London - AFP
Ecuador on Monday filed a pair of lawsuits worth more than $500 million dollars against US oil company Burlington Resources, prosecutors said. The suits were filed with the International Centre for Settlement of Investment Disputes (ICSID), an autonomous part of the World Bank. Burlington Resources was working in two oil blocs in Ecuador alongside France's Perenco in 2008, but halted operations after Ecuador demanded more compensation after the price of oil rose. Ecuador declared the oil contracts with the Franco-US consortium null and void on July 22, 2010, turning its oil blocs over to state oil giant Petroecuador. That prompted Burlington Resources to sue Ecuador for $400 million in the ICSID. In its counter-suits, Quito argues that Burlington did environmental damage at its abandoned blocs in the Amazon basin region. In a first lawsuit, Ecuador is seeking $488 million and in another suit it is seeking $16 million for the expenses it claims to have incurred by repairing the facilities. One of just two Latin American members of the Organization of Petroleum Exporting Countries, along with Venezuela, Ecuador currently produces about 500,000 barrels per day. President Rafael Correa's leftist government in August 2010 began renegotiating 33 foreign oil contracts following a July 26 law reforming the sector to give Ecuador 100-percent ownership of its crude oil production. Under previous contracts oil companies kept 18 percent of production regardless of the cost of petroleum, which Correa said was unfair. In November 2010, Ecuador canceled five existing foreign oil contracts, including with US, South Korean and Chinese firms. But other big firms successfully renegotiated their contracts, including Repsol-YPF, Chile's ENAP, China's Andes Petroleum and PetroOriental, and Italy's ENI.