Oil giants ‘have no power to take port’

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TWO multinational oil giants have been accused by public officials of attempting to “misuse” British law in their efforts to seize control of a key port site at the Humber estuary where millions of tonnes of oil are imported every year.

At the second day of a High Court hearing into the unprecedented move by French “supermajor” Total and American energy giant ConocoPhillips to forcibly take control of the Humber oil terminal against the wishes of its owner, Government agency lawyers insisted there is simply “no such power” for them to do so under UK harbour law.

The disputed terminal is a kilometre-long jetty at the Port of Immingham, currently owned by private firm Associated British Ports (ABP), where around a quarter of the UK’s oil supply arrives in a stream of tankers each year.

With ABP itself being owned by a consortium led by investment bank Goldman Sachs, the case effectively sees three of the world’s largest corporations battling it out for a vital piece of the UK’s energy infrastructure.

The parties first fell out in 2009 when the oil companies’ 40-year lease to operate the terminal expired – and ABP demanded a vast increase in annual rent. With the firms refusing to pay, ABP drew up plans to take back control of the terminal and operate it itself.

In response, the oil firms are trying to use an obscure clause in the 1964 Harbours Act to forcibly take ownership of the terminal from ABP. On Thursday the court heard their testimony that ABP’s plans could damage the efficiency of the port, and even endanger the UK’s supply of oil.

But yesterday, ABP representative Richard Drabble QC told the court this was simply “hot air”.

“I would not want it thought that ABP is creating a threat to security,” he said, accusing the oil firms of “over-egging their case”.

He pointed to a previous High Court judgment which upheld ABP’s right to operate the oil terminal, adding: “Our property is trying to be expropriated against our will because we have made management decisions that (the oil firms) do not like,” he said.

ABP’s stance is firmly backed by the Government, with Whitehall agencies the Marine Management Organisation (MMO), the Oil and Pipelines Agency and the Department for Transport all opposing the oil firms’ demands for an inquiry into whether they should be given ownership of the terminal.

James Maurici, representing the MMO, said granting such an inquiry would be “bizarre”, as the Harbours Act simply does not allow for a forcible takeover of part of an existing port.

“I have been to some pretty pointless public inquiries in my life, but this really would be the most pointless of all,” he said.

“It would cost an awful lot of money, and no doubt the lawyers would enjoy it. But it would be an inquiry into an order that cannot lawfully be made.”

Mr Maurici said the oil firms’ motivation was not the smooth running of the harbour, but simply to avoid paying the increased rent or losing the lease altogether.

“What underlies this dispute is money,” Mr Maurici said. “They couldn’t agree how much money they should pay for the lease.”

Mr Drabble agreed, citing the “obvious commercial motivation” of the oil giants and describing their efforts as a “misuse” of law.

The case continues.