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Noble sues Marathon

09 May 2011

Noble is suing Marathon Oil over its cancellation of a four-year, US$752 million contract for a rig in the Gulf of Mexico. Marathon cancelled the contract for the Jim Day in January, saying Noble failed to meet the criteria needed for Marathon to receive the newbuild deepwater rig by its December 31 deadline last year.

“We believe the rig was ready to commence operations and should have been accepted by Marathon,” Noble said in a quarterly filing with US financial regulators at the Securities and Exchange Commission (SEC). Marathon had also cited a force majeure condition for the contract because of a lack of deewater permits in the Gulf of Mexico following last year's disastrous well blow-out and oil spill. Noble said it filed its lawsuit in Texas in March. According to Marathon, the lawsuit in the District Court of Harris County seeks an unspecified amount of damages and alleges breaches of contract and of the duty of good faith and fair dealing, and negligent misrepresentation. In its own quarterly SEC filing today, Marathon said it filed a response in April, arguing that Noble failed to comply with material obligations, to mitigate alleged damages and to provide the rig, according to the contract requirements. “We are vigorously defending this litigation,” Marathon said, adding that the ultimate outcome of the lawsuit was uncertain, so it could not estimate any potential losses.

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