Some industry commentators see the prolonged legal jousting between Greymouth Petroleum and Indo-Pacific Energy as already starting to poison the previously healthy industry and affecting this country's growing reputation as a great international exploration destination.
Others describe the litigation as "really irritating" and the worst thing to hit the New Zealand energy scene since the 1988 Ngaere "Clayton's oil discovery" - when then Energy Minister David Butcher declared the Ngaere oil field a billion-dollar "find" and granted himself a mining licence over the area. He subsequently sold Ngaere to Petrocorp for much less and the company later incorporated Ngaere into the Waihapa production facilities.
"I have seen more litigation in New Zealand than in several other countries that I have worked in," said one commentator.
"This latest litigation is just driving a huge block through the New Zealand energy scene, people being called to give evidence against others for whom they have worked. This country is too small to make enemies and we should all be working together to confront this country's looming gas and electricity crisis."
Greymouth Petroleum and Indo-Pacific Energy last Friday finally finished their High Court fight for effective control of the small onshore Taranaki Goldie oil field. Justice Wild, who presided over the 2½ week hearing, is not expected to deliver his judgment for several months.
Commentators say that in any litigation case there are always matters which appear clear-cut and some which look quite grey, but they hope that whatever the final ruling, common senses will prevail. "Justice Wild is a really sharp man and for the sake of the industry I hope he does not get it wrong," said one.
A second said he only realised the extent of Greymouth's claims after reading EnergyReview.Net coverage of the trial. While some seemed pretty outrageous, others might be upheld, and he also hoped for the parties to forsake further litigious action.
In court Greymouth said Indo-Pacific Energy subsidiary Ngatoro Energy Ltd (NEL) should be removed as Goldie operator because of its breaches of the joint venture operating agreement and because of its substandard oil field practices, which Greymouth alleged had caused losses of up to $NZ16.7 million. Greymouth also argued that NEL had no right to the oil produced, which was worth about $NZ11.3 million.
A month after drilling the well on a sole risk basis, Indo-Pacific, in April 2001, estimated the Goldie oil prospect had a net present value of about $NZ32 million. Its drilling, testing and completion costs were about $NZ3 million.
