Todd to run solo on Pohokura appeal?

Todd Energy now has less than two weeks to decide whether to appeal, possibly without partners Shell New Zealand and OMV, against the Commerce Commission's rulings on Pohokura gas marketing.
Todd to run solo on Pohokura appeal? Todd to run solo on Pohokura appeal? Todd to run solo on Pohokura appeal? Todd to run solo on Pohokura appeal? Todd to run solo on Pohokura appeal?

Late last week the Pohokura joint venture - Shell New Zealand, Todd Energy and OMV Petroleum - confirmed a High Court appeal was possible, after EnergyReview.Net had earlier said a disgruntled Todd Energy was considering legal action.

The Pohokura joint venture release was a carefully worded statement, but one which left little doubt as to where Shell and OMV stand. The fact that they admitted any appeal might be on a "joint or individual" basis indicates the partners are unlikely to move together on any legal appeal.

Even more telling is the statement - "the joint venture will need to ensure that the appeal process can be managed expeditiously and in parallel with other scheduled activities without compromising the June 2006 target date to which they are all committed".

One reading of this says this is Shell and OMV letting everyone know that while they can't stop Todd appealing, they will be very unhappy if anything Todd does impacts on the development schedule for this critical project.

The joint venture statement also said the commission's June 2006 development deadline posed "a significant additional project risk for those parties seeking to secure project finance", which is thought, by a process of elimination, to be Todd.

They also said any failure to achieve that deadline would void the approval for joint marketing of uncontracted gas after that date, unless an extension was granted.

At the July commission conference on Pohokura gas, however, the joint venture said it would not approve the development going ahead unless the majority of the gas was already under contract.

Given the likely intense competition for Pohokura gas - which at a maximum of 70 Petajoules a year will only "replace" a third or so of the former prolific Maui field - it is hard to believe that almost all of the proven and probable Pohokura gas will not be under contract before 2006.

The joint venture statement also said the partners remained committed to the work program proposed by project operator Shell Todd Oil Services to achieve a final investment decision no later than June 2004, followed by a commitment to the procurement and construction stages of the possible $NZ900 million project.

Todd Energy chief executive Richard Tweedie is declining to comment on whether Todd will appeal. The partners have until September 30 to lodge any appeal with the Wellington High Court.

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