Exxon may face hearings over oil well sabotage allegations

AUSTIN — Texas Land Commissioner Jerry Patterson called on the state's powerful oil regulatory agency Tuesday to open hearings into allegations that Irving-based Exxon Mobil Corp. improperly plugged and sabotaged oil wells in a South Texas county after failed negotiations to reduce royalty payments.

Patterson said the alleged violations could possibly result in more than $1 billion in administrative fees to the state from the nation's largest oil company. But Exxon Mobil said in a statement that the Republican official’s allegations are "groundless" and "paint a false and misleading picture" of its involvement in the Refugio County wells.

The three-member Texas Railroad Commission heard Patterson's allegations, but made no comments and issued no decision because the public hearing was not posted in advance, commission spokeswoman Ramona Nye said. She said commissioners will rule "as quickly as possible."

Patterson, a former oilfield roustabout who now oversees 20 million acres of state-owned minerals, is accusing Exxon Mobil of committing "irrefutable, intentional and flagrant violations" of state oilfield regulations. But lawyer Shannon Ratliff, who represents Exxon Mobil, challenged Patterson’s assertions and said the company is prepared to respond.

"What you have here is a grandstand play by an interloper," he told commissioners.

The case stems from a legal dispute between Exxon Mobil and the O'Connor family, a South Texas dynasty whose roots date to the Texas Republic. The family owns thousands of acres of oil-rich land in Refugio County.

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