Ecuador prepares for new hearing in Occidental Petroleum case

Dow Jones Newswires

Ecuador Prepares For New Hearing In Occidental Petroleum Case

13 June 2011

By Mercedes Alvaro, Dow Jones Newswires

QUITO -(Dow Jones)- The office of Ecuador’s Attorney General will represent Ecuador in Washington at a June 30 hearing in the arbitration case filed against the Andean country by U.S. oil company Occidental Petroleum Corp. (OXY).

Ecuador’s Attorney General Diego Garcia said in a press release that the final decision on the case could be known in the second half of the year.

Occidental is seeking $3.2 billion in damages for Ecuador’s May 2006 decision to cancel the company’s operating contract, alleging Occidental broke several of its terms by transferring a 40% stake in its Ecuadorian projects to Canada’s Encana Corp. (ECA) without the approval of Ecuador’s energy ministry.

Occidental filed the claim with the World Bank’s International Centre for Settlement of Investment Disputes, or ICSID, in July 2006.

Occidental has said that the Ecuadorian government violated the U.S.-Ecuador bilateral investment treaty by illegally nullifying its exploration rights and expropriating its assets.

The Ecuadorian government meanwhile say that it has followed the laws and the contract with the U.S company.