Exxon, Conoco, Cite Prudhoe Bay Shutdown As "Act Of God" - NYT

[hatrack]

DALLAS (AP) -- Some analysts are questioning whether Exxon Mobil Corp. and ConocoPhillips Co. can legitimately blame events beyond their control for failing to supply customers following the partial shutdown of Prudhoe Bay oil field. The contractual clause, force majeure, that excuses a company from fulfilling its obligations is usually excercised following a natural disaster or in war.

Neither was the case when the two oil companies invoked it last week after field operator BP PLC said it would shut down part of the nation's largest oil field because of pipeline corrosion that had gone undetected for years.

If BP was negligent -- the British oil giant has accepted responsibility for the lack of upkeep that led to shutdown -- does this really qualify as an unforeseen circumstance? As huge interest holders in the oil field, do Exxon Mobil and ConocoPhillips still have some oversight responsibility?

''Some one could very easily bring that claim and have it be a valid one,'' said Houston attorney Tom Kruse, of Baker & Hostetler LLP, who has tried force majeure cases. ''It will come down to the question of law that if you have ownership in a pipeline, whether or not you have responsibility to monitor BP's operations,'' he said. The other two companies ''are trying to get ahead of the curve and get declaration from the court that they are not responsible.''

EDIT

http://www.nytimes.com/aponline/business/AP-Oil-Field-Act-of-God.html?_r=1&oref=slogin

[shain from kane]

1. What does the insurance company say? Business interruption insurance

policies are fairly specific.

[LeftCoast]

2. They shouldn't blame their lack of maintainence on God.

I'm just saying...

[phantom power]

3. Silly analysts. Rules are for the little people.

[MUAD_DIB]

4. Oh my...I didn't take my car to the shop and rpair my breaks.

Too bad I crashed it. Must be an act of God.


No?

[nam78_two]

5. Greg Palast wrote an interesting article about that

I wanted to post the link but I can't find it now :-/

[nam78_two]

6. Oh wait found it! Here is the Palast piece

http://www.commondreams.org/views06/0808-34.htm

Originally published in the Guardian

[damntexdem]

7. Hey, I guess that it IS an act of God:

the Almighty Dollar!