Taipan Resources has announced that the Company’s Kenya based subsidiary Lion Petroleum Corp has commenced an arbitration action against East African Exploration (Kenya) Limited (EAX), a wholly owned subsidiary of Afren Plc.
This follows certain breaches to the Joint Operating Agreement (JOA) signed between EAX and Lion in respect of Block 1.
This Request for Arbitration is filed on behalf of Lion in accordance with Article 4 of the Rules of Arbitration of the International Chamber of Commerce (the ICC Rules).
In its Notice of Arbitration, Taipan claims that among other things, EAX, as Operator in Block 1, failed to (1) diligently pursue joint operations or meet minimum work obligations; (2) follow good and prudent petroleum industry practices followed by international petroleum industry operators under similar circumstances; (3) follow agreed contract award procedures; and (4) follow agreed accounting procedures.
Taipan is seeking not less than US$10 million as restitution for the damages it has suffered as a result of EAX’s breaches of contract.
Taipan (through “Lion”) holds a 20-per-cent working interest in Block 1 (5,497,000 acres/22,246 square kilometres) while EAX holds the remaining 80%. EAX has a two-well commitment in the current exploration period in Block 1 ending October 8, 2016.