Platts Commodity News

September 26, 2006

US court lets stand Timor Sea 'RICO' case against ConocoPhillips

A federal district judge in Washington, D.C., has dismissed the Timor Sea Designated Authority as a defendant in Oceanic Exploration's $10.5 billion damages lawsuit over the loss of what now includes the Bayu Undan development in what an area formerly controlled by Indonesia.

But Judge Emmet Sullivan, in a ruling last week, refused to dismiss Denver-based Oceanic's racketeering, antitrust and "intential interferrence" claims against ConocoPhillips, which Oceanic alleges used years of bribery in Indonesia and East Timor to thwart Oceanic's Portugese-era concession claim.

As a government entity, the TSDA is exempt from Oceanic's claims under the so-called "act of state" doctrine, Sullivan ruled. He also dismissed on technical grounds a raft of ConocoPhillips subsidiaries as defendants.

But Sullivan left standing tiny Oceanic's claim under the Racketeer Influenced Corrupt Organization (RICO) rules, which alleges persistent bribery efforts by ConocoPhillips made it "futile" for Oceanic to try to hang on to its 1974 Timor Sea concession, which was auctioned off in 1991 after Indonesia invaded and annexed the former Portuguese enclave of East Timor.

In a securities filing Monday, Oceanic said it expects ConocoPhillips will continue to deny the allegations and "vigorously defend against Oceanic's claims."

ConocoPhillips had no comment on the ruling.

------------------------------------------ Joyo Indonesia News Service