Friday, July 29, 2016

Hess Wants Compensation from Schlumberger

 Hess Completes Sale of Natuna A to PTTEP

Hess Corp. could pursue legal action against Schlumberger over a defective valve for one of its GoM oilfields. The company is looking for as much as $40 million as recompense for the bad valve that led to three wells being shut in, lowering its production flows from the field.

Hess announced its litigation plans in its quarterly earnings conference call, publicly mentioning Schlumberger and decrying the quality of service and parts provided.

“It’s extremely disappointing,” Greg Hill, COO at Hess said on the earnings call of the alleged defective valve.

Hess claims it is owed between $30 million and $40 million in remediation fees, attorney fees and lost profit from the shutdown of some wells at its Tubular Bells field. Originally only two were shut in but during a routine maintenance check a third was shut in.

As a result, Hess slashed its production outlook from the Tubular project to about 10,000 boepd for the year, down from previous estimates for at least 25,000 boepd.

“It relates to some quality control and some of the components of the valve,” Hill said in the conference call.

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