Chevron and Wooside contractors sue over ‘comedy of errors’

Normal
0

false
false
false

MicrosoftInternetExplorer4

/* Style Definitions */
table.MsoNormalTable
{mso-style-name:”Table Normal”;
mso-tstyle-rowband-size:0;
mso-tstyle-colband-size:0;
mso-style-noshow:yes;
mso-style-parent:””;
mso-padding-alt:0cm 5.4pt 0cm 5.4pt;
mso-para-margin:0cm;
mso-para-margin-bottom:.0001pt;
mso-pagination:widow-orphan;
font-size:10.0pt;
font-family:”Times New Roman”;
mso-ansi-language:#0400;
mso-fareast-language:#0400;
mso-bidi-language:#0400;}

Chevron and Woodside Petroleum are facing further delays in completing their respective Pluto and Gorgon liquefied natural gas projects following legal action from their contractors.

Leighton Contractors, Thiess, Kentz, Saipem, and AJ Lucas are in talks with Chevron while UGL is negotiating with Woodside.

The reworking and lengthening of completion time for most work on the sites has spurred the contractors to sue in an attempt to recoup costs from the energy giants for changes to their contracts.

Leighton Contractors and Thiess, companies forming part of the Leighton Group, were awarded $2.36 billion of work on Gorgon, but onsite delays have seen changes to their packages which they want compensation for.

A former Leighton Group manager told the Financial Review the Gorgon project was “a comedy of errors”.

“You’ve got people falling over themselves on Gorgon trying to complete their jobs, its enormously inefficient,” he said.

Thiess, Decmil, and Kentz are also in negotiations with Chevron for the construction of the village at Gorgon, in which the completion time has blown-out by around six months.

UGL has also filed a $30 million claim against Woodside for changes to its original $300 million contract on the Pluto LNG train.

It said the claim should be resolved by early 2012 but it had low expectations of recovering money.

The legal action represents the latest trouble for Chevron and Woodside’s projects, which are already under heavy pressure from investors to meet tight deadlines and budgets.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.