Former Costa Rican Minister of Environment and Energy, Roberto Dobles Mora, is suing American energy company Black Hills Corporation (BHC) for breach of contract regarding royalty payments. Dobles claims he is owed these payments from a failed oil concession deal that never materialized.
Over a decade ago, Dobles signed a consulting agreement with BHC, advising the company on securing oil and natural gas concessions in Costa Rica for $4,000 per month. Additionally, a “Royalty Agreement” would entitle Dobles to 3% royalties on any extracted oil and gas. BHC, however, never submitted the necessary environmental impact assessments, and the concessions were never finalized.
Dobles argues that BHC deliberately delayed the approval process due to reluctance in revealing its overseas fossil fuel interests. As a result, he alleges that he missed out on millions in potential royalty payments.
BHC inherited the exploration rights covering over 9,300 square kilometers in northern Costa Rica after acquiring Mallon Oil Company in 2003. The company struggled with the country’s strict environmental policies and eventually lost access to the oil and gas fields in January 2020.
Dobles faced corruption allegations in 2009 but was later acquitted. Interestingly, his decisions while serving under former president Oscar Arias had initially allowed for oil and gas concessions. Now, Dobles is suing over the unsuccessful deal with BHC that occurred after he left the Arias administration. However, his $42 million damages claim against BHC was recently dismissed by a U.S. appellate court.
The former environmental minister’s pursuit of oil concessions has drawn attention due to Costa Rica’s eco-friendly reputation and adds another chapter to this ongoing story.
1. Research the company before entering into any business agreements. It’s important to understand their track record, financial stability, and reputation to ensure a successful partnership.
2. Ensure that all contract terms are clearly defined and agreed upon before signing. This includes royalty payments, obligations, and expectations from both parties. Get legal advice if necessary.
3. Be aware of the environmental regulations and policies of the country you are operating in. Failure to comply with these regulations can lead to delays, legal issues, and financial losses.
4. Regularly review and assess the progress and viability of any business ventures. If there are any red flags or concerns about the success of the project, take appropriate measures to mitigate risks or reconsider the partnership.
5. Maintain transparency and open communication with all stakeholders involved in the project. This includes investors, government officials, and local communities. Transparency can help avoid misunderstandings, disputes, and legal complications.
6. Learn from past experiences and mistakes. In this case, the former environmental minister took controversial decisions during his tenure that opened the door for oil concessions. Understanding the consequences of such decisions can help shape better future strategies and policies.