Hess Corp said on it was pursuing legal action against Schlumberger NV for $40 million or more, claiming the oilfield service provider supplied a defective valve for a U.S. Gulf of Mexico oilfield that shuttered three wells and crimped production.
Hess took the unusual step of announcing the move on its quarterly earnings conference call, publicly mentioning Schlumberger and decrying the quality of service and parts provided.
Oil producers such as Hess have been battling with Schlumberger and other oilfield service providers over price and other financial matters at a time when depressed crude prices have eroded profits for the entire industry.
“It’s extremely disappointing,” Greg Hill, chief operating officer at Hess, said on the earnings call of the alleged defective valve.
Schlumberger representatives were not immediately available to comment.
Hess executives claimed the company is owed between $30 million and $40 million in remediation fees from the shutdown of some wells at its deepwater Tubular Bells field, roughly 135 miles (217 km) southeast of New Orleans.