By July 23, 2016 Read More →

Ecuador pays $112 million award to Chevron – central bank


Photo by Justin Sullivan/Getty Images.

Ecuador paid Occidental Petroleum $980 million this year to compensate for seizing its oil field in 2006

CARACAS (Reuters) – Ecuador has paid $112 million to energy company Chevron Corp over a four-decade-old contract dispute, even though it remains in disagreement, the head of the central bank has said.

A Hague arbitration court awarded the U.S. company $96 million in 2011 in a dispute stemming from a 1973 deal that called for Texaco, later acquired by Chevron, to develop fields in exchange for selling oil to Ecuador at below-market rates.

Various appeals by Ecuador against the ruling failed.

“We have today paid around $112 million,” the central bank head Diego Martinez told a local radio station late on Friday.

That amount represented the award plus interest.

“We don’t agree with how these international mechanisms work … however, we are respectful and we fulfill our international obligations,” Martinez added.

The payment comes as leftist President Rafael Correa’s government faces a cash crunch due to tumbling crude revenues in the Andean oil producer that is OPEC’s smallest member.

Ecuador also had to pay Occidental Petroleum Corp roughly $980 million this year to compensate the company for seizing its oil field in 2006.

The $112 million payment to Chevron is not part of a separate legal battle brought by a group of Ecuadorean villagers who claim Texaco caused billions of dollars in pollution damage when it began exploring oil deposits in the 1960s.

Chevron continues to fight claims from the villagers, who have filed lawsuits in Canada, Brazil and Argentina seeking to enforce a $9 billion judgment rendered in Ecuador against Chevron. (Reporting by Alexandra Valencia; Editing by Tom Heneghan)

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