CVX Investors: Remember This Date -- June 5, 2013

On Wednesday, June 5, 2013, the Argentine Supreme Court lifted an embargo on $19 billion-worth of assets held by Chevron’s subsidiary in the Latin American country. -- Forbes, article linked below.

Argentina Supreme Court lifts freeze on CVX assets. MarketWatch is reporting:

Argentina’s Supreme Court has lifted a freeze on Chevron Corp. assets in the country, opening the way for Chevron to invest $1.5 billion to develop a vast oil and gas shale formation in west-central Argentina.

The freeze was a side effect of Chevron’s decades-long legal wrangling with indigenous groups in Ecuador.

The champagne must be flowing in Chevron’s legal department, as it scored a second victory over a legal thorn-in-the-side. Earlier this year, Chevron resolved litigation in Brazil involving a small oil spill.  Production at the field, Frade, has resumed.

A consultant hired by YPF said last year Vaca Muerta holds nearly 23 million barrels of oil equivalent in reserves. The area covers 7.4 million acres, with YPF holding rights for more than 3 million acres.

Initial results have shown the area to be 70% oil — more lucrative.

Forbes calling it Chevron's dream:

Argentina’s relationship with the global economy has become immensely complex since the 2001-2 default. In its attempts to develop what could potentially be one of the most important global hydrocarbon discoveries of the past several years, the Argentine government has sought to close a deal with Chevron, through recently nationalized oil company YPF. And, in order to close that deal, they had to tie a few loose knots.

The Supreme Court reversed a ruling on Wednesday that came through an appeals court which froze Chevron’s assets in Argentina in connection to alleged environmental damage in the Ecuadorian rain forest.  The original suit goes back to 1993, when U.S. lawyers asked for a class action in favor of 30,000 residents of the Ecuadorian Amazon near the Lago Agrio oil field, accusing Texaco of environmental damage, according to Argentine daily Ambito Financiero; Chevron bought Texaco in 2001.

As Chevron has no assets in Ecuador, the plaintiffs pursued suits in Canada, Brazil, and Argentina to secure assets to pay for damages.  Basing his decision on an international treaty between Argentina and Ecuador, Judge Adrian Elcuj Miranda gave way to an Ecuadorian court’s ruling, ordering an embargo of Chevron’s Argentine subsidiary’s assets, dividends, and 40% of future bank deposits worth approximately $19 million (mirroring a ruling in Ecuador).

In a five page ruling, the Argentine Supreme Court unanimously agreed to lift the embargo, noting Chevron Argentina and the other involved entities were separate from Chevron Corporation, and therefore not parties to previous litigation.  The Argentine Supreme Court’s decision followed a Canadian court which on May 1 said it had no jurisdiction, therefore securing Chevron’s assets in Canada.

Just a month ago, Canada told the plaintiffs to go elsewhere, as noted above.

Let's see Brazil, strike one. Canada, strike two. Argentina, strike three. 

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