Goldie operator Indo-Pacific Energy and relative newcomer Greymouth Petroleum have been slugging out for months now, but there is no end in sight to the dispute which is threatening to tarnish the "amicable" reputation of this country's energy industry.
The latest High Court actions in Wellington have essentially involved Greymouth trying to stop production at the Goldie-1 well by appealing Indo-Pacific's flaring application to Crown Minerals; Indo-Pacific's effective counter appeal to Justice Wylde; and then Greymouth's case to the Court of Appeal seeking to have Justice Wylde rehear its High Court application.
Indo-Pacific chief executive David Bennett said High Court judge Justice Wylde had last week told Greymouth it was not a party to the flaring application and that Crown Minerals was to consider Indo-Pacific's application solely on its merits.
The appeal court had adjourned any ruling on the Greymouth application so as to give Greymouth time to go back to the High Court and to seek leave to have Justice Wylde rehear the company on the flaring issue, which was not likely until December.
"There's a lot of detail and this looks complex, but really it's not and the basic case should be clear enough," said Bennett from Wellington.
"We have spent $3M of our own money to create the Goldie oil field. If we had failed no-one would have bailed us out. We invested the money, at our sole cost and risk, on the basis that we would be rewarded by producing the field for our sole benefit, until the sole risk premium was met."
The individual Greymouth claims effectively amounted to one overall claim aimed at taking all the value from the field "from the very first dollar to the last, then still go us for more", he added.
The Goldie oil field, within the Ngatoro mining licence PMP 38148, has produced over 220,000 barrels of light sweet crude since March, 2001.
EnergyReview.Net was the first to report sketchy details of this dispute earlier this year, though both parties refused to elaborate on their respective positions. However, more information was later made available by American-listed Indo-Pacific to its North American shareholders.
Greymouth claimed it was entitled to 92.2564% of all revenues from Goldie on the basis that it (in reality former stakeholders Shell) "backed in" with respect to the 59.57% interest, while NZOG did not, thus entitling Greymouth to the former Shell share plus a pro-rata share of NZOG's interest, Bennett said.
Indo-Pacific maintained Goldie-1 had been in production since March 2001, though Greymouth claimed that was only testing as the company had not approved a development plan, though none of FCE, Shell or NZOG had seen it that way, he added.
Greymouth was also claiming about $40 million in damages because Indo-Pacific was not operating the field "optimally".
Shell New Zealand bought back into Goldie last year for an initial payment of about $US750, 000 and agreed to forego production worth about six times that amount, while fellow Ngatoro partner New Zealand Oil and Gas declined to buy back into Goldie. Shell NZ later sold the former Fletcher Challenge Energy 59.57% stake in PMP 38148, in which the Goldie and Tabla pools are situated, to Greymouth for an undisclosed sum.
Industry commentators see strong arguments for some of Greymouth's claims and several of Indo-Pacific's rebuttals. However, they say this prolonged and boisterous legal jousting will do no good for the industry's reputation.
"The New Zealand is big enough to be interesting, but small enough so that you don't want to make enemies," said one commentator.
