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Ecuador paid $ 75 million to Burlington by agreement
Posted On 05 Dec 2017
Ecuadornews:
The Minister of Finance reported that the first payment was made last week; the balance will be canceled in April. The resources are included in the budget of the State of next year.
The Ecuadorian State reached a definitive agreement with the US oil company Burlington (a subsidiary of ConocoPhillips) to cancel the compensation resulting from the complaint filed by the company against the country in 2008.
he agreement was disclosed yesterday by the General Attorney through a press release, where Diego García, head of the entity, indicated that legal means were exercised to challenge the February award of this year in the that the Arbitral Tribunal ruled in favor of the company.
According to the Minister of Economy and Finance, Carlos de la Torre, the total debt with the oil company is around $ 320 million. On Friday, December 1, Ecuador disbursed a first payment of approximately $ 75 million, de la Torre said. The balance ($ 245 million) will be paid in a single transaction in April of next year.
When asked about the money to fulfill the obligation, he assured that it is included in the general budget of the State next year. “There are items that allow us to have resources for situations” said the Finance principal, but did not detail exactly from which accounts that amount will come.
The dispute with Burlington originated after the lawsuit filed against Ecuador in April 2008 for the application of Law 42 (redistribution of extraordinary oil revenues).
In the arbitration Burlington requested $ 1,500 million plus interest. In February 2017 the Arbitral Tribunal issued an award discounting 78% of the claim, setting compensation in favor of the company for $ 379 million plus interest.
He also accepted Ecuador’s counterclaim for environmental damages and demanded from Burlington a $ 41 million remediation for the infrastructure of Blocks 7 and 21, in which the ConocoPhillips Consortium operated, which was also integrated by the Perenco company.
Attorney’s office indicated that the environmental remediation will remain pending until the Court in the arbitration initiated by Perenco issues its final award and finally determines the extent of the damages caused by the Consortium.
The authorities of the economic and productive fronts analyze the actions that they will recommend to the President of the Republic, Lenin Moreno, in order to adopt a decision on the Law of Economic Reactivation, approved by the National Assembly on November 29.
The Minister of Industries and Productivity, Eva García, informed that she will suggest to Moreno to apply a partial veto mainly in what corresponds to the handling of electronic money, whose transfer to financial institutions was eliminated.
García believes that this payment mechanism should be managed by the private financial sector. “The issue was not treated properly,” said the Minister, adding that “it is a great opportunity not only to modernize the financial system, but also to lead to real financial inclusion at the national level.”
Finance Minister Carlos de la Torre recalled that the Executive has three options: leveling, partial veto or total veto. The corresponding decision, he said, will be based on technical analysis. As it is the norm “would generate net income for the treasury in the order of $ 45 million,” said De la Torre. (I)
