Tag Archives: company news

Comments on Chevron-Ecuador in Argentina

An informed observer sends this in:

I love the subsidiaries argument. As in, this thing belongs to me, but when you want to take it away from me, it doesn’t belong to me, it belongs to something that belongs to me, therefore you can’t take it from me. I’m a bit disappointed this has been taken at face value.

… Pretty quick turnaround for a decision of that magnitude. And pretty lame that the judge said “If you want to appeal this decision, take it back to Ecuador, because that’s where we go the order from.” Seems flimsy. A pretty big fight for Argentina, which already has some nasty fights on the horizon anyway.

But I kinda want to think this will eventually make Chevron uncomfortable. Best case scenario would be at some point they’d stumble across a legal regulation that says they have to provision some part of this, which means they have to put it on their books, which gets investors talking about it, which means it gets interesting. I’m guessing we’ll never get to that.

Speaking of subsidiaries, here’s a link to Chevron’s annual report to the US securities regulator. I can’t find the part where they say “those 27,000 barrels a day of oil equivalent we’re producing in Argentina, we shouldn’t count those cause they really aren’t ours, they belong to a subsidiary that has nothing to do with us, really guv.” However I do see that the company makes some rather lawyerly terms, and I wonder if this is what they are going to rely on: “Although each subsidiary of Chevron is responsible for its own affairs, Chevron Corporation manages its investments in these subsidiaries and their affiliates.” I certainly don’t know Argentina corporations law, so I have no idea how all this plays out. The only clear winner I see is Buenos Aires law firms and their caterers.

Oh also, you can see how important the market thinks this is: CVX stock has moved with XOM, its closest competitor, for last 2 days. No obvious news-driven divergence, just CVX winning by a bit.

More notes on Chevron-Ecuador in Argentina

A few items for the record.

Statement from James Craig, Chevron’s US-based spokesman on this issue (sent by e-mail):

“Chevron Corp., the Lago Agrio judgment debtor, has no assets in Argentina. All operations in Argentina are conducted by subsidiaries that have nothing to do with the plaintiffs’ fraud in Ecuador. The plaintiffs’ lawyers have no legal right to embargo subsidiary assets in Argentina and should not be allowed to disrupt Argentina’s pursuit of its important energy resources.

“The Ecuador judgment is a product of bribery, fraud, and it is illegitimate. We do not believe that the Ecuador judgment is enforceable in any court that observes the rule of law.”

Amazon Defense Coalition statement:

In a major blow to Chevron’s effort to avoid paying a historic $19 billion environmental judgment in Ecuador, an Argentine judge today signed the first of what is expected to be many orders freezing billions of dollars of assets owned by the U.S. oil company.

The order, signed by Judge Adrian Elcuj Miranda of the Commercial Court of Justice in Buenos Aries, freezes almost all Chevron assets in Argentina pending enforcement of the Ecuador judgment. The embargo applies to 100% of Chevron’s capital in Argentina, 100% of dividends, all of Chevron’s stake in pipeline operator Oleoductos del Valle SA, 40% of Chevron’s oil sales to Argentine refineries, and 40% of the money Chevron has deposited in Argentine banks, said Enrique Bruchou, the lawyer who represents the indigenous and farmer communities in Ecuador who brought the lawsuit.

Continue reading

Argentina vs. Chevron: It’s $19 billion worth of on

Remember how Ecuadorian rain forest villagers won an $18 billion judgment against Chevron Corp. because Texaco polluted the Amazon back in the day? Never mind that the Chevron still says they discharged all their responsibilities long ago and the trial judge was corrupt. Never mind because they got the venue they asked for, they lost the case, and they have spent the last year acting as though no judgment existed. For the most part, that strategy worked fine. No US court was about to seize their assets, at least no time soon. A court case in Canada to enforce the Ecuador judgment promises to be sloow, only with more os. Some have suggested that Chevron try Venezuela, but Venezuela is more dependent on Chevron than vice versa — so that’s not going to happen. But Argentina well, we shall see.

Reuters, take it away:

Argentine judge puts embargo on Chevron assets-lawyer

Nov 7 (Reuters) – An argentine judge has put an embargo on $19 billion in Chevron Corp assets in the South American country over an environmental damages suit in Ecuador, a lawyer for the plaintiffs told reporters on Wednesday.

And that’s the whole article, for now.

For those of you in North America, an “embargo” in South American law is usually pretty much the same as an asset freeze. The company can still use its stuff, but can’t sell it or give it away. I’m sure we’ll all have much more to learn about the term over the next few weeks.

UPDATING WITH CHEVRON STATEMENT:
Bloomberg now has this, from Chevron:

Chevron is unaware of either a filing by the plaintiffs or a court order in Argentina, James Craig, a spokesman for the San Ramon, California-based company said in an e-mailed response to questions.

“The plaintiffs’ lawyers have no legal right to embargo subsidiary assets in Argentina and should not be allowed to disrupt Argentina’s pursuit of its important energy resources,” he said. “The Ecuador judgment is a product of bribery, fraud, and it is illegitimate.”

Anglo confirming Venezuela departure? UPDATE: No, but…

UPDATE: A worker tells me Anglo has said no such thing. However, the government did send someone to guarantee workers that they’d still have their jobs after Nov. 11. So, I guess it’s all going according to plan…

Earlier version of story:

Venezuela’s gossip-master extraordinaire Nelson Bocaranda says Anglo American has told Venezuelan mine workers to stay home tomorrow as its nickel mine will be expropriated. I haven’t confirmed that yet, but it would fit with the Venezuelan government’s usual method of avoiding sabotage — always expropriate a bit before the last possible minute.

In other news, a worker writes in to say that the company has been totally closed-mouthed about this whole operation, but that workers knew something was afoot as mine operations halted and the site’s electrical furnaces were cut to minimum power. No metal output in October, according to my source.

Don’t mind if I toot my own horn a bit more in pointing out that readers here knew about Anglo’s departure from Venezuela before they told their own workers. See, the Internet is more than just cat bounces after all.

Oh wow, forget mining & energy, I want to bounce cats.

UPDATE2: I missed this, from Reuters on Friday: Anglo has indeed confirmed the end of metal production at Loma de Niquel and the company’s likely departure from Venezuela.

Loma de Niquel, the Venezuelan ferronickel producer owned by Anglo-American, closed in September as a long-running dispute over the company’s mining concessions comes to a head.

Anglo has warned that unless a deal can be reached before November 10, when its last three concessions expire, “there will be no further production contribution from this operation”.

If that turns out to be the case, it will remove around 17,000 tonnes of annual capacity from the market, a larger hit on supply than any of the cost-related cuts so far announced.

I would dispute his claim that there was any long-running dispute. But otherwise, nice work getting Anglo’s statement.

Rubiales (PRE.to) to buy Alange-cum-PetroMagdalena (PMD.to) — time to cash out

(After-hours update at bottom regarding that headline.)

When life gives you lemonade, dilute and drink. Or as the statement says:

Shareholders of PetroMagdalena will receive C$1.60 in cash for each outstanding Share, representing a premium of approximately 38% on the 20 day volume weighted average price of PetroMagdalena’s common shares on the TSX-V as of June 4, 2012. In addition, holders of all of the outstanding PetroMagdalena warrants (TSX-V: PMD.WT) will receive C$0.25 in cash for each unexercised Warrant held at closing. The Warrants had a closing trading price on the TSX-V of C$0.215 on June 4, 2012.

Pacific Rubiales chairmen Serafino Iacono and Miguel de la Campa owned a combined 644,857 shares of PetroMagdalena, according to PetroMagdalena’s 2011 Annual Information Form. PRE.to agreed to buy Petromagdalena for $1.60 a share, or 44 cents a share above average market price, in cash. If the deal goes through as currently structured, it will put $2.35 million of Pacific Rubiales money directly into the pockets of Iacono and de la Campa. Continue reading

Goodbye, Fly Aruba

Fly Aruba N407BV returns to USA

This is the way Fly Aruba ends, not with a bang but a roar down the jetway.

Thanks again to readers JS and T for keeping me updated on this. Look up the history of this plane and others at FlightAware.

UPDATING: it looks like the flight plan was filed a day early. The plane will go to Brownsville today, according to a newly filed flight plan.

Responding to the comment that “why” is the important issue here, all I can say is yes, of course. But the real “why” may never be known. Starting an airline is an odd thing to do with one’s money. I am starting to think it’s an apt coincidence that Arevenca is in the old Stanford Bank offices in Oranjestad.

Fascinating AP story on Cuba oil hunt, US sanctions

AP-Cuba doing their job. Look at this:

Experts say it is not unusual that a 3-mile (4.8-kilometer) deep exploratory well drilled at a cost of more than $100 million by Spanish oil giant Repsol was a bust. Four out of five such wells find nothing in the high-stakes oil game, and petroleum companies are built to handle the losses.

But Cuba has more at stake, and only a few more spins left of the roulette wheel. The enormous Scarabeo-9 platform being used in the hunt is the only one in the world that can drill in Cuban waters without incurring sanctions under the U.S. economic embargo, and it is under contract for only one to four more exploratory wells before it heads off to Brazil.

Go check it out.