• 35 mins Iraq’s Giant Majnoon Oilfield Attracts Attention Of Supermajors
  • 3 hours South Iraq Oil Exports Close To Record High To Offset Kirkuk Drop
  • 6 hours Iraqi Forces Find Mass Graves In Oil Wells Near Kirkuk
  • 6 hours Chevron Joint Venture Signs $1.7B Oil, Gas Deal In Nigeria
  • 7 hours Iraq Steps In To Offset Falling Venezuela Oil Production
  • 9 hours ConocoPhillips Sets Price Ceiling For New Projects
  • 3 days Shell Oil Trading Head Steps Down After 29 Years
  • 3 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 3 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 3 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 3 days Venezuela Officially In Default
  • 3 days Iran Prepares To Export LNG To Boost Trade Relations
  • 3 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 4 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 4 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 4 days Rosneft Announces Completion Of World’s Longest Well
  • 4 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 4 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 4 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 4 days Santos Admits It Rejected $7.2B Takeover Bid
  • 5 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 5 days Africa’s Richest Woman Fired From Sonangol
  • 5 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 5 days Russian Hackers Target British Energy Industry
  • 5 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia
  • 5 days DOJ: Protestors Interfering With Pipeline Construction Will Be Prosecuted
  • 5 days Lower Oil Prices Benefit European Refiners
  • 5 days World’s Biggest Private Equity Firm Raises $1 Billion To Invest In Oil
  • 6 days Oil Prices Tank After API Reports Strong Build In Crude Inventories
  • 6 days Iraq Oil Revenue Not Enough For Sustainable Development
  • 6 days Sudan In Talks With Foreign Oil Firms To Boost Crude Production
  • 6 days Shell: Four Oil Platforms Shut In Gulf Of Mexico After Fire
  • 6 days OPEC To Recruit New Members To Fight Market Imbalance
  • 6 days Green Groups Want Norway’s Arctic Oil Drilling Licenses Canceled
  • 7 days Venezuelan Oil Output Drops To Lowest In 28 Years
  • 7 days Shale Production Rises By 80,000 BPD In Latest EIA Forecasts
  • 7 days GE Considers Selling Baker Hughes Assets
  • 7 days Eni To Address Barents Sea Regulatory Breaches By Dec 11
  • 7 days Saudi Aramco To Invest $300 Billion In Upstream Projects
  • 7 days Aramco To List Shares In Hong Kong ‘For Sure’
Alt Text

Tesla Investors Are Losing Patience

Elon Musk has a history…

Alt Text

The Kurdish Oil Gamble Has Backfired

Kurdistan’s failure to hold the…

Alt Text

New Battery Design Could Crush Tesla

Elon Musk’s old rival, Henrik…

Bribery in Ecuadorean Lawsuit Against Chevron?

Bribery in Ecuadorean Lawsuit Against Chevron?

Few people realize that Ecuador is the smallest oil-producing member of the Organization of the Petroleum Exporting Countries. Ecuador rejoined OPEC in 2007, after leaving the organization at the end of 1992. The oil sector is critical to the Ecuadorian economy, accounting for about 50 percent of the country’s export earnings and about one-third of all tax revenues.

Ecuador produces approximately 500,000 barrels of oil per day, most of which is exported, primarily to the United States, but like many other oil exporting nations, Ecuador has begun to look towards China as an alternative export market and source of investment.

Given the centrality of hydrocarbons to Ecuador’s economy, resource nationalism and debates about the economic, strategic, and environmental implications of oil sector development occupy a central place in Ecuadorian politics, and the administration of President Rafael Correa has decided to make pressing a decades-old lawsuit against Chevron a central plank of its policies. Not surprisingly Chevron, America’s second largest oil company, is fighting back with all the formidable legal weapons at its disposal.

At issue is the environmental degradation suffered in Ecuador’s Lago Agrio oil field in Oriente province, where Texaco Petroleum and Gulf Oil began operations in 1964 as a joint consortium. Texaco, later acquired by Chevron, operated the Lago Agrio oil field from 1972 to 1993 and Petroecuador, Ecuador’s state oil took over operations there after Texaco left. In 1993 Texaco was found responsible for dumping billions of gallons of toxic waste and the company subsequently spent $40 million cleaning up the area during the 1990s. In 1998 the Ecuadorian government signed an agreement with Texaco accepting the clean up as complete and absolving Texaco of any further responsibility. The money quote is, “…in 1998 Ecuador and Petroecuador executed an agreement releasing TexPet, its affiliates and principals from liability for environmental impact in the former Concession area.”

Related article: Chevron Invests $12 Billion on Gulf of Mexico Expansion

Fast forward to February 2011, when an Ecuadorian court ordered Chevron to pay over $18 billion in damages to indigenous communities that it found to be harmed by Texaco's operations in Ecuador between 1964 and 1990. Not surprisingly, Chevron is appealing, on the position that the 1998 agreement remains legal and binding, and last month an international arbitration tribunal affirmed the accords’ validity. Donziger and the Ecuadorians have been unable to collect the award in Ecuador because Chevron no longer has operations there and in 2011 Chevron obtained an injunction from Judge Lewis Kaplan in New York blocking enforcement of the judgment anywhere outside Ecuador, but the 2nd U.S. Circuit Court of Appeals subsequently reversed Kaplan’s ruling.

Taking the environmental high road, on 5 October Correa said on his “Enlace Ciudadano” television program, “If Chevron thought that it would trample on a small country with its millions, it chose the wrong country to mess with. Because here we have a small country, but great in dignity and sovereignty.”

Accordingly Quito is portraying the lawsuit is a long delayed bid for environmental accountability, while Chevron seeks to portray is as a shakedown by a left-leaning populist government.

Chevron fought back by filing a RICO (Racketeer Influenced and Corrupt Organizations Act) lawsuit in 2011 against the Ecuadorian plaintiffs and their American lawyer, Steven Dozinger, “Chevron Corp v. Steven Donziger et al, U.S. District Court for the Southern District of New York, No. 11-0691.” Chevron argued that the Amazon Defense Front had entered into its lawsuit fraudulently, through extortion, mail fraud, wire fraud, and witness tampering.

The trial opened on 15 October before U.S. District Judge Lewis Kaplan, and the fireworks have already begun. Chevron maintains that Donziger bribed a former Ecuadorian judge, Alberto Guerra, to allow Donziger's colleagues to ghostwrite the entire 188-page, $19 billion environmental judgment. Unfortunately for the plaintiffs, Guerra testified on 22 October that he was paid thousands of dollars by lawyers for the plaintiffs to rule in their favor and that another former Ecuadorian judge, Nicolas Zambrano, who issued the $19 billion ruling, was promised $500,000.

Guerra testified that he received the bribes sometimes as bank deposits and other times in envelopes filled with 20 and 50 dollar bills, while Zambrano has denied that he was bribed by the plaintiffs and that Guerra or the plaintiffs were involved in writing his decisions.

Related article: Mapping Mangroves for Our Carbon Future

Donziger’s spokesman Chris Gowen stated, "We are completely and utterly denying the allegations by Chevron. Steven Donziger did not ghostwrite a judgment. Steven Donziger did not bribe a judge." Donziger countered that Chevron has agreed to pay Guerra at least $326,000 dollars through 2015 for cooperation and favorable testimony.

Correa has called for a global boycott of Chevron as the trial continues, with a new hearing scheduled next week.

Which way will the case go? Judge Kaplan, who since 2011 has largely sided with Chevron, was subjected to a recusal request from the Ecuadorian plaintiffs, and appeared before a three-judge panel on 25 September, where the request to remove him was unsuccessful. Accordingly, Kaplan is still overseeing the case, though he directed U.S. Magistrate Judge James C. Francis to decide the issue, according to the Ecuadorian Embassy in Washington DC.

In the meantime, the oil slop in Lago Agrio from Texaco’s 350 abandoned oil wells and 1,000 open waste pits continues to fester.

By. John C.K. Daly of Oilprice.com




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News