BP Triumphs Over Venture Global in LNG Supply Arbitration Case

BP plc BP, the British oil and gas giant, has recently secured a win in an arbitration proceeding against Venture Global Inc. VG over the latter’s failure to supply liquefied natural gas (LNG) shipments under a long-term contract between the two companies. As per the contract, the LNG shipments were slated to begin toward the end of 2022.Multiple Energy Majors Pursue Similar Claims Against VGThe dispute was centered on a breach of obligations by Venture Global, as the LNG supplier reportedly did not declare the start of commercial operations at the Calcasieu Pass plant in Louisiana. Several other major oil companies, including Shell, Galp Energia and Repsol, have also filed arbitration claims against VG. They accuse the company of selling LNG cargoes from the Calcasieu Pass facility on the spot market at higher rates instead of delivering them under long-term contracts. Venture Global, in response, argued that under these long-term contracts, it was not required to deliver the cargoes during the commissioning phase.The International Chamber of Commerce International Court of Arbitration ruled in favor of BP in the arbitration proceeding and determined that Venture Global has breached its contractual obligations. The ruling in favor of BP came as a surprise after Venture Global recently won a similar arbitration case against Shell. However, BP’s win raises concerns regarding other arbitration claims pending against the LNG operator. The UK-headquartered energy major is reportedly seeking over $1 billion in damages, along with interest and legal costs.Financial Repercussions Loom for VGPer Reuters, VG’s customers are seeking over $4 billion in compensation for the delayed commercial startup of the Calcasieu Pass facility. Venture Global had previously mentioned that losing the arbitration cases could significantly weigh down on the company’s financials. Losing any arbitration cases may lead to major financial penalties and accelerated repayment of project debt. Furthermore, it could trigger the potential termination of certain gas supply contracts.BP Awaits 2026 Hearing to Determine CompensationBP has mentioned that it is pleased with this ruling. A separate hearing, scheduled for 2026, will determine the final compensation that VG is expected to pay BP. Venture Global mentioned that damages claimed by BP and its other customers may exceed the cap set in the original LNG sales agreement. The U.S.-based LNG company has stated that it will defend its position in the future. Additionally, it is reviewing the available options against the tribunal’s decision.Zacks Rank and Key PicksBP and VG bothcurrently carry a Zacks Rank #3 (Hold).Some better-ranked stocks from the energy sector are Oceaneering International OII and Galp Energia SGPS SA GLPEY, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Oceaneering International delivers integrated technology solutions across all stages of the offshore oilfield lifecycle. The company is a leading provider of offshore equipment and technology solutions to the energy industry. OII’s proven ability to deliver innovative, integrated solutions supports ongoing client retention and new business opportunities, ensuring steady revenue growth.Galp Energia is a Portuguese energy company engaged in exploration and production activities. The company’s oil exploration efforts have yielded positive results, particularly with the Mopane discovery in the Orange Basin, offshore Namibia. After the initial exploration phase, Galp had estimated that the Mopane prospect could hold nearly 10 billion barrels of oil. This discovery allows Galp to diversify its global presence with the potential to become a significant oil producer in the region.Radical New Technology Could Hand Investors Huge GainsQuantum Computing is the next technological revolution, and it could be even more advanced than AI.While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power.Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.See Top Quantum Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BP p.l.c. (BP): Free Stock Analysis Report Oceaneering International, Inc. (OII): Free Stock Analysis Report Venture Global, Inc. (VG): Free Stock Analysis Report Galp Energia SGPS SA (GLPEY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks