ST. PETERSBURG, March 26 - RAPSI. The Arkhangelsk Region Commercial Court suspended until April 19 its hearing of the environmental watchdog's $16.5 million lawsuit against Naryanmarneftegaz, a joint venture of Russia's LUKOIL oil company and U.S.-based Conoco Phillips.

The case was suspended at the request of the Federal Service for the Supervision of Natural Resources (Rosprirodnadzor), which insists on establishing a hazard class of the wastes for which the watchdog sues the company.

Naryanmarneftegaz is a LUKOIL-ConocoPhillips joint venture developing the South-Khylchuyuskoye field in the Nenets Autonomous District. The field was discovered in 1981 with proved reserves estimated at over 500 million barrels.

The Arkhangelsk Commercial Court earlier suspended the proceedings in the case, as a similar lawsuit is underway. Previously, Rosprirodnadzor filed a lawsuit against Naryanmarneftegaz for 249.46 million rubles ($8.4 million) for discharging oil waste in the first quarter of 2008.

However, an appellate court found no legal connection between the two cases as the "subjects of the disputes are different." The court added that the trial court had no reason to suspend the proceedings in the $16.5 million lawsuit.

The environmental service requested the court to obligate Naryanmarneftegaz to pay for disposing saline oily waste water generated from hydrocarbon production and oil treatment at the Varandey facility in the first and second quarters of 2007.

In July 2010, Naryanmarneftegaz paid 1.1 million rubles ($37,400) on the assumption that the bottom water is a waste product. However, the watchdog claims $17.3 million, arguing that bottom water falls within the fourth hazardous class.