October 7th 2012
QUITO: Ecuador said Saturday it will appeal a ruling declaring it must pay $1.77 billion to Occidental Petroleum as compensation for canceling a contract with the American oil giant.
That much money is equivalent to Ecuador’s entire education budget for a year, said President Rafael Correa.
The ruling was released Friday by the International Center for Settlement of Investment Disputes, which is a branch of the World Bank.
“We are now preparing the appeal, trying to get it overturned,” Correa said.
He noted that in the ruling from the Washington-based body there was a strong dissenting opinion from a French judge and said this boded well for his country. Ecuador has 90 days to appeal.
In May 2006 Occidental Petroleum, or Oxy, sued Ecuador for $3.37 billion at the ICSID a day after the country canceled a contract under which the company could extract 100,000 barrels of oil per day from the South American nation’s Amazon basin region in the east.
Ecuador was angry that Oxy had sold 40 percent of its shares to the Canadian company Encana without first advising the Quito government.