A World Bank tribunal has reduced to around US$1bn the compensation that Ecuador will have to pay to US oil company Occidental Petroleum (OXY) for having seized its assets in 2006.
Occidental Petroleum exploited Block 15 and was the largest oil investor in Ecuador, with a daily production of around 100,000 bbl/d. In 2006, the Government cancelled the contract with Occidental Petroleum (OXY), after OXY sold 40% of its shares to EnCana for US$400m without the authorisation of the Ministry of Energy, and seized the fields operated by OXY. OXY then filed a claim against the Ecuadorian Government with the World Bank's International Centre for the Settlement of Investment Disputes (ICSID). In October 2012, the ICSID ordered Ecuador to pay OXY US$1.77bn to settle the dispute.
The new ruling took into account the US$400m raised by Occidental Petroleum from the sale of 40% to EnCana and consequently reduced the compensation.
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