Concern over oil deals

Potential implications of contracts being signed between landowners and oil and gas companies saw representatives of eight Taranaki law firms come together in Stratford to discuss concerns.

"Once the agreement is signed, it is signed," says Philip Armistead from Thomson, O' Neil & Co.

He says landowners could be in breach of other agreements and the potential impact of not understanding what is being agreed to, could be huge.

"I have seen agreements where for laying pipelines access is also granted to land other than where the pipeline is being laid; some clauses in access agreements provide consent for other associated activities for ever; and some limits the companies' liability should something go wrong."

Landowners need to take into account the rights of their employees and other users of their land, such as those under sharemilking agreements, he says. The access agreements can also be in breach of mortgage agreements.

The Stratford Press understands that all law firms contacted to attend the meeting, were interested in attending.

"The exploration, and the infrastructure oil and gas companies are putting down now, is at a far greater rate than I have seen in my 20 years working here. The majority of farmers will get some advice, but I suspect some have not," Philip says.

He says a Federated Farmers contract was long used as the basis for access and well-site agreements, but that oil and gas companies now increasingly push their own agreements, written to favour them.

However, he says it is a matter of balancing rights. Oil and gas companies have the right through prospect permits to access land for specified minimal activities under the Crown Minerals Act, which includes surveying and taking samples.

For drilling, laying pipelines and seismic testing landowners' consent is needed.

"We will be considering the access agreements very carefully and where necessary negotiate fairer terms," Philip says.

Federated Farmers Taranaki executive met on Tuesday to discuss these issues. At going to press they were still in session.