ConocoPhilips Wins $380 Million Damage Claim Against Ecuador In International Arbitration
Feb 10, 2017 08:20 AM EST
The International arbitration has ruled to order Ecuador to pay $380 million to ConocoPhilips. The amount is damage claims after the government of Ecuador confiscated the company’s assets in 2009.
President of Ecuador Rafael Correa took over the assets of Burlington Resources, the subsidiary of ConocoPhilips that had stakes in two oil blocks in Ecuador as reported by Reuters. The blocks were operated by a French oil and gas conmpany Perenco. ConocoPhilips sued the Ecuador for annexing its oil investments unlawfully and breaching the bilateral investment treaty between the United States and Ecuador.
After a long process, the international arbitration tribunal decided Ecuador must pay the damage caused by the forced takeover of the ConocoPhilips oil investments. The tInternational Centre for the Settlement of Investment Disputes tribunal was led by Gabrielle Kaufmann-Kohler, with co-adjudicators Stephen L. Drymer and Brigitte Stern.
Subsequently, Senior VP of Legal and General Counsel at ConocoPhilips Janet Carrig welcomed the decision as reported by Business Wire. She said the decision sent a clear message that there is no governments which are able to take over the investment without fair compensation. “ConocoPhillips sought to protect its interests to the fullest degree,” she said and praised the tribunal decision.
Conoco Philips is recorded as the largest energy company in the world. Formed as a merger between two American oil companies Conoco Inc. and Phillips Petroleum Co. in August 2002. Its main business is oil and gas exploration and production with a worldwide operation.
Ecuador has the second largest oil reserved in South America after Venezuela. Since President took office in 2007, he followed similar trait with Venezuelan late president Hugo Chavez, by nationalizing oil companies asets across the country.
In 2013, he auctioned three million hectares Amazonian rainforrest to Chinese oil company which has been protested by indigenous people. Watch the journey into the Ecuador Amazon forrest to find the oil trail below: