Shearman leads oil fight for Algerian govt against Spanish companies

Shearman & Sterling has hit out at its rivals during a tense $1bn (£489.37m) arbitration between Spanish company Repsol and Algerian state-owned energy group Sonatrach.

Shearman global arbitration head Emmanuel Gaillard is leading a three-partner team for Sonatrach, which kicked Repsol and partner Gas Natural off a project to develop a EURO5bn (£3.46bn) Gassi Touil gas field in Algeria.

Sonatrach is now suing the Repsol-led consortium for damages following delays to the project. Uría Menéndez, along with French firm Derains, is representing Repsol and its partners in the arbitration.

Gaillard said: "The Spaniards are trying to politicise the matter. They were supposed to build the plant for 2009 and now it's estimated for 2012. For us it's a pure question of contract. They were several years late in terms of their own estimation.

"My sense is that they want to stay away from any strict application of the contract because they have no case."

The decision to remove the Spanish companies came after months of discussions between the Spanish and Algerian governments.

Gaillard said definite value had now been attached to the proceedings, but that damages could run into billions of dollars.

"The value of the arbitration is more than $1bn," said Gaillard. "It's for the losses incurred, the delays and the opportunity costs."

A chairman for the arbitration is yet to be appointed.