logo logo

Ecuador Prez: No Oxy arbitration

Prensa Latina, Cuba

Ecuador Prez: No Oxy Arbitration

9 September 2006

Quito, Sep 9 (Prensa Latina) Ecuadorian President Alfredo Palacio has rejected arbitration against his nation for annulling in May the contract with US Oxy oil company that operated there.

Friday, in a letter sent to the International Center for Settlement of Investment Disputes (ICSID), Palacio requested that body to disregard the arbitration set on Ecuador by the venture.

"The contract sealed with Oxy is legal and sets the mechanisms to solve disputes emerging from its implementation, and that was precisely what the government took into account to resolve differences," he noted.

The dignitary cleared up that state-run firm Petroecuador neither violated the rules of the international or national laws nor the agreement with the US transnational.

Palacio emphasized that Oxy presented the arbitration request without taking into account the 21st clause of the contract, which points out that the cause of the expiration is out of the ICSID arbitral jurisdiction.

Finally, the president reiterated he buttressed Petroecuador when it decided to annul the deal with the US oil cooperation for selling 40 percent of its shares to Canadian EnCana in 2004 without government consent.

Oxy operated in the Block 15, eastern Ecuador, for 20 years and produced 100,000 barrels a day.