On Friday, Oct. 24, 2003, a jury in a Texas state court awarded $70.4 million to Anglo-Dutch Petroleum International Inc. and Anglo-Dutch (Tenge) LLC against Halliburton Energy Services Inc., and Scottish-based Ramco Energy plc, and Ramco Oil Ltd. for violating confidentiality contracts, causing severe damage to Anglo-Dutch.
Anglo-Dutch was represented by John M. O’Quinn of O’Quinn, Laminack & Pirtle, and John L. McConn, Jr. and Jett Williams III of McConn & Williams LLP.
“Confidentiality agreements between service companies and oil companies are the fabric of our industry, and must be maintained at all times,” said Jim Wood, retired vice president of exploration for Exxon U.S.A.
The Anglo-Dutch companies are privately owned oil and gas companies based in Houston. Anglo-Dutch went to Kazakhstan in 1992, soon after the Soviet Union dissolved, and started to conduct technical studies on the Tenge field. The Tenge field is located in Western Kazakhstan near the Caspian Sea. Anglo-Dutch became the second Western oil company to sign a contract with Kazakhstan when it entered into an agreement in 1994 to develop the Tenge field.
In 1995, Anglo-Dutch raised money to develop the Tenge Field from various investors. In 1997, those investors offered their interests for sale. To continue development of the Tenge field, Anglo-Dutch began to arrange financing to acquire the interests of the selling investors. In mid-1997, Halliburton and Ramco expressed interest in joining Anglo-Dutch in buying the sellers’ interests and in developing the Tenge field. Both companies signed confidentiality contracts with Anglo-Dutch, and were given access to Anglo-Dutch’s data room, which housed extensive geologic, geophysical, production history, and contractual information on the field.
In early 1998, Halliburton and Ramco hired Golden Eagle Partners S.a.r.L., a Swiss company, as their contractor. Halliburton and Ramco made confidential information available to Golden Eagle during their due diligence on the Tenge field. However, neither Halliburton nor Ramco obtained confidentiality contracts from Golden Eagle. Soon after Halliburton and Ramco had decided not to acquire an interest in the Tenge field, Golden Eagle contacted Anglo-Dutch’s investors and started negotiations to purchase their interests without Anglo-Dutch’s knowledge. While Anglo-Dutch was pursuing the purchase of the sellers’ interest for itself, Golden Eagle, without Anglo-Dutch’s knowledge, was bidding against Anglo-Dutch.
When Anglo-Dutch learned that Golden Eagle was about to acquire the sellers’ interests and Anglo-Dutch was going to loose its own interest in the same transaction, Anglo-Dutch filed suit on May 5, 2000, against Halliburton and Ramco in Texas State court in Harris County. In face of the lawsuit, neither Halliburton nor Ramco took action to prevent their contractor, Golden Eagle, from acquiring the Tenge field interests. After Golden Eagle made the acquisition, Halliburton was awarded a service contract on the Tenge field.
The trial lasted eight weeks. The jury found against Halliburton, Ramco and their consultants on all of the issues submitted to them by the Court. Those issues included that (1) Halliburton and Ramco had violated their confidentiality contracts with Anglo-Dutch, (2) Golden Eagle had been a contractor of Halliburton, (3) Golden Eagle had violated the confidentiality contracts with Anglo-Dutch, and (4) Halliburton and Ramco were partners in the transaction. The jury awarded Anglo-Dutch a total of $70.4 million against Halliburton and Ramco for past and future damages.