Few Oklahoma oil and gas producers do business overseas.
Part of the reason is there are so many opportunities domestically.
But that's not the only reason for the local focus.
There also are many headaches involved in working with foreign governments, especially for an oil and natural gas producer.
An ongoing trial between Chevron and environmental groups in Ecuador highlights the challenges of American oil companies doing business overseas.
Chevron inherited its Ecuador problem when it bought Texaco in 2001. The issue centers on claims of pollution in Ecuador from a series of Texaco oil wells.
Texaco settled with Ecuador, agreeing to spend about $40 million for cleanup.
But the lawsuit later became a class-action case involving about 30,000 people who claimed environmental injury. A court-appointed independent expert said there were ongoing environmental problems with at least two former Texaco well sites.
The court ruled against Chevron, ordering the company to pay a record $19 billion in fines and restitution.
It was later shown that the expert was paid by the environmental group bringing the suit and that the opinion was written by the group, not the expert.
That information became public because the environmental group paid a video crew to document the process. The “behind-the-scenes” footage later became evidence.
“In some of the other outtakes, the lawyer talks about plans to scare the judge and to confront the judge,” said Mark Walker, an attorney at Crowe and Dunlevy in Oklahoma City. “He said this is something you would never see in the United States. This is out-of-bounds behavior that lawyers would not do. But in Ecuador, there are almost no rules.”
An international arbitration tribunal in The Hague last week ruled in Chevron's favor, saying the initial, $40 million settlement resolves the claims and that the $19 billion judgment should not be enforced.
But that doesn't necessarily affect the ruling in Ecuador.
“The entire energy industry is watching this case and has been watching it carefully,” Walker said. “Certainly every oil company that does business overseas or has thought about doing business in a third-world country is watching the case closely. I think everybody is watching to see a result, whether a company that has been the unfortunate victim of a corrupt judicial system in a Third World country can get relief in the United States in some way.”
Either way, the case highlights some of the potential risks of doing business overseas, Walker said.
“I think the lesson here is that when you're in a volatile Third World country like that, the political landscape can change pretty quickly,” he said. “What you think is a stable investment environment can change on you quickly.”