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Shell, Todd Energy in dispute over oilfield service payments

BUSINESSDESK: The joint owners of some of New Zealand's largest oil and gas fields, Shell New Zealand and Todd Energy, are in dispute over non-payment for services provided for work on the Maui, Pohokura, and Kapuni fields.

Companies Office records show Shell Todd Oil Services, a shell company that sits atop the long-standing partnership, was carrying a contingent liability at December 31 for an unresolved dispute relating to work programmes and budgets for all three fields.

The notes say these have "not been approved and accordingly some JV parties have declined to pay cash calls relating to aspects of the SIEP (Shell International Exploration and Production) charges".

Included in the dispute are issues relating to global technical services, some information technology charges, global support services, regional support services and regional cross charges.

"The dispute between the parties remains open and includes a difference of views between the parties about the nature and extent of the obligations of STOS to SIEP," the notes say.

"The potential impact on the company is indeterminate as at the date of this report."

It appears the issue remains live, with a spokesperson for Shell declining to discuss the issues, citing commercial confidentiality, and a Todd spokesperson referring all questions to the fields' operator, Shell Exploration New Zealand (SENZL).

Under the contracts governing Pohokura, STOS provides services to SENZL.