BP seeks at least $3.7bn from Venture Global after LNG arbitration

 BP has obtained a partial final arbitration award against Venture Global over LNG sales from the Calcasieu Pass project and is seeking at least $3.7 billion—and potentially over $6 billion—in damages, plus interest, costs and attorneys’ fees, according to Venture Global’s recently filed annual repory.

 BP is seeking at least $3.7 billion from its arbitration win against Venture Global in a case concerning liquefied natural gas (LNG) cargoes, Venture Global's annual report shows. 

The remedies sought by BP include damages ranging from $3.7 billion to potentially in excess of $6.0 billion, as well as interest, costs and attorneys' fees, said the report, which was released this week.

BP declined to comment, while a Venture Global spokesperson said the British oil major's requested damages are "unserious and not supported by evidence or controlling law".

Major LNG Dispute Participants

BP, Shell, Unipec, Edison, Galp, Repsol and Orlen all took Venture Global to arbitration in one of the biggest disputes in the history of the LNG industry.

Details of the Arbitration Ruling

In October, BP won its case over Venture Global's failure to deliver LNG under a long-term contract that was due to start in late 2022.

The International Chamber of Commerce (ICC) International Court of Arbitration found that Venture Global breached its obligations to declare commercial operations had begun at the Calcasieu Pass plant in a timely manner and act as a "reasonable and prudent operator," Venture Global said in a regulatory filing at the time.

Financial Implications and Future Outlook

Expected Damages and Timeline

Venture Global CEO Mike Sabel said this week that BP's award for damages is expected in 2027 but did not elaborate on the figure.

Venture Global previously said after losing the case that BP was seeking damages of more than $1 billion, but a new hearing was required to determine the amount. 

BP's Strategic Response

BP in February suspended its share buybacks to prioritise investing in oil and gas projects and shrinking its net debt to $14 billion–$18 billion by 2027 from $22 billion.

Other Arbitration Outcomes

Venture Global's Arbitration Record

Venture Global, the second largest LNG exporter in the U.S., has won two out of the three arbitrations brought against it.

It prevailed in an arbitration brought against it by Shell and won a subsequent court challenge from Shell over the arbitration award.

https://www.globalbankingandfinance.com/bp-seeks-award-least-3-7-billion-venture-global-arbitration/