Petrotimor v. ConocoPhillips
Lawsuit dismissed by United States Courts
March 2004 - November 2009
La'o Hamutuk created this web page because information and accuracy is lacking regarding this lawsuit and its outcome. Although media were quick to report the sensational allegations when the case was filed in 2004, no journalist anywhere reported the dismissal of the case in the six weeks before La'o Hamutuk called it to public attention.
More information is on the OilWeb portion of this website, including the 2003 dismissal of Petrotimor's case in Australian court, their 2004 case against ConocoPhillips in US courts and its continuation in 2007, and the court's dismissal of the case because "it does not plead facts that, if true, would show that its loss was proximately caused by the bribery."
Petrotimor's backer Oceanic Exploration appealed the decision against them (docket), and the Fifth Circuit Court of Appeals upheld the lower court dismissal of the case in November 2009. Follow this link for more information on the appeal proceedings.
In 2004, the U.S. company Oceanic Exploration and its Petrotimor subsidiary filed a multi-billion dollar lawsuit against ConocoPhillips, the Timor Sea Designated Authority (TSDA), Pertamina and others. The lawsuit initially alleged that ConocoPhillips benefited illegally from the Indonesian occupation of Timor-Leste, and that ConocoPhillips (then known as Phillips Petroleum) bribed Prime Minister Mari Alkatiri and other Fretilin officials to continue contracts it had signed with the Australian-Indonesian Timor Gap Joint Authority during the illegal Indonesian occupation, rather than have a new bidding process in 2002 or revoke Indonesian-era contracts in favor of Portuguese-era ones. Oceanic claims that in 1974 Portugal awarded it an exclusive exploration contract for the entire Joint Petroleum Development Area (JPDA), and that ConocoPhillips illegal activities deprived Oceanic of its legal rights to exploit Timor Sea Oil. A similar lawsuit was dismissed by Australian courts in 2003 for lack of jurisdiction.
The case was filed in U.S. Federal District Court in Washington, DC on 1 March 2004 and assigned to Judge Emmet G. Sullivan.
Oceanic demanded US$10.5 billion in damages, multiplied by three because they claimed that racketeering and corruption deprived them of their rights. Oceanic alleges that ConocoPhillips bribed Timor-Leste Prime Minister Mari Alkatiri and Fretilin members of Parliament to secure the Timor Sea Treaty and a favorable tax regime. The allegations got a lot of coverage in Timorese and international media, and were immediately denied by the Prime Minister and the Fretilin bancada in Parliament.
A year later, Judge Sullivan rejected Oceanic's initial complaint, and Oceanic filed a new version on 1 March 2005, dropping some allegations and adding others. In September 2006, the judge dismissed the case against the TSDA and subsidiaries of ConocoPhillips, but allowed it to proceed against the parent ConocoPhillips company. ConocoPhillips filed its first answer to the substantive allegations in October 2006.
In February 2007, Judge Sullivan accepted ConocoPhillips' request that the case be transferred to Houston, Texas, where it continued before judge Lynn N. Hughes. Some hearings and filings took place over the next four months.
On 16 April 2008, Judge Hughes dismissed the entire case, issuing a final judgment the following week. About the bribery allegations, the judge wrote
Judge Hughes concluded:
In May 2008, Oceanic Exploration and Petrotimor appealed the decision to the U.S. Fifth Circuit Court of Appeals. The Appellate Court accepted filings and held oral arguments. On 6 November 2009, the Appeals Court issued an opinion that they "agree with the district court that Oceanic failed to set forth a plausible theory of proximate causation and accordingly affirm" the lower court ruling and rejected Oceanic's appeal, ordering Oceanic to pay the appeals costs incurred by ConocoPhillips and other defendants.
Although this case, including Oceanic's detailed allegations, has been on the public record for more than four years, no prosecuting authority anywhere brought criminal charges against anyone named by Oceanic's allegations. Most likely, prosecutors in the United States, Australia and elsewhere did not find the allegations of bribery, racketeering and corruption credible enough to bring alleged perpetrators to trial.
Follow these links to relevant articles and documents
The Timor-Leste Institute for Development Monitoring and Analysis (La’o Hamutuk)