The High Court at Wellington earlier this week dismissed Todd Energy’s appeal regarding the August vote – by Shell NZ and fellow Pohokura partner Austrian firm OMV – to remove STOS. Todd had challenged the validity of that August 17 resolution.
The court decision also signals the beginning of the end of the 50-year relationship Shell and Todd have had through STOS – an unincorporated organisation that operates the Maui, Pohokura, Kapuni fields, as well as McKee and Mangahewa for Todd alone, without holding any equity in any licence.
Shell and OMV had earlier told the High Court that removing STOS as Pohokura operator was allowed under the amended Pohokura Joint Venture Agreement if parties holding a combined 70% interest voted to do so.
But Todd had claimed clause 9 of the technical services agreement stated such a decision had to be unanimous. The court rejected that argument and Todd subsequently appealed.
Shell NZ EP commercial manager Ajit Bansal had told the court Shell believed it could add substantial value to the oil and gas assets in which it had major stakes – Maui, Kapuni and Pohokura – by moving away from the STOS service company structure.
Shell NZ holds 82.75% of Maui, 48% of Pohukura and 50% of Kapuni. Todd holds 6.25% of Maui, 26% of Pohokura and 50% of Kapuni. OMV holds 10% of Maui and 26% of Pohokura.
According to the STOS website, Pohokura contains 900 bcf of recoverable gas and 50 million barrels of condensate. The possible NZ$1 billion development project is scheduled for completion late next year.
Other recent court cases have also gone against Todd Energy.
In June, the High Court rejected the company’s bid to require unanimous agreement for any third-party access to the Taranaki-Huntly Maui gas pipeline. The Maui Pipeline Operating Code (MPOC) subsequently took effect from October, allowing non-Maui gas to be shipped by any party through New Zealand’s largest pipeline north to energy-hungry Auckland and other regions.
Earlier this month, the Environment Court slammed Todd over its attempt to block development of a proposed NZ$100 million dual-fuel power station at the giant Fonterra dairy complex at Whareroa, Taranaki. That court described Todd's appeal against the necessary resource consents for the power station as "specious and insubstantial", with the real argument for Todd’s actions being a fear of loss of business if the project went ahead.
