An oil and gas company purchased a subsea gas pipeline and claimed the seller had withheld information about mercury contamination in the pipeline, which impacted its value. Baker & O’Brien’s consultants examined the information available about pipeline mercury levels and whether the buyer had sufficient information to assess the risks and potential decommissioning costs. Our expert opinions expressed in a technical report, a reply expert report, and a joint expert report were helpful in the settlement of the dispute.

Mercury is a trace contaminant found in oil and gas reservoirs worldwide. Southeast Asia and Northwest Australia are well-known hotspots for high mercury levels. The risks associated with mercury contamination are well recognized in the oil and gas industry, and operators take measures to reduce its impact throughout all production operations and decommissioning phases. The level of mercury contamination in a pipeline can significantly impact decommissioning costs, as contamination may dictate whether a subsea pipeline is removed or left in situ.

A dispute arose between the buyer and seller of an offshore gas pipeline regarding the levels of mercury in the pipeline. A vital aspect of the dispute was whether the seller withheld information about mercury contamination in the gas pipeline. Baker & O’Brien was asked to provide opinions on (1) the information available before the sale about mercury in the pipeline from public sources or the seller, (2) any new information about mercury that emerged after the sale, and (3) whether the information available was sufficient for the buyer to assess the risks and decommissioning costs.

Our experienced consultants, with a deep understanding of subsea pipelines and decommissioning, examined the publicly available data and the information shared between the parties as part of the sale. Based on our assessment of the adequacy of existing information to comprehend the mercury risks, we presented opinions in an expert report, a reply report, and a joint expert report. Our expert reports assisted in resolving the dispute.