Ecuadorean President Rafael Correa informed Saturday that his government finally reached an agreement with the U.S. oil company Occidental Petroleum Corporation (OXY.N), about the over US$1 billion fine that a World Bank-affiliated court imposed to the Andean country.
After “a very tough negotiation” with OXY.N, Ecuador managed to reduce the fine down to US$980 million instead of US$1.4 billion – corresponding to a discount of more than 17 percent,” said Correa in his weekly program broadcast on TV.
This is a good deal, he commented, although the amount remains very high for a country strongly hit by the recent drop of oil prices in the world, he added.
“We agreed on a substantial discount and payment plan to Oxy. Very good achievement from the part of the Ecuadorean negotiating team,” said Ecuador’s ambassador to the U.N., Marco Albuja.
According to the agreement, Ecuador will have to take over all the labor, tax and environment liabilities the company left behind.
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Correa also revealed that a first payment of US$100 million had been issued on Dec. 21, and that the fine will be cleared on April 29, according to the agreed schedule.
OXY.N filed a lawsuit against Ecuador in 2006, after its contract to exploit an oil concession in the Amazon was canceled. Ecuadorean authorities justified the decision by arguing that the multinational violated their mutual agreement when it sold 40 percent of its exploitation rights to a Canadian firm without consulting the country’s Ministry of Energy.
In 2014, a WikiLeaks cable revealed that the U.S. Embassy in Ecuador actively lobbied to avoid the defeat of OXY.N against the Latin American country’s government.