Cue defends Jambi action

Cue defends Jambi action

WELLINGTON (Dow Jones): New Zealand-listed exploration concern Cue Energy Resources NL yesterday advised it has been served with a claim for US$32.2 million in damages by Norwegian oil company Saga Petroleum ASA.

The claim is for breach of contract relating to the abandonment of the company's plans to buy interests of Saga's Indonesian unit Saga Petroleum Indonesia Jambi in an undersea exploration license area off Sumatra.

Cue said it believed it had the lawful right to terminate any arrangement it may have had with Saga, and that the claim from Saga is without merit. "The company will vigorously defend the action," it said.

Cue announced its intention to buy Saga's stake in the Jambi Merang block in May 1997. But in April 1998, Cue said it was discontinuing the purchase because a number of conditions, including approval from the Indonesian government, had not been met.