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Ecuador to seek ’payment plan’ for award to French oil company

Reuters | 3 June 2021

Ecuador to seek ’payment plan’ for award to French oil company

Ecuador will seek to negotiate a "payment plan" for a $374.3 million award it owes to French oil company Perenco, the country’s solicitor general said on Wednesday, citing the South American country’s recession and tight finances.

President Guillermo Lasso’s newly-installed government on Tuesday pledged to honor the award, ratified last week by the World Bank’s International Centre for Investment Disputes in a case rooted in a 2007 decree that boosted the Ecuadorean state’s take in oil sales exceeding a certain level. read more

Solicitor General Inigo Salvador said the Andean nation had 60 days to make the payment and has already contacted Perenco to start negotiations. Ecuador, which in 2020 inked a $6.5 billion emergency deal with the International Monetary Fund (IMF), seeks to emerge from a 7.8% economic contraction in 2020.

"We trust that the French company will keep in mind the difficult situation the Ecuadorean state is going through with regard to its finances, which has been deeply aggravated by the pandemic," Salvador told reporters. "It would be terrible that during these moments ... that money would have to be dedicated to something else."

Perenco did not immediately respond to a request for comment.

Beyond the Perenco case, Ecuador is facing eight open investment arbitration proceedings in various jurisdictions, according to the solicitor general’s office.

 source: Reuters