ST.-PETERSBURG, March 5 - RAPSI. The North-Western District Federal Commercial Court has upheld the lower courts' judgments dismissing Arktikshelfneftegaz' lawsuit against Arktikmorneftegazrazvedka for $3.7 million, the Supreme Commercial Court reports on its website.

Arktikshelfneftegaz contested the Murmansk Region Commercial Court's April 27 decision upheld by the Thirteenth Commercial Appeals Court in late September.

The dispute stems from the companies' agreement dated March 7, 2003, pursuant to which Arktikmorneftegazrazvedka was to build from scratch 4,200 meters' deep exploration well No. 3 at the Barents Sea's shelf. Arktikshelfneftegaz maintains that the former did not fulfill its contractual obligations and therefore it failed to get the necessary geological data.

Meanwhile the plaintiff used the data obtained during its production operations and did not complain to the contractor about the quality as the latter carried on its works.

"The customer's representatives were permanently present at the well drilling platform. Throughout the well construction period the customer never claimed that the contractor deviated from the contract terms which might make it impossible to use the work results," the trial court noted in its judgment.

The Arktikshelfneftegaz oil and gas company, a part of the Sintez group, was established in 2002 to search for, explore and produce mineral resources at the Barents Sea.
Established in 1979, Arktikmorneftegazrazvedka searches for, explores and develops oil and gas deposits at the Arctic sea shelf.