GAS

NZ High Court rules for Todd on Maui operatorship

THE New Zealand High Court has stymied Shell New Zealand’s plans to take over operations of the Maui gas field by upholding a Todd Energy injunction, which prevents the removal of Shell Todd Oil Services as operator of that offshore Taranaki permit.

NZ High Court rules for Todd on Maui operatorship

Todd Energy managing director Richard Tweedie said his company was pleased with the High Court judgement. However, Shell NZ said it was disappointed and would be reviewing its options, which included a possible appeal to the Court of Appeal.

High Court judge Justice John Wild delivered his judgement on the case earlier this week, upholding the interim injunction granted to Todd Energy that had prevented STOS – an unincorporated organisation jointly owned by Shell NZ and Todd but holding no equity in any licences – from being removed as Maui operator.

Last year Shell NZ and fellow Maui-Pohokura partner Austrian firm OMV voted to appoint Shell as Maui operator if STOS resigned, but Todd filed the injunction preventing that resignation.

About the same time, Shell and OMV also sought to remove STOS from operating the near-shore Taranaki $US600 million ($A812 million) Pohokura project, with Shell NZ exploration and production commercial manager Ajit Bansal saying it could add substantial value to its major New Zealand oil and gas assets by moving away from the STOS service company structure.

Tweedie told EnergyReview.net this morning that the court’s judgment made it very clear that STOS is operator of Maui for the term of the field.

He said Justice Wild had found that the proposed resignation of STOS as Maui operator would have been a breach of employment contract and of the joint venture deal between Shell and Todd.

Tweedie also said the decision validated the steps Todd had taken over the last 15 months to resist Shell’s attempt to take over as Maui operator.

Shell NZ’s aim in replacing STOS was to maximise the value of Shell’s assets in New Zealand, “particularly in the case of Shell selling some or all of them”.

Justice Wild also found that Shell had “misled the court” about the causes of slippage in the Pohokura development schedule and that Shell had “misled” OMV on the same issue, Tweedie said.

He said it was particularly pleasing the court had found Todd’s actions were not open to criticism, but Shell’s were.

“Todd Energy looks forward to a continuing orderly and efficient operation of Maui as a key component of New Zealand’s energy supply,” Tweedie said.

“STOS also continues to operate the Kapuni onshore gas and condensate field and, in substance, remains the operator of the Pohokura field.”

Earlier this year, the High Court cleared Shell NZ to take over operating Pohokura, which it did last April, while Todd took over operating the onshore Taranaki McKee-Mangahewa fields on June 1.

Shell NZ spokesperson Jackie Maitland said Shell was disappointed with the court decision.

“We are reviewing the judgment and considering whether to appeal,” she told ERN.

Shell NZ owns 82.75% of Maui, 48% of Pohokura, and 50% of Kapuni. Todd owns 6.25% of Maui, 26% of Pohokura, 50% of Kapuni and 100% of McKee-Mangahewa. OMV owns 10% of Maui and 26% of Pohokura.

TOPICS:

A growing series of reports, each focused on a key discussion point for the energy sector, brought to you by the Energy News Bulletin Intelligence team.

A growing series of reports, each focused on a key discussion point for the energy sector, brought to you by the Energy News Bulletin Intelligence team.

editions

ENB Cost Report 2023

ENB’s latest Cost Report findings provide optimism as investments in oil and gas, as well as new energy rise.

editions

ENB Future of Energy Report 2023

ENB’s inaugural Future of Energy Report details the industry outlook on the medium-to-long-term future for the sector in the Asia Pacific region.

editions

ENB Cost Report 2021

This industry-wide report aims to understand current cost levels across the energy industry

editions

ENB Social Licence Report 2021

In its second year, this research now includes trends and new findings surrounding impacts and responses as the energy industry seeks to secure and maintain a social licence to operate.