NZ High Court to decide ExxonMobil-Crown Minerals seismic stoush

EXXONMOBIL’S fight with New Zealand’s Crown Minerals unit to keep its Great South Basin (GSB) seismic data is due to heard in the Wellington High Court in two weeks.
NZ High Court to decide ExxonMobil-Crown Minerals seismic stoush NZ High Court to decide ExxonMobil-Crown Minerals seismic stoush NZ High Court to decide ExxonMobil-Crown Minerals seismic stoush NZ High Court to decide ExxonMobil-Crown Minerals seismic stoush NZ High Court to decide ExxonMobil-Crown Minerals seismic stoush

The three-day David and Goliath trial is set to start on Monday, November 20, and industry sources say the outcome of the court case will send signals around the world on the overall attractiveness of New Zealand as an international exploration destination.

ExxonMobil asked the High Court earlier this year to rule on the wrangle involving seismic data shot over two years ago by a Fugro-Geoteam survey for the partners in the former licence PEP 38215, then operated by Australian explorer Bounty Oil & Gas.

The dispute centres on Crown Minerals’ demands that ExxonMobil make available all PEP 38215 data as usually is required by joint ventures that relinquish licences or have them revoked.

But the oil giant says it was never a partner in the permit and is therefore not legally required to surrender the seismic data it reportedly paid $US3.2 million ($A4.5 million) for last year.

The Polar Duke seismic vessel acquired about 2000km of 2D seismic in early 2004 for Bounty, which was to be free-carried through a farm-out to British company Electro Silica.

But the UK company never fulfilled its licence obligations and Fugro-Geoteam later sold the data to ExxonMobil.

In June, the high court dismissed Perth-based Bounty’s two appeals against the revocation of its PEP 38215.

Crown Minerals revoked the permit on the grounds that the Bounty-led consortium had not begun drilling in the agreed three-year timeframe, but Bounty argued its non-compliance was beyond its control and that it had been unfairly shut out of a deepwater basin that could contain petroleum reserves worth up to $A1 trillion.

In addition, in May Brisbane-based Magellan Petroleum surrendered its GSB licence PEP 328225, clearing the way for Crown Minerals to offer all 40 GSB blocks for bidding.

Crown Minerals is hoping to attract many bids for its frontier GSB Blocks Offer, which closes next March.

The GSB has been very lightly explored, with only seven wells drilled there during the 1970s and 1980s, all of which had significant oil or gas-condensate shows.

The Dominion Post newspaper today says High Court documents show Crown Minerals will accuse ExxonMobil of damaging the long-term energy interests of New Zealand by refusing to hand over the seismic data Crown Minerals intended making available to other parties.

The government unit would say ExxonMobil’s actions threatened to spoil a competitive tender, the paper said, as all bidders would not have equal information without the ExxonMobil data.

Fewer bids might be made and the bids might contain fewer drilling commitments over longer time frames if there was less competition among them.

In pre-trial statements, ExxonMobil says it last year told Crown Minerals that it saw potential for huge gas finds that could be turned into liquefied natural gas for export.

ExxonMobil rejects Crown Mineral’s discretion to take into account the dispute and says the relevant considerations are whether companies, including itself, can carry out proposed work programs.

loader