The
adventures continuein the lawsuit between Ecuador and
Chevron (NYSE: CVX), the second-largest U.S.
oil company. As you no doubt recall, the litigation
stems from claimsthat Texaco, before it was acquired by
Chevron, was responsible for considerable environmental
damage in the country.
That damage supposedly occurred between 1964 and 1990,
when Texaco operated a consortium in Ecuador. Chevron didn't
buy Texaco until 2001, at which time the case, which had
first been filed in 1993, was refiled. Now, facing the
specter of a judgment that could run to $27 billion, the
company has filed suit in The Hague, Netherlands, under the
auspices of a trade pact between Ecuador and the U.S. that
was passed in 1997.
In essence, by filing the suit, Chevron is requesting
arbitration through a procedure established by a United
Nations commission specializing in international trade law.
That procedure is separate from the core lawsuit, although
under the 1997 pact, Ecuador is required to recognize
arbitration as binding.
Last week's activities follow the August release of
secretly recorded tapesin which two businessmen are shown
meeting with Judge Juan Evangelista Nunez, the case's
presiding judge. After the tapes were placed on the Chevron
website and alleged judicial improprieties claimed, Nunez
asked to be removed from the case. However, his request was
denied by the court on Tuesday -- a decision he says he'll
appeal. Â
Latin America has been a difficult place for oil companies
to operate of late. Chevron was one of those affected by Hugo
Chavez's nationalization of energy and
other industries, as were
ExxonMobil (NYSE: XOM),
ConocoPhillips (NYSE: COP),
Total (NYSE: TOT), and
BP (NYSE: BP).
In addition, as I've told you, Brazil's government has
begun to flex its musclesand contemplate a bigger piece
of the action in the prolific deepwater Santos Basin through
Petrobras (NYSE: PBR). As a result, companies
like
Shell (NYSE: RDS-A) are waiting for clues
regarding how potential Brazilian changes might affect
them.
But back to Chevron. The company has been making
substantial strides in a number of areas of late. On that
basis alone, I wouldn't let a process which has been going on
for years (decades, really), and which could be much further
drawn out into the future, separate me from this solid
company.
Chevron has been accorded four stars (of a possible five)
by
Motley Fool CAPSplayers.
Why not register your thumb up or down
on the
company?
This article was originally published as
Chevron Swings Back at Ecuadoron
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