Exclusive: Unveiling BP's Legal Triumph Against Venture Global
In a landmark legal victory, BP has secured a judgment exceeding $1 billion against liquefied natural gas producer Venture Global, alleging unfair business practices. This ruling, as revealed by five sources familiar with the case, sheds light on a strategic approach that could significantly impact parallel cases. The dispute, one of the largest in the industry's history, involves multiple companies seeking substantial damages.
The case against Venture Global emerged from a complex web of legal battles, with Shell losing a similar case just two months prior. BP's argument centered on Venture Global's alleged unfair behavior in spot sales, a strategy that Shell notably omitted in its arbitration. This decision has sparked intense interest among legal professionals, as four additional companies are pursuing billions in damages from Venture Global.
The arbitration process, distinct from legal cases, lacks precedent-setting nature, as noted by Roberto Lipari, Europe's head of litigation and dispute resolution at Dentons. This means that similar cases may yield vastly different outcomes, contingent on the presentation of facts and the interpretation by arbitrators.
The dispute involves a host of major players, including Shell, BP, Unipec, Edison, Galp, Repsol, and Orlen, each seeking compensation from Venture Global. The combined claims from customers total $5.5 billion, according to Venture Global's January statement, following its settlement with Unipec and losses against Shell and BP.
BP's pursuit of damages surpassing $1 billion was contingent on a new hearing to determine the exact amount, Venture Global stated after the loss. In October, the company expressed belief that the BP ruling contradicted the findings of the Shell arbitration. BP Chief Executive Murray Auchincloss confirmed that the exact damages sought remain undisclosed, with a date yet to be set for the damages determination.
The case revolves around Venture Global's alleged withholding of LNG cargoes under long-term contracts, a claim the company refutes. Venture Global's Calcasieu Pass LNG plant, with its 18 trains, has a unique design, leading to quicker initial production but a longer ramp-up to full operation. This design, the company argues, was communicated to long-term customers, who were offered cargoes in 2021.
The legal battle has been a focal point for Reuters journalists, including Marwa Rashad, who covers LNG and natural gas from London, and Francesca Landini, who has reported on Europe's energy groups and their decarbonization efforts. The case's outcome highlights the growing legal exposure for Venture Global, with multiple disputes unfolding simultaneously, each with the potential for substantial financial impact.
