Cuba vows to fight ExxonMobil suit

Cuba is pledging a vigorous defense against ExxonMobil's new lawsuit that seeks compensation for a refinery and other oil installations seized by the island's government after the 1959 revolution.

The US major filed the suit in May 2019 against Cuba's state-owned oil company Cupet and diversified holding company Cimex that operates service stations.

The suit, filed in District of Columbia district court, accuses the Cuban companies of continuing to use the confiscated property without compensation.

"We have successfully defended ourselves in previous similar attacks in the US courts, and will do so again whenever this suit is heard," Cupet told Argus, declining to give details of the earlier cases.

ExxonMobil's legal action came after the US government recently activated a section of the Helms-Burton Act that allows US firms and individuals to seek compensation for property seized by the Cuban government after the island's 1959 revolution.

The assets for which ExxonMobil is seeking compensation were operated by its predecessor company Standard Oil. These include the 35,000 b/d Belot refinery that is now operated by Cupet as Nico Lopez, fuel storage tanks with a total capacity of 2.4mn bl, 117 retail stations and several marine and inland terminals.

The facilities had a value of $71.6mn when they were seized, ExxonMobil said.

The company confirmed that it is now seeking to recover around $280mn associated with seized assets. But it declined to comment on Cuba's reaction to the lawsuit.

This suit is "another example of US attempt at extra-judicial jurisdiction, and a further attempt to damage our national economy through illegal means such as the Helms-Burton Act, the economic blockade and sanctions," Cupet said.

The confiscated oil installations had been managed "in a manner that threatened the national economy, and this could not be allowed to continue," Cupet said.

Cuba seized the facilities after Standard refused to process bartered crude from the Soviet Union, which had been Cuba's leading international patron.

There is "significant international rejection" of compensation claims filed under the Helms-Burton Act, and Cuba is confident that it will be supported when the suit filed by ExxonMobil is heard, Cupet said.

EU members and Canada are among the countries that have rejected the use of the Helms-Burton provision and plan to ask the World Trade Organization for a ruling.

Spanish and Canadian companies, such as Sherritt International, have a strong presence in Cuba.

The ExxonMobil lawsuit coincides with a deepening oil shortage in Cuba caused by a decline in oil imports from its close ally Venezuela.

Washington imposed an economic embargo on Havana in the 1960s, and more recently expanded sanctions as an offshoot of its campaign to remove Venezuelan president Nicolas Maduro, whom most Western countries no longer recognize as head of state.