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- RBR Group (RBR) and its subsidiary Projectos Dinamicos (PD) have reached a settlement with the CCS JV regarding the Wentworth Camp contract dispute
- PD was contracted by the CCS JV to build an accommodation camp for a major LNG project in Mozambique but an insurgent attack last March suspended operations
- A lengthy dispute ensued regarding the CCS JV not paying invoices PD had issued while work was suspended through 2021
- CCS JV has now paid a settlement sum of US$4.2 million (A$5.9 million) to PD’s account
- RBR shares are up 11.1 per cent to trade at 0.5 cents
RBR Group (RBR) has reached a full and final settlement regarding a dispute over unpaid accounts for the Wentworth Camp construction contract in Mozambique, with a sum of US$4.2 million now paid into the account of a RBR Group subsidiary.
Background
In late 2020, RBR announced it would jointly develop an accommodation camp of nearly 670 beds at the Wentworth site of a US$23 billion (A$32 billion) LNG project in Cabo Delgado, Mozambique.
However throughout 2021, the contract was the subject of a long-winded dispute between RBR’s 50 per cent-owned subsidiary Projectos Dinamicos (PD) and the CCS Joint Venture (JV) which includes McDermott, Saipem and Chiyoda.
The CCS JV was the engineering, procurement and construction contractor developing the LNG project on behalf of the operator, TotalEnergies.
The dispute related to the CCS JV not paying preliminary invoices issued by PD over the course of the year.
In March last year, an insurgent attack forced RBR Group to indefinitely suspend all work at the Wentworth camp.
At the time of the attack, over half of the beds as well as associated infrastructure had been installed on the site. In early April due to town-wide communication systems being disconnected, RBR was unable to determine the status of its assets at the camp.
The contract between PD and the CCS JV was still intact at the time and the parties were waiting for more clarity on the future and timing of the project, as well as security in the region, to determine their next steps.
At the end of April, TotalEnergies withdrew all personnel from the project and declared “force majeure”, which is when parties are freed from their contractual obligations.
RBR said the operator’s announcement was devoid of any detail and the CCS JV hadn’t advised PD of any force majeure.
In the September quarter, the company discovered the Wentworth camp appeared “basically intact” and PD was continuing to charge the CCS JV monthly rent invoices which had not been paid.
Outcome
In October, PD formally withdrew its application to resolve the matter through an arbitration process in the London Chamber of International Arbitration. It said it “remained confident of a favourable outcome”.
A settlement sum of US$4.2 million (A$5.9 million) was agreed and has now been paid into PD’s account.
The company has however lodged a US$900,00 (A$1.3 million) insurance claim for damage to the camp and associated infrastructure.
PD said security has improved and insurers agreed to send an assessor to the Wentworth camp in the next few weeks.
Importantly, PD has retained full ownership rights to the camp and associated infrastructure.
Subject to logistical constraints, it also has the rights to completion of construction, tenancy or relocation.
A decision on the future of the Wentworth Camp is still subject to a number of factors including the security situation in the Palma district where the camp is located and the company will provide an update on this in the first half of the year.
Company shares were up 11.1 per cent to trade at 0.5 cents at 2:41 pm AEDT.
