holdings to begin proceedings against both Gaz du Cameroun and Victoria, as it claims it is entitled to such payments. Cameroon Holdings's claim also includes potential damages.
By Anna Farley; annafarley@alliancenews.com
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