No Price Tag Attached
U.S. oil majors balk at demands for increased spending in a Canadian province.
The American Lawyer
August 01, 2009
Danny Williams, the fiery premier of Newfoundland, has been demanding that foreign investors in the Canadian province's offshore oil business spend more revenues locally. Mobil Investments Inc. (a subsidiary of Exxon Mobil Corporation) and Murphy Oil Corporation concede that they were legally obligated to inject some funds into the local economy when they signed oil contracts with the province, but the U.S. companies contend that no exact amount was specified. When Newfoundland later required them to spend at least $27 million on research and development, the companies balked. In an arbitration claim filed in 2007, they say that Canada is liable for the province's actions, and that the local spending requirements breach a NAFTA clause barring so-called performance requirements on foreign investors. Canada has yet to file a response.
Mobil Investments and Murphy Oil v. Canada, filed November 2007
For claimant Mobil Investments Inc. (Irving, Texas) and Murphy Oil Corporation (El Dorado, Arizona): Debevoise & Plimpton For respondent Canada: Trade Law Bureau
