Ecuador Will Fight Not to Pay Occidental in Oil Dispute

Ecuador Will Fight Not to Pay Occidental in Oil Dispute by Mercedes Alvaro, October 15, 2012, Dow Jones Newswires
QUITO, Ecuador – Ecuador’s President Rafael Correa said over the weekend that his government will fight not to pay Occidental Petroleum Corp. compensation that was ordered by an international tribunal for canceling a contract in 2006. “We will continue fighting to not pay any penny from the Ecuadorean people to this abusive transnational company that tried to defraud the country,” Mr. Correa said during his weekly media address. Ecuador canceled Occidental’s operating contract in May 2006, alleging that the company broke its terms by transferring a 40% stake to Encana Corp. without obtaining approval from the country’s energy ministry. Occidental filed for arbitration with the Washington D.C.-based International Center for Settlement of Investment Disputes, or Icsid, under the U.S.-Ecuador bilateral investment treaty. Early this month Icsid released a ruling, ordering Ecuador to pay Occidental $1.77 billion, plus pre- and post-award interest. Last week Ecuador filed an appeal to overturn the Icsid ruling, arguing Icsid has no jurisdiction in the case. “We won’t allow that this money leaves from the country,” Mr. Correa said. Mr. Correa said the U.S. company broke its contract and the Ecuadorean law. Ecuador expects the process of trying to overturn the Icsid ruling could take one to two years. [Emphasis added]