Shares in Petroneft Resources PLC fell Tuesday after the company said that it was progressively shutting down its wells at Russia’s License 61 field as Nord Imperial LLC temporarily suspended the acceptance and transfer of oil from the field.
Shares at 0725 GMT were down 0.15 pence, or 17%, at 0.75 pence.
The Russia-focused oil-and-gas company said it has been in discussions with Nord Imperial–a subsidiary of India’s Oil & Natural Gas Corp.–for many years over the terms of a contract tariff that it considers to be higher than normal market rates. It said discussions to date haven’t resulted in any meaningful offer or agreement.
The company said that in 2021, Stimul-T–a company owned by Petroneft and Oil India Ltd. that owns and operates License 61–started making reduced payments to Nord Imperial and launched a series of legal cases against it.
“Nord Imperial have responded by temporarily suspending the acceptance of our oil and transfer until the debt claimed on the basis of the monopolistic contract terms is paid in full,” the company said.
Petroneft said production from License 67 was unaffected by this situation and that the C-4 well continued to produce at around 270 barrels of oil a day.
“The suspension of acceptance of our oil, whilst disappointing, will not change our determination to seek an equitable solution for both parties. We will work hard with our partner, Oil India, and Nord Imperial to resolve this issue as our priority is to protect the interests of our shareholders,” Chief Executive David Sturt said.