Oil field dispute set to simmer slowly

Shell New Zealand and Todd Petroleum's row over who operates New Zealand's main oil and gas fields looks like becoming a drawn out affair following a Court of Appeal decision.

The court has refused to lift an interim injunction won by Todd, which stops directors of Shell Todd Oil Services (STOS) voting to dissolve the company and replace it with Shell as operator of several oil and gas fields.

Shell and Todd each have three directors on the joint venture, but one of Shell's directors also has a casting vote. Shell had been intending to use that vote to dissolve STOS.

Shell went to the Court of Appeal after the High Court imposed the interim injunction in April, until a substantive hearing could be held.

Shell claims the hearing will be many months away.

STOS operates the Maui, Pohokura, Western Platform and Kapuni fields, in which Shell and Todd have interests, plus the McKee and Mangahewa fields owned by Todd.

The Court of Appeal found Todd's arguments more persuasive. STOS had existed for a long time and implementation of votes to remove it as operator of several fields would lead to serious disruption for STOS and its staff.

Shell's arguments "relied significantly on acceptance of the view Shell knows best."

Todd said if STOS were allowed to vote on its dissolution it would not be possible to reverse that, regardless of it gaining a successful outcome from the hearing.

- NZPA