The country lost before a court in Santiago de Chile, which ordered the payment of USD 11 million to the oil company Gente Oil. The conflict started in 2018.
Block 5 or Singue field, operated by the oil company Gente Oil, which proposed an international arbitration to Ecuador. Date: August 14, 2022.
The State Attorney General’s Office filed an appeal for annulment of the international arbitration award in favor of the oil company Gente Oil.
The agency filed the annulment on August 23, 2022 before the Court of Appeals of Santiago de Chile.
Ecuador took action after on May 24, 2022, an arbitral tribunal administered by the Permanent Court of Arbitration, based in Santiago de Chile, sentenced Ecuador to pay USD 11 million to the oil company.
This controversy arose from Ecuador’s alleged breach of several of its obligations under the contract for oil exploitation and exploration in the Singue field , signed in 2012.
“The Attorney General’s Office will not cease its efforts to defend the interests of the State,” according to a statement from the agency dated August 24, 2022.
Silvana Pástor, financial administrative vice president of Gente Oil, said that the company has not yet been notified of this appeal.
“We trust that the forcefulness of the award, the result of a process of more than four years, will be enough so that the annulment does not prosper”, added Pástor.
The Singe case
Gente Oil filed an arbitration with the Ecuadorian State on April 6, 2018, for alleged violations of the terms of the contract .
One of these violations, according to the oil company, is the State’s intention to reduce the rate it pays to the company .
“Without any legal basis, the State Comptroller General’s Office unilaterally intends to recover USD 1.05 for each barrel produced from the fee paid,” said Gente Oil.
According to the oil company, the current rate paid by the State “does not even cover investments.”
The rate per barrel produced that was originally agreed in the Gente Oil contract is USD 33.5 per barrel .
Observations on the contract
The Comptroller’s Office audited the contract signed between the state oil company Petroecuador and the foreign company Gente Oil and determined evidence of criminal responsibility for alleged damage to the State.
The agency argues that there is an incorrect definition of the oil extraction rate in the Singue field.
Later, the case went to court, where an alleged damage of USD 28.4 million to the State is under discussion.
There is a judgment of first instance for embezzlement for seven people in the so-called Singue case; among them, the former vice president of Correismo Jorge Glas.
