Judgement in case on Kårstø expansion

The Kårstø processing plant north of Stavanger. (Photo: Øyvind Hagen)

The Kårstø processing plant north of Stavanger. (Photo: Øyvind Hagen)

The Stavanger District Court has handed down its decision Jan. 15 in a case between the Norwegian government, represented by the Ministry of Petroleum and Energy, and Statoil ASA.

Statoil is pleased that the court agreed with Statoil’s view that the government was not entitled to a transfer of interests in the Mikkel field in the Norwegian Sea.

Statoil also notes that the court has awarded the government cash compensation of NOK 378 million after tax, and default interest from Jan. 24, 2002.

Statoil will take a closer look at the grounds for the court’s decision before deciding whether to enter an appeal.

The case has its background in a declaration Statoil made to the government in December 1999 after a dispute over cost allocation for the expansion of the Kårstø terminal north of Stavanger.

A number of projects were involved in this development during the second half of the 1990s, including the joint venture responsible for the Åsgard gas field development in the Norwegian Sea.

The agreement between Statpipe, owner of the Kårstø terminal, and the Åsgard partnership was that Åsgard would pay for that part of the expansion required to handle gas from the field.

Towards the end of the development, in 1999, four of the Åsgard partners issued claims against Statoil on the grounds that investment costs charged to the field had not been incurred in Åsgard’s interest.

The government, via the state’s direct financial interest (SDFI), had a large holding in Åsgard. It was however considered undesirable for the state to enter a possible legal action against its own company.

Instead, Statoil issued a declaration that, should the four plaintiffs succeed in their action, the government would receive a corresponding compensation.

Two of the Åsgard partners initiated arbitration against Statoil. Statoil did not agree that any illegitimate allocation of costs had taken place and also disputed other claims made in the case.

Before a judgment was reached in that case, the two companies and Statoil agreed a compromise settlement.

The dispute now decided by the Stavanger court concerned whether the government could exercise its claim against Statoil on the basis of the declaration made to the government.

The government has primarily sought to obtain the transfer of interests in the Mikkel field in the Norwegian Sea, alternatively a cash compensation payment.

Source: Statoil

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