Pemex Nets $27 Million in Stolen Gas Judgment
HOUSTON (CN) - A federal judge handed Mexico's national oil company Pemex a mixed bag on its two lawsuits accusing U.S. companies of trafficking and buying its stolen gas condensate, dismissing one and awarding it a $27 million judgment in the other.
Pemex Exploración y Producción sued at least a dozen U.S. oil and gas companies in three separate lawsuits filed in Houston federal court between 2010 and 2012.
The 2010 and 2011 lawsuits were consolidated by U.S. District Judge Sim Lake.
In the complaints Pemex accused the U.S. companies of knowingly importing, trading in, or transporting natural gas condensate stolen by drug cartels from the Burgos Field, an Ireland-sized tract in northeastern Mexico.
Refinery and chemical plant operators use natural gas condensate as a feedstock.
Since Pemex's profits account for about 40 percent of the Mexican government's annual revenue, Pemex claimed the condensate thefts funneled money away from Mexico.
According to Pemex's lawsuits cartels have run wild over the Burgos oilfield since 2006, stealing at least $300 million of condensate by hijacking tankers at gunpoint, kidnapping company officials and building their own pipelines to steal condensate from the company's 52 gas transfer-and-delivery stations.
Pemex filed its 2012 lawsuit against 12 U.S. oil and gas companies, including Houston-based ConocoPhillips and Shell Chemical Co.
In that lawsuit Pemex claimed the defendants "knowingly or unwittingly" participated and profited in trafficking stolen Mexican condensate, and "thereby encouraged and facilitated the Mexican organized crime groups that stole the condensate."
Pemex sued the 12 companies for conversion and unjust enrichment among other claims.
Judge Lake dismissed the case Friday, finding that the claims are all barred by the two-year statute of limitations under Texas law.
Even if the claims were not time-barred, Lake found, Pemex failed to present evidence "that would allow a juror to form a reasonably certain estimate of the amount of allegedly stolen condensate" purchased by the defendants.
Pemex's attorney Mark Maney said it will appeal the ruling to the 5th Circuit in New Orleans.
Pemex's other related lawsuit named the German chemical company BASF as the headline defendant.
In that lawsuit, Pemex claimed that in 2009 co-defendant U.S. oil and gas companies Murphy Energy Corp., Trammo Petroleum, Bio-Nu Southwest dba Valley Fuels, U.S. Petroleum Depot and their officers knowingly coordinated the purchase and delivery of the stolen condensate to U.S. Petroleum Depot's storage facility at the Port of Brownsville.
At the port the condensate was loaded onto a barge and shipped to BASF's plant in Port Arthur, Texas, where BASF bought the feed stock and converted it for its own uses, Pemex alleged in the lawsuit.
Other defendants in the BASF litigation were Continental Fuels Inc., the parent company of U.S. Petroleum Depot, and its president Timothy Brink.
Brink pleaded guilty to a federal felony charge of conspiring to trade condensate he knew was stolen from Pemex.
Continental Fuels bought the stolen condensate from M&B Trading, whose owner Jonathan Dappen also pleaded guilty to felony conspiracy in the case, court records show.
Brink's and Dappen's criminal troubles migrated to the civil side Monday, as Lake handed down a $27.4 million default judgment against them, Continental Fuels and U.S. Petroleum Depot.
Lake based his judgment on the failure of Continental Fuels and Brink to file an answer to Pemex's lawsuit, and Dappen's no shows at pretrial conferences and trial.
Lake also tacked on $8.8 million in pre-judgment interest. Despite the award, Maney said Pemex will also appeal an adverse ruling in the BASF litigation.