Bocardo SA v Star Energy UK Onshore Ltd & Anor

Subsurface drilling and pipelines may constitute trespass where they pass through land to obtain valuable minerals, even if they are deep underground and cause no physical damage or interference with surface use. Statutory vesting of petroleum in the Crown does not confer ancillary access rights. Those rights must be acquired separately.

Compensation for access rights under the Mines (Working Facilities and Support) Act 1966 is assessed on what is fair and reasonable between a willing grantor and willing grantee. It is not confined to the landowner’s diminution in value. Deliberate concealment postpones limitation under the Limitation Act 1980, but time runs once the claimant could, with reasonable diligence, have discovered the relevant facts.

The claimant owned land beneath which the defendants’ predecessor had drilled deviated oil wells and laid pipelines. The wells extracted petroleum from the Palmers Wood Oilfield, although the petroleum itself belonged to the Crown under the statutory regime.

The claimant alleged trespass and sought damages measured by the sum that would have been negotiated for access rights. The defendants argued that the depth of the pipelines, the absence of physical damage, and the statutory petroleum licence prevented an actionable trespass. They also relied on limitation and disputed the correct measure of compensation.

The issues were whether the underground access was trespass, whether limitation was postponed by deliberate concealment, and how damages should be assessed.

1. Trespass. The claim succeeded in principle. Ownership of the surface prima facie includes the subjacent subsoil. Before severance, removal of minerals beneath the land would involve trespass. When petroleum was vested in the Crown, the mineral ownership was separated from the surface ownership, but the statutory transfer did not create ownerless access space or confer automatic rights to pass through the subsoil.
2. The relevant question was not the depth of the pipelines or whether the surface owner suffered physical damage. It was the purpose for which access was used. Access through the claimant’s subsoil to remove valuable petroleum was an actionable trespass. The statutory licence authorised extraction of Crown-owned petroleum, but did not itself authorise entry on or interference with privately owned land.
3. Compensation. Section 8(2) of the Mines (Working Facilities and Support) Act 1966 required a fair and reasonable assessment between a willing grantor and willing grantee. The court declined to follow BP Petroleum Developments Ltd v Ryder, holding that its reliance on compulsory-purchase principles and existing agricultural value failed to give proper effect to the statutory wording. The hypothetical negotiation had to take account of the statutory procedure, the existing pipelines, the economic impracticability of relocation, and the parties’ respective control of oil and access.
4. The appropriate negotiated figure was 9 per cent of the income from oil extracted through the relevant wells. The award was compensation for trespass measured by reference to a negotiated access payment, not a royalty.
5. Limitation. Deliberate concealment was established in relation to the defendants’ conduct, but the claimant could have discovered the relevant facts with reasonable diligence when information about the wells entered the public domain in 1997. The claim was therefore time-barred before 22 July 2000. A later concealment could not revive claims already barred where the claimant already had sufficient knowledge to sue.
6. The claimant was awarded damages at 9 per cent of the relevant income between 22 July 2000 and 31 December 2007, together with 9 per cent of future income until extraction ended. The court left the form of the final order for further submissions.