Cobalt International Energy, Inc. disclosed that the company had invoked the force majeure clause in its contract for the lease of an offshore drilling rig located in the Gulf of Mexico.
Force majeure is a French term that means “greater force,” and the clause excuses parties to a contract from liability due to acts beyond its control. These acts can be natural disasters, war or acts of God.
Cobalt International Energy, Inc. said that the contract was for the lease of the Ocean Monarch drilling rig owned by the Diamond Offshore Company (DO). The rig was set to begin drilling at the North Platte #1 well located in the Garden Banks 959 block in the Gulf of Mexico.
Cobalt International Energy, Inc. said that the clause was invoked after the U.S. Government announces the suspension of all deepwater drilling in the Gulf of Mexico beginning on May 27, 2010. Deepwater drilling is defined as all drilling at water depths of greater than 5000 feet.
Cobalt International Energy, Inc. said that the cost to the company would be $15 million, and the company expects to publish an update schedule of drilling activities in the Gulf of Mexico once it knows more details about the drilling suspension.
For more information on the company, go to www.cobaltintl.com