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Judge Tosses Most Claims Against U.S. Oil Firms

HOUSTON (CN) - A federal judge dismissed most claims Mexico's oil company Pemex made against U.S. firms it charged with trafficking its stolen gas condensate, but left the door open for a trial.

Pemex Exploración y Producción (PEP) 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 complaint PEP accuses the U.S. companies of knowingly importing, trading in, or transporting natural gas condensate stolen from its Burgos Field by drug cartels. Refineries and chemical plants use natural gas condensate as a feedstock to fuel their operations.

Since Pemex's profits account for about 40 percent of the Mexican government's annual revenue, it claims the condensate thefts are siphoning money away from Mexico.

Cartels have run wild over the Burgos oilfield since 2006, stealing at least $300 million of condensate, Pemex says. Tankers are hijacked at gunpoint, company officials are kidnapped and threatened, and the cartels also build their own pipelines to steal condensate from PEP's 52 transfer-and-delivery stations, Pemex claims.

Pemex says cartels take advantage of the expanse and isolation of the Burgos field, an Ireland-sized property that cuts across Mexico's three northeastern states, Tamaulipas, Nuevo Leon and Coahuila.

Defendants Plains Marketing LP, Murphy Energy Corp., Superior Crude Gathering Inc., BASF Corp. and subsidiary BASF FINA Petrochemicals LP, F&M Transportation Inc., and RGV Energy Partners LLC moved to dismiss, arguing the two-year statute of limitations on Texas state law claims barred Pemex's claims against them.

Judge Lake agreed for the most part and dismissed the majority of Pemex's claims as time-barred.

Pemex argued that the clock on its claims against any particular defendant did not start until it could have sued that defendant for a legal injury; while the defendants argued that the limitations period started when the natural gas condensate was stolen.

Lake came down in the middle, finding that limitations began to run when the various players purchased the stolen condensate.

In its first lawsuit Pemex named Trammo Petroleum Inc. and its employee Donald Schroeder as defendants. But after Schroeder pleaded guilty to conspiring to receive and sell stolen condensate Pemex dismissed all its claims against him and Trammo.

Pemex's complaint contains a list of purchases of stolen condensate BASF made from Trammo. While Lake dismissed the majority of transactions as time-barred, he found that six purchases BASF made from Trammo in 2008 and 2009 are not time-barred.

BASF also argued that it was entitled to summary judgment on its three 2009 purchases of natural gas condensate, at a cost of $2.4 million, from Trammo because Trammo paid Pemex $2.4 million restitution for the condensate.

Lake was unmoved, however.

"The amount PEP claims it is owed as a result of Trammo's sales of stolen condensate to BASF and BFLP is substantially more than the $2.4 million. Because Trammo's payment of $2.4 million to PEP does not entirely set-off the maximum amount of liability claimed by PEP, BASF and BFLP are not entitled to summary judgment on any individual transactions," Lake wrote Tuesday.

BFLP is the acronym for BASF subsidiary BASF FINA Petrochemicals Limited Partnership.

While Lake dismissed the majority of Pemex's claims he did give the oil giant leave to pursue its conversion claims at trial.

"In order to hold any individual defendant liable for conversion, PEP must trace condensate that was actually stolen in Mexico to the individual defendant. PEP must also present evidence from which a fact-finder could form a reasonably certain estimate of the amount of stolen condensate, if any, that each defendant converted," Lake wrote in the 183-page ruling.

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