Engineering, construction and services company, KBR Inc.(KBR) Tuesday, said its Mexican subsidiary, Commisa, has received an arbitration award against Pemex Exploration and Production, a subsidiary of Pemex, the Mexican national oil company. The base award is about $286Mln. The award also includes legal and administrative recovery fees as well as interest, taking the award total to over $350Mln. Pemex Exploration was awarded approximately $6Mln. on counterclaims, and interest on a portion of the sum paid.
The award arises out of a 1997 EPC contract and PEP's resulting failure to pay Commisa fully for the construction of platforms off the coast of Mexico in the Bay of Campeche. This is the third recent arbitration award received by KBR subsidiaries Commisa and Combisa against PEP, all arising from works performed in the Bay of Campeche.
The arbitration was conducted by the International Chamber of Commerce. The final arbitration hearings were conducted in December 2007, the arbitration award released two years later and Commisa was notified of the award yesterday.
William Utt, KBR Chairman, President and Chief Executive Officer said,"This arbitration closes the chapter on a significant legacy litigation issue for KBR. With this matter now resolved, the company can move forward and reinvigorate its continued efforts of being the global contractor of choice."
KBR closed Tuesday's regular trading at $.20.28, down $0.43 or 2.08%, on the NYSE. However, in after hours trading, the stock gained 0.24%, $20.328.
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