Seacrest Petroleo Bermuda Limited: Commencement of arbitration proceeding against Petrobras

06 Jan 2025 07:00 CET

Rio de Janeiro, Brazil/Hamilton, Bermuda, 6 January 2025: Seacrest Petroleo
Bermuda Limited ("Seacrest Petroleo" or the "Company") refers to the
injunction obtained from a court in Rio de Janeiro, announced on 27 December
2024, preventing Petróleo Brasileiro S.A. - Petrobras ("Petrobras") from
taking action for 30 days in respect of the non-payment by the Company's
subsidiaries SPE Cricaré and SPE Norte Capixaba of an aggregate of
approximately US$71 million of post-closing consideration due to Petrobras on
31 December 2024 for the acquisitions of the Cricaré and Norte Capixaba
Clusters. The Company announces that SPE Cricaré and SPE Norte Capixaba (the
"Claimants") filed overnight a Request for Arbitration with the International
Court of Arbitration of the International Chamber of Commerce (ICC), thereby
commencing an arbitration proceeding against Petrobras.

In the arbitration, the Claimants are seeking, among other things, (i) an
order that Petrobras indemnify the Claimants for all damages caused to the
Claimants as a result of Petrobras' continued failure to successfully complete
the repair works on the Terminal Norte Capixaba ("TNC") subsea pipelines in
accordance with the requirements of the Norte Capixaba purchase and sale
agreement, which are essential for the logistics of the offtake of production
from the Cricaré and Norte Capixaba Clusters, as well as (ii) the suspension
of the enforceability of the post-closing payments due to Petrobras as
consideration installments under the Norte Capixaba and Cricaré purchase and
sale agreements. Under the Brazilian Civil Code, a party that is in default of
its own obligations is not entitled to demand performance of a counterparty's
obligations. For that reason, the Claimants did not pay to Petrobras on 2
January 2025, the approximate US$71 million of consideration installments due
under the Cricaré and Norte Capixaba purchase and sale agreements.

The basis for the Claimant's Request for Arbitration is the ongoing failure of
Petrobras to fulfil its contractual obligations to complete the subsea
pipeline repairs at the TNC, which has resulted in US$71.2 million of direct
cumulative damages to the Company to date. As part of the sale and purchase
agreement for the Norte Capixaba Cluster, Petrobras undertook to complete the
repairs, but during the 20 month period since the April 2023 closing has
repeatedly failed to do so. The repairs are necessary to allow the Company to
transport heavy oil through the pipelines and realize Very Light Sulphur Fuel
Oil (VLSFO)-spec pricing for its production. Petrobras' failure to perform its
obligations and restore the pipelines to the temperature and pressure
specifications for which they were designed has, during that 20 month period,
forced the Company to sell an off-spec blend of its production at significant
discounts to Brent, which has severely impacted the Company's revenue,
profitability and reputation.

On 16 April 2024, SPE Norte Capixaba sent an indemnity claim letter to
Petrobras in respect of the damages incurred by the Company as at that date,
which totaled US$38.78 million. On 13 December 2024, SPE Norte Capixaba sent
Petrobras an updated indemnity claim letter, describing direct cumulative
damages that now total US$71.2 million.

For further information, please contact:

John de los Santos, Head of Investor Relations
Seacrest Petroleo Bermuda Limited
Tel. +44 79 4971 4756
E-mail: john.santos@seacrestpetroleo.com

This information is subject to the disclosure requirements in article 17 of
the Regulation EU 596/2014 (the EU Market Abuse Regulation) and section 5-12
of the Norwegian Securities Trading Act.

About Seacrest Petroleo

Seacrest Petroleo is an independent oil and gas production company with an
integrated portfolio of onshore producing oil fields and export infrastructure
onshore in Espírito Santo, Brazil. The fields have estimated oil and gas in
place volumes of 1.2 billion barrels of oil equivalents and certified 2P
reserves of 144 million barrels of oil equivalents. The Company has exclusive
control over its infrastructure, continuously from field production to
offshore tanker loading terminal, allowing for cost-effective operations, and
enabling direct access to markets for its premium grade products. The Company
has offices in Bermuda, Norway and Brazil.

Important information

Matters discussed in this press release may constitute forward-looking
statements. Forward-looking statements are statements that are not historical
facts and may be identified by words such as "anticipate", "believes",
"continue", "estimate", "expect", "intends", "may", "should", "will" and
similar expressions. The forward-looking statements in this release are based
upon various assumptions, many of which are based, in turn, upon further
assumptions. Although the Company believes that these assumptions were
reasonable when made, these assumptions are inherently subject to significant
known and unknown risks, uncertainties, contingencies and other important
factors which are difficult or impossible to predict and are beyond its
control. Such risks, uncertainties, contingencies and other important factors
could cause actual events to differ materially from the expectations expressed
or implied in this release by such forward-looking statements. The
information, opinions and forward-looking statements contained in this release
speak only as at the date of this release and are subject to change without
notice.

This information has been submitted pursuant to the Securities Trading Act §
5-12 and MAR Article 17. The information was submitted for publication at
2025-01-06 07:00 CET.

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