And Then From Their June 2015 Financial StatementsFrom Petrofac’s June 30, 2015 Interim Condensed Consolidated Financial Statements
Provision for potential interim 30 June 2015 liquidated damages claims (LD’s) in respect of the Laggan-Tormore contract
The Group provides for LD claims where there have been significant contract delays and it is considered probable that the customer will successfully pursue such a claim. This requires an estimate of the amount of LD’s contractually payable under a claim, and the likelihood that any amount will be levied. This involves a number of management judgments and assumptions regarding the appropriate amounts to recognise.
The delay in commissioning the Laggan-Tormore plant in Shetland could result in a claim for liquidated damages under the contract with our client, Total. No provision has been recorded for any potential claim. The contractual completion date specified in the revised commercial settlement we entered into with Total earlier this year was 31 July 2015. The Group is working in collaboration with Total as we commission the plant and we currently anticipate completion in the fourth quarter of 2015. Management believes that liquidated damages are not likely to be claimed in the event that our revised completion schedule is achieved and the gas plant is successfully handed over in line with our client’s expectation. Further delays to completion of the contract would increase the risk of a claim arising. Any further disclosure in relation to this matter would be commercially prejudicial to the Group’s interests.