Todd Energy's case against oil giants Shell and OMV starts in the Wellington High Court on Monday.Todd alleges that partners in Pohokura, Shell Exploration NZ Ltd and Austrian explorer OMV NZ Ltd, conspired to hold production at a level below the multi-bi
Todd Energy’s case against oil giants Shell and OMV starts in the Wellington High Court on Monday.
Todd alleges that partners in Pohokura, Shell Exploration NZ Ltd and Austrian explorer OMV NZ Ltd, conspired to hold production at a level below the multi-billion dollar gasfield’s capacity.
The family-owned company is claiming damages worth $274 million.
It claims that since 2006, Shell and OMV have breached the Commerce Act by colluding to prevent production beyond 70 petajoules, when the field could produce at least 85 petajoules a year.
Each additional petajoule could generate $12 million in extra revenue.
Todd claims the partners breached the act by lessening competition in the gas market and attempting to control the price of gas.
Todd claims the take-off arrangements were also a breach of the Crown Minerals Act.
The civil trial is the latest in a string of litigation that started in 2004, when Todd faced off against Shell (then a 50:50 partner) over which company would operate the offshore natural gas field, which was due to start production.
Todd Energy claims it brought litigation against Shell and OMV to force them to connect export lines from the Pohokura Production Station – which the two companies had avoided unless Todd Energy signed up to the production constraint.
In August 2006, the High Court granted an injunction in favour of Todd Energy and a series of interlocutory arguments have proceeded since then in preparation for the trial.
In December 2008, Crown Minerals lifted its estimates of oil and gas reserves in the Pohokura field. Gas jumped 24 percent to 978 billion cubic feet and oil reserves lifted 38 percent to 61.6 million barrels.
