Shell sues Woodside, Paladin Resources over $83M bill

Global oil and gas giant Shell has launched a high-stakes lawsuit in the West Australian Supreme Court against Woodside Energy (ASX:WDS) and Paladin Resources, demanding over $83 million to cover tax levies for an abandoned offshore oil platform.

The dispute underscores the spiralling financial liabilities facing the energy sector as it tackles an estimated $50 billion decommissioning backlog by 2070.

The legal action targets two offshore petroleum levy assessments issued by the Australian Taxation Office in 2024 and 2025, worth $41.2 million and $42.4 million, respectively.

The levies relate to the remediation of the Northern Endeavour, a floating production vessel in the Timor Sea.

Originally part of a 1997 joint venture between Woodside, Shell, and BHP (ASX:BHP), Shell was bought out by Woodside and Britain’s Paladin in 2005.

The asset was later sold to Northern Oil and Gas Australia, which collapsed in 2019 following regulatory safety warnings, leaving the federal government with the clean-up bill.

In response, strict 2022 legislation introduced a retrospective trailing levy to ensure former permit holders footed the bill for dismantling legacy assets.

According to court documents, Shell argues that a 2005 share purchase agreement indemnified it against any subsequent liabilities or levies linked to the rig.

Shell claims it formalised demands for payment in early 2025 and 2026, but both co-defendants have denied liability.

A Woodside spokesperson confirmed the company intends to defend the claims, which follow a separate $86.5 million lawsuit filed by Shell in 2024 over previous tax notices.