What happens when a country uses its natural wealth for poverty reduction

ExxonMobil Not Finished With Venezuelan Arbitration; Could Win $7 Billion

International Business Times News, January 3, 2012 Tuesday

ExxonMobil has not thrown in the towel in a controversial arbitration in Venezuela over seizure of its assets, in which the International Chamber of Commerce ruled against it in favour of the government of President Hugo Chavez.

Irving, Tex.-based Exxon Mobil is scheduled to receive $907.6 million from Venezuela's state-owned oil producer PDVSA in compensation for the 2007 seizure of the U.S. company's oil wells and refineries. A certain portion was already credited in the form of debt relief and the remaining $746.9 million could be paid out in the form of cash, further debt relief, or $305 million held in U.S. courts, said Patrick McGinn, a spokesperson for ExxonMobil.

Chavez's government seized the company's assets when it nationalized the country's oil industry. Caracas offered ExxonMobil the book value of its seized assets in the Orinoco River Basin while ExxonMobil demanded more. Government officials said the company's demands were excessive. An impasse ensued, and for years the two have been locked in arbitration.

"This ICC arbitration award represents recovery on a limited, contractual liability of PDVSA that was provided for in the Cerro Negro project agreement. Contract sanctity and respect for the rule of law are core principles used to manage our business over the long term," McGinn said in a statement.

ExxonMobil originally asked for $12 billion, but has since lowered its compensation request to $7 billion.

The arbitration is being hailed as a victory for the Chavez government. PDVSA, on its Web site, said the arbitration is consistent with what Venezuela was initially ready to offer.

"After four years of arbitration, the actual amount determined by the ICC Court is, in fact, less than the exorbitant sum originally claimed," read the statement.

Fedel Gheit, an oil analyst with Oppenheimer, told International Business Times the arbitration is a victory for the Chavez government because it is on the low end of the scale.

That being said, the arbitration sum makes it so that ExxonMobil essentially breaks even on its investment in the country.

"To my recollection, that is the exact book value of the asset," Gheit told IBTimes.

But book value and market value are two very different things, and the company's assets could very well be calculated in billions of dollars, he said. With oil prices higher now than they were previously when ExxonMobil first entered the country, Gheit said he suspects the market vaule of the company's assets could have quadrupled beyond its book value.

The settlement, in a way, goes against the whole principle of investing - one does not invest without the intention of collecting on returns.

"It's unfortunate in a way because it makes it difficult for companies to conduct business," Gheit said.

ExxonMobil could receive more in compensation come February when a larger arbitration hearing between the two is argued in the International Center for Settlement of Investment Disputes for the fair market value of the company's assets in the country, said McGinn.

"We recognize Venezuela's legal right to expropriate assets subject to compensation at fair market value," McGinn said.

Venezuela's state oil company PDVSA, said if ExxonMobil continues its arbitration, it will take all necessary measures to protect itself.

ExxonMobil's shares rose $1.56 to $86.32 in midday trading. They rose nearly 16 percent in 2011.

Exxon's Outstanding Corporate Social Responsibility Shines Through Again

Exxon's deal with the Kurds inflames Baghdad

Patrick Cockburn

The Independent, Friday, 09 December 2011

The great Iraqi oil rush has started to exacerbate dangerous communal tensions after a major oil company ignored the wishes of the central government in Baghdad and decided to do business with its main regional rival.

The bombshell exploded last month when Exxon Mobil, the world's largest oil company, defied the instructions of the Baghdad government and signed a deal with the Iraqi Kurds to search for oil in the northern area of Iraq they control. To make matters worse, three of the areas Exxon has signed up to explore are on territory the two authorities dispute. The government must now decide if it will retaliate by kicking Exxon out of a giant oilfield it is developing in the south of Iraq.

Political leaders in Baghdad say the company is putting the unity of their country at risk. Hussain Shahristani, the Deputy Prime Minister in charge of energy matters, told The Independent in an interview in Baghdad that any oil or gas field development contract in Iraq "needs the approval of the federal government, and any contract that has not been presented to the federal government has no standing and the companies are not advised to work on Iraqi territory in breach of Iraqi laws".

Baghdad has had oil disputes before with the Kurdistan Regional Government (KRG), but the present row is far more serious because it is the first time "Big Oil" has moved into Kurdistan, showing that at least one of the major oil companies is prepared to disregard threats from the government of Nouri al-Maliki. Previously, only small independent foreign oil companies, without other interests to protect in the rest of the country, have risked signing contracts with the Kurds.

"Exxon Mobil was aware of the position of the Iraqi government," says Mr Shahristani, a former nuclear scientist who was tortured and imprisoned by Saddam Hussein. "We hear from the American government that they've advised all American companies, including Exxon Mobil, that contracts should not be signed without the approval of the federal government."

Whatever the prospects of finding oil in the north of Iraq, observers are surprised that Exxon is prepared to hang its future in Iraq on the outcome of the power struggle between Iraqi Kurdistan and the central government. Control of the right to explore for oil and exploit it is crucial to the authorities on both sides since they have virtually no other source of revenue.

The Kurds have won a degree of autonomy close to independence since the fall of Saddam, and the ability to sign oil contracts without reference to Baghdad will be another step towards practical independence and the break-up of Iraq. A parallel would be if the Scottish government were to sign exploration contracts in the North Sea without consulting London.

What makes the Exxon-KRG deal particularly inflammatory, says Mr Shahristani, is that three of the six blocs where Exxon is planning to drill are understood to be "across the blue line – that is outside the border of the KRG". This means they are in the large areas in northern Iraq disputed between Arabs and Kurds since 2003, but where the Kurds have military control.

The government must now decide if it will make good on its threats and replace Exxon at a mammoth oil field called West Qurna 1 at the other end of the country, north of Basra. Iraqi oil officials hint that Royal Dutch Shell might replace the American company.

Both sides have much at stake. The Iraqi government is totally reliant on its oil revenues to pay its soldiers, police force and civilian officials. It needs vast sums to rebuild the country after 30 years of war, civil war and sanctions. In 2009, it began to expand its oil industry by signing contracts with firms such as BP, Royal Dutch Shell and Exxon to boost production in under-exploited and poorly maintained fields.

These companies thereby gained access to some of the largest fields in the world, each with reserves of more than five billion barrels. Vast sums are being invested, mostly around Basra in the south of Iraq. Oil output, now at 2.9 million barrels a day, is due to rise to a production capacity of 12 million b/d by 2017, potentially putting Iraq on a par with Saudi Arabia as an oil exporter.

Mr Shahristani is pleased with progress so far, saying that what "we are doing in Basra is at least five times larger than the largest oil projects in the history of the oil industry so far."

Sitting in his vast office in a cavernous palace originally designed for one of Saddam's senior lieutenants, he holds up a chart showing the surging production from the Rumaila oilfield of 1.4 million b/d, more than Britain's entire current output of crude from the North Sea.

Iraqis are split on whether Exxon is being cunning or naive. One explanation is that the oil company feels so powerful, or so essential to Iraqi oil development, that it can disregard the Iraqi government. An alternative argument is that Exxon is dissatisfied with the West Qurna 1 deal and so does not mind walking away from it and looking for oil elsewhere. A third is that the company got suckered by the Kurds.

Iraqi Arabs know that the Iraqi Kurds want to control as much of Iraq's oil reserves as possible to buttress their independence. Less easy to understand is why Exxon should willingly make its activities a central issue in the Arab-Kurdish confrontation which has for so long destabilised Iraq.

Flashpoint: Iraqi military bases

The transfer of Iraq's military bases to local control is another flashpoint between the Kurdistan Regional Government and Baghdad, and some fear the dispute may boil over when US forces pull out at the end of the year.

Last month saw a tense standoff between the Iraqi army and local Kurdish forces at a US airbase in the northern city of Kirkuk, an oil-rich area long a point of dispute. The Kurdish police force reportedly blocked an army team from entering the base for an official handover from the US, unhappy that it was being transferred to Baghdad.

In an effort to calm the drama, the US ambassador, James Jeffrey, met Kirkuk's Governor, Najmaldin Karim, and Iraq's Prime Minister, Nouri al-Maliki, in the capital.

"We did not want a situation where we ended up shooting at each other," said Mr Karim.

The situation was defused when the central government made assurances that the base would be used for 

civilian aircraft only, a key demand of the Kurds.

However, once the base is handed over to Iraqi control, Washington will have little control over whether Baghdad sticks by its verbal agreement. Indeed, Ali Ghaidan, the commander of Iraq's ground forces who led the army team that eventually entered the base, has since publicly ruled out the possibility of the base being turned into a civilian airport – saying it is of too much strategic importance to Iraqi forces.

Reports of Kurdish security forces, known as peshmerga, bolstering their presence in Kirkuk have raised questions over how long the lid can be kept on this simmering conflict.

ExxonMobil Selling Gas Assets At Center Of Indonesia Human-Rights Case

When being suited, it is always good to know the past conduct of your partner. In the first of two articles, Isabella Ordonez reports on Exxon Mobil’s conduct in Indonesia following a case brought by villagers over serious human rights abuses (Dow Jones Newswire, 8/8/2011). The background of the case is summarised in the second article.

Exxon Mobil Corp. (XOM) said Monday it is selling some of its depleting natural gas assets in Indonesia's Aceh province, but will maintain a presence in the Southeast Asian country.

The properties being marketed have been at the center of a lawsuit brought by Indonesian villagers that seeks to hold ExxonMobil, the world's largest publicly-traded oil company, liable for alleged killings and torture committed by Indonesian soldiers guarding the assets. The lawsuit was thrown out by a trial judge in 2009, but a U.S. federal appeals court reinstated the case in early July, saying the suit had been wrongly dismissed.

The assets being offered include the Arun field and satellite fields, and the North Sumatra Offshore field. Gas production from these fields--which started in the late 1960s--has been dwindling, and last year they produced an annual average of 215 million cubic feet of gas a day plus associated liquids, the company said.

The gas from the fields is delivered to the Arun LNG processing plant, which is operated by Arun NGL--a joint venture between state-owned Pertamina, Mobil Indonesia LNG and Japan-Indonesia LNG Company.

Texas-based ExxonMobil said the decision to sell the assets is in line with its long-standing practice of continually reviewing assets for their contribution to the company.

ExxonMobil didn't immediately respond to requests for comments on whether the sale was also motivated by the recent reinstatement of the human-rights lawsuit.

The company said it continues to have an active presence in the exploration and production and refining and marketing sectors in the Southeast Asian country.

"Exxon Mobil continues to seek and evaluate new opportunities in Indonesia," the company said.

Its current projects in the country include the Cepu block, East Natuna and a coalbed-methane project being evaluated in Kalimantan. Last month, ExxonMobil said it was seeking partners for half of its interest in three blocks where the company is exploring for coalbed-methane in Kalimantan.

The Indonesians' lawsuit against Exxon dates back to 2001. A group of villagers alleged that Indonesian soldiers, serving as Exxon's security forces, murdered, tortured, raped and kidnapped local residents. The alleged abuses took place from 1999 to 2001, during a period of civil unrest in the region. The plaintiffs said Exxon had authority over the soldiers and provided them with material and logistical support that aided the alleged abuses.

Not all of the villagers' claims are based on international-law violations. Among other things, they also sued Exxon for wrongful death and assault and battery.

ExxonMobil has recently said the plaintiffs' claims were baseless and that the company was reviewing the July ruling of the U.S. Court of Appeals for the District of Columbia Circuit, which reinstated the lawsuit.

Exxon has said it has worked for generations to improve the quality of life in Aceh through employment of local workers, provision of health services and extensive community investment. "The company strongly condemns human rights violations in any form," the company said.

Amnesty International Welcomes US Court Decision

Ankara (22/7/11)

Amnesty International hailed the decision of the United States court of appeals on US-based Exxon Mobil in facing the demand for the alleged murder outside the law, torture and arrest by Indonesian troops in Aceh province, Indonesia, under the Alien Tort Statute (ATS).

A group of rural people from Aceh had filed civil cases in 2001 and 2007 against Exxon Mobil Corporation, the US company which operates the big natural gas extraction and processing facilities in Aceh province in 2000 and 2001, Campaigner of Indonesia & Timor-Leste, Amnesty International Secretariat, Josef Roy Benedict, told ANTARA's London correspondent on Thursday.

Josef Roy Benedict said they claimed that Exxon Mobil is responsible for the involvement in the alleged violation of human rights by Indonesian troops who were supposed to protect the property and operations of the company.

In the first and second verdicts on July 8, 2011, the US court of appeals stated that Exxon Mobil did not have the company's immunity against the claim made by 15 Indonesians under the ATS.

The decision sends a signal to the Indonesian government to do more to make sure of the truth and justice for the past human rights violations in Aceh.

There were no suspects brought before the court for one of the thousands of cases of human rights violations including torture, believed to have taken place between 1989 and 1998 when the province was a Military Operation Area (DOM).

Aceh province faced rebellion for tens of years including human rights violation and lack of development, which ended after the peace agreement of August 2005, while the Indonesian government and the armed pro-freedom movement (Free Aceh Movement/GAM) was signed.

Law no 2006 on the Aceh administration on the formation of a human rights court on the formation of the Truth and Reconciliation Commission (KKR) Aceh branch. The two government institutions have not been set up until today.

Amnesty International called on the Indonesian government to immediately form a human rights court and make sure that a Truth and Reconciliation Commission is set up and functions according to the international law and standards, like contained in the report of Amnesty International, truth, justice, and reparation: forming an effective commission of truth.

The government must also make sure of the responsibility of violators of human rights in the past including torture in Aceh. This includes cooperation in connection with the litigation process on the case filed in the US.

Amnesty International knows only two examples, in Indonesia, on the case involving human rights violations in Aceh between 1998 and May 2003 had been verified and produced a trial. Only several human rights violation cases had been handled during the military emergency period and the following civil administration (May 2003-August 2005).

Amnesty International praised the decision of the US court of appeals that the company was not immune from its obligations under the ATS for the despicable treatment by the perpetrators violating international law.

The victims of the human rights violations in which the multinational company was also involved, must have unlimited access to the court, and the countries need to take measures to eradicate the obstacles to the access of the victims.

Like this case shows, access to the court of the country of origin (place where the company has its domicile or was registered) has often become the only realistic way to claim the victims of human rights violations by the company need to be listened to and reached all kinds of reparations.

The decision of the court of appeals which make possible a claim to be continued in the US, giving an important opportunity for charges made against Exxon Mobil to be examined by the court.

Big Legal Win in the US: Exxon May Have to Pay for Alleged Complicity in Aceh Atrocities

For over a decade landowners and villagers from countries including Papua New Guinea, Indonesia and Nigeria have been attempting to seek redress using the US Alien Tort Statute for atrocities committed by mining companies. Last year after a number of unfavourable decisions it appeared that the courts in the US were going to employ a restrictive reading of the statute. However, the below decision from the D.C. Court of Appeal gives renewed hoped to litigants.

Currently, Bougainvilleans litigants are seeking redress in the US under this statute for Rio Tinto’s direct involvement in the war crimes committed by the government during the Bougainville war. Exxon Mobil stand accused of aiding and abetting the Indonesian government in a similar vein.

If the Alien Tort Statute is held to extend to cases such as these by the Supreme Court (which is the lilekly next venue), this will be an important victory for mining communities globally for four principle reasons:

1)      It will allow them to seek redress for corporate crimes committed against them.

2)      It will allow them to utilise the sophisticated legal machinery in the United States to promote their claim.

3)      Using this legal machinery, litigants can meticulously expose the illegal practices being used by mining companies.

4)     Companies like ExxonMobil will have to be that little more careful when operating abroad.  

Indonesia torture case vs Exxon Mobil revived

Fri, Jul 8 2011

By Jonathan Stempel

NEW YORK (Reuters) - Indonesian villagers who accused Exxon Mobil Corp's security forces of murder, torture and other atrocities have regained their right to sue the giant oil company in the United States.

A federal appeals court said on Friday that companies are not immune from liability under a 1789 U.S. law known as the Alien Tort Statute for "heinous conduct" allegedly committed by its agents in violation of human rights norms.

The 15 villagers contended in their lawsuit that family members were killed and that others were "beaten, burned, shocked with cattle prods, kicked, and subjected to other forms of brutality and cruelty" amounting to torture in Indonesia's Aceh province between 1999 and 2001, a period of civil unrest.

A divided panel of the D.C. Circuit Court of Appeals said Exxon Mobil should be forced to defend against such charges.

Given that laws in civilized nations hold corporations responsible for lesser wrongs, "it would create a bizarre anomaly to immunize corporations from liability for the conduct of their agents in lawsuits brought for shockingly egregious violations of universally recognized principles of international law," Judge Judith Rogers wrote for a 2-1 majority.

Friday's decision reversed part of a ruling by the federal district court in Washington, D.C.

It is also at odds with a landmark ruling last September by the federal appeals court in New York, raising the prospect that the U.S. Supreme Court could try to resolve the dispute.

"The ruling basically says that corporations are not above the law," said Jennifer Green, a University of Minnesota law professor and director of that school's human rights litigation clinic, who submitted a brief on the plaintiffs' behalf. "When corporations have knowledge that they are aiding and abetting human rights abuses, they can be held liable in a U.S. court."

Exxon Mobil, based in Irving, Texas, said it is reviewing Friday's decision, calling the plaintiffs' claims "baseless." Indonesia's government has also opposed the lawsuit.

"Not above the Law"

The villagers sought to hold Exxon Mobil responsible for having retained soldiers from Indonesia's military as guards for a natural gas facility in Aceh, despite knowing of past human rights abuses by Indonesia's army and that the contract would lead to human rights violations against Aceh villagers.

In its ruling, the D.C. Circuit also upheld the district court dismissal of claims under a different law, the Torture Victim Protection Act.

It returned the case to that court, where a jury could decide liability and any compensatory or punitive damages.

"We have fought these baseless claims for many years," Exxon Mobil spokesman Patrick McGinn said in a statement.

"While conducting its business in Indonesia, ExxonMobil has worked for generations to improve the quality of life in Aceh through employment of local workers, provision of health services and extensive community investment. The company strongly condemns human rights violations in any form."

Agnieszka Fryszman, a lawyer for the plaintiffs, said the decision makes clear that corporations would be "as liable as anyone else" for violating international human rights norms.

Dissent

Friday's decision puts the D.C. Circuit in agreement with the 11th U.S. Circuit Court of Appeals, which has jurisdiction in Alabama, Florida and Georgia.

It also put both courts at odds with the 2nd U.S. Circuit Court of Appeals, which said companies are not liable in U.S. courts for violating international human rights law.

That case was brought against Royal Dutch Shell Plc by the families of seven Nigerians executed by a former military government. They accused Shell of helping Nigerian authorities violently suppress protests against its oil exploration and development in the 1990s. [ID:nN04244684]

The 2nd Circuit decision applies in New York, Connecticut and Vermont.

Judge Brett Kavanaugh dissented from Friday's decision, saying it would be "quite odd" for a U.S. court to allow Alien Tort Statute claims against a corporation based on customary international law, when no international tribunals would.

He also said the ruling could harm U.S.-Indonesian relations, and perhaps damage the war on terrorism.

Kavanaugh was appointed to the bench by President George W. Bush. Rogers and Judge David Tatel, who comprised the majority, were appointed by President Bill Clinton.

Exxon shares closed up 6 cents at $82.42 on the New York Stock Exchange.

The case is John Doe VIII et al v. Exxon Mobil Corp et al, D.C. Circuit Court of Appeals, No. 09-7125.

(Reporting by Jonathan Stempel; additional reporting by Anna Driver in Houston and James Vicini in Washington, D.C.; editing by Tim Dobbyn, Andre Grenon and Matthew Lewis)

Exxon Spill Shines Light on the Dangers of Pipelines

An article by Steven Mufson and Juliet Eilperin from today's Washington Post

For 20 years, Exxon Mobil's 12-inch Silvertip pipeline lay buried beneath the waters and muddy bottom of the Yellowstone River in Montana, and Friday it was feeding 39 barrels a minute to small refineries in the Billings area.  Then at 10:41 p.m., the pressure in the pipeline dropped - the sign of a leak.          

Six minutes later, at the Exxon Mobil control room in Houston, workers used remote devices to shut down the pipeline's pumps, reducing the flow. A valve near the refinery was closed, reopened, then closed again. Finally, 55 minutes after the pressure drop, the crucial valve on the other side of the river was closed.

Exxon Mobil estimates that in the interim as many as 42,000 gallons of crude oil spilled into the fast-flowing Yellowstone River, which is swollen with melted runoff from heavy winter snowfalls. The river, surging over its banks, snakes its way through Montana into North Dakota and empties into the Missouri River.

Suddenly, images familiar from last summer's much bigger Gulf of Mexico spill are back: Workers mopping up oil with absorbent pads and laying plastic booms near shorelines. Soiled grasses and breeding grounds. Apologies from a big oil company. And an angry governor.

Montana Gov. Brian Schweitzer (D), who has a master's degree in soil science, vowed to "stay on this like smell on a skunk until it's cleaned up." He added: "Exxon Mobil? They're going to pay for it. I promise you this right now. Yellowstone is cleaned up when the state of Montana says it's cleaned up, not some bureaucrat from Washington or the state of Texas."         

If Exxon's estimate is correct, this spill would be just a fraction of 1 percent of the size of BP's spill in the gulf last year. But the company said it had already spread nearly 20 miles, and others said it stretched twice that far. Schweitzer said flooding had carried the oil into eddies and wetlands that he called "the health and wealth of a river."

Moreover, the spill raises questions far beyond the banks of the Yellowstone River: How can the nation's 2.3 million miles of aging gas and hazardous-liquid pipelines be safely maintained? Exxon Mobil's pipeline subsidiary alone has 8,000 miles of lines. Was there sufficient regulatory oversight? And how can a big company make sure that decisions in far-flung corners of its bureaucracy don't end up causing a disaster?

Agency's investigation         

In the wake of the BP spill last year, Exxon Mobil executives said the 1989 Exxon Valdez tanker accident off the coast of Alaska taught them to control risks. Yet environmental groups said Exxon had failed to take measures that might have prevented the Yellowstone River spill.

The Transportation Department's Pipeline and Hazardous Materials Safety Administration said it is looking into Exxon's handling of the pipeline shutdown as well as its maintenance of the line's other river crossings.

This past fall, officials from PHMSA had met with residents from the nearby town of Laurel because people there were worried that flooding from heavy snowmelt could erode the soil above the pipeline and expose it to damage from debris.

In May, Exxon Mobil shut the pipeline for a day and reviewed data collected last year - including soundings from September and December that it said showed five to eight feet of riverbed above the line, said company spokesman Alan T. Jeffers. He said the company was responding to Laurel's concerns but concluded that the line was safe. PHMSA, however, said Exxon reported 12 feet of cover.

"I was not aware of that shutdown," said Chris Hoidal, PHMSA's western regional director for pipeline safety. The company was not required by law to close the line in May. "What led them to shut that down, that is a focus of our investigation," Hoidal said.

Jeffers also said the company ran an inspection device, known in the industry as a "pig," through the line in 2009, complying with regulations.

The unfolding spill in Montana could complicate the State Department's decision about whether to approve the 2,000-mile TransCanada Keystone XL pipeline, stretching from Canada's tar sands to the Gulf Coast. Foes of the project - environmentalists, ranchers, farmers and residents along the proposed route - point to other recent pipeline spills, including a nearly million-gallon spill on the Kalamazoo River last year and several smaller accidents in the United States and Canada.

"The Yellowstone spill makes it clear, yet again, that we have to have a better assessment of pipeline safety in the U.S. before we move ahead with the mother of pipelines in the Keystone XL pipeline," said Susan Casey-Lefkowitz, who directs the international program at the Natural Resources Defense Council. She said an existing Keystone pipeline has had 12 spills in its first year of operation.

TransCanada spokesman James Millar said that the spills - which ranged from five to 16,800 gallons - came from ground pump stations, not underground lines, and that each was contained within TransCanada's property.

Spill cleanup

At the Yellowstone River, the president of Exxon Mobil's pipeline unit, Gary Pruessing, said the company had received complaints of oil deposits from 36 landowners. He said Exxon had brought in 70,000 feet of boom and 3,000 absorbent pads, each 2 by 3 feet. Half the pads had been applied, he said. He said there was no new technology involved, "just hard work."

Jim Martin, the Environmental Protection Agency's regional administrator, said the EPA was coordinating a team of 440 people seeking "oil and oily waste." Martin said flooding made some areas impenetrable, making it hard to determine whether there is contamination south of Billings.

"There's a tremendous amount of water moving at a very high velocity," Martin said in a phone interview. "There are some places we can't get to." He added, "We are going to be here for quite a while."

Exxon Mobil to Pay $1.6 Billion for Contaminating Water Supply

TOWSON, Md. (AP) — Exxon Mobil Corp. has been ordered to pay more than $1.5 billion in damages to 160 families and businesses affected by a 2006 gasoline leak in Maryland.

Jurors awarded more than $1 billion in punitive damages on Thursday, after earlier awarding $495 million in compensatory damages. The ruling in Baltimore County Circuit Court follows a $150 million award in 2009 involving about 90 households, which Exxon is appealing. The Irving, Texas-based oil company said the facts do not support the latest ruling and that it will appeal it as well.

The 2006 leak occurred in Jacksonville, a small, affluent community about 20 miles north of Baltimore. An underground pipe burst beneath an Exxon gas station, allowing more 26,000 gallons of gasoline to escape. Many residents get their water from wells and the spill led the state to order well monitoring in the area to judge contamination. The plaintiffs had claimed lost property values as well as emotional stress.

"As we've stated throughout the last five years, we sincerely regret this unfortunate accident. We apologize to the Jacksonville community and have devoted significant resources to clean-up, recovery and remediation activities," Exxon said in a statement. "As soon as the leak was discovered, we immediately took responsibility and, sparing no expense, began cleanup activities working under the Maryland Department of Environment's oversight and direction."

Exxon Mobil asked the Maryland Department of the Environment in January 2010 for approval to stop monitoring some of the 248 private wells near the Jacksonville station. MDE agreed to the oil company's request to stop monitoring 130 of the wells. Exxon Mobil also stopped delivering bottled water to those homes.

Exxon's Attempts to Downplay Yellowstone Spill Exposed

Associated Press Report by Matthew Brown 6/7/11

Federal documents show it took Exxon Mobil nearly twice as long as it publicly disclosed to fully seal a pipeline that spilled roughly 1,000 barrels of crude oil into the Yellowstone River.

Details about the company's response to the Montana pipeline burst emerged late Tuesday as the Department of Transportation ordered the company bury the duct deeper beneath the riverbed, where it is buried 5 to 8 feet underground to deliver 40,000 barrels of oil a day to a refinery in Billings.

The federal agency's records indicate the pipeline was not fully shut down for 56 minutes after the break occurred Friday near Laurel. That's longer than the 30 minutes that company officials claimed Tuesday in a briefing with federal officials and Gov. Brian Schweitzer.

An Exxon Mobil spokesman said the longer time span was based on information provided to the agency by the company and the discrepancy might have come about because Exxon Mobil Pipeline Co. President Gary Pruessing was speaking without any notes in front of him when he addressed Schweitzer.

"Clearly our communication with the regulator (DOT) is the one that we've got precision on," spokesman Alan Jeffers said.

It was not the first time the company offered clarification of its response and assessment of the spill. A day earlier, the company acknowledged under political pressure that the leak's impact could extend far beyond a 10-mile stretch of the river it initially said was the most affected area. The company had earlier downplayed government officials' assertions that damage was spread over dozens of miles.

The governor toured the area Tuesday as the waterway rose above flood stage and stoked fears that surging currents could push crude into undamaged areas and back channels vital to the river's prized fishery. Conditions have hampered efforts to find the cause of the break.

The river has been flowing too swiftly for crews to reach some oiled areas, and forecasters said mountain snowmelt was adding to high water levels. Officials speculated that the surge may push oil into areas that haven't yet been damaged.

Most observations have been made through aerial flights.

A few miles downriver from the broken pipe, homeowner Robert Castleberry said he had been out of his house since Saturday because of dangerous fumes from oil that the river pushed across his yard and into the crawlspace beneath his house.

Castleberry's wife suffers from heart disease and the fumes gave her difficulty breathing, he said. While he appreciated the company promising to cover the couple's immediate expenses, the retired fuel truck driver was doubtful workers would be able to clean up the black, gooey film that laced through the underbrush along the river.

"Exxon's been nothing but 100 percent with us," he said. "But when you get into brush that thick, that's going to be virtually impossible to clean."

Company and federal officials said they have only seen oil about 25 miles downstream from the site of the break near Laurel. But Schweitzer said he believes some has traveled hundreds of miles to North Dakota.

"At seven miles per hour, some oil is already in North Dakota. That's a given," Schweitzer said. "I'm asking everyone to get out there and report what you see on the river."

Representatives of Exxon Mobil and the Environmental Protection Agency said they had no reports of oil beyond the town of Huntley.

Transportation officials said Tuesday that oil was observed as far downstream as 240 miles in Terry, Mont. The agency said that information was provided by Exxon Mobil, but company spokesman Alan Jeffers said he was not aware of any such sighting.

Exxon planned to test the river's conditions with a jet boat, with eight more on standby if the launch is successful, Glass said.

Federal regulators have ordered Exxon to make safety improvements to the 20-year-old pipeline. Among them was an order to re-bury the line to protect against external damage and assess risk where it crosses a waterway, which the company intended to comply with, Jeffers said.

"We will follow their requirements," he said.

The company also will have to submit a restart plan to the Department of Transportation before crude can again flow through the line.

Schweitzer also ordered a review of pipelines that cross major and minor rivers in the state. Officials will look at the pipes' age, location of shut-off valves and whether they are similar to the ruptured pipe. He said the state has 88 such crossings.

Modern pipelines can be buried as much as 25 feet beneath bodies of water; Exxon Mobil's Silvertip line was 5 to 8 feet below the bottom of the Yellowstone.

The line was temporarily shut down in May after Laurel officials raised concerns that it could be at risk as the Yellowstone started to rise. The company restarted the line after a day, following a review of its safety record.

Schweitzer said he noticed that oil was pooling in areas near banks with slower-moving water, close to islands and cottonwood stands that support the microbes and insects that bring life to the river.

"Those riparian areas are a biological treasure trove. That's the health and wealth of the river," he said.

Exxon Spill Damages Iconic Yellowstone River

http://news.smh.com.au/breaking-news-world/exxon-pipeline-leaks-oil-into-us-river-20110704-1gxoz.html

Teams of federal and state workers have fanned out along Montana's Yellowstone River to gauge the environmental damage from a ruptured ExxonMobil pipeline that spewed crude into the famous waterway.

An Environmental Protection Agency representative said on Sunday only a small fraction of the tens of thousands of gallons of spilled oil is likely to be recovered.

Agency on-scene coordinator Steve Way said fast flows along the flooding river are spreading the oil, making it harder to capture, but that also could reduce damage to wildlife and cropland along the river.

A 40-km slick of oil had reached as far west as Hysham on Saturday night. An estimated 1000 barrels spilled on Saturday before the flow was stopped.

Yellowstone County disaster coordinator Duane Winslow says dozens more ExxonMobil clean-up workers began to arrive in Montana on Sunday morning.

The break near Billings in south-central Montana fouled the riverbank and forced municipalities on Saturday to close intakes.

The river has no dams on its way to its confluence with the Missouri River just across the Montana border in North Dakota.

Winslow said the plume was dissipating as it moved downstream. "We're just kind of waiting for it to move on down while Exxon is trying to figure out how to corral this monster," he said.

"The timing couldn't be worse," said Steve Knecht, chief of operations for Montana Disaster and Emergency Services. He said the plume was measured at 40km near Pompeys Pillar National Monument.

"With the Yellowstone running at flood stage and all the debris, it makes it dang tough to get out there to do anything."

Brent Peters, the fire chief for the city of Laurel, about 20km west of Billings, said the rupture in the 30.5-cm diameter pipe occurred late on Friday about 1.6km south of Laurel.

About 140 people in the Laurel area were evacuated early on Saturday on concerns about possible explosions and overpowering fumes. They were allowed to return about 4am after fumes had decreased.

Winslow said hundreds of residents downstream were told to evacuate in the early morning hours.

ExxonMobil said it was sending a team to help with clean-up, and that state and federal authorities had been alerted to the spill. The ExxonMobil Pipeline Company "deeply regrets this release", it said.

Crews were putting out absorbent material along stretches of the river in Billings and near Laurel, but there were no attempts at capturing oil farther out in the river. In some areas oil flowed underneath booms and continued downstream.

The smell of oil permeated the air for kilometres downstream and through the city of Billings.

"Right now, the Yellowstone River is at flood stage," Peters said. "The bank isn't stable enough for anybody to get close."

The cause of the rupture in the pipe carrying crude oil from Belfry, Montana, to the company's refinery in Billings wasn't known. Peters and Malek said speculation involved high water that might have gouged out the riverbed and exposed the pipe, which was possibly hit by debris.

"I haven't seen it this high for at least 15 years," Peters said.

Jeb Montgomery of ExxonMobil said the pipe was buried 1.8m below the riverbed.

Laurel, which has about 6500 residents, is known for a huge Fourth of July fireworks display put on by the fire department. Peters said the town can swell to as many as 50,000 people for the event.

He said the fire department plans to hold the event on Monday

Exxon Mobil's Profits Soar 55 Percent

LNG Watch: Interesting data from this article -  last year Exxon Mobil's profit was US40.6 billion. PNG's annual budget is about US3 billion.

ExxonMobil profit soars 55 percent in third quarter

(AFP) – 28 October, 2010

ExxonMobil said Thursday its profit soared 55 percent in the third quarter, driven in part by higher energy prices and rising oil production in Qatar. The US energy giant reported net earnings of 7.35 billion dollars, a better- than-expected advance from the 4.73 billion dollars posted in the 2009 third quarter.

Earnings per share of 1.44 dollars in the July-September period topped the consensus forecast of 1.39 dollars. Revenue surged 16 percent to 95.29 billion dollars.

ExxonMobil, the world's largest non-state oil company, said the strong performance was due to higher crude oil and natural gas prices, improved refining margins, and solid chemical results.

"Despite continuing economic uncertainty, we had strong quarterly results and continued to advance our robust investment opportunities," ExxonMobil chairman Rex Tillerson said in a statement.

The Irving, Texas-based company said it had returned more than five billion dollars to shareholders in the third quarter, through dividends and share purchases.

The company announced Tuesday it would pay a fourth-quarter dividend of 44 cents, the same amount paid in the third quarter.

Oil and gas production rose 20 percent from the third quarter of 2009, driven in part by increased production from projects in Qatar.

Capital and exploration spending increased 35 percent, to 8.8 billion dollars. ExxonMobil reported nine-month earnings, excluding special items, were 21.21 billion dollars, a 59 percent increase from the same period in 2009.

In 2009 it posted the largest profit of any publicly listed company worldwide: 40.6 billion dollars.