Monday, November 5, 2012

Lawsuit Slapped on Chevron Corporation (CVX) in Argentina Due to Ecuadorian Spills

Seizure of $2 billion of Chevron Corporation(NYSE:CVX)’s assets are now being sought by attorneys of Amazonian Indians, as they attempt to get their hands on an $18.7 billion environmental verdict won in Ecuador last year. Argentine lawyer Enrique Bruchou stated that the seizure is a warning bell to all foreign investors to apply the same environmental standards irrespective of the location of their business. He is confident that they will secure a victory in the case.

Chevron has not agreed to pay up because it was Texaco Petroleum that caused damages leading to contamination and illnesses from 1972-990, a long time before Chevron made it a subsidiary in 2001. The company has emphasized clearly that bribery is involved in the trial and the entire lawsuit is a sham. According to them, the Ecuador verdict can’t be enforced in any court that upholds proper legal practices.

A deal was signed by Texaco with Ecuador right after a cleanup of $40 million, and Chevron states that this 1998 agreement frees it of any liability and it is the Ecuador's state-run oil company, which is the main culprit for pollution, in the patch that was abandoned by Texaco more than 20 years ago.

Chevron produces around 26,000 barrels of crude and 4 million cubic feet of natural gas daily in Argentina. They had agreed to collaborate with state-run YPF oil company to develop shale reserves. YRF went all out to get potential investors but even so, Chevron or any big oil firm has not publicly declared that it will spend a huge amount in extraction of oil and gas. Analysts feel that the Government of Argentina has constantly interfered and their untimely interventions discouraged investors.

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