ExxonMobil liable for $1 billion fine in Texas
20 July 2009
The world's largest oil company ExxonMobil may be hit with penalties exceeding over $1 billion for allegedly sabotaging oil wells it no longer wanted, in order to prevent other producers from exploiting them, the Texas General Land Office said.
The Texas General Land Office, said that Exxon Mobil intentionally damaged the wells, filling them with trash, sludge and explosives, to prevent other producers from exploiting them. The trash has made it impossible for other producers from reviving the wells.
"Exxon committed irrefutable, intentional and flagrant violations of state rules regulating the oilfield," commissioner of the Texas General Land Office, Jerry Patterson said in a statement.
Irving, Texas-based Exxon Mobil may have to pay $10,000 a day per well in fines under the Railroad Commission rules, which would total to more than $1 billion after the company scrapped its agreement in 1992 over a royalty payment dispute with the owners of the land, the O'Connors family, which had leased the land to the company in the 1950s.
While exiting tha land, ExxonMobil has been accused of plugging about 100 wells that it had drilled by cutting all the underground pipes inside the wells, putting thick cement plugs, explosives, and sludge at different depths.
Moreover it is accused of failing to list these obstructions in its report filed with the Railroad Commission, a regulator of the state's oil and gas production.