Exxon ordered to pay $105 million in NYC case

NEW YORK Tue Oct 20, 2009 7:35am EDT

A view of the Exxon Mobil refinery in Baytown, Texas September 15, 2008. REUTERS/Jessica Rinaldi

A view of the Exxon Mobil refinery in Baytown, Texas September 15, 2008.

Credit: Reuters/Jessica Rinaldi

NEW YORK (Reuters) - A federal jury in New York City ruled Exxon Mobil Corp (XOM.N) had polluted the city's ground water and ordered the oil giant to pay $105 million in damages, the city said in a statement on Monday.

The city contended Exxon knew that gasoline additive methyl tertiary butyl ether would contaminate ground water if it leaked from the underground storage tanks at its retail stations.

Exxon ignored warnings from its own scientists and engineers not to use MTBE in areas of the country that relied on ground water for drinking water, the city said.

MTBE is an oxygenate that is added to gasoline to increase its octane level and reduce air pollution, but it has largely been phased out of the U.S. fuel supply because of the dangers to ground water.

The $105 million verdict represents less than 3 percent of Exxon's second-quarter profit of $3.95 billion.

Royal Dutch Shell (RDSa.L), BP Plc (BP.L), Chevron Corp (CVX.N), Citgo Petroleum Corp, Hess Corp (HES.N) and Sunoco Inc (SUN.N) have previously settled claims against them for a total of $15 million, the city said.

Irving, Texas-based Exxon said it was disappointed with the decision and would consider its legal options. The company said during the trial that its service stations were not the cause of the contamination.

"We do not believe we should be required to compensate the City of New York for someone else's contamination," company spokesman Kevin Allexon said in an email.

Shares of Exxon Mobil rose 1.1 percent, or 82 cents, to $73.94 on the New York Stock Exchange at mid-afternoon.

(Reporting by Matt Daily; Editing by Richard Chang and Steve Orlofsky)