Why Venture Global Stock Was Plummeting Today

Liquefied natural gas (LNG) exporter Venture Global (NYSE: VG) was having an awful Friday on the stock market following a surprising resolution to a legal dispute with a large business partner. In late afternoon trading, the company's shares were down a queasy 24%. That was a far steeper fall than the S&P 500 index's 2.3% slide at that point.

A shocking loss

Various media outlets reported that Venture Global lost an arbitration proceeding against that partner, which is none other than global energy industry titan BP.

Image source: Getty Images.

A panel convened by the International Chamber of Commerce International Court of Arbitration ruled that Venture Global breached a contract with BP by selling LNG on the spot market for the commodity. It was, the panel found, beholden to ship it to BP under long-term agreements.

BP stands to take in vast sums from the victory. It had been requesting more than $1 billion in damages. Financial remedies are to be set in a separate hearing; we can imagine Venture Global's stock will take another hit if they are considerable.

The decision was unexpected given that Venture Global won a case featuring similar allegations from another energy giant, Shell, in mid-August.

Admitting defeat

In a regulatory filing, Venture Global wrote that it is "disappointed by the arbitration tribunal's decision in the proceeding with BP, which it believes contradicts the decisive findings in the prior arbitration involving Shell and the facts verified by independent third parties and regulatory agencies."

Venture Global said it is considering all options for a response to the BP ruling.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends BP. The Motley Fool has a disclosure policy.