Petromec Inc & Anor v Petroleo Brasileiro SA & Ors

Petromec Inc & Anor v Petroleo Brasileiro SA & Ors

The compression deviation in the Supervision Agreement operates as a cost allocation provision: Petromec's obligation was limited to supplying one new 2 million m3/d compressor and the existing compressor, with all costs of additional compression systems, deck space, and associated equipment to meet Petrobras' 6 million m3/d requirement to be for Petrobras' account. The riser deviation entitled Petromec to use the central caisson for attachment of 52 risers, with the remaining 46 to be wet-attached to the pontoons; Petromec was not required to install a spider deck. Deck extension required for South Marlim was 600 m2, and the transverse piperack would not have to be relocated. Issues 5,...

Parties
Claimant: Petromec Inc; Defendant/part 20 Claimant: Petroleo Brasileiro S. A. Petrobras; Defendant/part 20 Claimant: Braspetro Oil Services Company; Part 20 Defendant: Petro-Deep Inc.; Part 20 Defendant: Maritima Petroleo E Engenharia Ltda
Jurisdiction
England and Wales
Judgment Date
17 November 2011
Procedural Posture
Commercial Contract Dispute / Judgment on Preliminary Issues
Outcome
Preliminary issues determined; some issues left open for trial or further hearing.
Legal Topics
Contractual Interpretation, Construction of Commercial Agreements, Variation Orders, Cost Allocation, Interest on Sums Due
Contract Law Commercial Law Contractual Interpretation Construction of Commercial Agreements Variation Orders Cost Allocation Interest on Sums Due

Case Brief

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Parties

Petromec Inc

Claimant

Petroleo Brasileiro S. A. Petrobras

Defendant/part 20 Claimant

Braspetro Oil Services Company

Defendant/part 20 Claimant

Petro-Deep Inc.

Part 20 Defendant

Maritima Petroleo E Engenharia Ltda

Part 20 Defendant

Procedural Posture

Commercial Contract Dispute / Judgment on Preliminary Issues

Legal Issues

  1. 1 Proper construction of the gas compression system deviation in the Supervision Agreement (Issue 1)
  2. 2 Interpretation of the riser attachment deviation and whether a spider deck was required (Issue 3)
  3. 3 Deck space requirements for South Marlim upgrade (Issue 2)

Ratio Decidendi

The compression deviation in the Supervision Agreement operates as a cost allocation provision: Petromec's obligation was limited to supplying one new 2 million m3/d compressor and the existing compressor, with all costs of additional compression systems, deck space, and associated equipment to meet Petrobras' 6 million m3/d requirement to be for Petrobras' account. The riser deviation entitled Petromec to use the central caisson for attachment of 52 risers, with the remaining 46 to be wet-attached to the pontoons; Petromec was not required to install a spider deck. Deck extension required for South Marlim was 600 m2, and the transverse piperack would not have to be relocated. Issues 5,...

Court Disposition

Preliminary issues determined; some issues left open for trial or further hearing.

Orders

  • Compression deviation interpreted as a cost allocation provision in Petromec's favour.
  • Petromec not required to install a spider deck; central caisson and wet pontoon attachment sufficient.