Shell demands $170 million from former partners for FPSO cleanup
Shell has filed a second lawsuit against its former partners in the Laminaria-Corallina project, seeking compensation for the costs of decommissioning the Northern Endeavour floating facility. The total amount of the company's claims is approximately 170 million Australian dollars.
Petrus
Shell has initiated legal proceedings in Australia, seeking additional payments from its former joint venture partners to cover the costs of decommissioning the Northern Endeavour floating production, storage, and offloading (FPSO) facility.
Two years ago, the company filed a lawsuit in the Supreme Court of Western Australia against its former partners, Woodside Energy and Paladin Resources, after being issued a tax bill of 86.5 million Australian dollars (61 million USD) for assets, including the FPSO, that had been sold roughly a decade earlier.
This bill was issued under the Offshore Petroleum Levy (OP Levy), introduced by the Australian federal government in 2022 to cover expenses related to the decommissioning of the Laminaria-Corallina and Northern Endeavour fields.
Currently, Shell has filed a second claim against Woodside and Paladin in the Supreme Court of Western Australia, demanding an additional 83 million Australian dollars after the federal government billed the company for cleaning up the FPSO. In total, Shell’s claims against its former Laminaria-Corallina partners amount to around 170 million Australian dollars.
The new lawsuit concerns NOGA levies for 2024 and 2025, which were not included in the company’s initial demands.
In 2019, Northern Oil & Gas Australia (NOGA), the former operator of Laminaria-Corallina, appointed administrators after its only producing asset was shut down by offshore regulator Nopsema for safety reasons. Following NOGA’s administration, the Australian federal government faced costs of up to 1 billion Australian dollars, as the Northern Endeavour remained in place.
In 2022, the Australian government introduced a temporary levy on the oil and gas sector to help offset the costs of decommissioning and restoring the Laminaria and Corallina fields and related infrastructure.
Shell’s claims are based on a 2005 agreement when the company sold its stake in the Laminaria-Corallina joint venture. According to Shell, the agreement covered all related assets and contracts, including its share in the Northern Endeavour and subsea infrastructure.
The second lawsuit notes that the holder of the oil license was responsible for removing facilities, equipment, and property from the licensed area.
Attempts to reach Paladin Resources for comment were unsuccessful.