Contractors accuse Jubilant of late payments

Vol 14, PW 3 (29 Jul 10) People & Policy

Delhi-based Jubilant Energy is under fire for delaying payments to drilling and service contractors.

Two disgruntled contractors, who wish to remain anonymous, tell PETROWATCH they are consulting lawyers and plan to launch legal proceedings against Jubilant to recover their money. “Our company will send Jubilant a legal notice by next week,” says one contractor.

“This is our last resort.” Others accuse the Bhartia-owned explorer of delaying payments for almost a year.

In one instance, Jubilant hired drilling contractors Quippo and Dewanchand Ramsaran and service contractors Techno Canada and Schlumberger to work at its 1260-sq km NELP-IV onshore block AA-ONN-2002/1 in the remote northeast state of Tripura. “Jubilant owes close to Rs20cr ($4m) to contractors that worked in Tripura,” we hear.

Jubilant also owes approximately Rs18cr ($3.6m) to contractors who worked at its 680-sq km NELP-IV onland Cauvery basin block CY-ONN-2002/1. Last November, Jubilant hired an onland rig from John Energy at this block, Halliburton for ‘hydrofrac’ services and Techno Canada for testing.

In March this year it drilled a three well appraisal programme but told the DGH in April it wanted to relinquish the block because of disappointing results. Angry service contractors say Jubilant has not paid them mobilisation charges.

One contractor even accuses Jubilant of renegotiating contract terms after his equipment was mobilised. “I mobilised my rig for them without signing a formal contract,” he says.

“Later they sent me a contract with a ‘liquidated damages’ clause inserted. How could they add this clause after the rig was mobilised” But a Jubilant sympathiser says it shouldn’t bear sole blame for delayed payments.

“These services are hired by the consortium,” he says. “Jubilant acted on its behalf.

” Jubilant operates the Tripura block with a 20% stake, but GAIL is majority stakeholder with 80%. At the Cauvery block it holds 30%, but GAIL holds 50% and GSPC has 20%.

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