When the oilman comes calling


Exxon Mobil Corp. is suing Corporación CIMEX and the Unión Cuba-Petróleo, or CUPET, for “unlawful trafficking” of properties that Cuban authorities confiscated in 1960.
Total damages could exceed $6 billion, which is more than the Cuban companies are worth.
Exxon’s lawsuit, filed May 2 in U.S. District Court in Washington, D.C., states:

CIMEX uses and continues to profit from the confiscated property by, among other things, operating service stations in cooperation with CUPET, the state-owned oil company of Cuba. CUPET additionally uses and continues to profit from the confiscated property through its use of the Ñico Lopez Refinery (formerly known as the Belot Refinery) and certain terminals and plants used in conjunction with the refinery operations.

CIMEX and CUPET have not filed a response to the lawsuit. If the companies don’t respond, it’s likely that U.S. District Judge Amit P. Mehta would declare default judgments against them.
Exxon, based in Irving, Texas, began doing business in Cuba as the Standard Oil Company more than 100 years ago.
Standard Oil’s subsidiaries in Cuba were Esso Standard Oil S.A., or Essoaa, in Havana, and Esso Standard Inc. and Esso Inc., two Delaware companies that explored for and produced crude oil.
Exxon’s lawsuit states:

On October 30, 1959, Cuban government inspectors from Fomento Nacional (National Development) arrived at the office of the Exploration Companies and confiscated and copied all files, maps, and other records of geological exploration. After the copying incident and the passage of Law 625 of November 29, 1959, which changed the basis for granting mineral concessions, the Exploration Companies stopped all exploration efforts on the island. On February 1, 1960, the Exploration Companies closed their office in Cuba.
On July 1, 1960, Essosa’s property rights were expropriated pursuant to Resolution No. 33 issued by the Cuban Petroleum Institute, which was issued pursuant to Resolution No. 190 of June 30, 1960 by Cuban Prime Minister Fidel Castro. The Director General of the Cuban Petroleum Institute appointed Major Onelio Pino as “Interventor” of Essosa for “all the properties and installations that [Essosa] may have in Cuba.”
As a result, Essosa not only lost control over its assets, but it was also forced to end its ongoing operations. Essosa was prohibited from operating its expanded Belot Refinery, which was completed in early 1958 and employed 530 people. Essosa was also forced to abandon its Cuban-based marketing operation with over 500 employees who were engaged in selling and distributing products through more than one thousand retail outlets. And Essosa was also forced to cease operating its service stations in Cuba.

Exxon Mobil says seized assets included:

  • Belot Refinery, a new 35,000 barrel-per-day refinery in Havana, including:
    • a marine terminal;
    • a 8,800 pounds-per-day grease plant;
    • a 205 barrel-per-day lube blending and packaging plant; and
    • 109 storage tanks with a total capacity of 2.4 million barrels.
  • Bulk products terminals, including:
    • three ocean terminals;
    • seven inland terminals; and
    • seven bulk and packaging plants.
  • Service station properties, including:
    • 117 service station properties; and
    • 176 loans outstanding to service station owners secured by mortgages.

Standard Oil filed a claim with the Foreign Claims Settlement Commission after the properties were confiscated. On Sept. 3, 1969, the commission certified that Standard Oil had suffered a loss of $71,611,002.90, not including interest.
An interest rate of 6 percent per year from the July 1, 1960, loss through today would bring the claim to $2,102,422,236.88.
The claims commission also allows for triple damages, which would raise the total to $6,307,266,710.64.
Lawyers for Exxon Mobil describe the company as “Cuba’s largest commercial corporation with annual revenues reportedly as high as $1.3 billion….CIMEX reportedly maintains a financial division that manages all remittance wire transfers from the United States and a tourism company that is the exclusive provider of travel from the United States.”
CIMEX and CUPET “operate over 300 services stations across Cuba…”

6 thoughts on “When the oilman comes calling”

  1. Standard Oil is not the only one owed money by Cuba. My grandmother owned thousands of shares of Cuban oil stock which was nationalized by Castro, as did thousands of private investors. Exxon does deserve to be compensated for the property which was stolen from them and I hope they get it. But how is my family and the thousands of private citizens who had their property stolen get what they deserve?


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