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. Last Updated: 07/27/2016

Moncrief's Siberian Claim Fails

FRANKFURT -- A German court on Thursday rejected a lawsuit by Moncrief Oil International that sought to void a joint venture between BASF and Gazprom to develop a Siberian gas field.

Forth Worth, Texas-based Moncrief, a privately held U.S. gas company, sued BASF, contending that a deal between Gazprom and BASF's Wintershall unit should not have been permitted because the U.S. company had already signed a deal with Gazprom in the late 1990s.

The U.S. company claimed that BASF had induced Gazprom to breach its contractual obligations to Moncrief, leaving it out in the cold and devoid of any chance to explore, exploit and profit from the natural gas field.

Moncrief signed deals with Gazprom in the late 1990s for a 40 percent stake of the Yuzhno-Russkoye gas field. The value of the stake is estimated at around $8.5 billion. But in April 2006, Gazprom and BASF struck an asset-swap deal that raised Gazprom's stake in BASF marketing subsidiaries in exchange for increasing the German company's share in the giant Siberian gas field.

BASF had maintained that Moncrief's claims were without merit. Gazprom was not named in the suit.

Gazprom owns a pipe network in Germany through its Wingas partnership with BASF's Wintershall division.

Manfred Nax, a judge at the Frankenthal district court, said Moncrief failed to "convince us that [BASF] actively persuaded Gazprom to breach its contract. And whether or not there was a binding contract between Gazprom and [Moncrief] that was breached by the contract with [BASF] is not up to this court to decide."

The court added that BASF had not been provided with any documents proving beyond a shadow of a doubt that Moncrief and Gazprom had a contract to begin with. Moncrief did provide copies of the original contracts, but was unable to secure forms from Russia proving that the signature by a Gazprom executive was valid.

In a statement, Moncrief said it would review the decision before deciding its next step. Moncrief can appeal the decision to a regional court.