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Thu 24 Nov 2016 09:35 AM

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BP ordered to pay $68m to NBAD over Morocco oil cargo

British energy company sold a cargo of Russian Urals crude to Samir in August 2014 which was not paid for and NBAD took on 95 percent of that debt

BP ordered to pay $68m to NBAD over Morocco oil cargo
(Getty Images)

BP must pay more than $68 million to the National Bank of Abu Dhabi (NBAD), a UK court has ruled, in a case stemming from the surprise closure of Morocco's Samir refinery in 2015.

The British energy company sold a cargo of Russian Urals crude to Samir in August 2014 which was not paid for and NBAD took on 95 percent of that debt.

The London High Court ruled that BP did not have the right to pass on the debt. It said the contract between BP and Samir stipulated that there could be no assignment of obligations or rights without reasonable consent and that Samir's consent had not been obtained.

It said NBAD was entitled to claim from BP some $68.9 million plus interest that Samir failed to pay the bank.

BP declined to comment on the judgement.

Trading and oil companies such as Glencore, Vitol and BB Energy are collectively owed around $1 billion by Samir.

Efforts to restart the refinery have so far failed. Liquidator Mohamed el-Krimi said on Monday that he would only consider bids to buy the Samir refinery that included a production restart.

The 200,000 barrel per day plant was shut in August 2015 due to financial difficulties after the government said Samir owed over $1.3 billion in taxes.

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Industry sources have criticised that move, noting it reduces the plant's value and necessitates a restart that could take several months.

After Samir failed to buy crude in the market earlier this year, a processing agreement, whereby traders provide crude in exchange for the refined output, was considered as a way to pay back money owed. Those negotiations have also failed to produce a deal.

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