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Judge orders ’embargo’ of Chevron Argentina assets

by on November 7, 2012 10:45 pm GMT
 

Indigenous tribespeople and farmers in the Ecuadorean Amazon have sued the US-based oil major in Argentina and Colombia to collect the $19 billion award, Reuters reported.

A 2011 decision by a court in Lago Agrio, Ecuador, ordered Chevron to pay the sum as a result of water contamination and inappropriately disposing of oil industry waste during crude production in the Amazon over a period of nearly 30 years.

Because Chevron has few assets in Ecuador that can be taken as compensation, the plaintiffs are trying to get the ruling enforced in other countries.

Chevron is the fourth-largest producer of oil in Argentina. In September, it signed a memorandum of understanding with state-controlled YPF , Argentina’s No. 1 energy company, to consider a joint exploration project.

The plaintiff’s lawyer, Enrique Bruchou, said the Argentine judgment includes an embargo on 40% of Chevron’s Argentine oil revenue.

“We consider this to be an exemplary ruling,” he said. “We are letting the world know that foreign investment is welcome in Latin America, but that investors must adhere to the same environmental protection standards that apply in their own countries.”

The company quickly issued a statement calling the Ecuador ruling unenforceable.

“The Ecuador judgment is a product of bribery, fraud, and it is illegitimate,” the statement said. “We do not believe that the Ecuador judgment is enforceable in any court that observes the rule of law.”

The plaintiffs in Ecuador deny Chevron’s accusations.

All the company’s operations in Argentina are conducted by subsidiaries, Chevron said.

“Plaintiffs’ lawyers have no legal right to embargo subsidiary assets in Argentina and should not be allowed to disrupt Argentina’s pursuit of its important energy resources,” Chevron said.