Page last updated at 16:04 GMT, Thursday, 24 July 2008 17:04 UK

Al Fayed given oil wells payout

Mohamed Al Fayed
Mohamed Al Fayed did not find out about the oil wells until 2006

Harrods boss Mohamed Al Fayed has won a stake in 7m profits from oil pumped from under his estate in Surrey without his knowledge.

The High Court was told Star Energy owned three wells drilled diagonally at its Palmers Wood oilfield which passed under Mr Al Fayed's land in Oxted.

Mr Al Fayed did not know for many years that the wells ran 800ft beneath Barrow Green Court and Barrow Green Farm.

The court ruled the company had trespassed on Mr Al Fayed's land.

But Mr Justice Peter Smith said Mr Al Fayed had no claim to the oil itself, which belonged to the Crown.

After the hearing, Mr Al Fayed said: "I am satisfied with the decision. Justice has been done."

The multi-millionaire sued Star Energy through his company Bocardo, claiming 12.5% of the income from the wells.

Commercial confidentiality

He was awarded 9% of the proceeds since 2000 and the same from future income.

Production from the wells, initially 9,000 barrels a month, began in October 1990 but had now reduced to 2,000 barrels, the judge said.

Mr Al Fayed first noticed the oil rig next to his estate in 1992 and instructed his solicitors to find out what was happening.

They were told the oil company could not reveal whether the bore hole passed under the estate for reasons of commercial confidentiality.

It was not until after Mr Al Fayed saw records held at the British Geological Survey in 2006 that he realised the pipelines were beneath his land.

'Landmark legal decision'

The judge accepted that the oil company was trying to conceal that drilling was taking place under Mr Al Fayed's estate.

"They expected trouble if he found out," he said.

And he rejected the oil company's argument that because there was no disturbance on the surface there was no trespass.

He limited the claim to the year 2000 because of statutory bars and because Bocardo could have discovered the pipeline earlier if it had employed proper experts.

Mr Al Fayed's lawyer, Julian Cridge, of city law firm Denton Wilde Sapte, described it as a "landmark legal decision".

"It's the first case to consider trespass of land at great depth," he said.

"It may mean that other landowners will consider whether they have claims against companies who have drilled or who try to drill under their land.

"We are very pleased by the outcome after what has been a long and hard-fought battle since a claim was issued two years ago."




SEE ALSO
MP's war of words with Al Fayed
21 Apr 08 |  UK Politics

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