China Oil says arbitration is next in US$1bn oil field dispute

rig 1061339 640Arbitration next US$1bn lawsuit. (Image source: Sundem/Pixel)PetroChina Co told a federal judge in Texas that their submission to arbitration in an African oil field dispute is worth potentially US$1bn settles the only purpose of Carlton Energy Group LLC's lawsuit, despite Carlton's request for further action from the court, according to Law360

Carlton initially filed the lawsuit in 2012, which PetroChina and related entities resisted until they relented in March 2017. They participated in arbitration in its pursuit of a 10 per cent profit share of a vast oil field in Chad from Cliveden Petroleum Co. A week later, Carlton opposed an effort to stay the case pending arbitration, arguing that the court still needed to determine jurisdiction. 

"With these requests, plaintiff stands the Federal Arbitration Act and decades of jurisprudence regarding the separation of powers between courts and panels on their heads," The reply stated reply said. "Not a single case cited by plaintiff permits this court's continued jurisdiction over this matter now that arbitrability is agreed, and certainly no case approves the issuance of collateral orders by this court whose purposes can only be to shape the arbitration proceedings."

The issue stems from the 108mn-acre oil and gas field in Chad which Carlton acquired from Cliveden in 2000. PetroChina's parent company, China National Petroleum Corp, bought half of Cliveden when 1bn barrels of oil were discovered in the field. Carlton claimed that the CNPC followed up the takeover by stripping Cliveden's assets and forcing Carlton out of receiving any revenue. 

According to the conclusion of the court report, 'For these reasons, and those stated in the Suggestion of Mootness and Motion to Stay, the Non-Signatory Defendants respectfully request that the Court stay this case pending the completion of arbitration proceedings.'

For the full in-depth report from Law360, visit the site here.

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