Indo Pacific to be Removed as Goldie Field Operator
Greymouth Petroleum reports that a judgment had been received from the High Court hearing concerning the disputed Goldie oil field.
Indo Pacific Energy Limited subsidiary Ngatoro Energy Limited, is to be removed as Operator of the Goldie oil field for material breach of its obligations and gross negligence. In summary, the court has found Indo Pacific in breach of its obligations in:
- Failing to seek or gain approval for development of the Goldie oil field
- Failing to prepare a development program and budget for the Goldie discovery
- Flaring gas from Goldie without consents
- Acting toward Greymouth in bad faith and with a lack of candor, and deliberately and falsely representing its position to Government agencies including the Ministry of Economic Development and the Taranaki Regional Council and its co-venturers Greymouth and Shell.
- Developing Goldie in a sub-optimal manner involving significant losses and excessive costs.
Claims for damages of Greymouth have been reserved for further argument. Mark Dunphy, Greymouth's Chairman said; "We are pleased to have this decision from the court. We hope now to be able to move quickly to development of the Goldie resource. It is disappointing that the actions of Indo Pacific Energy required this matter to be resolved through court proceedings." Greymouth Petroleum is to become operator of Goldie.
Greymouth acquired assets from Shell in April, 2002 including an interest in the Goldie oil and gas field. Shell had paid close to $2 million in 2001 as its contribution to the cost of the Goldie-1 well, which gave Shell the right to participate in revenues from Goldie when net revenues exceed a six times multiple of Goldie-1 well costs.
Competing for the purchase from Shell, and the under bidder, was the small foreign mining company, Indo Pacific Energy Limited (then operator of the Goldie property). Greymouth formed the view the Kaimiro, Ngatoro and Goldie oil field assets were important and strategic assets, and priced its purchases accordingly.
Greymouth made the purchase relying on its entitlement to have the Goldie oil and gas field asset managed properly and prudently.
Indo Pacific Energy decided that it would manage the Goldie oil field without reference to Greymouth's interests and without giving Greymouth a say. Without informing Greymouth, in October, 2002 Indo Pacific took the New Zealand Government Ministry of Economic Development to the High Court in a contested application over gas flaring. Indo Pacific's application was not successful. Greymouth then litigated to preserve the value of its interest and to enforce its contractual entitlements.
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