Oil firm may face $50m clean-up

Waterfront Auckland is taking Mobil to the High Court at Auckland over two Wynyard Quarter blocks. Photo / Michael Craig

An international oil company may face a $50 million bill for two seaside sites it left last year.

Waterfront Auckland is taking Mobil to the High Court at Auckland over two Wynyard Quarter blocks, saying that unless the petroleum business pays to clean up the land it used for almost a century, ratepayers will be left to foot the bill.

Mobil is opposing Waterfront Auckland and has maintained it is only obliged to leave the surface of the land clean and tidy and it is not obliged to remediate the subsurface.

Alternatively, it has claimed it is only obliged to remediate the blocks to an industrial standard.

John Dalzell, of Waterfront Auckland, said a declaration was being sought for the blocks which are between Pakenham St West and Madden St, and off Beaumont St.

"Waterfront Auckland is attempting to seek clarification, in the interests of both parties, of the lease agreement with Mobil. Specifically, it is seeking clarification of the scope of Mobil's obligation to remediate the site at the end of its lease.

"Remediation and decontamination of the sites needs to be done prior to or during development of the land. Waterfront Auckland has reached agreement with other petroleum companies who held leases in the area, regarding their remediation obligations.

"If Mobil is not obliged to remediate the site it has leased for approximately 90 years, the remediation bill - currently estimated at $40 million to $50 million - would fall to the Auckland ratepayer," Dalzell said.

The case is set down for the week of June 25 but Mobil has made an application to strike out the claim. That application was heard late last week and judgment was reserved.

Mobil and predecessor companies had occupied the tank storage site on the land since the 1920s. Dalzell said during that time, the land was contaminated with petroleum and chemical products including known carcinogens, petroleum hydrocarbons, volatile organic compounds and semi-volatile organic compounds.

"Mobil's lease requires the company to keep the land in good order and deliver it up in good condition when it vacates the land. Mobil's leases came to an end at the end of 2011 and Mobil has now vacated the site. Waterfront Auckland maintains Mobil is required to fully remediate the land, apart from gasworks contaminants from the original reclamation," Dalzell said.