Investors query Fairfield listing

Institutional investors have started to shun next week's $500m London listing of Fairfield Energy, the North Sea oil explorer and producer, due to fears over a loan and future liabilities.

But Mark McAllister, the Fairview chief executive, believes the company has properly accounted for the decommissioning of the key Dunlin field cluster 500km from Aberdeen.

Bank of Tokyo-Mitsubishi, which has a 30 per cent stake in Dunlin, has given Fairfield a letter of credit for $270m to help decommission the fields in 2026. North Sea oil companies must have sufficient capital in place to cover future decommissioning.

Mr McAllister, who visited potential US shareholders last week, said: "We've had a number of independent reviews of the decommissioning costs and we feel comfortable with them and covered them well in presentations to investors."

But, a fund manager at an institutional investor said: "We're not going for it. They have a large decommissioning liability that would have a big impact on the net asset value if it were triggered."