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Pemex Seeks to Add Conoco, Shell Subsidiaries to Suit


MEXICO CITY—Mexican oil company Petroleos Mexicanos has filed a motion to add ConocoPhillips and subsidiaries of Royal Dutch Shell PLC to a 2010 suit in U.S. federal court that seeks damages against companies that had allegedly purchased natural-gas condensate that Pemex said was stolen from its operations in northern Mexico.

In a proposed amended suit that was attached to the motion, Pemex, as the state-owned company is known, said it doesn’t allege that either company “acted with intent or knowledge or that it was part of any conspiracy,” but it does allege that they are liable for “transactions involving the stolen property of Mexico.”

ConocoPhillips didn’t immediately comment Thursday. Shell said it had been notified about the suit, but declined to comment per company policy. Pemex didn’t immediately issue a statement on its latest filing.

The motion to amend the suit to add the additional companies was filed at the Southern District Court of Texas in Houston last week.

In the proposed amended suit, Pemex alleges ConocoPhillips purchased an estimated $35 million in stolen condensate from two other companies after the fuel had been “laundered” through resales to hide its origin.

The plaintiff in the original suit is the exploration and production division of Pemex, or PEP for its Spanish-language initials, which operates natural-gas operations in northern Mexico. Pemex added additional defendants to the original suit last year, bringing the total at that time to more than a dozen.

Last year’s suit followed a criminal investigation by U.S. authorities into a cross-border smuggling scheme that has resulted in the conviction of at least five people since late 2008.

Pemex said in its original suit it believes organized-crime groups have stolen more than $300 million in condensate since 2006 by robbing storage facilities and hijacking tanker trucks.

Petroleum condensates, like propane and butane, are byproducts of the production of natural gas. Pemex doesn’t typically sell the condensate, but instead uses it in its own oil refineries.

—Angel Gonzalez and Chad Bray contributed to this article.

Write to Laurence Iliff at [email protected]


Comment: this also occurred in the 1980’s at Shell’s Dutch subsidiary, NAM, where large volumes of condensate produced from the Groningen “dry” gas field were sold and used as diesel fuel in road vehicles. It was only after an investigation by the authorities into the use of untaxed road fuel that NAM “discovered” their loss.

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