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Wednesday, October 01, 2008

UT could get record $500 million gift - or zilch

//Oil company's pledge dependent on lawsuit vs. Russian oil company
October 01, 2008 - Austin American Statesman by Claudia Grisales - The University of Texas could be in line for a $500 million windfall from a longtime donor. But first, Fort Worth-based Moncrief Oil International must hit its own jackpot: winning a complex, international legal fight over its interests in one of Russia's largest natural gas fields. If Moncrief Oil wins, UT would receive 25 percent of the net proceeds from the case, or up to $500 million. If Moncrief Oil loses, the university would get nothing. "Oh, we don't want to talk about that," UT spokesman Don Hale joked Tuesday after the university announced the pledge. "It has the potential to be a $500 million gift, but it also has the potential to be less than that." Moncrief Oil International is owned by the family of Richard Moncrief, son of W.A. "Tex" Moncrief Jr., an oilman and former UT regent who has given $27 million over the years for new facilities and programs at the university. The Moncrief Oil donation could surpass UT's largest gift, one valued at $241 million, from the late Dallas oilman John Jackson and his late wife, Katie, Hale said. It also would be one of the biggest gifts ever in higher education. It is far from a sure thing, however. The pledge is tied to the outcome of litigation over Moncrief Oil's interests in the Yuzhno-Russkoye gas field in Siberia. Moncrief Oil maintains that it owns 40 percent of the gas field, with an estimated value of $16 billion. The company alleges that Gazprom, the Russian oil giant that controls the gas field, has refused to honor Moncrief Oil's contracts with a Gazprom subsidiary, which date back to the 1990s. According to the litigation, in 2004, Gazprom sold a stake in the gas field to a German company without Moncrief Oil's knowledge. The Texas firm filed a lawsuit against Gazprom in the United States and Germany, but the U.S. court said it did not have jurisdiction. It has filed new lawsuits in Texas and a different German court and is fighting a move by Gazprom to move the case to Russia. Rob Reich, who is co-director of the Stanford Center on Philanthropy and Civil Society at Stanford University, said UT's announcement of the pledge was interesting. "Making a public announcement about a pledge that is conditional on the outcome of a trial is unusual. I don't know, however, whether it's unprecedented," Reich said. "However, $500 million is a lot of money, and especially for a public university. It's not surprising that a university would find such a donation attractive. "The main issue of ethical interest is whether Mr. Moncrief is seeking to influence either the outcome or the speed of the trial," Reich said. "It's unclear whether he's trying to do either, and one would have to produce some evidence to make the accusation that his pledge of the proceeds to UT has some ethical taint." The pledge would be given in Tex Moncrief's name to establish an alternative energy program, Richard Moncrief said in a statement released by UT. "The Moncrief family has a long tradition of giving to The University of Texas at Austin," UT President William Powers Jr. said in a statement. "This is another generous contribution that would be an enormous catalyst to the work already being done by our faculty and researchers in the energy field. We will watch the legal developments in this case with great interest in the hope the litigation will be handled expeditiously." Richard Moncrief did not return a phone call seeking comment Tuesday.

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