In 1997, Moncrief signed a binding contract
with a subsidiary of Gazprom to provide state of the art technology and 100% of the financing required to develop the Yuzhno
Russkoye gas field in return for 40% ownership.
After 18 months and an expenditure of
more than $10 million on the technical and financial plans necessary to commence the $800 million development program, Gazprom
suddenly ceased communicating with Moncrief. Public records subsequently reveal that Gazprom management had transferred ownership
of the YR gas field, through a series of fraudulent transactions, to Itera, a company widely known to be controlled by existing
Gazprom management.
In 2002, President Putin was elected
President of Russia and instructed Gazprom to recover assets, including the YR field, lost
through fraud.
In 2002, Presidents Bush and Putin met
and created the “Bush-Putin Energy Initiative” to assist and promote ongoing oil and gas transactions between
the countries. The Bush administration examined the Moncrief contract with Gazprom for the YR field, and agreed that it was
valid. US Secretary of Commerce Don Evans and Russian Economic Minister German Gref then
agreed that the Moncrief-Gazprom contract would be a focus of the Energy Initiative.
As a result of the Energy Initiative,
Moncrief met with two Gazprom Vice Chairman and was instructed to inform the Bush Administration that Gazprom would honor
the Moncrief agreement. Despite Gazprom’s promise, attempts by Moncrief
to resume work under the agreement were rebuffed.
In 2004, Moncrief met with Gazprom’s
Chairman Alexi Miller and was assured of Gazprom's intent to honor the agreement. Again Moncrief attempts to resume work were
rebuffed.
In 2005, Moncrief filed a claim in US
District Court to regain its interest in the YR field.
The Court refused to assert jurisdiction
over the Moncrief – Gazprom case despite more than sufficient US
based activity under the contract. Moncrief has appealed the case to the US
5th Circuit and is awaiting a decision.
Moncrief is aware that in the past, US
courts have been reluctant to get involved in complex foreign disputes. However, in today’s global economy, US courts
no longer have that luxury. Whether Gazprom honors its contractual obligations to deliver gas to American and EU gas consumers
is very much an issue that must be addressed by US and EU courts. Without the protection of international law, worldwide consumers
are clearly vulnerable to the potential of Russian expedience and lawlessness.
