It is understood Todd Energy is so disappointed with the Commerce Commission's conditions for joint gas marketing and selling from the field it is considering appealing the ruling.

"Each Pohokura partner can appeal any aspects of the commission's decision, though I doubt Todd would want to go it alone - they would prefer to have the backing of the others. I can't see that happening, but you never can tell," one industry source told EnergyReview.Net.

Last week the commission approved joint marketing and selling of Pohokura gas until mid-2006, but said any contracts entered into after June 2006 would only be allowed if the field was fully operational and producing at least 60 Petajoules of gas a year.

The commission also ruled the partners were not allowed to restrict on-selling to third parties and that the commission would have to approve any future sale by the partners of their Pohokura interests.

The initial reaction of the partners - Shell New Zealand, Todd Energy and OMV Petroleum - was to brand the ruling as wrong and "contrary to the overwhelming weight of legal and economic evidence" and said they would urgently be considering all options, a veiled threat of possible legal action.

However, Shell NZ chairman Lloyd Taylor later said the commission's conditions were workable and that 2006 had always been the basis of joint venture planning, engineering work and schedule. It is understood OMV also anticipated expected the conditional approval and wants the partners to work within those restrictions.

Taylor said Shell already had finance in place for the possible project and it is believed OMV has Austrian head office approval for the Pohokura project.

However, sources say Todd Energy does not yet have the necessary funding in place and the commission's conditions could impact the financial model approved by such organisations as Westpac Institutional Bank, which has lent Todd Energy money in the past.

Todd Energy chief executive Richard Tweedie has declined to comment, though during the July commission hearing Todd Energy counsel Chris Hall warned of an appeal if approval was not given for the desired joint marketing. He said there would be no further capital expenditure on field development until all issues had been satisfactorily resolved.

Taylor concedes there are problems within the Pohokura joint venture, while not revealing what those are. "Some players seem more concerned with self-interest than what is good for the joint venture," he said, admitting he was tired of the "controversial, adversarial" approach often present in New Zealand and looking forward to returning to his native Australia at the end of the year.