UpdateMurphy Energy says it was unaware it bought stolen NGLs

08 June 2010 23:53  [Source: ICIS news]

BASF denies Pemex allegations(adds details throughout)

HOUSTON (ICIS news)--US marketer and distributor Murphy Energy had no knowledge that it had bought natural gas liquids (NGLs) that were stolen from Petroleos Mexicanos (Pemex), a lawyer representing the company said on Tuesday.

Pemex sued Murphy Energy and BASF, accusing both companies of buying stolen NGLs.

In both cases, Pemex did not accuse either company of knowing that the NGLs were stolen.

Instead, Pemex said BASF and Murphy Energy were at the end of a long chain of transactions that began with NGLs stolen in Mexico by organised crime.

Regardless, BASF and Murphy benefited at the expense of Pemex, according to the lawsuit. Pemex said the two companies should pay it for the stolen NGLs.

Murphy Energy attorney Joel Androphy said the lawsuit surprised the company.

"If this had been an ongoing problem, you would have thought they would have contacted people in the industry to warn them," he said.

In fact, Murphy had notified Pemex about earlier NGL transactions, Androphy said. "Nothing was ever said about it being stolen."

As it were, Murphy paid market value for the NGLs, Androphy said. Months after the deals were consummated, Murphy learned that the NGLs were stolen, he said.

"The only thing we're accused of in the lawsuit was ultimately being in the possession of something that was stolen," Androphy said. "Nothing more, nothing less."

Earlier on Tuesday, BASF denied allegations by Pemex connecting the chemical giant to a smuggling ring that sold natural gas liquids (NGLs) stolen from Mexico.

"Pemex's allegations with respect to BASF are demonstrably false and without merit," according to a statement by David Stryker, BASF general counsel.

BASF said it never knowingly bought stolen NGLs.

Once BASF learned that the material was stolen, it set aside all of the disputed money into an account, Stryker saidt.

BASF said it stopped buying NGLs from Trammo Petroleum, one of the companies accused of brokering the stolen product. BASF also stopped buying NGLs from other sources on or near the Mexican border.

"It is both false and irresponsible for the plaintiff to allege that BASF continues to buy product stolen from Pemex and to imply that BASF supports ongoing criminal activity," Stryker said.

BASF "will defend the case vigorously and expects Pemex's baseless allegations to be dismissed in their entirety", Stryker said.

The Pemex lawsuit accused other companies and business executives of distributing what they knew were stolen NGLs.

Since 2006, Pemex estimated that gangs had stolen more than $300m (€252m) worth of condensate.

($1 = €0.84)

For more on BASF visit ICIS company intelligence
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