Court denies Occidental bid for assets - Ecuador


Court denies Occidental bid for assets - Ecuador

22 August 2006

QUITO, Ecuador, Aug 22 (Reuters) - An international arbitration court has rejected a request by Occidental Petroleum Corp. to stop Ecuador from seizing its assets in the Andean country, a government official said on Tuesday.

Ecuador in May seized fields operated by Occidental after terminating its contract over a long-standing legal spat about Occidental’s transfer of assets to Canadian oil company EnCana.

The government charged that Occidental had made the transfer without state permission, which the company denied.

Galo Chiriboga, president of state oil company Petroecuador, said the Washington-based International Center for Settlement of Investment Disputes — an arbitration wing of the World Bank — denied Occidental’s request for an injunction.

"We received a communication from the Secretariat of the ICSID saying that the ... injunctions will definitely not proceed," Chiriboga told reporters.

Petroecuador took over Block 15 and the Eden-Yuturi and Limoncocha fields after terminating its contract with Occidental.

Ecuador, South America’s fifth largest oil producer, has an output of around 530,000 barrels of oil per day.